Cafazzo v. Central Medical Health Services, Inc.

Decision Date28 November 1995
Citation542 Pa. 526,668 A.2d 521
Parties, 64 USLW 2378, Prod.Liab.Rep. (CCH) P 14,440 Albert F. CAFAZZO, and Tammy J. Cafazzo, his wife, Appellants, v. CENTRAL MEDICAL HEALTH SERVICES, INC., a corporation, Central Medical Pavilion, Inc., a corporation, and Norman Stern, D.M.D., Appellees.
CourtPennsylvania Supreme Court

Robert W. Deer, Lorrie K. Albert, Law Offices of Robert W. Deer, Pittsburgh, James F. Mundy, Philadelphia, for Appellants.

Laurence M. Kelly, Kelly & Kelly, Montrose, for Pennsylvania Trial Lawyers.

David B. White, Stella L. Smetanka, Sherry L. Halfhill, Burns, White & Hickton, Pittsburgh, for Norman Stern.

Louis C. Long, Julie Fields Sweeney, Meyer, Darragh, Buckler, Bebenek & Eck, Pittsburgh, for Central Medical Health Services, Inc. & Central Medical Pavillion, Inc.

Roland D. Morris, Mark B. Schoeller, Duane, Morris & Heckscher, Philadelphia, for Hospital Association of Pennsylvania.

Robert B. Hoffman, Reed, Smith, Shaw & McClay, Harrisburg, for Pennsylvania Medical Society.

Before NIX, C.J., and FLAHERTY, ZAPPALA, CAPPY, CASTILLE and MONTEMURO, JJ.

OPINION

MONTEMURO, Justice.

In this case of first impression, we are presented with the question of whether a hospital and a physician can be held subject to strict liability under the Restatement of Torts (Second) § 402A, for defects in a product incidental to the provision of medical services.

In 1986, appellant Albert Cafazzo underwent surgery for implantation of a mandibular prosthesis. In 1992, some time after it was discovered that this device was defective, a complaint 1 was filed against appellees, the physician who performed the surgery and the hospital where the operation took place, claiming that "all defendants sell, provide or use certain prosthetic devices," and that they should be held strictly liable as having "provided, sold or otherwise placed in the stream of commerce products manufactured by Vitek, Inc., known as Proplast TMJ Implants." The complaint alleged that the prosthesis was defectively designed, unsafe for its intended use, and lacked any warning necessary in order to ensure safety.

Appellees' preliminary objections in the nature of a demurer were granted by the trial court which concluded that appellant had failed to state a claim cognizable under Pennsylvania law, and the Superior Court affirmed. We granted allocatur to determine whether liability will attach under the circumstances of this case.

In reviewing a dismissal on the pleadings in the nature of a demurrer, the averments of the complaint must be taken as true except to the extent that they constitute conclusions of law. Cianfrani v. Commonwealth, State Employees Retirement Board, 505 Pa. 294, 479 A.2d 468 (1984). Thus we are not compelled to accept appellants' legal analysis, only their recitation of the facts. Whether appellees are sellers for the purposes of 402A is the central issue in this matter, and, therefore, appellants' assertion that appellees are in fact, sellers, need not be accepted out of hand. Moreover, even if the central question is answered in the affirmative, the corollary issue arises as to whether appellees, by virtue of their position as providers of health care, are exempted from the consequences of having so acted.

This Court finds that the answer to the initial question is a negative, and further holds that even if appellees could be shown to have "marketed" the prothesis, strict liability does not apply.

Section 402A of the Restatement (Second) of Torts, provides in relevant part as follows:

(1) One who sells any product in a defective condition unreasonably dangerous to the user or consumer or to his property is subject to liability for physical harm thereby caused to the ultimate user or consumer, or to his property, if:

(a) the seller is engaged in the business of selling such a product, and

(b) it is expected to and does reach the consumer without substantial change in the condition in which it is sold.

While we do not slavishly adhere to the language of 402A, the rule enunciated there, as with other non-statutory declarations, is a common law pronouncement by the court, which "always retains the right and the duty to test the reason behind a common law rule in determining the applicability of such a rule to the facts before it." Coyle v. Richardson-Merrell, Inc., 526 Pa. 208, 212, 584 A.2d 1383, 1385 (1981). What appellants would have us do is to apply the rule while ignoring the facts of this case, after having accepted as a "fact" the central issue which must be resolved in order to determine whether application of the rule is proper. Such a procedure makes a mockery of the idea behind strict liability, i.e., that it inheres only in situations where a defective product has been provided by a seller "engaged in the business of selling such a product."

