Johnson v. National Sea Products, Ltd.

• Decision Date: 01 August 1994
• Docket Number: No. 94-1105,94-1105
• Citation: 35 F.3d 626
• Parties: 24 UCC Rep.Serv.2d 784 Michael JOHNSON, et al., Plaintiffs-Appellants, v. NATIONAL SEA PRODUCTS, LTD., et al., Defendants-Appellees. . Heard
• Court: U.S. Court of Appeals — First Circuit

Page 626

35 F.3d 626

24 UCC Rep.Serv.2d 784

Michael JOHNSON, et al., Plaintiffs-Appellants, v. NATIONAL SEA PRODUCTS, LTD., et al., Defendants-Appellees.

No. 94-1105.

United States Court of Appeals First Circuit.

Heard Aug. 1, 1994.

Decided Sept. 20, 1994.

Joseph G. Abromovitz, with whom Marsha A. Morello, George F. Leahy and Abromovitz & Leahy, P.C., Boston, MA, were on brief for appellants.

Brian P. Voke, with whom Richard P. Campbell, Kathleen M. Guilfoyle, Campbell & Associates, P.C., Boston, MA, David T. DeCelles, and Avery, Dooley, Post & Avery, Belmont, MA, were on brief for appellees.

Before TORRUELLA, SELYA and CYR, Circuit Judges.

TORRUELLA, Circuit Judge.

Appellants Michael and Kelli Johnson ("plaintiffs") filed an action alleging negligence and breach of warranty against defendant National Sea Products, Ltd., in connection

with injuries that Michael Johnson ("Johnson") suffered when a pallet of frozen fish fell upon him. At trial, the jury found in favor of the defendant on the negligence claim. The court directed a verdict for the defendant on plaintiffs' breach of warranty claim. Plaintiffs ask this court to grant them a new trial due to errors allegedly committed by the district court. Plaintiffs also ask this court to reverse the district court's order directing a verdict on the breach of warranty claims. We affirm the district court in all respects.

I. BACKGROUND

On May 19, 1989, Michael Johnson was injured when a pallet loaded with boxes of frozen cod fillets ("the fish") fell on him while he was working as a stock-loader at Condyne, Inc., a public warehouse in Avon, Massachusetts, which stored frozen foods.

National Sea is a Canadian corporation engaged in the business of harvesting, processing and distributing fish. Among their many products are Hi-liner cod fillets which are frozen, packed in sealed plastic containers, placed in boxes, and then packed into "master cartons" for shipment. Before being shipped, National Sea piles the master cartons on several 40" X 48" wooden pallets and applies a plastic stretch wrap to hold the cartons together and to keep them from falling off the pallet.

National Sea consists of two corporations: National Sea Products, Ltd., a Canadian company, and National Sea Products, Inc., a United States company. The Canadian corporation is the parent company, and the United States corporation is a wholly owned subsidiary. These corporations are, in turn, divided into several operating units, among which is Canada Products-Corporate Sales ("Canada Products"), a division of the Canadian corporation, with responsibility for servicing major accounts.

One of Canada Products' major accounts was Long John Silver, also known as Jerrico, Inc., which was expected to be the purchaser of the fish involved in this case. The fish was processed and packaged according to specifications provided by Long John Silver and the cartons were placed on the pallets for shipment according to Long John Silver's specifications for pallet configuration, which required that each layer have eight cartons and that there be five layers on the pallet. Sometimes, for storage at its Lunenburg, Nova Scotia plant, National Sea uses a different pallet configuration for these cartons, placing them ten cartons to a layer, three layers high.

Although the fish involved in this case were prepared, packaged and placed on pallets to Long John Silver's specifications, in anticipation of a possible order, there was, at the time of Johnson's accident, no order by Long John Silver for these fish.

The fish in question were shipped from the Canadian corporation to Canada Products care-of the Condyne public warehouse. Generally, when the shipment arrives at Condyne, a bill for storage is generated and sent to the American corporation, which enters the shipment in its records and is responsible ultimately for paying the storage bill. The ownership of the goods does not pass, however, until the end of the month when there is an intercompany financial reconciliation of all transferred products. Ultimately, Long John Silver purchased the fish in question. The fish, however, were not purchased or shipped to Long John Silver until the following month, long after the accident.

