Hawkins Construction Co. v. Matthews Co., Inc. ( 1973 )

McCown, J.,

concurring in part and dissenting in part. •

I concur in much of the discussion and in the result reached in the majority opinion. I dissent from that portion of the opinion which purports to hold that the doctrine of strict liability in tort on the seller of defective products does not extend to the property damage here involved.

In Kohler v. Ford Motor Co., 187 Neb. 428, 191 N. W. 2d 601, this court adopted the doctrine of strict liability in tort on the seller of defective products where personal injuries resulted. The majority opinion now refuses to extend that doctrine to physical damage to the property of the ultimate user or consumer. The basis for that determination misconceives and misinterprets the doctrine of strict product liability in tort.

Section 402A of Restatement, Torts 2d, p. 347, provides in part: “(1) One who sells any product in a defective condition unreasonably dangerous to the user or consumer or to his property is subject to liability for physical harm thereby caused to the ultimate user or consumer, or to his property, if * *

It will be noted that the critical difference rests on the term “physical harm” and not on any distinction between person and property. Every other section of Restatement dealing with areas of strict liability refers to liability for harm to the person, land, or chattels of another. There is no logical or reasonable basis upon which the doctrine of strict liability for defective products can be applied to physical harm caused to a person, and at the same time be denied for physical harm caused to his property.

The distinction which the majority opinion attempts to make treats the damages caused here as being “commercial” or an economic loss of the bargain. The opinion therefore concludes that it is more suitable for handling under warranty provisions and the Uniform Commercial Code. The opinion also attempts to bolster that conclusion by the fact that a fractional share of the damages claimed was for replacement of the scaffold itself. Nevertheless, the entire damage was in the form of physical harm to the property of the plaintiff. There is a clear distinction between a defective condition which causes direct tortious physical harm in the form of damage to the person or property of a user, and a defective condition which causes only a commercial or economic loss resting on warranty and grounded in the U.C.C.

In Seely v. White Motor Co., 63 Cal. 2d 9, 45 Cal. Rptr. 17, 403 P. 2d 145, Chief Justice Traynor, in refusing to apply the doctrine of strict liability to cover economic loss, set out the distinctions which the law has drawn between tort recovery for physical injuries and warranty recovery for economic loss. He said: “The distinction rests, rather, on an understanding of the nature of the responsibility a manufacturer must undertake in distributing his products. He can appropriately be held liable for physical injuries caused by defects by requiring his goods to match a standard of safety defined in terms of conditions that create unreasonable risks of harm. He cannot be held for the level of performance of his products in the consumer’s business unless he agrees that the product was designed to meet the consumer’s demands. A consumer should not be charged at the will of the manufacturer with bearing the risk of physical injury when he buys a product on the market. He can, however, be fairly charged with the risk that the product will not match his economic expectations unless the manufacturer agrees that it will. Even in actions for negligence, a manufacturer’s liability is limited to damages for physical injuries and there is no recovery for economic loss alone. * * * The Restatement of Torts similarly limits strict liability to physical harm to person or property.”

Following a discussion of the Uniform Commercial Code and its application to cases of commercial loss, Chief Justice Traynor said: “Plaintiff contends that, even though the law of warranty governs the economic relations between the parties, the doctrine of strict liability in tort should be extended to govern physical injury to plaintiff’s property, as well as personal injury. We agree with this contention. Physical injury to property is so akin to personal injury that there is no reason to distinguish them.” He refused to apply the doctrine in that case because there was no proof in the trial court that the defect caused the physical damage to the truck involved.

In the case before us the damage was the result of “physical harm” to the plaintiff’s property, which was property other than the defective product. The scaffold itself was leased by the plaintiff. While it also suffered physical harm, that fact ought not alter the situation nor impel the court into a restrictive treatment of the doctrine of strict liability. Particularly is that true here when the plaintiff clearly ought to recover under either theory, and there is no justification for the gratuitous restriction. Physical injury is not limited to persona] injury and physical harm is not merely economic loss. To permit recovery in tort on the basis of strict liability when the user or consumer suffers personal injuries from an accident caused by a defective product but to deny recovery for physical injury to his property suffered in the same occurrence is a distinction inconsistent with the whole body of the law of torts.

Section 402A of Restatement, Torts 2d, p. 347, is a comprehensive and accurate statement of the law of strict tort liability on the seller of defective products. It should be adopted by this court.