Farmex Inc. v. Wainwright
Decision Date | 29 June 1998 |
Docket Number | No. S97G1919.,S97G1919. |
Citation | 501 S.E.2d 802,269 Ga. 548 |
Parties | FARMEX INCORPORATED v. WAINWRIGHT et al. |
Court | Georgia Supreme Court |
OPINION TEXT STARTS HERE
David B. Dunaway, Adams, Barfield, Dunaway & Hankinson, Thomaston, for Farmex Incorporated.
Wallace Miller, III, John Dan Raines III, Miller & Towson, Macon, for Jeff Wainwright et al.
Jeff Wainwright and James Corbin (Appellees) were sued for damages caused when a trailer became unhitched and struck a vehicle. As one of their defenses, Appellees alleged that the proximate cause of the collision was a defectively designed and manufactured hitch pin. Appellees also filed a third-party complaint against Farmex Incorporated (Farmex), an Ohio manufacturer of hitch pins, even though the hitch pin involved in the collision had been designed and manufactured by JA-BIL, Inc. (JA-BIL), another Ohio corporation. Third-party liability under the continuation theory was predicated upon Farmex's acquisition of the hitch pin inventory in a purchase of assets from JA-BIL, and its subsequent introduction of that product into the stream of commerce.
The trial court granted summary judgment in favor of Farmex, concluding that, under the continuation theory, Farmex was not the "manufacturer" of the hitch pin for purposes of strict liability. In a whole-court opinion, the Court of Appeals reversed, although the elements of "the continuation theory, as traditionally applied," were not present. Corbin v. Farmex, 227 Ga.App. 620, 622(1), 490 S.E.2d 395 (1997). The dissenters took the position that Bullington v. Union Tool Corp., 254 Ga. 283, 328 S.E.2d 726 (1985) was controlling Georgia authority and that the majority's expansion of the continuation theory was contrary to that decision. We granted certiorari to review the opinion of the Court of Appeals.
In Georgia, strict liability applies only to the "manufacturer of any personal property sold as new property," and not to a "product seller." OCGA §§ 51-1-11(b)(1), 51-1-11.1. However, a successor corporation can be held strictly liable as a "manufacturer," if it is a mere continuation of the predecessor corporation which actually manufactured the product. Bullington v. Union Tool Corp., supra at 284, 328 S.E.2d 726. Bullington v. Union Tool Corp., supra at 284, 328 S.E.2d 726. Between JA-BIL, as the seller of corporate assets, and Farmex, as the purchaser of those assets, there is no identity of ownership. Thus, as the Court of Appeals held, the common law continuation theory, as previously applied in Georgia, has no applicability here.
It is undisputed that, after the transaction, Farmex continued JA-BIL's general business of manufacturing, warehousing and selling hitch parts. However, it also is undisputed that Farmex did not continue to design or manufacture any hitch pins of the type that it acquired from JA-BIL. Compare Cyr v. B. Offen & Co., 501 F.2d 1145, 1151(II) (1st Cir.1974) (applying New Hampshire law) (successor corporation "continued to produce the same kind of product in essentially the same way that [the predecessor corporation] had."); Ray v. Alad Corp., 19 Cal.3d 22, 136 Cal.Rptr. 574, 581, 560 P.2d 3, 10 (1974) ( ).
Bullington v. Union Tool Corp., supra at 284-285, 328 S.E.2d 726. If, however, the successor corporation merely continues the general business of the predecessor corporation, then it will not be "in a position to improve the quality of the product in question or to reflect the possible defects in the cost of the product." Bullington v. Union Tool Corp., supra at 285, 328 S.E.2d 726.
As between Farmex and JA-BIL, any alleged defect in the hitch pin was attributable exclusively to JA-BIL's original design and manufacture. Farmex did not continue to manufacture hitch pins of that design. Therefore, Farmex was not a "manufacturer" against whom strict liability, regardless of negligence, can be imposed for defects in the design or manufacture of JA-BIL's hitch pins. Farmex's only connection to the hitch pins was that, after purchasing those items from JA-BIL, it introduced them into the stream of commerce. Under these circumstances, Farmex is simply a wholesaler of JA-BIL's hitch pins. Because Farmex was only "involved in placing a product in the stream of commerce" it became a "product seller" under OCGA § 51-1-11.1(a), not a "manufacturer" subject to strict liability for any defect in the hitch pins under OCGA § 51-1-11(b)(1).
