Opinion
Civil Action No. A:88-1512
October 12, 1989
MEMORANDUM OPINION AND ORDER
Pending before the Court is the Defendant's motion to dismiss. The issues raised therein have been fully briefed. The facts of this case are taken from the complaint and, for purposes of this motion, are accepted as true.
The Plaintiff operated an industrial plant at Ravenswood, West Virginia. The facilities at the plant included a 168-inch hot mill for aluminum. The mill was powered through a motor-generator set, which included a stator component and a rotor/ shaft component. In 1976 the Plaintiff Kaiser Aluminum Chemical Corporation ordered from the Defendant Westinghouse Electric Corporation one of each of these components to have on hand in the event of failure of those then in use. These parts were delivered in 1978 or 1979, but were not used until April, 1981, when they were installed in the motor-generator set. After installation the rotor/shaft component malfunctioned and Westinghouse agreed to repair it. Following the repair, the component was again stored until it was needed in December, 1987. After the second installation and upon Kaiser's attempt to start up the motor-generator set, the rotor/shaft component failed immediately, causing damage to the motor-generator set. As a result, the hot mill was out of service for about ten days.
The Plaintiff seeks damages representing the costs of repair to the motor-generator set and business interruption losses. The Plaintiff bases its claim on the alleged negligent repair of the rotor/shaft component by the Defendant.
In its motion to dismiss, the Defendant contends that the damages sought by the Plaintiff represent economic losses and, as such, are not recoverable in tort. The Defendant's contention is based on its position that the damages sought are the result of the rotor/shaft component's failure to meet the Plaintiff's expectations for performance and are recoverable, therefore, only under a breach of contract or breach of warranty theory. As a contract action, the Defendant further contends, recovery is barred by the applicable statute of limitations.
Under West Virginia law, "commercial enterprises may utilize strict liability actions to recover damages" but with certain critical limitations. Star Furniture Co. v. Pulaski Furniture Co., ___ W. Va. ___, 297 S.E.2d 854, 861 (1982). Damages for economic losses are not recoverable in such an action. Id. at 859. Moreoever, in order to maintain an action for strict liability in tort, "the damage to the product must result from a sudden calamitous event attributable to the dangerous defect or design of the product itself." Capitol Fuels, Inc. v. Clark Equipment Co., ___ W. Va. ___ , 382 S.E.2d 311, 313 (1989) (reaffirming Star Furniture).
Perhaps recognizing that it can recover, if at all, in tort only under the principles set forth in Star Furniture, Kaiser's position is stated as follows. As a result of Westinghouse's negligent repair, the rotor/shaft component "suffered a sudden, immediate and massive electrical failure" when energized which resulted in physical damage to the rotor itself and the motor-generator set and in loss of profits during the period of time the hot mill was not operational, Plaintiff's memorandum at 4. The Plaintiff has not alleged, however, that the electrical failure was attributable to any inherently dangerous defect or design of the rotor/shaft component.
The relevant allegations in the complaint are as follows:
"17. On December 3, 1987, plaintiff Kaiser Aluminum attempted to energize and start the 168 inch mill motor-generator set, which included the spare rotor-shaft component.
18. As a direct and proximate result of the negligent repairs made by defendant Westinghouse, as described in Paragraph No. 14 above, electrical failure occurred immediately in the spare rotor-shaft component.
19. This failure of the spare rotor-shaft component caused physical damage to the motor-generator set, and rendered the Kaiser Aluminum 168 inch mill inoperable for approximately 10 days."
In paragraph 8 of the complaint, Kaiser has alleged that extra parts "were purchased as backup or spare components to be used in the event of a failure of the existing motor generator components . . . ." Thus, it is clear that the failure of the rotor was not a sudden calamitous event, but rather was an event contemplated by Kaiser at the time it purchased the rotor/shaft component.
Having failed to satisfy either element of a Star Furniture type of claim, the allegations of the complaint will not support a tort cause of action. Instead, the Plaintiff's factual allegations support only an action for damages resulting from the ineffectiveness of the rotor/shaft component. Such damages are economic losses and may be pursued only in a contract or breach of warranty action. See Roxalana Hills Ltd. v. Masonite Corp,. 627 F. Supp. 1194 (S.D. W. Va. 1986), aff'd. 813 F.2d 1228 (4th Cir. 1987).
The Court is not troubled by the Plaintiff's allegations regarding damage to property other than the rotor itself. See Roxalana Hills, 627 F. Supp. at 1197.
In its answer and motion to dismiss, Westinghouse has raised a statute of limitations defense. The relevant statute of limitations is set forth at W. Va. Code, § 46-2-725, which provides in pertinent part:
"(1) An action for breach of any contract for sale must be commenced within four years after the cause of action has accrued. By the original agreement the parties may reduce the period of limitation to not less than one year but may not extend it.
(2) A cause of action accrues when the breach occurs, regardless of the aggrieved party's lack of knowledge of the breach. A breach of warranty occurs when tender of delivery is made, except that where a warranty explicitly extends to future performance of the goods and discovery of the breach must await the time of such performance the cause of action accrues when the breach is or should have been discovered.
* * *"
This action, begun November 17, 1988, was not brought within four years after tender of delivery of the rotor/shaft component — whether that time is fixed in 1979 when it was first delivered or in 1981 when it was returned after repair. There is no allegation that the rotor was warranted as to future performance so as to toll the statute of limitations as permitted by Section 46-2-725(2). Nor does the Plaintiff's discovery of the breach after the expiration of a four-year period operate to toll the statute of limitations. Because of the express language of subsection 2, the West Virginia Supreme Court of Appeals has declined to recognize the discovery rule in a case governed by that provision.
"[W]here the only loss suffered is an economic loss, as in the case of losses which are associated with a `bad bargain,' the injured party must pursue the remedies provided in the Uniform Commercial Code, subject to the statute of limitations contained therein."Basham, 377 S.E.2d at 835. Any breach of warranty incident to the sale of the component, therefore, became actionable at the time of delivery.
For the foregoing reasons, this action is dismissed for failure to state a claim upon which relief can be granted. Alternatively, the action is dismissed inasmuch as recovery is precluded by the applicable statue of limitations.
The Clerk is directed to send a certified copy of this Memorandum Opinion and Order to counsel of record.
JUDGMENT ORDER
In accordance with the Memorandum Opinion and Order entered this day, the Court hereby ORDERS as follows:
1. That the motion of the Defendant Westinghouse Electric Corporation to dismiss is granted; and
2. That the Plaintiff take nothing, that the action be dismissed on the merits, and that the Defendant recover of the Plaintiff its costs of action.
The Clerk is directed to remove this action from the docket of this Court and to send a certified copy of this Judgment Order to counsel of record.