ULGT v. Wheeler

2008 UT 84
This opinion is subject to revision before final
publication in the Pacific Reporter.
IN THE SUPREME COURT OF THE STATE OF UTAH
----oo0oo----
Utah Local Government Trust, No. 20070084
Plaintiff and Respondent,
v.
Wheeler Machinery Co. and Does F I L E D
1 through 50, inclusive,
Defendants and Petitioner. December 12, 2008
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Fifth District, St. George
The Honorable G. Rand Beacham
No. 030501330
Attorneys: Scott M. Lilja, Nicole M. Deforge, Salt Lake City,
Huey P. Cotton, Los Angeles, CA, for respondent
Joseph C. Rust, Salt Lake City, for petitioner
---
On Certiorari to the Utah Court of Appeals
NEHRING, Justice:
INTRODUCTION
¶1 We are asked to determine whether the court of appeals
erred in holding that the Utah Product Liability Act’s two-year
statute of limitations did not apply to the Utah Local Government
Trust’s claim against Wheeler Machinery Company. We hold that
the court of appeals did not apply the correct test for
determining whether ULGT’s claim was a product liability claim.
We therefore reverse and remand for application of the
appropriate test.
FACTUAL BACKGROUND
¶2 Wheeler Machinery Company contracted with the City of
Hurricane for the purchase of two diesel generators to supply
emergency power and to supplement the existing electric power
supply during periods of peak demand. The initial bid included a
list of items Wheeler would provide as part of its “Turn Key”
bid. These items included the generators, fuel tanks, all other
equipment needed to install the generators, enclosures for the

1 Utah Local Government Trust is an entity that underwrites
the construction and maintenance of various state-owned
properties, including the Hurricane City power plant. Hurricane
City is ULGT’s insured and the party that contracted with Wheeler
Machinery Company.
No. 20070084 2
generators, setup of all the supplied items, and testing and
commissioning of the entire system. Sometime after awarding the
initial bid to Wheeler, the City decided it would house the
generators in a larger building, which it would build. As a
result of these changes, Wheeler made several oral revisions to
its bid.
¶3 Wheeler supplied all the materials for the system but
paid Richard Carlson, an independent welding contractor, to
fabricate the exhaust pipe for the generators. Mr. Carlson also
welded the rain caps to the exhaust system when the exhaust
system was installed. Although Mr. Carlson’s fabrication of the
exhaust pipe was paid for by Wheeler, the City had agreed to
install the exhaust pipe through the roof, connect it to the
mufflers, and attach the rain caps to the exhaust pipe.
¶4 The purpose of the rain caps was to prevent moisture
from entering the system. To attach the rain caps, Mr. Carlson
had to modify them by cutting half an inch off each side so they
would fit within the framework supporting the generators’
mufflers. This modification was not part of the original plan
for installing the generators. Before the modified rain caps
were installed, the City performed some work on other parts of
the generator system as agreed to in an oral modification of the
bid.
¶5 About seven months after the generators were installed,
a fire in the generator building occurred, causing extensive
damage to the City’s building and equipment. The modified rain
caps were identified as the cause of the fire.
¶6 On July 10, 2003, ULGT sued Wheeler.1 It alleged that
“one of the generators sold, supplied, assembled, and installed
by Wheeler Machinery Co.” caused the fire that damaged the City’s
property. Wheeler moved to dismiss the lawsuit. Wheeler argued
that ULGT’s complaint alleged a product liability cause of action
and that the complaint had not been filed within the two-year
product liability statute of limitations. ULGT amended its
complaint and filed a motion in opposition to Wheeler’s motion to
dismiss. The district court denied Wheeler’s motion to dismiss.
Wheeler then moved for summary judgment. Wheeler reasserted its
claim that ULGT’s complaint alleged a product liability cause of

