Duncan Place Owners Association, on its own behalf and as assignee of the Association Members, Plaintiff-Appellant,
Danze, Inc., f/k/a Globe Union America Corporation, and Globe Union Group, Inc., Defendants-Appellees.
April 4, 2018
from the United States District Court for the Northern
District of Illinois, Eastern Division. No. 15 C 01662 -
Edmond E. Chang, Judge.
Wood, Chief Judge, and Bauer and Sykes, Circuit Judges.
faucets manufactured by Illinois-based Danze, Inc., were
installed in all 63 units of a new condominium building in
Seattle, Washington. In the years that followed, some of the
faucets failed, causing damage to the building and
replacement costs. The condominium association, Duncan Place
Owners Association, filed a proposed class-action suit
against Danze raising multiple claims for relief, including
breach of express warranty, unjust enrichment, negligence,
and strict product liability. The district judge dismissed
all but one of the claims and later entered summary judgment
on the sole remaining claim.
Place appeals, seeking reinstatement of the claims that were
dismissed on the pleadings. We affirm, with one narrow
exception. The Washington Product Liability Act
("WPLA" or "the Act") subsumes all
common-law product-liability claims, so we construe Duncan
Place's negligence and strict-liability claims as one
cause of action under the Act. In a suit for damages caused
by a defective product, Washington's "independent
duty doctrine" (formerly known as the "economic
loss doctrine") generally bars recovery in tort for
direct and consequential economic losses stemming from the
product's failure-that is, damages associated with the
"injury" to the product itself. But the doctrine
does not bar recovery for damage to other property
caused by the defective product. See Eastwood v. Horse
Harbor Found., Inc., 241 P.3d 1256, 1265 (Wash. 2010)
(en banc). Duncan Place alleges in general terms that the
defective faucets caused damage to other condominium
property. To that limited extent, the WPLA claim is not
blocked by the independent-duty doctrine and should have been
allowed to proceed.
Place's arguments for reinstatement of its warranty and
unjust-enrichment claims are new on appeal. Arguments not
raised in the district court are waived, so we affirm the
dismissal of the warranty and unjust-enrichment claims.
the following factual allegations from Duncan Place's
second amended complaint, accepting them as true for present
purposes. When the Duncan Place condominium complex was built
in 2009, the developers installed Danze faucets in the
bathrooms of each of the 63 units. The water hoses in
Danze's faucets are made from an inferior low nickel
stainless-steel alloy that makes them vulnerable to corrosion
and cracking when put to normal use. As a result several of
the faucets failed causing "extensive property
damage" and replacement costs.
"limited lifetime warranty" guarantees the quality
of its faucets and promises to replace any parts that prove
defective. Nonetheless, Danze refused to repair or replace
Duncan Place Owners Association filed this lawsuit in federal
court in the Northern District of Illinois on behalf of
itself, the condominium's 63 unit owners, and a proposed
nationwide class of original consumer end-users of Danze
faucets with a steel-braided supply hose. The suit asserted
claims under Washington law, including breach of express
warranty, unjust enrichment, negligence, and strict product
liability, as well as other state-law claims that have since
dropped out of the case.
moved to dismiss on the ground that Duncan Place lacked
associational standing to assert the rights of the unit
owners. The judge agreed and dismissed the claims brought on
their behalf. Duncan Place then amended its complaint to
reflect that it had obtained assignments from 41 of the 63
unit owners, eliminating the need for associational standing
to support its assertion of their rights.
again moved to dismiss. The judge granted the motion for the
most part. He held that Washington's independent-duty
doctrine barred the claims of negligence and strict product
liability and dismissed them. The judge also dismissed the
unjust-enrichment claim because it was premised on fraud but
did not satisfy the heightened pleading requirements of Rule
9(b) of the Federal Rules of Civil Procedure.
same order, the judge explained that to prevail on a claim
for breach of an express warranty under Washington law, a
plaintiff must show that he was aware of the warranty.
Allegations of that sort did not appear in the amended
complaint, so the judge gave Duncan Place an opportunity to
investigate whether it had a good-faith basis to allege that
any of the 41 unit owners knew of the warranty. After several
months of investigation, Duncan Place was unable to make
those allegations in ...