Rogelio ACOSTA et al., Plaintiffs and Appellants, v. SYNTHETIC INDUSTRIES, INC., Defendant and Respondent.
Luis Alvarez et al., Plaintiffs and Appellants, v. Synthetic Industries, Inc., Defendant and Respondent.
Plaintiffs are numerous homeowners in the California Marquis housing development. Defendant Synthetic Industries, Inc., is a manufacturer of Fibermesh, a secondary reinforcer added to the concrete. It was used in the construction of the slab foundations for homes purchased by the plaintiffs.1 The trial court granted two separate motions for summary adjudication. One disposed of plaintiffs' claims based on strict products liability on the ground that defendant was a component supplier of a bulk product and the other disposed of their claims for fraud and negligent misrepresentation on the ground that plaintiffs failed to prove any reasonable reliance. We reverse, holding that defendant is not a component supplier of a bulk product and, therefore, is not entitled to the defense articulated in Artiglio v. General Electric Co. (1998) 61 Cal.App.4th 830, 71 Cal.Rptr.2d 817. We otherwise agree with the trial court.
FACTUAL AND PROCEDURAL BACKGROUND
Plaintiffs filed a fourth amended complaint, alleging causes of action for strict liability, fraud, negligence, and breach of express warranty.2 Plaintiffs allege they purchased their houses in the California Marquis housing development in which defendant's product, Fibermesh, was used to reinforce the concrete slab foundations. In their cause of action for strict liability, plaintiffs allege that the developer, Kaufman and Broad, used Fibermesh according to the instructions provided by defendant as a substitute for “6x6/10x10” welded wire in the concrete foundations of the homes. They allege that Fibermesh does not serve its intended function of holding the concrete slab together when cracks occur, “allow[ing] each cracked piece of concrete to act independently of each other, thus creating many separate slabs, rather than one integral slab.”
Plaintiffs allege they suffered damages such as intrusion of water, insects, and dirt through the cracked foundation, cracked stucco on exterior walls, “wracking and twisting of window frames” which then leak, “deformation of floor coverings,” and “general weakness of the entire foundation.” Plaintiffs allege they incurred substantial expenses to replace the slabs and repair the physical damage to their homes. Plaintiffs also claim personal injuries and emotional distress from living in and paying for a defective house, and that the market value of their homes diminished due to the stigma now attached to the homes.
In their cause of action for fraud, plaintiffs allege that defendant made certain representations to the single family home construction industry, including that Fibermesh can be used as an adequate substitute for welded wire mesh, and that the suitability of such substitution is substantiated by laboratory tests. These representations were made from 1984 through the present in advertising and promotional material prepared and disseminated by defendant to the construction industry, and especially through distribution at the International Conference of Builders (ICBO), in an effort to obtain approval from the ICBO of the substitution. Plaintiffs allege the representations regarding Fibermesh were false, and that defendant made these false representations knowingly and willfully. “Plaintiffs are informed and believe that Kaufman and Broad and their agents were also mislead [sic] by the assertions of Synthetic, as above stated and that they were caused to substitute Fibermesh for welded wire mesh in the Plaintiffs' homes.” “Synthetic knew or should have known that builders and developers such as and including Kaufman and Broad, would rely upon their assertions, as above alleged and that Plaintiffs and other home buyers in the same position as Plaintiffs would rely upon the builders' and developers' judgment in what products to use in the construction of their homes, so that the false statements of [S]ynthetic would be indirectly relied upon by Plaintiffs and others like Plaintiffs.” Plaintiffs allege they justifiably relied upon the statements and assertions of Synthetic, and had they known of the actual facts they would not have purchased their homes, knowing that they have defective slabs.
In their cause of action for negligence and negligent misrepresentation, plaintiffs alleged that defendant advertised and promoted Fibermesh to the construction industry and individual purchasers as the substantial equivalent of and an adequate replacement for “6x6/10x10” welded wire mesh in concrete slabs. In so doing defendant knew or should have known that individuals would purchase their homes from developers or others who relied upon those assertions and substituted Fibermesh for welded wire mesh, and would pass on the statements regarding Fibermesh to home buyers. Defendant made these representations negligently, recklessly, and in disregard of the actual facts, knowing they were false. Kaufman and Broad had the right to substitute a product that was the “substantial equivalent” of welded wire mesh, and used Fibermesh based upon the claims made by defendant that it was the substantial equivalent of welded wire mesh.
In their cause of action for breach of express warranty,3 plaintiffs alleged that defendant expressly and in writing warranted to the developer, Kaufman and Broad, that Fibermesh, when used as instructed by defendant, was the substantial equivalent of “6x6/10x10” welded wire mesh for use in concrete slabs. Plaintiffs entered into written agreements with Kaufman and Broad “which agreements consisted of the agreements themselves and the plans and specifications incorporated into the agreements, whereby the Plaintiffs agreed to purchase their homes, subject to the terms of said agreements. In said agreements it was warranted to Plaintiffs that the slabs in their homes would be constructed using 6x6/10x10 wire mesh or if an [sic ] other product was substituted, that product would be the ‘substantial equivalent’ of the aforementioned wire mesh․ Plaintiffs are informed and believe that said warranty was given to the Plaintiffs by Kaufman and Broad, based upon the warranty given to Kaufman and Broad by Synthetic․”
Motion for Summary Adjudication as to Cause of Action for Strict Liability
Defendant filed a motion for summary adjudication as to the first cause of action for strict liability on the ground that it is barred by the “component supplier” doctrine. In its separate statement of undisputed facts,4 defendant set forth that it manufactures a polypropylene fiber known by the trade name Fibermesh, which is used as a concrete admixture.5 Fibermesh is added to concrete by ready mix companies and sold to concrete contractors or developers for construction of residential slabs on grade (those placed directly on the ground surface). Fibermesh is added to the concrete by placing the degradable bags of it into the mixer at the “ready mix” “batch” plant or into the mixing drum of the concrete truck before the concrete is placed at the job site. Fibermesh fibers consist of bundles of interconnected strands which, when blended into the concrete mix, expand, spread out, and separate into millions of individual fibers.6 The mixing action distributes the individual fibers throughout the concrete mixture and orients them in a uniform random distribution. When Fibermesh is mixed into concrete, the bundles of fibers alter their shape, open and expand, and wrap around the aggregate particles of the concrete, forming a mechanical bond to the concrete.7 When “mixed into concrete at the recommended dosage rate of 1.5 lbs. per cubic yard of concrete, it represents one-tenth of one percent (0.1%) of the volume of the finished concrete product.” Fibermesh is not caustic, and does not require the use of any protective gloves, clothing, or air filtration equipment. The fibers are nontoxic and are chemically stable both before and after they are mixed with concrete.
