Goldrich v. Masco Corporation

Background

Steven Goldrich sued Watkins Wellness and Wellness Marketing Corporation, doing business as Endless Pools, over losses connected to an allegedly defective pool. Watkins manufactures Endless Pools. The opinion states that Endless is a Delaware corporation with its principal place of business in Pennsylvania, while it does not identify a specific relationship between the two defendants.

Goldrich alleged that he purchased the pool in 2012 for approximately $25,000 and had it installed in a house extension. He alleged that the installation did not account for high groundwater, the size of the pool room, or the need for service access. In July 2020, the pool allegedly developed an oil leak caused by a defective hydraulic sealant and underwent a refurbishment involving new benches and lining, replumbing, and new hydraulic components. Less than two months later, the pool allegedly failed after autocover brackets rusted and one bracket collapsed. Goldrich then obtained replacement supports, brackets, a frame, and stainless-steel covers, and incurred costs for tile work around the pool.

Goldrich asserted five common-law claims: design defect, manufacturing defect, negligence, fraudulent concealment, and failure to warn. He sought approximately $45,000 for the refurbishment, structural repairs, and tile work, although the complaint also requested $50,000 for two claims. The defendants filed a motion under Federal Rule of Civil Procedure 12(b)(6), which asks whether the complaint states a legally sufficient claim.

Economic-loss ruling

The defendants argued that the economic-loss rule barred Goldrich’s design-defect, manufacturing-defect, negligence, and failure-to-warn claims. The rule generally limits a purchaser of a product to contract remedies for financial losses arising from damage to the product itself, including repair or replacement costs. An exception may apply when the defective product causes physical injury or damage to genuinely separate “other property.”

The court held that the refurbishment costs were barred because they were costs of repairing or replacing the allegedly defective pool. It also held that the structural components were not adequately alleged to be separate from the pool. Goldrich’s complaint described the supports and covers as necessary to keep the pool from collapsing and to ensure its operation, showing that they were parts of an integrated unit. The court further found that the structural losses were tied to the pool’s failure to perform as intended, rather than to a properly functioning product that independently caused damage.

The court also rejected the argument that the tile work fell within the “other property” exception. Although tile around the pool might ordinarily seem separate, the complaint did not allege that the pool damaged the tile. Instead, it alleged that the tile work was needed to repair the pool itself. The court therefore determined that the damages asserted in the first, second, third, and fifth causes of action were economic losses that could not be recovered in tort.

Fraudulent-concealment ruling

The defendants separately argued that Goldrich failed to adequately plead reliance for his fraudulent-concealment claim. The court explained that this claim required allegations that the defendants had a duty to disclose material information, failed to disclose it, made an intentional material misrepresentation, that Goldrich reasonably relied on it, and that he suffered damages. Federal Rule of Civil Procedure 9(b) also required the fraud allegations to describe the circumstances with particularity, including the relevant omissions, who was responsible, their context, and how they misled him.

The court recognized that Goldrich identified a specific alleged omission: an Endless employee supposedly told his installer in 2012 not to disclose that the pool’s motor would need replacement within six years. But Goldrich alleged that he relied on silence about having to rebuild the pool and whether it would nearly collapse indoors. The court found a mismatch between the specific motor allegation and the broader omissions on which Goldrich claimed reliance. It also found that Goldrich did not adequately identify the person responsible for the broader omissions, explain their context, or allege why they were misleading. The court therefore found the fraudulent-concealment claim insufficiently pleaded.

Disposition

The court granted the defendants’ motion to dismiss. It declined to allow another amendment because Goldrich had already amended his complaint twice and had previously been informed of its deficiencies. The court dismissed Goldrich’s claims with prejudice and directed the Clerk of Court to close the case.