FRANCIS THORPE a v. GENERAL ELECTRIC COMPANY

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-2805-10T2

FRANCIS THORPE and MARY

ELLEN THORPE,

Plaintiffs-Appellants,

v.

GENERAL ELECTRIC COMPANY

d/b/a GE APPLIANCES,

Defendant-Respondent.

__________________________________

November 22, 2011

Argued October 31, 2011 - Decided

Before Judges A. A. Rodr guez and Ashrafi.

On appeal from Superior Court of New Jersey, Law Division, Somerset County, Docket No.

L-1674-09.

Richard S. Nichols argued the cause for appellants (Gennet, Kallmann, Antin & Robinson, P.C., attorneys; Mr. Nichols, on the brief).

Christine M. Gurry argued the cause for respondent (Traflet & Fabian, attorneys; Ms. Gurry, on the brief).

PER CURIAM

Plaintiffs Francis and Mary Ellen Thorpe appeal from summary judgment dismissing their complaint for water damage caused to their vacation home by a ruptured waterline of their refrigerator. We affirm.

Viewed most favorably to plaintiffs, R. 4:46-2(c); Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 540 (1995), the summary judgment record established the following relevant facts and procedural history.

The Thorpes purchased a General Electric refrigerator in 2001 and, at some later time, installed it in their vacation home in Stone Harbor, New Jersey. The owner's manual warned that only copper tubing should be used to connect the ice-maker to house plumbing. The manual cautioned that plastic tubing posed a risk of water leakage over time. On the rear of the refrigerator near the waterline connection a label further warned in conspicuous language against using plastic tubing and disclaimed liability for improper installation. Despite these warnings, whoever installed the refrigerator used plastic tubing. Defendant General Electric Company (GE) did not install the refrigerator in the Stone Harbor home.

In August 2006, the Thorpes entered into a twelve-month service contract with GE. In the contract, GE disclaimed liability for damages arising out of installation of the refrigerator, for damages caused by plumbing, or for replacement of hoses. It also disclaimed liability for any consequential damages related to the performance of the service contract.

On May 15, 2007, a GE technician was granted access to the Thorpes' Stone Harbor home by their rental agent to repair the ice-maker. In his deposition, the technician did not remember the service call. He acknowledged that, to work on the ice-maker, he would have to move the refrigerator and the plastic tubing would be exposed. As a general practice, when the technician found a refrigerator had plastic tubing in "bad shape," he would recommend that the owner replace it with copper tubing or at least newer plastic tubing. Because he had no recollection of the service call, the technician could not say whether he saw that the tubing on the Thorpes' refrigerator was plastic or whether it was in bad condition.

About sixteen months after the service call, in September 2008, the plastic tubing ruptured and water leaked into the Thorpes' house, causing substantial damage. The homeowner's insurance carrier for the Thorpes paid them approximately $35,000 to repair the damages and then brought this action in subrogation of the Thorpes' claimed right to recover the money from defendant GE.

After discovery was conducted, the parties filed cross-motions for summary judgment on the alleged liability of GE for damage to the house. Judge Margaret Goodzeit granted summary judgment, concluding that GE did not have a duty under the service contract or under tort law for the service technician to warn the Thorpes again that copper tubing should have been used. On appeal, the Thorpes contend the court erred because, in the circumstances shown by these facts, the law imposes a duty upon a contract service provider to warn its customer of the unsafe condition of the product it is servicing.

"A duty is an obligation imposed by law requiring one party to conform to a particular standard of conduct toward another." Acuna v. Turkish, 192 N.J. 399, 413 (2007) (internal quotation marks omitted), cert. denied, 555 U.S. 813, 129 S. Ct. 44, 172 L. Ed. 2d 22 (2008). Whether a duty exists is a matter of law decided by the court. Ibid. We give no "special deference" to the trial court's "interpretation of the law and the legal consequences that flow from established facts." Manalapan Realty, LP v. Manalapan Twp. Comm., 140 N.J. 366, 378 (1995). Our standard of review, therefore, is plenary.

The imposition of duty requires an analysis that is "both very fact-specific and principled; it must lead to . . . sensible rules to govern future conduct." Hopkins v. Fox & Lazo Realtors, 132 N.J. 426, 439 (1993). The court weighs and balances several factors: "the relationship of the parties, the nature of the attendant risk, the opportunity and ability to exercise care, and the public interest in the proposed solution." Ibid. The court must ask whether imposing a duty satisfies "an abiding sense of basic fairness under all of the circumstances." Ibid.

As an initial matter in this case, the service contract did not impose a duty upon GE to inspect the refrigerator for defects in connection of the ice-maker or to warn about risks of damage as a result of faulty installation. In fact, the contract did just the opposite; it expressly notified the Thorpes that GE undertook no such duty.1 Any duty imposed upon GE would have to arise out of tort law despite the express terms of the service contract.

The Thorpes argue that the court should impose a tort duty upon GE because the service provider would have a simple obligation to note on its invoice that the refrigerator had been improperly installed with plastic tubing. Such a duty would arise whether or not the technician observed any deterioration or damage to the tubing. We question whether the suggested duty could be limited as the Thorpes contend. The service provider would have to undertake an inspection of the refrigerator in addition to the purpose of each service call to assure it did not violate such a legal duty, and the adequacy of the warning would likely give rise to further litigation. Especially because the owners already disregarded more explicit warnings at the time they purchased and installed the refrigerator, we doubt a simple notation on a service invoice would have been an effective means of avoiding the risk of damage to their property.

