Product liability and contract liability claims evaluated
Several insurers and tenants sued Professional Temperature Heating and Air Conditioning after a fire caused significant damage to an Oakland County apartment complex. The plaintiffs claimed that the Defendant, Professional, was liable under several theories, for a fire caused by the positioning of a leaking boiler over a potentially flammable floor protected only by a rusting drip pan. They argued that Professional was negligent in selling the drip pan for this purpose and that it was also negligent in performing annual maintenance inspections without addressing the hazard.
In a mixed opinion, the Court held that the tenants could pursue a negligence claim but not a product liability claim. Two of the judges believed no one could pursue a product liability claim because it was not "foreseeable" that the owner/manager would misuse the drip pan by failing to elevate the boiler above a flammable floor. To reach this result, the two judges held that the HVAC installer's presence when the drip pan was installed was nullified by the fact that title to the drip pan had already passed to the building owner.
The Judges also ruled that the insurers for the building's owner and manager could not pursue any negligence or contract claim because their contract with the HVAC contractor included an indemnity clause. The tenants were allowed to pursue a limited claim because the HVAC contractor owed them a duty, apart from its contract with the building's owner and manager, to exercise reasonable care fo the tenants' safety.