Dutchmen Mfg., Inc. v. Reynolds

• Decision Date: 22 December 2004
• Docket Number: No. 20A05-0404-CV-202.,20A05-0404-CV-202.
• Citation: 819 N.E.2d 529
• Parties: DUTCHMEN MANUFACTURING, INC., Appellant-Defendant, v. Chad REYNOLDS and Don Reynolds, Appellees-Plaintiffs.
• Court: Indiana Appellate Court

819 N.E.2d 529

DUTCHMEN MANUFACTURING, INC., Appellant-Defendant, v. Chad REYNOLDS and Don Reynolds, Appellees-Plaintiffs.

No. 20A05-0404-CV-202.

Court of Appeals of Indiana.

December 22, 2004.

Rehearing Denied February 22, 2005.

Tracy D. Knox, D. Michael Anderson, Barnes & Thornburg LLP, South Bend, IN, Attorneys for Appellant.

Patrick F. O'Leary, Goshen, IN, Attorney for Appellee.

OPINION

BAKER, Judge.

Appellant-defendant Dutchmen Manufacturing, Inc. (Dutchmen) appeals the trial court's denial of its motion for summary judgment against appellees-plaintiffs Chad Reynolds (Reynolds) and Don Reynolds. Specifically, Dutchmen raises three issues,¹ one of which we find dispositive: whether the scaffolding at issue was a chattel for purposes of Section 388 of the Restatement (Second) of Torts.² Finding that the scaffolding had merged into the real estate, we reverse and remand to the trial court with instructions that judgment be entered in favor of Dutchmen.

FACTS

Dutchmen leased a manufacturing facility in Goshen pursuant to a written lease agreement with Chapman Realty, Inc. (Chapman). While it occupied the premises, Dutchmen installed scaffolding for its sole use in manufacturing recreational vehicles. Dutchmen employees built and maintained the scaffolding during the period of Dutchmen's occupancy, but the date it was made and the identities of the employees who built it are not known. The scaffolding was made primarily of steel and was affixed to the ceiling beams in the premises.

Dutchmen vacated the premises when its lease with Chapman expired on February 28, 1999. The lease required Dutchmen to remove all personal property and trade fixtures at the end of the lease or to pay Chapman for the removal of all such property. The lease also provided that any property not so removed would become the property of Chapman. Upon vacating the premises, Dutchmen left the scaffolding for the use of Keystone RV Company (Keystone), a manufacturer of travel trailers that was to be the next lessee of the premises. Because of this agreement between Dutchmen and Keystone, Chapman did not charge Dutchmen to leave the scaffolding. Dutchmen intended to abandon the scaffolding in the premises, and Keystone intended to accept ownership of the scaffolding only after it had negotiated and signed a lease with Chapman.

Keystone signed a lease with Chapman on March 14, 1999, which gave it possession of the premises on May 3, 1999. On December 14, 1999, Reynolds was working for Keystone as an electrician on the assembly line. He installed wiring beneath the trailers. After Reynolds emerged from beneath the trailer, he was struck on the head by a falling scaffolding that had broken loose from its mounting. Reynolds was not directly beneath the scaffolding when it failed, but to the side of it. The scaffolding failed while it was being raised to permit the trailer to be pushed to the next workstation. The scaffolding unit was raised and lowered by means of a hoist chain and motor approximately twelve times a day. Reynolds and Don Reynolds, Reynolds's father who also worked for Keystone, testified that they were aware of dangers associated with the scaffolding, of their belief that something was wrong with it, and of the Keystone policy not to go beneath the scaffolding. Appellant's App. p. 601, 604.

According to Keystone's employee injury report, a weld in the scaffolding failed, causing it to fall to the floor: "A pipe inside the support tube for the center arm of the scaffold broke." Appellant's App. p. 424. Keystone's engineers determined that the inner tube fractured due to "improper welding procedure." Appellant's App. p. 373. The defective weld was completely concealed from view by the outer tube and an end cap at the time the unit was assembled.

On November 28, 2000, Reynolds and Don Reynolds filed a complaint against Chapman and Dutchmen, alleging, among other things, that Dutchmen was liable for the injuries because it had constructed and installed an allegedly defective scaffolding in a building that it formerly leased from Chapman. On October 29, 2001, Dutchmen moved for summary judgment on all of the plaintiffs' claims and theories of liability, arguing that Dutchmen did not owe them a duty and that Dutchmen was not negligent per se. At the hearing on this motion, Reynolds filed a supplemental memorandum of law, alleging for the first time that Dutchmen was liable to Reynolds pursuant to Section 388 of the Restatement (Second) of Torts, which essentially provides that one who provides a chattel to a third person is subject to liability for physical harm caused by the use of the chattel if the supplier knew it was likely to be dangerous and has no reason to believe the other party would realize it was dangerous. Because Reynolds had not raised this theory previously, Dutchmen had not addressed that issue.

On December 11, 2002, the trial court granted Dutchmen's motion for summary judgment on all of the plaintiffs' claims that were the subject of the original motion of summary judgment. Dutchmen filed a supplemental motion for summary judgment on July 28, 2003, addressing plaintiffs' Section 388 claims. Dutchmen alleged that the scaffolding was not a chattel, that Keystone was aware of the dangers of the scaffolding although Dutchmen was not, and that Keystone had accepted the premises "AS IS." Appellant's App. p. 467-80. The trial court denied Dutchmen's motion on February 19, 2004. Dutchmen sought interlocutory appeal of this order on March 3, 2003, and we accepted jurisdiction of the appeal on May 17, 2004.

DISCUSSION AND DECISION

Dutchmen contends that the trial court erred in denying its motion for summary judgment because Reynolds failed to prove an essential element of Section 388. Specifically, Dutchmen argues that the scaffolding at issue was not a chattel for purposes of Section 388.

When reviewing the grant or denial of a motion for summary judgment, we use the same standard as the trial court. Bastin v. First Indiana Bank, 694 N.E.2d 740, 743 (Ind.Ct.App.1998),trans. denied. Summary judgment is appropriate only if the designated evidence shows that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law. Hemingway v. Sandoe, 676 N.E.2d 368, 369 (Ind.Ct.App.1997). We will construe the designated evidence liberally in the light most...