ATTORNEYS FOR APPELLANTS
Fred M. Stults, III
Fred M. Stults, Jr.
ATTORNEY FOR APPELLEE
Michael E. Simmons
SUPREME COURT OF INDIANA
FLEETWOOD ENTERPRISES, INC., )
and FLEETWOOD MOTOR HOMES )
OF INDIANA, INC., )
Appellants (Defendants Below), ) Indiana Supreme Court
) Cause No.45S03-0106-CV-265
) Indiana Court of Appeals
PROGRESSIVE NORTHERN ) Cause No. 45A03-9909-CV-366
INSURANCE COMPANY, as Subrogee )
of Jack Bostic, )
Appellee (Plaintiff Below). )
APPEAL FROM THE LAKE SUPERIOR COURT
The Honorable Jeffery J. Dywan, Judge
Cause No. 45D01-9611-CP-1133
ON PETITION FOR TRANSFER
June 6, 2001
In Progressive Insurance Co. v. Ford Motor Co., ___ N.E.2d ___, ___ (Ind.
2001), we held that the Products Liability Act does not support an action
based on a defect in a product where the only damage is to
the product itself. In this case a defect in the product is
alleged to have damaged both the product itself and also other property.
We hold that personal injury and damage to other property from a defective
product are actionable under the Act, but their presence does not create a
claim under the Act for damage to the product itself.
On January 6, 1996, the three occupants of a motor home smelled something
hot and fled. The home had been manufactured by Fleetwood. It
was quickly engulfed in flames and was completely destroyed. Progressive Insurance had
issued a homeowners policy and paid the owner $162,500 for damages to the
motor home and $6,587.89 for damages to other personal property in the home.
As subrogee, Progressive then sought to recover its losses from Fleetwood under
a products liability theory. The trial court refused to give the defendants
proposed jury instruction that, under the Indiana Strict Product Liability Law, Plaintiff .
. . is NOT entitled to recover for any sums it paid .
. . for the Fleetwood Motor Home only. Instead, the only amount
of damages you may consider is the amount Progressive . . .
paid . . . for  loss of personal property contents contained within
the motor home. Instead, the trial court gave Indiana Pattern Jury Instruction
No. 11.40: When personal property is completely destroyed, the measure of damages is
the fair market value of the property at the time of its destruction.
The jury awarded Progressive the full $169,087.89 Progressive had paid its insured,
and the trial court added prejudgment interest of $46,881.35, for a total judgment
Progressive, we reaffirmed the rule that no damages are recoverable under the
Products Liability Act where the only damage is to the defective product itself.
___ N.E.2d at ___. However, cases from this Court and others
have discussed that doctrine in language suggesting that damage to the product might
be recoverable under a products liability theory if the defective product also causes
personal injury or damage to other property. For example, in Reed v.
Central Soya Co., 621 N.E.2d 1069, 1074-75 (Ind. 1993), this Court held that,
where the loss is solely economic in nature, as where the only claim
of loss relates to the products failure to live up to expectations, and
in the absence of damage to other property or person, then such losses
are more appropriately recovered by contract remedies. (Emphasis added.). In Reed,
this Court was presented with a case in which the only claim was
for damage to other property. In the other leading Indiana precedent, Martin
Rispens & Son v. Hall Farms, Inc., 621 N.E.2d 1078 (Ind. 1993), the
productwatermelon seedswas viewed as the same thing as the resulting bacteria-infected watermelon crop.
Accordingly, Rispens addressed only harm to the product itself. Thus, this
Court has never faced a products liability claim for damage to the product
where there was also damage to persons or other property. This dispute
between Progressive and Fleetwood directly presents us with that question.
Some decisions from other states, like
Reed, note the absence of damage to
other property in rejecting claims for damage to the defective product, which is
sometimes viewed as a subcategory of economic loss. However, these decisions, like
Reed, typically were not faced with a claim for damages to the product
and also to other property. For example, E.I. Du Pont de Nemours
& Co. v. Finks Farms, Inc., 656 So. 2d 171, 173 (Fla. Ct.
