Des Moines Flying Service, Inc. v. Aerial Services Inc.

Summary

The Iowa Supreme Court considered whether Iowa Code section 613.18(1)(a), which provides immunity to certain nonmanufacturing sellers for strict liability in tort or breach of implied warranty of merchantability, applies to claims involving purely economic loss. The court held that the immunity applies only to products-liability cases involving personal injury or property damage, not claims based solely on economic loss, and reversed and remanded the district court judgment.

Holdings

1. Section 613.18(1)(a) immunity applies only in products-liability cases involving personal injury or property damage; it does not immunize a nonmanufacturing seller from an implied-warranty-of-merchantability claim based solely on economic loss.
2. The district court erred by granting summary judgment to Des Moines Flying Service on Aerial Services' implied-warranty-of-merchantability claim based on section 613.18(1)(a).
3. When a defective product causes only economic loss, the buyer may pursue direct-loss express-warranty claims against a remote seller and consequential-loss warranty claims against the seller in privity, subject to applicable disclaimers or modifications; when personal injury or additional property damage occurs, the matter may proceed under products-liability principles against the manufacturer.

Questions Presented

1. Whether Iowa Code section 613.18(1)(a), which grants nonmanufacturing sellers immunity from suits based on strict liability in tort or breach of implied warranty of merchantability arising solely from an alleged original design or manufacturing defect, applies to claims involving only economic loss.
2. Whether the district court erred by dismissing Aerial Services' implied-warranty-of-merchantability claim against Des Moines Flying Service under section 613.18(1)(a).

Disposition

reversed_and_remanded