Products Liability Law Reporter

A federal district court held that an insurer’s tort claims against a motor home manufacturer were outside the scope of the forum selection clause contained in the warranty agreement the insured-purchasers had signed.

Byron and Stephanie Crain purchased a 2023 Thor Compass 23TW RV. The motor home spontaneously combusted, and, under the Crains’ policy with Progressive Preferred Insurance Co., Progressive paid out over $147,500. The insurer sued Thor and Ford Motor Co. in Arizona state court, alleging claims for products liability, negligence, and breach of express and implied warranties. Thor removed the action on the basis of diversity jurisdiction and then moved to dismiss or transfer venue. Thor argued that the forum selection clause in the Crains’ warranty agreement required Progressive’s claims to be brought in the alternative forum of Indiana.

Granting the motion, in part, the district court noted that the forum selection clause stated that Indiana state and federal courts had exclusive jurisdiction over legal disputes relating to breach of warranty. Thus, the court granted the motion with regard to the warranty claims without prejudice. Nevertheless, the court found that Progressive’s products liability and tort claims are governed by the Indiana Product Liability Act, which does not require privity between a manufacturer or seller and the party claiming damages. Thus, the court held that Progressive could bring its tort claims absent any agreement between Thor and the Crains. It is Thor’s alleged actions that gave rise to Progressive’s products liability claims, the court noted, finding that the warranty agreement had no logical or causal connection to Progressive’s tort claims.

Consequently, the court held that Progressive’s tort claims were properly maintained in Arizona federal district court.

Citation: Progressive Preferred Ins. Co. v. Ford Motor Co., 2024 WL 23315 (D. Ariz. Jan. 22, 2024).