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11/19/87 PRAIRIE PRODUCTION v. AGCHEM

Filed: November 19, 1987.

PRAIRIE PRODUCTION, INC., APPELLANT, (PLAINTIFF BELOW),
v.
AGCHEM DIVISION-PENNWALT CORPORATION AND MBM HELICOPTER SERVICE, INC., APPELLEES, (DEFENDANTS BELOW)



APPEAL FROM THE FOUNTAIN CIRCUIT COURT, The Honorable Vincent F. Grogg, Judge, CAUSE NO. 85-C-142.

Robertson, J., Ratliff, C. J. And Neal, J. Concur.

Author: Robertson

ROBERTSON, J.

Appellant-plaintiff Prairie Production, Inc. (PPI) appeals from the trial court's entry of summary judgment in favor of appellee-defendant Agchem Division-Pennwalt Corp. (Pennwalt). MBM Helicopter Service is not a party to this appeal.

We affirm in part and reverse in part.

PPI is a seed growing company in Indiana. Around August 15, 1984, the president of PPI, Stephen Ratcliff, spoke with John Townsend of MBM about the infestation of corn earworms in PPI's seed corn crop. MBM applies pesticides by helicopter to crops. In their Discussion regarding the product which MBM should apply, Townsend suggested the use of Penncap-M, a micro-encapsulated pesticide manufactured by Pennwalt. Penncap-M is a restricted use pesticide which may only be sold to, and applied by, licensed applicators such as Townsend.

Townsend had received product information about Penncap-M from Pennwalt in the past. Included in this information was a label update, describing the pests for which the product was effective. The label stated that Penncap-M was effective against corn earworms. After his conversation with PPI's Ratcliff, Townsend contacted Bill Smith, a sales representative for Pennwalt, to discuss the use of Penncap-M in reducing corn earworms. Smith informed Townsend of expected "kill" percentages of corn earworms with Penncap-M. Townsend then told Ratcliff what Smith had represented. Pennwalt also disseminated information about Penncap-M and its effectiveness by way of sample labels, brochures, and written advertisements appearing in trade magazines, including Seedmen's Digest. This information was sent to growers and farmers as well as to applicators, and stated that Penncap-M was effective against corn earworms.

MBM sprayed PPI's growing seed corn with Penncap-M on August 18, 1984 and again on August 20, 1984. MBM billed PPI for the application and for the Penncap-M. Subsequently, PPI lost a portion of its seed corn crop to corn earworms.

PPI's complaint against Pennwalt and MBM read in three counts, alleging breach of express warranties, breach of implied warranties and negligence of Pennwalt in the manufacture, sale, labeling and distribution of Penncap-M. PPI is seeking damages solely for loss of profits occasioned by the failure of Penncap-M to control corn earworms.

The trial court granted Pennwalt's motion for summary judgment, finding that there was no privity of contract between PPI and Pennwalt with respect to the sale of Penncap-M and concluding that PPI did not have a cause of action against Pennwalt on the warranty theories. The court also found that PPI may not recover against Pennwalt on the negligence claim for purely economic loss. PPI appeals from the adverse judgment.

We have consolidated PPI's three issues into the following two:

I. Does the absence of privity of contract between PPI and Pennwalt in the sale of Penncap-M bar recovery under the theories of implied and express warranties?

II. May PPI recover purely economic damages on its negligence claim against Pennwalt?

We begin our Discussion of the issues by stating our oft-repeated standard of review with respect to summary judgment. On appeal, this court applies the same standard of review as does the trial court. We look to determine whether any genuine issue of material fact exists and whether the law was correctly applied. In determining whether a genuine issue of material fact exists, we accept as true all facts set forth by the non-moving party and resolve all doubts against the movant. Only where there is no dispute as to the material facts or the inferences to be drawn therefrom, and the moving party is entitled to summary judgment as a matter of law, may the court grant such a motion. Naughgle v. Feeney-Hornak Shadeland Mortuary (1986), Ind.App., 498 N.E.2d 1298.

ISSUE I

Implied ...


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