In Musser v. Vilsmeier Auction Co., Inc., 522 Pa. 367, 562 A.2d 279 (1989), this Court observed that "the broadened concept of "supplier," for purposes of predicating strict liability, is not without practical limits. The limits obtain in the purposes of the policy. When those purposes will not be served persons whose implication in supplying products is tangential to that undertaking will not be subjected to strict liability for the harms caused by defects in those products." Id. at 372, 562 A.2d at 281. The policy behind strict liability is "to insure that the costs of injuries resulting from defective products are borne by the manufacturers who put such products on the market rather than by the injured persons who are powerless to help themselves." Shepard v. Alexian Brothers Hospital, 33 Cal.App.3d 606, 610, 109 Cal.Rptr. 132, 132 (1973) (emphasis omitted), and to further insure that defective products are removed from the market.

In this instance, the manufacturer is in bankruptcy, and unable to sustain liability. Thus, an alternative, and solvent, payor was sought. All other considerations were subordinated to this objective, hence the unequivocal necessity, in appellants' view, for appellees to be designated as sellers irrespective of the actual facts of this matter. However, to ignore the ancillary nature of the association of product with activity is to posit surgery, or indeed any medical service requiring the use of a physical object, as a marketing device for the incorporated object. This is tantamount to deciding that the surgical skills necessary for the implantation of, e.g., mandibular prostheses, are an adjunct to the sale of the implants. Moreover, under such a theory, no product of which a patient in any medical setting is the ultimate consumer, from CT scanners to cotton balls, could escape the assignment of strict liability. Clearly, the relationship of hospital and/or doctor to patients is not dictated by the distribution of such products, even if there is some surcharge on the price of the product. As the New York Court of Appeals has aptly stated,

Concepts of purchase and sale cannot be separately attached to the healing materials ... supplied by the hospital for a price as part of the medical services. That the property or title to certain items of medical material may be transferred, so to speak, from the hospital to the patient during the course of medical treatment does not serve to make such a transaction a sale. "Sale" and "transfer" are not synonymous, and not every transfer of personal property constitutes a sale.

Perlmutter v. Beth David Hospital, 308 N.Y. 100, 104, 123 N.E.2d 792, 794 (1954).

The thrust of the inquiry is thus not on whether a separate consideration is charged for the physical material used in the exercise of medical skill, but what service is performed to restore or maintain the patient's health. The determinative question becomes not what is being charged, but what is being done. See Hoff v. Zimmer, 746 F.Supp. 872 (W.D.Wis.1990) (strict liability not applied to hospital for failure of hip prosthesis); Easterly v. HSP of Texas, Inc., 772 S.W.2d 211 (Tex.Ct.App.1989) (strict liability not applied to hospital which supplied epidural kit containing defective needle); Hector v. Cedars-Sinai Medical Center, 180 Cal.App.3d 493, 225 Cal.Rptr. 595 (1986) (strict liability not applied to hospital for defective pacemaker); Silverhart v. Mount Zion Hospital, 20 Cal.App.3d 1022, 98 Cal.Rptr. 187 (1971) (strict liability not applied to dentist whose drill broke during use on patient; Magrine v. Krasnica, 94 N.J.Super. 228, 227 A.2d 539 (1971), aff'd 100 N.J.Super. 223, 241 A.2d 637 and 53 N.J. 259, 250 A.2d 129 (strict liability not applied to dentist whose drill broke while in use on patient).

The cases cited above have been labelled by some the exponents of a "service exception" to 402A. However, the very term "service exception" is misleading, since it presupposes that the distinction drawn where medical personnel/hospitals are involved is an artificial one. The cases, however, make clear that provision of medical services is regarded as qualitatively different from the sale of products, and, rather than being an exception to 402A, is unaffected by it. See Hector v. Cedars-Sinai Medical Center, Inc., 180 Cal.App.3d 493, 225 Cal.Rptr. 595 (1986). To quote the Superior Court's holding in Podrat v. Codman-Shurtleff, Inc., 384 Pa.Super. 404, 558 A.2d 895 (1989), alloc. dn'd., 524 Pa. 609, 569 A.2d 1368 (1989),

[appellees] could not be liable under a theory of strict liability because [they were] not in the business of selling th[e implant], its use was only incidental to [appellees'] primary function of providing medical services, and the medical services could not have been rendered without the use of this product.

Id. at 410, 558 A.2d at 898.

This distinction is made clearer by the fact that case law also supports the application of 402A where what has been provided is not medical service or products connected with diagnosis and treatment, but rather materials...

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