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Circuit Court for Montgomery County Case # 186389

IN THE COURT OF APPEALS OF MARYLAND No. 100 September Term, 2000

FORD MOTOR COMPANY v. GENERAL ACCIDENT INSURANCE COMPANY, t/o/u and t/u/o MONTROSE TOWING SERVICE a/k/a INTERNATIONAL MOTORS, INC.

Bell, C.J. Eldridge Raker Wilner Cathell Harrell Battaglia JJ.

Opinion by Harrell, J.

Filed: September 10, 2001

On 5 August 1995, International Motors, Inc., trading as Montrose Towing (Montrose or Respondent), purchased a tow truck from Elzenheimer Chevrolet. The tow truck had been created by Elzenheimer by adding necessary components to a 1995 Ford F-350 base chassis cab truck that Elzenheimer had purchased from a Ford dealership. Respondent insured the

truck with General Accident Insurance Company (General Accident). On 19 August 1997, the tow truck caught fire as its operator was about to tow a vehicle. As a result of the fire, General Accident determined that the truck was a total loss and payed Montrose for its value. General Accident then sought reimbursement from Ford Motor Company (Ford or Petitioner), the manufacturer of the chassis cab truck, but Ford refused. On 5 May 1998, General Accident, on behalf of Respondent, filed a subrogation claim against Ford in the Circuit Court for Montgomery County alleging negligence, breach of warranty, and strict liability based on a manufacturing defect. The trial court, after a bench

trial, entered judgment in favor of Ford on all claims. General Accident appealed. The Court of Special Appeals affirmed the Circuit Court's judgment in favor of Ford on the express warranty, negligence, and strict liability claims, but vacated that part of the Circuit's Court's judgment with regards to claims of breach of the implied warranty of merchantability and the implied warranty of fitness for a particular purpose. International Motors v. Ford, 133 Md. App. 269, 273, 275, 754 A.2d 1115, 1117, 1118 (2000). We granted Petitioner's petition for writ of certiorari, Ford Motor Company, Inc. v. International Motors Inc., 362 Md. 34, 762 A.2d 968 (2000), to consider the following questions: 1. Did the Court of Special Appeals err in holding that proof of product defect is not required to sustain a claim for breach of the implied warranty of merchantability, thereby shifting the burden

of proof to the manufacturer, even though all prior reported decisions on this issue in Maryland have held that, regardless whether a claim sounds in negligence, strict liability, or implied warranty, a plaintiff must prove the existence of a defect? 2. Did the Court of Special Appeals err in holding that plaintiff made out a claim for breach of the implied warranty of fitness for a particular purpose even though the alleged "particular purpose" of the product was the same as its ordinary purpose, the product damage was unrelated to the alleged particular purpose, there was undisputed lack of privity between the manufacturer and the plaintiff, and such a claim was never before the trial court? I. On 15 March 1995, Ford sold a 1995 F-350 chassis cab truck1 it had manufactured to Homer Skelton Ford, Inc., a Ford dealership in Olive Branch, Mississippi. The truck came with an express "bumper to bumper" warranty that provided, in pertinent part: Authorized Ford Motor Company dealers will repair, replace or adjust all parts on your vehicle (except tires) that are defective in factory-supplied materials or workmanship for 3 years or 36,000 miles (whichever occurs first).

A chassis cab truck, and specifically the 1995 Ford F-350 in the present case, was described as a truck with a frame and cab that contained all of the interior devices usually found in a truck, such as a heater, blower, motor, plenum, radio, steering controls, braking controls, engine, transmission, and axle. The rear of the chassis cab truck, however, only has a drive train. At trial, Ford's expert, Ronald Ehlert, explained a chassis as the following: Chassis in a sort of succinct way is if you took the body off this vehicle you would have the suspension and the brakes and the steering system absent the steering column, and that would be the chassis. Chassis cab trucks are sold with the anticipation that they can be, and usually are, modified into a tow truck, dump truck, garbage truck, or any one of many other acceptable uses through the addition of the required equipment. 2

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Warranty Information Booklet for 1995-Model Ford and Mercury Cars and Light Trucks 5 (1995). The "bumper to bumper" warranty did not cover, in pertinent part, "alteration,

misuse, or damage caused by accident" or consequential or incidental damages. Id. at 4, 11-12.

