Superior Court of New Jersey,

Appellate Division.

AIG CENTENNIAL INSURANCE COMPANY, Plaintiff–Respondent,

v.

Gregory R. THOMPSON d/b/a Thompson Trucking, Defendant,

and

Ari Mutual Insurance Company, Defendant–Appellant.

 

Argued Oct. 23, 2012.

Decided Nov. 19, 2012.

 

On appeal from the Superior Court of New Jersey, Law Division, Camden County, Docket No. L–3822–11.

Brooks H. Leonard argued the cause for appellant (Coughlin Duffy, LLP, attorneys; James P. Lisovicz, of counsel and on the brief; Mr. Leonard, on the brief).

 

Sandra S. Grossman argued the cause for respondent (Law Offices of Steven G. Kraus, attorneys; Ms. Grossman, on the brief).

 

Before Judges HARRIS and HOFFMAN.

 

PER CURIAM.

*1 This appeal arises from the Law Division’s declaration that defendant ARI Mutual Insurance Company (ARI Mutual) is obliged to reimburse plaintiff AIG Centennial Insurance Company (AIG) for personal injury protection (PIP) medical expense benefits paid to AIG’s insured under N.J.S.A. 39:6A–9.1. We reverse because the benefits were not paid in accordance with the policy covering the insured, but instead exceeded the policy limits due to AIG’s error.

 

I.

The dispute between the insurers has its genesis in an automobile accident that occurred on September 11, 2006. On that date, Dorothy Davis was the driver of a private passenger automobile owned by Sherman Harris, AIG’s named insured. According to a police report, Davis’s vehicle was struck by a dump truck operated by William H. Kanauss, III, a driver for Thompson Trucking.

 

At the time of the accident, Thompson Trucking’s liability insurer was ARI Mutual. Because the dump truck was a commercial vehicle, see N.J.S.A. 39:6A–2(a) and –4, there was no PIP coverage provided by ARI Mutual’s Business Auto Policy, except for injuries suffered by pedestrians. See N.J.S.A. 17:28–1.3.

 

Harris, however, had procured from AIG a basic automobile insurance policy, N.J.S.A. 39:6A–3.1, which provided PIP medical expense coverage of $15,000 per person, per accident. By letter dated September 18, 2006, AIG mistakenly notified Davis that Harris’s policy provided her with PIP coverage of $250,000. After submitting her written application for PIP benefits to AIG on September 25, 2006, Davis relied on AIG’s $250,000 representation and obtained medical treatment costing far in excess of the basic automobile insurance policy’s $15,000 PIP medical expense limitation. At some point, AIG realized that it had mistakenly advised Davis about the policy’s limit of liability and declined to provide further PIP benefits beyond what it had already expended. ARI Mutual reimbursed AIG $15,000 pursuant to N.J.S.A. 39:6A–9.1.

 

Davis filed a personal injury lawsuit against Kanauss, Gregory Thompson, and Thompson Trucking (the Thompson defendants) in August 2008. ARI Mutual provided a defense to the Thompson defendants pursuant to its Business Auto Policy.

 

In December 2009, Davis commenced a separate action against AIG, ARI Mutual, and the Thompson defendants, which sought, among other things, a declaration that “AIG is to afford coverage for any medical and/or hospital expenses up to $250,000 under the policy it issued and defendant AIG should be estopped from denying PIP benefits in excess of $15,000.” FN1 The complaint also sought a judgment “declaring that defendant AIG’s policy is reformed to include PIP coverage in the amount of $250,000.”

 

FN1. The personal injury and declaratory judgment actions were consolidated in the Camden vicinage.

 

Among the reasons for bringing this declaratory judgment action was Davis’s claimed inability “to resolve the third party case since she is uncertain as to whether or not said third party defendants and their carrier ARI [Mutual] would be responsible for the unpaid medical and surgical expenses.” Although AIG and ARI Mutual were co-defendants in Davis’s declaratory judgment action, they did not file cross-claims against each other relating to the ultimate responsibility for PIP payments under N.J.S.A. 39:6A–9.1.

 

*2 In October 2010, Davis settled her personal injury lawsuit against the Thompson defendants for $225,000. In March 2011, Davis’s claims against ARI Mutual and the Thompson defendants in the declaratory judgment action were dismissed. In like vein, but on a date not disclosed in the record, Davis separately settled her dispute with AIG, wherein AIG agreed to pay for all of Davis’s requested PIP expenses. The record is silent about the specific details concerning that settlement. AIG refers to having “reformed” the insurance contract, but it does not appear that Harris was a party to the “reformation” of his basic automobile insurance policy.

 

On April 28, 2011, AIG demanded reimbursement from ARI Mutual for the PIP benefits paid on Davis’s behalf in excess of $15,000, a sum totaling $75,634.29. On May 4, 2011, ARI Mutual declined to reimburse AIG for any amounts in excess of the $15,000 it had already paid.

