Rolph v. EBI Companies

• Decision Date: 25 January 1991
• Docket Number: No. 89-0708,89-0708
• Citation: 464 N.W.2d 667,159 Wis.2d 518
• Parties: , 59 USLW 2474, Prod.Liab.Rep. (CCH) P 12,691 Kevin M. ROLPH, Plaintiff, v. EBI COMPANIES and E.L. Essley Machinery Company, Defendants. BUFFALO FORGE COMPANY and Liberty Mutual Insurance Company, Defendants-Third Party Plaintiffs-Appellants, v. J.C. BUSCH COMPANY, INC., Third Party Defendant-Respondent.
• Court: Wisconsin Supreme Court

Page 667

464 N.W.2d 667

159 Wis.2d 518, 59 USLW 2474,

Prod.Liab.Rep. (CCH) P 12,691

Kevin M. ROLPH, Plaintiff, v. EBI COMPANIES and E.L. Essley Machinery Company, Defendants.

BUFFALO FORGE COMPANY and Liberty Mutual Insurance Company, Defendants-Third Party Plaintiffs-Appellants, v. J.C. BUSCH COMPANY, INC., Third Party Defendant-Respondent.

No. 89-0708.

Supreme Court of Wisconsin.

Argued Sept. 4, 1990.

Decided Jan. 25, 1991.

John M. Swietlik, argued, John E. Cain and Kasdorf, Lewis & Swietlik, S.C., on brief (in Court of Appeals), Milwaukee, for defendants-third party plaintiffs-appellants.

L. William Staudenmaier, argued, Carolyn A. Yagla and Cooke & Franke, S.C., on brief (in Court of Appeals), Milwaukee, for third party defendant-respondent.

CECI, Justice.

This case is before the court on certification from the court of appeals, pursuant to sec. (Rule) 809.61, Stats. The plaintiff, Kevin M. Rolph, commenced a personal injury action against the defendant Buffalo Forge Company (Buffalo); its insurer, Liberty Mutual Insurance Company; and other parties which are not before the court in this appeal. The plaintiff alleged, inter alia, that Buffalo had manufactured a defective and unreasonably dangerous bending roll machine (the machine) in which he caught his hand and thereby received injuries. The plaintiff further alleged that Buffalo was liable in tort, under the doctrine of strict products liability or negligence, for the injuries he received as a result of the defective and unreasonably dangerous condition of the machine. Buffalo, in turn, commenced a third-party action against J.C. Busch Company, Inc. (Busch), who had reconditioned the machine approximately two years before the plaintiff was injured, alleging that if Buffalo was liable to the plaintiff, it was entitled to indemnification or contribution from Busch on the theory that Busch should have cured the unreasonably dangerous defect in the machine when it reconditioned it.

Buffalo appeals from a judgment of the circuit court for Fond du Lac county, Henry B. Buslee, Circuit Judge. The circuit court granted summary judgment in favor of Busch, dismissing the third-party complaint filed against it. In granting summary judgment, the court ruled that Busch did not have a duty to correct the allegedly defective and unreasonably dangerous condition of the machine regardless of whether the underlying theory of liability sounds in strict tort or negligence.

Two issues are presented on this appeal. ¹ The first issue is whether a reconditioner ² may be strictly liable for unreasonably dangerous defects in the machines it reconditions. The second issue is whether a reconditioner has a duty under ordinary principles of negligence to ensure that the machines it reconditions are in compliance with safety standards when it returns them to their owners. We hold that a reconditioner who does not manufacture, distribute, or sell the products it reconditions is not liable in strict products liability for the defects in the machines it reconditions. We further hold that a reconditioner does not have a duty to bring the machines it reconditions into compliance with applicable safety standards in effect when it reconditions the machines so long as it does not hold itself out as bringing machines into compliance with safety standards and is not requested to do so by the machine's owner. ³ Accordingly, we affirm the judgment of the circuit court.

The facts of this case follow. The facts relevant to this appeal are not in dispute. On August 26, 1986, the plaintiff was injured when his hand became entrapped while he was operating the machine. The plaintiff commenced an action against the manufacturer of the machine, Buffalo; its insurer, Liberty Mutual Insurance Company; and other parties not before this court in this appeal. The plaintiff alleged that Buffalo had failed to use ordinary care in the design, manufacture, packaging, labeling, formulation and application of warnings pertinent to the machine, and dissemination of information applicable to the machine. The plaintiff also alleged that the machine was in a defective and unreasonably dangerous condition when Buffalo sold it. Buffalo commenced a third-party action against Busch, alleging that Busch had failed to exercise ordinary care when it reconditioned the machine and that if the machine was in fact defective, Buffalo would be entitled to contribution or indemnification from Busch. The plaintiff did not sue Busch directly.

