against Wausau, while counts V and VI are directed against TPI.
Wausau's motion to dismiss count I, a strict liability in tort
claim, and count II, a breach of an express contract warranty,
pursuant to Rule 12 of the Federal Rules of Civil Procedure for
failure to state a cause of action, is now before this court.
The purpose of a motion under Fed.R.Civ.P. 12(b)(6) is to
determine whether the claim has been adequately stated in the
complaint. The complaint should not be dismissed unless it
appears beyond a doubt that the plaintiff can prove no set of
facts in support of his claim entitling him to relief. Conley v.
Gibson, 355 U.S. 41, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957).
Plaintiffs' complaint alleges that they entered into a contract
to purchase a home from Wausau on June 14, 1979 and that the home
was constructed by Wausau in 1979 at Route 1, Creek Road,
Sandwich, Illinois. In count I of the complaint plaintiffs
further allege that the home, which was designed, packaged,
constructed and sold to them by Wausau, was in an unreasonably
dangerous condition at the time it left Wausau's control in that
it contained an electric baseboard heater which (a) was
defectively designed, manufactured, assembled or installed,
causing it to short, and/or (b) failed to contain a double high
limit thermostat switch. The Bastians further allege that as a
direct and proximate cause of the above unreasonably dangerous
condition(s) a fire occurred suddenly and without warning within
the home on December 30, 1982 and destroyed the home and its
In Suvada v. White Motor Co., 32 Ill.2d 612, 210 N.E.2d 182
(1965), the Illinois Supreme Court adopted the doctrine of strict
liability in tort as set out in the Restatement (Second) of
The Suvada court stated that liability for a defective product
extended to a manufacturer, one who holds himself out to be a
manufacturer, a seller, a contractor, a supplier, the assembler
of parts and the manufacturer of a component part. Suvada at 617,
210 N.E.2d 182.
Wausau, in seeking dismissal of count I of the complaint
contends that a home is not a "product" for purposes of strict
liability. Although the Illinois Supreme Court has not defined
specifically a "product" for purposes of strict liability in
tort, the Illinois Appellate Court for the First District has
repeatedly stated that the public policies underlying strict
liability, rather than a dictionary definition, should determine
what is a product. Lowrie v. City of Evanston, 50 Ill.App.3d 376,
384, 8 Ill.Dec. 537, 542, 365 N.E.2d 923, 928 (1st Dist. 1977);
Trent v. Brasch Mfg. Co., Inc., 132 Ill.App.3d 586, 87 Ill.Dec.
784, 787, 477 N.E.2d 1312, 1315 (1st Dist. 1985); Heller v.
Cadral Corp., 84 Ill.App.3d 677, 40 Ill.Dec. 387, 388,
406 N.E.2d 88, 89 (1st Dist. 1980); Immergluck v. Ridgeview House, Inc.,
53 Ill. App.3d 472, 11 Ill.Dec. 252, 253, 368 N.E.2d 803, 804 (1st
The policy issues to be considered in imposing strict liability
include (1) the public interest in human life and health, Suvada
v. White Motor Co., 32 Ill.2d 612, 619, 210 N.E.2d 182, 186
(1965), (2) the invitations and solicitations of the manufacturer
to purchase the product, id., 210 N.E.2d at 186, (3) the
justice of imposing the loss on the manufacturer who created the
risk and reaped the profit by placing the product in
the stream of commerce, id., 210 N.E.2d at 186, and (4) the
superior ability of the commercial enterprise to distribute the
risk of injury proximately caused by the defective condition of
its product by passing the loss on to the public as a cost of
doing business, Trent, 87 Ill.Dec. at 787, 477 N.E.2d at 1315. In
Immergluck, the court recognized an additional policy
consideration: the disparity in position and bargaining power
which forces the consumer to depend entirely on the manufacturer,
and the difficulty of requiring the injured party in consumer
products cases to trace back along the channel of trade to the
source of production in the search for the origin of the defect
in order to prove negligence. Immergluck, 11 Ill.Dec. at 253, 368
N.E.2d at 804, citing LaRossa v. Scientific Design Co., Inc.,
402 F.2d 937, 942 (3d Cir. 1968). Whether the "product" is in the
stream of commerce is also relevant. Immergluck, 11 Ill.Dec. at
253, 368 N.E.2d at 804.
