Reid v. Volkswagen of America, Inc.

• Decision Date: 21 March 1975
• Docket Number: No. 74-1576,74-1576
• Citation: 512 F.2d 1294
• Parties: 16 UCC Rep.Serv. 743 Barbara J. REID, Plaintiff-Appellant, v. VOLKSWAGEN OF AMERICA, INC., a Foreign Corporation, Defendant-Appellee.
• Court: U.S. Court of Appeals — Sixth Circuit

Page 1294

512 F.2d 1294

16 UCC Rep.Serv. 743

Barbara J. REID, Plaintiff-Appellant, v. VOLKSWAGEN OF AMERICA, INC., a Foreign Corporation Defendant-Appellee.

No. 74-1576.

United States Court of Appeals Sixth Circuit.

March 21, 1975.

William J. Garlington, Garlington & Smiley, Jack R. Sluiter, Wyoming, Mich., for plaintiff-appellant.

Peter R. Tolley, Vander Veen, Freihofer & Cook, Grand Rapids, Mich., for defendant-appellee.

Before PHILLIPS, Chief Judge, EDWARDS, Circuit Judge, and O'SULLIVAN, Senior Circuit Judge.

EDWARDS, Circuit Judge.

The diversity of citizenship jurisdiction of the federal courts requires us to decide this close, complicated and undecided question of Michigan law. It also requires us to risk "the hazards of prophecy" ¹ as to how the Michigan Supreme Court will ultimately decide the same issue. Although our decision itself may directly affect relatively few Michigan cases, it could, if similarly decided by the Michigan Supreme Court, have enduring ramifications on Michigan's products liability law. If the Michigan Supreme Court ultimately decides to adopt a different view than ours, that too will have wide ranging results, and it would leave our instant decision applicable only to the case immediately at hand.

The facts underlying this appeal as alleged in plaintiff's complaint are simple-if that cannot be said of anything else which will follow.

Barbara Reid, the plaintiff, was injured April 19, 1969, when the new Volkswagen which she was driving was struck from the rear by another automobile. Plaintiff had purchased the Volkswagen approximately one month earlier from an authorized Volkswagen dealer. Plaintiff alleges that the Volkswagen she was driving was manufactured and distributed by defendant-appellee, Volkswagen of America, Inc. She also alleges that she was injured in the accident by reason of the fact that on impact, the left front seat of the Volkswagen broke loose from the floor of the car, causing plaintiff to be thrown about the car, resulting in injuries for which she seeks damages.

On August 14, 1972, plaintiff filed this suit in the United States District Court for the Western District of Michigan, Southern Division, claiming that her injuries resulted from defendant's breach of express and implied warranties of fitness of the automobile, citing two sections of Michigan's Uniform Commercial Code, M.S.A. § 19.2313 (M.C.L.A. § 440.2313 (1967)) and M.S.A. § 19.2315 (M.C.L.A. § 440.2315 (1967)).

The filing date was more than three years and less than four years after the happening of the accident. Defendant promptly filed an answer, claiming plaintiff's claim was barred by the general statute of limitations. M.C.L.A. § 600.5805 (1968), which provides:

Injuries to person or property

No person may bring or maintain any action to recover damages for injuries to persons or property unless, after the claim first accrued to himself or to someone through whom he claims, he commences the action within the periods of time prescribed by this section.

(1) The period of limitations is 2 years for actions charging assault, battery, and false imprisonment.

(2) The period of limitations is 2 years for actions charging malicious prosecution.

(3) The period of limitations is 2 years for actions charging malpractice.

(4) The period of limitations is 2 years for actions against sheriffs charging misconduct or neglect of office by themselves or their deputies.

(5) The period of limitations is 2 years after the expiration of the year for which a constable was elected for actions based on his negligence or misconduct as constable.

(6) The period of limitations is 1 year for actions charging libel or slander.

(7) The period of limitations is 3 years for all other actions to recover damages for injuries to persons and property. (Emphasis added.)

Plaintiff thereupon moved to strike defendant's affirmative defense, citing M.C.L.A. § 440.2725(1) (1967), the Michigan Uniform Commercial Code limitation section for contract actions applicable when consequential damages include personal injuries, which provides:

Statute of limitations in contracts for sale, contractual

reduction; accrual, tolling

(1) An action for breach of any contract for sale must be commenced within 4 years after the cause of action has accrued. By the original agreement the parties may reduce the period of limitation to not less than 1 year but may not extend it. (Emphasis supplied.)

Another section of the Michigan Uniform Commercial Code authorizes a breach of warranty action for consequential damages which result in personal injuries:

Buyer's incidental and consequential damages

(2) Consequential damages resulting from the seller's breach include (b) injury to person or property proximately resulting from any breach of warranty.

M.C.L.A. § 440.2715(2)(b) (1967).

Michigan's Uniform Commercial Code containing the limitation provision above had been adopted in 1962, to be effective in 1964. The tort limitation statute previously quoted was last reenacted in 1961, to be effective in 1963-one year prior to the Michigan Uniform Commercial Code. The Code, however, contained no general repealer section and made no reference to the three-year personal injury limitation in the earlier general limitation statute.