The paramount purpose of strict liability (Emphasis omitted.) Ray v. Alad Corp., supra at 579, 560 P.2d at 8. In Georgia, that purpose cannot be advanced by imposing strict liability upon a "product seller." Unless and until the General Assembly acts, strict liability is an available remedy only against a "manufacturer." Because Farmex did not continue the manufacture of the allegedly defective hitch pin, "it never produced the product, [and the continuation] rationale does not apply." Bullington v. Union Tool Corp., supra at 285, 328 S.E.2d 726. A strict liability claim can be asserted only against JA-BIL, which continued in existence after the sale of its assets to Farmex. The decision of the Court of Appeals reversing the grant of Farmex's motion for summary judgment is, therefore, reversed.
Judgment reversed.
All the Justices concur, except HUNSTEIN, J., who concurs specially.
Bullington v. Union Tool Corp., 254 Ga. 283, 328 S.E.2d 726 (1985) involved a plaintiff who was injured in 1981 while operating a table saw which had been designed, manufactured and sold to an unknown purchaser at an unknown date no later than 1956. In the twenty-five year interval between the last date of sale and the plaintiff's injury, the company that...
To continue reading
Request your trial-
Smith v. Ontario Sewing Machine Co., Ltd.
...in the proper case. See Corbin v. Farmex, 227 Ga.App. 620, 624(2), 490 S.E.2d 395 (1997), rev'd on other grounds, Farmex v. Wainwright, 269 Ga. 548, 549, 501 S.E.2d 802 (1998). Corbin approved citation to § 13(b)(1) of the Restatement of Torts, 3rd, Product Liability. While not a successor ......
-
Wheat v. Sofamor, S.N.C.
...as provided at O.C.G.A. § 51-1-11, is applicable only to the manufacturer of a product, not the distributor. Farmex Inc. v. Wainwright, 269 Ga. 548, 501 S.E.2d 802 (1998); Ellis v. Rich's, Inc., 132 Ga.App. 430, 208 S.E.2d 331 (1974), aff'd, 233 Ga. 573, 212 S.E.2d 373 (1975); Wansor v. Geo......
-
Johns v. Suzuki Motor of Am., Inc.
...victims of manufacturing defects and the spreading throughout society of the cost of compensating them." Farmex Inc. v. Wainwright , 269 Ga. 548, 550, 501 S.E.2d 802 (1998) (citation and punctuation omitted). To advance these goals, strict products liability "imposes liability irrespective ......
-
Acme Sec., Inc. v. CLN Props., LLC (In re Acme Sec., Inc.)
...may apply when the claim is based on the strict liability of a manufacturer of a defective product in tort, e.g., Farmex Inc. v. Wainwright, 269 Ga. 548, 501 S.E.2d 802 (1998) or when other policy considerations require them, such as when the claim involves federal labor policy. E.g., Evans......
-
Do's and Don'ts When Handling a Product Liability Matter in Georgia
...the manufacturer and the seller" but innocent seller may have indemnity remedy against manufacturer). [57] See Farmex, Inc. v. Wainwright, 269 Ga. 548, 549-50, 501 S.E.2d 802, 803 (1998) (seller acquired inventory from manufacturer); Ellis v. Rich's, Inc., 233 Ga. 573, 577, 212 S.E.2d 373, ......
-
Product Liability - Franklin P. Brannen, Jr. and Jacob E. Daly
...222 Ga. App. 456, 457-58, 475 S.E.2d 188, 190 (1996)). 27. Id. 28. O.C.G.A. Sec. 51-1-11(b)(1) (2000); Farmex Inc. v. Wainwright, 269 Ga. 548, 550, 501 S.E.2d 802, 804 (1998); Ellis v. Rich's, Inc., 233 Ga. 573, 577, 212 S.E.2d 373, 376 (1975). 29. Farmer v. Brannan Auto Parts, Inc., 231 Ga......
-
Torts - Deron R. Hicks and Jacob E. Daly
...121. 227 Ga. App. 620, 624, 490 S.E.2d 395, 399 (1997) (en banc), rev'd on other grounds sub nom., Farmex Inc. v. Wainwright, 269 Ga. 548, 501 S.E.2d 802 (1998). 122. 241 Ga. App. at 804, 527 S.E.2d at 883. 123. Id. 124. Id. 125. Id. at 804-05, 527 S.E.2d at 883-84. 126. 238 Ga. App. 755, 5......
-
Business Associations - Paul A. Quiros, Lynn Schutte Scott, and Daniel J. Babb
..."misnomer" is not enough to impose personal liability upon the representative signing on behalf of the corporation). 54. Id. 55. Id. 56. 269 Ga. 548, S.E.2d 802 (1998). 57. Id. at 548-49, 501 S.E.2d at 803-04. 58. Id. at 548, 501 S.E.2d at 803. 59. Id. (citing Corbin v. Farmex, 227 Ga. App.......