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Electric Insurance Co. v. Freudenberg-NOK, General Partnership

United States District Court for the Western District of Kentucky
487 F. Supp. 2d 894 (2007)

Written by Robert Cane, JD

Facts

Freudenberg-NOK, General Partnership (FNOK) (defendant) supplied General Electric Company (GE) (plaintiff) with a pump-seal assembly part for GE’s dishwashers. The part was made with a carbon-steel insert. The carbon-steel inserts were prone to corrosion and caused the pump-seal assemblies to fail. FNOK switched to using stainless-steel inserts as a result. Numerous homeowners made claims to GE that leaking dishwashers had caused property damaged. Electric Insurance Company (EIC) (plaintiff), GE’s product-liability insurer, settled many property-damage claims on behalf of GE totaling $8 million. About one-fourth of the claims were paid before November 22, 2000 (479 out of 2,104 claims totaling about $1.6 million). EIC sued FNOK, seeking to enforce GE’s right to indemnity from FNOK. FNOK filed a motion to dismiss, arguing that EIC’s claims were time barred by the four-year statute of limitations for contract actions and, alternatively, claims arising before November 22, 2000, were barred by the state’s residual five-year statute of limitations.

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Holding and Reasoning (Coffman, J.)

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