Opinion
Civil Action No. 03-5403.
June 1, 2004
MEMORANDUM AND ORDER
While driving a vehicle owned by her employer, Rose Fuel Oil Heating Company, ("Rose Fuel"), Sheila Sullivan was injured when the transmission system malfunctioned and exploded, causing the vehicle to veer out of control and suddenly stop. (Amended Complaint, at ¶¶ 8-9). In the Amended Complaint, Rose Fuel sets forth the following:
As a direct and proximate result of the defective condition of the transmission system and drive mechanism, Plaintiff, Rose Oil Company, suffered the use, convenience and service of said vehicle, economic losses as well as the valuable services of its dedicated and loyal employee Sheila Sullivan, for which Rose Oil Company, demands a sum in excess of Fifty Thousand Dollars ($50,000).
(Amended Complaint, at ¶ 13). Both defendants in this action have filed motions to dismiss Rose Fuel's claims for failure to state a claim upon which relief can be granted.
The Defendants contend that Rose Fuel's claim sounds in tort and products liability, not contract or warranty. Since "Pennsylvania case law holds that negligence and strict liability theories do not apply to disputes involving product malfunction where the only resulting damage is to the product itself," the Defendants argue that Rose Fuel's claim must be dismissed. (Kia's Motion, at 4). In response, Rose Fuel contends that their claim is sufficient to alert the Defendants to both tort and contract based claims. Moreover, Rose Fuel contends that it suffered economic losses beyond those that are limited by Pennsylvania case law to negligence and strict liability causes of action.
With respect to Rose Fuel's first response, that the pleading is sufficient to put the Defendants on notice to both tort and contract based claims, we agree. Although Rose Fuel did not include any reference to a purchase contract or warranty, we do not require talismanic phrases or magical words to alert a defendant to a cause of action. "Our focus is not on the use of magic words rather `the adequacy of the complaint must be judged by examination of the facts pled, and not of the conclusions of law that accompany them.'" Ratti v. Wheeling Pittsburgh Steel Corp., 758 A.2d 695, 706 (Pa.Super. 2000) (quoting Bloom v. DuBois Regional Medical Center, 597 A.2d 671, 677 n. 7 (Pa.Super. 1991)).
Here, the Plaintiffs identified Rose Fuel as the purchaser of the vehicle. (Amended Complaint, at ¶ 5). Rose Fuel seeks certain damages which the Defendants admit are available through contract or warranty claims. (Amended Complaint, at ¶ 13; Kia Motion, at ¶ 14; Cherry Hill Triplex Motion, at ¶ 15). Considering the Amended Complaint in its entirety, we find that the Plaintiffs pleaded sufficient facts to put the Defendants on notice of contract and warranty claims. However, the relief available to Rose Fuel is limited to that available through a contract or warranty action.
Rose Fuel also contends that it has damages in tort that surpass those limited by the "economic loss doctrine." The economic loss doctrine "prohibits plaintiffs from recovering in tort economic losses to which their entitlement flows only from contract." Debbs v. Chrysler Corp., 810 A.2d 137, 164 n. 32 (Pa.Super. 2002) (quoting Werwinski v. Ford Motor Co., 286 F.3d 661 (3d Cir. 2002)). In REM Coal Co. v. Clark Equipment Co., 386 Pa.Super. 401 (1989), a case upon which the Defendants heavily rely, the Pennsylvania Superior Court held that "negligence and strict liability theories do not apply in an action between commercial enterprises involving a product that malfunctions where the only resulting damage is to the product itself." Id, at 412-13. Relying on the Supreme Court's decision in East River S.S. Corp. v. Transamerica Delaval, 476 U.S. 858 (1986), the Superior Court reasoned as follows:
First, tort law's concern for the protection of the public is greatly reduced in [cases involving injury to the product alone]. Since consumers of the product can insure against the loss of the product and its use, there is no need to provide them with the special protection of tort remedies. Second, damage to the product is most naturally understood as a warranty claim. Warranties aim at maintaining product value and quality, which is all a consumer loses when the product is defective in a manner that results only in economic losses. Finally, warranty law is suited to economic loss cases because in such cases, the parties have the opportunity to have set the terms of their agreement regarding product value and quality in advance. The manufacturer may provide limited warranties and reduce the price, or give full warranties at a higher cost. The customer has the ability to negotiate over the terms of the bargain. If the product does not perform according to the agreement, the consumer is made whole by contract damages as limited by the terms of the agreement. This limitation of liability is an entirely appropriate brake on the manufacturer's liability in a case involving only the loss of the bargained for product.REM Coal, at 410-11.
Rose Fuel contends that it has suffered property damage and business losses beyond those that would be remedied by claims under contract and warranty. Specifically, Rose Fuel claimed it suffered a loss of use, convenience and service of the vehicle and the services of its dedicated employee. After reviewing many Pennsylvania cases discussing the economic loss doctrine, we conclude that the types of losses Rose Fuel alleges are exactly those barred in tort by the economic loss doctrine.
In Teledyne Technologies, Inc. v. Freedom Forge Corp., 2002 WL 748898 (C.C.Pl. Apr. 19, 2002), the court concluded that Teledyne's cost for the recall, testing, and replacement of aircraft engines due to the improper chemical composition of the steel provided by Freedom Forge was an economic loss barred from tort recovery by the economic loss doctrine. In its discussion, the court reviewed the types of losses that the Pennsylvania courts had recognized as barred in tort by the economic loss doctrine. The list included: "the plaintiff's lost profits, gross earnings, credits to consumers, business interruption, cost of repair, interest on additional loans taken by the plaintiff, cost of price reduction to recapture customers, damage to goodwill and damage to reputation." Id (quoting Ready Food Products v. APV Crepaco, 28 Phila. Co. Rptr. 194, 203 (C.P. Phila. August 10, 1994)).
Most recently, in discussing the damages available in a negligence action involving a chlorine leak at a water pumping station, see Duquesne Light Co. v. Pennsylvania American Water Co., 2004 WL 1049453 (Pa.Super. May 11, 2004), the Superior Court found that the Plaintiff's costs in obtaining electricity from a different source (to supply to its customers) and the medical expenses incurred by Plaintiff's employees were barred in tort by the economic loss doctrine. Thus, it is clear that the Pennsylvania courts consider costs due to business interruption to be barred by the economic loss doctrine.
Here, the inconvenience due to the loss of the use of the vehicle and the loss of service of the employee are akin to business interruptions. The only loss the business would suffer from the employee's absence and the repair of the vehicle are interruptions to its business or customer service. The Pennsylvania courts have held that such damages are not recoverable in tort.
An appropriate Order follows.