SECURA Insurance Company v. Deere & Company

Background

The two related cases concerned fires that damaged two John Deere Model 9620RX tractors three weeks apart in November 2019. Molitor Equipment, LLC, doing business as Molitor Brothers Farm, had purchased the tractors in October 2018. The tractors were part of Deere’s 2018.5 manufacturing year and did not include engine side shields. SECURA Insurance Company, acting as subrogee after paying Molitor’s insurance claim, pursued Molitor’s warranty claims against Deere.

Deere’s express warranty promised to repair or replace parts found defective in materials or workmanship during the warranty period. SECURA claimed that Deere breached the warranty by failing to include engine side shields, by failing to respond to the warranty claim within a reasonable time, and by imposing requirements that were not disclosed when the tractors were purchased.

Earlier in the cases, Judge Eric Tostrud dismissed the design-defect theory. The remaining claims concerned an alleged manufacturing defect, Deere’s response to the warranty notice, and alleged additional conditions for receiving warranty service.

Summary-judgment ruling

The court held that the warranty’s reference to defects in materials or workmanship covered manufacturing defects. Under the standard applied by the court, a manufacturing defect exists when a product departs from its intended design. A design defect, by contrast, concerns the adequacy of the design itself and was outside the warranty theory remaining in these cases.

The court rejected SECURA’s argument that the tractors should be judged under a consumer-expectation or “flawless product” approach that would allow a jury to decide whether the tractors were unreasonably dangerous because they lacked side shields. The court concluded that this argument improperly attempted to revive the previously dismissed design-defect theory.

The court found no genuine dispute of material fact about whether the tractors departed from their intended design. Engine side shields were not listed in the tractors’ bills of materials, birth-certificate information, or relevant parts catalog. Although the frames had holes that could eventually accommodate side shields, the court found that the holes were only one of several changes needed to install them. The tractors also lacked dozens of other necessary parts, and some existing parts would have needed to be removed or modified.

The court also found that SECURA’s expert, Steven Hamers, did not create a fact dispute. His testimony acknowledged that the tractors required modifications before the shields could be installed, and his description of Deere’s later decision not to include the shields was treated as another attempt to present a design-defect theory. Deere’s later side-shield enhancement program, adopted in August 2019, did not show what the tractors were intended to include when Molitor bought them in October 2018.

Because SECURA could not show that the tractors had a manufacturing defect covered by the warranty, the court granted Deere summary judgment on that claim and denied SECURA’s motion for summary judgment on the same claim.

Deere’s response to the warranty claims

The court also granted Deere summary judgment on SECURA’s claims that Deere responded too slowly and imposed undisclosed requirements. SECURA identified damages including the value of the tractors, damage to disc rippers and other property, and fire-department charges. The court found that these damages occurred before, or were unrelated to, Deere’s response to the warranty notice. SECURA presented no admissible evidence connecting Deere’s alleged delay or information requests to those damages.

The court rejected SECURA’s argument that Deere’s conduct caused the warranty’s limited remedy to fail of its essential purpose. That doctrine can apply when a repair-or-replacement remedy does not provide the buyer the substantial value of the bargain. But the court concluded that the doctrine presupposes a defect covered by the warranty, and SECURA had not shown such a defect here. The court also found that SECURA’s evidence about Deere’s alleged additional requirements did not connect those requirements to any claimed damages.

Motion to exclude expert testimony

SECURA moved to exclude portions of the testimony of Deere’s expert, Troy Schick, under Federal Rule of Evidence 702. The court denied the motion. It stated that legal conclusions by Schick would likely have been excluded if a trial occurred, but the court had not relied on those conclusions in deciding summary judgment, so that portion of the motion was denied as moot.

The court rejected SECURA’s challenges to Schick’s methods and qualifications, finding that his experience with the tractor’s design and Deere’s manufacturing processes, together with his review of relevant documents, supported his opinions. The court also found that his testimony about Deere’s documentation and the tractors’ intended components would have helped a jury. The court denied as moot SECURA’s challenge to Schick’s opinions about the fire’s cause and origin because summary judgment for Deere meant there would be no trial.

Disposition

For Case No. 21-cv-1199, the court granted Deere’s motion for summary judgment, denied SECURA’s motion for summary judgment, and denied SECURA’s motion to exclude expert testimony. It entered the same rulings in Case No. 21-cv-1200. The court dismissed both actions with prejudice and directed that judgment be entered. Judge Katherine Menendez signed the order.