Case Name and Citation:
AIU Insurance Company, as subrogee of Garthland, LLC, Plaintiff, v. Omega Flex, Inc.
Civil Action No. 3:11-CV-00023 2011
Facts:
Subrogee Garthland a customer of AIU Insurance Company, contracted with Mr. Alexander Nicholson to work on his property. During the work Nicholson used Omega Flex Trac Pipe in the homes plumbing system. During a lightening storm a lightening bolt hit on or near the property. The lightening created an Arc of Electricity, which created a hole in the Omega Trac Pipe. Natural gas then began to escape from the hole and caused a fire which burned and damaged Garthland's home and property. AIU paid Mr. Garthland $249,302.91 dollars. Upon suit, AIU charged Omega Flex with being negligent, and also that Omega's implied warranty was breached also.
Procedural History:
AIU Ins. Co. v. Omega Flex, Inc., 2012 U.S. Dist 2011
Issues:
Issue 1:
Does AIU prove that the Omega Flex Trac Pipe was defective?
Issue 2:
Does the defendant warranty provide legal liability in this case?
Holdings:
Issue 1:
No The Plaintiff just stated that all Omega Flex Pipe could be defective.
Issue 2:
No and Yes The Plaintiff did not have a contract with defendant, but defendant can still be held accountable without a contract.
Reasoning:
Issue 1:
Plaintiff argued that defendant manufactured, supplied and put defective steel piping out for commerce.
The Plaintiff failed to show the standard the pipe was supposed to meet, and/or the quality. According to Virginia Law, the standard of quality must be referenced and defined by both parties in agreement.
The Plaintiff had no such standard or agreement with defendant.
Issue 2:
“If the cause of complaint be for an act of omission or non-misfeasance which,
without proof of a contract to do what was left undone, would not give rise to any
cause of action (because no duty apart from contract to do what is complained of
exists) then the action is founded upon contract, and not upon tort. If, on the
other hand, the relation of the plaintiff and the defendants be such that a duty
arises from that relationship, irrespective of contract, to take due care, and the
defendants are negligent, then the action is one of tort.” (Moon).
Decision:
Motion by Defendant to strike denied, Motion that defendant was liable under warranty was granted.
Comments:
In these cases it is important to understand the difference between injury and economic loss. While the defendant clearly had to make his pipe to a certain standard for the use of natural gas, he did not advise, install, or state how and when to use the pipe. In the wording of this case both terms property damage and economic loss were found to be a factor in this case.
Sources:
Judge, N. K., & Moon. (2011). IN THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF VIRGINIA CHARLOTTESVILLE DIVISION. Retrieved from http://constructionlawva.com/wp-content/uploads/2011/08/AIU-Ins.-Co.-v.-Omega-Flex-Inc..pdf
AIU Ins. Co. v. Omega Flex, Inc., 2012 U.S. Dist. LEXIS 2011
AIU Insurance Company, as subrogee of Garthland, LLC, Plaintiff, v. Omega Flex, Inc.
Civil Action No. 3:11-CV-00023 2011
Facts:
Subrogee Garthland a customer of AIU Insurance Company, contracted with Mr. Alexander Nicholson to work on his property. During the work Nicholson used Omega Flex Trac Pipe in the homes plumbing system. During a lightening storm a lightening bolt hit on or near the property. The lightening created an Arc of Electricity, which created a hole in the Omega Trac Pipe. Natural gas then began to escape from the hole and caused a fire which burned and damaged Garthland's home and property. AIU paid Mr. Garthland $249,302.91 dollars. Upon suit, AIU charged Omega Flex with being negligent, and also that Omega's implied warranty was breached also.
Procedural History:
AIU Ins. Co. v. Omega Flex, Inc., 2012 U.S. Dist 2011
Issues:
Issue 1:
Does AIU prove that the Omega Flex Trac Pipe was defective?
Issue 2:
Does the defendant warranty provide legal liability in this case?
Holdings:
Issue 1:
No The Plaintiff just stated that all Omega Flex Pipe could be defective.
Issue 2:
No and Yes The Plaintiff did not have a contract with defendant, but defendant can still be held accountable without a contract.
Reasoning:
Issue 1:
Plaintiff argued that defendant manufactured, supplied and put defective steel piping out for commerce.
The Plaintiff failed to show the standard the pipe was supposed to meet, and/or the quality. According to Virginia Law, the standard of quality must be referenced and defined by both parties in agreement.
The Plaintiff had no such standard or agreement with defendant.
Issue 2:
“If the cause of complaint be for an act of omission or non-misfeasance which,
without proof of a contract to do what was left undone, would not give rise to any
cause of action (because no duty apart from contract to do what is complained of
exists) then the action is founded upon contract, and not upon tort. If, on the
other hand, the relation of the plaintiff and the defendants be such that a duty
arises from that relationship, irrespective of contract, to take due care, and the
defendants are negligent, then the action is one of tort.” (Moon).
Decision:
Motion by Defendant to strike denied, Motion that defendant was liable under warranty was granted.
Comments:
In these cases it is important to understand the difference between injury and economic loss. While the defendant clearly had to make his pipe to a certain standard for the use of natural gas, he did not advise, install, or state how and when to use the pipe. In the wording of this case both terms property damage and economic loss were found to be a factor in this case.
Sources:
Judge, N. K., & Moon. (2011). IN THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF VIRGINIA CHARLOTTESVILLE DIVISION. Retrieved from http://constructionlawva.com/wp-content/uploads/2011/08/AIU-Ins.-Co.-v.-Omega-Flex-Inc..pdf
AIU Ins. Co. v. Omega Flex, Inc., 2012 U.S. Dist. LEXIS 2011