 

On August 1, 2011, AIG filed the present lawsuit seeking (1) money damages against the Thompson defendants FN2 and (2) reimbursement or arbitration of AIG’s dispute against ARI Mutual. After consideration of the parties’ motions for summary judgment, the Law Division dismissed all of AIG’s claims against the Thompson defendants. In denying ARI Mutual’s motion, the court granted AIG’s application to not cap reimbursement at $15,000, and directed the insurers “to submit [AIG’s] claim for reimbursement to binding arbitration.” This appeal followed.

 

FN2. AIG’s complaint actually only sought recovery from “Gregory R. Thompson d/b/a Thompson Trucking” as a “tortfeasor responsible for payment to [AIG] of the amount of its personal injury protection benefits” pursuant to N.J.S.A. 39:6A–9.1.

 

II.

“An appellate court reviews a grant of summary judgment de novo, applying the same standard governing the trial court under Rule 4:46.” Chance v. McCann, 405 N.J.Super. 547, 563 (App.Div .2009) (citing Liberty Surplus Ins. Corp. v. Nowell Amoroso, P.A., 189 N.J. 436, 445–46 (2007)). In such review, “ ‘[a] trial court’s interpretation of the law and the legal consequences that flow from established facts are not entitled to any special deference.’ “ Estate of Hanges v. Metro. Prop. & Cas. Ins. Co., 202 N.J. 369, 382 (2010) (alteration in original) (quoting Manalapan Realty, L.P. v. Twp. Comm. of Manalapan, 140 N.J. 366, 378 (1995)). Moreover, because we are specifically reviewing the Law Division’s application of N.J.S.A. 39:6A–9.1, we need not defer to the motion court’s “interpretive conclusions.” Murray v. Plainfield Rescue Squad, 210 N.J. 581, 584 (2012).

 

PIP reimbursement to a PIP carrier is strictly governed by N.J.S.A. 39:6A–9.1. IFA Ins. Co. v. Waitt, 270 N.J.Super. 621, 622 (App.Div.1994). The statute states in pertinent part:

 

a. An insurer, health maintenance organization or governmental agency paying benefits pursuant to subsection a., b., or d., of section 13 of P.L.1983, c. 362 (C. 39:6A–4.3), personal injury protection benefits in accordance with section 4 or section 10 of P.L.1972, c. 70 (C. 39:6A–3.1) or benefits pursuant to section 45 of P.L.2003, c. 89 (C. 39:6A–3.3), as a result of an accident occurring within this State, shall, within two years of filing of the claim, have the right to recover the amount of payments from any tortfeasor who was not, at the time of the accident, required to maintain personal injury protection coverage required to be provided in accordance with section 18 of P.L.1985, c. 520 (C. 17:28–1.4), or although required did not maintain personal injury protection or medical expense benefits coverage at the time of the accident.

 

*3 b. In the case of an accident occurring in this State involving an insured tortfeasor, the determination as to whether an insurer … is legally entitled to recover the amount of payments and the amount of recovery, including the costs of processing benefit claims and enforcing rights granted under this section, shall be made against the insurer of the tortfeasor, and shall be by agreement of the involved parties or, upon failing to agree, by arbitration. Any recovery by an insurer … pursuant to this subsection shall be subject to any claim against the insured tortfeasor’s insurer by the injured party and shall be paid only after satisfaction of that claim, up to the limits of the insured tortfeasor’s motor vehicle … insurance policy.

 

[N.J.S.A. 39:6A–9.1 (emphasis added).]

 

The statute was not among the provisions contained in the original New Jersey Automobile Reparation Reform Act, N.J.S.A. 39:6A–1 to –35. Instead, it was enacted as part of the New Jersey Automobile Insurance Freedom of Choice and Cost Containment Act of 1984. Liberty Mut. Ins. Co. v. Selective Ins. Co., 271 N.J.Super. 454, 458 (App.Div.1994). Its purpose was to reduce “the cost of insurance for automobile owners and allow[ ] automobile insurers to recover PIP through reimbursement.” State Farm Mut. Auto. Ins. Co. v. Licensed Beverage Ins. Exch., 146 N.J. 1, 9 (1996). “Allowing the PIP carrier to recoup its payments from a commercial liability carrier reduces premiums for private automobile insurance, thus advancing a purpose of N.J.S.A. 39:6A–9.1.” Liberty Mut., supra, 271 N.J.Super. at 458.

 

“Our paramount goal in interpreting a statute is to give effect to the Legislature’s intent.” Wilson ex rel. Manzano v. City of Jersey City, 209 N.J. 558, 572 (2012). To do so, “courts begin with the language of the statute.” In re Kollman, 210 N.J. 557, 568 (2012). Statutory words gain their meaning and significance by reading them within the context of the legislation as a whole. See DiProspero v. Penn, 183 N.J. 477, 492 (2005).

