Harber v. Altec Industries, Inc.

• Citation: 812 F. Supp. 954
• Decision Date: 16 February 1993
• Docket Number: No. 91-5057-CV-SW-8.,91-5057-CV-SW-8.
• Parties: Bill Loyd HARBER and Lucinda Earlene Harber, Plaintiffs, v. ALTEC INDUSTRIES, INC., Defendant.
• Court: U.S. District Court — Western District of Missouri

812 F. Supp. 954

Bill Loyd HARBER and Lucinda Earlene Harber, Plaintiffs, v. ALTEC INDUSTRIES, INC., Defendant.

No. 91-5057-CV-SW-8.

United States District Court, W.D. Missouri, Southwestern Division.

February 16, 1993.

Richard L. Anderson, Kimberling City, MO, for plaintiffs.

Gary Cunningham, Daniel Clampett Law Firm, Springfield, IL, Mary Anne Mellow, Sandberg, Phoenix & von Gontard, P.C., St. Louis, MO, for defendant.

ORDER

STEVENS, Chief Judge.

This matter is before the court on defendant's motion for summary judgment.

FACTS

This case concerns the sale and the subsequent failure of a utility truck with an aerial lift bucket. The uncontested facts are as follows. On April 30, 1989, defendants sold to a wholly-owned company of plaintiffs a 1975 Ford Model F750 truck equipped with a Utility Model DOP 37 derrick assembly and a fiberglass aerial lift bucket. Plaintiffs concede that defendant did not manufacture or design the aerial bucket. The parties agree that the truck was sold "AS IS" and that defendant disclaimed all warranties in a section of the sale contract. That section provides:

EXCLUSION OF WARRANTIES

Buyer purchases the goods sold hereunder AS IS and with all faults and buyer recognizes that there are no warranties of seller which extend beyond the description of the goods sold on the face hereof. Seller hereby disclaims any warranties, expressed or implied, of merchantability of the goods sold hereunder or of fitness for the particular purpose for which such goods are to be used by buyer. Buyer acknowledges that he has examined such goods as fully as buyer desired.

Contract Attached to Defendant's Motion for Summary Judgment as Exhibit B. Defendant originally acquired the truck and bucket as a trade-in. Defendant did not inspect, repair or modify the equipment before its sale. On September 6, 1989, plaintiff Bill Harber was working in the aerial bucket, which was in an elevated position. The bucket then sheared away from the derrick arm and fell to the ground, injuring Harber. Plaintiffs sued defendant in the Circuit Court for Stone County, alleging three counts. The first count alleges strict liability, while the second and third counts allege a breach of warranty. Defendant removed the case to this court, and now moves the court for summary judgment.

SUMMARY JUDGMENT

Summary judgment is appropriate where "the pleadings, depositions, answers to interrogatories, and admissions on file, together with affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Fed. R.Civ.P. 56(c). Facts must be viewed in the light most favorable to the nonmoving party, who must be given the benefit of all reasonable inferences which may be made from the facts disclosed in the record. Adickes v. S.H. Kress & Co., 398 U.S. 144, 90 S.Ct. 1598, 26 L.Ed.2d 142 (1970); Raschick v. Prudent Supply, Inc., 830 F.2d 1497, 1499 (8th Cir.1987), cert. denied, 485 U.S. 935, 108 S.Ct. 1111, 99 L.Ed.2d 272 (1988).

If a party is unable to make a sufficient showing as to some essential element of its case upon which it will bear the ultimate burden of proof at trial, all other facts are necessarily immaterial. Celotex Corp. v. Catrett, 477 U.S. 317, 322-23, 106 S.Ct. 2548, 2552, 91 L.Ed.2d 265 (1986). A party seeking summary judgment bears the initial burden of demonstrating to the court that an essential element of the non-moving party's case is lacking, Id. The burden then shifts to the non-moving party to come forward with sufficient evidence to demonstrate that there is a factual controversy as to that element, or to explain why such evidence is not currently available. Id.; Fed.R.Civ.P. 56(e). If the nonmoving party fails to so respond, summary judgment, if appropriate, shall be entered against such party. Fed.R.Civ.P. 56(e). The standard for determining whether a factual dispute is genuine is the same as the standard applied to motions for a directed verdict. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250, 106 S.Ct. 2505, 2511, 91 L.Ed.2d 202 (1986). The nonmoving party must come forward with sufficient evidence to allow a reasonable jury to find in its favor. Id. at 251, 106 S.Ct. at 2511-12.