3 No. 20070084
action and should be dismissed because it was not filed within
the two-year statute of limitations and claimed that it did not
control the contractor who installed the rain caps. The district
court found that if ULGT’s claim had been a product liability
claim, it would have been filed too late. For reasons the
district court did not explain, the court did not rule on whether
the claim actually was a product liability claim. The district
court held that Mr. Carlson was acting under the direction of the
City and not under the direction of Wheeler and granted summary
judgment in favor of Wheeler. ULGT appealed to the court of
appeals. On appeal, Wheeler again argued that ULGT’s claim was a
product liability claim and was barred by the statute of
limitations. The court of appeals held that ULGT’s claim was not
a product liability claim because the installation of the rain
caps occurred after the product was placed in the stream of
commerce. It also held that there was sufficient evidence to
create a question of fact regarding whether the City or Wheeler
controlled Mr. Carlson. Wheeler petitioned for certiorari on the
issue of whether the court of appeals applied the correct statute
of limitations.
¶7 We granted certiorari and hold that the court of
appeals applied the wrong test for determining whether ULGT’s
claim stated a cause of action in product liability. The
appropriate test for determining whether ULGT’s claim sounded in
product liability is (1) whether the transaction primarily
concerned a product and (2) whether the product was defective
when it was sold. We reverse the determination of the court of
appeals that ULGT’s claim was not a product liability claim and
remand for action consistent with this opinion.
STANDARD OF REVIEW
¶8 “On certiorari review, we review the decision of the
court of appeals, not the decision of the district court.” Nolan
v. Hoopiiaina (In re Hoopiiaina Trust), 2006 UT 53, ¶ 19, 144
P.3d 1129. Whether the correct statute of limitations was
applied is a question of law, which we review for correctness.
Id.
ANALYSIS
¶9 The product liability statute of limitations states
that “[a] civil action under [the Product Liability Act] shall be
brought within two years from the time the individual who would
be the claimant in the action discovered, or in the exercise of
due diligence should have discovered, both the harm and its
cause.” Utah Code Ann. § 78B-6-706 (Supp. 2008). The Product

No. 20070084 4
Liability Act does not define what constitutes “a civil action
under [the Act].”
¶10 Although our statute does not define a product
liability action, product liability encompasses all actions
seeking money damages for injury to people or property resulting
from defective products. See 1 David G. Owen et al., Madden &
Owen on Products Liability § 1:5 (3d ed. 2000). An action for
damages resulting from a defective product can be based on claims
of negligence, strict liability, tortious misrepresentation, and
breach of warranty. Id. If the facts permit, a plaintiff can
choose to bring claims under one or all of these theories in a
single action. Slisze v. Stanley-Bostitch, 1999 UT 20, ¶ 8, 979
P.2d 317. Thus, by choosing one of the available legal theories,
a claimant does not thereby foreclose bringing the claim under
any other theory. Id. Because all of these claims share the
common characteristic of arising out of an injury caused by a
product, they are often all alleged together.
¶11 Although the Product Liability Act does not define a
product liability action, section 78B-6-703 provides some insight
into the subject in its description of what may or may not be a
defective product. The statute states:
In any action for damages for personal
injury, death, or property damage allegedly
caused by a defect in a product, a product
may not be considered to have a defect or to
be in a defective condition, unless at the
time the product was sold by the manufacturer
or other initial seller, there was a defect
or defective condition in the product which
made the product unreasonably dangerous to
the user or consumer.
Utah Code Ann. § 78B-6-703(1) (emphases added). What this
statutory language makes clear is that in order to be governed by
the two-year statute of limitations, the transaction must concern
a product and that product must be defective when it is sold.
¶12 Thus, even if ULGT’s claim were characterized as a
claim for negligent manufacture of a product rather than for
strict liability, the claim would still have to be brought within
the product liability statute of limitations. See Strickland v.
Gen. Motors Corp., 852 F. Supp. 956, 959 (D. Utah 1994). The
court of appeals acknowledged the broad application of the
product liability statute of limitations, and ULGT agreed that if
its claim alleged that negligence caused a product defect, its

