Bren-Tex Tractor Co. v. Massey-Ferguson, Inc. 97 S.W.3d 155

MAJORITY OPINION

RICHARD H. EDELMAN, Justice.

In this statutory indemnity case, Bren-Tex Tractor Co., Inc. and BrenTex Farm and Ranch Service (collectively, “Bren-Tex”) appeal a take-nothing judgment in favor of Massey-Ferguson, Inc., Massey-Ferguson (Delaware), Inc., Massey-Ferguson Corp., Varity Assets Corporation, Varity Corporation, and AGCO Corporation (collectively, “Massey”) on the grounds that: (1) the trial court erred by denying Bren-Tex’s cross-claim for indemnity because (a) there is no evidence that Bren-Tex was independently hable for the underlying claims; and (b) the release and take-nothing judgment entered on the underlying claims establish Bren-Tex’s right to indemnity as a matter of law; and (2) Bren-Tex is entitled to prejudgment interest on its claim for indemnity. We reverse, render in part, and remand in part.

Background

In 1998, Michael Hensen (“Michael”) died from injuries he sustained while operating a tractor (the “tractor”) that had been manufactured in 1976 by Massey, purchased used and refurbished by Bren-Tex, and then purchased in 1985 by Michael or his family (the “Hensens”). Following Michael’s death, the Hensens sued Bren-Tex and Massey, asserting claims for strict liability, negligence, breach of implied warranties, and violations of the Deceptive Trade Practices-Consumer Protection Act (the “DTPA”). According to their petition, Michael was killed when the tractor, which was sold without a roll bar, rolled over.

Bren-Tex filed a cross-claim against Massey, seeking indemnity for the costs it incurred in defending the Hensens’ lawsuit. Before trial, Massey settled with the *158Hensens, the Hensens released all defendants, including Bren-Tex, and the trial court entered an agreed take-nothing judgment against the Hensens’ claims, including those against Bren-Tex. A bench trial was thereafter held on Bren-Tex’s indemnity claim against Massey, and the trial court entered a take-nothing judgment against Bren-Tex and findings of fact and conclusions of law (the “findings and conclusions”).1

Indemnity

Bren-Tex’s indemnity claim is asserted under section 82.002 of the Texas Civil Practice and Remedies Code (“CPRC”), which states:

A manufacturer shall indemnify and hold harmless a seller against loss arising out of a products liability action, except for any loss caused by the seller’s negligence, intentional misconduct, or other act or omission, such as negligently modifying or altering the product, for which the seller is independently liable.

Tex. Civ. Prac. & Rem.Code Ann. § 82.002(a) (Vernon 1997) (emphasis added). This section requires a manufacturer to indemnify an “innocent” seller2 for certain damages and litigation expenses arising out of a products liability action,3 but requires (non-innocent) sellers to bear the damages and expenses for losses they cause. Meritor Auto., Inc. v. Ruan Leasing Co., 44 S.W.3d 86, 88 (Tex.2001). The exception to this statutory indemnity obligation (italicized above) is established only by a finding that the seller’s independent conduct was a cause of the plaintiffs injury. Id. 4

In this case, the trial court’s findings and conclusions state that Massey was not hable to Bren-Tex for indemnity under section 82.002 because the evidence showed that any loss suffered by Bren-Tex was caused by negligence, intentional misconduct, or other acts or omissions for which Bren-Tex would be independently hable.5 The only finding or conclusion that indicates the nature of the conduct for which the trial court determined that Bren-Tex would be independently hable is finding number 5, which states that a reseller such as Bren-Tex should advise a purchaser of a used tractor without a rollover protection system (“ROPS”) of the availability and purpose of such a system.

