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Court enforces one-year statute of limitation for defective product

Liparoto Construction sued General Shale Brick, and Lincoln Brick, alleging that they provided defective materials [brick] to Liparoto's construction project.  It also sued its commercial insurer for losses suffered as a result of the defective brick.  The Court held that it was too late in suing the manufacturer, and that State Auto, Liparoto's insurer, had not agreed to insure this type of loss.

Liparoto was the general contractor on a house it built for the Ainscough family.  The exterior was brick manufactured by General Shale.  The Ainscoughs reported that the bricks were discolored after they became wet, and the cause was determined to be the use of an acid clearner used by a contractor, contrary to General Shale's instructions. When the Ainscoughs complained to the Department of Consumer and Industry Services, Liparoto's insurer attributed the problem to a latent defect in manufacturing and denied coverage.  Liparoto then mediated the dispute with the Ainscoughs and undertook  corrective measures.  It also brought suit against the parties it considered responsible for the problem.

The Court ruled that under the terms of the written contract from the retailer, Lincoln Brick, Liparoto was  required to sue within one year (a standard product limitation under the Uniform Commercial Code, if there is no injury involved) and was therefore too late in filing suit.  Lincoln Brick was dismissed. 

The manufacturer, General Shale, was dismissed on the grounds that its express instructions for product use had not been complied with.  The Insurer's investigatory conclusion and claim that the bricks were discolored at the factory was rejected as without evidentiary support.  Further, the parties and witnesses acknowledged that acid was used to clean the brickwork, in contravention of the manufacturer's instructions.

State Auto claimed that it had excluded claims resulting from poor workmanship and also argued that it could not be required to pay for repairs agreed to by Liparoto without its' consent.  The Court held that since the damage resulting to the home did not extend "beyond the insured's work product," there was no "occurrence" insured by State Auto.

Thompson O’Neil, P.C.
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Traverse City, Michigan 49684
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