Page County Appliance Center, Inc. v. Honeywell, Inc.

347 N.W.2d 171 (Iowa 1984)

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Nature of the Case

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Facts

Page (P) owned and operated an appliance store. Prior to 1980, neither P nor any of P’s customers had any problems with reception or the displays on their televisions. In early January 1980, Honeywell (D) through ITT placed a computer with Central Travel Service as part of a nationwide campaign to lease computers to retail travel agents. The ITT computer was manufactured, installed, and maintained by D. Thereafter many of P's customers told him his display television pictures were bad. P eventually traced the problem to D's computer, which was leaking radiation. P complained and D’s engineers made repeated attempts to fix the problems. They found that the computer was working properly and that the interference was design related and not a service problem. A modification to the computer fixed the problem to about a level of 70%. P sued D. While the suit was pending, D designed the problem out of its units, and P's problems were finally eliminated in May of 1982. During trial, D's engineer stated that the technology to design a radiation-proof computer was available at the time, but it was cost prohibitive. The jury verdict went to P for $71,000 in compensatory damages and $150,000 in exemplary damages for nuisance and tortious interference with prospective business relations. The trial court awarded ITT full indemnity from D. D appealed.