 

There are no disputed facts here. ARI Mutual recognizes its responsibility to reimburse AIG for the $15,000 PIP medical expense benefit provided in Harris’s basic automobile insurance policy pursuant to N.J.S.A. 39:6A–9.1. ARI Mutual understandably objects to paying more simply because of AIG’s initial mistake and subsequent unilateral settlement with Davis.

 

While acknowledging its error, AIG argues that ARI Mutual nevertheless should be responsible for reimbursing PIP medical expense amounts in excess of the basic automobile insurance policy limit because if AIG had hewed to the $15,000 limit, ARI Mutual would have been exposed to Davis’s claim for the difference as part of the personal injury action. That may theoretically be true, but we are not engaged in an equitable redistribution divorced from the Legislature’s intent. Instead, we are involved with a purely statutory reimbursement scheme between insurers, and Davis’s purported rights vis-à-vis ARI Mutual are not relevant to our determination.

 

*4 ARI Mutual relies on N.J.S.A. 39:6A–9.1’s phrase “pursuant to” in arguing that reimbursement over the $15,000 policy limit is not available to AIG because the PIP medical expense benefits paid to Davis were not those pursuant to the amount in the actual policy. We agree.

 

AIG’s payment of up to $250,000 was not made within the confines of the basic automobile insurance policy covering Davis. Instead, it was an ad hoc adjustment that suited AIG’s litigation strategy. Hence, the payment was not made “pursuant to” or “in accordance with” the PIP reimbursement statute. See N.J.S.A. 39:6A–9.1. The payment was made because AIG was potentially estopped from doing otherwise after providing representations to Davis for up to $250,000 in PIP benefits, upon which Davis reasonably relied. Furthermore, ARI Mutual was not involved in perpetrating the mistake; it was an operational gaffe made by AIG alone in the administration of its insurance business. Thus, the court “should not abruptly increase the exposure of [ARI Mutual]” to compensate AIG for its own error. IFA Ins. Co., supra, 270 N.J.Super. at 626.

 

The legislative intent of PIP benefits is clear. They enable persons injured on our streets and highways to get medical treatment and payment quickly, within the coverage limits designated in the policy, and without regard to fault. Furthermore, the Legislature ensured that carriers could obtain reimbursement from a tortfeasor’s insurer directly, to facilitate cost containment, rather than endure a cumbersome subrogation process. Nowhere does the legislation indicate that a tortfeasor’s insurer should also be exposed to liability due to one-sided errors made by the injured’s insurer. While reimbursement from a tortfeasor is provided for by N.J.S.A. 39:6A–9.1, it is limited to the PIP limit set forth in the policy covering the accident victim. “For a court to presume that the Legislature intended something other than that which it clearly and plainly expressed in plain language would be tantamount to rewriting the Legislature’s written enactment by judicial fiat.” Wise v. Marienski, 425 N.J.Super. 110, 120–21 (Law Div.2011).

 

AIG argues that ARI Mutual is reaping a windfall if it does not provide the reimbursement AIG seeks. However, the excess benefits paid resulted from AIG’s unilateral mistake and self-motivated settlement with Davis. It was a circumstance that ARI Mutual had no hand in producing. ARI can hardly be said to be reaping a windfall. From a public policy standpoint, allowing AIG to recover the amount in question from ARI Mutual would condone sloppiness by insurers and increase the cost of insurance in direct contravention of our no fault laws.

 

Reversed.

Supreme Court of South Dakota.

JORGENSEN FARMS, INC., d/b/a Jorgensen Land & Cattle Partnership, Plaintiff,

v.

COUNTRY PRIDE COOPERATIVE, INC., a South Dakota Corporation, Defendant, Third–Party Plaintiff and Appellant,

v.

Agriliance, LLC; Dakota Gasification Company, and Agrium U.S. Inc., Third–Party Defendants and Appellees,

and

Charles Baker Trucking Company, and Spaans Trucking, Inc., Third–Party Defendants.

 

Nos. 26154, 26161.

Considered on Briefs March 19, 2012.

Decided Nov. 20, 2012.

 

Appeal from the Circuit Court of the Sixth Judicial Circuit Tripp County, South Dakota; Mark Barnett, Judge.

Amy Amundson, Thomas D. Jensen of Lind, Jensen, Sullivan & Peterson, PA, Minneapolis, Minnesota, Attorneys for defendant, third-party plaintiff and appellant.

 

Margo D. Northrup of Riter, Rogers, Wattier & Brown, LLP, Pierre, South Dakota and Emily Murphy, Stillwater, Minnesota, Attorneys for third-party defendant and appellee Agriliance N.O.R. # 26161.

 

Paul E. Bachand of Schmidt, Schroyer, Moreno, Lee & Bachand, PC, Pierre, South Dakota, Todd Langel of Faegre & Benson, LLP, Des Moines, Iowa and Kristin R. Eads of Faegre & Benson, LLP, Minneapolis, Minnesota, Attorneys for third-party defendant and appellee Agrium.

