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Capital Motor Lines v. Detroit Diesel Corp

July 29, 2011


The opinion of the court was delivered by: Ellen Segal Huvelle United States District Judge


Plaintiff Capital Motor Lines ("Capital Motor") brings this action against Detroit Diesel Corporation ("Detroit Diesel") after a June 8, 2005 fire in the engine compartment of a motor coach owned by Capital Motor. Capital Motor alleges breach of implied warranty and two counts of negligence, and seeks damages from Detroit Diesel, the manufacturer of the motor coach engine, for property damage to the motor coach and its loss of use as a result of this fire.

Before the Court is Detroit Diesel's motion for summary judgment. For the reasons set forth herein, this motion will be granted.


Capital Motor is an Alabama corporation with its principal place of business in Montgomery, Alabama. (Compl. ¶ 3.) Detroit Diesel is incorporated in Delaware with its principal place of business in Detroit, Michigan. (Id. ¶ 4.)

On September 24, 2001, Capital Motor purchased a 2002 model year motor coach for $340,000.00.*fn1 (Id. ¶ 6.) Greyhound Lines, Inc. took delivery of this coach and operated it pursuant to an agreement with Capital Motor. (Def.'s Statement of Undisputed Facts ["Def.'s Facts"] ¶ 7.) The motor coach was equipped with a Detroit Diesel Series 60 engine. (Id. ¶ 6.) On June 8, 2005, while Greyhound was operating the coach in Washington, D.C., the driver of the motor coach noticed smoke coming from the rear of the motor coach. (Compl. ¶ 10.) After stopping, the driver saw flames from the rear of the coach which later spread throughout the vehicle. (Id. ¶ 11.) No personal injuries or deaths resulted from the fire, but the motor coach was rendered a complete and total loss.*fn2 (Id. ¶ 12.) A subsequent inspection of the motor coach by Capital Motor in August 2005 determined the cause of the fire to be engine malfunction.*fn3 (Id. ¶ 13.) In March 2006, Detroit Diesel issued a report stating that Series 60 engines were prone to turbocharger compressor failures which could result in fires, and that it would conduct a safety recall campaign to remedy the problem. (Id. ¶ 14.)

On June 5, 2008, Capital Motor commenced this suit against Detroit Diesel and MCI. Capital Motor alleged three counts against Detroit Diesel: (1) breach of implied warranty; (2) negligence in designing, marketing, testing, selling and distributing the engine which caused the fire; and (3) negligence in failing to warn Capital Motor of the defective engine. Capital Motor further alleged that it suffered significant property damage as a result of the engine fire, including total loss of the motor coach and related damages for loss of use. On June 13, 2011, Detroit Diesel filed the instant motion for summary judgment.


Detroit Diesel contends that it is entitled to summary judgment because (1) the statute of limitations bars the breach of implied warranty claim and (2) the economic loss rule bars the negligence claims. Capital Motor argues that Detroit Diesel waived the statute of limitations as an affirmative defense in an interrogatory answer and that any attempt to re-assert this defense would result in substantial prejudice. Capital Motor further argues that it is not seeking damages to recover loss of the engine, but rather it is seeking damages to "other property" caused by the fire, specifically the motor coach, and as a result, its negligence claims are not barred by the economic loss rule. With respect to each of these issues, there are no disputed issues of fact (Pl.'s Opp'n to Summ. J. ["Pl.'s Opp'n"] at 2), and the parties agree as to the applicability of D.C. law. (Def.'s Mot. for Summ. J. ["Def.'s Mot."] at 4-6; Pl.'s Opp'n at 2 n.1.)


Capital Motor's claim for breach of implied warranty is governed by a four-year statute of limitations, pursuant to the Uniform Commercial Code § 2-275, which has been adopted in the District of Columbia. D.C. Code § 28:2-725; see also Hull v. Eaton Corp., 825 F.2d 448, 456 (D.C. Cir. 1987); Long v. Sears Roebuck & Co., 877 F. Supp. 8, 13-14 (D.D.C. 1995). The D.C. Code states that this statute of limitation begins to run upon tender of delivery:

(1) An action for breach of any contract for sale must be commenced within four years after the cause of action has accrued. By the original agreement the parties may reduce the period of limitation to not less than one year but may not extend it.

(2) A cause of action accrues when the breach occurs, regardless of the aggrieved party's lack of knowledge of the breach. A breach of warranty occurs when tender of delivery is made, except that where a warranty explicitly extends to future performance of the goods and discovery of the breach must await the time of such performance the cause of action accrues when the breach is or should have been discovered.

D.C. Code ยง 28:2-725 (1)(2) (emphasis added). Here, Detroit Diesel contends that Capital Motor's breach of warranty claim accrued when it purchased the coach on September 24, 2001. (Def.'s Mot. at 7.) Because Capital Motor did not file suit until June 5, 2008, Detroit Diesel argues that the claim is barred by the four-year statute of limitations. (Id.) In response, Detroit Diesel does not dispute the applicability of a four-year statute of ...

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