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From Products Liability Law Daily, October 2, 2013

NJPLA subsumes all but express warranty claims against makers of defective refrigerator/freezer

By Pamela C. Maloney, J.D.

The New Jersey Products Liability Act (NJPLA) subsumes all claims arising out of a defective product except for breach of express warranty claims; therefore, an insurance company’s claims for strict liability, negligence, breach of duty of care and breach of implied warranties against companies that manufactured, designed and or packaged an allegedly defective refrigerator/freezer were dismissed by the U.S. District Court for the District of New Jersey (Certain Underwriters at Lloyd’s, London v. U-Line Corp., October 1, 2013, Hillman, N.). The court ultimately dismissed the insurance company’s NJPLA and breach of express warranty claims as well because of deficiencies in the pleadings.

Background. An insurance company, Certain Underwriters at Lloyd’s, London, sought to recover payments made by insured homeowners for damages caused by a refrigerator/freezer that malfunctioned and released water into the insureds’ home. The insurance company filed a claim under the NJPLA, as well as claims based on strict liability, negligence, breach of duty of care, and breach of express and implied warranties against U-Line Corporation and Nidec Motor Corporation, the companies that allegedly manufactured, designed, and/or packaged the appliance. The companies moved to dismiss, arguing that the insurance company’s NJPLA claim subsumed all other claims except the breach of express warranty claim, and that the NJPLA and breach of express warranty claims were not pleaded properly.

Scope of NJPLA. The purpose of the NJPLA is to establish one unified statutorily defined theory of recovery for harm caused by a product, the court explained. The Act defines a product liability action as “any claim or action brought by a claimant for harm caused by a product, irrespective of the theory underlying the claim, except actions for harm caused by breach of an express warranty.” Based on this definition, the NJPLA provides the exclusive method available to the insurance company to pursue claims alleging that the refrigerator/freezer malfunctioned; that the malfunction was caused by the defective design, manufacture, and/or packaging of the appliance; and that the malfunction caused physical damage to the premises.

Although the insured agreed that some of its claims must proceed under the NJPLA, it argued that the NJPLA does not cover the homeowners’ loss of the cost of the refrigerator/freezer (which was explicitly excluded from coverage under the NJPLA) or the homeowners’ loss of the use of their home as a result of the water damage caused by the defective appliance. In rejecting these arguments, the court found that the insurance company failed to specify which of its claims served as a basis for recovery for the cost of the appliance or the loss of use of the house. The insurance company was required to explain why the NJPLA did not cover these losses and to provide a specific legal cause of action that would provide a remedy for those losses if the NJPLA and breach of express warranty claim did not.

Sufficiency of pleadings. Unfortunately, the insured’s NJPLA and breach of express warranty claims failed to meet the court’s notice pleading requirements. The complaint provided sufficient notice regarding the specific product that malfunctioned, when it malfunctioned, and what damages the malfunction caused. However, the complaint failed to identify the relationship between the two companies and the appliance. The insurance company simply stated that the two companies designed, manufactured, and/or packaged the product but it did not identify what role each company played in those processes and how each was involved in the alleged malfunction. With respect to the breach of express warranty claim, the insurance company failed to identify which company provided an express warranty and whether that company had breached the warranty. Therefore, the insurance company’s two surviving claims must be dismissed.

The case number is: 13-2303 (NHL/AMD).

Attorneys: Christopher Philip Leise (White & Williams, LLP) for Certain Underwriters at Lloyd's, London. Bertrand C. Harry (Styliades, Jackson & Burghardt) for U-Line Corp. John Michael Kunsch (Sweeney and Sheehan) for Nidec Motor Corp.

Companies: Certain Underwriters at Lloyd's, London; U-Line Corp.; Nidec Motor Corp.

MainStory: TopStory DesignManufacturingNews HouseholdProductsNews NewJerseyNews

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