The Thorpes rely on Siddons v. Cook, 382 N.J. Super. 1, 10 (App. Div. 2005), to argue that GE's presumed knowledge of the improper use of plastic tubing was sufficient to impose a duty upon GE to warn the Thorpes of the risk of water damage. In Siddons, a condominium was damaged by water after a hose attached to a built-in dishwasher ruptured. Id. at 5. We reversed summary judgment and held the Condominium Association owed a duty to warn unit owners of the latent defect in the dishwasher hose because: (1) the Association was a fiduciary of the unit owners, id. at 7, 10-11; (2) the risk posed by flooding was "serious," id. at 11; (3) the Association was in the "best position" to reduce the risk because it had authority to access the units, it had notice of three prior incidents, and it could easily warn owners, id. at 10-11; and (4) the duty imposed was "limited" and would not result in a "cataclysmic change in the law," id. at 11-12.

Despite some similarity between this case and Siddons, the facts here are significantly different. In Siddons, the built-in dishwasher was installed by the developer, and the hose was not accessible to the owner. The owner had no prior warning or ability to learn about its defective condition. Here, GE as the manufacturer warned the Thorpes not to use plastic tubing. The Thorpes arranged for installation by someone other than GE, and the installer was also warned by the label in back of the refrigerator not to use plastic tubing. In addition, the Thorpes had access to the hose and could determine for themselves whether the refrigerator had been properly installed. They were in as good a position to avoid the risk as the service technician who made only one service call years later and did not have direct contact with the Thorpes even on that one call.

Nor is this a case like Hopkins, supra, 132 N.J. 426, where the Supreme Court held that a real estate agent had a duty to warn potential buyers about latent dangerous conditions of a house because the agent should have known of the danger and stood to gain an economic benefit from the presence of the business invitees. Id. at 440-41, 443-48. See also Monaco v. Hartz Mt. Corp., 178 N.J. 401, 404-05, 416-19 (2004) (because commercial landlord derived economic benefit and had the ability to protect invitees from the danger of a loose traffic sign, it had a duty to warn business invitees). Here, the economic benefit derived from the service contract was established by the contract itself. Imposing an additional duty upon GE to inspect the refrigerator and warn the owners of defects or dangers would alter the terms of the parties' agreement without sound policy reasons. Not only had the Thorpes already been warned of the risk of plastic tubing, they could have observed the type of tubing installed and prevented the risk.

The circumstances here are also not as compelling as those in Carvalho v. Toll Bros. & Developers, 143 N.J. 569 (1996), where the Supreme Court imposed a tort duty beyond the specific terms of a defendant's contract because of the relative ability of the parties to prevent injury and death. There, the Court held that an engineering firm owed a duty to warn of the danger of a trench collapse that killed a construction worker. Id. at 576-79. Unlike Carvalho, the facts in this case do not suggest that a mere additional warning on a service invoice would have been heeded any more than explicit warnings against the use of plastic tubing in the owner's manual and on a conspicuous label on the back of the refrigerator.

Similarly, in Calderon v. Machinenfabriek Bollegraaf Appingedam BV, 285 N.J. Super. 623 (App. Div. 1995), certif. denied, 144 N.J. 174 (1996), the danger was so obvious and the risks so great that the special relationship of a service provider and the owner of the equipment led to our imposing a legal duty to warn. In Calderon, an employer disregarded manufacturer warnings and removed safety devices on a baling and compacting machine; as a result an employee lost an arm. Id. at 626-28. We held that the service provider, who had also sold the machine, owed a continuing duty to warn against use of the machine without protective devices because it had assumed a role of assuring the safety of the machine. Id. at 627, 631-32. The service provider was on-call and available as needed and had a policy of notifying owners of such dangerous practices. Id. at 629-30. Cf. Lally v. Printing Mach. Sales & Serv. Co., 240 N.J. Super. 181 (App. Div. 1990) (service provider owed no duty to warn of unsafe condition of die-cutting press where it had no on-going relationship with employer and repaired the machine on only one occasion).

In contrast, the service technician in this case testified he only had an informal practice of notifying customers if he noticed that plastic tubing was in "bad shape," but neither he nor GE had a policy of re-warning customers at every service call that they should use copper tubing. Moreover, the Thorpes were not present when the technician serviced their refrigerator, and he only made that one visit to their home, some sixteen months before the tubing ruptured.

Unlike Calderon, which involved a specialized machine that posed an obvious danger of injury to workers, this case involves a consumer item in the context of a routine service call. We agree with the trial court that imposition of a duty on all service providers to inspect and warn owners about risks in the use of such consumer goods would have widespread economic consequences. Balancing and weighing the relevant factors, see Hopkins, supra, 132 N.J. at 439, we decline to impose a new duty under tort law upon all service providers to warn of potential risks related to use of the wrong supplies and equipment when installing a refrigerator.

Having reached that conclusion, we need not address the Thorpes' further argument that the service contract did not effectively disclaim liability for the negligence of GE.

A

1 Not only did the service contract limit GE's liability to repair or replacement of parts it had serviced, but it expressly stated:

10. What Is Not Covered
Your Contract does not cover:

. . . .

c. consumer replaceable items such as . . . hoses . . . .

. . . .

g. damages or failures caused by conditions beyond Administrator's control such as inadequate plumbing, abuse, misuse, . . . improper installation . . . .