Kaufman and Broad, a major home builder in the United States, was responsible for the design, planning, grading, engineering, construction, inspection, marketing, soils analysis, drainage, and sale of the homes.8 Dale Forbes, Kaufman and Broad's structural designer and civil engineer, approved the use of Fibermesh at the California Marquis project.9 Earth Systems Consultants, Kaufman and Broad's geotechnical engineers for the California Marquis project, approved the use of Fibermesh in the slabs. Any Fibermesh used in the project would have been sold by defendant to large, experienced concrete producers; defendant would not have sold the product directly to Kaufman and Broad or the concrete subcontractor.10
Defendant did not serve as the engineer, architect, or builder of the project, did not design the concrete slabs or any other aspect of the homes, did not select the concrete mix design specified by Kaufman and Broad for the project, did not construct the concrete slabs or any other aspect of the homes, and did not have any right to control any aspect of the construction of any of the homes.11 The City of Palmdale approved the use of Fibermesh at the project.12
In opposition, plaintiffs filed a separate statement of facts, as follows. Fibermesh is marketed as an alternative to welded wire mesh in the construction of concrete slabs.13 Fibermesh is not substantially altered when used as defendant directs; it is simply mixed into the concrete in the required quantity. The bundles of Fibermesh are “strands that have not been completely cut through, like a partially serrated carrot and all the mixing does is finish the separation of the bundles. The individual strands do not change, except for becoming scared [sic ] as a result of the mixing. They do not change in chemical composition, they do not expand in width nor absorb water.” “While Kaufman and Broad had initial responsibility for the design of the Plaintiffs' slabs, Kaufman and Broad and their agents altered the design of the slabs, by substituting Fibermesh for welded wire, based upon and as the result of the assertions and claims made by Defendant as to the suitability of Fibermesh to be used as a substitution for welded wire mesh, for secondary re [i]nforcement.” Fibermesh is sold in premeasured bags and is purchased and used according to the number of bags necessary. It has only one use, as an admixture in concrete. The purpose of an admixture is to reinforce the concrete slab when it dries and shrinks.
Plaintiffs further asserted Kaufman and Broad was not warned that Fibermesh does not prevent the formation of large cracks in the slab foundations weakening the foundation system of the homes and allowing insects, dirt, and water into the homes. Defendant filed responses and objections to plaintiffs' separate statement of facts.
After hearing argument, the trial court granted the motion. In its minute order, the trial court ruled that “mixing the fibers into concrete slabs does not ‘substantially change’ Fibermesh. However, the Court finds that Defendant has established that its limited role in developing and/or designing the cement in which Fibermesh was mixed is sufficient to warrant absolving the Defendant of any strict liability to Plaintiff as the ultimate consumer.”
Motion for Summary Adjudication as to Cause of Action for Fraud and Cause of Action for Negligence and Negligent Misrepresentation
Defendant then filed a motion for summary adjudication as to plaintiffs' cause of action for fraud and cause of action for negligence and negligent misrepresentation, on the ground that before purchasing their homes, plaintiffs were unaware of any alleged representations made by defendant and therefore cannot establish actual reliance.
In its separate statement of undisputed facts, defendant set forth that Kaufman and Broad was responsible for the design, planning, grading, engineering, construction, inspection, marketing, soils analysis, drainage, and sale of the homes.14 Plaintiffs did not buy Fibermesh directly from defendant, nor did Kaufman and Broad or its concrete subcontractors. Defendant sold Fibermesh directly to concrete producers.15 Defendant never made any oral or written representations directly to any of the plaintiffs.16
Before purchasing their homes, plaintiffs did not know Kaufman and Broad would use polypropylene fibers in the concrete slabs. Before purchasing their homes, plaintiffs had not read anything about Fibermesh or polypropylene fibers, including any product label or advertising materials. No one made any oral or written representations about Fibermesh to plaintiffs.17
Plaintiffs filed opposition to the motion for summary adjudication, including a separate statement of disputed facts. Plaintiffs stated that Kaufman and Broad altered the design of the slabs by substituting Fibermesh for welded wire based upon the representations and claims made by defendant as to the suitability of Fibermesh as a substitute for welded wire mesh for secondary reinforcement.18 Plaintiffs were informed in writing prior to purchasing their homes that the homes would be built according to the plans and specifications and the only substitution of materials would be for materials of substantially equivalent quality of the items being substituted. They were also informed that the homes would be built with the finest materials and quality from the foundation up, that the homes would be built in accord with the finest standards in the construction industry. Finally, plaintiffs were informed that the homes would be built in accordance with the plans and specifications of the engineers who designed them and with materials that were suitable for their intended purposes. Plaintiffs state they would not have purchased their homes had they known that the concrete slabs were constructed with Fibermesh and that it was not a suitable replacement for welded wire mesh.
