Etheredge v. Genie Industries, Inc.

Decision Date18 February 1994
Citation632 So.2d 1324
PartiesProd.Liab.Rep. (CCH) P 13,845 Vernon Clyde ETHEREDGE v. GENIE INDUSTRIES, INC. 1920868, 1921386.
CourtAlabama Supreme Court

Richard H. Sforzini, Jr., Steven L. Nicholas and Michael A. Youngpeter of Sirote & Permutt, P.C., Mobile, for appellant.

Donald F. Pierce, Forrest S. Latta and Andrew C. Clausen of Pierce, Carr & Alford, P.C., Mobile, for appellee.

PER CURIAM.

Vernon Clyde Etheredge appeals from a judgment based on a directed verdict in favor of Genie Industries, Inc. ("Genie"). 1 Etheredge brought this products liability action seeking to recover damages for injuries he sustained while working from a lifting device, known as a "Genie Superlift," manufactured by Genie. The accident from which Etheredge's injuries resulted occurred in North Carolina. The issue is whether, under conflict of laws principles, the North Carolina statute of repose, N.C.G.S. § 1-50(6), which bars products liability claims brought over six years after the product is initially purchased for use, is applicable to bar Etheredge's action.

Etheredge filed his complaint on May 7, 1991; on August 5, 1992, he filed a "Notice of Intent to Rely on Foreign Law," specifically the law of North Carolina. He filed an amendment to his complaint on August 7, 1992, claiming prejudgment interest pursuant to North Carolina General Statute § 24- 5(b). The circuit court then referred the matter to mediation. Mediation was completed, unsuccessfully, on December 30, 1992. On January 19, 1993, Genie filed an answer in response to Etheredge's amended complaint, raising North Carolina's statute of repose, N.C.G.S. § 1-50(6), and statute of limitations, N.C.G.S. § 1-52(16) 2 as affirmative defenses. Etheredge moved to strike these affirmative defenses, but the court denied his motion.

The case proceeded to trial. Before jury selection, Genie moved, pursuant to Rule 42(b), A.R.Civ.P., for a separate trial on the issue of when the lift was first sold. Genie's argument for bifurcation was based on an expectation that the evidence would establish that the lift was manufactured in 1978, more than 11 years before Etheredge filed his action. If the jury concluded that the lift was sold in 1978, then, according to Genie, the North Carolina statute of repose, N.C.G.S. § 1-50(6), would be dispositive of Etheredge's suit. The court denied this motion, and the matter proceeded on the merits. However, after receiving testimony from certain witnesses, the judge reconsidered Genie's motion for a bifurcated trial and granted it. After closing arguments on the limited issue of when the lift was sold, the court charged the jury. The jury returned a verdict finding that the lift was, in fact, sold in 1978. The judge orally granted Genie's motion for a dismissal of Etheredge's claims, or in the alternative, a directed verdict, or a summary judgment. Etheredge filed a notice of appeal on March 17, 1993, which was docketed as number 1920868. The circuit court on May 7 filed a written order and Etheredge filed another notice of appeal on June 16. That appeal was docketed as number 1921386. On June 23, this Court remanded the cause in appeal number 1920868 for entry of a final judgment. The circuit judge entered a final judgment for Genie on June 30, 1993, based on a directed verdict. Because the first notice of appeal divested the trial court of jurisdiction, the May 7 order was a nullity and would not support a notice of appeal. Appeal number 1921386 is therefore dismissed.

The facts are largely undisputed. The product in question, the Genie lift, was rented by Burt Steel, Inc., a Montgomery, Alabama, steel fabrication company, from Arrow-Rents, Inc., also of Montgomery. Burt Steel provided the lift to Etheredge's employer, Southeastern Construction Products, Inc. 3 Etheredge transported the lift to the North Carolina job site. Arrow Rents had purchased the lift directly from Genie.

Etheredge was injured while using the lift at the North Carolina job site on May 8, 1989. Etheredge filed this action against Genie on May 7, 1991.

Etheredge is not disputing the correctness of the jury's finding, but only the circuit court's application, under conflict of laws principles, of the North Carolina statute of repose. Thus, the only question before us is a question of law. On appeal, a trial court's decision on a question of law is not entitled to any presumption of correctness. Donnelly v. Doak, 346 So.2d 414, 416 (Ala.1977).

In Fitts v. Minnesota Mining & Manufacturing Co., 581 So.2d 819, 820 (Ala.1991), this Court held: "Lex loci delicti has been the rule in Alabama for almost 100 years. Under this principle, an Alabama court will determine the substantive rights of an injured party according to the law of the state where the injury occurred."

