Nancy Ann Burke, individually v. Lippert Components, Inc.; LCI Industries

United States Court of Appeals
For the Eighth Circuit
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No. 23-1626
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Nancy Ann Burke, individually and as Personal Representative for the estate of
David K Burke; Russell David Burke; Jeffrey John Burke; Katherine Elizabeth
Burke; Victoria Jane Burke,
lllllllllllllllllllllPlaintiffs - Appellants,
v.
Lippert Components, Inc.; LCI Industries,
lllllllllllllllllllllDefendants - Appellees,
Enerpac Tool Group Corp.; Engineered Solutions, L.P.,
lllllllllllllllllllllThird Party Defendants - Appellees.
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Appeal from United States District Court
for the Northern District of Iowa - Central
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Submitted: February 13, 2024
Filed: August 13, 2024
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Before LOKEN, COLLOTON,1 and KELLY, Circuit Judges.
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1Judge Colloton became chief judge of the circuit on March 11, 2024. See 28
U.S.C. § 45(a)(1).

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COLLOTON, Circuit Judge.
David Burke was fatally injured when he fell down retractable steps that were
attached to his motorhome. David’s estate, wife, and children brought product
liability claims against two companies who had purchased the product brand after
David and his wife bought the vehicle. Over a year into the litigation, the Burkes
moved for leave to add the previous owners of the product brand as defendants and
to amend the scheduling order. The district court2 denied the motions and then
granted summary judgment in favor of the original defendant companies. The Burkes
appeal, and we affirm.
I.
David and Nancy Burke purchased a motorhome in May 2013. The
motorhome came with Kwikee-brand retractable steps that the Burkes used to enter
and exit the motorhome. On a trip in 2019, David fell while using the steps and died.
The Burkes allege that the steps partially collapsed when David stepped on
them. They contend that the rivets connecting components of the steps were loose,
improperly crimped, and prone to failing.
In June 2021, the Burkes sued Lippert Components, Inc., and its parent
company, LCI Industries. The complaint alleged several claims under Iowa law:
negligence, design defects, manufacturing defects, inadequate instructions and
warnings, and post-sale inadequate instructions and warnings.
2The Honorable C.J. Williams, now Chief Judge, United States District Court
for the Northern District of Iowa.
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Lippert and LCI did not manufacture, distribute, or sell the stairs installed in
the motorhome. In June 2014, after David and Nancy purchased the vehicle, Lippert
purchased the Kwikee brand from Engineered Solutions, L.P., and its parent
company, now known as Enerpac Tool Group Corporation. The purchase agreement
contained a clause limiting Lippert’s liabilities as a successor entity.
In January 2022, Lippert and LCI told the Burkes that Lippert purchased the
Kwikee brand in June 2014, and that it was therefore “probably wise for Plaintiffs to
bring Enerpac into” the case. The Burkes took no action, but in May 2022, the court
granted Lippert’s motion for leave to file a complaint against Engineered Solutions
and Enerpac as third-party defendants for breach of contract and indemnity. In
November 2022, Lippert and LCI moved for summary judgment on the claims
brought by the Burkes.
In December 2022, the Burkes moved for leave to amend their complaint to add
Engineered Solutions and Enerpac as defendants. They also moved to modify the
scheduling order and to continue the trial date. The district court denied the motions
on the ground that they were unreasonably delayed. The district court then granted
summary judgment in favor of Lippert and LCI.
The Burkes appeal the district court’s rulings on the motions. We review a
grant of summary judgment de novo, viewing the record in the light most favorable
to the plaintiffs. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986). We
review the orders denying the motions to amend and to continue the trial for abuse
of discretion. Kmak v. Am. Century Cos., 873 F.3d 1030, 1034 (8th Cir. 2017);
Harris v. FedEx Nat’l LTL, Inc., 760 F.3d 780, 786 (8th Cir. 2014).
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II.
Under Iowa law, “a corporation that purchases the assets of another corporation
assumes no liability for the transferring corporation’s debts and liabilities.” Pancratz
v. Monsanto Co., 547 N.W.2d 198, 200 (Iowa 1996). The Burkes purchased the
motorhome with the Kwikee steps before Lippert and LCI purchased the Kwikee
brand. On that basis, Lippert and LCI invoked the general rule against successor
liability, and the district court agreed.
On appeal, the Burkes first argue that Lippert and LCI waived their argument
against successor liability because this assertion is an affirmative defense that must
be pleaded in response to a complaint. See Fed. R. Civ. P. 8(c). The Supreme Court
of Iowa has not decided whether an argument against successor liability is an
affirmative defense, Arthur Elevator Co. v. Grove, 236 N.W.2d 383, 390-91 (Iowa
1975), and no decision of this court addresses the question as a matter of federal law.
Our cases may be inconsistent on whether federal or state law governs the
determination of whether a position should be characterized as an affirmative defense,
compare Sayre v. Musicland Grp., Inc., 850 F.2d 350, 352-53 (8th Cir. 1988), with
First Union Nat’l Bank v. Pictet Overseas Tr. Corp., 477 F.3d 616, 621-22 (8th Cir.