5 No. 20070084
claim would be governed by section 78B-6-706. Utah Local Gov’t
Trust v. Wheeler Mach. Co., 2006 UT App 513, ¶ 11, 154 P.3d 175.
¶13 Common to all of the claims that can be considered
product liability claims is the fact that the damage was caused
by a product. The law does not make clear, however, what
constitutes a product and how the time of sale of that product is
determined. Although the Restatement (Second) of Torts does not
define product, the comments to its product liability section
contain a list of items that are considered products.
Restatement (Second) of Torts § 402A cmt. d (1965). One
commentator has suggested that product was undefined in order to
encourage and accommodate development of product liability law
and to allow for the expansion of what might qualify as a
product. David W. Lannetti, Toward a Revised Definition of
“Product” Under the Restatement (Third) of Torts: Products
Liability, 55 Bus. Law. 799, 808 (2000).
¶14 Defining product and sale under the Product Liability
Act are issues of first impression for this court. Lacking
guidance from our own statutes and cases, we turn for direction
to the law of sister states and to other authoritative
scholarship on the topic. We will first confront the dilemma of
whether the subject of the transaction was a product or a
service. Then we will turn to discerning the proper method for
ascertaining the time of the sale.
I. TEST FOR DETERMINING WHETHER A PRODUCT WAS THE SUBJECT OF THE
TRANSACTION
¶15 In product liability actions it is often easy to
determine whether a product is present and what it is. For
example, if a plaintiff alleges that faulty wiring in a toaster
caused a fire that damaged a kitchen, it is clear that the
toaster is a product. In some cases, however, it is more
difficult to determine whether a product is involved. For
example, where a furnace and its installation are part of the
same transaction and improper installation makes the furnace
dangerous, it is not clear that all elements of the transaction
fall within the scope of product liability. See, e.g.,
O’Laughlin v. Minn. Natural Gas Co., 253 N.W.2d 826, 830-31
(Minn. 1977) (holding that whether defective installation of a
furnace was a sale of a good was a question for the jury). In
some cases, however, installation, while clearly a service, is
considered part of the product. Id.
¶16 We have previously noted that the Product Liability Act
does not define product nor does it assist in determining whether
a transaction that includes both a tangible item and a service

2 In making this distinction, the Magrine court acknowledged
(continued...)
No. 20070084 6
will be treated as the sale of a product under the Act. We have
held that a service alone cannot be considered a product. See
Alder v. Bayer Corp., 2002 UT 115, ¶ 23, 61 P.3d 1068.
Additionally, no controlling Utah case law describes a test for
defining product in cases where there may be both a traditional
tangible good sale and a service present in the same transaction.
Despite this deficit in Utah law, case law from other states and
definitions of analogous terms in areas of law that overlap with
product liability can assist us in formulating a test for
determining when a hybrid transaction constitutes a product
liability claim.
A. Tests Used by Other States
¶17 There are several different tests used by other courts
to determine whether a product liability claim can be brought
where a transaction is a hybrid of sale and service. Although
cases discussing whether a hybrid transaction falls under product
liability typically involve a plaintiff attempting to bring a
product liability claim, the tests used in those cases are
equally applicable where a defendant alleges that the plaintiff’s
claim is properly characterized as a claim for damages resulting
from a defective product. See, e.g., Alder, 2002 UT 115, ¶ 23
(denying a defendant’s claim that moving and reinstalling a
machine rendered the machine defective and therefore the claim
should be governed by the two-year product liability statute of
limitations). Additionally, although most often these tests are
used to determine whether strict liability should apply, their
focus is on determining the nature of the transaction; therefore,
they are applicable to the question before us as well.
¶18 An important initial distinction often made in
classifying hybrid transactions is whether the transaction was
with a professional or a nonprofessional. Where a professional,
such as a doctor, dentist, hospital, architect, or engineer, uses
a defective item in their work, courts have refused to classify
the action against the professional as a product liability
action. See 2 David G. Owen et al., Madden & Owen on Products
Liability § 20:3, p. 447 (3d ed. 2000). For example, where a
patient was injured by a hypodermic needle that broke as a
dentist was injecting anesthetic into her jaw, the court held
that a product liability action could not be brought against the
dentist because the dentist was in no better position to inspect
and discover the defect than the plaintiff. Magrine v. Krasnica,
227 A.2d 539, 543 (N.J. Super. Ct. Law Div. 1967).2 Even where a

