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Product Liability


Update by Leslie Hayes Russo


Leslie Hayes Russo received her law degree from the Columbia School of Law at Catholic University, where she was a member of the Law Review. She served as law clerk to Hon. Theodore G. Bloom of the Court of Special Appeals (retired). Ms. Russo has previously served as legislative assistant and speechwriter to U.S. Senator Patrick J. Leahy and clerk to Hon. Ronald J. Wortheim, D.C. Superior Court. Her recent publications include, “Final Judgments and Interlocutory Appeals, “Appellate Practice for the Maryland Lawyer: State and Federal” (1st Ed. 1994 & 2nd Ed. 2001, MICPEL), “Can We Appeal Now?”, Trial Reporter, Summer 2000, “Brewster v. Woodhaven Building and Development: Immediate Appeals Now Permitted of Orders Transferring Circuit Court Actions for Improper Venue,” Trial Reporter Fall 2000. Ms. Russo is the Chair of MTLA’s recently formed Publication Committee. Of Counsel to Israelson, Salsbury, Clements & Bekman, L.L.C., Ms. Russo concentrates her trial and appellate practice on civil litigation, with an emphasis on personal injury.


FORD MOTOR SALES v. GENERAL ACCIDENT INSURANCE: IN ACTION INVOLVING ECONOMIC LOSSES ONLY, COURT OF APPEALS HOLDS PROOF OF DEFECT NECESSARY FOR BREACH OF IMPLIED WARRANTY OF MER- CHANTABILITY. SELLER’S KNOWLEDGE OF NON-ORDINARY PURPOSE HELD NECESSARY FOR BREACH OF WARRANTY FOR A PARTICULAR PURPOSE, CREATING “NEAR REQUIREMENT OF DIRECT DEALING, IF NOT ACTUAL PRIVITY”


Insurance Co.,1


In Ford Motor Sales v. General Accident the Court of Appeals held


that to prevail on a claim of breach of the implied warranty of merchantability un- der Section 2-3142


of the Maryland


Commercial Law Article (“Commercial Code”), the party asserting the breach must prove that the product was defec- tive at the time it left the manufacturer. 3 The Court of Appeals further held that a party asserting a claim for breach of the implied warranty of fitness for a particu- lar purpose under Section 2-315 4


of the


1 365 Md. 321, 779 A.2d 362 (2001). 2


Commercial Code is required to prove: (1) that the seller knew of the buyer’s particular purpose; (2) the seller had rea- son to know that the buyer was relying on the seller’s skill or judgment to furnish the appropriate goods; and (3) that the buyer relied upon the seller’s skill or judg- ment. As a practical matter, the Court noted that the need to establish specific knowledge on the part of the seller cre- ated a “near requirement of direct dealing, if not actual privity.”5


In the case before


Section 2-314 of the Commercial Code de- fines implied warranty of merchantability. It provides, in relevant pertinent part, as follows: (1) Unless excluded or modified (§2-316), a warranty that the goods shall be merchant- able is implied in a contract for their sale if the seller is a merchant with respect to goods of that kind.


(2) Goods to be merchantable must be at least as such as... (c) Are fit for the ordinary purposes for which such goods are used[.]


* * * 9


Md. Comm. Law Code Ann. (1997 Repl. Vol & Supp.) §2-314.


3 Ford Motor, 365 Md. at 333, 779 A.2d at 369. 4


Section 2-315 of the Commercial Code pro- vides, in pertinent part, as follows: (1) Where the seller at the time of contracting has reason to know any particular purpose for which the goods are required and that the buyer is relying on the seller’s skill or judg- ment to select or furnish suitable goods, there is unless excluded or modified under the next section an implied warranty that the goods shall be fit for such purpose [.]


4 10


Md. Comm. Law Code Ann. (1997 Repl. Vol. & Supp.), §2-315.


5 Ford Motor, 365 Md. at 343, 779 A.2d at 375. 6 Id. at 346-50, 779 A.2d at 377-79.


7


International is periodically referred to by its trade name, Montrose Towing, in the Court’s opinion. Id. at 322-23, 779 A.2d at 363.


Trial Reporter


it, the Court determined that there was insufficient evidence of the seller’s requi- site knowledge to support a claim for breach of implied warranty of fitness for a particular purpose because the plaintiff did not directly purchase the product from the manufacturer and had no direct deal- ings with it.6 In Ford Motor, International Motors, Inc. (“International”)7


purchased from


Elzenheimer Chevrolet a 1995 Ford F- 350 base chassis cab which Elzenheimer


had converted8 to a tow truck.9 Interna-


tional insured the truck with General Accident Insurance Company (“General Accident”). The tow truck was declared a total loss by General Accident after it caught fire as International’s operator was preparing to tow a vehicle.10


The flames


came from under the hood on the pas- senger side of the vehicle.11


After General


Accident paid International, it sought re- imbursement from Ford as manufacturer of the chassis cab truck. Ford denied the claim.12


and breaches of express and implied warranties under the Commercial Code.


gation claim against Ford in the Circuit Court for Montgomery County bringing actions, inter alia, for negligence, strict liability based on a manufacturing de- fect,13


8


A chassis cab truck has a frame and a cab that contain the usual interior devices found in a truck. The rear of the truck, however, is only a drive train. Chassis cab trucks are usually modified into other types of trucks. Id. at 324 n.l, 779 A.2d at 363 n.l.


Elzenheimer added a towing bar, boom tow sling, light illumination bar along the body of the truck, two-way radio, three-switch elec- trical panel inside the passenger cab, and power take-off controls on the transmission hump. Id. at 324-25, 779 A.2d at 364.


At the time of the occurrence, the truck had 27,600 miles on its odometer. Id. at 325, 779 A.2d at 364.


11Id. at 325-26, 779 A.2d at 364. 12Id. at 326, 779 A.2d at 365.


13


General Accident abandoned its manufactur- ing defect claims and later claimed that a de- sign defect in the Ford vehicle caused the fire. Id. at 326-27, 779 A.2d at 365.


Winter 2003 General Accident filed a subro-


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