McNally v. Nicholson Mfg. Co.

• Decision Date: 30 November 1973
• Citation: 14 UCC Rep. 381,313 A.2d 913
• Parties: 14 UCC Rep.Serv. 381 Bruce F. McNALLY v. NICHOLSON MANUFACTURING COMPANY.
• Court: Maine Supreme Court

Page 913

313 A.2d 913

14 UCC Rep.Serv. 381

Bruce F. McNALLY v. NICHOLSON MANUFACTURING COMPANY.

Supreme Judicial Court of Maine.

Nov. 30, 1973.

Smith, Elliott & Wood by Charles W. Smith, Saco, for plaintiff.

Richardson, Hildreth, Tyler & Troubh by Harrison L. Richardson, Robert E. Noonan, Portland, for defendant.

Before DUFRESNE, C. J., and WEATHERBEE, POMEROY, WERNICK, ARCHIBALD and WEBBER, JJ.

WERNICK, Justice.

This case has been reported to us, pursuant to Rule 72(c) M.R.C.P., by a Justice of the Superior Court (presiding in Penobscot County). It seeks the determination of important and novel questions of the law of 'products liability' in Maine which were the subject of interlocutory rulings made in a civil action instituted on October 14, 1969 by plaintiff, Bruce F. McNally, against defendant corporation, Nicholson Manufacturing Company.

Plaintiff was employed by J. M. Huber Corporation to work in its woods operation in Patten, Maine, as the operator of a skidder. The skidder conveys felled logs to a chipping machine which grinds them into chips for use in the making of pulp and paper.

Defendant manufactured a chipping machine, known as a 'Nicholson Utilizer II', intended for use at the site of a woods operation. Defendant sold a 'Nicholson Utilizer II' to J. M. Huber Corporation in August of 1966 and delivered it to the 'Huber' place of business on May 4, 1967. It was being used at Patten on August 19, 1968 for its intended purpose. In the course of his usual work, plaintiff was brought into the immediate vicinity of the 'Nicholson Utilizer II.' A piece of wood was expelled with great force and velocity through an orifice in the side of the machine, struck plaintiff in the head and caused him serious personal injuries.

Plaintiff's complaint, as originally filed, consisted of two counts in each of which plaintiff alluded to the general factual situation above described and added special allegations to delineate a distinct theory of legal liability.

Count I charged 'negligence' by defendant in that: (1) the basic design of the 'Nicholson Utilizer II' was unreasonably inadequate because (a) it placed an orifice in the side of the machine through which wood pieces could be expelled with great force and velocity, and (b) it failed to provide a guarding mechanism, shield or device to deflect towards the ground any pieces of wood ejected through the orifice; (2) defendant failed to give notice or warning of the above described dangers in the 'Nicholson Utilizer II'; and (3) defendant failed to make reasonable efforts to correct the aforesaid deficiencies which defendant, as a reasonable manufacturer exercising due care, should have ascertained.

Count II focused on the sale transaction between defendant and plaintiff's employer and the 'warranties' incident to it. Defendant was said to have expressly,

'. . . by publication, advertising and salesmen's interviews, . . . represented to the plaintiff's . . . employer that the . . . Nicholson Utilizer II . . . was designed, manufactured, constructed and could be safely used for its intended purpose as a chipping machine.'

It was further alleged that by the very act of sale defendant had

'impliedly represented that said machine was of merchantable quality and reasonably fit for its intended purpose.'

Plaintiff claimed to have been injured in his person by breaches of the warranties.

Defendant answered-denying such material factual allegations of Counts I and II as were critical to the existence of 'negligence' and 'warranty' liability, respectively and averring specially as to Count I that:

'plaintiff was guilty of contributory negligence to such a degree as would bar his recovery.' ¹

Subsequently, defendant filed a motion to dismiss Count II on the ground that it failed to state a claim upon which relief can be granted (as authorized by Rule 12(h) M.R.C.P.) ² Asserting that the face of the complaint revealed that plaintiff was 'not in privity of contract' with the defendant, the motion sought dismissal of Count II because, absent 'privity' between the parties, a claim for breach of warranty is

'. . . barred by Maine law . . . the plaintiff's right to recovery . . . not (being) affected by the passage of 14 M.R.S.A. § 161, expressly inapplicable to transactions occurring prior to October 1, 1969.' ³

After defendant had moved to dismiss Count II, plaintiff (by a series of amendments to the complaint each of which was allowed by the presiding Justice) added a third count. The allegations of this Count III purported to present a rationale of legal liability independent of, and alternative to, 'negligence' (Count I) and 'breach of warranty' (Count II). It averred that: (1) the 'Nicholson Utilizer II'

'. . . was defective in its design, defective in its manufacture and generally defective and because of such defects was unreasonably dangerous so that the use of said machine created a risk of harm to those in its proximity while said machine was in operation . . .';

(2) plaintiff was

'. . . unaware of the defects in the machine . . ., and said machine was without substantial change in its condition from the time of its manufacture to the time of the injury . . .' to plaintiff; and (3), therefore, defendant

'. . . has become strictly liable to the plaintiff by manufacturing and marketing said machine.' (emphasis supplied)

Defendant moved to dismiss Count III for failure to state a claim upon which relief can be granted.