2 (...continued)
that a typical retail seller also has little opportunity to
discover defects in goods; however, they distinguished the
plaintiff’s attempt to bring a product liability action from such
cases by pointing out that strict liability claims against
retailers draw in part from a legislative decision to adopt the
UCC warranty action. Magrine, 227 A.2d at 543.
7 No. 20070084
transaction with a professional involves the sale of a faulty
object, the professional is generally protected from a product
liability claim. See, e.g., Hoff v. Zimmer, Inc., 746 F. Supp.
872 (W.D. Wis. 1990) (holding that the doctor who used a faulty
artificial hip was not subject to a product liability action).
If it is not clear that a defendant is a professional, other
aspects of the transaction besides the defendant’s status must be
examined to determine the nature of a hybrid transaction.
¶19 One test for determining whether a hybrid transaction
should be treated as the sale of a product is whether the service
aspect of the transaction occurred before the item being sold was
placed in the stream of commerce. In Erickson Air-Crane Co. v.
United Technologies Corp., the Oregon Supreme Court held that the
product liability statute of limitations only applied to “acts,
omissions or conditions existing or occurring before or at the
date on which the product was first purchased for use or
consumption.” 735 P.2d 614, 616 (Or. 1987) (internal quotation
marks omitted). In Jamison v. Spencer R.V. Center, Inc., the
stream of commerce test was applied to a hybrid transaction
involving the sale and installation of a trailer hitch. 779 P.2d
1091 (Or. Ct. App. 1989). The item being sold was the hitch, and
the service being provided was installation of the hitch. The
court held that when the service makes the product defective
before the item is placed in the stream of commerce, the service
becomes part of the product and is subject to the product
liability statute of limitations. Id. at 1093. Additionally,
the court held that the product enters the stream of commerce
when it leaves the seller’s hands, even if the contract for sale
was executed before the service work was performed on the
product. Id.
¶20 This test is highly dependent on the definition of
entry into the stream of commerce. In the Oregon cases applying
this test, however, the time that the product entered the stream
of commerce was not at issue. See generally Erickson Air-Crane,
735 P.2d 614; Simonsen v. Ford Motor Co., 102 P.3d 710 (Or. Ct.
App. 2004); Kambury v. DaimlerChrysler Corp., 60 P.3d 1103 (Or.
Ct. App. 2003); Jamison, 779 P.2d 1091. No standard for
determining when something enters the stream of commerce is ever

No. 20070084 8
discussed. In the absence of such a standard, whether an item
entered the stream of commerce would be a factual question for
the district court.
¶21 The court of appeals used the stream of commerce test
in its resolution of this case; they failed, however, to
articulate a test for placement into the stream of commerce. The
court of appeals decided that the participation of the City in
some of the installation indicated that the product was already
in the stream of commerce. Since the question of when an item
was placed in the stream of commerce is one of fact, had this
been the correct test for determining whether a hybrid
transaction was governed by the product liability statute of
limitations, the court of appeals should have remanded the case
to the district court for application of the stream of commerce
test.
¶22 The stream of commerce test, however, is not the best
test for determining whether a transaction is the sale of a
product or the provision of a service. There are two reasons for
this. First, the test does not address the true nature of the
transaction; rather, it focuses on when the sale occurs. Second,
the test is overly broad because it could expand the scope of
product liability law to transactions that are primarily for
services but happen to involve the sale of an object. For
example, an electrician hired to repair a fuse box may have to
replace a piece of wiring in order to repair the box. If the
wire was installed incorrectly, rendering it defective, and if
the customer paid for the repair after the completion of the
installation, the use of the wire could cause the entire
transaction to be treated as a product liability action under the
stream of commerce test. In contrast, had the electrician not
needed to use a piece of new wiring, the transaction would have
been a pure service transaction and the product liability statute
of limitations would not apply. A test that would allow these
two transactions to be treated differently does not further the
goal of protecting people from dangerous objects.
¶23 The stream of commerce test is also at odds with the
most frequently used test for classifying hybrid transactions,
the essence of the transaction test. 2 David G. Owen et al.,
Madden & Owen on Products Liability § 20:3, p. 444 (3d ed. 2000);
see also Charles E. Cantu, A New Look at an Old Conundrum: The
Determinative Test for the Hybrid Sales/Service Transaction Under
Section 402A of the Restatement (Second) of Torts, 45 Ark. L.
Rev. 913, 923 (1992-1993).
¶24 The essence of the transaction test is often applied in
cases where the provision of medical service also involves the

