Broken Fuel Tank Lawsuit Strict Liability Damages
In Sacramento Regional Transit Dist. v. Grumman Flxible (1984) the plaintiff purchased 103 busses, with the manufacturer's standard written warranty. ( Id. at p. 292.)
"Plaintiff discovered a broken fuel tank support during routine maintenance on one of the busses . . . . Further inspection of all the busses . . . revealed that at least 26 . . . had the same or similar damage, i.e., cracked fuel tank supports.
As a result of further inspection plaintiff determined that all the busses it purchased from defendant would likely suffer the same type of damage unless certain remedial repairs were undertaken." (Ibid.)
In addition, the plaintiff found "structural defects in the undercarriage battery frame area of certain other busses [previously] purchased from defendant . . . ." ( Id. at p. 292, fn. 2.)
The plaintiff sought strict liability damages based on these latent defects ( Id. at p. 292.)
The Grumman court began its analysis stating, "Strict liability is imposed not only where the defective product causes personal injury, but also where the defective product causes physical damage to property.
The damaged property may consist of the product itself. [Citing Seely, International Knights of Wine, Inc. v. Ball Corp. (1980) 110 Cal. App. 3d 1001, 1005 [168 Cal. Rptr. 301] (IKW) and Gherna v. Ford Motor Co., supra, 246 Cal. App. 2d at p. 649.]" ( Grumman, supra, 158 Cal. App. 3d at p. 293, italics added.)
It further noted, however, "where damage consists solely of 'economic losses,' recovery on a theory of products liability is precluded." (Ibid.)
The Grumman court observed, "The line between physical injury to property and economic loss reflects the line of demarcation between tort theory and contract theory." ( Grumman, supra, 158 Cal. App. 3d at p. 294.)
Noting the plaintiff did not claim any physical injury to the busses "apart from the manifestation of the defect itself" (ibid.), it found the expenses the plaintiff had incurred and would incur for repair of the defects was not recoverable in strict liability, which "presupposes (1) a defect and (2) further damage to plaintiff's property caused by the defect." (Ibid., original italics.) for lack of the requisite damage to the property apart from the defect, the court concluded the plaintiff's repair costs were "purely economic damages." (Ibid.)