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COUNTY OF WESTCHESTER v. GMC

January 19, 1983

COUNTY OF WESTCHESTER and LIBERTY LINES TRANSIT INC., Plaintiffs,
v.
GENERAL MOTORS CORPORATION, Defendant



The opinion of the court was delivered by: BRIEANT

MEMORANDUM AND ORDER

 Brieant, Judge.

 Pursuant to Rule 12(b)(6), F.R.Civ.P., defendant General Motors Corporation ("GM") moves in this diversity case to dismiss the entire complaint of Liberty Lines Transit, Inc. ("Liberty"), and so much of the complaint of the County of Westchester ("County") as asserts claims arising under New York State law for negligence, strict products liability and breach of implied warranty. The motion is based on failure to state a claim upon which relief can be granted.

 This dispute arises out of the purchase by the County of one hundred five (105) "RTS 2, Model 03" buses from GM, eighty-six (86) of which buses were operated by Liberty pursuant to a carrier lease agreement with the County. Under this agreement Liberty uses the vehicles principally to provide public street transportation throughout a substantial portion of Westchester County where it possesses certificates of public convenience and necessity. The remaining buses are on lease to various other smaller common carriers.

 Plaintiffs allege that as a result of defective design and redesign of the buses' air conditioning system by GM, the system has failed repeatedly, causing substantial property damage to the air conditioning condensers, a nondefective component of the air conditioning system. In addition, plaintiffs allege that they have incurred increased maintenance and repair costs, operating losses and lost profits.

 Essentially, plaintiffs base their claims on improper placement of the air conditioning system by GM, in its design and manufacture of these vehicles. That system was placed in the engine compartment. In all its previous models, GM had placed the air conditioning on the top rear of the bus. Plaintiffs allege that the new location prevented the efficient cleaning of the outside of the condensers, causing the system to fail continually.

 In an effort to cure this perceived problem, GM redesigned the system twice at its own expense, without conceding liability. The initial modification consisted of a retrofit which allowed the condensers to swing out of the engine compartment to facilitate their cleaning. However, plaintiffs allege that this change increased the adverse effect of engine vibrations upon the condensers, causing them to crack from metal fatigue. In an effort to solve this new difficulty, GM installed a second retrofit, placing a picture frame type device around the swing out condensers. Plaintiffs allege that this remedial measure has been ineffective and that the condensers continue to crack.

 As a result, the plaintiffs contend that the cracked condensers must now be replaced in large numbers, and the entire air conditioning system will have to be relocated on the top rear of the bus as it was on prior models.

 GM has recommended such a relocation, but insists plaintiffs must pay for it. GM also denies that plaintiffs have incurred any property damage and denies that Liberty has any enforceable rights against it. GM asserts that despite the failure of the air conditioning system, the buses are still merchantable and fit for the particular purpose for which they were intended.

 GM now seeks by motion to dismiss the plaintiffs' negligence and products liability claims on the grounds that plaintiffs' complaint fails to plead the requisite property damage necessary to support claims for negligence and strict liability under New York law.

 These legal theories of negligent design and strict products liability were designed by the New York courts to compensate persons for tortious injury to persons or property resulting from badly made products. These theories may not be asserted solely to enforce contractual rights or expectations, nor merely to recover economic loss. Hole v. General Motors Corporation, 83 A.D.2d 715, 442 N.Y.S.2d 638 (3rd Dept. 1981); Martin v. Julius Dierck Equipment Co., 43 N.Y.2d 583, 374 N.E.2d 97, 403 N.Y.S.2d 185 (1978).

 Plaintiffs here seek essentially to recover from GM economic damages allegedly incurred as a result of the defective air conditioning system of the buses. The alleged property damage to the air conditioning condensers caused by the negligent design, is insufficient to support claims founded on negligence or strict products liability under New York law. To prevail on such a claim, New York requires that the alleged defective product cause physical injury or physical damage to unrelated property or to a portion of the defective property itself which is unrelated to the inherent nature of the alleged defect. See Schiavone Construction Co. v. Elgood Mayo Corp., 81 A.D.2d 221, 439 N.Y.S.2d 933, rev'd 56 N.Y.2d 667, 451 N.Y.S.2d 720, 436 N.E.2d 1322 (1982) reversing upon dissenting opinion below, 81 A.D.2d 221, 227-34, 439 N.Y.2d 933; Dudley Construction Inc., v. Drott Manufacturing Co., 66 A.D.2d 368, 412 N.Y.S.2d 512 (4th Dept. 1979).

 In this case, the condenser, the article damaged, is a primary component of the air conditioning system, alleged to be defectively designed or made. Such property damage cannot support a claim for damages for negligence or strict products liability under New York law.

 Accordingly, so much of the within motion as seeks to dismiss the plaintiffs' First and Third claims, based on theories of negligence and strict products liability for property damage is granted. With respect to these claims, plaintiffs' ...


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