Jaycox v. Terex Corp.
| Decision Date | 28 May 2021 |
| Docket Number | Case No. 4:19-cv-02650 SRC |
| Citation | 541 F.Supp.3d 954 |
| Parties | Jason JAYCOX, Plaintiff(s), v. TEREX CORPORATION, et al., Defendant(s). |
| Court | U.S. District Court — Eastern District of Missouri |
Todd R. Nissenholtz, Cofman Townsley LLP, Clayton, MO, for Plaintiffs.
Joseph R. Swift, John R. McLeod, Baker Sterchi LLC, St. Louis, MO, for Defendants Terex Corporation, Terex USA, LLC.
Heather J. Hays, Andrew John Andereck, Rynearson Suess LLC, St. Louis, MO, for Defendant Continental Biomass Industries Inc.
Jason Jaycox fell from atop a horizontal grinder in October 2014, landing on his head. His fall resulted in severe and debilitating injuries to his spine
and skull. At the time, Jaycox did not know who was responsible for his injuries. Nearly five years later, Jaycox brought a product-liability claim against the entities responsible for the defective grinder. Although Defendant Continental Biomass Industries, Inc. manufactured and sold the grinder at issue, Defendant Terex USA, LLC bought almost all of Continental's assets and liabilities in an asset purchase agreement in 2015. Defendants point the finger at each other, seeking to avoid liability for Jaycox's injuries through the complexities of corporate succession and their own asset purchase agreement.
Jaycox worked as an operations manager at Hansen's Tree Service. Doc. 94 at ¶ 8. While cleaning the horizontal grinder at the end of the day, Jaycox slipped and fell off the side of the grinder. Id. Jaycox alleges the grinder was defective and unsafe for its intended use because it did not include proper safety protections or sufficient warnings. Doc. 122. He asserts three counts against Defendants: (1) strict liability; (2) negligence; and (3) breach of warranty. Id.
Continental moves for summary judgment against Jaycox, claiming that in the asset purchase agreement Terex USA assumed sole liability for Jaycox's claims. Doc. 71. Terex USA and Terex Corporation move for summary judgment against Jaycox, arguing that Terex USA did not assume liability for injuries that preceded the 2015 asset purchase agreement.1 Doc. 76. Jaycox moves for partial summary judgment against Terex USA to hold it liable for his damages, in addition to Continental. Doc. 79. The Court grants Jaycox's motion for partial summary judgment, Doc. 79, grants in part and denies in part Continental's motion for summary judgment, Doc. 71, and denies Terex's motion for summary judgment, Doc. 76.
Except as otherwise noted, the Court finds the following facts not genuinely in dispute in this case. See Fed. R. Civ. P. 56(g).
In 2008, Continental sold a CBI Magnum Force 6800 horizontal grinder to Hansen's Tree Service, the same grinder that injured Jaycox. Doc. 94 at ¶ 6. Jaycox worked for Hansen's, and fell from the grinder while cleaning it in October 2014, resulting in serious bodily injuries. Id. Jaycox filed suit against Continental five years later, in September 2019. Doc. 1; Doc. 94 at ¶ 9. Jaycox alleges that Continental's grinder caused him severe and permanent injuries. Doc. 1 at ¶ 27. Continental did not know of Jaycox's injury until he filed suit. Doc. 94 at ¶ 11; Doc. 97 at ¶ 21–22.
On April 21, 2015, Continental, Terex USA, and several other parties entered into an asset purchase agreement to buy "substantially all" of Continental's assets. Doc. 97 at ¶ 1–6. Continental sold certain assets and liabilities to Terex USA, including several "Assigned Contracts" from Continental with "Standard Warranty Terms and Conditions." Id. at 4–5; Doc. 93-1 at 4–6, Schedule 1.1(a)(vii).
In a section titled "Assumed Liabilities," Terex USA agreed to assume "only those liabilities of the Company relating to the Business as set forth on the Balance Sheet ..." Doc. 97 at ¶ 7; Doc. 93-1 at 4, Article 1, Section 1.4. This section also set forth a non-exhaustive list of Terex USA's assumed liabilities. Doc. 93-1 at 4–5, Article 1, Section 1.4. In section 1.4(b), Terex USA assumed "all liabilities and obligations arising under or relating to the Assigned Contracts, including warranty liabilities ..." Id. ; Doc. 97 at ¶ 6. Section 1.4(f) elaborated that:
In addition to the foregoing, [Terex USA] expressly assumes all liabilities and obligations of [Continental] with respect to future occurrences of product liability and warranty claims whether such obligation or liability relates to machinery and equipment manufactured by [Continental] before or after the Closing Date.