The question in this case, therefore, is whether a products liability personal injury action in Michigan is governed by Michigan's general personal injury limitation of three years, or Michigan's Uniform Commercial Code limitation for four years.

Both parties have assured us that the Michigan courts have not decided this question. The District Judge held that the three-year statute applied and cited and relied upon three Michigan cases: State Mutual Cyclone Insurance Co. v. O & A Electric Cooperative, 381 Mich. 318, 161 N.W.2d 573 (1968); Baatz v. Smith, 361 Mich. 68, 104 N.W.2d 787 (1960); Harrington v. Nelson, 32 Mich.App. 347, 188 N.W.2d 679 (1971).

All of these cases, however, deal with causes of action accruing prior to Michigan's adoption of the Uniform Commercial Code. While we recognize that these cases do (as the District Judge held) apply the Michigan three-year statute of limitations, none of them dealt with or in anywise settled our current question.

The only discussion of our instant problem is to be found in Parrish v. B. F. Goodrich Co., 46 Mich.App. 85, 207 N.W.2d 422 (1973), where the Michigan Court of Appeals specifically reserved decision on the Michigan Uniform Commercial Code limitation:

Under this interpretation we need not decide whether the limitation period in causes of action seeking discovery for personal injury on breach of warranty theory is three years according to State Mutual Cyclone Insurance Co., supra, or four years, according to M.C.L.A. § 440.2725, supra, since plaintiffs filed their complaint within three years of discovery of the breach.

Parrish v. B. F. Goodrich Co., supra at 91, 207 N.W.2d at 426.

This case is now pending on appeal to the Michigan Supreme Court, but it appears unlikely to us that it necessitates decision of the question we must decide.

The question of application of the tort statute of limitations versus the applicable state version of the Uniform Commercial Code statute of limitations has divided the courts which have written on the subject. The following apply the tort limitation: Natale v. Upjohn Co., 356 F.2d 590 (3d Cir. 1966) (Delaware law); Tyler v. R. R. Street & Co., 322 F.Supp. 541 (E.D.Va.1971) (Virginia law); Maynard v. General Electric Co., 486 F.2d 538 (4th Cir. 1973) (West Virginia law); Abate v. Barkers of Wallingford, Inc., 27 Conn.Super. 46, 229 A.2d 366 (1967).

Other states apply the Uniform Commercial Code limitation: Berry v. G. D. Searle & Co., 56 Ill.2d 548, 309 N.E.2d 550 (1974); Mendel v. Pittsburgh Plate Glass Co., 25 N.Y.2d 340, 305 N.Y.S.2d 490, 253 N.E.2d 207 (1969); Redfield v. Mead, Johnson & Co., 512 P.2d 776 (Or.1973); Gardiner v. Philadelphia Gas Works, 413 Pa. 415, 197 A.2d 612 (1964); Stanford v. Lesco Associates, Inc., 10 U.C.C.Rep. 812 (D.D.C.1972).

Still other states apply the Uniform Commercial Code limitation where privity of contract has been alleged, but apply the tort limitation where it has not: ALASKA, Compare Anderson v. Fairchild Hiller Corp., 358 F.Supp. 976 (D.Alaska 1973) with Sinka v. Northern Commercial Co., 491 P.2d 116 (Alaska 1971); INDIANA, Compare Helvey v. Wabash County REMC, 278 N.E.2d 608 (Ind.Ct.App.1972) with Withers v. Sterling Drug, Inc., 319 F.Supp. 878 (S.D.Ind.1970); NEW JERSEY, Heavner v. Uniroyal Inc., 63 N.J. 130, 305 A.2d 412 (1973); OHIO, Compare Mahalsky v. Salem Tool Co., 461 F.2d 581 (6th Cir. 1972) with Val Decker Packing Co. v. Corn Products Sales Co., 411 F.2d 850 (6th Cir. 1969) (Ohio law); OKLAHOMA, Kirkland v. General Motors Corp., 521 P.2d 1353 (Okl.1974); RHODE ISLAND, Compare Kelly v. Ford Motor Co., 110 R.I. 83, 290 A.2d 607 (1972) with IUOE Local 57 v. Chrysler Motors Corp., 106 R.I. 248, 258 A.2d 271 (1969); TENNESSEE, Compare Hargrove v. Newsome, 225 Tenn. 462, 470 S.W.2d 348 (1971) with Layman v. Keller Ladders, Inc., 224 Tenn. 396, 455 S.W.2d 594 (1970).

While the question is a close one, this court believes the Michigan Supreme Court would adopt the Uniform Commercial Code limitation in the present situation. Our reasons are as follows:

1) Plaintiff's complaint is filed under and in specific reference to Michigan's Uniform Commercial Code. It provided in part:

5. That as of the date of said purchase Plaintiff received from Defendant both an expressed warranty as to the quality and fitness of the automobile as provided in Section 2313 of Act 174 of the Public Acts of 1962, as amended, being M.S.A. 19.2313, and an implied warranty of fitness for a particular purpose as provided in Section 2315 of Act 174 of the Public Acts of 1962, as amended, being M.S.A. 19.2315.

10. That as a direct consequence of Defendant's breach of both its express and...