As to the cause of action for negligence and negligent misrepresentation, plaintiffs contended that the facts alleged support either a claim for negligent misrepresentation regarding the suitability of Fibermesh as a replacement for welded wire, or a claim for negligent manufacture. Anticipating that the defense would contend that a cause of action for negligence was not pleaded, plaintiffs argued that they should be permitted to amend the complaint to conform to proof.
In reply, defendant asserted that there was no evidence that Kaufman and Broad or anyone else communicated any representation about Fibermesh to plaintiffs. As to the cause of action for negligence and negligent misrepresentation, defendant asserted that plaintiffs could not resist summary judgment on a theory not pleaded, and that the complaint pleaded only a claim for negligent misrepresentation, and not one for negligent manufacture. In the alternative, even if the complaint adequately pleaded a cause of action for negligent manufacture, such a claim would be barred by the component supplier doctrine.
The trial court granted the motion for summary adjudication, finding plaintiffs could not show actual reliance on any alleged misrepresentations by defendant. “[T]here is no evidence that any representations made by [defendant] regarding Fibermesh were communicated to plaintiffs.”
All issues having been disposed of, the court entered judgment in favor of defendant. This appeal followed.
“A grant of summary adjudication is reviewed de novo. (Ojavan Investors, Inc. v. California Coastal Com. (1997) 54 Cal.App.4th 373, 385 [62 Cal.Rptr.2d 803].) Our review is guided by Code of Civil Procedure section 437c, which provides in subdivisions (c) and (f) that a motion for summary adjudication of a cause of action may only be granted when, considering all of the evidence set forth in the papers and all inferences reasonably deducible therefrom, it has been demonstrated there is no triable issue as to any material fact as to that cause of action. We first look to the pleadings and decide whether the defendant has presented facts to negate an essential element of, or to establish a defense to, each cause of action sought to be adjudicated. If so, we then determine whether the plaintiff has demonstrated the existence of a triable, material issue of fact. (Ibid.)” (Casey v. Overhead Door Corp. (1999) 74 Cal.App.4th 112, 118, 87 Cal.Rptr.2d 603.) “A motion for summary adjudication proceeds in all procedural respects as a motion for summary judgment.” (Toigo v. Town of Ross (1998) 70 Cal.App.4th 309, 324, 82 Cal.Rptr.2d 649.) An appellate court “make[s] its own independent determination of the construction and effect of the papers submitted [citation], and the validity of the ruling is reviewable irrespective of the reasons stated. [Citation.]” (Preis v. American Indemnity Co. (1990) 220 Cal.App.3d 752, 757, 269 Cal.Rptr. 617.)
I. Strict Liability
In moving for summary adjudication as to the cause of action for strict liability, defendant asserted that it had no duty to plaintiffs based on the component supplier doctrine as stated in the case of Artiglio v. General Electric Co., supra, 61 Cal.App.4th 830, 71 Cal.Rptr.2d 817. In Artiglio, plaintiffs were women who received silicone breast implants manufactured by McGhan Medical Corporation. Plaintiffs filed suit against General Electric Company (GE), the supplier of the silicone used in manufacturing the implants, contending it was liable in negligence for failing to disclose to its customers information about the potential dangers posed by use of silicone in medical devices.19 (Id. at p. 833, 71 Cal.Rptr.2d 817.)
The Artiglio court first noted that some cases have held that manufacturers of component parts owe a duty to warn about the potential hazards of their products. It continued: “However, the duty of a component manufacturer or supplier to warn about the hazards of its products is not unlimited. As one court stated: ‘Making suppliers of inherently safe raw materials and component parts pay for the mistakes of the finished product manufacturer would not only be unfair, but it also would impose an [ ] intolerable burden on the business world․ Suppliers of versatile materials like chains, valves, sand[,] gravel, etc., cannot be expected to become experts in the infinite number of finished products that might conceivably incorporate their multi-use raw materials or components.’ (In re TMJ Implants Products Liability Litigation (8th Cir.1996) 97 F.3d 1050, 1057.) Thus, cases have subjected claims made against component suppliers to two related doctrines, the ‘raw material supplier defense’ and ‘the bulk sales/sophisticated purchaser rule.’ Although the doctrines are distinct, their application oftentimes overlaps and together they present factors which should be carefully considered in evaluating the liability of component suppliers. Those factors include whether the raw materials or components are inherently dangerous, whether the materials are significantly altered before integration into an end product, whether the supplier was involved in designing the end product and whether the manufacturer of the end product was in a position to discover and disclose hazards.
“A leading case which represents these doctrines is Walker v. Stauffer Chemical Corp. (1971) 19 Cal.App.3d 669 [96 Cal.Rptr. 803] (Walker ). In Walker the plaintiff was injured when a drain cleaner, composed of 50 percent sulfuric acid and 50 percent alkaline base, exploded. Among others, the plaintiff sued the supplier of the sulfuric acid. The court held that, in light of the substantial changes made to the sulfuric acid by the maker of the drain cleaner, the sulfuric acid supplier owed no duty to protect the plaintiff. In doing so, the court relied on the reasoning of the Restatement with respect to strict liability: ‘ “In the absence of decisions providing a clue to the rules which are likely to develop, the Institute has refrained from taking any position as to the possible liability of the seller where the product is expected to, and does, undergo further processing or other substantial change after it leaves his hands and before it reaches those of the ultimate user or consumer.
