Sale of Used Machinery and the Duty to Warn of Defects

February 23, 2010 | Erin Herbold

Farmers routinely engage in the sale of older farm equipment. Having a solid background knowledge of exposure to liability for the seller is a good way to avoid a lawsuit. In this personal injury suit, the plaintiff was seriously injured while using the dump truck he purchased from defendants eight years earlier. The defendant acquired the older dump truck, previously used for grain hauling, in 1995. In an effort to improve his line of equipment, the defendant moved the truck to inside storage and did not use it for two years. At that point, the plaintiff contacted the defendant about buying one of the dump trucks. The plaintiff examined the trust and asked the defendant if there were any problems with it. The defendant responded that “there’s nothing wrong with it,” except for it needed a new battery. Thus, the sale was finalized and the plaintiff used the truck in his operation for several years. In 2005, while attempting to fill a hole in his driveway, the bed of the dump truck became stuck in a raised position. The plaintiff attempted to “reach in” to lower the bed and he was crushed by the truck bed, leading to serious injuries and this lawsuit. 

The plaintiff sued for fraudulent concealment of the defect, implied warranty of merchantability, implied warranty of fitness for a particular purpose, and negligent failure to warn of the defect. At trial, witness testimony uncovered that the truck’s dump bed had a history of intermittent jamming when it was used on the defendant’s farm. The defendant consistently denied that he had any knowledge of the jamming problem, as the truck was primarily driven by his mother and he had been away from the farming operation for many years. 

During the litigation, the plaintiff abandoned his claims for implied warranty of merchantability and fraudulent concealment of a defect. At trial, the court found that the claim of implied warranty of fitness for a particular purpose was barred by Iowa’s five year statute of limitations rule and dismissed the failure to warn claim. 

On appeal, the Iowa Court of Appeals, reiterated their previous position that the courts in Iowa follow the Restatement of Torts for determining whether a defendant has a duty to warn of dangerous propensities. A plaintiff, in Iowa, must prove that a defendant knew or should have known that the equipment was dangerous for its intended use and that the defendant failed to warn the buyer of the dangerous defect. There was not enough evidence available to the court for the court to hold that the defendant knew of the defect -  there was only circumstantial evidence that he may have witnessed the problem “at some point” over the years. Thus, the court affirmed the trial court’s decision on the issue of the defendant’s failure to warn. 

Further, the appellate court agreed that the statute of limitations had run on the implied warranty of fitness for a particular purpose claim, because the statute of limitations began to run when the defendant “tendered delivery.” There was no warranty given by the defendant that extended to the future performance of the dump truck. In Iowa, the statute of limitations is not put on hold because of innocent, non-fraudulent statements regarding the quality of goods at the time of the original transaction. Merriam v. Samuelson Farms, Inc., No. 9-911/09-0117, 2010 Iowa App. LEXIS 110 (Iowa Ct. App., Feb. 10, 2010).