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Ismoilov v. Sears Holdings Corp.

Court of Appeals of Tennessee, Nashville

April 25, 2018


          Session November 7, 2017

          Appeal from the Circuit Court for Davidson County No. 15C3758 Thomas W. Brothers, Judge

         This case presents the issue of a seller's liability for damages caused by an allegedly defective water heater. The trial court granted judgment on the pleadings in favor of the defendant seller concerning the plaintiff's claims of products liability, strict liability, breach of implied warranty, negligence, and unfair or deceptive trade practices, finding these claims to be barred by the expiration of the ten-year statute of repose applicable to products liability actions. The trial court subsequently granted summary judgment in favor of the seller regarding the plaintiff's remaining claim of breach of express warranty. Determining that no material factual disputes existed, the court held that the seller was entitled to judgment as a matter of law because the seller had demonstrated that it had fully complied with the warranty on the water heater at issue. The plaintiff filed a motion to alter or amend, also requesting a more specific order. The trial court denied the motion to alter or amend except that it provided a more definite statement of the basis for its grant of summary judgment in favor of the seller. The plaintiff has appealed. Discerning no reversible error, we affirm.

         Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Circuit Court Affirmed; Case Remanded

          Ali Abdel Ati, Nashville, Tennessee, for the appellant, Khurshid Ismoilov.

          Christen C. Blackburn and Michael S. Holder, Nashville, Tennessee, for the appellees, Sears Holdings Corporation and Sears Roebuck and Co.

          Thomas R. Frierson, II, J., delivered the opinion of the court, in which Andy D. Bennett and W. Neal McBrayer, JJ., joined.



         I. Factual and Procedural Background

         The plaintiff, Khurshid Ismoilov, filed a products liability action in the General Sessions Court for Davidson County on June 16, 2015. Mr. Ismoilov named Sears Holdings Corporation ("Sears") as the defendant, alleging that on June 2, 2005, his "predecessor"[1] purchased a water heater from Sears with an express twelve-year warranty. Mr. Ismoilov alleged that on May 14, 2014, the water heater "suddenly exploded and leaked water everywhere badly damaging the property, the floors and the walls and causing mold in the premises because of the leak." Mr. Ismoilov asserted claims of products liability, strict liability in tort, breach of express and implied warranty, and negligence, and he sought damages of less than $25, 000.

         A hearing was conducted on August 26, 2015, during which the parties appeared with counsel and discussed a subpoena issued by Mr. Ismoilov, seeking the production of warranty documentation by Sears. Counsel for Sears stated that no such documents had been located despite a diligent search. The General Sessions Court therefore determined that Sears had complied with the subpoena and "advised counsel for the Plaintiff that he could either pay for Defendant's court reporter appearance fee and continue the case or dismiss the case on the merits." Mr. Ismoilov opted to pay the court reporter's fee and continue the case to October 7, 2015.

         The General Sessions Civil Warrant contains a notation that the case was ultimately dismissed on October 7, 2015. On October 8, 2015, Mr. Ismoilov filed a notice of appeal to the Davidson County Circuit Court ("trial court"). On October 23, 2015, Mr. Ismoilov filed a motion seeking to amend his complaint in order to more fully explain the factual basis of his claims. The trial court entered an order on November 12, 2015, granting leave for Mr. Ismoilov to file his amended complaint.

         Mr. Ismoilov's amended complaint was filed on November 17, 2015. In this complaint, Mr. Ismoilov explained that the prior owner of his home purchased a Kenmore water heater from Sears on June 2, 2005, and that it was installed in the home on the same day. According to Mr. Ismoilov's amended complaint, the water heater had an express warranty of twelve years' duration, which would result in an expiration date of June 2, 2017. Mr. Ismoilov further averred that on May 14, 2014, the water heater "exploded" and flooded the ground floor of his home, causing extensive property damage. Mr. Ismoilov informed Sears of the incident, and Sears replaced the water heater on the following day. Sears also allegedly opened an investigation concerning the damages caused by faulty water heater.

         Mr. Ismoilov asserted that he communicated with a Sears representative, Sean Maines, who requested documentation regarding Mr. Ismoilov's ownership of the home and repair estimates. Mr. Ismoilov claimed that he provided the requested documentation and was told by Mr. Maines that when Sears accepted a repair estimate, "we can move forward and get the claim processed and resolved." According to Mr. Ismoilov, Mr. Maines further communicated that the repair estimate would need to be "broken down between Material cost, labor cost and misc. cost." Mr. Ismoilov stated that he provided further estimate and repair information to Mr. Maines. It is undisputed that Mr. Maines then ceased communications with Mr. Ismoilov, leaving the claim unresolved.

