of the defect itself." Id., at 294. In contrast, strict liability for property damage "presupposes (1) a defect and (2) further damage to plaintiff's property caused by the defect." Id. (Emphasis in original.)
The case at bar is similar to Sacramento Regional Transit, 158 Cal. App. 3d 289, 204 Cal. Rptr. 736. In Sacramento Regional Transit, plaintiff purchased a fleet of busses from defendant. When plaintiff discovered that a number of busses had cracked fuel tank supports, it sued for damages based on negligence and strict liability. In affirming the trial court's order sustaining a demurrer, the appellate court held that "plaintiff failed to allege physical injury to its property apart from the manifestation of the defect itself." Id., 158 Cal. App. 3d at 294. The court held that "when the defect and the damage are one and the same, the defect may not be considered to have caused physical injury." Id. at 294. Because the only damage plaintiff suffered was the cost of repair, it sustained "purely economic damages." Id. See also, Anthony v. Kelsey-Hayes Co., 25 Cal. App. 3d 442, 446-47, 102 Cal. Rptr. 113 (1972) (Because no personal injury or property damage resulted from a defective wheel which had the potential to break apart, but which had not done so, plaintiffs suffered only a loss of its bargain, and therefore suffered only economic damages.)
Similarly, plaintiff LAVWMA has, to date, suffered only economic loss. Plaintiff has not alleged that the pipe has burst, or has caused any property damage or personal injury. Instead, plaintiff alleges that the pipe itself is delaminated and corroded, and will need to be either replaced or repaired. The damage and the defect are one and the same: delaminated, corroded pipe.
Plaintiff's opposition to the motions for summary judgment states that plaintiff is not seeking the cost of repair, but that it is instead alleging "actual physical corrosion and pitting of the metal pipe as a result of the defective enamel lining." Plaintiff's Opp. at 5. In opposition to the motion for summary judgment, plaintiff characterizes the pipeline as consisting of two products: the metal pipe, and the coal tar enamel lining.
Plaintiff argues that when the defect in one portion of the product caused damage to another portion of the product, its losses are not barred by the economic damages rule, citing Gherna v. Ford Motor Co., 246 Cal. App. 2d 639, 55 Cal. Rptr. 94 (1966), and International Knights of Wine, Inc. v. Ball Corp., 110 Cal. App. 3d 1001, 168 Cal. Rptr. 301 (1980). Plaintiff contends that the defect in the coal tar lining has caused the pitting and corrosion of the metal pipe, and that plaintiff is therefore not precluded from recovering its damages by the economic damages rule.
The Court finds that neither case applies here. In International Knights of Wine, 110 Cal. App. 3d 1001, 168 Cal. Rptr. 301, plaintiff purchased bottles of wine which were damaged when metal caps sealing the bottles corroded and damaged the wine. There, the damage was to the wine, a product separate and apart from the defective caps. In Gherna, 246 Cal. App. 2d 639, 55 Cal. Rptr. 94, a fire in an automobile engine resulted from an unknown cause. The court reversed a nonsuit as to strict liability, finding that there was conflicting evidence on how the plaintiff had used the car. Id. at 650. The Gherna court did not address or decide whether defective wiring or transmission fluid, which may have caused the fire, were separate products from the car.
But regardless of the holding of these cases, neither assists plaintiff here. The complaint alleges "that the pipeline "was delaminated and corroded, and exposed to the risk of leakage." Complaint at P 27. Id. at P 37. Thus, the coal tar enamel lined pipe at issue here is one product: coal tar enamel lined pipe, as is clear from plaintiff's complaint, and not, as plaintiff now alleges without any supporting evidence, two products consisting of coal tar enamel lining and pipe. The fact that the pipe may have both a metal component and a lining component does not mean that it is two separate products. For instance, the United States Supreme Court addressed whether a shipbuilder could recover in strict liability from a manufacture who designed turbines when the turbines were defectively designed and manufactured. East River S.S. Corp. v. Transamerica Delaval, 476 U.S. 858, 90 L. Ed. 2d 865, 106 S. Ct. 2295 (1986). In holding that strict liability did not apply, the Court in that case looked to whether the shipbuilder had alleged property damage or economic damage when it alleged the turbines were defectively designed and manufactured. The Court held:
In the traditional "property damage" cases, the defective product damages other property. In this case, there was no damage to "other" property. Rather, ... each supertanker's defectively designed turbine components damaged only the turbine itself. Since each turbine was supplied by Delaval as an integrated package, each is properly regarded as a single unit. "Since all but the very simplest of machines have component parts, [a contrary] holding would require a finding of 'property damage' in virtually every case where a product damages itself. Such a holding would eliminate the distinction between warranty and strict products liability."