Based on section 402A of the Restatement, and the above policy
issues, the Illinois Appellate Court for the First District has
held that certain "buildings" are not "products" for purposes of
strict liability in tort. In Lowrie, the court held that an
open-air parking garage and its parking spaces were not
"products" for strict liability purposes. In Heller, a
condominium was held not to be a "product." In Immergluck, it was
held that neither a sheltered care facility nor the defendant's
services constituted "products" for strict liability purposes.
However, in each of these three cases, and in Trent, the court
noted that jurisdictions which have applied strict liability to a
building have done so in the context of mass-produced homes
and/or have focused on a defective product within the home rather
than the home itself. See e.g., Kriegler v. Eichler Homes, Inc.,
269 Cal.App.2d 224, 74 Cal.Rptr. 749 (1969); State Stove
Manufacturing Company v. Hodges, 189 So.2d 113 (Miss.), cert.
denied, 386 U.S. 912, 87 S.Ct. 860, 17 L.Ed.2d 784 (1966);
Worrell v. Barnes, 87 Nev. 204, 484 P.2d 573 (1971); Schipper v.
Levitt & Sons, 44 N.J. 70, 207 A.2d 314 (1965).
The instant case is distinguishable from the Illinois cases in
which the court found no "product" for strict liability purposes.
Here the plaintiffs' home is a mass-produced prefabricated
factory-built home, as opposed to the single open-air parking
garage in Lowrie and the single sheltered care facility in
Immergluck. In Heller, there was no mass production over which to
distribute the risk of injury as there is in the instant case.
Further, the plaintiff in Heller alleged no personal harm but
rather alleged and sought damages for a defect in workmanship or
materials. In the instant case the plaintiffs have alleged the
loss of real and personal property.
Wausau allegedly designed, packaged, constructed and sold the
home to the plaintiffs. Assumably, Wausau advertised or otherwise
invited and solicited the purchase of the home. There is a
disparity in position and bargaining power between Wausau and the
home buyer that forces the buyer to depend on Wausau to provide a
safe and suitable house for use as a home. The plaintiffs have
alleged that the unreasonably dangerous condition(s) associated
with electric baseboard heater installed in the home directly and
proximately caused the fire that destroyed their property.
Wausau, as a builder-vender of mass-produced homes, is in the
better economic position to bear the loss by passing the loss on
as a cost of doing business than the injured plaintiff
homeowners. Consequently, based on section 402A of the
Restatement and the policy issues that have been identified by
the Illinois Appellate Court, this court must view the
plaintiffs' allegations as having stated a claim for strict
liability in tort.
In count II of the complaint the plaintiffs allege that Wausau
breached an express warranty contained in the sales contract, as
evidenced by an assignment contract for loan proceeds attached to
the complaint. An examination of the assignment contract reveals
no express warranty that the home is free from defects caused
by faulty materials or workmanship supplied by the seller.
Plaintiffs failed to attach the sales contract to the complaint.
Even if the sales contract had been properly alleged and
incorporated into count II of the complaint, the complaint would
still have been fatally defective. Paragraph 7A of the sales
Seller warrants to Buyer that from the date of final
invoice supplied by Seller and for one (1) year
thereafter Seller will repair or replace (or pay the
reasoable cost of such repair or replacement, at its
option) any defects in such home caused by faulty
materials or workmanship supplied by Seller under
this contract. . . . NO PERFORMANCE OF THIS WARRANTY
WILL BE MADE BY SELLER UNTIL SELLER HAS RECEIVED
PAYMENT IN FULL FROM BUYER.
(Emphasis in original.) Pursuant to the assignment contract
Wausau was to be paid three days after the July 13, 1979 signing
of the assignment contract. The sales contract warranty would
then have lapsed on July 16, 1980, approximately one and one-half
years prior to the date of the fire.
For the foregoing reasons, defendant's motion to dismiss count
I is denied and defendant's motion to dismiss count II is