Kern v. Frye Copysystems, Inc.

• Decision Date: 02 March 1995
• Docket Number: No. 93 Civ. 0331 (RWS).,93 Civ. 0331 (RWS).
• Citation: 878 F. Supp. 660
• Parties: William KERN and Dorothy Kern, Plaintiffs, v. FRYE COPYSYSTEMS, INC., Frye Industries, Inc., Wheelabrator-Frye Co., Frye Manufacturing Co., Impel Industries, Inc. and Pacific Industries, Inc., Defendants.
• Court: U.S. District Court — Southern District of New York

878 F. Supp. 660

William KERN and Dorothy Kern, Plaintiffs, v. FRYE COPYSYSTEMS, INC., Frye Industries, Inc., Wheelabrator-Frye Co., Frye Manufacturing Co., Impel Industries, Inc. and Pacific Industries, Inc., Defendants.

No. 93 Civ. 0331 (RWS).

United States District Court, S.D. New York.

March 2, 1995.

COPYRIGHT MATERIAL OMITTED

Finkelstein, Levine, Gittelsohn & Tetenbaum, Newburgh, NY (George A. Kohl, of counsel), for plaintiffs.

Bigham Englar Jones & Houston, New York City (James S. McMahon, George S. Evans, Jr., of counsel), for defendants.

OPINION

SWEET, District Judge.

Defendants Frye Copysystems, Inc. ("Copysystems") and Wheelabrator-Frye Co. ("Wheelabrator") have moved for summary judgment pursuant to Rule 56, Fed.R.Civ.P. against William Kern ("Kern") and Dorothy Kern (collectively the "Kerns").

For the reasons discussed below, Wheelabrator's motion with regard to the claims against it for breach of warranty and strict products liability are granted; its motion with respect to the claim of negligence against Copysystems is denied.

The Parties

Copysystems is a manufacturer located in Newburgh, New York. Wheelabrator is its parent company.

Frye Manufacturing Co., Pacific Industries, Inc., and Impel Industries, Inc. are predecessors to Wheelabrator by way of mergers and name changes.

William Kern is a machine operator formerly employed by Copysystems. Dorothy Kern is his wife.

Prior Proceedings

A related case, Kern v. Roemer Machine and Welding Co., (91 Civ. 615), was originally brought in 1991 by these same plaintiffs against Roemer, the manufacturer of the machine at issue in this case. The defendant, Roemer, impleaded Copysystems as a third-party defendant. In an Opinion dated October 30, 1992, 820 F.Supp. 719, this Court granted summary judgment to Roemer finding that as the manufacturer of the machine it could not be held liable for claims premised on defective design. This effectively dismissed the action as originally brought.

Pursuant to a Summons with Notice and Verified Complaint, the Kerns instituted an action in Supreme Court, Orange County, against defendants in December 1992. The complaint sought damages for personal injuries sustained by Kern. On the basis of diversity of citizenship, this action was timely removed to this Court on January 19, 1993. Argument was heard on the present motion to dismiss on November 2, 1994. Submissions were received from the parties until November 2, 1994, and the motion was considered fully submitted as of that date.

The Facts

This case is a personal injury action, including allegations of loss of consortium, stemming from an accident which occurred at Copysystems' Newburgh, New York plant. Kern was hired by Copysystems as a coating machine operator in 1983 and at the time underwent a one-month training period on the operation of such machines. On February 16, 1990, Kern, who had been employed full-time as a coating machine operator since 1983, was cleaning a pressure roll on a rotary coating machine (the "coating machine" or the "machine") with a rag while the machine was kept running. According to Kern, the rag was caught in the machine which dragged his hand between two pressure rolls, causing severe and permanent injuries to his right hand. Mr. Kern does not specifically recall how the accident occurred, and there were no witnesses.

The design specifications, instructions and blueprints for the rotary coating machine were provided by Frye Manufacturing Company, and the machine was constructed according to those specifications in or about 1969 and 1970. Frye Manufacturing Company merged with Pacific Carbon & Ribbon Manufacturing Company in 1963 and became Frye-Pacific Carbon & Ribbon Manufacturing Company. This entity changed its name in 1965 to Impel Industries, Inc., ("Impel"), and Impel changed its name in 1967 to Frye Manufacturing Company ("Frye Manufacturing2"). Frye Manufacturing2 merged with Pacific Industries, Inc. and became Frye Industries, Inc. Subsequently, in 1971 or 1972, Frye Industries, Inc. merged with other corporations and the resulting entity became the Wheelabrator-Frye Company. Thereafter, in 1972, Wheelabrator formed a subsidiary, Copysystems, which obtained all the assets of Wheelabrator's copy products division, including the rotary coater machine, in return for assuming all of the division's liabilities. To sum up, the succession of liability arising from the manufacture of the coater machine is Frye Manufacturing2 to Frye Industries to Wheelabrator to Copysystems. Between 1984 and 1985, Copysystems made changes to up-grade the machine, including changing the machine's motors and replacing the control panel.

