Great Northern Insurance Company, as subrogee of Scott and Leah Rued, Appellant,
Honeywell International, Inc., et al., Defendants, McMillan Electric Company, Respondent, and Honeywell International, Inc., Cross Claim Plaintiff,
McMillan Electric Company, Cross Claim Defendant.
County District Court File No. 27-CV-14-4020 Kirk, Judge
P. Kane, Cozen O'Connor, Minneapolis, Minnesota; and
Anthony J. Morrone (pro hac vice), Cozen O'Connor,
Chicago, Illinois (for appellant)
Cortney G. Sylvester, Nilan Johnson Lewis PA, Minneapolis,
Minnesota; and Webster A. Hart, Herrick & Hart, S.C., Eau
Claire, Wisconsin (for respondent)
Considered and decided by Schellhas, Presiding Judge; Kirk,
Judge; and Bratvold, Judge.
plain meaning of "equipment or machinery" includes
a heat-recovery ventilator under Minn. Stat. § 541.051,
subd. 1(e) (2016).
challenges the summary-judgment dismissal of its
product-liability, breach-of-warranty, and post-sale
duty-to-warn claims against respondent-manufacturer, arguing
that the district court erred by concluding that its claims
were barred by the ten-year statute of repose because the
heat-recovery ventilator (HRV) is not "equipment or
machinery" installed upon real property under Minn.
Stat. § 541.051, subd. 1(e) (2016), the exception to the
statute of repose. Because the HRV satisfies the plain and
ordinary meaning of "equipment or machinery" under
subdivision 1(e), and McMillan had a post-sale duty to warn,
we reverse and remand.
1996, Scott and Leah Rued constructed a new home in Eden
Prairie. The Rueds' architect included two HRVs in the
design of the home's ventilation system. Two Honeywell
HR200 Model 2355 HRVs were installed in the Rueds' home.
While the HRVs were not mandated by state code, they provided
additional energy efficiency by recovering heat and removing
humidity through the air-exchange process.
is an air exchanger containing two fans and two air filters,
a heat-exchange core, a motor, and two ventilation openings.
Two metal mechanical ducts connect the HRV with fresh air
from outside the home, as one duct removes stale air from the
home and the other duct draws in fresh air from outside the
home. The metal ducts are attached to the HRV with screws.
Each HRV is powered by an alternating current delivered via a
standard three-prong electrical plug that is connected to a
standard electrical outlet. The electrical outlet for the HRV
receives power on its own electrical breaker. The HRV is
controlled through a humidity-control dial on a thermostat
that is located in the bathroom. The humidity-control dial is
hard-wired through the walls to the HRV through low-voltage
wiring. Drains attach to the HRV, removing any condensation
that builds up inside the air exchanger.
completion of the first stage of construction, the HRVs were
hung from the overhead ceiling joists in the basement by
metal straps and brackets and connected to the duct branches
running throughout the Rueds' home. An HVAC technician
installed the HRVs. A city inspector checked the installation
of the HRVs prior to issuing a certificate of occupancy to
Nutech R. Holdings Inc. designed and manufactured the HRVs
that were installed in the Rueds' home. Nutech
manufactured the HRVs for defendant Honeywell International
Inc., and the HRVs were labeled with the Honeywell name. In
1992, Nutech began using electric motors that were
manufactured by respondent McMillan Electric Company. Nutech
installed McMillan's model 2355 electric motor only in
the Honeywell HRVs. McMillan sold the model 2355 motor
exclusively to Nutech, and the motor was only installed in
HRVs. In 1998, McMillan stopped producing the model 2355
motor. Between 2006 and 2010, approximately 60, 000 Honeywell
HRVs with McMillan motors were sold to customers in Canada
and the United States. When the lawsuit was filed in 2014,
the model 2355 motor had been linked to 11 fires, but no
2010, one of the two HRVs installed in the Rueds' home
was replaced with an air exchanger made by a different
manufacturer. On May 9, 2012, an HVAC technician from
defendant Treated Air Company serviced the Rueds' air
conditioner and furnace. Ten days later, a fire occurred in
the remaining Honeywell HRV, causing substantial property
damage to the Rueds' home. The parties contest the cause
of the Rueds' fire, but one theory is that the wires
within the motor were vulnerable to electrical failure
because they were not designed to withstand the thermal limit
of the motor. The Rueds had a homeowner's policy with
appellant Great Northern Insurance Company, and Great
Northern paid the Rueds' insurance claim.
Northern, as subrogee, alleged 13 counts of tort liability.
Great Northern alleged claims of post-sale duty to warn,
product liability, and breach of warranty against Honeywell,
Nutech, and McMillan and breach of contract and negligence
against defendant Heating and Cooling, Two, and Treated Air.
Honeywell and Nutech crossclaimed against McMillan, Treated
Air, and Heating and Cooling, Two, ...