Merfeld v. Dometic Corp.

          Submitted: June 12, 2019

          Appeals from United States District Court for the Northern District of Iowa - Waterloo

          Before LOKEN, KELLY, and ERICKSON, Circuit Judges.

          LOKEN, CIRCUIT JUDGE

         This diversity action arose from a fire in 2014 that extensively damaged a storage building and personal property owned by Mark and Debra Merfeld, including a 2003 Forest River Cardinal RV the Merfelds purchased in 2005 and stored in the building. The Merfelds sued Dometic Corporation ("Dometic"), alleging that the fire was caused by a defective Dometic refrigerator installed in the RV when it was manufactured by Forest River. The district court^[1] granted Dometic summary judgment, concluding that, because Dometic sold but did not manufacture, design, or assemble the refrigerator, it is immune from liability under Iowa Code § 613.18, which provides in relevant part:

1. A person who is not the assembler, designer, or manufacturer, and who wholesales, retails, distributes, or otherwise sells a product is:

a. Immune from any suit based upon strict liability in tort or breach of implied warranty of merchantability which arises solely from an alleged defect in the original design or manufacture of the product.

         The Merfelds appeal, arguing that genuine issues of material fact exist as to whether Dometic was the manufacturer or the designer of the RV's refrigerator. Dometic cross appeals the district court's decision not to dismiss the Merfelds's claims for spoliation of evidence. Reviewing the grant of summary judgment de novo and the evidence in the light most favorable to the Merfelds, we affirm. See Robinson v. Terex Corp., 439 F.3d 465, 467 (8th Cir. 2006) (standard of review).

         I. The Negligent Manufacturing Claim.

         It is undisputed that Dometic, a North American company, purchased refrigerators manufactured in Sweden by Dometic AB, a Swedish company, for resale in North America until manufacturing operations were shifted to Dometic's United States facility in 2009. The Merfelds' attorney submitted a Forest River invoice dated June 3, 2002 reflecting the initial sale of the Forest River Cardinal RV. The invoice listed an eight cubic foot refrigerator as one RV option, with a hand-written notation of a model number that matched a model included in a 2006 recall of certain Dometic refrigerators.^[2] Thus, the district court concluded, Dometic was "not the manufacturer" of this product within the meaning of Iowa Code § 613.18(1)(a). The Merfelds contend the court erred in granting summary judgment dismissing their negligent manufacturing claim.

         First, the Merfelds argue, Dometic's 2006 representation to the National Highway Traffic Safety Administration that it had filed a notice of potential safety-related defect regarding refrigerators which it "manufactured and sold in the United States," and its 2007 notice to customers warning of a defect in certain refrigerators "it manufactured" and advising that a "rework kit" would soon be available, were admissions creating a genuine fact issue as to whether Dometic manufactured the refrigerator at issue. The district court concluded that those statements were not sufficient to create a genuine issue of material fact absent "evidence that Dometic actually had a role in the manufacturing process before 2009." Given the responsibilities of Dometic as U.S. distributor in a safety-related recall of imported products, we agree.

         The Merfelds further argue that, even if Dometic was not the actual manufacturer, it cannot claim § 613.18 immunity if a jury finds it was the apparent manufacturer of the refrigerator. The apparent manufacturer doctrine arose before the doctrine of strict product liability and is reflected in Restatement (Second) of Torts § 400: "One who puts out as his own product a chattel manufactured by another is subject to the same liability as though he were its manufacturer." See generally Hebel v. Sherman Equip., 442 N.E.2d 199, 200-02 (Ill. 1982). More than fifty years ago, the Supreme Court of Iowa said that Restatement § 400 was adopted in earlier cases. Tice v. Wilmington Chem. Corp., 141 N.W.2d 616, 628 (Iowa 1966).

         "The Iowa Supreme Court has never revisited the apparent manufacturer doctrine, and it is . . . unclear if it even remains cognizable under Iowa law," Allianz Global Corp. v. Watts Regulator Co., No. 4:14-CV-00253, 2016 WL 4435094, at *5 n.2 (S.D. Iowa Apr. 7, 2016). Many jurisdictions have declined to adopt the doctrine. Notably, some courts have concluded that the broad Restatement doctrine is inconsistent with state statutes such as Iowa Code § 613.18(1)(a) that limit the liability of a non-manufacturing middleman for negligent manufacturing claims. See Bornsen v. Pragotrade, LLC., 804 N.W.2d 55, 59-62 (N.D. 2011) (North Dakota law); Rushing v. Ferlage Marine Co., No. 3:08-CV-00531, 2011 WL 4538075, at *3 (W.D. Ky. Sept. 29, 2011) (Kentucky law). Moreover, the facts in Tice and the earlier cases cited presented factually strong claims for manufacturer liability.

         The district court concluded that the apparent manufacturer doctrine "is not viable under Iowa law" because the plain meaning of the word "manufacturer" in Iowa Code § 613.18 "does not encompass a non-manufacturer that holds itself out as being the manufacturer." We are inclined to agree, but this unresolved question of Iowa law is not free from doubt. However, even if the Supreme Court of Iowa would preserve some role for the doctrine in negligent manufacturing cases, we conclude that the Merfelds failed to provide sufficient ...