Busch subsequently filed a motion for summary judgment against Buffalo, arguing that regardless of the nature of the underlying claim, a reconditioner does not owe a duty to correct the unsafe conditions of a machine it reconditions according to the directions of the machine's owner. In support of its motion, Busch relied upon two cases from other jurisdictions in which the courts held that reconditioners and repairers do not have a duty to correct the defective or unsafe conditions of the machines they service, Barry v. Stevens Equipment Co., 176 Ga.App. 27, 335 S.E.2d 129 (1985), and Johnson v. William C. Ellis & Sons Iron Works, 604 F.2d 950 (5th Cir.1979).

Busch also relied upon the deposition testimony of Norman Behnke, an employee of the owner of the machine, Brenner Tank, Inc. (Brenner), ⁴ and upon the invoice for the work it performed for Brenner. Mr. Behnke testified that Brenner did not request that Busch evaluate the safety of the machine, did not expect Busch would correct any safety problem with the machine, and did not expect Busch to warn it if the machine was in an unsafe condition or a new safety device was available. The invoice billed Brenner for reconditioning of the machine which was described as disassembly, cleaning, inspecting parts for wear, and replacing certain parts.

In opposition to the motion for summary judgment, Buffalo chiefly relied upon Michalko v. Cooke Color & Chemical Corp., 91 N.J. 386, 451 A.2d 179 (1982). In Michalko, the court held that a rebuilder of machinery has a duty to incorporate safety devices in the equipment it rebuilds when it is feasible to do so. The court further held that the fact that a machine was rebuilt according to the specifications of the owner does not absolve the rebuilder of this duty. Id., 91 N.J. at 395, 451 A.2d at 183.

Buffalo also relied upon the deposition testimony of two expert witnesses, Stanley Weiss and Professor Bobbie L. Richardson. Both experts testified that in their opinion, under American National Standards Institute (ANSI) standards for reconstructors of roll formers or roll benders that existed at the time of the accident, Busch had a duty to bring the machine in question up to current safety standards. Both experts further testified that Busch violated this duty when it failed to install an emergency stop device that would have prevented the plaintiff's injuries.

The circuit court heard the motion for summary judgment on March 9, 1989. By order entered March 10, 1989, the circuit court granted summary judgment to Busch, dismissing the third-party complaint filed against it. In granting the motion, the circuit court ruled that Busch did not have a duty to bring the machine up to the ANSI standards when it reconditioned it.

Buffalo appealed from the judgment of the circuit court, and the court of appeals certified the appeal to this court.

In reviewing the grant of a motion for summary judgment, this court applies the standards set forth in sec. 802.08(2), Stats., in the same manner as the circuit court. Green Spring Farms v. Kersten, 136 Wis.2d 304, 315, 401 N.W.2d 816 (1987). Under the standard procedure for evaluating the propriety of a motion for summary judgment, a court first examines the pleadings to determine whether a claim for relief has been stated. If a claim for relief has been stated, the court then determines whether there are triable issues of material fact which preclude the grant of summary judgment. Id. at 314-15, 401 N.W.2d 816. If the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law, a motion for summary judgment should be granted. Section 802.08(2).

The record shows that the facts material to Buffalo's third-party claim are not in dispute and that the trial court granted Busch's motion for summary judgment on the grounds that it did not have a duty to bring the machine up to present-day safety standards when it reconditioned the machine. Accordingly, determining whether the circuit court properly granted summary judgment in favor of Busch turns on whether Busch was entitled to judgment as a matter of law. In this case, whether Busch was entitled to judgment as a matter of law depends on whether Busch, as a reconditioner, is subject to strict products liability and whether Busch had a duty under ordinary principles of negligence to bring the machine into compliance with the safety standards in effect when it reconditioned the machine.

The application of strict liability to an undisputed set of facts is a question of law. Mulhern v. Outboard Marine Corp., 146 Wis.2d 604, 611, 432 N.W.2d 130 (Ct.App.1988). Whether a party owes a duty to another party and the scope of that duty are questions of law. Fitzgerald v. Ludwig, 41 Wis.2d 635, 639, 165 N.W.2d 158 (1969). This court decides questions of law independently and without deference to the trial court's decision. Ball v. District No. 4, Area Board, 117 Wis.2d 529, 537, 345 N.W.2d 389 (1984). Accordingly, we will decide the issues of this case without deference to the circuit court's decision.

The record shows that Busch is not in the business of manufacturing, distributing, or selling machines like the one that allegedly caused the plaintiff's injuries. The record further shows that Busch did not sell the machine allegedly...