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MAYS TOWING CO. v. UNIVERSAL MACH. CO.

November 19, 1990

MAYS TOWING COMPANY, INC., a corporation, Plaintiff,
v.
UNIVERSAL MACHINERY COMPANY, INC. and CATERPILLAR, INC., Defendants; and UNIVERSAL MACHINERY COMPANY, Defendant/Third-Party Plaintiff, v. DRESSER INDUSTRIES, INC., d/b/a MAGCOBAR NORTH AMERICAN DIVISION, DRESSER INDUSTRIES, INC., Third-Party Defendant



The opinion of the court was delivered by: STIEHL

 WILLIAM D. STIEHL, UNITED STATES DISTRICT JUDGE

 This matter is before the Court on defendant Caterpillar Inc.'s motion for summary judgment pursuant to Fed. R. Civ. P. 56. Defendant has also moved, in the alternative, for partial summary judgment and certification of issues to the Seventh Circuit for interlocutory appeal pursuant to 28 U.S.C. ยง 1291(b). Defendant Universal Machinery Company, has filed identical motions, and has joined Caterpillar's Brief in Support of its Motion for Summary Judgment; therefore, the Court will consider the motions collectively.

 I. BACKGROUND

 In 1979, defendant Caterpillar sold certain engines it manufactured to Dresser Industries, Inc. Dresser stored these engines, and in February, 1983, sold them to Universal. In August, 1983, defendant Universal sold the Caterpillar engines to plaintiff, who installed these engines in its river towboat M/V Peggy Mays. On August 10, 1984, the M/V Peggy Mays caught fire and was destroyed.

 Plaintiff subsequently filed this action in admiralty against defendants Universal and Caterpillar, asserting three products liability tort claims against the defendants. The second amended complaint seeks recovery against both defendants in each of the three counts. Count I is framed in maritime strict liability, Count II sounds in negligent design and/or manufacture, and Count III alleges failure to warn. Plaintiff alleges that the fire on the M/V Peggy Mays was caused by a fuel line break in one of the Caterpillar manufactured engines.

 The Court denied defendants' prior motion for summary judgment on the ground that summary judgment would not lie, because plaintiff was seeking recovery in tort only for damages to property other than the engines themselves.

 Defendants now move for summary judgment on the ground that plaintiff is precluded from seeking recovery based in tort for the losses associated with either the engines or the vessel. Plaintiff's second amended complaint seeks damages for "the total loss of the M/V Peggy Mays, costs of fighting the fire, surveying expenses, and other miscellaneous expenses." Each count seeks $ 500,000, plus prejudgment interest. In its brief in opposition to the motions for summary judgment, plaintiff asserts that included among the damages it can recover is the loss of the engines themselves. Plaintiff theorizes that because the contracted-for engines damaged property other than themselves, recovery can be had for all damaged property. Plaintiff asserts that defendants are merely rehashing old arguments previously considered and denied by the Court.

 Plaintiff's argument is, in part, correct. The defendants have reasserted issues decided in the Court's previous ruling. However, plaintiff's second amended complaint does, in fact, raise claims related to the loss of the engines. This Order, therefore, clarifies the Court's previous ruling with respect to the specific remedies available to plaintiff under the facts here presented.

 II. STANDARD OF REVIEW

 Fed. R. Civ. P. 56(c) provides that a district court shall grant summary judgment "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." In determining whether a district court properly granted summary judgment, "all factual inferences are to be taken against the moving party and in favor of the opposing party." International Admin., Inc. v. Life Ins. Co. of N. Am., 753 F.2d 1373, 1378 (7th Cir. 1985). In instances in which "inferences contrary to those drawn by the trial court might be permissible," a district court's grant of summary judgment must be reversed. Munson v. Friske, 754 F.2d 683, 690 (7th Cir. 1985). Once a motion for summary judgment has been made and properly supported, however, the nonmovant does have the burden of setting forth specific facts showing the existence of a genuine issue of a material fact for trial. See Rule 56(e); Posey v. Skyline Corp., 702 F.2d 102, 105 (7th Cir.), cert. denied, 464 U.S. 960, 78 L. Ed. 2d 336, 104 S. Ct. 392 (1983), (noting that "a bare contention that an issue of fact exists is insufficient to raise a factual issue"). Although a requisite, the existence of a factual dispute is not, standing alone, sufficient to bar summary judgment. It is well settled that a "factual dispute does not preclude summary judgment unless . . . the disputed fact is outcome determinative under the governing law." Egger v. Phillips, 710 F.2d 292, 296 (7th Cir.), cert. denied, 464 U.S. 918, 78 L. Ed. 2d 262, 104 S. Ct. 284 (1983), as cited in Shlay v. Montgomery, 802 F.2d 918, 920 (7th Cir. 1986).

 III. ANALYSIS

 A. Recovery Under Strict Product Liability or Negligent Design and Manufacture (Counts I and II)

 In East River Steamship Corp. v. Transamerica Delaval, Inc., 476 U.S. 858, 90 L. Ed. 2d 865, 106 S. Ct. 2295 (1986), the Supreme Court was called upon to decide whether a cause of action in strict products liability could be maintained "when a defective product purchased in a commercial transaction malfunctions, injuring only the product itself and causing purely economic loss." East River Steamship Corp. et al. v. Transamerica Deleval Inc, 476 U.S. 858, 859, 106 S. Ct. 2295, 90 L. Ed. 2d 865. The Supreme Court answered in the negative, and held that "a manufacturer in a commercial relationship has no duty under a negligence or strict products liability theory to prevent a product from injuring itself." Id. at 871. The Court concluded that recovery for "damage to a product itself is most naturally understood as a warranty claim." Id. The Court stated that tort recovery for damages to the ...


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