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Reliance Inc. v. Gregg''s Diesel Service

April 28, 1997

RELIANCE, INC., A WASHINGTON CORPORATION, APPELLANT,
v.
GREGG'S DIESEL SERVICE, A WASHINGTON CORPORATION, DEFENDANT, TACOMA DIESEL AND EQUIPMENT, INC., A WASHINGTON CORPORATION; AND CATERPILLAR INC., A DELAWARE CORPORATION, RESPONDENTS.



Appeal from Superior Court of King County. Docket No: 94-2-21379-2. Date filed: 10/25/95. Judge signing: Hon. Charles W. Mertel.

Authored by H. Joseph Coleman. Concurring: Walter E. Webster, Mary K. Becker.

The opinion of the court was delivered by: Coleman

COLEMAN, J. -- Reliance, Inc., appeals the summary judgment dismissal of its products liability and breach of express and implied warranties claims against the manufacturer and sellers of a defective marine gear part. While the gear failed as Reliance's vessel sailed for Alaska, it was replaced under warranty before crab season opened. Thus, Reliance was able to fish the entire season. Reliance failed to produce competent evidence that the defective gear caused damage to any other property. Moreover, because Reliance has not established lost fishing profits with reasonable certainty, we affirm the dismissal of all its claims.

Mike Nixon, a fisherman and fishing vessel skipper, owns Reliance, Inc. In 1993, Reliance contracted with Gregg's Diesel Service for an overhaul of its vessel, the F/V Reliance, in preparation for the 1993 king crab season in Alaska. Gregg's agreed to repair and rebuild the vessel's starboard reduction gear. This required that Gregg's install a new internal sun gear, a part that attaches to the reduction gear.

Gregg's purchased the sun gear from Tacoma Diesel and Equipment, Inc. Caterpillar, Inc., the sun gear's manufacturer, had expressly warranted that the sun gear would be free from defects for six months after purchase by the first user. The warranty excluded consequential damages:

THIS WARRANTY IS EXPRESSLY IN LIEU OF ANY OTHER WARRANTIES, EXPRESS OR

IMPLIED, INCLUDING ANY WARRANTY OF MERCHANTABILITY OR FITNESS FOR A

PARTICULAR PURPOSE. REMEDIES UNDER THIS WARRANTY ARE LIMITED TO THE

PROVISION OF MATERIAL AND SERVICES, AS SPECIFIED HEREIN. CATERPILLAR

IS NOT RESPONSIBLE FOR INCIDENTAL OR CONSEQUENTIAL DAMAGES. Caterpillar agreed to provide the parts and labor to correct any defect found during the warranty period.

After Gregg's completed the overhaul, the F/V Reliance sailed for Alaska. Within ten days, when the vessel was 120 miles away from Dutch Harbor, the sun gear began to break apart, causing the entire starboard reduction gear to fail. When the vessel arrived at Dutch Harbor, she was disabled for fifteen days. Gregg's and Tacoma Diesel sent representatives to attempt repairs on the starboard reduction gear. During this time, the vessel's crew was not able to overhaul the fishing gear or survey the crab grounds. But the sun gear was replaced by the time crab season opened. The F/V Reliance fished the entire crab season and caught 53,965 pounds of crab.

Jay Henderson, who performed the emergency repairs for Tacoma Diesel, stated in a sworn declaration that "the damage was completely isolated in the gear itself, and the gear caused no physical damage to the Reliance [or] any other engine part[.]" After replacing the sun gear, Tacoma Diesel sought reimbursement under Caterpillar's warranty. Caterpillar paid the full $3,812.78 for parts and labor.

Reliance sued Caterpillar, Tacoma Diesel, and Gregg's, alleging breach of contract, products liability, and breach of express and implied warranties. Reliance argued that its ability to fish was impaired because the defective sun gear disabled its vessel for fifteen days immediately before crab season. Nixon submitted a declaration stating that but for the sun gear's failure, his crew would have caught 90,000 to 100,000 pounds of crab. Reliance estimated its lost profits from the gross profits earned by the F/V Silent Lady, which Reliance claimed was of similar size and condition to its vessel. The F/V Silent Lady's crab season profits exceeded Reliance's by $92,945.

In a declaration, Nixon also claimed that the sun gear's failure had damaged the entire reduction gear by filling it with metal shavings. Reliance attempted to support this property damage claim ...


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