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Motorists Mutual Insurance Co. v. Mega Lion, Inc.

United States District Court, N.D. Indiana, Fort Wayne Division

June 12, 2019

MOTORISTS MUTUAL INSURANCE CO., Plaintiff,
v.
MEGA LION, INC., Defendant.

          OPINION AND ORDER

          HOLLY A. BRADY, JUDGE

         This matter comes before the Court on Plaintiff Motorists Mutual Insurance Co.'s Motion for Summary Judgment (ECF No. 48). Plaintiff asks this Court to determine, as a matter of law, that Defendant Mega Lion, Inc. is liable under the Indiana Product Liability Act, Ind. Code § 34-20-1-1, et seq. (the “Act”), for placing a defective water supply line into the stream of commerce. Defendant has filed a Response in Opposition (ECF No. 51), arguing that there are genuine issues of material fact as to whether Defendant placed the supply line into the stream of commerce, and further as to whether Defendant can be held liable under the theory of strict liability. For the reasons set forth below, Plaintiff's Motion for Summary Judgment will be denied.

         FACTUAL BACKGROUND

         Plaintiff's lawsuit arises out of water damage suffered by its insureds, Trent and Heidi Schrock, on July 14, 2015. It is undisputed that Plaintiff is subrogated to the rights of its insureds. Plaintiff alleges that the cause of the water damage was a faulty water supply line to an upstairs faucet. Plaintiff further alleges that the faucet and the supply line were sold by Defendant.

         It is undisputed that the faucet was an ELITE brand faucet, sold by Defendant. Mr. Schrock and his two sons installed the faucet in May or June of 2015, and they allege they used the supply line included with the faucet. Mrs. Schrock purchased the sink, faucet, and water supply line online from the same company, but she does not remember the website she used for the order. In addition, she does not remember whether the sink and faucet were sold as a single unit or as separate products. The Schrocks no longer have the receipt for the purchase.

         The supply line installed by the Schrocks was a braided metal line stamped with either “XXCY” or “XXGY”. Defendant claims that it does not distribute water supply lines with those markings. Instead, the water supply lines Defendant distributes are typically stamped with the ELITE logo. In addition, the lines sold by Defendant are two centimeters[1] longer than the line installed by the Schrocks. Accordingly, Defendant's owner is “100% sure” the faulty supply line did not come from his company.

         The Schrocks had no difficulty installing the faucet and supply lines, and the faucet worked as expected for approximately ten weeks. At 6:00 a.m. on July 14, 2015, Mr. Schrock and his sons awoke to water streaming from the vanity where the sink and faucet had been installed. During the night, the water supply line had burst, and water had infiltrated all three floors of the home. Although Mr. Schrock shut the water off to the home upon discovering the leak, the damage had already been done. The damage appears to have been extensive, as the Schrocks were forced to move out of the home during the remediation and repair process and were not able to move back into the home until December 2015 or January 2016. Plaintiff paid a total of $150, 800.01 on behalf of the Schrocks for restoring the home, replacing personal property, and providing alternative living arrangements.

         The origin of the faucet and supply line is a mystery. Defendant does not manufacture anything. Instead, it imports products from China to sell in the American market. Defendant has identified a Chinese company by the name of ECAE as the manufacturer for the faucet, but no other information regarding this company has been provided. No evidence has been designated by either party as to who manufactured the supply line.

         As a mere importer, Defendant has no oversight as to the products it sells. Defendant simply orders a product, and the manufacturer produces it. Defendant does not provide material specifications for the products, and indeed does not appear to know the materials that comprise the products. When the products arrive at Defendant's warehouse, one of its employees places the boxed product on a shelf. Defendant does not inspect the products as they arrive.

         As part of its investigation into the cause of the loss, Plaintiff hired Donan Engineering (“Donan”) to “identify any failure of the water supply lines in this matter, and to determine any cause of any such identified failure.” (ECF No. 48-6 at 1). The supply line is described as containing “a 3/8-inch chrome-plated brass compression nut at one end and a male-threaded proprietary fitting at its other end.” (Id. at 5). By “proprietary, ” Donan means “the fitting is not universal.” (Id. at 2). Donan states that the supply line could not be purchased at a plumbing store, but instead would have to be ordered from the manufacturer. There is no indication how Donan came to the conclusion that the fitting was proprietary.

         Donan concluded that the supply line's brass fitting suffered a stress corrosion crack caused by dezincification. This dezincification was caused by the brass fitting being comprised of too much zinc and not enough copper; Donan's testing revealed that the fitting had more than twice the amount of zinc than is recommended by industry standards. Donan's ultimate conclusions described the failure as a “manufacturer's defect with respect to a material deficiency and/or susceptible material selection given the product's intended and anticipated use.” (Id. at 16). Defendant does not challenge these findings.

         LEGAL ANALYSIS

         A. Summary Judgment Standard

         Summary judgment is appropriate “if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.” Fed.R.Civ.P. 56(c). A party seeking summary judgment bears the initial responsibility of informing the court of the basis for the motion, and identifying “those portions of the pleadings, depositions, answers to interrogatories, and admissions on file, together with the ...


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