“ ‘ “․ The question is essentially one of whether the responsibility for discovery and prevention of the dangerous defect is shifted to the intermediate party who is to make the changes. No doubt there will be some situations, and some defects, as to which the responsibility will be shifted, and others in which it will not.” ’ (Walker, supra, 19 Cal.App.3d at p. 673, 96 Cal.Rptr. 803, quoting of Rest.2d Torts, 402A, com. p, at p. 357.) The court in Walker went on to state: ‘We do not believe it realistically feasible or necessary to the protection of the public to require the manufacturer and supplier of a standard chemical ingredient such as bulk sulfuric acid, not having control over the subsequent compounding, packaging or marketing of an item eventually causing injury to the ultimate consumer, to bear the responsibility for that injury. The manufacturer (seller) of the product causing the injury is so situated as to afford the necessary protection. [Citation.]’ (19 Cal.App.3d at p. 674, 96 Cal.Rptr. 803.)
“Consistent with Walker, the Restatement Second commentators noted: ‘It seems reasonably clear that the mere fact that the product is to undergo processing, or other substantial change, will not in all cases relieve the seller of liability under the rule stated in this Section. If, for example, raw coffee beans are sold to a buyer who roasts and packs them for sale to the ultimate consumer, it cannot be supposed that the seller will be relieved of all liability when the raw beans are contaminated with arsenic, or some other poison․ On the other hand, the manufacturer of pigiron, which is capable of a wide variety of uses, is not so likely to be held to strict liability when it turns out to be unsuitable for the child's tricycle into which it is finally made by a remote buyer.’ (Rest.2d Torts, § 402A, com. p, at p. 357.)” (Artiglio, supra, 61 Cal.App.4th at pp. 837-838, 71 Cal.Rptr.2d 817, emphasis added.)
The Artiglio court continued: “The raw material and bulk supplier defenses have also been addressed by the drafters of the Restatement Third. The Proposed Final Draft of the Restatement Third of Torts: Products Liability, section 5, approved on May 20, 1997, by the American Law Institute, contains the following comments about the ‘raw material’ and ‘sophisticated buyer’ doctrines: [¶] ‘Inappropriate decisions regarding the use of [raw] materials are not attributable to the supplier of the raw materials but rather to the fabricator that puts them to improper use. The manufacturer of the integrated product has a significant comparative advantage regarding selection of materials to be used. Accordingly, raw materials sellers are not subject to liability for harm caused by defective design of the end-product․ To impose a duty to warn would require the seller to develop expertise regarding a multitude of different end-products and to investigate the actual use of raw materials by manufacturers over whom the supplier has no control. Courts uniformly refuse to impose such an onerous duty to warn.’ (Rest.3d Torts (Proposed Final Draft) § 5, com. c, at p. 156.)
“ ‘[W]hen a sophisticated buyer integrates a component into another product, the component seller owes no duty to warn either the immediate buyer or ultimate consumers of dangers arising because the component is unsuited for the special purpose to which the buyer puts it. To impose a duty to warn in such a circumstance would require that component sellers monitor the development of products and systems into which their components are to be integrated.’ (Rest.3d Torts (Proposed Final Draft) § 5, com. b, at p. 154.)
“Taken together, these authorities establish that component and raw material suppliers are not liable to ultimate consumers when the goods or material they supply are  not inherently dangerous,  they sell goods or material in bulk to a sophisticated buyer,  the material is substantially changed during the manufacturing process and  the supplier has a limited role in developing and designing the end product. When these factors exist, the social cost of imposing a duty to the ultimate consumers far exceeds any additional protection provided to consumers. (See In re TMJ Implants Products Liability Litigation, supra, 97 F.3d at p. 1057.)” (Artiglio, supra, 61 Cal.App.4th at p. 839, 71 Cal.Rptr.2d 817.)
The Artiglio court held that GE was relieved of liability for negligence because it supplied silicone, which was used safely in numerous products and only posed a potential danger when used in medical devices, which was sold to highly sophisticated buyers, and which was subjected to substantial processing by the implant manufacturers. Finally, GE had no control or involvement in designing and developing the implants. “On this issue, comment e to section 5 of the Restatement Third is instructive: ‘A component seller who simply designs a component to its buyer's specifications, and does not substantially participate in the integration of the component into the design of the product, is not liable within the meaning of Subsection (b). [Nor does providing mechanical or technical services or advice in the selection or integration of the component into a product over whose overall design, testing, or labelling the component supplier does not exercise control constitute substantial participation which would subject the component supplier to liability.]’ (Rest.3d Torts (Proposed Final Draft) § 5, com. e, at p. 158.)” (Artiglio v. General Electric Co., supra, 61 Cal.App.4th at pp. 840-841, 71 Cal.Rptr.2d 817.)
Defendant, the manufacturer of Fibermesh, contends that it is relieved of any duty of care, arguing that it is within the component supplier doctrine. We disagree. Fibermesh cannot be classified as “a versatile material[ ] like chains, valves, sand etc., [such that Synthetic Industries, Inc.] cannot be expected to become experts in the infinite number of finished products that might conceivably incorporate their multi-use raw materials or components.” Fibermesh is a single purpose product, manufactured and marketed for a very discreet application in the construction of concrete structures. The one-dimensional distinctive purpose of Fibermesh is thoroughly described in defendant's marketing materials.20 The fact that it is sold in “bulk” is essentially irrelevant because it is neither a “raw material” such as sand and gravel, nor is it versatile like chains and valves. It is this factor that takes defendant out of the protection afforded to component and bulk suppliers of products.
Notwithstanding our conclusion that Fibermesh is not within the purview of Artiglio, we address the four factors of the formula to demonstrate defendant may not rely on the defense afforded component and bulk product suppliers.
Defendant argues that Fibermesh is a benign, nontoxic product that is not inherently dangerous and handling it does not require use of protective equipment. We doubt if the Artiglio court intended so limited a definition of “inherently dangerous.” But, plaintiffs' theory of the case is that Fibermesh is “inherently dangerous” in the sense that it is inherently defective as an adequate substitute for welded wire mesh in concrete slab foundations, thus posing an integral risk that the structure will fail and a danger that occupants may be injured.
