Kaiser Steel Corp. v. Westinghouse Elec. Corp.

• Decision Date: 25 February 1976
• Citation: 127 Cal.Rptr. 838,55 Cal.App.3d 737
• Court: California Court of Appeals Court of Appeals
• Parties: KAISER STEEL CORPORATION, a corporation, Plaintiff and Appellant, v. WESTINGHOUSE ELECTRIC CORPORATION, a corporation, Defendant and Respondent. Civ. 43902.

Page 838

127 Cal.Rptr. 838

55 Cal.App.3d 737

KAISER STEEL CORPORATION, a corporation, Plaintiff and Appellant, v. WESTINGHOUSE ELECTRIC CORPORATION, a corporation, Defendant and Respondent.

Civ. 43902.

Court of Appeal, Second District, Division 1, California.

Feb. 25, 1976.

Kirtland & Packard, Loyd W. Reed, and Robert E. Moore, Jr., Los Angeles, for plaintiff and appellant.

Lynberg & Connor, Charles A. Lynberg, Morgan, Wenzel & McNicholas, and Patrick E. Quinlivan, Los Angeles, for defendant and respondent.

THOMPSON, Associate Justice.

In this appeal from a judgment for the defendant in an action asserting defendant's liability on theories of products liability, breach of express warranty, breach of the implied warranties of fitness and merchantability, negligence, and 'res ipsa loquitur,' we conclude that the trial court erred in applying an improper standard in ruling upon plaintiff's motion to be relieved of facts admitted pursuant to Code of Civil Procedure section 2033 for failure to deny under oath requests for admissions. That conclusion requires that summary judgment granted by the trial court to the defendant on the causes of action sounding in express and implied warranty be reversed and that a judgment based upon nonsuit granted by the trial court on the cause of action for negligence also be reversed. We conclude further that the trial court properly granted a nonsuit after hearing evidence on plaintiff's cause of action for products liability because plaintiff is not within the class of persons protected by that doctrine. Accordingly, we reverse the judgment as to all causes of action except that sounding in products liability.

Plaintiff filed its complaint commencing the case at bench on November 28, 1967. The complaint is framed in six causes of action. The first alleges the ultimate facts of strict liability of a manufacturer supplying a defective product. The second asserts breach of an express warranty that an electric motor supplied by defendant to plaintiff for use in plaintiff's steel mill was free from defects. The third and fourth causes of action allege the facts of defendant's breach of the warranties of fitness and merchantability. The fifth asserts that the generator was negligently manufactured, and the sixth cause of action amplifies the fifth, adding the factual basis for the application of the doctrine of res ipsa loquitur. The causes of action seek damages of $2,500,000.

Defendant answered the complaint, denying its charging allegations and asserting the affirmative defense, among others, that the generator was sold pursuant to an agreement limiting defendant's obligation to correction, by replacement or repair, of defects in workmanship or material developing in normal use during the one year period from date of shipment and relieving defendant of liability for consequential damages.

On December 9, 1968, pursuant to Code of Civil Procedure section 2033, defendant served a request for admissions upon plaintiff. Requests 2 through 5 in combination ask plaintiff to admit or deny that the electric motor was furnished, sold and accepted subject to the contractual provision limiting defendant's liability alleged in its affirmative defense. No time for response to the request for admissions is stated in the request. On January 28, 1969, defendant responded to the request for admissions, denying requests 2 through 5 as well as others. The response, however, was not under oath.

Defendant did not, pursuant to Code of Civil Procedure section 2034, subdivision (a), move for an order that the matters of fact which were the subject of the request for admissions be deemed admitted. Rather, both parties proceeded through extensive discovery and a flurry of pretrial motions inherently bottomed on the existence of a factual issue concerning the nature of the contract between plaintiff and defendant. ¹ On April 3, 1973, less than one month prior to the date the case was scheduled for trial, defendant filed a notice of motion for summary judgment. Defendant asserted that plaintiff's responsive denial to the requests for admissions not having been sworn as required by Code of Civil Procedure section 2033, requests 2 through 5 were deemed admitted. Hence, defendant argued, the contractual provisions asserted in the affirmative defense barred plaintiff's claim arising out of a failure of the motor occurring more than one year after it was delivered. The motion is supported by an affidavit and declaration establishing the date of delivery and date of failure of the motor.