On August 7, 1972 the presiding Justice in the Superior Court ruled on both of defendant's motions to dismiss. He dismissed Count II of the complaint but sustained Count III as stating a good cause of action.

The basis of the dismissal of Count II was that:

'No privity of contract is alleged between plaintiff and defendant.'

The presiding Justice adverted to Pelletier v. DuPont, 124 Me. 269, 128 A. 186 (1925) which had decided that privity of contractual relationship between the parties is essential to a plaintiff's recovery for breach of warranty.

Count III was upheld because the presiding Justice conceived it as

'charging strict liability on the part of the defendant to the plaintiff',

a principle which he regarded as established in the tort 'products liability' law of Maine within the doctrine of Section 402A of the Restatement of Torts, Second. ⁴ The theory was that although this Count

'. . . has not approved the use of the phrase 'strict liability', . . .',

its analysis in Wallace v. Coca-Cola Bottling Plants, Inc., Me., 269 A.2d 117 (1970), concerning events in the year 1966, '. . . compels the conclusion' that Count III, containing allegations adequate to meet the specifications of the Restatement of Torts, Second, Section 402A, states a good cause of action for 'strict liability in tort.'

We disagree with each of the conclusions of the presiding Justice. We decide that Count II (breach of warranty) does, but Count III (strict liability in tort) fails to, state a claim upon which relief can be granted.

I

We sustain the 'breach of warranty' gravamen of Count II on the basis of 11 M.R.S.A. § 2-318 as enacted in 1963 and in force until entirely rewritten effective October 1, 1969. (See footnote, 3, ante).

Thirty-eight years had intervened between the decision of Pelletier v. DuPont (1925) and the 1963 formulation of 11 M.R.S.A. § 2-318 (hereinafter described simply as Section 2-318). During that period there had been major developments in other jurisdictions reflecting a relaxation, or abandonment, of 'privity' requirements for breach of warranty recovery. ⁵ In Maine however, no case had come to this Court affording opportunity for thorough reevaluation, in light of developments elsewhere, of the actual decision or doctrine of Pelletier v. DuPont. ⁶

Similarly, there had been no intervening attention to the problem by the Maine Legislature.

Thus, the full significance of the public policy change produced by Section 2-318-adopted as one provision of the Uniform Commercial Code-is best elucidated by a direct comparison of Section 2-318 with Pelletier v. DuPont.

Product-wise, in Pelletier v. DuPont breach of warranty recovery was sought as to contaminated food. This Court conceded that by 1925 many courts had allowed breach of warranty recoveries, absent privity of contractual relationship between the parties, in cases involving

'the sale of drugs and . . . food products . . . intended for human consumption . . ..' (124 Me. at p. 272, 128 A. at p. 187)

Yet, Pelletier v. DuPont decided:

'. . . this court, . . ., finds no good reason for repudiating or modifying, . . ., the well-established rule that in order to recover on a warranty, there must be a privity of contractual relations between the parties, . . ..' (p. 275, 276, 128 A. at p. 189)

Section 2-318 operated, product-wise, generally across the board; all 'goods', as defined by Section 2-105(1) of the Uniform Commercial Code, were affected. Thus, in one broad sweep Section 2-318 had comprehended the step-by-step developments in other jurisdictions by which in actions for breach of warranty exceptions to 'privity' requirements had been established for special kinds of products-first, drugs and articles of food and drink (products of intimate internal bodily use) then, by analogical extension, toiletry and costmetic articles (products of intimate external bodily use), and, ultimately, under the impact of the New Jersey decision in Henningsen v. Bloomfield Motors, Inc., 32 N.J. 358, 161 A.2d 69 (1960), mechanical products in general.

Although Section 2-318 thus treated products comprehensively, its changes in the Pelletier v. DuPont 'privity' requirements were narrow. They are best understood when clarified by the frequently discussed distinction between a 'vertical' and 'horizontal' lack of privity.

'Vertical privity lies within the marketing chain and denotes the relationship existing between the parties in the several transactions among the manufacturer,...