 

Steven J. Oberg of Lynn, Jackson, Shultz & Lebrun, PC, Rapid City, South Dakota, Attorneys for third-party defendant and appellee Dakota Gasification.

 

WILBUR, Justice.

*1 [¶ 1.] Jorgensen Farms (Jorgensen) sued Country Pride Cooperative (Country Pride) alleging that Country Pride sold Jorgensen fertilizer contaminated with rye damaging its 2007 wheat crop. Country Pride settled with Jorgensen but preserved its claims against third-party defendants Agriliance, Agrium, and Dakota Gasification Co. (Dakota Gas). The trial court granted the third-party defendants’ motions for summary judgment. We affirm.

 

FACTS AND PROCEDURAL BACKGROUND

[¶ 2.] Jorgensen grows certified and registered winter wheat seed. During late spring or early summer 2007, rye plants contaminated Jorgensen’s winter wheat crop. According to Jorgensen’s expert, Jorgensen suffered a loss of $556,070 as a result of the rye contamination as Jorgensen was unable to sell the crop as certified seed, and instead, sold the wheat for a lower price as commodity grain.

 

[¶ 3.] Jorgensen, who believed the source of the contamination was fertilizer it purchased from Country Pride, brought suit against Country Pride to recover damages. Subsequently, Country Pride brought third-party complaints against a number of parties alleging that, if Jorgensen proved that the fertilizer it purchased from Country Pride was contaminated, the rye contamination must have occurred in the chain of fertilizer distribution.FN1 Country Pride alleges that the third-party defendants’ negligence, breach of contract, and/or breach of warranty entitles Country Pride to indemnification or contribution. FN2

 

FN1. Country Pride concedes that it only joined the Agriliance–Charles Baker Trucking (Baker Trucking)-Dakota Gas chain of distribution, and thereby excluded other parties who supplied or transported ammonium sulfate and urea to Country Pride during 2006 and who could also have been joined in the lawsuit.

 

FN2. Contribution and indemnification, although similar, are distinct remedies. A right to contribution arises when “[a] party to a joint, or joint and several, obligation … satisfies more than his share of the claim against all[.]” SDCL 20–1–6. In contrast, “indemnity is an ‘all-or-nothing’ proposition where the party seeking indemnification must show an absence of proportionate fault to shift the entire liability [.]” Weiszhaar Farms, Inc. v. Tobin, 522 N.W.2d 484, 492 (S.D.1994).

 

[¶ 4.] Country Pride settled with Jorgensen and the two carriers named as third-party defendants: Charles Baker Trucking (Baker Trucking) and Spaans Trucking, Inc. The only remaining issue is whether Country Pride is entitled to indemnification or contribution from any or all remaining third-party defendants: Agriliance, Agrium, or Dakota Gas.

 

[¶ 5.] The remaining third-party defendants were involved in selling either, or both, ammonium sulfate and urea, the two chemicals used in mixing the fertilizer. Agriliance, a sales broker, and Country Pride entered into a verbal agreement whereby Country Pride would purchase ammonium sulfate from Agriliance. As the intermediate seller, Agriliance never possessed or handled the ammonium sulfate. Rather, Agriliance purchased the ammonium sulfate from third-party defendant Dakota Gas. Agrium is a producer of both ammonium sulfate and urea. Country Pride dismissed its claim based on Agrium’s sale of ammonium sulfate but, on appeal, is pursuing a claim for the urea sold by Agrium.

 

[¶ 6.] The trial court granted summary judgment in favor of Agriliance, Agrium, and Dakota Gas, reasoning that Country Pride failed “to provide a specific fact upon which a jury could find a party responsible without resorting to speculation.” Country Pride appeals. We review Country Pride’s remaining claims against each Agriliance, Agrium, and Dakota Gas separately to determine whether summary judgment was appropriate as to each.FN3

 

FN3. The trial court noted Country Pride provided a “handful” of “evolving theories.” Alternative theories are allowed by SDCL 15–6–8(e)(2), which provides:

 

A party may set forth two or more statements of a claim or defense alternatively or hypothetically, either in one count or defense or in separate counts or defenses. When two or more statements are made in the alternative and one of them if made independently would be sufficient, the pleading is not made insufficient by the insufficiency of one or more of the alternative statements. A party may also state as many separate claims or defenses as he has regardless of consistency and whether based on legal or on equitable grounds or on both.

 

STANDARD OF REVIEW

*2 [¶ 7.] In reviewing a trial court’s grant or denial of summary judgment under SDCL 15–6–56(c), we must view evidence in the light most favorable to the non-moving party and decide both “ ‘whether the moving party has demonstrated the absence of any genuine issue of material fact’ “ and whether the trial court correctly decided all legal questions. Bertelsen v. Allstate Ins. Co., 2011 S.D. 13, ¶ 15, 796 N.W.2d 685, 692 (quoting Advanced Recycling Sys., L.L.C. v. Se. Prop., Ltd., 2010 S.D. 70, ¶ 10, 787 N.W.2d 778, 783). We make these determinations de novo, with “ ‘no deference to the [trial] court’s ruling.’ “ Highmark Fed. Credit Union v. Hunter, 2012 S.D. 37, ¶ 7, 814 N.W.2d 413, 415 (quoting Adrian v. Vonk, 2011 S.D. 84, ¶ 8, 807 N.W.2d 119, 122).