In this case, the injury occurred in North Carolina. Therefore, we look to North Carolina law to determine the substantive rights of the parties. Etheredge indicated to the circuit court that his claim was based on North Carolina law. However, he argued to the circuit court, and now to this Court, that the North Carolina statute of repose, N.C.G.S. § 1-50(6), should not be applied to bar his action.

North Carolina General Statute § 1-50(6) reads as follows:

"No action for the recovery of damages for personal injury, death, or damage to property based upon or arising out of any alleged defect or any failure in relation to a product shall be brought more than six years after the date of initial purchase for use or consumption."

The circuit court held that § 1-50(6) was substantive law of North Carolina and applied it to bar Etheredge's action, because it had been brought more than six years after the initial purchase of the lift.

The issue is whether the reference to North Carolina law mandated under lex loci delicti requires that our courts enforce North Carolina General Statute § 1-50(6). Although Etheredge frames the issue as whether the application of N.C.G.S. § 1-50(6) is against Alabama's public policy, the preliminary question is whether § 1-50(6) is a procedural law or a substantive law. When under lex loci delicti we are applying the law of another state, we will enforce only those laws of the other state that are substantive in nature. See Sanders v. Liberty National Life Insurance Co., 443 So.2d 909, 912 (Ala.1983); see also Bodnar v. Piper Aircraft Corp., 392 So.2d 1161, 1162 (Ala.1980). "Where the statute of limitations [is procedural, and] goes only to the remedy, it seems to be the settled rule here that the lex fori, and not the lex loci, governs." Mullins v. Alabama Great Southern Ry., 239 Ala. 608, 610, 195 So. 866 (1940).

"The distinction between 'substance' and 'procedure' has medieval origins: a court will apply foreign law only to the extent that it deals with the substance of the case, i.e., affects the outcome of the litigation, but will rely on forum law to deal with the 'procedural' aspects of the litigation." Eugene F. Scoles & Peter Hay, Conflict of Laws 57 (1992). "By legal tradition, most statutes of limitation are deemed procedural rather than substantive." Robert A. Leflar, et al., American Conflicts Law 348 (1986).

"The court before which the question arises is the one that has to decide whether any rule of law, domestic or foreign, will be characterized as substantive or as procedural for choice-of-law purposes." Leflar, supra, at 333; Thomas v. FMC Corp., 610 F.Supp. 912, 916 (M.D.Ala.1985). Therefore, it is up to this Court to determine, for the purpose of this action, whether § 1-50(6) is a substantive part or a procedural part of North Carolina law.

"This Court has recognized ... that a distinction exists between a true statute of limitations and a statute which creates a new right of action with an express restriction on the time within which an action may be brought to enforce the right." Cofer v. Ensor, 473 So.2d 984, 987 (Ala.1985). The former is known as a statute of limitations, while the latter has been referred to by this Court as a "statute of creation." Id.

"In one [a statute of creation], the limitation [period] is so inextricably bound up in the statute creating the right that it is deemed a portion of the substantive right itself. In the other [a statute of limitation], the limitation is deemed to affect only the remedy and does not constitute part of the substantive right."

Cofer, 473 So.2d at 987, quoting State, Department of Revenue v. Lindsey, 343 So.2d 535, 537 (Ala.Civ.App.1977) (bracketed terms added in Cofer; emphasis added here). 4

"Alabama decisions state that a statute of limitations, unless the act specifically declares otherwise, is construed as affecting the remedy only." State, Department of Revenue v. Lindsey, 343 So.2d 535, 537 (Ala .Civ.App.1977); Cofer, 473 So.2d at 987. Thus, we will apply another state's statute of limitations only when it is demonstrated that "the limitation is so inextricably bound up in the statute creating the right that it is deemed a portion of the substantive right itself." See id.

After reviewing the North Carolina statute, in the context in which it appears in the North Carolina General Statutes, we conclude that it is not "inextricably bound up in [a] statute creating the right [or cause of action]." Cofer. Section 1-50(6) is not a "statute of creation," but rather a "statute of limitations"; it is only a procedural law of North Carolina. Section 1-50(6) is found in the "Civil Procedure" chapter of the North Carolina General Statutes. Section 1-50 is entitled "Six years" and lists those causes of action to which a six-year limitations period is applicable. Subsection (6) merely places a six-year limit on the time for filing product liability actions in North Carolina. As such, N.C.G.S. § 1-50(6) is a procedural statute, which affects only a plaintiff's remedy; it, therefore, does not bar Etheredge's action brought in Alabama.

Genie relies heavily on decisions of the North Carolina...

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