DISCLAIMER OF WARRANTIES

Assuming plaintiffs have stated causes of action in counts II and III for breaches of warranty,¹ the court must nevertheless grant defendant's motion as to those counts. Missouri law expressly allows a seller to disclaim the warranty of merchantability and the warranty of fitness for a particular purpose. Mo.Rev. Stat. § 400.2-316. In order to exclude the implied warranty of merchantability successfully, the contract of sale must state specifically and conspicuously that the warranty of merchantability is being disclaimed. Under Mo.Rev.Stat. § 400.2-102, such a notice is "conspicuous" when "it is so written that a reasonable person against whom it is to operate ought to have noticed it...." Even when viewed in the light most favorable to the plaintiff, the disclaimer in the April 30, 1989, contract of sale is conspicuous as a matter of law. The contract reads "Seller hereby disclaims any warranties, expressed or implied, of merchantability of the goods sold hereunder. ..." There are no allegations that this language was buried or was inconspicuous.

The Missouri statute also provides that a seller may disclaim any warranty for fitness for a particular purpose by stating that "there are no warranties which extend beyond the description on the face hereof." Defendant met that standard in the EXCLUSION OF WARRANTIES section of the contract. Defendant even specifically excluded any warranty of "fitness for the particular purpose for which such goods are to be used by buyer." Defendants have come forward with a clear showing that essential elements of both causes of action are missing. Plaintiffs, in their response, do concede that defendant disclaimed all warranties. Therefore, defendant is entitled to judgment as a matter of law on counts II and III.

STRICT LIABILITY FOR A DEALER IN USED GOODS

For their first count, plaintiffs allege strict products liability. Plaintiffs claim the following to support that cause of action:

1. Defendant was a dealer in goods of like kind (new and used trucks with bucket assemblies);

2. The bucket was defective and unreasonably dangerous when first manufactured;

3. The defect continued in existence, and was in existence when the truck and bucket was sold to plaintiff's corporation;

4. The bucket was used in a manner reasonably anticipated and intended;

5. The defective and unreasonably dangerous condition produced injury to plaintiffs; and

6. The defective condition was hidden and could not have been discovered prior to the bucket's failure.

Plaintiff's Response to Defendant's Motion for Summary Judgment, at 2. Defendant argues that he is entitled to judgment as a matter of law because under Missouri law, a seller of used products cannot be held liable under strict liability since strict liability applies only to a designer, manufacturer or retailer of a product.

Missouri Law

The question of whether a dealer in used goods may be liable under the doctrine of strict liability is undecided under Missouri law. See Williams v. Nuckolls, 644 S.W.2d 670, 674 n. 1 (Mo.Ct.App.1982) ("Because of the absence of evidence to support a finding of a defect at the time the automobile left the seller's hands, we do not reach the controversial question of the applicability of Restatement of Torts (2d) § 402(a) to the sale of used cars."). The question has been ducked by other courts as well. See, e.g., Grimes v. Axtell Ford Lincoln-Mercury, 403 N.W.2d 781, 783 (Iowa 1987) (On certification from the Eighth Circuit Court of Appeals the Iowa Supreme Court declined to decide the question of strict liability for the seller of used goods, instead decided the case on the facts). Other jurisdictions have addressed this issue and there is no national consensus: states appear to be evenly split. See Allen E. Korpela, Annotation, Strict Liability in Tort: Liability of Seller of Used Product, 53 A.L.R.3d 337 (1973 & Supp. 1992) (collecting cases); W. Page Keeton et al., Prosser & Keeton on Torts, § 100, at 704 n. 24 (5th ed. 1984 and supp. 1988); James A. Henderson, Jr. & Aaron D. Twerski, A Proposed Revision of Section 402A of the Restatement (Second) of Torts, 77 Cornell L.Rev. 1512, 1518-19 (1992) (imposing strict liability on dealers in sued goods is the minority rule). Therefore, this issue is one of first impression in Missouri and there is no clear national trend that guides our result.

Normally a Federal Court looks to established state law to decide legal issues in diversity cases, but where "the state law issue is a question of first impression, a federal district court judge must apply the law as he believes the state's highest court would declare it to be if it had the opportunity to do so." Sell v. Bertsch & Co., 577 F.Supp. 1393, 1398 (D.Kan.1984). In making this analysis, this court may look to prior actions of the Missouri Supreme Court and the Missouri General Assembly, as well as decisions from other states.

The Missouri Supreme Court adopted the doctrine of strict liability in Keener v. Dayton Elec. Manufacturing Co., 445 S.W.2d 362 (Mo.1969). The court specifically adopted the rule as set forth in the Restatement (Second) Torts § 402A:

(1) One who sells any product in a defective condition unreasonably dangerous to the user 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 user or consumer without substantial change in the condition in which it is sold.

(2) The rule stated in Subsection (1) applies although

(a) the seller has exercised all possible care in the preparation and sale

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