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Stanton v. Bayliner Marine Corp.12/30/1993
In consolidated actions against Bayliner Marine Corporation and Olympic Sales, Inc. (hereafter collectively Bayliner), plaintiffs seek recovery of the cost of replacing or repairing damaged yachts. Bayliner seeks review of a Court of Appeals decision reversing the trial court's order of partial summary judgment in its favor. We reverse the Court of Appeals.
BACKGROUND
In December 1985, plaintiffs James Stanton, Winnifred Stanton, and Stanton Investment Company purchased the M/Y Moonraker, a 45-foot model 4550 Bayliner motor yacht, from Olympic Sales, Inc., doing business as Olympic Boat Centers, in Seattle, Washington, for $225,342. In April 1988, plaintiff Wiley Dean Henry purchased the M/Y Contessa, also a Bayliner model 4550 motor yacht, from Olympic Sales, Inc., for $251,548.70. Albany Insurance Company insured both yachts.
On separate occasions, while the Stantons and Henry were pleasure boating, their yachts struck underwater objects. The Moonraker struck a submerged rock in Puget Sound in 1987, while the Contessa struck a reef off of Vancouver Island, Canada, in 1988. Both yachts sustained severe hull damage which caused mass flooding. The Stantons' boat rapidly sank, but the Stantons were rescued by
nearby boaters. Henry's boat remained lodged on the rocks; Henry and his passengers were rescued by a Canadian maritime helicopter. No one suffered personal injury in either incident. Each boat was determined to be a constructive total loss. Salvage values for each boat ranged between $42,000 and $46,000.
The Stantons and Albany, under its subrogated interest from Henry, brought suits against Bayliner and Olympic Sales for products liability, negligence, breach of warranty, and violation of the Consumer Protection Act. The plaintiffs primarily seek to recover their "economic losses", or the cost of replacing and repairing the yachts. In addition, the Stantons claim loss of various items of personal property having an alleged combined value of approximately $25,000. The plaintiffs submitted the declaration of Mr. Ted Drake, a naval architect/marine engineer, who stated that the keel design of the Bayliner model 4550 was defective and created an unreasonable risk of mass flooding should penetration occur due to accidental grounding or stranding. Mr. Drake also stated that certain design techniques could have prevented the mass flooding.
Citing East River S.S. Corp. v. Transamerica Delaval Inc., 476 U.S. 858, 90 L. Ed. 2d 865, 106 S. Ct. 2295 (1986), Bayliner moved for summary judgment, claiming that admiralty law applies and precludes recovery for economic losses under either tort theory of products liability or negligence. Bayliner also argued that plaintiffs' warranty claim, governed by state law, did not allow recovery against Bayliner under a breach of warranty theory since the plaintiffs and Bayliner did not have privity of contract. Plaintiffs cross-moved for partial summary judgment, claiming that the Washington products liability act governed the facts of this case thereby permitting the recovery sought. The trial court granted Bayliner's motion, dismissing substantially all of plaintiffs' claims, and entered an order of finality. The
plaintiffs appealed, claiming that the Washington products liability act (WPLA) applies and provides a remedy for the economic losses sustained in this case. See Washington Water Power Co. v. Graybar Elec. Co., 112 Wash. 2d 847, 774 P.2d 1199, 779 P.2d 697 (1989) (economic loss within context of WPLA determined by "risk of harm" analysis).
The Court of Appeals reversed and remanded, holding that while admiralty juri
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