The ready mix concrete producers to which defendant directly sold Fibermesh and the developer, Kaufman and Broad, qualify as sophisticated buyers. Plaintiffs contend Kaufman and Broad was not sophisticated because it was unaware of the unsuitability of Fibermesh as secondary reinforcement for concrete based on the marketing materials provided by defendant. We cannot ignore the fact that defendant specifically marketed Fibermesh to the construction industry as an acceptable alternative for welded wire to reinforce concrete slabs.
Defendant claims that Fibermesh was substantially changed during the manufacturing process, but the trial court determined that it was not. We agree with the trial court. Defendant argues that the process of blending Fibermesh fibers into the concrete mix causes the fibers to expand, spread out, and separate into millions of randomly distributed fibers, forming a bond to the concrete, and the fibers cannot thereafter be extracted once the concrete dries. We conclude that this does not constitute a substantial change as contemplated by the component supplier doctrine. Any change which Fibermesh undergoes is exactly what is intended in its application. Defendant recommends to concrete producers the number of bags to use with a given volume of concrete, and the bags are simply mixed into the concrete. Defendant did not present any evidence that the concrete producers altered the product in any way to change its properties or intended function.21 Mere integration of Fibermesh with the concrete does not change its composition.
As to whether defendant had a limited role in developing and designing the end product, the trial court found that “Defendant has established that its limited role in developing and/or designing the cement in which Fibermesh was mixed is sufficient to warrant absolving the Defendant of any strict liability to Plaintiff as the ultimate consumer.” Here we disagree with the trial court's conclusion.
Although, as defendant points out, the nature and quality of the other materials put into the concrete may affect the ultimate performance of the concrete slab, there is no evidence that the other constituents to which Fibermesh was added were inferior in any way. Also, there is no evidence that defendant's recommended formula for using Fibermesh was not followed. Therefore, defendant may be held liable for strict products liability in the context of the summary judgment under review here.
Defendant's lack of control over the other materials mixed into the concrete slab along with Fibermesh goes only to the issue of causation. Defendant did not attempt to show in moving for summary adjudication that the other materials used in the concrete were to blame for the crumbling slabs or that Fibermesh was improperly mixed. The fact that Fibermesh is used in numerous other applications for the reinforcement of other concrete structures, such as parking lots and bridges, does not modify its single purpose application.22 Indeed, defendant specifically marketed Fibermesh for as an alternative means of providing secondary reinforcement of concrete slab foundations. The end use of its product was not only foreseeable, it was an expressly intended use.
In Casey v. Overhead Door Corp., supra, 74 Cal.App.4th 112, 87 Cal.Rptr.2d 603, the court held that while courts have extended the concept of strict products liability to allow purchasers to sue developers of mass-produced homes (citing Kriegler v. Eichler Homes, Inc. (1969) 269 Cal.App.2d 224, 74 Cal.Rptr. 749), “they have refused to extend the principle beyond the developer to the subcontractors or suppliers. (La Jolla Village Homeowners' Assn. v. Superior Court (1989) 212 Cal.App.3d 1131, 1144-1146 [261 Cal.Rptr. 146].) ‘[A] subcontractor who does not have any ownership or control over the project or over its portion of the project being built should not be held strictly liable for defective or dangerous conditions of the mass-produced homes.’ (Id. at p. 1145 [261 Cal.Rptr. 146].) This applies to ‘all subcontractors in the typical real estate construction project regardless of whether they provided “services” or a “product.” ’ (Id. at p. 1146 [261 Cal.Rptr. 146].)” (Casey, at p. 119, 87 Cal.Rptr.2d 603.)
The plaintiffs in Casey unsuccessfully argued that La Jolla Village Homeowners' Assn. v. Superior Court, supra, 212 Cal.App.3d 1131, 261 Cal.Rptr. 146, did not apply and Overhead was not shielded from strict liability because it manufactured a defective product: windows, window frames, and window components. The Casey court said: “La Jolla is not limited as plaintiffs suggest. The distinction is not between material or service suppliers (i.e. subcontractors), on the one hand and materials manufacturers on the other. Instead, the distinction is between the developer, which ‘manufactures' the homes, and the rest of the participants, regardless of whether they provide a service, supply a component or manufacture a component part. The principle of risk distribution, fundamental to the doctrine of strict liability, is effected by holding the developer strictly liable for all defects in mass-produced homes.” (Casey v. Overhead Door Corp., supra, 74 Cal.App.4th at pp. 119-120, 87 Cal.Rptr.2d 603.)
We respectfully disagree with the reasoning and the holding in Casey. We question its assertion that “the principle of risk distribution” restricts the legal recourse of purchasers of defective mass-produced homes to pursuing claims only against the developer. Such a narrow approach simply ignores the situation where the deficiency is solely attributed to a defective component not suited to perform the function for which it was supplied and incorporated into the house. This is especially true where the supplier and manufacturer of the component has marketed it to the construction industry and persuaded developers that the component is sufficient to fulfill its intended purpose. Also, limiting the application of strict liability by purchasers of defective housing to only the developer ignores economic reality. It is not beyond experience that developers sometimes become insolvent or go into receivership. Applying the holding of Casey in such circumstances leaves the homeowners with no recourse. There is simply no logical reason to insulate suppliers and manufacturers of defective products from strict liability just because the developer had primary responsibility for the construction of the mass-produced homes. “[C]ommon sense often makes good law.” (Peak v. United States (1957) 353 U.S. 43, 46, 77 S.Ct. 613, 1 L.Ed.2d 631.)