 

ANALYSIS AND DECISION

[¶ 8.] On appeal, the parties dispute whether Country Pride has set forth sufficient evidence to survive summary judgment. Country Pride concedes that it has not provided direct evidence as to which of the three third-party defendants, if any, are responsible for the rye contamination. However, Country Pride argues, despite the absence of direct evidence, it has provided sufficient circumstantial evidence to survive summary judgment.

 

[¶ 9.] Country Pride’s position at the summary judgment hearing was that circumstantial evidence of “inspection negligence” established that rye entered the ammonium sulfate due to Baker Trucking’s negligence in its failure to properly inspect its delivery trucks. With this backdrop in mind, we examine the evidence presented in this case, viewing it “in [the] light most favorable to the nonmoving part[ies][.]” Cashman v. Van Dyke, 2012 S.D. 43, ¶ 6, 815 N.W.2d 308, 311.

 

[¶ 10.] 1. Agriliance is not liable as a matter of law under either a breach of contract or negligence theory.

[¶ 11.] Country Pride presents alternative theories under which Agriliance could be liable for the damages to Jorgensen’s wheat crop. First, Country Pride argues that a September 17, 2006 delivery of ammonium sulfate by Baker Trucking, which Country Pride ordered from Agriliance, contained the rye contamination. Second, Country Pride argues that Agriliance supplied approximately 65.3% of Country Pride’s ammonium sulfate prior to September 2006 and that this supply contained the contamination.

 

[¶ 12.] There are disputed facts regarding the date the first load of ammonium sulfate was delivered to Country Pride by Baker Trucking.FN4 In addition, Country Pride offered the testimony of former Baker Trucking employee, David Sherman, regarding the presence of rye in Baker Trucking’s trucks.FN5 When the evidence is viewed in the light most favorable to Country Pride, the non-moving party, the date of delivery, and whether the trailer used by Baker Trucking was contaminated are disputed facts that should ordinarily be decided by a jury. In this case, however, resolution of those disputed facts is not determinative as to any liability on the part of Agriliance.

 

FN4. Country Pride and Agriliance dispute when the first load of ammonium sulfate was delivered to Country Pride. Based on its timeline of events, Country Pride asserts that it received its first load of ammonium sulfate from Baker Trucking on September 17 or 18. Agriliance argues that Country Pride’s own receipt, or “hand ticket,” which contains handwritten notations providing a date of “9/14/06” and “delivered by Ted @ 1:00 PM,” establishes a September 14 delivery date. Country Pride concedes that if Baker Trucking delivered the ammonium sulfate to Country Pride on September 14, Agriliance cannot be held liable.

 

FN5. Sherman, after initially stating that he had never come across rye seed in any of his deliveries, recanted, and stated that Charles Baker, owner of Baker Trucking, told Sherman he had rye in his fields and that, if Baker had gotten rye in his fields, “there’s a good possibility that rye got in between the two floors” of the trailer that delivered ammonium sulfate to Country Pride, and therefore, was the source of Jorgensen’s rye contamination.

 

*3 [¶ 13.] Country Pride is suing Agriliance for breach of warranty FN6 and negligence. Country Pride conceded that the ammonium sulfate was defect-free when it was manufactured and shipped from Dakota Gas. In light of this concession, Agriliance cannot be liable as a matter of law for breach of warranty because the goods were as warranted from the manufacturer when the goods were shipped. See Shaffer v. Honeywell, Inc., 249 N.W.2d 251, 256 (S.D.1976) overruled on other grounds by First Premier Bank v. Kolcraft Enters., Inc., 2004 S.D. 92, 686 N.W.2d 430 (stating that, in a case with claims for breach of warranty, negligence, and strict liability involving a valve manufactured by Honeywell, “plaintiff [injured homeowner] has the burden of showing that the defect existed when the product left the manufacturer’s hands”).

 

FN6. Country Pride advances that Agriliance violated the implied warranty of merchantability (SDCL 57A–2–314); the implied warranty of fitness for a particular purpose (SDCL 57A–2–315); and an express warranty by affirmation, promise, description, sample (SDCL 57A–2–313).

 

[¶ 14.] Additionally, Country Pride’s negligence claim against Agriliance is based upon its failure to inspect the shipper’s, Baker Trucking, trucks. Agriliance, however, cannot be liable for negligence because it is the carrier’s duty, under state law, to inspect its truck.FN7 Berry v. Chicago, M. & St. P. Ry. Co., 24 S.D. 611, 124 N.W. 859, 862–63 (1910). Country Pride has settled with and dismissed Baker Trucking from this lawsuit. Based on the undisputed material fact that the ammonium sulfate was defect-free when manufactured and shipped, as conceded by Country Pride, and that Agriliance did not have a duty to inspect the carrier, Agriliance is entitled to summary judgment as a matter of law.