         Mr. Ismoilov alleged that he suffered damages in the amount of $13, 958 in property damage to the home, $6, 600 in unpaid rent, $1, 350 in reduced rent value (because he subsequently had to lower the rent amount), and cleaning expenses of $600. Mr. Ismoilov asserted multiple claims against Sears for unfair and deceptive practices, breach of express and implied warranties, strict liability, and negligence.

         In response, Sears filed an answer, denying liability and asserting the defenses of comparative fault and expiration of the applicable statutes of limitations and repose. Sears subsequently filed a motion for judgment on the pleadings, wherein Sears posited that Mr. Ismoilov could not prevail on his products liability claim due to the expiration of the statutes of limitations and repose. Sears further asserted that Mr. Ismoilov's other alleged causes of action failed to state a claim upon which relief could be granted.

         On February 5, 2016, the trial court conducted a hearing regarding Sears's motion for judgment on the pleadings. In its subsequent order entered, the trial court granted Sears's motion as to all claims except Mr. Ismoilov's claim of breach of express warranty. Finding that there was no Tennessee case on point concerning whether a seller's liability could be extended when the express warranty covered a longer period than the applicable statute of repose, the court relied upon a decision in which the North Carolina Supreme Court held affirmatively regarding this question. See Christie v. Hartley Const., 766 S.E.2d 283 ( N.C. 2014). The court thus directed Mr. Ismoilov to file an amended complaint with a more definite statement regarding the express warranty and to attach a copy of the warranty or provide a statement explaining why the warranty was unavailable.

         On March 9, 2016, Mr. Ismoilov filed a second amended complaint, alleging solely a cause of action for breach of express warranty. Mr. Ismoilov attached an affidavit, wherein he stated that he purchased the home during foreclosure proceedings and was not provided the warranty documentation by the previous owner. Mr. Ismoilov asserted, however, that Sears had admitted the existence of a twelve-year express warranty on the water heater.

         On March 31, 2016, Mr. Ismoilov filed a motion seeking to exclude from evidence a document proffered by Sears entitled, "Master Protection Agreement." Mr. Ismoilov contended that this document was irrelevant because it was dated after the purchase of the water heater in question and was issued by a party other than the defendant. The document in question, a copy of which was attached to Mr. Ismoilov's motion, reflected that it was issued by Sears Protection Services, a division of Sears Roebuck and Co., and the document was not signed by any party.

         On April 18, 2016, Sears filed a motion seeking to substitute Sears Roebuck and Co. ("SRC") for Sears. Sears asserted that SRC was the proper party defendant, a fact which Sears's counsel had determined during the process of responding to discovery requests. Sears claimed that substitution of the proper party defendant was necessary but that Mr. Ismoilov's counsel would not agree to the substitution. On April 22, 2016, the trial court conducted a hearing regarding the pending motions. The court denied Mr. Ismoilov's motion to exclude the Master Protection Agreement from evidence and continued the hearing regarding substitution of the defendant in order to afford Mr. Ismoilov additional time to file a response. Following the subsequent hearing conducted one week later, the court granted the motion to substitute, determining that the substitution would relate back to the date of initial filing. The court noted that SRC had acknowledged that it was adopting all prior admissions made and pleadings filed by Sears. The court also prohibited SRC from later claiming that Sears was the proper defendant.

         Mr. Ismoilov subsequently filed a motion on May 20, 2016, seeking recusal of the trial judge. Mr. Ismoilov maintained that the trial judge's act of granting the motion for judgment on the pleadings had deprived Mr. Ismoilov of his constitutional right to a fair trial. Mr. Ismoilov also asserted that the trial judge's acts of denying Mr. Ismoilov's motions, granting substitution of the party defendant, and dismissing most of Mr. Ismoilov's claims demonstrated that the trial court judge had "prejudged" Mr. Ismoilov and exhibited bias and prejudice against him, warranting recusal. Mr. Ismoilov also filed a motion seeking permission for an interlocutory appeal.

         On September 13, 2016, the trial court entered an order denying Mr. Ismoilov's recusal motion. The court found the motion to be procedurally deficient because it was not supported by an affidavit and did not contain a declaration under penalty of perjury. See Tenn. Sup. Ct. R. 10B. Despite the procedural shortcomings, the court considered the substance of the motion and found that it was not well taken. The court noted that it had no personal relationship with either party, no interest in the defendant corporation, and no personal history with counsel for either party. The court determined that Mr. Ismoilov had presented no evidence of bias or partiality except for his disagreement with the court's rulings. The court thus determined that the motion should be denied. The trial court concomitantly entered an order denying Mr. Ismoilov's motion for permission to file an interlocutory appeal. The court found that Mr. Ismoilov had failed to present any reason that an interlocutory appeal was necessary in this matter because Mr. Ismoilov would have the remedy of an appeal as of right following entry of a final order.

