Mahalsky v. Salem Tool Company

• Decision Date: 14 June 1972
• Docket Number: No. 72-1034.,72-1034.
• Citation: 461 F.2d 581
• Parties: Edward MAHALSKY and Paul Logue et al., Plaintiffs-Appellants, v. The SALEM TOOL COMPANY, Defendant-Appellee.
• Court: U.S. Court of Appeals — Sixth Circuit

461 F.2d 581 (1972)

Edward MAHALSKY and Paul Logue et al., Plaintiffs-Appellants, v. The SALEM TOOL COMPANY, Defendant-Appellee.

No. 72-1034.

United States Court of Appeals, Sixth Circuit.

June 14, 1972.

Richard M. Markus, Cleveland, Ohio, for plaintiffs-appellants; Sindell, Sindell, Bourne, Markus, Stern & Spero, Cleveland, Ohio, on brief.

Barry L. Springel, Cleveland, Ohio, for defendant-appellee; James C. Sennett, Jr., Jones, Day, Cockley & Reavis, Cleveland, Ohio, on brief; Robert W. Poore, Jones, Day, Cockley & Reavis, Cleveland, Ohio, of counsel.

Before WEICK, EDWARDS and CELEBREZZE, Circuit Judges.

WEICK, Circuit Judge.

This is a products liability case involving questions of conflict of laws. The suit was brought in the United States District Court for Northern Ohio, by Global Coal Mining Company (Global), a Pennsylvania partnership, against an Ohio manufacturer, The Salem Tool Company (Salem), to recover damages for breach of contract and of express and implied warranties, arising out of the sale to Global by Salem's distributor, Boyer Equipment Company (Boyer), of an allegedly defective augering machine or coal recovery drill, which is used to extract pieces of coal from exposed seams of coal. It was alleged that the augers cracked or broke during drilling operations, and that plaintiffs were forced to cease their mining business, and sustained damages as a result thereof.

Jurisdiction of the Court was based on diversity of citizenship.

The defendant filed a motion for summary judgment on the ground that plaintiffs' action was barred by Ohio's two-year statute of limitations, Ohio Rev.Code § 2305.10, which provides as follows:

"§ 2305.10 Bodily injury or injury to personal property.

"An action for bodily injury or injuring personal property shall be brought within two years after the cause thereof arose."

The District Judge considered the motion on evidence consisting of discovery depositions and answers to interrogatories. In a well-considered memorandum opinion and order, the District Judge held that plaintiffs' action, which was filed more than twenty-eight months after the damage to the auger and the cessation of operations of plaintiffs' business, was barred by the two-year Ohio statute of limitations. Plaintiffs appeal. We affirm.

Neither side disputes the fact that Pennsylvania substantive law is controlling. The District Court reached this result, correctly concluding that in this diversity case Ohio conflict of laws rules govern. Klaxon Co. v. Stentor Elec. Mfg. Co., 313 U.S. 487, 61 S.Ct. 1020, 85 L.Ed. 1477 (1941).

In his memorandum opinion the District Judge stated:

"Applying either the place of making rule, 9 O.Jur.2d Conflict of Laws § 62 (1954), or the place of performance rule, 9 O.Jur.2d Conflict of Laws § 53 (1954), it would appear that the substantive law of Pennsylvania is controlling. See Standard Agencies, Inc. v. Russell, 100 Ohio App. 140, 143; 135 N.E.2d 896 (Drake County, 1954) and Alropa v. Kerchwehm Kirchwehn, 138 Ohio St. 30; 33 N.E.2d 655 (1941). See also Pipe Welding Supply Co. v. Gas Atmospheres, Inc., 201 F.Supp. 191 (N.D.Ohio 1961). The contracts between plaintiffs and Boyer Equipment Company were made in Pennsylvania; negotiations pursuant to the contracts occurred in Pennsylvania; and delivery of the augering machine `the last act necessary to make the contract complete,\' Brocalsa Chemical Co. v. Langenskamp Langsenkamp, 32 F.2d 725, 729 (6th Cir. 1929), occurred in Pennsylvania."

