Tort Of Another: Appellate Court Reverses $166,000 Damages Under Tort Of Another Doctrine Based On Lack Of A Predicate Tort

 

Retail Mobilehome Seller Owes No Independent Tort Duty To Component Part Manufacturer.

     Justice Ikola, on behalf of the Fourth District, Division 3, has penned an interesting decision in Mega RV Corp. v. HWH Corp., Case No. G047718 (4^th Dist., Div. 3 Apr. 30, 2014) (published) in the Song-Beverly Consumer Act area. In the part for which we blog, the appellate court ordered stricken the award of $166,000 in damages under the tort of another doctrine.

     Briefly told, plaintiffs filed a complaint against a mobilehome retailer seller, the mobilehome manufacturer, and the financing company for defective hydraulic systems in the mobilehome. However, manufacturer had an involuntary bankruptcy filed against it, with retailer seller worried that its defense costs in the suit would not be picked up by someone else. It devised the strategy of adding a component part manufacturer to the lawsuit in order to obtain indemnification and a defense, a strategy which backfired. The trial court concluded component manufacturer was not required to indemnify manufacturer and also awarded $166,000 in damages to component manufacturer in the form of defense attorney’s fees under the tort of another doctrine.

     The appellate court affirmed the no indemnification ruling, but deleted the $166,000 in damages against mobilehome manufacturer under the tort of another doctrine.

     After an eloquent discussion of the law resulting in the conclusion that the component manufacturer will not face exposure for economic loss to the consumer or retail seller unless an express warranty is provided, the appellate court turned to the tort of another ruling. The problem here was that no tort existed, because the manufacturer owed no duty to the component manufacturer under the circumstances. No tort; no tort of another doctrine. In a footnote, Justice Ikola also explained why tort of another doctrine is not a particularly relevant doctrine in cases involving physical injury or property damage because, otherwise, the American Rule that each party bears its own fees/costs in tort cases would be vitiated. (Slip Op., p. 25, fn. 17.)