This is the case of American Family Mutual Insurance Co. v. Wood Stoves Etc. Inc., case number 83528-9-I, heard in the Court of Appeals of the State of Washington, Division One.

Last week, Washington’s appellate court overturned the summary judgment win obtained by American Family Mutual Insurance Co. against Wood Stoves Etc. Inc., which does business as Rich’s for the Home, a retainer seller of a faulty pellet stove.

The panel of appellate judges found that American Family Mutual Insurance Co. (“AmFam”) did not do enough to show that it could not sue the stove’s manufacturer first before it decided to sue only Wood Stoves Etc. Inc. (“Wood stoves”).

The underlying circumstances involved the insurer’s summary judgment victory against the seller of a pellet stove that caught fire after it was installed, but the appellate court has now reversed that decision, stating in its opinion that AmFam failed to prove that it was unable to first sue the manufacturer of the stoves, before suing Wood Stoves.

The manufacturer of the stove is located in Italy, but under Washington’s Product Liability Act, the insurer has the burden of proof to establish that it would have been impossible or nearly impossible to successfully sue it. The three-judge panel said that AmFam didn’t do enough to pursue legal action against the Italian manufacturer, thus reversing the lower court’s ruling.

The case and its $115,000 verdict were remanded for further proceedings. Judges Cecily C. Hazelrigg, Lori K. Smith, and Beth M. Andrus concurred in their opinion, that under the 1981 Product Liability Act, a product seller can only be held liable over a manufacturer if one of four specific elements are met, which include being unable to enforce a judgment against them.

The panel found that AmFam failed to show evidence proving that it would be unable to effectuate the service of process of the complaint or to successfully prosecute a case against the Italian manufacturer, Ravelli Group.

Judge Cecily C. Hazelrigg wrote for the panel, and noted that “AmFam must do more than make conclusory statements about the difficulty of suing the manufacturer, Ravelli, in order to obtain a judgment against the retailer, Wood Stoves, under WPLA.” The court said, “To reduce AmFam’s burden is contrary to the legislative intent of WPLA and our long-standing summary judgment standards.”

AmFam is represented by George M. Shumsky and Brent J. Hardy of Shumsky & Backmab, who had argued the act’s requirements are affirmative defenses that Wood Stoves must prove. However, the panel said that the plain language of the statute indicates the opposite.

Judge Hazelrigg wrote, “AmFam’s proposed interpretation would produce an absurd result, as language narrowing product seller liability to a handful of conditions would require a seller to disprove those conditions, rather than requiring a claimant to prove them.”

The panel held that in order for AmFam to prevail on summary judgment, AmFam needed to prove that there weren’t any factual disputes between it and the seller. However, attorneys for Wood Stoves, Francis S. Floyd and Amber L. Pearce of Floyd Pflueger & Ringer PS argued that AmFam could have served the Italian manufacturer under The Hague Convention, which AmFam did not dispute.

According to court records, this dispute arose in 2019 when a Washington couple purchased the pellet stove from Wood Stoves Etc, Inc., which caught on fire two days after it was installed. The record shows that AmFam paid the couple in excess of $115,000 for damage caused to their home as a result of the fire. AmFam then filed a lawsuit against Wood Stoves to recover the payments made to the couple. At the district level, AmFam successfully obtained an order for summary judgment against Wood Stoves in October 2021.

However, Wood Stoves appealed the decision in December 2021. Last month, during oral argument, AmFam faced difficult questioning from the justice panel as it expressed skepticism regarding AmFam’s arguments for why it could not have sued the Italian manufacturer instead.