 

FN7. The parties disagree whether the Carmack Amendment affects the outcome of this case. The Carmack Amendment governs the liability of carriers and freight forwarders for damage to goods during transportation. 49 U.S.C. §§ 11706 and 14706. Although this case involves transportation by truck, both motor carriers and rail carriers, are “carriers” under the Carmack Amendment. And, as the Supreme Court has explained, “in cases where it applies,” the Carmack Amendment

 

imposes upon receiving rail carriers and delivering rail carriers liability for damage caused during the rail route under the bill of lading, regardless of which carrier caused the damage. Carmack’s purpose is to relieve cargo owners of the burden of searching out a particular negligent carrier from among the often numerous carriers handling an interstate shipment of goods.

 

Kawasaki Kisen Kaisha Ltd. v. Regal–Beloit Corp., ––– U.S. ––––, ––––, 130 S.Ct. 2433, 2441, 177 L.Ed.2d 424 (2010) (internal citations and quotations omitted). See generally Royal & Sun Alliance Ins., PLC v. Ocean World Lines, Inc., 612 F.3d 138, 145–46 (2nd Cir.2010) (considering whether a United States Supreme Court case involving rail carriers is applicable to a case involving motor carriers and freight forwarders).

 

We first observe that the Carmack Amendment does not apply here because Agriliance is neither a carrier nor freight forwarder. See 49 U.S.C. §§ 13102(3), (8). Second, even if the Carmack Amendment applied, it would only impose liability on the carrier, Baker Trucking, not Agriliance, a sales broker. See, e.g., Windows, Inc. v. Jordan Panel Sys. Corp., 177 F.3d 114, 117–18 (2nd Cir.1999).

 

[¶ 15.] Country Pride offered the possibility that the doctrine of alternative liability could apply in this case.FN8 However, because Country Pride did not join all potential defendants, i.e., all parties who produced, shipped, manufactured, or sold ammonium sulfate or urea to Country Pride in 2006, even if this Court were to consider adopting the doctrine, it would not be applicable for that reason. See Bradley v. Firestone Tire and Rubber Co., 590 F.Supp. 1177, 1179 (D.S.D.1984) (quoting Starling v. Seaboard Coastline R.R. Co., 533 F.Supp. 183, 188 (S.D.Ga.1982) (stating that “[u]nder alternative liability, however, all the possible wrongdoers responsible for the injury must be before the Court, and the negligent acts must have been committed simultaneously”)).

 

FN8. The alternative liability theory is

 

[w]here the conduct of two or more actors is tortious, and it is proved that harm has been caused to the plaintiff by only one of them, but there is uncertainty as to which one has caused it, the burden is upon each such actor to prove that he has not caused the harm.

 

Restatement (Second) of Torts § 433B(3) (1965).

 

[¶ 16.] 2. Country Pride’s claims against Agrium are barred by (a) Country Pride’s failure to give notice, (b) the economic loss doctrine, and (c) the statute of limitations.

[¶ 17.] Country Pride argues, in the alternative, that if the ammonium sulfate it purchased from Agriliance was not the source of the rye contamination, the urea Country Pride purchased from Agrium in fall 2006 caused the contamination. Country Pride concedes that the more likely source of the rye contamination is the fertilizer sold by Agriliance. Despite this concession, Country Pride believes it has set forth sufficient facts for a jury to determine that Agrium is the source of the rye contamination.

 

*4 [¶ 18.] Country Pride asserts that it can prove that: (1) it purchased 100% of its August 2006 urea from Agrium; (2) Jorgensen purchased 66,090 pounds of urea from Country Pride on September 14; (3) on one or more occasions, Agrium used Drueke Trucking, a party not joined in this action, to deliver urea to Country Pride; and (4) that Country Pride has previously discovered contaminated urea in Drueke Trucking deliveries.FN9 Thus, according to Country Pride, a reasonable jury could infer that the urea supplied by Agrium in August 2006 contained the offending rye.

 

FN9. Dale Vogt, a Country Pride employee, testified that, on several occasions, he discovered corn contaminated urea in fertilizer delivered by Drueke. Vogt did not testify, nor does Country Pride allege, that it previously discovered rye contaminated urea delivered by Drueke.

 

[¶ 19.] In response, Agrium argues that summary judgment was appropriate for four reasons: (1) the trial court correctly concluded that there was no genuine issue of material fact regarding the source of the contamination; (2) Country Pride’s breach of warranty claims fail because Country Pride did not give reasonable notice as required by SDCL 57A–2–607(3); (3) Country Pride’s tort claims are barred by the economic loss doctrine; and (4) Country Pride’s claims are barred by the statute of limitations contained in SDCL 57A–2–725.

