No. 2572 Philadelphia 1981, Appeal from the Judgment Nunc Pro Tunc of March 16, 1982, Court of Common Pleas, Philadelphia County, Civil Trial Division, at No. 3278 June Term 1978.
Arnold M. Kessler, Philadelphia, for appellants.
Francis F. Quinn, Philadelphia, for appellee.
Hester, Cirillo and Johnson, JJ. Hester, J., files a dissenting opinion.
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The question before this court is whether Pennsylvania courts should recognize a claim in strict liability*fn1 for recovery
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of economic losses,*fn2 where the injury is only in the deterioration of the product itself, and is not the result of a defect causing some untoward occurrence thereby damaging the product.
In September 1971 Avis Rent A Car System, Inc. purchased a certain number of trucks from International Harvester Co. In October 1971 the appellant corporations, Industrial Uniform Rental Co., Inc. and Stork Diaper Service, Inc., leased the trucks from Avis for use in their business. Then in October 1974 the appellant corporations purchased these same trucks from Avis.
In December 1972 two of these trucks had allegedly developed cracks and failures in the frames, which were repaired by Avis. Then, after the 1974 purchase of the trucks, twelve more trucks allegedly developed cracks and failures in the frames. These cracks were repaired by the appellant corporations.
In June of 1978 the appellant corporations commenced this suit in trespass against International Harvester, the manufacturer of the trucks, alleging negligent design, manufacture and sale of the trucks, and requesting damages for the cost of the repairs to the trucks. In its answer, under New Matter, International Harvester raised the bar of the statute of limitations, which the appellants denied in their reply, alleging that this being a "property damage" claim it was within the statute of limitation for trespass actions.
A certain amount of discovery was undertaken until March 1981 when International Harvester filed a motion for summary judgment, arguing that the appellants' claim was solely for economic losses, that the allegations in the complaint
[ 317 Pa. Super. Page 68]
that the trucks were defective, poorly designed and not adequate for their contemplated use, sounded in breach of warranty, and that therefore the action was barred by section 2-275 of the Uniform Commercial Code (UCC).*fn3
In answer to the motion for summary judgment, the appellants argued inter alia that their claim for damages included not only repairs to the trucks but also a "diminution in use expectancy," and that their claim was indeed a tort action. In their memorandum of law in support of their answer the appellants raised for the first time the question of section 402A of the Restatement (Second) of Torts, asserting that Pennsylvania law supported their action "under 402A and in negligence against the manufacturer of trucks where defects cause damages sustained."
The trial court in its opinion stated that the uncontradicted evidence established that the plaintiffs were seeking damages for defects of quality evidenced by internal deterioration or breakdown which constituted economic loss not recoverable in a claim under strict liability, and granted the motion for summary judgment.
On appeal to this court the appellant purchasers of the trucks assert that the (unspecified) defects in the trucks brought about the cracking and caused damages to the trucks, thus creating a cause of action for "property damage" under section 402A of the Restatement (Second) of Torts.
We believe, on the contrary, that the claim in this case is precisely the type of claim envisaged by the UCC. See 13 Pa.C.S.A. § 2714, which provides:
§ 2714. Damages of buyer for breach in regard to accepted goods
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(a) Damages for nonconformity of tender. -- Where the buyer has accepted goods and given notification (section 2607(c)) he may recover as damages for any nonconformity of tender the loss resulting in the ordinary course of events from the breach of the seller as determined in any manner which is reasonable.
(b) Measure of damages for breach of warranty. -- The measure of damages for breach of warranty is the difference at the time and place of acceptance between the value of the goods accepted and the value they would have if they had been as warranted, unless special circumstances show proximate damages of a different amount.
(c) Incidental and consequential damages. -- In a proper case any incidental and consequential damages under section 2715 (relating to incidental and consequential damages of buyer) may also be recovered.
We do not agree with appellants that the facts of this case call for the application of Section 402A of the Restatement (Second) of Torts,*fn4 which provides:
§ 402A. Special Liability of Seller of Product for Physical Harm to User or Consumer
(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
(a) the seller is engaged in the business of selling such a product, and
(b) it is expected to and does reach the user or consumer without substantial change in the condition in which it is sold.
(2) The rule stated in Subsection (1) applies although
(a) the seller has exercised all possible care in the preparation and sale ...