The Casey court relied solely on La Jolla Village Homeowners' Assn. v. Superior Court, supra, 212 Cal.App.3d 1131, 261 Cal.Rptr. 146, and the dictum therein that subcontractors should not be held strictly liable whether they provided services or products.23 The doctrine of strict products liability does not apply to defective services (Hyland Therapeutics v. Superior Court (1985) 175 Cal.App.3d 509, 513, 220 Cal.Rptr. 590), or to circumstances where the primary objective is obtaining services, or where the service aspect predominates and any product sale is merely incidental to the provision of the service. (Pierson v. Sharp Memorial Hospital, Inc. (1989) 216 Cal.App.3d 340, 344, 264 Cal.Rptr. 673.) Here, defendant did not provide services of any kind and, therefore, Fibermesh does not fall within the category of products that are merely incidental to the provision of services.
A simple analogy demonstrates the lack of merit in the notion that defendant could not be strictly liable if its product is defective and unsuitable for its intended use. If carpenters engaged as framers use defective nails, they may not be liable if the houses break apart, but the manufacturer of the nails would be liable, assuming they were used for the intended purpose. So it is with a manufacturer of secondary reinforcement for concrete used according to instructions and for its intended purpose. Although the subcontractor responsible for laying the foundations may not be strictly liable for his services, the manufacturer of the secondary reinforcement product, like the nails, would be if the product failed to hold the slab foundation together. We discern no difference between those who supply defective components to builders of mass-produced homes and those who supply defective components to manufacturers of mass-produced automobiles. (Springmeyer v. Ford Motor Co. (1998) 60 Cal.App.4th 1541, 1550, 71 Cal.Rptr.2d 190.)
The doctrine applies to defective products. “As long as the [plaintiffs] establish[ ] that the product was defective when it left the hands of a given seller in the distributive chain, [strict products] liability will attach․” (Rest.3d Torts, Products Liability, § 2, com. c, p. 18.) Strict products liability attaches to all persons in the chain of distribution of a defective product (including a product which is a component of another product in a mass-produced home), i.e., manufacturers, wholesalers, suppliers, and retailers; the imposition of strict products liability on one person in the distributive chain does not relieve other persons in the chain from liability. We disagree with the holding in Casey. We conclude that manufacturers of nonversatile, single purpose products used and incorporated in mass-produced homes are subject to strict products liability to the ultimate consumer. Although suppliers of “chains, valves, sand, and gravel, etc.” cannot be expected to become experts in the infinite number of finished products that might conceivably incorporate their multi-use raw materials or components, the defendant here should be held to a higher standard. Its promotional materials clearly show that it purports to be expert in the use and application of Fibermesh as a secondary reinforcer in the construction of concrete structures.
II. Negligence and Negligent Misrepresentation
Defendant contends that the motion for summary adjudication of the causes of action for fraud and for negligence and negligent misrepresentation was properly granted because plaintiffs failed to establish the existence of a triable issue of fact as to their actual reliance on any misrepresentations made by Fibermesh. We agree.
In order to maintain a cause of action for fraud or one based on alleged misrepresentations, facts establishing actual reliance must be pleaded. (See Mirkin v. Wasserman (1993) 5 Cal.4th 1082, 23 Cal.Rptr.2d 101, 858 P.2d 568; Gawara v. United States Brass Corp. (1998) 63 Cal.App.4th 1341, 74 Cal.Rptr.2d 663.) It is not necessary for plaintiffs to show that the misrepresentations were communicated directly to them; an indirect communication to plaintiffs' agent, for example to the developer here, would suffice, so long as plaintiffs can plead that the alleged misrepresentations came to their attention. (Gawara v. United States Brass Corp., supra, 63 Cal.App.4th at p. 1350, 74 Cal.Rptr.2d 663, citing Mirkin v. Wasserman, supra, 5 Cal.4th at p. 1095, 23 Cal.Rptr.2d 101, 858 P.2d 568.)
We agree with the Court of Appeal's conclusion in Gawara that allegations of misrepresentations about the quality and durability of a product do not present a compelling public policy reason to excuse plaintiffs from showing actual reliance on those misrepresentations. (Gawara v. United States Brass Corp., supra, 63 Cal.App.4th at p. 1354-1355, 74 Cal.Rptr.2d 663 [where alleged misrepresentations were to the effect that polybutylene plumbing system was equivalent to copper plumbing system, and the former was used in mass-produced housing development].) In cases where misrepresentations are made to an intermediary, plaintiffs still must show that the misrepresentations were communicated by the intermediary to plaintiffs. (Id. at pp. 1357-1358, 74 Cal.Rptr.2d 663.) In Gawara, the court noted that “[n]ot only is there no evidence that any of the defendants communicated with the homeowners, there was no evidence anyone made any representations about the plumbing system to the homeowners. The homeowners do not cite any evidence indicating they knew what type of plumbing was in the homes or made the decision to purchase their homes based on representations about the plumbing system. At most, the evidence indicates the homeowners relied on [developer's] general warranty, i.e., that the plumbing system was built to code and fit for residential housing. Since there is no evidence the homeowners ever read or heard of the defendants' misrepresentations, directly or indirectly, or acted in reliance on any statements by the defendants in purchasing their homes, we reverse the fraud judgment as to the homeowners.” (Id. at p. 1359, 74 Cal.Rptr.2d 663, fn. omitted.)