 

[¶ 20.] This Court has often stated that, “ ‘[i]f there exists any basis which supports the ruling of the trial court, affirmance of a summary judgment is proper.’ “ Murray v. Mansheim, 2010 S .D. 18, ¶ 4, 779 N.W.2d 379, 382 (quoting Jacobson v. Leisinger, 2008 S.D. 19, ¶ 24, 746 N.W.2d 739, 745). We hold that Country Pride’s breach of warranty claims are barred by its failure to give reasonable notice; its tort claims are barred by the economic loss doctrine; and its indemnification and contribution claim is barred by the statute of limitations. Therefore, we affirm summary judgment in favor of Agrium.

 

(a) Country Pride’s breach of warranty claims against Agrium are barred by the notice requirement contained in SDCL 57A–2–607(3).

[¶ 21.] Both Country Pride and Agrium agree that Agrium’s sale of urea to Country Pride was a sales transaction, and thus governed by the Uniform Commercial Code (UCC). See City of Lennox v. Mitek Indus. Ins., 519 N.W.2d 330, 332 (S.D.1994) (stating that “[i]n order for the UCC to govern the transaction, the sale must be for a sale of goods”). Accordingly, Country Pride must comply with the notice requirement contained in SDCL 57A–2–607(3)(a). This statute provides, “[w]here a tender [of goods] has been accepted [,] … [t]he buyer must within a reasonable time after he discovers or should have discovered any breach notify the seller of breach or be barred from any remedy[.]” (Emphasis added.)

 

[¶ 22.] We previously interpreted this notice requirement in Hepper v. Triple U Enterprises., Inc., 388 N.W.2d 525 (S.D.1986). In Hepper, we reasoned that “[t]he purpose of requiring notice within a reasonable time is to give the seller sufficient time to investigate the breach of warranty claim while facts are still fresh[,] … foster[ ] settlement through negotiation, permit[ ] a seller to avoid future defects, allow[ ] a seller to minimize damages, and protect[ ] a seller from stale claims.” Id . at 527 (additional citations omitted). Importantly, “[n]otice is an element that must be specifically proven; it is not an affirmative defense” and “[n]otice of breach by summons and complaint is obviously insufficient.” Id. at 527,529.

 

*5 [¶ 23.] Agrium argues that Country Pride “never even pleaded notice in its complaint and cannot provide that it ever gave Agrium anything resembling notice of the breach it claims.” We agree. Notably, Country Pride, in its reply brief, responds to Agrium’s notice argument by stating “notice was … given to Agrium in a reasonable time per the statute” without stating, nor citing to the record, when this notice was provided and through what means. Thus, Country Pride has not shown facts in the record to support its assertion that it provided reasonable notice, nor did our review of the record bear out this assertion. As a result, we affirm summary judgment on its breach of warranty claims on the basis that Country Pride failed to provide notice.

 

(b) Country Pride’s negligence claim against Agrium is barred by the economic loss doctrine.

[¶ 24.] In addition to its warranty theory, Country Pride also argues that Agrium is liable under a negligence theory. In UCC cases, this Court has adopted the economic loss doctrine which provides that “ ‘economic losses are not recoverable under tort theories’ “ such as negligence. Diamond Surface, Inc. v. State Cement Plant Comm’n, 1998 S.D. 97, ¶ 24, 583 N.W.2d 155, 161 (quoting City of Lennox, 519 N.W.2d at 333). Rather, a plaintiff is “ ‘limited to the commercial theories found in the UCC.’ “ Id .FN10

 

FN10. The underlying purpose of the rule “is to maintain the separateness of tort law and contract law.” Lesiak v. Cent. Valley Agric. Coop., Inc., 808 N.W.2d 67, 83 (Neb.2012).

 

[¶ 25.] This doctrine has two exceptions. Id. ¶ 25. First, tort damages are not barred in cases where personal injury is involved. Id. ¶ 25 n. 5 (citing City of Lennox, 519 N.W .2d at 333). Neither Country Pride nor Agrium asserts that this first exception applies in this case. Rather, the parties dispute the application of the second exception. The second exception, commonly referred to as the “other property exception,” applies “when the damage is to ‘other property’ as opposed to the specific goods that were part of the transaction.” Id.

 

[¶ 26.] Country Pride reasons that the “other property” exception applies because the damage was to the winter wheat crop, rather than the specific goods that were part of the transaction (the fertilizer). This Court has previously noted, “[o]ther property has been defined as damage to property collateral to the product itself.” City of Lennox, 519 N.W.2d at 333. Examples include, “1) [a] defective heater that exploded and destroyed a major portion of a refinery” and “2) defective brakes that hypothetically caused [a] truck to run into [a] home.” Id. (internal footnotes omitted). However “[w]hen a defect in a component part damages the product into which that component was incorporated, economic losses to the product as a whole are not losses to ‘other property’ and are therefore not recoverable in tort .” Id.