9 No. 20070084
doctor or hospital dispensing a medical device. See generally
San Diego Hosp. Ass’n v. Superior Court, 35 Cal. Rptr. 2d 489
(Cal. Ct. App. 1994) (holding that a physician who was injured
while using a laser provided by the hospital could not bring a
product liability action against the hospital because the
hospital rendered service to physicians and patients and was not
in the business of selling products); Hector v. Cedars-Sinai Med.
Ctr., 225 Cal. Rptr. 595 (Cal. Ct. App. 1986) (holding that
implanting a defective pacemaker was a service despite the
device’s defect). Courts in these cases have examined the nature
of the relationship between the hospital and the patient and have
found that the facts of the case support a finding that the
transaction was for a service. In Hector, the court found that
the fact that the hospital did “not stock, recommend, distribute
or sell any pacemakers” supported a finding that it did not “play
‘an integral and vital part in the overall production or
marketing’ of pacemakers” and therefore provided a service rather
than engaged in a sale. 225 Cal. Rptr. at 599 (quoting
Silverhart v. Mount Zion Hosp., 98 Cal. Rptr. 187, 190 (Cal. Ct.
App. 1971)). Generally, when courts must determine the essence
of the transaction, they look at whether the defendant was
“instrumental in moving a harm-producing ‘product’ through the
stream of commerce” or “whether the chain of distribution ended
effectively with the defendant who was more of a product user
than a supplier.” 2 David G. Owen et al., Madden & Owen on
Products Liability § 20:3, p. 445 (3d ed. 2000). If the
defendant was more a product user than supplier, then the
transaction was more likely a service.
B. Standards From Analogous Doctrines
¶25 The theories of liability that are included within
product liability law--negligence, strict liability, tortious
misrepresentation, and breach of warranty--share the common
characteristic of arising from an injury caused by a product.
One of them, however, is unique because of its status as a
contract cause of action. Breach of warranty is the general
description of three causes of action that can be brought under
the Uniform Commercial Code: breach of express warranty, breach
of implied warranty of merchantability, and breach of warranty of
fitness for a particular purpose. See 1 David G. Owen et al.,
Madden & Owen on Products Liability § 1:5, p. 17 (3d ed. 2000).
Including a contract claim in a family of claims that is
otherwise composed entirely of tort claims appears misplaced at
first, but further examination of these claims reveals that
breach of warranty is one of the roots of strict product
liability.

