Schmidt v. Boardman Co.

• Decision Date: 02 September 2008
• Docket Number: 905 WDA 2007
• Citation: Schmidt v. Boardman Co., 958 A.2d 498, 2008 PA Super 203 (Pa. Super. Ct. 2008)
• Parties: Joyce A. SCHMIDT, Adminisratrix of the Estate of Erin D. Schmidt, deceased; Joyce A. Schmidt, in her own right; and Lindsay Schmidt, a minor, by her Mother and natural guardian, Joyce A. Schmidt, v. BOARDMAN COMPANY, a division of TBC Fabrication, Inc.; Boardman, Inc.; TBC Fabrication, Inc.; Coraopolis Volunteer Fire Department; Sinor Manufacturing, Inc., n/k/a Freightliner Specialty Vehicles, Inc., and Peter Jeffress and Michele Jeffress, Individually and on behalf of their minor Daughters, Joeylynne Jeffress and Lauren Jeffress, v. Coraopolis Volunteer Fire Department; Boardman Company, a division of TBC Fabrication, Inc.; Boardman, Inc.; Sinor Manufacturing, Inc.; and Freightliner Specialty Vehicles, Inc. Appeal of Sinor Manufacturing, Inc., n/k/a Freightliner Specialty Vehicles, Inc., and Freightliner Specialty Vehicles, Inc.
• Court: Pennsylvania Superior Court

958 A.2d 498

2008 PA Super 203

Joyce A. SCHMIDT, Adminisratrix of the Estate of Erin D. Schmidt, deceased; Joyce A. Schmidt, in her own right; and Lindsay Schmidt, a minor, by her Mother and natural guardian, Joyce A. Schmidt, v. BOARDMAN COMPANY, a division of TBC Fabrication, Inc.; Boardman, Inc.; TBC Fabrication, Inc.; Coraopolis Volunteer Fire Department; Sinor Manufacturing, Inc., n/k/a Freightliner Specialty Vehicles, Inc., and Peter Jeffress and Michele Jeffress, Individually and on behalf of their minor Daughters, Joeylynne Jeffress and Lauren Jeffress, v. Coraopolis Volunteer Fire Department; Boardman Company, a division of TBC Fabrication, Inc.; Boardman, Inc.; Sinor Manufacturing, Inc.; and Freightliner Specialty Vehicles, Inc.

Appeal of Sinor Manufacturing, Inc., n/k/a Freightliner Specialty Vehicles, Inc., and Freightliner Specialty Vehicles, Inc.

905 WDA 2007

Superior Court of Pennsylvania.

Argued April 30, 2008.

Filed September 2, 2008.

Reargument Denied November 7, 2008.

Kim M. Watterson, Pittsburgh, for Sinor, appellant.

Alan H. Peter, Pittsburgh, for Schmidt, appellee.

BEFORE: ORIE MELVIN, BENDER and ALLEN, JJ.

OPINION BY ALLEN, J.:

¶ 1 Sinor Manufacturing, Inc., n/k/a Freightliner Specialty Vehicles, Inc. and Freightliner Specialty Vehicles, Inc. (collectively "Appellants") appeal from the judgment entered against them and in favor of various plaintiffs on their claims of strict product liability and infliction of emotional distress.

¶ 2 Plaintiffs commenced this suit against Appellants asserting that they were liable as the successor companies to the original company that manufactured the defective product. On appeal, Appellants contend that the trial court erred in denying their motion for judgment notwithstanding the verdict ("JNOV"). Particularly, Appellants argue that the evidence was insufficient to establish Appellants' liability under the product line exception to the general rule that a successor company does not incur the liability of the selling company. Appellants further assert that the trial court erred in instructing the jury on, and in excluding evidence relevant to, the product line exception. Appellants additionally claim that the trial court erred in failing to mold the verdict to exclude emotional damages because Plaintiffs commenced their action under a theory of strict product liability and certain plaintiffs did not suffer physical injury. Finally, Appellants contend that the trial court erred in failing to bifurcate the trial into two separate proceedings on liability and damages. Upon review, we conclude that Appellants' assignments of error lack merit. Accordingly, we affirm the judgment.

¶ 3 The trial court succinctly set forth the facts and procedural history of this case as follows:

On August 19, 2004, while responding to a fire alarm, members of the Coraopolis Volunteer Fire Department were operating a fire truck on Mt. Vernon Avenue within the Borough of Coraopolis. Unbeknownst to the fire company, a fire hose was dangling from the side of the truck.