App. 1995), addressed a claim for damage to a tomato crop from an
allegedly defective fungicide: Where, however, as in the instant case, the finished product
causes property damage to other property, the economic loss doctrine does not apply.
In addition to the absence of direct authority in this state, it appears
that the question whether damage to the product is recoverable in products liability
where it is accompanied by damage to other property or personal injury has
rarely been addressed elsewhere. However, at least one court has permitted that
recovery in a jurisdiction that does not permit recovery for damage to the
product alone. In
Dutsch v. Sea Ray Boats, Inc., 845 P.2d 187,
189, 193 (Okla. 1992), the court affirmed a judgment under Oklahoma products liability
law awarding $181,500 for personal injury damages and $115,000 for damages to a
boat that exploded. As support for allowing damages for harm to the
product itself, the court reasoned that the policy of preserving remedies under the
Uniform Commercial Code would not be furthered by requiring a plaintiff to proceed
under two different theories to recover two different types of damage if one
type of damage claimed is recoverable in manufacturers products liability. Id. at
193-94. The Court cited four precedents for its view, but a reading
of those cases suggests that there was either no damage at all to
or extremely minor damage in comparison to the personal injury or
other property loss from the defective product.
In any event, none of
these four cases suggested that any part of the damages was for loss
of the defective product and none mentioned the issue discussed here.
Here there was damage, although relatively small in amount, to other property.
Plainly that amount is recoverable under the Products Liability Act. However, we
find no persuasive reason to sustain a products liability claim for damage to
the product if it is accompanied by personal injury or damage to other
property when there is no products liability claim if that other damage is
absent. The reason given in
Dutsch to find such a claimavoidance of
dual theory trialsdoes not seem very forceful. Many of these cases, like
this one, present situations where either the loss to the product or the
damage to other property is by far the largest component of the total
claim. Here the motor home itself is ninety-six percent of the claim.
In contrast, some fact patterns, like those described in footnote two, do
not expressly address the issue presented here, but involved severe personal injury or
damage to other property and very minor or no damage to the product.
If either claim is sufficiently large to warrant litigation, it is not
too much to demand proof of the elements of recovery under a products
liability or contract theory, whichever is appropriate. And under Indiana procedure, a
plaintiff may readily pursue both a contract claim for damage to the product
itself and a tort claim for personal injury or damage to other property
under the Products Liability Act.
More importantly, unlike Oklahoma, in Indiana a products claim is governed by statute.
There is no support in Indianas Products Liability Act for the result
Dutsch. Precedent from this Court has not regarded the product
whose defect gives rise to liability as property whose damage gives rise to
a claim under the Act. Rispens, 621 N.E.2d at 1089. That
result, apparently accepted by the legislature, dictates disallowance of the claim for damage
to the defective product, whether or not accompanied by other damage. Thus,
for the same reasons given in Progressive, we hold that damage caused to
other property by a defective product does not create a claim for damage
to the product itself. We also think there are other persuasive reasons
to reject the Dutsch rule. If recovery hinges on the presence of
other damage, many cases will be launched into quests for some collateral damage.
An oil stain on a garage floor from a failed engine or
a burnt blade of grass from a fire should not create a claim
where none existed.
We conclude that it was error for the trial court to refuse to
instruct the jury that damage to the product itself, i.e., the motor home,
was not recoverable under the Products Liability Act. In reviewing a trial
courts decision to give or refuse tendered instructions, the Court considers: (1) whether
the instruction correctly states the law; (2) whether there was evidence in the
record to support the giving of the instruction; and (3) whether the substance
of the tendered instruction is covered by other instructions which are given.
Wooley v. State, 716 N.E.2d 919, 926 (Ind. 1999). An erroneous instruction
merits reversal if it could have formed the basis for the jurys verdict.