When the shipment of fish arrived at Condyne, the Condyne receiver ordered the truck driver, an employee of Carleton County Brokerage, Ltd., ¹ to remove the top layer from each of the pallets, reducing them to four layers of eight cartons each, and to make up new pallet loads with the removed boxes. Apparently this was done so that the pallet loads would fit into Condyne's rack storage system. After the truck driver had Rather than placing the fish in the rack storage facilities, however, Johnson, using a forklift, bulk stacked or free stacked the fish by piling one pallet load on top of another, four pallet loads high with a fifth pallet load spanning the gap between each stack of four. Each pallet load was four feet high, and weighed over one ton. Johnson was piling these heavy loads 16 to 20 feet high.

reconfigured the boxes on the pallets, the shipment was 22 pallet loads instead of the original 17.

Johnson testified that the accident occurred as he stacked the pallet loads four and five loads high. He testified that as he attempted to move the two highest pallet loads in the stack, the top pallet fell. Johnson jumped from the truck and ran, but was hit by the pallet load. There is no evidence as to whether the pallet which fell had been configured by National Sea or by Carleton's driver.

In his suit, Johnson alleged that National Sea, as seller of the fish, packaged the fish in an unstable palletized configuration rather than National Sea's own recommended 3 X 10 configuration. The method of stacking by National Sea created a condition referred to by the witnesses as "pyramiding" when the pallets of fish were bulk stacked, i.e., one pallet stacked atop another, four or five pallets high.

The trial in the district court commenced on November 29, 1993. Much of the trial concerned whether National Sea should have foreseen that the pallet loads of fish would be bulk stacked four or five loads high rather than stored in racks. It was undisputed that the pallet configuration of the cartons of fish was entirely safe for rack storage and that Johnson would not have been injured if the pallet loads had been placed in racks at Condyne.

Following the close of the evidence, the district court judge granted National Sea's motion for a directed verdict on plaintiffs' breach of warranty counts because it found that the goods had not reached an ultimate consumer and therefore, no warranties attached. On December 16, Rule 49(b) interrogatories were submitted to the jury.

The jury answered the following interrogatory in the negative, thereby precluding further response to the subsequent interrogatories and disposing of the case in favor of National Sea:

Was it reasonably foreseeable by the Defendant, National Sea Products, Ltd. that the pallet loads in question would be stacked at Condyne Freezers by a forklift truck one on top of another to a level of four/five pallet loads high?

On appeal, the plaintiffs contend that: 1) the district court erred in granting National Sea's motion for a directed verdict as to the plaintiffs' breach of warranty claims; 2) statements made by defense counsel during closing argument were improper and resulted in reversible error; and 3) the court erred in instructing the jury on the issue of foreseeability and defective design.

II. DISCUSSION

A. Breach of Warranty Claims

The plaintiffs claim that Michael Johnson was entitled to benefit from warranties of merchantability and that the district court erred in dismissing their breach of warranty claims. Under Massachusetts law, "a warranty of merchantability is implied in two situations: (1) when title to goods passes for a price, and (2) when a contract is made for the future passing of title to goods for a price." Mason v. General Motors Corporation, 397 Mass. 183, 187-88, 490 N.E.2d 437, 440 (1986).

Plaintiffs have not presented any evidence showing that there was a sale of goods, or any contract for sale, particularly one involving themselves. Therefore, we need not determine whether Johnson was a member of the class of persons entitled to benefit from any warranties of merchantability that might attach to a sale of the fish.

There was no evidence of a sale of goods between National Sea and Long John Silver. Rather, the evidence indicates that at the time of the accident, Long John Silver had not yet placed an order for these fish, and that the fish might have been sold to anyone. There was no contract for sale between National Sea and Long John Silver: no price had been determined, no delivery date had been set, and no quantity or other terms had been specified.

Nor was there a sale or contract for sale from the National Sea parent to the United States subsidiary. The fish were owned, at the time of the accident, by Canada Products, a division of the Canadian corporation. The fish could have been sold at the end of the month to the United States corporation at a price to be determined at that time, but that was not a certainty. Instead, the fish might have been disposed of or returned to Canada prior to any transfer. Under these circumstances, absent any sale of the fish or contract for the sale of the fish, no warranty of merchantability could have attached.

A directed verdict is appropriate where the evidence is such that a reasonable person could be led to only one conclusion, namely, that the moving party is entitled to judgment as a matter of law. Luson Int'l Distributors, Inc. v. Fabricating & Production Machinery, Inc., 966 F.2d 9, 10-11 (1st Cir.1992). Therefore, the district court did not err in directing a verdict on this issue.

B. Defense Counsel's Closing Argument

As grounds for a new trial, the plaintiffs charge that National Sea's co...