Appeal from the United States District Court for the Northern District of Mississippi. D.C. DOCKET NUMBER CA WC 88-160-B-D. JUDGE Neal B. Biggers
Before Davis and Jones, Circuit Judges, and Parker*fn1, District Judge.
Plaintiffs brought this diversity action seeking recovery for personal injuries against Cummins Engine Company (Cummins) and Freightliner Corporation (Freightliner). The district court granted summary judgment for Cummins, dismissing Cross's claims against Cummins. The district court found there was sufficient proof in the record to sustain the plaintiffs' claims against Freightliner. The Crosses subsequently entered into a settlement agreement with Freightliner. Plaintiffs appeal from the order dismissing their claims against Cummins. We vacate the district court's order granting summary judgment for Cummins and remand this case to the district court for further proceedings.
Appellant Paul Cross was severely burned on August 26, 1983, in a gasoline fire. Cross, a tank truck driver, was unloading gasoline from his truck into an above ground storage tank at a convenience store. The pump used to transfer the gasoline was driven by a power take off (PTO) assembly attached to the truck engine, which required that the truck be left idling during the transfer. After some period of pumping, the storage tank began to overflow, dumping gasoline on the ground around the truck. Cross attempted to turn off the truck engine, but was engulfed in flames as the gasoline ignited.
Appellant contends that a cause of the explosion and fire was a condition known as overspeeding. Although Cummins disputes this allegation, for purposes of the appeal of summary judgment, we will take appellant's allegation as true.
A diesel engine is designed to operate on a specific ratio of air to liquid fuel. The speed of the engine is determined by the mechanical load on the engine and the amounts of air and fuel available. Engine speed is regulated by a governor which monitors the revolutions per minute and adjusts the fuel flow to the cylinders. Gasoline produces highly combustible vapors when exposed to air. Vapors from a gasoline spill may enter the engine through the air intake ports. This additional, unregulated source of fuel can cause the engine to accelerate uncontrollably. A diesel engine may accelerate to the point of self destruction, and can become an ignition source, turning the cloud of combustible vapor into an explosion and fire.
A relatively inexpensive air intake shutoff valve is available which, when attached to the engine, would prevent overspeeding. No air intake shutoff valve was attached to the engine of the truck appellant was driving the day of the accident.
Cummins designed and built the engine involved in the instant case. Cummins shipped the engine to Freightliner as a stock item on December 11, 1980. Freightliner assembled the truck as manufacturer, incorporating the stock engine built by Cummins. Cummins had actual knowledge that a dangerous condition is created when its diesel engine is operated in an environment containing volatile fumes. The summary judgment evidence, though perhaps not uncontested, indicates that Freightliner was also aware of this danger. Cummins' appreciation of this danger led it to design and manufacture an air intake shutoff valve, which it makes available as an optional item on its engines. Cummins contends that it does not install the devices. However, we are unable to conclude from the record before us that this is an undisputed fact.
Freightliner provides a driver's manual for each truck it assembles. Cummins also provides an engine owner's manual that accompanies the truck into which it is installed. Neither manual contained warnings about the danger of overspeeding.
The district court, applying Tennessee law, granted summary judgment to Cummins on the plaintiffs' strict liability, negligence, and gross negligence claims. It concluded that Cummins could not be held liable because there was no evidence that an air intake shut-off device is necessary for all diesel engines in all circumstances, Cummins was unaware of the intended use of its engine, and only Freightliner had control over whether the device was placed in a particular vehicle. The district court also dismissed the plaintiffs' failure to warn claims against Cummins. It concluded that Cummins adequately warned Freightliner about the overspeeding phenomenon and, therefore, reasonably relied on Freightliner to convey those warnings to its customers. This appeal followed.
Appellate review of a summary judgment is governed by the same legal standard applied by the district court in the first instance. Beck v. Somerset Technologies, Inc., 882 F.2d 993, 996 (5th Cir.1989). Summary judgment is appropriate only if there are no genuine issues of material fact and the movant is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c). A factual dispute is deemed "genuine" if a reasonable juror could return a verdict for the nonmovant and a fact is considered "material" if it might affect the outcome of the lawsuit under the governing substantive law. Beck, 882 F.2d at 996, citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 106 S. Ct. 2505, 91 L. Ed. 2d 202 (1986). Although this court has upheld grants of summary judgment in certain products liability and negligence actions where the claims clearly lacked an evidentiary basis, we ...