No. 20070084 10
¶26 The tort of strict product liability evolved from the
negligence cause of action and the contractual breach of warranty
action. Denny v. Ford Motor Co., 662 N.E.2d 730, 734 (N.Y.
1995). A negligence action has always been available as a
potential claim against a seller of a faulty product, although
all of the elements of a negligence claim had to be proven,
including the point in the process of manufacturing the product
where the seller’s conduct fell below the required standard of
care. This particular requirement presented a substantial
obstacle to recovery, especially in the case of mass-produced
products. 1 David G. Owen et al., Madden & Owen on Products
Liability § 1:5, p. 21 (3d ed. 2000). Contract warranty was the
original cause of action for recovering for injuries caused by
defective products without having to prove negligence, but
privity of contract between the injured party and the seller of
the product was required. Denny, 662 N.E.2d at 734. In response
to the barriers to recovery presented by negligence and breach of
warranty, the concept of strict liability in tort developed. See
Greenman v. Yuba Power Prods., Inc., 377 P.2d 897 (Cal. 1963).
Strict product liability combined the concept from negligence
that an action can be brought when there is no privity with the
contract requirement that the defendant be a seller of the type
of product that caused the injury. By combining these two
concepts, the new strict product liability cause of action
discarded the privity requirement and the need to establish a
breach in a standard of care.
¶27 The combination of tort and contract concepts to form a
new theory of liability demonstrates the substantial overlap
between the two doctrines where safety of a product is concerned.
In Davidson Lumber Sales, Inc. v. Bonneville Investment, Inc., we
noted that in some cases, breach of warranty has been used to
describe both the strict liability tort action and the contract
action. 794 P.2d 11, 14 (Utah 1990). The ability to use breach
of warranty to describe both a tort action and a contract action
has tempted some jurists into applying the UCC statute of
limitations to the tort portions of a plaintiff’s complaint
whenever the plaintiff alleges breach of warranty. Id. at 15-16.
Conversely, some courts have argued for merging the contract
cause of action into the strict liability cause of action. See,
e.g., Denny, 662 N.E.2d at 740 (Simons, J., dissenting). Both of
these approaches, however, ignore the important conceptual
differences between contract and tort that justify resisting
their merger. See id. at 736 (explaining that contract law
“directs its attention to the purchaser’s disappointed
expectations” and tort law “traditionally has concerned itself
with social policy and risk allocation”). Additionally,
application of the UCC statute of limitations to the tort portion

11 No. 20070084
of a plaintiff’s complaint has been specifically rejected by this
court. See Davidson, 794 P.2d at 15-16.
¶28 In Davidson, Davidson Lumber brought an action for
negligence, breach of implied warranty of merchantability and
fitness for a particular purpose, indemnity, and contribution.
794 P.2d at 12. The action for which Davidson Lumber sought
indemnity was a suit alleging strict product liability, breach of
implied warranties of merchantability and fitness for a
particular purpose, and negligence. Id. The trial court held
that the UCC statute of limitations, Utah Code Ann. § 70A-2-725,
barred Davidson Lumber’s claims. Davidson, 794 P.2d at 12. We
reversed, holding that the UCC statute of limitations only covers
claims for damages recoverable under contract law and does not
cover actions for personal injury or personal property damage.
Id. at 16. Since only some of the claims for which Davidson
Lumber sought indemnity were contract claims, we held that
Davidson Lumber’s claims for injury to persons or property were
governed by the relevant tort statute of limitations. Id. at 18.
¶29 Davidson forecloses applying the UCC statute of
limitations to ULGT’s tort claim merely because it is alleged in
the same complaint as ULGT’s contract claim. The tort statute of
limitations must be applied to the tort claim, and the contract
statute of limitations to the contract claim. And we must still
determine which statute of limitations is the relevant tort
statute of limitations by determining what constitutes a product.
However, the overlap between tort and contract pointed out in
Davidson and the fact that contract and tort each contributed to
the formation of the new theory of product liability indicates
that elements of each body of law may be looked to in order to
shape the law of product liability. In this instance, we can
look to the UCC for assistance in defining product.
¶30 The UCC defines goods as “all things (including
specially manufactured goods) which are movable at the time of
identification to the contract for sale other than the money in
which the price is to be paid, investment securities . . . and
things in action.” Utah Code Ann. § 70A-2-105 (2001). In
contrast to the absence of law giving direction to a court facing
a product-service hybrid transaction under product liability law,
Utah law does address hybrid transactions under the UCC. In
Beehive Brick Co. v. Robinson Brick Co., the court of appeals
applied the predominant purpose test to determine the status of a
hybrid transaction under the UCC. 780 P.2d 827, 832 (Utah Ct.
App. 1989); see also 1-3 Commercial Law and Practice Guide p.
3.02 (2007). The court stated that “if service predominates, and
the transfer of title to personal property is only an incidental

