Crowe v. Public Bldg. Commission of Chicago

• Decision Date: 04 December 1978
• Docket Number: No. 50258,50258
• Citation: 23 Ill.Dec. 80,74 Ill.2d 10,383 N.E.2d 951
• Parties: , 23 Ill.Dec. 80 Marcy S. CROWE, Indiv. and as Adm'r, Appellee, v. The PUBLIC BUILDING COMMISSION OF CHICAGO et al. (Arrow Contractors Equipment Company, Appellant.)
• Court: Illinois Supreme Court

Page 951

383 N.E.2d 951

74 Ill.2d 10, 23 Ill.Dec. 80

Marcy S. CROWE, Indiv. and as Adm'r, Appellee, v. The PUBLIC BUILDING COMMISSION OF CHICAGO et al. (Arrow Contractors Equipment Company, Appellant.)

No. 50258.

Supreme Court of Illinois.

Dec. 4, 1978.

Hinshaw, Culbertson, Moelmann, Hoban & Fuller, Chicago (Leonel I. Hatch, Jr., and Stanley J. Davidson, Chicago, of counsel), for appellant Arrow Contractors Equipment Co.

Nat P. Ozmon and Curt N. Rodin, Chicago (Horwitz, Anesi, Ozmon & Associates, Ltd., Chicago, of counsel), for appellee.

THOMAS J. MORAN, Justice:

This action was filed in the circuit court of Cook County by Marcy S. Crowe, individually and as administrator of the estate of her husband. The action sought damages against numerous defendants for the injury and resultant death of her husband on September 20, 1973. The complaint contained three counts. The only count at issue here is count III, which alleged, among other things, that Arrow Contractors Equipment Company (Arrow) was engaged in the business of leasing equipment and that it leased a defective scaffold (characterized as a hoisting tower), which defective product proximately caused the fatal fall of her husband.

Arrow moved to dismiss on the basis that it had sold the hoisting tower and assigned its lease to Southeastern Tower and Equipment Company as part of a bulk sale of equipment on July 12, 1973. Arrow asserted in its motion to dismiss that, on the date of the accident, it was merely a former owner and lessor; that any liability which it may have had as owner and lessor of the tower had been transferred, by virtue of the sale, to Southeastern. The trial court granted Arrow's motion to dismiss and expressly found no just reason for delaying enforcement of its dismissal order. Pursuant to Rule 304(a) (58 Ill.2d R. 304(a)), plaintiff appealed the order. The appellate court, in a majority decision, reversed. (54 Ill.App.3d 699, 12 Ill.Dec. 409, 370 N.E.2d 32.) We granted Arrow leave to appeal.

The sole issue presented for review is whether strict tort liability applies to a Former lessor of a defective product.

Arrow concedes that the extension of the doctrine of strict liability to the lessor of a defective product is an established principle of law in Illinois. (See Galluccio v. Hertz Corp. (1971), 1 Ill.App.3d 272, 274 N.E.2d 178, Appeal denied (1972), 49 Ill.2d 575; Lowrie v. City of Evanston (1977), 50 Ill.App.3d 376, 382, 8 Ill.Dec. 537, 365 N.E.2d 923, Appeal denied (1977), 66 Ill.2d 631; Annot., 52 A.L.R.3d 121, 131-32 (1973).) Arrow does not dispute the soundness of this principle, but posits that the rationale for imposing strict liability on lessors does not apply to Former lessors. A brief review of the applicability of strict liability to lessors, we believe, will expose the fatal weaknesses in Arrow's position.

Ever since Illinois law first embraced the principles of strict liability in Suvada v. White Motor Co. (1965), 32 Ill.2d 612, 619, 210 N.E.2d 182, this court has recognized the public policy justifications for imposing strict liability upon those who reaped a profit by placing a defective product in the stream of commerce. Imposition of strict liability upon sellers (wholesalers and retailers), as well as upon manufacturers, arises from their "integral role in the overall producing and marketing" of a defective product. (Dunham v. Vaughan & Bushnell Mfg. Co. (1969), 42 Ill.2d 339, 344, 247 N.E.2d 401, 404.) A seller who does not create a defect, but who puts the defective product into circulation, is still responsible in strict liability to an injured user. Because the ultimate loss will ordinarily be borne, through indemnification, by the party that created the defect, the public policy concern is really who, between the injured user and the seller, should bear the initial loss. The seller is in a position to prevent a defective product from entering the stream of commerce. The seller may either adopt inspection procedures or influence the manufacturer to enhance the safety of a product. Moreover, the seller is generally better able to bear and distribute any loss resulting from injury caused by a defective product. See Restatement (Second) of Torts sec. 402A, comment C (1965).

The only obstacle to the natural extension of strict liability to lessors has been the applicable strict liability provision of the Restatement (Second) of Torts, section 402A, which refers expressly only to the strict liability of sellers. The section neither attempts to define those commercial transactions which may constitute a sale for purposes of attaching strict liability nor purports to confine the imposition of strict liability to sellers alone. The most persuasive interpretation of the section characterized the reference to sellers "as a description of the situation that has most commonly arisen rather than as a deliberate limitation of the principle to cases where the product has been sold, intentionally excluding instances where a manufacturer has placed a defective article in the stream of commerce by other means." Delaney v. Towmotor Corp. (2d Cir. 1964), 339 F.2d 4, 6; quoted with approval in Cintrone v. Hertz Truck Leasing & Rental Service (1965), 45 N.J. 434, 453, 212 A.2d 769, 779; Perfection Paint & Color Co. v. Konduris (1970), 147 Ind.App. 106, 114-15, 258 N.E.2d 681, 686.

The limited language of the Restatement has not deterred Illinois, or the majority of jurisdictions which have considered the question, from extending strict liability to lessors. (See Annot., 52 A.L.R.3d 121 (1973).) Courts have recognized that commercial leasing has become an increasingly practicable way for businesses to market their products. (Price v. Shell Oil Co. (1970), 2 Cal.3d 245, 251-52, 85 Cal.Rptr. 178, 182, 466 P.2d 722, 726; also see B. Henszey, Application of Strict Liability to the Leasing Industry, 33 Bus.Law. 631 (1978).) The nature of a commercial transaction by which a product is placed in the stream of commerce is irrelevant to the policy considerations which justify strict liability. A lessor is subject to strict liability because his position in the "overall producing and marketing...