Mitchell v. Stop & Shop Companies, Inc.

Decision Date28 October 1996
Docket NumberNo. 94-P-1660,94-P-1660
Citation41 Mass.App.Ct. 521,672 N.E.2d 544
PartiesHarvey MITCHELL & another 1 v. The STOP & SHOP COMPANIES, INC.; Continental Baking Co., third-party defendant.
CourtAppeals Court of Massachusetts

Owen Gallagher, Charlestown, for Continental Baking Company.

Mark C. McCrystal, Boston, for The Stop & Shop Companies, Inc.

Before ARMSTRONG, PERRETTA and LAURENCE, JJ.

ARMSTRONG, Justice.

The plaintiff Harvey Mitchell, an employee of Continental Baking Co. (Continental), was injured by a Stop & Shop Companies, Inc. (Stop & Shop) truck, at or near a Stop & Shop loading dock, as he was making a delivery of bread products to a Stop & Shop grocery store in Everett. The Mitchells sued Stop & Shop for damages caused by its driver's negligence, and Stop & Shop, a certified insured under Continental's broad form vendor's agreement, cross claimed against Continental for Stop & Shop's costs of defense and for indemnification of its liability to the Mitchells. 2 Following settlement of the Mitchells' claims, judgment was entered for Stop & Shop against Continental pursuant to an earlier allowed motion for summary judgment. Continental appeals.

By the terms of the vendor's broad form coverage, Continental had undertaken "to defend [and] indemnify ... [Stop & Shop, the] 'vendor,' but only with respect to the distribution or sale in the regular course of the vendor's business of Continental Baking Company's products...." This coverage was subject to certain exclusions, which are set out in the margin. 3

The vendor's broad form coverage is an outgrowth of modern products liability law, which not only makes a manufacturer strictly liable, generally, for injuries caused by defects in its product, see Swartz v. General Motors Corp., 375 Mass. 628, 630, 378 N.E.2d 61 (1978); Back v. Wickes Corp., 375 Mass. 633, 639-641, 378 N.E.2d 964 (1978); Mason v. General Motors Corp., 397 Mass. 183, 187-191, 490 N.E.2d 437 (1986) (limiting strict liability to sales and leases), but extends strict liability as well to the distributor or retailer of the manufacturer's product. See G.L. c. 106, §§ 2-314 & 2-315; Collins v. Sears, Roebuck & Co., 31 Mass.App.Ct. 961, 961-962, 583 N.E.2d 873 (1992). The retailer or distributor who has acted merely as a conduit for the product and has not altered it or otherwise acted in a manner that contributed to the injuries may then normally sue the manufacturer of the defective product for indemnification. Wolfe v. Ford Motor Co., 386 Mass. 95, 100-101, 434 N.E.2d 1008 (1982). See also Oates v. Diamond Shamrock Corp., 23 Mass.App.Ct. 446, 448, 503 N.E.2d 58 (1987). Because the liability trail in such cases leads back to the manufacturer of the defective product, it has generally been concluded that the purpose of the vendor's broad form endorsement is to curtail that circuitry of action by extending the insurance coverage of the manufacturer down the line to the distributor and the retailer of the product. Dominick's Finer Foods, Inc. v. American Mfrs. Mut. Ins. Co., 163 Ill.App.3d 149, 152, 114 Ill.Dec. 389, 516 N.E.2d 544 (1987). American White Cross Labs., Inc. v. Continental Ins. Co., 202 N.J.Super. 372, 379, 495 A.2d 152 (1985).

So understood, the vendor's coverage as a whole has been held to relate only to injuries that arise out of the product itself. Oliver Mach. Co. v. United States Fid. & Guar. Co., 187 Cal.App.3d 1510, 1516-1518, 232 Cal.Rptr 691 (1986). SDR Co. v. Federal Ins. Co., 196 Cal.App.3d 1433, 1438-1439, 242 Cal.Rptr. 534 (1987) ("the commercial purpose behind the vendor's endorsement is [to ensure] that the manufacturer's insurer will defend and indemnify the vendor for losses caused by the manufacturer's product " [emphasis original] ). Dominick's Finer Foods, Inc. v. American Mfrs. Mut. Ins. Co., 163 Ill.App.3d at 152, 114 Ill.Dec. 389, 516 N.E.2d 544. The exclusions from coverage are interpreted as an attempt to define the boundary between those instances in which the retailer's exposure to liability arises purely from its role as a conduit, and those in which, by altering or repairing or repackaging the product, it--the retailer--may itself have caused or contributed to the injuries. See Sears, Roebuck & Co. v. Reliance Ins. Co., 654 F.2d 494, 497-498 (7th Cir.1981), citing Mattocks v. Daylin, Inc., 452 F.Supp. 512, 515-516 (W.D.Pa.1978), aff'd. mem., 614 F.2d 770 (3d Cir.1979); SDR Co. v. Federal Ins. Co., 196 Cal.App.3d at 1437-1439, 242 Cal.Rptr. 534; American White Cross Labs., Inc. v. Continental Ins. Co., 202 N.J.Super. at 380-381, 495 A.2d 152.

Although Mitchell was injured in the course of delivering a Continental product to Stop & Shop, his injuries cannot be said to have been caused by the product or to have arisen in "the distribution or sale in the regular course of the vendor's [i.e., Stop & Shop's] business of Continental Baking Companies' products...." Rather, they arose from the distribution in the regular course of Continental's business of its products to a vendor. The factors that caused the accident were totally unrelated to defects in the products. On precisely parallel facts--injury to a manufacturer's deliveryman due to a hazardous condition at the premises of the vendor--another co...

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