Martin v. Julius Dierck Equipment Co.

• Decision Date: 14 June 1976
• Citation: 43 N.Y.2d 583,384 N.Y.S.2d 479,52 A.D.2d 463
• Parties: , 19 UCC Rep.Serv. 1041 Dwight C. MARTIN, Respondent, v. JULIUS DIERCK EQUIPMENT CO. et al., Appellants. (and a third-party action).
• Court: New York Supreme Court — Appellate Division

Page 479

384 N.Y.S.2d 479

52 A.D.2d 463, 19 UCC Rep.Serv. 1041

Dwight C. MARTIN, Respondent, v. JULIUS DIERCK EQUIPMENT CO. et al., Appellants. (and a third-party action).

Supreme Court, Appellate Division, Second Department.

June 14, 1976.

Rivkin, Leff & Sherman, Freeport, for appellant Julius Dierck Equipment Co. (no brief filed).

Alexander, Ash, Schwartz & Cohen, New York City (Sidney A. Schwartz and Irwin H. Haut, New York City, of counsel), for appellant Raymond Corp.

Lawrence M. Rosenberg, New York City (Seymour Armstrong, New York City, of counsel), for respondent.

Before HOPKINS, Acting P.J., and COHALAN, DAMIANI, CHRIST and TITONE, JJ.

TITONE, Justice.

Plaintiff, a resident of the District of Columbia, was injured during the course of his employment at the premises of his employer, Western Electric Corporation, located in Arlington, Virginia. The accident occurred on June 7, 1968 while he was operating a fork lift truck which was manufactured by defendant Raymond Corporation (Raymond), and which was sold to Western Electric, 'f.o.b. Greene, New York', through Raymond's distributor, defendant Julius Dierck Equipment Co. (Dierck). Both the manufacturer and the distributor are New York State corporations. Plaintiff became 21 years-of-age on May 6, 1969.

The action was commenced against Dierck on May 21, 1971 and against Raymond on June 25, 1971. The complaint contains causes of action for negligence and breach of warranty against both New York firms. It alleges, Inter alia, that plaintiff sustained injuries when the fork lift truck which he was operating at the Western Electric warehouse in Arlington, Virginia malfunctioned and could not be stopped, causing him to be thrown therefrom.

At Special Term, both New York corporations moved for summary judgment, claiming that the matter is governed by the Virginia Statute of Limitations, which states that 'every action for personal injuries shall be brought within two years next after the right to bring the same shall have accrued' (Virginia Code (1950), § 8--24). They argued that the nonresident plaintiff's causes of action, for breach of warranty and for negligence, accrued without the State on May 6, 1969, the date of plaintiff's 21st birthday, and pointed out that the within action was commenced more than two years after that date. Therefore, concluded defendants, under the New York 'borrowing' statute (CPLR 202), as between the New York and Virginia Statutes of Limitations, they are entitled to the benefit of the one enacted in Virginia, which has the shorter period of time. CPLR 202 provides that, where a cause of action accrues outside of New York in favor of a nonresident, the action 'cannot be commenced after the expiration of the time limited by the laws of either the state (New York) or the place without the state where the cause of action accrued' (bracketed matter supplied). It should also be noted that, under Virginia decisional law, it has been held that an action to recover damages for personal injuries based upon a breach of warranty is essentially an action for personal injuries and, therefore, that the two-year limitation statute pertaining to personal injuries applies, rather than the statute pertaining to contracts (Friedman v. Peoples Serv. Drug Stores, 208 Va. 700, 160 S.E.2d 563).

Special Term rejected appellants' argument, citing Myers v. Dunlop Tire & Rubber Corp. (69 Misc.2d 729, 330 N.Y.S.2d 461, mod. 40 A.D.2d 599, 335 N.Y.S.2d 961). With respect to the breach of warranty claims, the Special Term held that they had accrued in New York, the place where the sale of the fork lift truck took place, and, therefore, that the New York 'borrowing' statute, pertaining to a nonresident's causes of action accruing outside the State, did not apply. Special Term further reasoned that since the warranty claims accrued in this State, New York's own four-year Statute of Limitations (Uniform Commercial Code, § 2--725) applied and, hence, the action as to said claims was timely brought in view of the fact that the Statute of Limitations was tolled until plaintiff reached his majority (see CPLR 208). As to the negligence cause of action, Special Term was of the opinion that, under our 'borrowing' statute, the Virginia Statute of Limitations applied since the injury occurred in that State and, as a result, such cause accrued there. However, it also held that in borrowing the Virginia statute, New York must apply the tolling provisions contained in section 8--33 of the Virginia Code (1950), because factual questions were presented with respect to whether jurisdiction was obtainable in Virginia over the New York corporations (under that state's long-arm statute (Virginia Code (1950), § 8--81.2)).

In Myers v. Dunlop Tire & Rubber Corp. (supra), upon which Special Term relied, a New York manufacturer shipped a tire f.o.b. to Kentucky. Some time later, the tire exploded in that State while plaintiff, a Kentucky resident, was mounting it in the course of his employment. Special Term in New York County held that plaintiff's causes of action for negligence and breach of warranty both accrued in this State because the tire was manufactured and sold here and, therefore, that the 'borrowing' statute was inapplicable. The First Department, although affirming Special Term's determination that the warranty cause of action was governed by New York law, because it was manufactured here, modified the order with respect to the negligence cause of action. It held that since the accident occurred in Kentucky, the negligence claim accrued there and, hence, it was barred by that State's one-year Statute of Limitations.

We are of the view that Special Term erred in fragmenting the complaint by holding that the warranty causes of action accrued in this State because the sale of the fork lift truck was consummated here, while the negligence cause of action accrued in Virginia because the accident occurred there. In reaching this conclusion we are fully aware that we are not adhering to the rationale upon which the ultimate determination was reached by the First Department in Myers v. Dunlop Tire & Rubber Corp. (supra). However, we believe that under the modern conflict of laws doctrine, where a breach of warranty cause of action and one in negligence arise out of the same incident or transaction, instead of routinely looking to the place of performance with respect to a claim under the law of contracts, and to the place of occurrence with respect to a claim under the law of torts, a court should first ascertain the underlying nature of plaintiff's action and then decide which area or locality has the primary interest in the matters in dispute. To put it succinctly, the test requires us to determine what the essence of the action is and which jurisdiction has the most significant contacts with the issues before the court (cf. Babcock v. Jackson, 12 N.Y.2d 473, 240 N.Y.S.2d 743, 191 N.E.2d 279; Auten v. Auten, 308 N.Y. 155, 124 N.E.2d 99).

With respect to the essence or underlying nature of this action, we believe it to be tortious in concept, notwithstanding that two of the three causes of action are for breach of warranty. In his complaint plaintiff alleges, under his negligence cause of action, that the appellant corporations assembled and distributed the vehicle in a dangerous and defective condition, that they failed to provide it with safety devices, that the vehicle's reverse gears were defective and hazardous to users of the vehicle and that there was a failure to give proper and adequate warning and instructions with respect to the vehicle's operation, management and care. Under the two warranty causes of action plaintiff contends that the appellant corporations manufactured, sold, distributed and supplied the vehicle and its appurtenant parts to Western Electric in a defective, dangerous and hazardous condition, and that they were unsafe and unfit for their intended use. Thus, reduced to its simplest terms, this case involves personal injuries sustain in Virginia by a nonresident of this State, arising out of hazardous and dangerous defects in a fork lift truck which the appellant corporations should have corrected before selling and distributing it for extensive use in Virginia by a person such as plaintiff. Without proof of negligence on the part of appellants, we question...