         On November 23, 2016, Mr. Ismoilov filed a motion seeking to enjoin defense counsel from representing "two parties with conflicted interests in violation of Rule 1.7 of the Tennessee Rules of Professional Conduct" and for sanctions. Although Mr. Ismoilov claimed that SRC's counsel could not ethically represent both SRC and Sears because the representation of one would be adverse to representation of the other, he provided no factual basis for his contention. SRC opposed this motion, asserting that no conflict existed. The trial court subsequently denied the motion.

         On December 14, 2016, SRC filed a motion for summary judgment. SRC postulated that the twelve-year warranty applicable to the water heater was a limited warranty that promised only to furnish replacement parts or a replacement water heater in the event of a defect. SRC also posited that because such a replacement water heater had been provided, SRC maintained no further liability to Mr. Ismoilov. SRC asserted that it had not expressly warranted that the water heater would be free of defects. SRC further asserted that it had not agreed to pay incidental or consequential damages caused by any alleged defect.

         In support of the motion, SRC attached an affidavit from Tim Adkisson, Director of Product Quality and Support for SRC. Mr. Adkisson stated that the water heater in question originally came with an owner's manual that contained information regarding the applicable twelve-year limited warranty. A copy of said owner's manual was attached to Mr. Adkisson's affidavit. Mr. Adkisson affirmed that no other warranty was applicable to the water heater in question. The attached owner's manual provides in pertinent part:

After one year and through 12 years from the date of purchase for water heaters used in a single-family residence, if a leak occurs in the tank, Sears will furnish a new current model water heater of equal capacity and quality. You will be charged for any installation.
* * *
After one year and through 12 years from the date of purchase, when your Sears Kenmore water heater is used in a single-family residence and is installed and operated in accordance with the information in this manual, if a part fails due to a [sic] materials or workmanship, Sears will furnish a replacement free of charge. You will be charged for labor.

         SRC also filed a statement of material facts in support of its motion for summary judgment, stating that the twelve-year warranty contained only the above-quoted language. SRC averred that no other warranties were provided with the water heater. SRC further claimed that the water heater had been promptly replaced.

         On January 30, 2017, the trial court entered an order compelling SRC to respond completely and accurately to Mr. Ismoilov's written discovery within thirty days. This order referenced a hearing held on December 16, 2016. Meanwhile, on January 27, 2017, the trial court conducted a hearing regarding SRC's summary judgment motion, which the court granted by order dated February 16, 2017. In its order, the court stated:

Defendant came before this Court on January 27, 2017, on Defendant Sears Roebuck and Co.'s Motion for Summary Judgment. Defendant filed its Motion for Summary Judgment on December 14, 2016. Defendant's motion provided notice of the hearing scheduled for January 27, 2017 and indicated that "Failure to file a timely written response to the motion may result in the motion being granted without further hearing." Plaintiff did not file a response and Plaintiff's attorney did not appear at the scheduled hearing.
Notwithstanding Plaintiff's failure to respond or appear, the Court has independently reviewed Defendant's Motion for Summary Judgment, which appears to be well-taken. Thus, the Court finds that there are no genuine issues of material fact and Defendant Sears Roebuck and Co. is entitled to judgment as a matter of law.
It is hereby ORDERED, that Plaintiff's claims against Defendant Sears Roebuck and Co. are dismissed with prejudice.

         On February 6, 2017, ten days prior to the trial court's entry of a written order granting summary judgment, Mr. Ismoilov filed a "Motion to Reconsider the Absentia Granting Sears Roebuck and Co. Motion for Summary Judgment and to Schedule a Hearing for the Motion." Mr. Ismoilov claimed that he did not receive a notice regarding the summary judgment hearing, had no opportunity to respond to the motion, and was still awaiting discovery responses from SRC. On February 17, 2017, Mr. Ismoilov filed a notice stating that he wished to withdraw the motion to reconsider. On March 8, 2017, Mr. Ismoilov filed a response to the summary judgment motion, to which he attached his own affidavit and copies of his electronic mail correspondence with SRC regarding his claim. Mr. Ismoilov also filed a statement of material facts he claimed were in dispute as well as a response to the statement of facts filed by SRC.

         On March 8, 2017, Mr. Ismoilov filed a motion seeking additional findings of fact and conclusions of law and seeking alteration or amendment of the trial court's order granting summary judgment. Mr. Ismoilov asserted that he had never received SRC's responses to written discovery before summary judgment was granted. In addition, according to Mr. Ismoilov, the trial court's order granting summary judgment failed to state the court's basis for its grant of ...

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