McCarthy v. Litton Industries, Inc.

• Decision Date: 07 May 1991
• Citation: McCarthy v. Litton Industries, Inc., 410 Mass. 15, 570 N.E.2d 1008 (Mass. 1991)
• Parties: , 14 UCC Rep.Serv.2d 424, Prod.Liab.Rep. (CCH) P 12,970 Alphonsus E. McCARTHY, Jr. v. LITTON INDUSTRIES, INC.
• Court: Supreme Judicial Court of Massachusetts

Page 1008

570 N.E.2d 1008

410 Mass. 15, 14 UCC Rep.Serv.2d 424,

Prod.Liab.Rep. (CCH) P 12,970

Alphonsus E. McCARTHY, Jr. v.LITTON INDUSTRIES, INC.

Supreme Judicial Court of Massachusetts Plymouth.

Argued Jan. 7, 1991.

Decided May 7, 1991.

John J. McGivney(Christopher A. Duggan with him), Boston, for defendant.

Thomas J. Lynch(Alexandra B. Harvey with him), Boston, for plaintiff.

Before LIACOS, C.J., and WILKINS, ABRAMS, NOLAN, LYNCH, O'CONNOR and GREANEY, JJ.

LYNCH, Justice.

This is a product liability action arising out of an accident in which the plaintiff, Alphonsus E. McCarthy, Jr., was injured while operating a glass-working lathe.The case was submitted to a Superior Court jury on a breach of warranty theory.In answers to special questions, the jury found that the manufacturer had breached its implied warranty of merchantability by failing to warn against dangerous modifications to the lathe.The defendant moved for judgment notwithstanding the verdict in part on the ground that the defendant did not succeed to the liability of the manufacturer of the lathe, a predecessor corporation also named Litton Industries, Inc.Following a separate hearing, the judge denied the defendant's motion, and judgment entered for McCarthy.We granted the defendant's application for direct appellate review, and we now affirm the judgment of the Superior Court.

We summarize the evidence concerning the accident and the corporate history of the defendant, and we describe the procedural history of this action.

McCarthy was employed at a Raytheon Company facility in Quincy where his responsibilities included the operation of a glass-blowing lathe used in the manufacture of cathode ray tubes.At the time of the accident, McCarthy was "renecking" a glass cathode ray tube.This procedure involves several steps.First, the operator fastens the tube to a glass-working lathe over a gas-fueled burner, heats the neck of the tube, and removes the damaged or defective neck.The operator then fuses a new neck to the tube by heating both pieces over the burner while turning the pieces slowly on the lathe.

Several years prior to the accident, Raytheon modified the lathe on which the accident occurred.The lathe operator varies the intensity of the flame by increasing or decreasing the flow of gas to the burner.At the time the lathe was manufactured, the flow of gas was controlled by foot pedals located at the bottom of the lathe.These pedals were attached to springs so that when the operator removed his foot from the pedal the flow of gas was automatically shut off.Raytheon replaced the spring-loaded pedals, however, with manual valves located at the front of the lathe which did not close automatically.

The accident occurred on August 13, 1980, after McCarthy left the lathe to take a break during the course of renecking a cathode ray tube.Before leaving, McCarthy testified, he closed the hand-operated valves controlling the flow of gas to the burner.Having just removed an unwanted neck, McCarthy left the lower portion of the tube attached to the lathe above the gas burner and the manual valves controlling the flow of gas.Ten or fifteen minutes later, McCarthy returned to his station, opened the valves, and placed an igniter over the burner.The tube exploded, and McCarthy was injured.

We turn now to the corporate history of the defendant and the evidence relevant to the issue of successor liability.The lathe in question was designed, manufactured, and sold by a California corporation called "Litton Industries, Inc."(This corporation will be referred to hereinafter as Litton-California to distinguish it from the present defendant.)The corporation sold the lathe on which the accident occurred in 1948.The sole shareholder in Litton-California was Charles V. Litton.From its incorporation in 1947 until 1952, Litton-California manufactured two products, glass-working lathes and vacuum tubes.

On August 3, 1952, Litton-California transferred assets used in the manufacture of glass-working lathes to a sole proprietorship of Charles V. Litton, which also acquired certain of Litton-California's corporate records and personnel.The sole proprietorship assumed production of Litton-California's glass-working lathe product lines using Litton-California's former plant.On May 1, 1953, Charles V. Litton incorporated the sole proprietorship as "Litton Engineering Laboratories, Inc."(hereinafter, Engineering), which continues to produce glass-working lathes under that name today.

