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Service Merchandise Co. v. Hunter Fan Co.7/11/2005
RUFFIN, C. J., JOHNSON, P. J., BARNES, J.
This appeal involves cross-motions for summary judgment filed by The Service Merchandise Company, Inc. (SM) and Hunter Fan Company (Hunter) on the issue of contractual indemnity for the wrongful death claims asserted against SM by Kimberly Boss. SM filed a motion for summary judgment on its third party complaint, and Hunter filed a motion for partial summary judgment against SM on the issue of contractual indemnity. The trial court denied summary judgment to SM and granted partial summary judgment to Hunter. On appeal, SM contends that the trial court erred in denying its motion for summary judgment. For reasons that follow, we affirm.
In 1993, Hunter and SM adopted a purchase agreement which set the acceptance of the contract's terms at the time of Hunter's shipment of its products to SM. On September 4, 1994, Connie Shirley, a relative of the decedent, purchased a Hunter Air Purifier Model 30300 from SM. Shirley also purchased an extended warranty for the air purifier and provided her name and address to SM for purposes of the warranty. After identifying a potential fire hazard posed by this particular product, Hunter instituted a nationwide voluntary recall in January of 1996 for this product. Hunter notified SM about the recall and requested a list of all purchasers of the Air Purifier Model 30300 from SM. It is undisputed that the customer list that SM provided to Hunter failed to include Shirley's name and address and that Hunter did not notify Shirley about the recall.
Unaware of the recall, the Boss family continued to use the air purifier. Meanwhile, Shirley continued to maintain an extended service contract for parts and labor for the Air Purifier Model 30300 through September 3, 2000. On November 12, 2000, ten-year-old Steven Boss perished in a house fire apparently caused by the air purifier.
After her son's death, Boss brought a product liability/wrongful death suit in federal district court against Hunter, the manufacturer of the allegedly defective product. While the federal case against Hunter was pending, Boss, individually and as administratrix of her son's estate, filed a wrongful death suit in November 2002 in superior court against SM, the retailer of the allegedly defective product. The wrongful death suit against SM focused on its alleged failure to warn customers about the defective product. Boss claimed that Hunter notified SM in writing in January 1996 that the "product was dangerous and was being recalled." Boss further claimed that Hunter notified SM "that the Model 30300 air purifier constituted a potential safety hazard and should be removed from inventory." Boss alleged that SM had negligently failed to check its own business records when asked by Hunter to do so and negligently failed to warn its customers of the known dangers of a product of "which it had specific knowledge and information . . . concerning latent dangers that would be unknown to its customers." The lawsuit was later amended to add a claim against SM for punitive damages attributed to SM's "gross negligence, wantonness and entire want of care."
After Boss filed suit against SM, SM filed a third party complaint against Hunter for "indemnity and/or contribution based on both contractual and common law theories" which it claimed applied to the wrongful death suit. SM sought to have the parties' 1998 contract apply to the air purifier, a product purchased in 1994 that had allegedly caused the boy's death in 2000. While the litigation against SM was pending in superior court, Hunter and Boss executed a confidential settlement of the federal lawsuit early in 2003. After settling the case with Boss, Hunter answered SM's
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