Mark Merfeld; Debra Merfeld; Merfeld Transport, Inc. Plaintiffs - Appellants/Cross-Appellees
v.
Dometic Corporation Defendant-Appellee/Cross-Appellant
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
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