Thursday, November 20, 2008

McDonald v. Sun Oil Co.

Nov 19: In the U.S. Court of Appeals, Ninth Circuit, Case No. 06-35683. Thomas McDonald, Marian McDonald and Alex McDonald appeal from the district court’s grant of summary judgment in favor of Sun Oil Company, Sunoco, Inc. and Cordero Mining Company (collectively, Sun). The McDonalds sued Sun for, among other things, negligence, contribution, breach of contract and fraud. Each of the claims arose out of an alleged oral warranty that certain crushed rock at the Horse Heaven Mine Property (Horse Heaven), a disused mercury mine, was free of mercury.

The district court held that Oregon’s statute of repose barred the McDonalds’ negligence claim, that their claim for contribution failed to comply with an administrative requirement, that their breach of contract claim failed because of the merger doctrine and the parol evidence rule, and that their fraud claim failed to raise a genuine issue of material fact. The Appeals Court affirmed in part, reversed in part, and remanded for trial.

The Appeals Court concluded, "The district court erred in granting summary judgment to Sun on the McDonalds’ negligence claim and that claim is remanded for trial. The district court correctly concluded that summary judgment was proper on the McDonalds’ contribution, breach of contract and fraud claim." In explaining the negligence ruling the Appeals Court said, "
the negligence claim is not based on any alleged promise to provide mercury-free calcine, but rather on alleged failures to warn about the mercury in the calcine and to test the calcine. A jury could find that there was no oral agreement, but that Sun was negligent in failing to warn that, for example, the calcine was not tested. The negligence claim should not have been dismissed."

Access the complete opinion (click here).

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