Under the law of strict liability for products, an individual who sells any product in a defective condition unreasonably dangerous to the user or consumer or to his property is subject to liability for physical harm thereby caused to the ultimate user or consumer, or to his property, if: (a) the seller is engaged in the business of selling such a product, and (b) it is expected to and does reach the user or consumer without substantial change in the condition in which it is sold.
Plaintiff was a guest at defendant's time-share facility when the plaintiff slipped on a lanai tile and was injured. The tile company had sold the lanai tile to a division of the trustee, and it was installed by an independent contractor. The plaintiff sued the time-share owner, property manager, and the tile company. Defendants, trustee and property manager, filed motions for an order dismissing plaintiff injured guest's claims for strict liability and breach of warranty of habitability, arguing that these claims failed to state a claim upon which relief could be granted. Because defendants' motion was based upon attached exhibits, the court treated the motion as one for partial summary judgment.
Whether the defendant can be considered a "merchant" with regard to a permanently affixed lanai tile?
No, the defendant cannot be considered a "merchant" with regard to a permanently affixed lanai tile.
The Court granted the trustee and property owner's motion for summary judgment. As to the tile company, the court held that having tile installed by an independent contractor did not amount to introducing the tile into the stream of commerce because defendants did not play a role in the production or marketing of the lanai tile. The court found that defendants were not suppliers for the purposes of product liability law, and that they did not introduce the lanai tile into the stream of commerce. Further, even if they did act as suppliers, the doctrine of strict liability would still not apply because the tile did not constitute a "product" under Hawaii law because neither the condominium unit nor any portion thereof can be considered a product within the meaning of strict product liability law. Permanently affixed lanai tile could not possibly be regarded as a "good," and there was no evidence of a relevant "sale" of lanai tile to the time-share owner, and trustee and property manager were not in the business of selling lanai tile, so there was no breach of implied warranty.