Global contends that the form of its action is in contract for breach of contract and that the four-year statute of limitations contained in the Uniform Commercial Code for actions in contract, which Code was in force in both Ohio and Pennsylvania, applies. Oh.R.C. § 1302.98; Pennsylvania Statutes Annotated, Ch. 12a, § 2-725.

The only trouble with this contention is that questions relating to the form of the action, i. e., the remedy, are procedural and are to be determined by the law of the forum. Bank of U. S. v. Donnally, 8 Pet. 361, 33 U.S. 361, 8 L. Ed. 974 (1834); LeRoy v. Beard, 8 How. 451, 49 U.S. 451, 12 L.Ed. 1151 (1850); Willard v. Wood, 135 U.S. 309, 10 S.Ct. 831, 34 L.Ed. 210 (1890); Marks v. Kindel, 41 F.2d 584, 585 (6th Cir. 1930). In an action in the United States District Court in Ohio, the procedural law of Ohio must be applied in determining whether the cause of action sounds in tort or contract, and in deciding what is the appropriate statute of limitations. Levine v. Levine, 209 F. Supp. 564 (D.Del.1962).

As Mr. Justice Story stated in Donnally, supra, 8 Pet. at 372:

"The general principle adopted by civilized nations is, that the nature, validity, and interpretation of contracts, are to be governed by the law of the country where the contracts are made, or are to be performed. But the remedies are to be governed by the laws of the country where the suit is brought; or, as it is compendiously expressed, by the lex fori. No one will pretend, that because an action of covenant will lie in Kentucky, on an unsealed contract made in that State, therefore, a like action will lie in another State, where covenant can be brought only on a contract under seal. It is an appropriate part of the remedy, which every State prescribes to its own tribunals, in the same manner in which it prescribes the times within which all suits must be brought. The nature, validity, and interpretation of the contract may be admitted to be the same in both States; but the mode by which the remedy is to be pursued, and the time within which it is to be brought, may essentially differ. The remedy, in Virginia, must be sought within the time, and in the mode, and according to the descriptive characters of the instrument, known to the laws of Virginia, and not by the description and characters of it, prescribed in another State."

See also: Restatement, Conflict of Laws, § 587 (1934); Restatement (Second), Conflict of Laws, § 124 (1971). This general principle is the law of Ohio, 9 Oh.Jur.2d, Conflict of Laws, § 111 (1954).

Global complains about the age of some of the decisions of the Supreme Court of the United States. The fact that they are old does not make them bad. They have withstood the ravages of time and have never been overruled. The principle which they have enunciated has been followed and applied in recent cases and authority as we have shown.

Although in federal practice we have only one form of action known as a civil action, it is frequently necessary to determine the nature and character of the civil action in order to adjudicate the rights of the parties. It was necessary to do so in the present case.

Ohio has no remedy for and does not recognize an action in contract absent privity, 11 Oh.Jur.2d Contracts, § 171, but Pennsylvania has. Kassab v. Central Soya, 432 Pa. 217, 246 A.2d 848 (1968). Here, no privity existed between Global and Salem, so that such an action in contract cannot be maintained in Ohio. Under Pennsylvania law, a contract action would lie in that state and its 4-year statute of limitations for actions on contract would govern.

The Ohio Supreme Court held that without privity an action in tort for injury to personal property due to a defective product can be maintained for breach of an implied warranty, and it is subject to the two-year statute of limitations under Oh.R.C. § 2305.10. Lonzrick v. Republic Steel Corp., 6 Ohio St.2d 227, 218 N.E.2d 185 (1967); United States Fidelity & Guaranty Company v. Truck and Concrete Equipment Company, 21 Ohio St.2d 244, 257 N.E.2d 380 (1970). Thus, Global's first cause of action for breach of...