After August 3, 1952, when it transferred its lathe-manufacturing assets, Litton-California continued to produce vacuum tubes.Fifteen months after the transfer, on November 4, 1953, Charles V. Litton sold his shares in Litton-California to a Delaware corporation called Electro Dynamics Corporation(Electro).In this transaction, Electro acquired all the issued and outstanding capital stock of Litton-California.Charles V. Litton received no shares in Electro, nor did he become an officer, director, or employee of that corporation after the sale.In 1954, Electro discovered that its name was similar to that of another corporation.Electro therefore changed its name to "Litton Industries, Inc.," a Delaware corporation, after acquiring the right to that name from Charles V. Litton.This corporation, still known as "Litton Industries, Inc."(hereinafter, Industries), continues to manufacture electronic components today.Since the equipment transfer on August 3, 1952, however, neither Litton-California, Electro, nor Industries has produced glass-working lathes.

To summarize, Litton-California was in a sense the predecessor of two existing corporations: Engineering, a separate corporation which, before it was incorporated, acquired certain of Litton-California's assets for manufacturing lathes in 1952; and Industries, which, under the name Electro Dynamics Corporation, purchased all the outstanding stock in Litton-California in 1953.The latter, Industries, is the defendant named in this action.

In 1981, McCarthy sued Engineering alleging negligence and breach of warranty.Engineering moved for summary judgment on the ground that it did not manufacture the lathe.In support of its motion, Engineering submitted an affidavit of Charles V. Litton, Jr., the president of the corporation and son of the founder, stating that Engineering had nothing to do with the design, manufacture, advertisement, or sale of the lathe involved in the accident.¹Engineering also provided answers to interrogatories to the same effect.

In light of this evidence, McCarthy moved to amend his complaint to substitute Industries as the defendant in place of Engineering.In April of 1984, by agreement of the parties, the judge allowed McCarthy's motion so to amend the complaint and allowed Engineering's motion for summary judgment.McCarthy served Industries with the amended complaint in April, 1985, and the case was called for trial in March, 1988.

At trial, McCarthy proceeded solely on a theory of breach of warranty based on the manufacturer's failure to warn against disconnecting the foot pedals controlling the flow of gas to the burner.In support of his claim, McCarthy called John Orlowski as an expert witness.According to his testimony, Orlowski's qualifications included approximately thirty years of work experience in the design, maintenance, or safety analysis of industrial machinery.Orlowski also had some training (though not a Bachelor's degree) in mechanical engineering, had published in the field, was a member of several relevant professional organizations, and was a licensed professional engineer in Massachusetts and New York.On cross-examination, however, it was revealed that Orlowski had no specific expertise in the design of glass-working lathes and had not even seen such a lathe before being hired to testify.

Over the defendant's objection, the judge qualified Orlowski as an expert and allowed him to offer his opinion as to how the accident occurred.Orlowski stated that most likely McCarthy inadvertently left the gas valve slightly open when he went on his break, permitting gas to accumulate in the open tube fastened above the burner, which caused an explosion when McCarthy attempted to light the burner.Orlowski further stated that Raytheon's bypassing the foot pedal was foreseeable to the manufacturer, that the manufacturer should have affixed to the lathe a warning against such a modification, and that the modification was "directly responsible for the accident."

The jury returned a verdict for McCarthy.In answers to special questions, the jury found that both McCarthy and Raytheon had misused the lathe.The jury found that Raytheon's misuse was foreseeable to the manufacturer and that McCarthy's misuse, though unforeseeable, was not a proximate cause.Thus, judgment entered in McCarthy's favor.

Industries appeals on four grounds.First, Industries argues that Engineering, and not Industries, is liable for defects in lathes sold by Litton-California.²Second Industries contends that the applicable law is the Uniform Sales Act, G.L. (Ter.Ed.)c. 106, § 17(2), the commercial statute in effect when the lathe was originally sold in 1948, before the Uniform Commercial Code(UCC) was adopted.The Uniform Sales Act, Industries argues, provides no warranty in cases involving misuse of a product even where the misuse was foreseeable.Third, Industries suggests that McCarthy's misuse bars his recovery under current law.Fourth, and finally, Industries argues that the court erred in qualifying Orlowski as an expert witness.We are not persuaded by these arguments.³

1.Successor corporate liability.Industries argues that Engineering succeeded to Litton-California's liability for defective lathes when it purchased assets used in manufacturing lathes from Litton-California in August of 1952.

It is a settled rule of corporate law that, when one company...