Gonzalez v. Rock Wool Engineering and Equipment Co., Inc.

• Citation: 72 Ill.Dec. 917,117 Ill.App.3d 435,453 N.E.2d 792
• Decision Date: 19 August 1983
• Docket Number: No. 82-1906,82-1906
• Parties: , 72 Ill.Dec. 917 Jose GONZALEZ, Plaintiff-Appellant, v. ROCK WOOL ENGINEERING AND EQUIPMENT COMPANY, INC., a corporation, and Bemis Company, Inc., a corporation, Defendants-Appellees.
• Court: United States Appellate Court of Illinois

Page 792

453 N.E.2d 792

117 Ill.App.3d 435, 72 Ill.Dec. 917

Jose GONZALEZ, Plaintiff-Appellant, v. ROCK WOOL ENGINEERING AND EQUIPMENT COMPANY, INC., a corporation, and Bemis Company, Inc., a corporation, Defendants-Appellees.

No. 82-1906.

Appellate Court of Illinois,

First District, Fifth Division.

Aug. 19, 1983.

[72 Ill.Dec. 918] Steinberg, Polacek & Goodman, Chicago, for plaintiff-appellant; William L. Barr, Jr., Chicago, of counsel

Wildman, Harrold, Allen & Dixon, Chicago, for defendants-appellees; Lenard C. Swanson, Elise E. Singer, Chicago, of counsel.

LORENZ, Justice:

During the course of his employment with Forty-Eight Insulations in Aurora, Illinois, plaintiff was injured on April 21, 1975, operating a battline insulation processing and cutting machine manufactured by defendant Rock Wool Engineering and Equipment Company, Inc., an Indiana corporation. The injury resulted in the amputation of the fingers of his right hand. The machine, designed by Rock Wool's employees, Thomas Shovlin and E.R. Overman was built in 1953 and modified in 1958.

On March 3, 1966, Rock Wool executed an agreement by which it sold the bulk of its assets to defendant Bemis in exchange for cash and Bemis continued to manufacture battline machines similar to the one which plaintiff assets was defective. Bemis also supplied Rock Wool's former customers with spare parts. Later, Rock Wool changed its corporate name to Overman and Shovlin and in late 1967, the corporation was dissolved under the applicable provisions of Indiana law. Thomas Shovlin, former director and vice president of Rock Wool, accepted Bemis' offer to be its product manager. Another Rock Wool employee, Robert Stoudt, was employed as a foreman for Bemis.

In his original complaint filed February 22, 1977, plaintiff sought to attach the liability of Rock Wool for the injury caused by the allegedly defective machine to the defendant Bemis, as successor in interest to Rock Wool.

Plaintiff's fourth amended complaint, the subject of this appeal, was filed on January 11, 1982, and consisted of four counts. Count I was based on Bemis' alleged failure to give adequate warning as to the presence of certain conditions which allegedly rendered the product unreasonably dangerous. Count II alleged Bemis' negligence in failing to warn of a dangerous and defective condition. Count III pleaded a cause of action in strict liability predicated upon an alleged "de facto merger" between Bemis and Rock Wool. The final strict liability count alleged that Bemis, as corporate successor to Rock Wool, carried on the "product line" of Rock Wool.

On March 8, 1982, Bemis moved to dismiss the fourth amended complaint and attached the affidavit of Thomas Shovlin, the product manager of Bemis. The affidavit set forth, inter alia, that there was no interchange of stock or change in ownership in either corporation following the agreement; and that the battline equipment at Forty-Eight Insulations was not serviced by Bemis from 1966 up to and including the date of plaintiff's injury, April 21, 1975.

Following a hearing, the trial court dismissed plaintiff's complaint for failure to state a cause of action. Plaintiff appeals.

OPINION

The sole issue on review is whether the trial court erred in dismissing plaintiff's fourth amended complaint for failure to state a cause of action against Bemis.

An analysis of this issue requires us to address the arguments advanced by plaintiff in support of his claim.

Plaintiff argues that: (1) Bemis, as successor in interest, undertook the duty of its predecessor to warn of dangerous defects of which it was aware; (2) that the transaction in question constituted a de facto merger; and (3) that strict liability attaches to a successor corporation which acquires services and maintains its predecessor's product line.

We first address plaintiff's contention that Bemis, as a successor corporation, owed an independent duty to warn under a strict liability theory.

In Illinois, three elements are required for strict liability in tort; (1) plaintiff must have suffered an injury to an interest protected by law; (2) defendant must have had a duty to prevent the injury from occurring, and (3) defendant must have breached that duty and the injury must have resulted from that breach. (See, Braband v. Beech Aircraft Corp. (1977), 51 Ill.App.3d 296, 9 Ill.Dec. 684, 367 N.E.2d 118, aff'd (1978), 72 Ill.2d 548, 21 Ill.Dec. 888, 382 N.E.2d 252, cert. denied (1979), 442 U.S. 928, 99 S.Ct. 2857, 61 L.Ed.2d 296.) It is clear, however, that one who has done nothing to create a risk of injury cannot usually be burdened with the duty of preventing that injury.

Plaintiff directs our attention to dictum in Nguyen v. Johnson Machine & Press Corp. (1982), 104 Ill.App.3d 1141, 1147, 60 Ill.Dec. 866, 871, 433 N.E.2d 1104, 1109 which suggests that a successor corporation may have a duty to warn of defects before an injury occurs if it learns that one of its predecessors' products is defective.

There, the Nguyen court stated that "[i]n strict liability cases, our courts have found an absolute duty of prevention in those parties who can be found to have created the risk of injury by being involved in placing the defective product that has caused injury into the stream of commerce. [Citation.] However, it is impossible to conceive of such a duty on the party of the successor corporation unless circumstances following the corporate transfer give rise to the duty. For example, if the successor corporation learns that one of its predecessor's products is defective and knows the location of that product, it may, though we do not so hold here, have a duty to warn of its defects before an injury occurs." Nguyen v. Johnson Machine & Press Corp. (1982), 104 Ill.App.3d 1141, 1147, 60 Ill.Dec. 866, 871, 433 N.E.2d 1104, 1109.

In order to determine the presence of a nexus or relationship effective to create a duty to warn, the following factors may be considered: (1) succession to a predecessor's service contracts; (2) coverage of the particular machine under a service contract; (3) service of that machine by the purchaser corporation; and (4) a purchaser corporation's knowledge of defects and of the location or owner of that machine. (Travis v. Harris Corp. (7th Cir.1977) 565 F.2d 443, 449.) Thus, the critical element required for the imposition of this duty is a continuing relationship between the successor and the predecessor's customers benefiting the successor.

In the present case, a review of the record does not indicate that such a continuing relationship existed. The purchase agreement did not include either a succession to the service contracts of Rock Wool, or coverage of the particular battline machine in question under a service contract. Thomas Shovlin's affidavit states that defendant Bemis did not service, maintain, or repair the battline equipment located at Forty-Eight Insulations from March 31, 1966 up to and including April 21, 1975; and while Bemis did send a letter to...