 

[¶ 27.] Here, the urea was a component part that was later incorporated into both the fertilizer and the wheat crop. The alleged defect, the rye-contamination, damaged the fertilizer and wheat crop, resulting in lost profits. “Economic loss … is defined as that loss resulting from the failure of the product to perform to the level expected by the buyer and the consequential losses resulting from the buyer’s inability to make use of the ineffective product, such as lost profits.” Diamond Surface, 1998 S.D. 97, ¶ 25, 583 N.W.2d at 161 (quoting City of Lennox, 519 N.W.2d at 333). Country Pride’s claimed damages are consequential losses, specifically lost profits, from defective fertilizer rather than damage to collateral property. Accordingly, Country Pride’s claimed damages fall under the scope of the general rule and not the “other property” exception; thus, the economic loss doctrine bars Country Pride’s negligence claim against Agrium.

 

(c) Country Pride’s indemnity and contribution claim against Agrium is barred by the statute of limitations.

*6 [¶ 28.] Country Pride’s initial complaint in December 2008 did not include any claims against Agrium. On April 20, 2010, Country Pride amended its complaint to assert an indemnification claim against Agrium. Country Pride pleaded that ammonium sulfate supplied by Agrium was the source of the contamination. This ammonium sulfate claim was later dismissed. Only Agrium’s supply of urea is now at issue.

 

[¶ 29.] However, Country Pride never amended its complaint to plead that urea purchased from Agrium was the source of contamination. Indeed, Agrium was not notified that its urea deliveries to Country Pride were the subject of Country Pride’s suit until October 2010.

 

[¶ 30.] SDCL 57A–2–725(1) provides, “[a]n action for breach of any contract for sale must be commenced within four years after the cause of action has accrued.” This Court has “consistently held that ‘compliance with statutes of limitations is strictly required and doctrines of substantial compliance or equitable tolling are not invoked to alleviate a claimant from a loss of his right to proceed with a claim.’ “ Murray, 2010 S.D. 18, ¶ 21, 779 N.W.2d at 389 (quoting Dakota Truck Underwriters v. S.D. Subsequent Injury Fund, 2004 S.D. 120, ¶ 17, 689 N.W.2d 196, 201).

 

[¶ 31.] The parties agree that this action accrued when the urea was delivered to Country Pride in August 2006. Country Pride never formally commenced an action regarding the urea claim nor did it move to amend under SDCL 15–6–15(a). Agrium was not put on notice that its August 2006 urea delivery would be the subject of this suit until October 2010. As a result, Country Pride’s indemnification and contribution claim against Agrium is barred by the four-year statute of limitations for an action for breach of a sales contract.

 

[¶ 32.] 3. Dakota Gas did not have a duty to inspect Baker Trucking’s vehicles.

[¶ 33.] The only claim that Country Pride makes with respect to Dakota Gas is negligence. Country Pride argues that Dakota Gas, as the manufacturer of the ammonium sulfate sold by Agriliance, had a duty to ensure that trailers used by Baker Trucking for delivery were free from contaminants, and therefore, Dakota Gas was negligent when it failed to inspect Baker Trucking’s vehicles. The trial court granted Dakota Gas’s motion for summary judgment on the basis that, regardless of any factual disputes, under South Dakota law, the duty to ensure a properly cleaned trailer rested solely upon the carrier, Baker Trucking. We agree.

 

[¶ 34.] This Court has previously stated that:

 

[T]he duty of furnishing suitable vehicles rests upon the carrier, and not upon the shipper, and the failure to discharge this duty is negligence from the consequences of which the carrier is not permitted to free himself by a stipulation in the bill of lading which devolves upon the shipper the duty of selecting vehicles which are suitable. Such a stipulation is void, as an attempt by the carrier to limit his liability against his own negligence in providing defective vehicles.

 

*7 Berry, 24 S.D. 611, 124 N.W. at 862 (emphasis added).

 

[¶ 35.] Based on Berry, we hold that the duty to provide a contaminant-free vehicle rested upon Baker Trucking, the carrier, not Dakota Gas, the shipper. “ ‘Summary judgment in a negligence case is appropriate when the trial judge resolves the duty question in the defendant’s favor.’ “ Highmark Fed. Credit Union, 2012 S.D. 37, ¶ 7, 814 N.W.2d at 415 (quoting Hendrix v. Schulte, 2007 S.D. 73, ¶ 8, 736 N.W.2d 845, 847). Consequently, because Dakota Gas did not breach any duty owed to Country Pride, we affirm the trial court’s grant of summary judgment.

 

CONCLUSION

[¶ 36.] We affirm the summary judgment motions granted in favor of Agriliance, Agrium, and Dakota Gas.

 

[¶ 37.] GILBERTSON, Chief Justice, and KONENKAMP, ZINTER, and SEVERSON, Justices, concur.