2007), but we conclude that the answer is the same here under either body of law.
Under Iowa law, an “affirmative defense is one which rests on facts not
necessary to support the plaintiff’s case.” Erickson v. Wright Welding Supply, Inc.,
485 N.W.2d 82, 86 (Iowa 1992). Any “defense which would avoid liability although
admitting the allegations of the petition is an affirmative defense.” Id. Similarly,
under federal law, when “the defense involved is one that merely negates an element
of the plaintiff’s prima facie case . . . it is not truly an affirmative defense and need
not be pleaded despite rule 8(c).” First Union Nat’l Bank, 477 F.3d at 622 (internal
quotation omitted).
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Under these standards, Lippert and LCI were not required to plead an
affirmative defense. One element of the product liability claims at issue in this case
is that the defendant sold or distributed the product. See Restatement (Third) of
Torts: Products Liability § 1 (Am. L. Inst. 1998); Wright v. Brooke Grp. Ltd., 652
N.W.2d 159, 169 (Iowa 2002). Lippert and LCI defend the case on the ground that
they did not sell or distribute the product; they are successors to someone else who
sold and distributed it. Their defense thus does not admit the allegations of the
complaint, but rather negates an essential element, so it is not truly an affirmative
defense. This conclusion is consistent with the prevailing view that a plaintiff bears
the burden to establish successor liability by showing an exception to the general rule
against it. See, e.g., Campbell v. Davol, Inc., 620 F.3d 887, 891-92 (8th Cir. 2010);
Restatement (Third) of Torts: Products Liability §§ 12-13 (Am. L. Inst. 1998). By
contrast, a defendant typically bears the burden of proving an affirmative defense.
See Breese v. City of Burlington, 945 N.W.2d 12, 23 (Iowa 2020).
The Burkes argue alternatively that Lippert and LCI expressly assumed liability
as successor entities to Engineered Solutions and Enerpac. See Pancratz, 547
N.W.2d at 200-01. They cite a provision in the purchase agreement that “the first
Two Hundred Fifty Thousand Dollars ($250,000) of Losses arising out of [product
liability] litigation or claims shall be the obligation of” Lippert. This clause,
however, serves as an indemnity agreement for the first $250,000 of liability assessed
against Engineered Solutions and Enerpac, not as an assumption of liability by
Lippert. The agreement elsewhere specifically excludes the assumption of “liability
arising out of any product liability claim commenced after the Closing and arising out
of any incident that occurred on or after the Closing Date in connection with the use
of products manufactured or sold by [Engineered Solutions] prior to the Closing
Date.”
The Burkes next contend that Lippert and LCI are liable in their own right for
a failure to give adequate warnings after their purchase of the Kwikee brand. The
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district court dismissed this claim on the ground that the Burkes failed to present
expert testimony to prove the claim. Under Iowa law, whether “expert testimony is
required ultimately depends on whether it is a fact issue upon which the jury needs
assistance to reach an intelligent or correct decision.” Reed v. Chrysler Corp., 494
N.W.2d 224, 226 (Iowa 1992) (internal quotation omitted).
We agree with the district court that a jury would need assistance from an
expert to reach an intelligent decision on this claim about allegedly inadequate
warnings. Why rivets crimp and fail is not a matter of common sense and experience
for an average juror; they are matters requiring technical knowledge. Nor is it
reasonable to expect a jury to determine without assistance whether the “foreseeable
risks of harm posed by the product could have been reduced or avoided by the
provision of reasonable instructions or warnings.” Restatement (Third) of Torts:
Products Liability § 2 (Am. L. Inst. 1998). The Burkes argue that Lippert and LCI
were aware of customer complaints about the rivets, such that a reasonable jury could
infer that the companies were obliged to provide warnings. Assuming without
deciding that the evidence of complaints is in the record, expert testimony was still
necessary to assist the jury in determining whether additional reasonable warnings
could have reduced or avoided any foreseeable risk of harm.
Finally, the Burkes assert that the district court erred in denying their motions
for leave to amend the complaint after the deadline and to amend the scheduling
order. They were required to show good cause for the requested relief. Fed. R. Civ.
P. 16(b)(4); Sherman v. Winco Fireworks, Inc., 532 F.3d 709, 715-16 (8th Cir. 2008).
The district court did not abuse its discretion in concluding that the plaintiffs were not
diligent. The defendants gave notice to the plaintiffs in January 2022 that it was
probably wise to bring the predecessor entities into the case, but the plaintiffs did not
seek to do so until December 2022. If they had acted diligently, the plaintiffs could
have obtained a copy of the purchase agreement as needed, and timely added
Engineered Solutions and Enerpac as defendants. Their failure to do so justifies the
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district court’s ruling that there was no good cause to amend the schedule or allow an
untimely amendment of the complaint. See Harris, 760 F.3d at 786.
The judgment of the district court is affirmed.
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