We similarly conclude that plaintiffs failed to show the requisite actual reliance, and the motion for summary adjudication was properly granted. At best, plaintiffs contend that Kaufman and Broad warranted that the materials used in the homes would be those specified, or the substantial equivalent of the specified materials. Plaintiffs essentially contend that by using Fibermesh, Kaufman and Broad was passing along to plaintiffs the assertion that Fibermesh was an adequate substitute for welded wire mesh. We reject plaintiffs claim; there was no communication by Kaufman and Broad to the plaintiffs that Fibermesh is as good as welded wire and would be used as a substitute. As defendant points out, in their lawsuit against Kaufman and Broad plaintiffs alleged that they thought the homes were made with welded wire slabs. They did not even know there was Fibermesh in the slabs, and they logically cannot maintain that they relied on any representations that Fibermesh was an adequate substitute for welded wire.
Finally, as to plaintiffs' attempt to resist defendant's second motion for summary adjudication by urging that their fourth amended complaint stated a cause of action for negligent manufacture of Fibermesh, we agree with the trial court's assessment that the complaint did not state such a cause of action. We identify the issues framed by the pleadings since it is these allegations to which the motion must respond by establishing a complete defense or showing there is no factual basis for relief on any theory reasonably contemplated by the pleadings. (AARTS Productions, Inc. v. Crocker National Bank (1986) 179 Cal.App.3d 1061, 1064, 225 Cal.Rptr. 203.) “A party cannot successfully resist summary judgment on a theory not pleaded.” (Roth v. Rhodes (1994) 25 Cal.App.4th 530, 541, 30 Cal.Rptr.2d 706; see also 580 Folsom Associates v. Prometheus Development Co. (1990) 223 Cal.App.3d 1, 18, 272 Cal.Rptr. 227.) Plaintiffs' attempt to add a cause of action for simple negligence was properly rejected by the trial court.
The judgment in favor of defendant is reversed. The trial court's order granting the motion for summary adjudication as to the cause of action for strict liability is reversed and the matter remanded to the trial court for further proceedings. The order granting defendant's motion for summary adjudication as to the causes of action for fraud and negligent misrepresentation is affirmed. Plaintiffs are to recover their costs on appeal.
1. The plaintiffs and appellants in Los Angeles Superior Court Case No. SC046852 are: Rogelio and Enriqueta Acosta; Carlos and Yvette Ayala; Darlene Dohi; Dale and Shawna Bayless; Uwe and Raquel Beth; Stuart and Arpegea Cannold; Glenn and Carrol Chance; Dan Curry; Rebe Scruggs; Omar and Stacy Davis; James and Tamara Dillard; Everardo and Lorraine Garcia; Henry Gembitz; Dennis Giroud; Mary and Cynthia Hidalgo; Glen and Patricia Nester; Clifford and Concepcion Nolte; Michael and Elena O'Shea; Dolores Sumilang; George and Anicia Vintimilla; Thomas Vonins; and Alice Yazgulian.The plaintiffs and appellants in the consolidated case No. SC048043 are: Luis and Lojray Alvarez; Wilfred and Pearlie Aubert; John Asadourian; Joe and Ma Dolores Baca; John and Carol Barrett; Zoar and Marie Bialobroda; Jaime and Martha Briceno; Fred and Coleen Brignoni; Randy Brown; Ken and Salli Blair; Ernest Brown; Raymond E. Brune; Nancy Joan Castelan; Virat and Aissa Char; Richard and Michele Chavez; Elenore Berkley; Robert and Jamet Conti; Mary and Walter V. Cralley; Jeff and April Cramer; Phyllus Crise; Michael and Adrienne Collins; James Wm. and Dawn C. Charlton Trust; Paul Chambers; John and Lorraine Divins; Dennis De La Roche; Ronaldo and Alicia Diaz; Thomas and Debbie Denny; Rudy and Elizabeth Dubon; Larry Dunn and Carl Franklin; Ron and Dena Deming; Marvin Dardin and Jonathan Hayes; John Delugt; John and Pat Dwyer; David and Maria Enriquez; Kevin and Carol Elliot; Jeff Erickson; Jim Ellison; Fidel and Maria Torres Escobedo; Claudio and Lori Fluxa; John and Cynthia Fling; Dina Gordon and Lola Thomas; Gustavo and Amparo Guzzetti; Rafael and Lusandra Garcia; James and Lorraine Gibson; Ed and Nancy Gibson; Richard and Aki Greenlee; Daryl and Juarenita L. Gross; Halcyon Hamel; Curtis Henderson; Ray Heredia; James and Tammy Hernandez; Paul and Alicia Herrera; Emily Hess; Ruth Hildago; Mike Hogan; Mary and Douglass Horgan; Roy Hoogvelt; Jim Hosseinian; Gilbert and Debra Hall; Terry Henson and Bernadette Aguilar; Chadwick Holmes; Maria Jardin; Richard Johnson and Geraldine Fields; Tom Jones; Mary Jones; Glen and Kimberly Johnson; Brian and Julie Knapp; Ian Knight; Darryl and Masako Keimach; Sam and Patricia Larios; Roderick Lee; Susan Lopez; Derek and Elizabeth Lewis; Manuel Lopez; Ron Loraw; David and Cristine Manguramas; Jeff and Tracie McCune; Laurie and Charles McDaniel; Dave McFadden; Alan Mendoza; Pablo and Alicia Meza; Thomas Milano; Paul and Jacqueline Murphy; George and Ruth Martinez; Paul Moore; Greg and Gina McCarthy; Steven and Barbara McElroy; Edgar Mosley; Enrique Nelson; Greg Nehen; Tom and Madeline Nye; Richard and Janet O'Brian; Katherine M. Otis; George and Haydee Otero; Arlene Ondarza and Doria G. Pfluke; Cameron and Cherlyn O'Steen; Kevin and Barbara Painter; George Park and Geralyn Garcia; Bill D. Pierce, Trustee of the Pierce Trust; Sean and Micheale Poliseno; Glenda Potts; Thomas and Kellene Radzyminski; Stacey and Viena Reith; Lee and Stacey Resetar; William H. and Karen Rittenberg; Froylan and Maria Sandoval; Jeff and Jerianne Shelton; Craig and Marianne Sherman; Brian Sliwoski; Daren and Cristin Springett; Antoinette Sutter; Georg and Fredrika Siebes; John and Connie Soflin; Tim and Ann Marie Sharma; Carlos and Eustolia Sotelo; Scott and Lisa Stordahl; Betty Stacy; Georgette Srouji; Steve Toly; Michael A. and Marguerite Tarr; Jennifer Turner; Ann Marie Vasquez; Lee and Pamela Chatoo Whaley; Debbie Welty; John Whitlaw; Sandra Wurtz; John West; Norman Winkey; William and Maria Williams; George Yacob and Nelly Khalil Hallak; Felipe and Theresa Yanez; Robert and Victoria Young; Miriam and Daniel Zamora; Alan and Cynthia Norman; and Saundra Jackson Galipo.