Canfield v. Sandock, 563 N.E.2d 1279, 1282 (Ind. 1990).
Here, it is clear that Indiana Pattern Instruction No. 11.40 left the jury
with the mistaken impression that it should award full damages for the motor
home to Fleetwood if it determined that Fleetwood was liable to Progressive in
Progressives products liability claim, and that the trial court erred in refusing to
give Fleetwoods instruction. Ordinarily, a new trial would be required. However,
where, as here, liability was determined by the jury and the basis of
the jurys damages award is apparent, it is appropriate to vacate the portion
of the damages award not recoverable as a matter of Indiana law.
See Ind.Appellate Rule 15(N)(5) (now App. R. 66(C)(4)) (The court, with respect to
all or some of the parties or upon all or some of the
issues, may order: . . . (6) In the case of excessive or
inadequate damages, entry of final judgment on the evidence for the amount of
the proper damages . . . .).
No challenge is raised to the award of prejudgment interest beyond a challenge
to the underlying judgment. Accordingly, prejudgment interest should be awarded in proportion
to the amount of the judgment that is affirmed.
We affirm the jurys award of damages in the amount of $6,587.89, reverse
the damages award in the amount of $162,500, and remand with direction that
judgment be entered for the plaintiff in the amount of $6,587.89 plus prejudgment
interest of $1,826.56.
SHEPARD, C.J., and SULLIVAN, J., concur.
RUCKER, J., concurs in result with separate opinion in which DICKSON, J., concurs.
ATTORNEYS FOR APPELLANTS: ATTORNEY FOR APPELLEE:
FRED M. STULTS, III MICHAEL E. SIMMONS
FRED M. STULTS, JR. Hume Smith Geddes Green &
The Stults Law Offices Simmons, LLP
Gary, Indiana Indianapolis, Indiana
SUPREME COURT OF INDIANA
FLEETWOOD ENTERPRISES, INC. )
and FLEETWOOD MOTOR HOMES OF )
INDIANA, INC., ) Indiana Supreme Court
) Cause No.: 45S03-0106-CV-265
PROGRESSIVE NORTHERN INSURANCE ) Indiana Court of Appeals
COMPANY, as Subrogee of Jack Bostic, ) Cause No.: 45A03-9909-CV-366
APPEAL FROM THE LAKE SUPERIOR COURT
The Honorable Jeffery J. Dywan, Judge
Cause No.: 45D01-9611-CP-1133
ON PETITION TO TRANSFER
June 6, 2001
RUCKER, Justice, concurring in result
Because of the doctrine of stare decisis, I concur in the result reached
by the majority. Both Martin Rispens & Son v. Hall Farms, Inc., 621
N.E.2d 1078 (Ind. 1993), and Reed v. Central Soya Co., Inc., 621 N.E.2d
1069 (Ind. 1993), compel the outcome in this case.
DICKSON, J., concurs.
In Lee v. Volkswagen of America, Inc., 688 P.2d 1283, 1285 (Okla.
1984), the plaintiff was rendered quadriplegic by an accident in which a defective
Volkswagen door latch caused his ejectment from the car. He was awarded
1.8 million dollars for personal injury. There is no suggestion that the
defect in the door caused any damage to the car. Dewberry v.
LaFollette, 598 P.2d 241, 242 (Okla. 1979), involved a claim of personal injury
from collapsing steps. There was no claim for the steps themselves.
In Smith v. United States Gypsum, Co., 612 P.2d 251, 252-53 (Okla.
1980), the plaintiff was awarded $600,000 for personal injuries from the explosion of
solvent-based adhesive for installing wall paneling. The court does not identify the
components of damage, but it is clear that virtually all, if not all,
were for personal injury. In Kimbrell v. Zenith Radio Corp., 555 P.2d
590 (Okla. 1976), a television was claimed to have caused a fire that
destroyed a home. If compensation for damage to the television itself was
sought, it is not mentioned by the court. In any event, it
was trivial compared to the loss of the home.