On 16 May 1995, Elzenheimer Chevrolet, located in the State of New York, purchased the truck from Homer Skelton Ford and converted it into a tow truck. To convert the chassis cab into a tow truck, Elzenheimer Chevrolet added, among other things, a towing bar, boom tow sling, a light illumination bar on top of the pre-existing lights along the body of the truck, a strobe light in the grill, a two-way radio mounted to the dash board, a three-switch electrical panel inside the passenger cab, and a power take-off with controls on the transmission hump. On 5 August 1995, Montrose purchased the truck, as yet unused as a tow truck, from Elzenheimer and insured it with General Accident. On 19 August 1997, the truck, now with 27,600 miles on the odometer, caught fire while its operator, Greg Blum, a Montrose employee, was preparing to tow another vehicle. Mr. Blum had responded to a routine call to Dulles Airport in Virginia to tow a limousine, which had been struck on the driver's side door by a shuttle bus. When Mr. Blum arrived, he observed that the door to the limousine was stuck in the open position. could be towed safely, the door of the limousine needed to be closed. Before the vehicle

It took approximately

fifteen minutes to secure the door. While working on closing the car door, Mr. Blum kept the engine of the tow truck running. This was necessary apparently because the engine must be

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running in order to use the power take-off to tow a vehicle.2

He reentered the driver's

compartment of the tow truck to back the truck up to begin the actual hook-up and towing. When Mr. Blum reentered the tow truck to begin the towing process, he noticed steam or smoke coming from under the hood of the vehicle. He checked the engine temperature

gauge, but it registered normal. When Mr. Blum looked up from the gauge, he noticed flames coming from under the hood of the vehicle on the passenger side.3 After pulling the hood

release located under the driver's side of the dashboard, he exited the cab and proceeded to the rear of the truck to retrieve a fire extinguisher. When he went to the front of the truck with the extinguisher and attempted to lift the engine hood, he found the hood too hot to touch. aimed the fire extinguisher towards the flames and completely discharged the extinguisher. The truck was deemed a total loss. stipulated to be $23,880.21. Ford seeking reimbursement. General Accident paid Montrose for its value, He

General Accident, the subrogated insurer, thereafter wrote to Ford initially responded that it needed to inspect the vehicle.

General Accident voluntarily made the vehicle available to Mr. Samuel, an inspector employed by Ford. After Mr. Samuel inspected the vehicle and reported, Ford denied the claim. On 5 May 1998, General Accident, on behalf of its insured, Montrose, filed a subrogation claim against Ford in the Circuit Court for Montgomery County. General

The power take-off is a mechanical control that diverts power from the transmission of the vehicle to a hydraulic pump that operates the wrecker body. The wrecker body in turn operates the wheel lift, which lowers and raises the front or rear end of the disabled vehicle. Mr. Blum testified that there were no flames projecting into the driver's/passenger's compartment of the truck at this time. 4
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Accident thereafter filed two amended complaints, the last of which alleged claims for negligence, breach of warranty, and strict liability based on a manufacturing defect.4 A one-day bench trial was held on 24 June 1999. At trial, General Accident abandoned its claim of a manufacturing defect, claiming instead that a design defect in the Ford vehicle caused the fire.5 General Accident, it is supposed, proceeded to trial under claims of

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The Second Amended Complaint states, in pertinent part: Plaintiff sues Defendant for negligence for failing to exercise reasonable care in manufacturing a product which caused damage to the Defendant's vehicle, for breach of warranty for selling a product which cause property damage and also for strict liability in tort under the authority of United Gypsum Company v. Mayor and City Council of Baltimore, 336 Md. 145, 647 A.2d 405 (1992). The Defendants placed a defective product on the market which caused property damage and which created a substantial and unreasonable risk of death and personal injury. The following relevant discourse took place at trial: [DEFENDANT'S TRIAL ATTORNEY]: Well, strict liability claims are really two-fold. The manufacturing I think should be granted because there was no evidence. THE COURT: I do not think he is

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