Lumbermen's Underwriting Alliance, a Foreign Corporation v. Can-Car, Inc., a Foreign Corporation, a Division of Hawker Siddeley Canada, Ltd.

In September 1974, a C7D tree farming machine owned by Southwest Forest Industries sustained fire damage in the amount of $17,648.15. The C7D was manufactured by Hawker Siddeley Canada, Ltd., and sold by its wholly-owned subsidiary, Can-Car, Inc. Pursuant to a subrogation clause in an insurance contract between Southwest Forest Industries and LUA (Lumbermen’s Underwriting Alliance), the claim against Can-Car was assigned to LUA. This products liability action was initiated by LUA seeking recovery for the loss based on the theories of negligent design or manufacture, and breach of express or implied warranties.

It is undisputed that the fire resulted from an accumulation of pine needles, wood chips, and other combustible materials around the moving parts housed in the belly pan of the C7D. As the material became compressed against the moving parts, heat was generated which eventually ignited the accumulated debris. The controversy, therefore, centered around the question of who was responsible for the accumulation of debris in the belly pan.

LUA contended that the accumulation resulted because the design of the C7D precluded reasonable access to the belly pan for inspection,…