904 F. 2d 40 - American Motorists Insurance Company v. Controlled Atmosphere Services Inc

MEMORANDUM*

American Motorists Insurance appeals the district court's grant of summary judgment. The district court ruled that Controlled Atmosphere Services had no contractual or tort duty to warn of dangers in a product it had not sold. We affirm.

This court reviews the grant of summary judgment de novo. Kruso v. International Telephone & Telegraph Corp., 872 F.2d 1416, 1421 (9th Cir.1989). The decision granting summary judgment should be affirmed if, viewing the evidence in the light most favorable to the non-moving party, there are no genuine issues of material fact. Tzung v. State Farm Fire and Casualty Co., 873 F.2d 1338, 1339-40 (9th Cir.1989). The parties agree that Washington law governs this diversity action.

American Motorists argues that Controlled Atmosphere breached an oral maintenance contract with Joseph by failing to warn of dangers in the COB units and failing to notify Joseph of the availability of automated gas sensor equipment. The district court found nothing in the allegations to raise a genuine issue of material fact on the requisite contractual relationship. Our independent review leads us to the same conclusion. Under either the Washington product liability statute or the common law of contracts, American Motorists has failed to demonstrate that there is a question of whether an oral implied or express agreement existed.

Further, there is evidence of the absence of any agreement. The deposition of Milo Elander, Joseph's maintenance employee, reflects that Controlled Atmosphere was under no maintenance agreement with Joseph but merely serviced units "from time to time."

(1) Common Law

American Motorists argues that Controlled Atmosphere was negligent in failing to warn Joseph of a known danger in the COB-6 models sold and in the COB-3 model serviced by Controlled Atmosphere. The elements of a negligence claim against a product retailer are:

(a) the offer of sale of the product by a retailer, (b) a duty of care in the retailer, (c) a failure by act or omission to perform the duty, (d) an injury occurring from use of the product and (e) a proximate cause of the injury was a failure to perform the duty.

Controlled Atmosphere, Inc. v. Branom Instrument Co., 748 P.2d 686, 690 (Wash.App.1988). In traditional product liability cases the plaintiff must show "a reasonable connection between the injured plaintiff, the injury-causing product, and the manufacturer [or retailer] of the injury-causing product." Martin v. Abbott Laboratories, 689 P.2d 368, 375 (Wash.1984) (en banc). Nothing in the record raises a genuine issue of material fact regarding a duty, on the part of controlled atmosphere, to warn of dangers in a product that it did not sell. American Motorists attempts to demonstrate duty and causation from three events: (1) Controlled Atmosphere's sale of a similar product, (2) two maintenance charges on the product in issue, and (3) conduct that "lulled" Joseph into believing the COB-3 was safe.

In so doing, it ignores its burden to raise a genuine issue of material fact. Ordinarily, only persons who participated in or contributed to a risk are subject to liability. See ITT Rayonier v. Puget Sound Freight, 722 P.2d 1310, 1316 (1986). Dicta in Powell v. Standard Brands Paint Co., 212 Cal.Rptr. 395 (Cal.App.1985) suggested that if a theory of liability could be premised on the sale of a similar product it would require at least that:

a) the injuring product was of same generic type as defendant's b) both products were used for the same consumer purposes, c) defendant's product had inadequate warnings, and d) defendant's product had risks of use identical to the injury-causing product.

Id. at 398. The district court considered this but found that the risks of use were not identical between the COB-3 and COB-6 because the latter were equipped with low temperature cut-off switch.1 The distribution of a product manual does not in itself create a duty to warn of dangers in a product the distributor did not sell. See Spaulding v. Lesco Intern. Corp., 451 N.W.2d 603, 606 (Mich.App.1990).

American Motorists also relies on the two service calls made by Controlled Atmosphere on the COB-3 unit. The district court found that this was insufficient to raise a genuine issue of material fact of a duty to warn of dangers unrelated to that maintenance. We agree. American Motorists relies on Burr v. Clark, 190 P.2d 769 (Wash.1948), for the proposition that knowledge of danger is a basis for the duty to warn. We reject the argument. The explosion complained of was unrelated in time and subject matter to the service work performed by Controlled Atmosphere.

American Motorists also asserts that Controlled Atmosphere's duty was created because Controlled Atmosphere "affirmatively led Joseph personnel to believe that the COB-3 operation was safe." American Motorists relies on a comment in McCully v. Fuller Brush Company, 415 P.2d 7, 9 (Wash.1966) that a misrepresentation on a product label would "naturally lull" the consumer into a false sense of security. We recognize the fundamental duty of all persons to act reasonably once they undertake to act affirmatively. See W. Prosser, W. Keeton, The Law of Torts Sec. 56 at p. 378 (5th ed. 1984). However, American Motorists fails to cite any affirmative conduct that misrepresented the safety of the COB-3. Any representations of safety about the COB-6 that Controlled Atmosphere sold, cannot be attributed to a similar product for which Controlled Atmosphere had no duty to warn. This is particularly so when the two products possess different safety features. Nor can Controlled Atmosphere's silence during maintenance misrepresent safety because there was no duty to discuss safety unrelated to the repair calls. Nothing in the record points to conduct that affirmatively misled Joseph, Inc. about the safety of the COB-3.

(2) Washington Product Liability Statute

American Motorists also argues liability pursuant to Wash.Rev.Code Ann. Sec. 7.72.040 which establishes seller liability. The defect in that argument is that section 7.72.010 defines "product seller" to include distributor or retailer of the "relevant product." The definition of the "relevant product" is the product that "gave rise to the product liability claim." Wash.Rev.Code Sec. 7.72.010(3). Since Controlled Atmosphere did not sell the product that caused the explosion the product seller liability statute defeats rather than supports American Motorists' position.

AFFIRMED.