Among other things, Bren-Tex’s first and second issues challenge the denial *159of its cross-claim for indemnity on the ground that there is no evidence6 of conduct for which it would be independently liable for Michael’s death. Massey asserts that the evidence showed Bren-Tex would be independently liable to the Hensens on negligence, implied warranty, and DTPA claims for failing to inform the Hensens of the benefits, importance, and availability of an optional ROPS system that could be pm-chased for the tractor.7 Bren-Tex contends that, as a seller, it had only a duty to warn customers of known dangers, and the evidence in this case failed to prove that it knew of any defect in the tractor or that any existed due to the absence of a ROPS.

A seller can be independently liable for injury resulting from his negligent failure to inform buyers of the dangerous nature of a product that he sells them if he knows or has reason to know of the danger. See Restatement (Second) of ToRts § 401 (1965); Jaimes v. Fiesta Mart, Inc., 21 S.W.3d 301, 305 (Tex.App.-Houston [1st Dist.] 1999, pet. denied.).8 Similarly, a seller can be liable under the DTPA for failure to disclose information concerning goods, which he knew at the time of the transaction, if the failure was intended to induce the consumer into a transaction into which the consumer would not have entered had the information been disclosed. See Tex. Bus. & Com.Code Ann. § 17.46(b)(23) (Vernon 2002).9

In this case, there is no evidence that Bren-Tex discussed a ROPS with the Hen-sens when it sold them the tractor. Moreover, the evidence is undisputed that by the time the Hensens bought the tractor, ROPSs had become standard on new Massey tractors and in the tractor industry and that Bren-Tex was aware that people had been killed in tractor rollovers.

However, the absence of a ROPS would not render the tractor defective or other*160wise impose a duty on Bren-Tex to warn the Hensens about it unless: (1) the average user of a tractor would not recognize the risk of harm from operating one without a ROPS;10 or (2) Bren-Tex had reason to know that someone was likely to operate the tractor either without understanding that risk or otherwise lacking the competence to operate the tractor safely without one.11

There is no evidence in this case that the average user of a tractor would not recognize the risk of harm from operating one without a ROPS or that Bren-Tex had reason to know that someone was likely to operate the tractor without understanding that risk or otherwise lacking the competence to operate the tractor safely without one.12 Nor is there any evidence that this particular model of tractor presented any increased risk of turnover. Therefore, there is no evidence to support a duty by Bren-Tex to warn the Hensens of the risk of injury from a turnover on the tractor without a ROPS.

However, the fact that a potential danger associated with a product is obvious to the average user is not probative of whether such a user also knows of the availability of devices to lessen the likelihood of a mishap or the severity of a resulting injury. Massey has cited no authority imposing a general duty on sellers to advise buyers of such safety enhancements with regard to obvious dangers, and the only authority we have found suggests a lack of any such duty.13 Obviously, a duty on sellers, particularly of used products, to advise buyers of any available safety enhancements and the importance of adding them to mitigate obvious dangers could amount to a significant burden. Moreover, if such a duty does not already *161exist, the record in this case14 and briefing provided by the parties afford a wholly inadequate basis for determining whether any such duty should be created, and the creation of a new tort duty would be beyond the province of an intermediate appellate court in any event. Therefore, finding no evidence of a defect or danger known to Bren-Tex that subjected it to a duty to warn the Hensens concerning the absence of a ROPS, we sustain Bren-Tex’s “no evidence” challenge to the trial court’s finding that Bren-Tex would be independently liable, and we need not address the remaining challenges to its liability in the first three issues.

Prejudgment Interest

Bren-Tex’s fourth issue contends that it is entitled to an award of prejudgment interest on its recovery for indemnity. However, because the trial court has not ruled on the availability of such prejudgment interest, we have no ruling to review on that issue. Therefore, Bren-Tex’s fourth issue is overruled.

Accordingly, we: (1) reverse the judgment of the trial court; (2) render judgment that Bren-Tex is entitled to indemnity from Massey under section 82.002 of the CPRC for its costs to defend the Hensens’ lawsuit, as determined in the trial court’s findings of fact numbers 10 and 11;15 and (3) remand the case for entry of judgment awarding those costs and any other relief which the trial court determines Bren-Tex to be entitled.

