Floyd County Mutual Insurance Ass'n v. CNH Industrial America LLC, No. 21-1075 (8th Cir. 2021)Annotate this Case
After a tractor manufactured by CNH caught fire, Floyd filed suit against CNH in federal court under a theory of product liability, claiming that its insureds owned the tractor and other property on the tractor, both of which were damaged in the fire, and that Floyd was subrogated to its insureds' claims against CNH because Floyd had paid its insureds' claim for the damage. The district court dismissed the case for lack of subject matter jurisdiction under 28 U.S.C. 1332.
The Eighth Circuit affirmed and concluded that section 1332's amount-in-controversy requirement was not satisfied in this case. The court concluded that the Iowa Supreme Court would hold that the economic-loss doctrine permits recovery only for the other property and not for the product itself. Accordingly, the Iowa Supreme Court would bar recovery in tort for damage that a defective product causes to itself, even if the plaintiff also seeks recovery for damage to other property. Here, Floyd's recovery is limited as a matter of law to the alleged $22,787.81 in damage to property other than the tractor. The court denied the motion to certify a question of law to the Iowa Supreme Court and upheld the district court's dismissal based on lack of subject matter jurisdiction.
Court Description: [Gruender, Author, with Smith, Chief Judge, and Stras, Circuit Judge] Civil case - Insurance. In a fire, a truck tractor and other property covered under plaintiff's policy were damaged. The loss to the tractor was $145,000, while the damage to other property was $22,781. Plaintiff alleged it met the $75,000 amount-in-controversy threshold because it could recover for both the tractor and the other property damage. The district court held the recovery was limited to the other property and it dismissed the case for failure to meet Sec. 1332's amount-in-controversy requirement. While the Iowa Supreme Court has not dealt directly with the question presented here, the court concludes that it would hold that the economic loss doctrine permits recovery only for the other property involved in the incident and not for the defective product itself; thus the Iowa Supreme Court would bar recovery in tort for damage that a defective product (here the truck tractor) causes to itself, even if the plaintiff also seeks recovery to damage to other property lost in the incident; here, plaintiff's recovery is limited as a matter of law to the alleged $22,787 in damage to the other property and the amount-in-controversy requirement is not met. Judge Stras, dissenting.