On April 23, 1973, plaintiff served and filed another response to the request for admissions, denying requests 2 through 5, this time under oath. It opposed the motion for summary judgment with declarations establishing the factual issue of the existence of the contractual provision relied upon by defendant as part of the agreement for sale of the motor. The declarations state that the provision was expressly superseded by a later provision of plaintiff's purchase order which also provided that plaintiff reserved the right to make claims for unsatisfactory or defective merchandise and retained the warranties of merchantability and fitness.

In its points and authorities resisting the motion for summary judgment, plaintiff argued that an unsworn denial of a request for admissions could be corrected by verification at a later date so long as the proponent of the request was not prejudiced and that the conduct of the parties in the litigation showed no prejudice to defendant. Defendant argued, in response, that plaintiff was conclusively bound by failure to file a sworn denial because of the long passage of time and plaintiff's failure to move for relief from default pursuant to Code of Civil Procedure section 473.

On April 26, 1973, the trial court granted defendant a summary judgment on the three causes of action framed in express and implied warranty. Its minute order states: 'Plaintiff has failed to file and serve a sworn statement in response to defendant's request for admissions within the time provided by CCP 2033 and thus the relevant matters of fact set forth in the request are deemed admitted. These include the fact that the warranty provision of the Westinghouse proposal was part of the contract between the parties. It is too late to relieve plaintiff of this default under CCP 473. . . . The warranty provision provides that (defendant's) compliance with its obligations under said provision constitutes a fulfullment (sic) of all . . . liabilities in respect to the apparatus sold.' The court also granted a motion for summary judgment on the cause of action asserting res ipsa loquitur, stating that the theory was available in plaintiff's cause of action for negligence.

The trial court denied defendant's motion for summary judgment on plaintiff's causes of action alleging negligence and strict products liability. Trial on the issue of liability alleged in those two causes of action commenced before a jury, the issue of damages having been bifurcated on defendant's motion. Plaintiff's opening statement disclosed that the negligence cause was based upon the defective installation of rivets in the electric motor which became displaced by continued use causing a short circuit which destroyed the motor. Defendant moved for a nonsuit on the opening statement, asserting that the contractual limitation on liability deemed admitted by plaintiff's failure to serve and file a timely denial to the request for admissions barred defendant's liability for negligent construction of the motor. The trial judge, having declined to reconsider the earlier ruling, the motion was granted.

Plaintiff presented its evidence on strict products liability to the jury. That evidence established a defect in the welding of rivets in the motor which caused its destruction. It established also that destruction of the motor caused the portion of plaintiff's steel manufacturing plant in which it was used to shut down. Other evidence disclosed that the motor wad designed by defendant to plaintiff's specifications, that plaintiff's purchase order to defendant stated that: '. . . all merchandise hereby ordered is subject to inspection and testing by (plaintiff) within a reasonable time after arrival at the ultimate destination,' and that the motor was delivered to plaintiff unassembled and was then assembled and tested by an affiliate of plaintiff before it was placed in operation.

The trial court granted a nonsuit at the conclusion of plaintiff's case, thus terminating the litigation in defendant's favor. In this appeal from the resulting judgment, plaintiff contends: (1) the trial court prejudicially erred in determining that requests for admissions 2 through 5 were deemed conclusively admitted and in therefore granting summary judgment on the warranty causes of action and a nonsuit on the cause of action for negligence; (2) the court erred in granting the motion for summary judgment on the cause of action alleging the factual basis of res ipsa loquitur; (3) the trial court erroneously granted defendant's motion to bifurcate the trial; and (4) the trial court erroneously granted a nonsuit on the cause of action in strict products liability.

Requests for Admissions

At the time of the trial court's judgment, Code of Civil Procedure section 2033, subdivision (a), stated in pertinent part: 'After service of summons or the appearance of a party, any other party who has appeared in the action may file and serve upon such party . . . a written request for the admission by the latter of . . . the truth of any relevant matters of fact set forth in the request. . . . Each of the matters of which an admission is requested shall be deemed admitted unless, within a period designated in the request, not less than 20 days after service thereof or within such shorter or longer time as the court may allow on motion and notice, the party to whom the...