KEM THOMPSON FROST, Justice, concui'S.

KEM THOMPSON FROST, Justice,

concurring.

This court correctly reverses the trial court’s judgment because there was no evidence of independently actionable conduct by Bren-Tex that caused Michael Hensen’s death. There was no evidence to support independent liability in this regard as to the alleged DTPA and implied-warranty claims. The majority opinion also correctly holds that there was no evidence of facts that would impose a negligence duty on Bren-Tex to warn the Hensens of dangers concerning the used tractor’s lack of a ROPS or to inform the Hensens of the benefits, importance, and availability of a ROPS for this tractor.

This alleged negligence duty arguably might be based on section 388 or section 401 of the Restatement (Second) of Torts. See Restatement (Second) of ToRts §§ 388, 401 (1966). Whether based on one of these sections or some other source, there was no evidence Bren-Tex owed such a negligence duty in this case because Massey presented no evidence the average user of a tractor would not recognize the dangers of using a tractor without a ROPS or the benefits and availability of a ROPS. See Sauder Custom Fabrication, Inc. v. Boyd, 967 S.W.2d 349, 349-51 (Tex.1998) (holding there is no duty to warn of risks obvious to the average user of the product); Caterpillar, Inc. v. Shears, 911 S.W.2d 379, 381-83 (Tex.1995) (holding that seller of front-end loader had no duty to warn injured worker concerning the dangers of operating the loader without a *162ROPS because the dangers were obvious under an objective standard); Winn ex rel. Winn v. Pollard, 62 S.W.3d 611, 616-18 (Mo.Ct.App.2001) (holding, under section 388 of the Restatement (Seoond) of ToRts, defendants had no duty to warn injured tractor driver that tractor lacked a ROPS because this was an open and obvious danger); Livengood v. ABS Contractors Supply, 126 Ohio App.3d 464, 710 N.E.2d 770, 771-73 (1998) (holding supplier of compactor had no duty to warn worker or his employer of the availability and/or need for a ROPS for the compactor because this was an open and obvious danger); Restatement (Second) of Toets § 388 (requiring supplier of chattel to have “no reason to believe that those for whose use the chattel is supplied will realize its dangerous condition” before supplier has a duty to warn); Restatement (Second) of ToRts § 401 cmt. k (stating that seller has no duty to warn of dangers in chattel sold where seller reasonably believes the buyer and other users of the chattel will realize the danger in question).

The subjective knowledge of the personal-injury plaintiff is not determinative; rather, the issue is whether, under an objective standard, the risk in question is obvious to the average user of that product. See Caterpillar, Inc., 911 S.W.2d at 381-83; see also Sauder Custom Fabrication, Inc., 967 S.W.2d at 349-51. The Texas Supreme Court has held that the risks associated with the lack of a ROPS on a front-end loader were objectively open and obvious so that there was no duty to warn. See Caterpillar, Inc., 911 S.W.2d at 381-83. The Texas Supreme Court also has stated that, “In general, a product seller is not subject to liability for failing to warn or instruct regarding risks and risk avoidance measures that should be obvious to, or generally known by, foreseeable product users.” Sauder Custom Fabrication, Inc., 967 S.W.2d at 351 (quoting Restatement (Third) of Torts: Prod. Liab. § 2, cmt. j (1997)).

Accordingly, this court correctly holds that there was no evidence to support a duty by Bren-Tex to warn the Hensens about either: (1) the dangers concerning the lack of a ROPS; or (2) the importance and availability of a ROPS. See Sauder Custom Fabrication, Inc., 967 S.W.2d at 349-51; Caterpillar, Inc., 911 S.W.2d at 381-83; Winn ex rel. Winn, 62 S.W.3d at 616-18; Livengood, 710 N.E.2d at 771-73; Restatement (Second) of Torts §§ 388, 401.