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IN THE COURT OF APPEALS OF MARYLAND No. 63 September Term, 1994 _____________________________________

PATTY MORRIS et al.

v.

OSMOSE WOOD PRESERVING et al.

____________________________________ Murphy, C.J. Eldridge Rodowsky Chasanow Karwacki Bell Raker, JJ. ____________________________________ OPINION BY MURPHY, C.J. Eldridge, Bell, and Raker, JJ. dissent ____________________________________ Filed: November 14, l995

Plaintiffs' products liability tort claims in this case seek recovery for purely economic loss associated with the alleged deterioration of plywood in the roofs of their townhouses. The

principal issue is whether their claims come within the exception for conditions "presenting a clear danger of death or personal injury," which we adopted in Council of Co-Owners v. WhitingTurner, 308 Md. 18, 35 n.5, 517 A.2d 336 (1986). In addition, we

must determine whether the plaintiff home buyers may maintain an action under Maryland's Consumer Protection Act against

manufacturers or sellers with whom the plaintiffs had no direct contact. Further, we consider whether Maryland's version of the

Uniform Commercial Code (UCC) permits plaintiffs' implied warranty claims. I. A. Plaintiffs brought this class action suit to recover from the defendants the cost of replacing roofs that contained allegedly defective fire retardant treated plywood ("FRT plywood").1

According to the complaint, on November 3, 1987, plaintiff Patty

1

The complaint describes the class as

"[a]ll present owners of roofs or buildings, including townhouses, in the State of Maryland and in the United States, where the roofs were at any time constructed with fire retardant treated plywood, manufactured, treated, produced, tested, inspected, marketed and/or sold by Osmose Wood Preserving, Inc, [sic] Hoover Universal, Inc. or Hoover Treated Wood Products, Inc., and prior owners of said buildings who have paid for the inspection, replacement or repair of said buildings' roofs." The circuit court dismissed the complaint before the class was certified.

2 Morris purchased a townhouse that had a roof constructed of FRT plywood manufactured by defendant Osmose Wood Preserving (Osmose). On October 23, 1987, plaintiff Richard Mills purchased a townhouse that also had a roof constructed of FRT plywood manufactured by Osmose. On July 11, 1985, plaintiff Michael Karbeling purchased a

townhouse that had a roof constructed of FRT plywood manufactured by defendant Hoover Treated Wood Products, Inc. (Hoover Wood). On

September 28, 1983, plaintiff Laura Herlihy purchased a townhouse that had a roof constructed of FRT plywood manufactured by

defendant Hoover Universal, Inc. (Hoover Universal).2 Plaintiffs allege in their Fourth Amended Complaint that FRT plywood, when exposed to high temperatures, begins an acidic reaction that was designed to stop the spread of fire. It was

further alleged that the reaction can occur at temperatures as low as 130 degrees fahrenheit, and roofs can reach temperatures of 180 degrees fahrenheit without the presence of fire. Plaintiffs aver

that the chemical reaction "weakens the wood and destroys the bonding between the plywood laminates, thereby causing the wood, among other things, to bow, darken, spot, warp, fracture and otherwise deteriorate and lose strength capacity." This reaction,

the plaintiffs claim, will inevitably occur in plywood installed in roofs, and it will occur without regard to ventilation or moisture levels in attics.

According to the complaint, Hoover Universal sold the assets of its wood preserving division to Hoover Wood on September 28, 1983. Under the terms of the sale, Hoover Universal retained liabilities for products sold prior to the sale of the assets.

2

3 The plaintiffs allege in their amended complaint that the plywood in plaintiffs' roofs has undergone this reaction,

"significantly weakening the roofs and resulting in substantial impairment of the strength and structural integrity of the roofs, and damaging other components of the roofs in which it is

incorporated."

Plaintiffs allege, therefore, that the roofs are They

"unsafe and dangerous" and "at risk of premature failure."

further assert that "[t]here is an immediate threat of injury from walking on the roofs, and also the threat of the roofs collapsing and injuring the occupants within," and that the roofs cannot support "any weight, even a heavy snowfall."3 According to the complaint, the defendants each had advertised their products as suitable for constructing roofs, when in fact they were not. On March 30, 1986, the American Plywood Association

(the Association) informed Hoover Wood of a situation in which its FRT plywood had deteriorated despite adequate ventilation. In

April 1987, the Association notified all defendants of the thermal

The plaintiffs, in a previous version of the complaint, alleged that Plaintiff Herlihy had been warned to stay off of her roof because of the FRT plywood. See infra note 4 (explaining the procedural history of the case prior to the current version of the complaint). They also alleged that local fire departments have cautioned fire fighters not to walk on roofs containing FRT plywood. Further, they alleged that "[t]here have been instances where homeowners and others have fallen through roofs constructed of defendants' FRT plywood while attempting to perform maintenance work on these roofs." After the defendants filed a motion to strike certain irrelevant and scandalous statements from the complaint, and Judge Cave, at a hearing on September 25, 1992, stated that "much of what is contained in the complaint ... isn't necessary to put into the complaint," plaintiffs omitted these allegations from their fourth and final amended complaint.

3

4 degradation problems associated with FRT plywood. The general

public was alerted to the problem in the spring of 1990, most notably by an article on the front page of the New York Times dated April 11, 1990. Plaintiffs allege that they would have become

aware of the problem sooner if the defendants had not controlled all information concerning it. B. Based on these facts, the fourth amended complaint contained five counts: strict liability, negligence, breach of implied

warranties, negligent misrepresentation, and violations of the Maryland Consumer Protection Act, Maryland Code (1975, 1990 Repl. Vol., 1995 Supp.)

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