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Lincoln General Insurance Company v. Detroit Diesel Corporation | 293 S.W.3d 487 (2009)
A defective product fails and ends up destroying itself. This sounds like a products liability case, right? Maybe not, as the court explained in Lincoln General Insurance Company versus Detroit Diesel Corporation.
Senators Rental, Incorporated, bought a bus manufactured by Prevost Car, Incorporated, and equipped with an engine manufactured by Detroit Diesel. Lincoln General provided insurance for Senators Rental. While being driven, the bus caught fire, allegedly due to an engine defect. Nobody got hurt, and no other property was damaged. Lincoln General paid Senators Rental over four hundred thousand dollars in insurance proceeds.
Lincoln General sued Detroit Diesel and Prevost in state court, alleging breach of warranties, negligence, and strict product liability. Detroit Diesel and Prevost removed the case to federal district court. Prevost moved to dismiss the negligence and tort claims, arguing that the tort claims were barred by the economic loss doctrine. The federal court certified a question of Tennessee law to the Tennessee Supreme Court, which accepted the certified question.
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