Opinion
January 27, 1989.
Present: Turcotte, P.J., Dohoney Lenhoff, JJ.
Negligence, In manufacture of water heater. Contract, Sale of water heater; Rental of water heater to homeowner; Breach of warranty.
Report of court's affirmance of judgment for defendant Berkshire Gas Company and entry of judgment for codefendant A.O. Smith Company. Action heard in the Central Berkshire Division by Ferris, J.
David A. Carey for the plaintiff.
John A. Agostini for defendant Berkshire Gas Company.
David W. Murphy, Jr. for defendant A.O. Smith Corporation.
The plaintiff's insurance company was subrogated to the rights of a damaged homeowner and brought this action on an amended complaint of three counts. One count alleged the defendant, A.O. Smith (Smith) breached warranties arising out of the sale of a hot water heater to Berkshire Gas Company (Berkshire) and another alleged Smith was negligent in the manufacture of the heater. A final count alleged breach of warranty by Berkshire in its rental of the heater to the homeowner. The case was presented to the Trial Justice with written stipulations of all the facts. He found for the plaintiff on both warranty counts for $6175.00 and for the defendant Smith on the negligence count. Both defendants requested a report.
The parties have agreed that this is the correct amount.
The defendant Berkshire had filed a crossclaim against defendant Smith and Smith counterclaimed against Berkshire. The judge found against Berkshire on its crossclaim and against Smith on its counterclaim. The report does not identify the errors claimed but the briefs and argument of all parties make it clear the only errors now claimed are the awards on the warranty counts.
We are in the same position as the Trial Justice where there is a case stated, the only question being whether the decision on the warranty counts "was right on the facts stated and proper inferences therefrom." Rock v. Pittsfield, 316 Mass. 348 (1944), G.L. 231, § 110. The facts stated are a hot water heater was manufactured by Smith and at some unknown time was sold to Berkshire. The heater has an internal steel tank suspended in a metal frame for support. The tank is glasslined and connected to a cold water intake pipe, and a hot water discharge pipe. The tank is not visible unless a coating of insulation is removed. Inside the tank a magnesium rod runs its length, the purpose of the rod to retard rust and corrosion. A burner supplies heat at the bottom of the tank.
On Oct. 3, 1980, the homeowner entered into an agreement renting the heater on a month-to-month basis with a right to purchase from Berkshire. The heater was installed properly and, thereafter, operated properly. There was no evidence of damage to the heater. On August 5, 1984 the heater leaked, flooded the basement and caused the agreed damage. It was observed that the leak was from the heater itself and not the intake or discharge plumbing. The lease provides that: "The Company shall at its expense maintain the appliance in efficient operating condition. . . . The customer further agrees not to remove, transfer, tamper, deface, adjust or repair the appliance, or to permit the same, without the permission of the Company. The Company shall at all reasonable times, have access to the premises for the purpose of inspecting and maintaining the appliances."
The plaintiff argues that these facts support the finding that the manufacturer Smith breached its implied warranty of merchantability since the heater was not fit for the ordinary purposes for which such goods are used. G.L. 106, § 2-314, § 2-318. The plaintiff must prove on the count against the manufacturer and against the lessor that there was a defective condition and that it existed at a particular time. In the case of Smith, the plaintiff was required to have a defect at the time of the sale to Berkshire. Walsh v. Atamian Motors, Inc. 10 Mass. App. Ct. 828 (1980). On that date, Smith lost control of the heater, and thereafter is liable only for a defect in existence before it lost control. The plaintiff has not proven the date of sale to Berkshire or whether there was any defect before Smith lost control. We find for the defendant Smith on that count.
A lessor may be liable for breach of an implied warranty of merchantability. G.L. § 2-318. It has been held that the defective condition must be proved to exist when the lessor loses control of the product either at the date of the lease or the date of renewal. Brimbau v. Ausdale Equipment Rental Corp., 440 A.2d 1292 (R.I. 1982). Under the terms of this lease unlike a sale or other leases where control passes at some particular time, the lessor retains control of adjustment, repair, maintenance and inspection throughout the lease and its renewals. We hold that under the provisions of this lease the plaintiff must prove the defective condition existed on the date the damage occurred. The heater has no moving parts and suddenly began leaking. An event such as this without explanation was itself evidence of a defective condition. McCabe v. L.K. Liggett Drug Co. 330 Mass. 117 (1953).
The judgment as to Berkshire is affirmed and judgment is to enter for the defendant Smith.
Judgments on cross claim and counterclaim are affirmed.