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Estate of Countryman v. Farmers Coop. Assoc.

Iowa Supreme Court
679 N.W.2d 598 (2004)


Facts

A propane gas explosion killed seven people. The families and estate representatives of those who died (plaintiffs) sued several entities, including propane supplier Iowa Double Circle, LLC (Double Circle) and its majority owner/manager Farmers Cooperative Association of Keota (Keota) (defendants). Keota owned 95 percent of Double Circle and provided management services under a contract. In turn, Keota contracted Dave Hopscheidt to manage Double Circle. Hopscheidt oversaw the daily operations of both Double Circle and Keota, but the two operated as separate entities and maintained separate finances. The lawsuit alleged that Keota participated directly in wrongdoing through the consumer-safety decisions it made managing Double Circle. Specifically, the plaintiffs alleged that Keota, acting through Hopscheidt, failed to provide adequate warnings to propane users, did not advise users to install gas detectors, and failed to properly design the odorant added to propane to make leaks detectable. The trial court granted summary judgment for Keota, reasoning that Double Circle’s LLC and operating agreements insulated Keota’s members from liability based solely on its membership in Double Circle. The plaintiffs appealed solely as to that claim.

Rule of Law

Issue

Holding and Reasoning (Cady, J.)

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