2. Defendant's demurrer to the cause of action for express warranty was sustained.
3. As noted in footnote 2, defendant's demurrer to this cause of action was sustained. We include the allegations of this cause of action because they relate to plaintiffs' cause of action for negligent misrepresentation.
4. In opposition, plaintiffs admitted each fact, except as indicated below.
5. Dennis Hogan, defendant's director of marketing, stated in a declaration in support of the motion for summary adjudication: “ ‘Admixture’ is defined by the ICBO as a ‘material other than water, aggregate [sand, gravel, or stone], or hydraulic cement used as an ingredient of concrete and added to concrete before or during its mixing to modify its properties.’ ”
6. In opposition, plaintiffs admit this is what defendant claims, but question whether it actually works; if it does, plaintiffs contend it happens automatically.
7. Hogan said in his declaration that “after the fibers are mixed into the concrete, if you attempted to extract the fibers from the wet concrete, i.e.[,] you washed away the aggregate, sand, and cement paste, the fibers that you would see would be individual fibrillated fibers that could not be put back into bundles or repackaged into their original manufactured, pre-mix condition.”In opposition, plaintiffs assert that the fibers do not expand and their shape is not altered. The only thing that happens is that the partially cut bundles are automatically torn apart.
8. In opposition, plaintiffs admit Kaufman and Broad was primarily responsible, but assert that it was misled by defendant.
9. In opposition, plaintiffs admit this fact, but state that approval was based upon the false and misleading statements made by defendant.
10. In opposition, plaintiffs assert discovery was incomplete and this information was not known; however, defendant made representations regarding Fibermesh directly to agents of Kaufman and Broad, including Forbes, the civil engineer, and Norman Engen, the geotechnical engineer.
11. In opposition, plaintiffs admit defendant did not design the slabs, “however they influenced the design by [its] representations regarding the use of Fibermesh as a replacement for welded wire, which was required in the plans.”
12. Plaintiffs admit this fact, but state that approval was based upon the fact the engineers on the project approved it; no independent investigation was made.
13. Defendant does not dispute this fact.
14. In opposition to the motion for summary adjudication, plaintiffs admitted each of the facts set forth by defendant in its separate statement, with some notations as indicated below.
15. Plaintiffs noted that defendant made representations to agents of Kaufman and Broad regarding the suitability of Fibermesh as a replacement for welded wire, in order to get the agents' required approval of the substitution.
16. Plaintiffs noted that they “read documents that had representations based upon representations made by [defendant] to Kaufman & Broad, who then made these representations to the Plaintiffs.”
17. Plaintiffs noted that representations were made to them that only materials that were the substantial equivalent of the product being substituted would be used and representations were made that the homes would contain welded wire.
18. Forbes, the civil engineer for Kaufman and Broad for the California Marquis development, said in deposition that he was asked, probably by someone at Kaufman and Broad, to approve substituting polypropylene fiber for welded wire in the concrete slab foundations. He recalled that before he approved the use of Fibermesh, he saw a Fibermesh advertisement that was given to him either by someone at Kaufman and Broad or directly by Fibermesh people.Engen, the geotechnical engineer, said during deposition that he was asked by Kaufman and Broad to review using Fibermesh as an alternate product to welded wire mesh. He recommended that substitution based on his review of ICBO Evaluation Reports and on literature from Fibermesh.
19. Although Artiglio involved a claim sounding in negligence based on a duty to warn, defendant contends that the holding announced there also applies to strict liability actions based on public policy grounds that, as a matter of law, no duty of care was owed.
20. Two pages of Synthetic's brochure promoting the use of Fibermesh are included in the addendum. This brochure was an exhibit to the deposition of Dale Forbes and was included in plaintiffs' opposition to defendant's motion for summary judgment.
21. “The mere fact that the component part is shipped in a separate state and that it must be later assembled by the manufacturer or the end-user of the larger product[ ] does not relieve the component maker of strict liability. [Citations.] [¶] Furthermore, even a significant subsequent alteration of a component will not relieve a component part manufacturer of strict liability unless the change itself creates the defect that constitutes the proximate cause of injury. [Citations.]” (Rest.3d Torts, Products Liability, § 19, reporter's notes, p. 274.)
22. Defendant contends there are “a wide variety of industrial and residential applications for concrete ․ (e.g., parking structures, bridge parapets, roads, precast pipes). Each of those applications has its own engineering, structural, and environmental requirements, none of which Synthetic can control.”
23. The same court which decided La Jolla reexamined its holding in a later case, Jimenez v. Superior Court, (2000) 82 Cal.App.4th 856, 98 Cal.Rptr.2d 587, in which the Supreme Court granted review (Nov. 15, 2000, S091453).
CHARLES S. VOGEL, P.J.
EPSTEIN, J., and HASTINGS, J., concur.