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Bay Summit Community Assn. v. Shell Oil Co.12/16/1996
HALLER, J.
The developer of a condominium development, Bay Summit, installed polybutylene plumbing in the individual condominium units and in the common areas. After the plumbing developed numerous leaks, the Bay Summit Community Association and individual homeowners (plaintiffs ) sued numerous entities, including United States Brass Corporation (U.S. Brass), a polybutylene plumbing manufacturer, and Shell Oil Company (Shell), a supplier of resin for the polybutylene pipes. Plaintiffs alleged the plumbing leaked because of defective fittings used in the polybutlene plumbing system. When the jury reached its verdict, plaintiffs had settled with all defendants except U.S. Brass and Shell.
The jury found U.S. Brass and Shell committed fraud and were strictly liable for damages caused by the defective fittings in the polybutylene plumbing system. The jury awarded plaintiffs $89,035.85 in compensatory damages, for which it found Shell to be 10 percent liable and U.S. Brass 55 percent liable. The jury assessed $14,014 in punitive damages against Shell and $63,816 in punitive damages against U.S. Brass. After offset of sums paid in settlement by other defendants, Shell and U.S. Brass's compensatory damage liability was reduced to zero.
Shell appeals, arguing the judgment cannot be sustained on fraud or strict liability grounds. Shell contends the fraud verdict was improper because plaintiffs were not required to, and did not, establish they relied on Shell's representations. Plaintiffs concede they did not prove reliance and that under the recent decision in Mirkin v. Wasserman (1993) 5 Cal. 4th 1082 [23 Cal. Rptr. 2d 101, 858 P.2d 568], they were required to establish reliance to prove fraud. Based on this concession, we hold the judgment must be reversed with respect to the fraud claim, including the punitive damages award.
Shell additionally contends that because it was merely a supplier of a nondefective product (resin) it may not be held strictly liable to plaintiffs. Plaintiffs counter that Shell was properly held strictly liable based on its extensive involvement in the marketing and distribution of the defective polybutylene plumbing system. We conclude Shell is potentially subject to strict liability, but the trial court prejudicially erred in instructing the jury on the scope of a strict liability claim. Accordingly, we reverse the judgment on the strict liability claim.
FACTUAL AND PROCEDURAL BACKGROUND
A. The Polybutylene Plumbing System
U.S. Brass and Vanguard Plastics, Inc. (Vanguard) each manufactured a substantially identical polybutylene plumbing system. The system consisted of several parts: (1) polybutylene pipes, (2) T-shaped plastic fittings, (3) metal rings, and (4) installation tools. The manufacturers made the pipes and fittings each from a different material. The pipes were made from polybutylene resin supplied in pellet form by Shell. The fittings were made from a plastic material described as an "acetal copolymer" supplied by Hoechst Celanese Corporation (Celanese). Celanese sold the material under the trade name Celcon.
After purchasing the parts, a plumber would attach the polybutylene pipes together by placing a Celcon fitting between the pipes, positioning the metal ring over the connection between the pipe and the fitting, and crimping the ring with a large crimping tool.
B. Plumbing at Bay Summit
In approximately September 1980, Bay Summit's developer contracted with Ted Whitt Plumbing (Whitt) to install polybutylene plumbing at the condominium development. During the latter part of 1980, Whitt installed Vanguard and U.S. Brass polybutylene plumbing
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