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Red Rose Transit Authority v. North American Bus Industries

January 16, 2013

RED ROSE TRANSIT AUTHORITY,
PLAINTIFF
v.
NORTH AMERICAN BUS INDUSTRIES, DEFENDANT



The opinion of the court was delivered by: Stengel, J.

MEMORANDUM

In this diversity action, Red Rose Transit Authority brings claims against North American Bus Industries for negligence, strict liability, and breach of warranty stemming from a fire which destroyed a bus, damaged other buses, and damaged the plaintiff's garage. The defendant's motion for partial summary judgment raises the economic loss doctrine as a defense. For the reasons that follow, I will grant the motion.

I. BACKGROUND

Red Rose Transit Authority is a municipal transportation authority with its principal offices in Lancaster, Pennsylvania. North American Bus Industries is a bus manufacturer located in Alabama which purchased certain bus manufacturing assets and liabilities from several companies, including those of its former co-defendants.*fn1 The defendant is engaged in the business of designing, manufacturing, and selling mass transit buses, including the branded name of "Opus Coach."

On July 11, 2002, the plaintiff accepted bids for the purchase of passenger buses as part of a multi-year vehicle purchase. About a week later, the bid for a 30/35 foot transit bus was awarded to Chance Coach, Inc., whose assets and liabilities were subsequently transferred to Defendant North American Bus Industries. A contract was entered into on October 2, 2002 between the plaintiff and Chance Coach. On May 5, 2003, the plaintiff received a shipment of vehicles pursuant to that contract, including the Opus Coach bus referred to here as "Bus #135.

On June 14, 2009, at one o'clock in the morning, a fire started on Bus #135 while it was parked for the night in the plaintiff's garage. Thirty-four other buses were parked there as well. Twenty minutes later, the Lancaster City Fire Department arrived and found Bus #135 on fire with soot and smoke covering the garage and all the other buses.

An investigation determined that the origin of the fire was within the battery compartment located beneath the driver's seat. Apparently, a twenty-four volt battery cable shorted to ground on a steel battery tray structural member and also to a battery clamp bolt. The electrical shorting resulted in sparking that then ignited other combustible materials housed within the battery compartment of the bus causing the fire. For our purposes here, the battery compartment and associated equipment were designed, manufactured, and assembled by the defendant. Red Rose seeks to recover damages on one count of negligence, one count of strict liability, and one count of breach of warranty.

II. STANDARD OF REVIEW

A court shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law. FED.R.CIV.P. 56(a). A dispute is "genuine" if the evidence is such that a reasonable jury could return a verdict for the non-moving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A factual dispute is "material" if it might affect the outcome of the case under governing law. Id.

A party seeking summary judgment always bears the initial responsibility for informing the court of the basis for its motion and identifying those portions of the record that it believes demonstrate the absence of a genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). Where the non-moving party bears the burden of proof on a particular issue at trial, the movant's initial Celotex burden can be met simply by "pointing out to the district court that there is an absence of evidence to support the non-moving party's case." Id. at 325. A party asserting that a fact cannot be or is genuinely disputed must support the assertion by: citing to particular parts of materials in the record, including depositions, documents, electronically stored information, affidavits or declarations, stipulations, admissions, interrogatory answers or other materials. FED.R.CIV.P. 56(c)(1)(A). That is, summary judgment is appropriate if the non-moving party fails to rebut by making a factual showing "sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial." Celotex Corp. v. Catrett, 477 U.S. at 322. Under Rule 56, the court must view the evidence presented on the motion in the light most favorable to the opposing party. Anderson v. Liberty Lobby, Inc., 477 U.S. at 255. The court must decide not whether the evidence unmistakably favors one side or the other but whether a fair-minded jury could return a verdict for the plaintiff on the evidence presented. Id. at 252. If the non-moving party has exceeded the mere scintilla of evidence threshold and has offered a genuine issue of material fact, then the court cannot credit the movant's version of events against the opponent, even if the quantity of the movant's evidence far outweighs that of its opponent. Big Apple BMW, Inc. v. BMW of North America, Inc., 974 F.2d 1358, 1363 (3d Cir. 1992).

III. DISCUSSION

The plaintiff seeks to recover damages for the total destruction of Bus #135, for the repair of the other buses involved, and for the repair to the structure and contents of the garage where the buses were housed at the time of the fire. The defendant contends the economic loss doctrine limits the damages to contract remedies for damage to Bus #135. Further, the defendant raises the statute of limitations, and seeks to limit the plaintiff's claims to damage to property other than Bus #135.

A. Economic Loss Doctrine

The economic loss doctrine prohibits plaintiffs from recovering in tort economic losses which flow from a breach of contract. Werwinski v. Ford Motor Co., 286 F.3d 661, 671 (3d Cir. 2002). The doctrine is typically invoked in cases ...


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