Great Northern Insurance Co. v. Honeywell International, Inc.

911 N.W.2d 510 (2018)

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Great Northern Insurance Co. v. Honeywell International, Inc.

Minnesota Supreme Court
911 N.W.2d 510 (2018)

Facts

McMillan Electric Company (McMillan) (defendant) produced motors used in household ventilators. Nutech R. Holdings Inc. (Nutech), a ventilator manufacturer, incorporated the motors into its heat-recovery ventilators. Nutech learned that motor failures sometimes caused ventilator fires and informed McMillan. McMillan had no access to Nutech’s consumer sales records. Some of the fires caused significant property damage. A Minnesota homeowner suffered property damage from such a fire. Great Northern Insurance Company (insurer) (plaintiff), the homeowner’s insurer, sued McMillan and others, alleging that McMillan had a duty to warn the homeowners of the motor defect. The Restatement (Third) of Torts § 10 (restatement rule) provided that a distributor should issue postsale warnings if a reasonable person in the seller’s position would have done so. The restatement rule further stated that a reasonable person would issue postsale warnings if (1) the seller knew or should have known that the product posed a substantial risk, (2) the seller could identify users that were unaware of the risk, (3) the seller could effectively communicate the warning, and (4) the risk of harm was great enough to justify the burden of providing a warning. An alternative rule set out a five-factor balancing test. One factor that weighed in favor of a duty to warn was whether the seller had decided to issue a warning at the time of sale. A court of appeals ruled that McMillan had a duty to warn of the defect.

Rule of Law

Issue

Holding and Reasoning (Chutich, J.)

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