The Kerns' complaint alleges three causes of action against the defendants for negligence, breach of warranty, and strict products liability. Each claim is premised on the contention that the rotary coater machine was defectively designed because it failed to include a cover guard or dual-hand controls, which would prevent the type of accident that precipitated Kern's injuries, and that Wheelabrator and Copysystems are the successors in liability to the company that manufactured the machine, Frye Manufacturing Company.

Wheelabrator has interposed affirmative defenses alleging that the Kerns have failed to state a claim upon which relief may be granted and that any injuries sustained by Kern were caused by his own negligence and that he assumed the risk.

The Motions

The defendants have moved for summary judgment, contending that they are immune from any common-law action by New York's Worker's Compensation Law §§ 11 and 29(6), that the Kerns' breach of warranty claim is time barred, and that the strict liability claim has no basis in law or fact. Defendant Wheelabrator further contends that if any liability is found, it must be attributable to its subsidiary, Copysystems; and a parent corporation may not be held liable for the acts of its subsidiary.

Discussion

I. Standards for Summary Judgment

Summary judgment procedures, in accordance with Rule 56, facilitate the overall purpose of the Federal Rules of Civil Procedure, which are designed "to secure the just, speedy and inexpensive determination of every action." Fed.R.Civ.P. 1; Celotex Corp. v. Catrett, 477 U.S. 317, 327, 106 S.Ct. 2548, 2555, 91 L.Ed.2d 265 (1986). Rule 56(c) provides that summary judgment "shall be rendered forthwith if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255, 106 S.Ct. 2505, 2513-14, 91 L.Ed.2d 202 (1986); Moller v. N. Shore Univ. Hosp., 12 F.3d 13, 15 (2d Cir. 1993).

On a motion for summary judgment, all inferences to be drawn from the underlying facts and all doubts as to the existence of a genuine issue for trial must be resolved in favor on the party opposing the motion. Brody v. Town of Colchester, 863 F.2d 205, 210 (2d Cir.1988). If, when "viewing the evidence produced in the light most favorable to the nonmovant ... a rational trier could not find for the movant, then there is no genuine issue of material fact and entry of summary judgment is appropriate." Binder v. Long Island Lighting Co., 933 F.2d 187, 191 (2d Cir.1991). The substantive law identifies which facts are material, and "only disputes over facts that might affect the outcome of the suit under the governing law will properly preclude the entry of summary judgment." Anderson, 477 U.S. at 248, 106 S.Ct. at 2510. In resolving a motion for summary judgment, a judge will not "weigh the evidence and determine the truth of the matter"; rather, the judge merely will "determine whether there does indeed exist a genuine issue for trial." Id. at 249, 106 S.Ct. at 2511.

The party seeking summary judgment bears the initial burden of informing the court of the basis for its motion and identifying which materials "it believes demonstrate the absence of a genuine issue of for trial." Celotex Corp., 477 U.S. at 323, 106 S.Ct. at 2553; See Bay v. Times Mirror Magazines, Inc., 936 F.2d 112, 116 (2d Cir.1991). If a motion for summary judgment is properly made, the burden shifts to the non-moving party to "set forth specific facts showing that there is a genuine issue for trial." Fed. R.Civ.P. 56(e); Anderson, 477 U.S. at 250, 106 S.Ct. at 2511. To defeat a motion for summary judgment, the non-movant must "do more than simply show that there is some metaphysical doubt as to the material facts" concerning those issues which the moving party has sustained its burden or those which the non-moving party itself bears the burden of proof. Matushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586, 106 S.Ct. 1348, 1355-56, 89 L.Ed.2d 538 (1986). The non-movant must establish the existence of enough evidence such that a jury could return a verdict in his favor. See Anderson, 477 U.S. at 247-51, 106 S.Ct. at 2509-11. Entry of summary judgment indicates that under the governing law no reasonable jury could return a verdict for the losing party. Coach Leatherware Co. v. AnnTaylor, Inc., 933 F.2d 162, 167 (2d Cir. 1991).

II. Assumption of Liability

The general rule of successor liability is that a corporation which acquires the assets of another — the predecessor — is not liable for the torts of its predecessor, unless: (1) the successor expressly or impliedly assumed such liability; (2) the transaction amounted to a consolidation or merger of the seller and purchaser; (3) the purchaser was a mere continuation of the seller; or (4) the transaction was entered into fraudulently for the purpose of escaping such liability. Diaz v. South Bend Lathe Inc., 707 F.Supp. 97, 99-100 (E.D.N.Y.1989); Schumacher v. Richards Shear Co., Inc., 59 N.Y.2d 239, 244-45, 464 N.Y.S.2d 437, 451 N.E.2d 195 (1983). As...