No. 20070084 12
feature of the transaction, the contract does not fall within the
ambit of [the UCC].” Beehive Brick, 780 P.2d at 832.
¶31 The predominant purpose test was also applied in
Neilson Business Equipment Center, Inc. v. Monteleone, 524 A.2d
1172 (Del. 1987). In that case, the Delaware Supreme Court
addressed whether a contract for a turn-key computer system that
included software specifically designed for Monteleone’s business
was a contract for goods or services. The court held that
“[w]hen a mixed contract is presented, it is necessary for a
court to review the factual circumstances surrounding the
negotiation, formation and contemplated performance of the
contract to determine whether the contact is predominantly or
primarily a contract for the sale of goods.” Id. at 1174. Using
this test, the court found that where “[t]he hardware and
software elements are combined into a single unit--the computer
system--prior to sale[,] . . . the computer system is
predominantly ‘goods.’” Id.
¶32 The close association between tort and contract law in
the area of product liability and the similarity of the Beehive
Brick test and the product liability essence of the transaction
test support using the Beehive Brick test to determine whether a
hybrid tort claim concerns a product or a service. Therefore, it
is appropriate to remand this case for a determination of the
predominant purpose of the transaction at issue.
¶33 Having described the test for when a hybrid transaction
is considered the sale of a product, we will now address the test
for determining when the product was sold. Even if the
transaction was for the sale of a product, a claim for product
liability may not lie if the product became dangerous after it
was sold.
II. TEST FOR DETERMINING WHEN THE PRODUCT WAS SOLD
¶34 Like the definition of product, the Utah Product
Liability Act has spawned no judicial or legislative answer to
the question of when a product is sold. Based on the above-
discussed overlap between tort and contract, however, the UCC
definition of sale can also be borrowed to provide a method to
answer the timing question posed by Utah product liability law.
¶35 Under the UCC, a sale occurs with “the passing of title
from the seller to the buyer for a price.” Utah Code Ann. § 70A-
2-106(1) (2001). Section 70A-2-401(2) states that “[u]nless
otherwise explicitly agreed, title passes to the buyer at the
time and place at which the seller completes his performance with
reference to the physical delivery of the goods.” Id. § 70A-2-

13 No. 20070084
401(2) (Supp. 2008). What constituted the performance with
respect to physical delivery of the goods is an issue of fact
that will depend on what the parties agreed to.
¶36 In this case, there is no explicit agreement on when
title to the generators would pass to the City. Determining when
the sale occurred will require knowing what Wheeler had to
perform, what constituted delivery, and whether Wheeler met its
performance requirements. Because the answers to these questions
are not evident in the record, we remand for action consistent
with this opinion.
CONCLUSION
¶37 The Utah Product Liability Act applies to actions, in
both tort and contract, arising from injury caused by a defective
product. The two-year product liability statute of limitations
will only apply if a claim alleges damage from a product and if
that product was defective when sold. Because the tort and
contract actions contained within product liability share common
roots, whether a transaction involves a product can be determined
by using the UCC test for determining whether the transaction was
for goods. In cases involving hybrid transactions, this is done
by examining the predominant purpose of the transaction. The
overlap between tort and contract also allows the UCC definition
of sale to be used to determine when a product is sold. Because
we find these two tests from the UCC to be the appropriate tests
for resolving the issue of whether ULGT’s claim is for product
liability, we reverse the decision of the court of appeals and
remand for the application of these tests.
---
¶38 Chief Justice Durham, Associate Chief Justice Durrant,
Justice Wilkins, and Justice Parrish concur in Justice Nehring’s
opinion.