Strict Products Liability and Property Damage Claims

Although Strict Products Liability is most often associated with personal injury claims, it can also be asserted in property damages claims as well. The Texas Supreme Court has held that strict products liability does not apply when the plaintiff suffers only economic losses. In Nobility Homes of Texas, Inc. V. Shivers, 557 S.W.3d 77 (Tex. 1977), John Shivers sued Nobility Homes of Texas, Inc., the manufacturer of a mobile home he purchased, because of defects in the mobile home. Shivers' damages claim was the difference between the market value of the mobile home and its purchase price. The Texas Supreme Court held this was an economic loss that could not be recovered under a Strict Products Liability theory. The court in Nobility Homes indicated that economic losses may be recoverable in contract and/or negligence acations though. However, in Indelco, Inc. V. Hansen Industries, 967 S.W.2d 931 (Tex.App.–Hou–14th Dist., 1998, writ denied), the Court of Appeals held that economic damages caused by a defective product damaging itself are not recoverable in a negligence action.

The Texas Supreme Court has also held that a plaintiff cannot recover under a Strict Products Liability theory for damage to the defective product itself. In Mid-continent Aircraft Corporation v. Curry County Spraying Service, Inc., 572 S.W.2d 308 (Tex. 1978), the buyer of a rebuilt airplane filed suit against the seller, prior owner, and repairer after the airplane in question crashed. The pilot was not injured in the crash and no property other than the aircraft was damaged. The Court held that damage to the defective product itself was an economic loss, and hence was not recoverable. However, in contrast, if there is collateral property damage in addition to the damage to the defective product itself, a plaintiff can recover for damage to the collateral property and damage to the product itself. In Signal Oil & Gas Company v. Universal Oil Products, 572 S.W.2d 320 (Tex. 1978), the plaintiff brought suit to recover for property damage and economic loss resulting from an explosion and fire at the plaintiff's refinery.