Doc. 97 at ¶ 7; Doc. 93-1 at 4–5, Article 1, Section 1.4. In the very next section, Terex USA denied assumption of several "Excluded Liabilities," including any potential third-party "claim arising out of the matter forth in Schedule 1.5(c)[.]" Doc. 97 at ¶ 8–9; Doc. 93-1 at 5, Article 1, Section 1.5. Curiously, no "Schedule 1.5(c)" exists, and the parties dispute whether another schedule contains the information referenced in Section 1.5(c). Doc. 93-1 at 79–80; Doc. 72 at 2; Doc. 97 at ¶¶ 11–12.
The asset purchase agreement also contains a choice-of-law provision, selecting Delaware law as the governing law for the agreement. Doc. 97 at ¶ 15; Doc. 93-1 at 39, Article 14, Section 14.10.
Rule 56(a) of the Federal Rules of Civil Procedure provides that "[t]he court shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." In ruling on a motion for summary judgment, the Court is required to view the evidence in the light most favorable to the non-moving party and must give that party the benefit of all reasonable inferences drawn from the underlying facts. AgriStor Leasing v. Farrow , 826 F.2d 732, 734 (8th Cir. 1987). The moving party bears the initial burden of showing both the absence of a genuine issue of material fact and entitlement to judgment as a matter of law. Anderson v. Liberty Lobby, Inc. , 477 U.S. 242, 250, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986) ; Fed. R. Civ. P. 56(a).
In response to the proponent's showing, the opponent's burden is to "come forward with ‘specific facts showing that there is a genuine issue for trial.’ " Matsushita Elec. Indus. Co. v. Zenith Radio Corp. , 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986) (quoting Fed. R. Civ. P. 56(e) ). Self-serving, conclusory statements without support are insufficient to defeat summary judgment. Armour and Co., Inc. v. Inver Grove Heights , 2 F.3d 276, 279 (8th Cir. 1993). Rule 56(c) "mandates the entry of summary judgment, after adequate time for discovery and upon motion, against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial." Celotex Corp. v. Catrett , 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986).
For the most part, the parties do not dispute the material facts for summary judgment. Instead, the parties disagree on the meaning of certain language in the asset purchase agreement ("APA") and which of the Defendants are therefore liable for Jaycox's claims. Continental and Jaycox both argue that Terex USA expressly assumed liability for all claims occurring after the closing date of the APA, so Terex USA is liable for Jaycox's claims. Docs. 71, 79. Terex responds that it only assumed liability for incidents occurring after the APA closing date, so Continental is liable. Doc. 76. Relatedly, Continental asserts that because Terex USA assumed liability for Jaycox's claims in the APA, Continental cannot be liable for Jaycox's claims as a matter of law. Doc. 71. The parties also dispute which state's law governs, and the Court begins its analysis there.
A federal court sitting in diversity applies the substantive law of the state in which the district court sits. Urban Hotel Dev. Co. v. President Dev. Co., L.C. , 535 F.3d 874, 877 (8th Cir. 2008). The obligation to apply state law extends to the forum state's choice-of-law principles. Klaxon Co. v. Stentor Elec. Mfg. Co. , 313 U.S. 487, 496, 61 S.Ct. 1020, 85 L.Ed. 1477 (1941) ; Winter v. Novartis Pharm. Corp. , 739 F.3d 405, 410 (8th Cir. 2014). The Court applies Missouri's choice-of-law rules. See Stricker v. Union Planters Bank, N.A. , 436 F.3d 875, 877 (8th Cir. 2006) (). Missouri courts apply the Restatement-of-Conflicts rules that require courts to make choice-of-law decisions on each particular issue at hand. See E. Prairie R-2 School Dist. v. U.S. Gypsum Co. , 813 F. Supp. 1396, 1401 (E.D. Mo. 1993) () (citing Restatement (Second), Conflicts of Law §§ 6(2)(c), 145 comment d, 188 comment d (1971)). This case raises two choice-of-law issues: 1) what law applies to determining liability as between Continental and Terex USA, i.e. what law governs interpretation of the APA, and 2) what law applies to determining who is liable to Jaycox, a tort victim who is a stranger to the APA.
Jaycox argues that despite the APA's selection of Delaware law, Missouri law should apply instead. Doc. 90 at 2 (citing Ronnoco Coffee, LLC v. Westfeldt Brothers, Inc. , 939 F.3d 914, 920 (8th Cir. 2019) ). For the reasons explained below, Delaware law applies to the APA.
Missouri generally enforces contractual choice-of-law provisions. Stone v. Crown Diversified Indus. Corp. , 9 S.W.3d 659, 666 (Mo. Ct. App. 1999) ; Sturgeon v. Allied Professionals Ins. Co. , 344 S.W.3d 205, 210 (Mo. Ct. App. 2011) ; see also Davis v. Citibank, N.A. , 2015 WL 928117, at *2 (E.D. Mo. 2015) (...
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