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Donegal Mutual Insurance Co. v. Electrolux North America

August 10, 2010

DONEGAL MUTUAL INSURANCE COMPANY A/S/O VANESSA SCHANTZ, PLAINTIFF,
v.
ELECTROLUX NORTH AMERICA, DEFENDANT



The opinion of the court was delivered by: Chief Judge Kane

MEMORANDUM

Pending before the Court is Defendant Electrolux North America's motion for partial summary judgment as to Plaintiff Donegal Mutual Insurance Company's strict liability claim. (Doc. No. 57.) For the following reasons, the motion will be denied.

I. Discussion

Plaintiff Donegal Mutual Insurance Company ("Donegal") has instituted this subrogation action against Defendant Electrolux North America ("Electrolux") for a fire that occurred in November 2006, involving a dryer manufactured by Electrolux. Donegal alleges that the electric clothes dryer was defective and caused a fire in the home of Donegal's insured, Vanessa Schantz. The dryer at issue, Model MDE116REW0, was manufactured in April 1996 by Electrolux and was approximately ten years old at the time of the fire. Schantz testified that she never had any problems with the dryer and she never had to call for service for the dryer. One month prior to the fire, Schantz heard a squeaking noise occasionally coming from the dryer.

Donegal has asserted causes of action sounding in negligence, strict liability, and warranty/breach of contract. Electrolux has moved for summary judgment solely as to Donegal's strict liability claim. On June 23, 2010, the Court held a hearing to allow the parties to present oral argument as to the pending motion.

Both parties agree as to the governing law in this case. In Pennsylvania, the court must, in a strict liability claim, "determine, initially and as a matter of law, whether the product in question is 'unreasonably dangerous.'" Riley v. Becton Dickinson Vascular Access, Inc., 913 F. Supp. 879, 881 (E.D. Pa. 1995) (citations omitted); see also Webb v. Zern, 220 A.2d 853, 854 (1966) (adopting Restatement (Second) of Torts § 402A). In making such a determination, the Court engages in "a risk utility analysis, weighing a product's harms against its social utility." Surace v. Caterpillar, Inc., 111 F.3d 1039, 1044 (3d Cir. 1997) (citations omitted). Viewing the evidence in the light most favorable to the plaintiff, the Court determines "whether the evidence is sufficient for purposes of the threshold risk-utility analysis, to conclude as a matter of law that the product was not unreasonably dangerous, not whether the evidence creates a genuine issue of fact for the jury." Id. at 1049 n.10. "If the judge determines as a matter of law 'that the risk-utility balance so favor[s] the manufacturer that the [product] could not be deemed unreasonably dangerous' then the claim does not go to the jury." Kagan v. Harley Davidson, Inc., No. 07-0694, 2008 WL 3874824, at *5 (E.D. Pa. Aug. 20, 2008) (quoting Surace, 111 F.3d at 1048).

The Court's risk utility analysis considers seven different factors to determine whether a product is unreasonably dangerous.*fn1 These factors include:

(1) The usefulness and desirability of the product-its utility to the user and to the public as a whole; (2) The safety aspects of the product-the likelihood that it will cause injury, and the probable seriousness of the injury; (3) The availability of a substitute product which would meet the same need and not be as unsafe; (4) The manufacturer's ability to eliminate the unsafe character of the product without impairing its usefulness or making it too expensive to maintain its utility; (5) The user's ability to avoid danger by the exercise of care in the use of the product; (6) The user's anticipated awareness of the dangers inherent in the product and their avoidability, because of general public knowledge of the obvious condition of the product, or of the existence of suitable warnings or instruction; and (7) The feasibility, on the part of the manufacturer, of spreading the loss of [sic] setting the price of the product or carrying liability insurance.

Surace, 111 F.3d at 1046 (citations omitted).

A. The Usefulness and Desirability of the Product--Its Utility to the User and to the Public as a Whole

The parties agree that the first factor weighs in favor of Electrolux, as Donegal concedes that the device at issue had a high utility to its users.

B. The Safety Aspects of a Product--the Likelihood that it Will Cause Injury, and the Probable Seriousness of the Injury

In regard to the second factor, Electrolux point to its own statistical analysis prepared by its experts, which is attached to its motion as Exhibit "C." According to the analysis, "[f]or the U.S., using any model of clothes dryer from any manufacturer, the estimated annual risk of a clothes dryer fire is 1.76 fires per 10,000 dryers." (Ex. C at 6.) For Electrolux dryers, "the estimated annual risk is 0.26 fires reported per 10,000 Electrolux dryers." (Id.) "The annual risk for all clothes dryers is seven times greater than the risk of a reported fire for Electrolux clothes dryers." (Id.) According to Electrolux, this data "demonstrates that Electrolux clothes dryers do not pose an elevated risk of fire compared with other clothes dryers and thus are not an unreasonably dangerous product." (Doc. No. 57 ¶ 49.) In response, Donegal asserts that Electrolux's expert has performed "statistical sophistry," because Electrolux has not produced information specifically pertaining to the dryer model at issue and because a number of claims may never have been reported to the National Fire Incident Reporting System upon which Electrolux's experts relied. (Doc. No. 73 at 9-10.) Donegal also points out that Electrolux does not address the second part of this factor, "the probable seriousness of the injury if failure occurs," which in the case of house fires is significant. (Id. at 11-12.)

The Court finds Donegal's position persuasive. Electrolux has not produced any information regarding the actual number of dryers that were produced of the specific model at issue. Without such a number, the Court is without the proper information to consider the statistical rate of injury from the design at issue. Furthermore, the second part of this factor weighs in Donegal's favor, as the ...


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