Products Liability Law Daily Wrap Up, DAMAGES—BUILDING AND CONSTRUCTION—D. Colo.: Water pipe manufacturer’s motion to dismiss homeowner’s product liability case denied, (Dec 11, 2024)

By Kerry McInerney, J.D.

The homeowner’s tort claims were not barred by the economic loss rule or disclaimed by a warranty because the claims arose from independent duties of care that the manufacturer owed the homeowner, and the warranty disclaimer defense had not been established.

In a homeowner’s suit for strict products liability, negligence, and breach of implied warranty concerning allegedly defective water pipes, the manufacturer was denied its motions to dismiss the claims or, in the alternative, to strike portions relating to certain remedies (Lee v. Uponor, Inc., No. 1:24-cv-01469-CNS-STV (D. Colo. Dec. 9, 2024)).

As part of reconstruction on his house, a homeowner hired a company to install plumbing and pipe fitting services. The plumber used Uponor’s AquaPex Piping, which Uponor advertised as the highest quality PEX piping available, resistant to cracking and microcracking.

Approximately four years later, the piping in the homeowner’s house prematurely cracked and leaked at several points, which caused damage to the home and to the piping itself. Since the initial incident, the piping experienced seven substantial leaks. The homeowner alleged that the leaks caused significant damage to the home, including water fully penetrating the home’s ceiling, substantial water damage in the crawl space, and water damage to the first-floor hall bathroom. Each time, the homeowner had to hire emergency plumbers to do repairs, resulting in substantial costs and loss of hot water. The homeowner asserted that he would have to replace all the water lines within the home because of the inherent defects of the piping.

The homeowner alleged that the piping suffered from “various design and manufacturing defects,” and that the manufacturer recalled the piping in 2021 because of frequent cracking, leaking, and pipe bursts attributable to these design and manufacturing defects. The homeowner brought suit for strict products liability, negligence, and breach of implied warranty. The manufacturer moved to dismiss the claims or, in the alternative, to strike portions relating to certain remedies.

Tort claims. The manufacturer moved to dismiss the homeowner’s tort claims, arguing that they were barred by the economic loss rule and disclaimed by a warranty. The homeowner argued that the tort claims should proceed because the manufacturer’s warranty arguments were affirmative defenses, which the company had the burden of proving, and the defenses were not established by the allegations in the complaint. The court agreed with the homeowner that the manufacturer’s affirmative defenses had not been established at this stage, based on the facts alleged in the complaint. Because an express warranty was not referenced in the complaint, the court declined to consider the warranty at this stage (i.e., on the motion to dismiss), and so the warranty disclaimer defense had not been established.

Next, the manufacturer contended that the economic loss rule barred the homeowner’s claims for the repair or replacement costs of the piping. The homeowner countered that the economic loss rule did not apply because the tort claims arose from independent duties of care that the manufacturer owed the homeowner. Again, the court agreed with the homeowner. The court noted that the economic loss rule bars tort claims that would otherwise be covered by contract claims. In this case, the homeowner alleged that the negligence and strict products liability claims arose from a separate duty than the manufacturer’s contractual obligations: the duty to act reasonably in the design, manufacture, and sale of the piping. The court found that the economic loss doctrine did not bar these tort claims.

The manufacturer also asserted that the economic loss rule barred recovery for the repair or replacement cost of the product itself when that was the only damage that occurred, and so the homeowner could only recover for damage to other property. However, the court observed that the case that the manufacturer cited to support this argument explicitly restricted the economic loss rule to situations “where there is no physical injury or damage to other property.” In the instant case, the homeowner sought to recover both damage to the product and damage the product caused to other parts of the house, which the manufacturer conceded would not be barred by the economic loss rule. Therefore, the manufacturer’s argument lacked merit, according to the court. Furthermore, the court stated that damage to the product itself was recoverable.

Thus, the court denied the manufacturer’s motion to dismiss the tort claims.

Breach of implied warranty claim. The manufacturer asserted that the homeowner’s breach of implied warranty claim should be dismissed because the warranty disclaimed implied warranties and because it was barred by the statute of limitations. However, as the court discussed above, the complaint did not sufficiently establish the elements of a warranty disclaimer affirmative defense, so the warranty disclaimer defense also did not apply to the implied warranty claim.

As to the statute of limitations defense, the court explained that at the motion to dismiss stage, “a complaint may be dismissed on the basis of a statute of limitations defense only if it appears beyond a doubt that Plaintiffs can prove no set of facts that toll the statute.” In this case, the homeowner did plead a set of facts for fraudulent concealment that might toll the statute of limitations, according to the court. The court determined that the homeowner adequately pleaded fraudulent concealment—the manufacturer knowingly concealed the piping’s tendency to premature cracking, leaking, and bursting, causing the homeowner to purchase and keep the piping, which then prematurely cracked and caused damage to the house. At this stage, the homeowner could sufficiently prove this set of facts to toll the statute of limitations, and, thus, the court refused to grant the motion to dismiss the implied warranty claim.

Motion to strike. Finally, the manufacturer requested that, in the alternative, the court strike allegations pertaining to “legally unavailable damages.” The court noted that the manufacturer’s arguments that certain damages were legally unavailable were identical to its arguments in the motion to dismiss portions of the brief: that the economic loss rule barred recovery of the cost of repairing or replacing the piping, in light of the warranty. As the court discussed above, these damages were not legally unavailable and so did not warrant striking, nor were these portions of the complaint “redundant, immaterial, impertinent, or scandalous matter.” Thus, the court denied the motion to strike.

The case is No. 1:24-cv-01469-CNS-STV.

Judge: Sweeney, C.

Attorneys: Gregory Scott Rich (Coombe Curry Rich & Jarvis) for Bo [I] Lee. Jeffrey M. Goldman (Troutman Pepper LLP) for Uponor, Inc.

Companies: Uponor, Inc.

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