The nozzle [to the fire hose] became briefly lodged under the tire of a parked truck as the hose ran underneath a parked car. The hose [then] became `taut' [and the] force was so great that it lifted the parked car before the nozzle broke free. The hose and nozzle, which was described as a missile during trial testimony, traveled with enough force to sheer a concrete bird feeder in half before striking three of the plaintiffs. (Tr. at 180).

The nozzle struck the head and face of Joeylynne Jeffress, age 10, causing extensive injuries. Erin D. Schmidt was similarly struck by the dangling house resulting in her death a day later. [] Joyce A. Schmidt, Erin's mother, was also struck. Joeylynne, Erin and Joyce were standing in [the] Schmidt's front yard at the time of the accident.

Joeylynne Jeffress' sister[,] Lauren Jeffress[,] age 14, was standing across the street from her sister at the time of the accident and witnessed the trauma to her sister. Lindsay Schmidt, age 13, the sister of Erin Schmidt, similarly witnessed the fatal blow that killed her sister while standing alongside Lauren Jeffress.

The fire truck involved in the Coraopolis accident was manufactured and/or designed by the defendant ... Boardman Company (hereinafter "Boardman"), a division of TBC Fabrication, Inc. (hereinafter "TBC") in May of 1995.

In July of 1995, the defendant Sinor Manufacturing, Inc. (hereinafter "Sinor") purchased substantially all of the assets of [Boardman.] [Under the sales agreement, Sinor's purchase included the rights "to the drawings, designs and engineering used in the production of fire trucks for The Boardman Company, and the name `Boardman' for use on emergency vehicles."] [A]lthough Sinor did not manufacture the fire truck exactly in question, it was alleged by Plaintiffs that Sinor held itself out to be Boardman, manufactured a "fire wagon" and various emergency vehicles and represented to the public in at least one of its order forms that a fire truck could be manufactured and/or repaired by Sinor. (Tr. 400).

In 1998, Sinor and a certain division of Freightliner, Inc. were merged into a new entity known as Freightliner Specialty Vehicles, Inc., (hereinafter "Sinor/FSV").

* * * *

The Jeffress plaintiffs filed a Complaint at GD 05-7185, [and] the Schmidt plaintiffs filed a Complaint at GD 05-7191. By Order dated September 9, 2005, the cases were consolidated to GD 05-7191. Plaintiffs sued TBC, the Coraopolis Fire Department, Boardman Inc., and Sinor/FSV. Boardman Inc., was granted summary judgment on August 30, 2006[,] and the action against TBC was discontinued on September 5, 2006. Plaintiffs settled with the Coraopolis Volunteer Fire Department before trial pursuant to a pro tanto joint tortfeaser release. Coraopolis Volunteer Fire Department's liability was fixed at $500,000.¹ Defendant Sinor/FSV's cross-claim against the Coraopolis Fire Department proceeded to trial.

A jury trial commenced on September 5, 2006, and proceeded until a verdict was taken on September 14, 2006. The Jury returned a verdict in which it held Sinor/FSV fifty percent (50%) liable and the Coraopolis Volunteer Fire Department fifty percent (50%) liable. The award was approximately four and a half million ($4,500,000) dollars.

Trial Court Opinion (T.C.O.), 7/25/07, at 2-3 (footnote added).

¶ 4 On September 25, 2006, Appellants filed motions for post-trial relief, which included a motion for JNOV on the ground that Plaintiffs failed to establish successor liability under the product line exception. In their post-trial motions, Appellants also requested the granting of new trial, alleging that the trial court erred in charging the jury on the product line exception. Appellants further sought a new trial, claiming that the trial court abused its discretion in precluding evidence of a transaction between TBC and Boardman, Inc. and evidence that TBC had product liability insurance. In addition, Appellants argued that the trial court erred in denying their motion to bifurcate. Finally, Appellants contended that the trial court erred in failing to mold the verdict to exclude emotional distress damages to certain Plaintiffs because those plaintiffs were bystanders and did not suffer physical injury. On April 4, 2007, the trial court denied Appellants' post-trial motions and thereafter, the trial court granted Plaintiffs' motion for delay damages. On April 23, 2007, judgment was entered against Appellants in the amount of $4,517.073.00.

¶ 5 Appellants now appeal to this Court, raising the following issues for review:

I. Whether judgment in favor of the defendant was required when the plaintiffs' only basis for seeking to impose strict product liability against the defendant was the product line exception to the general rule of no successor liability and when none of the three essential threshold requirements for imposition of liability under the exception were established because (1) the defendant did not purchase all or substantially all of the original manufacturer's assets; (2) the defendant did not continue to manufacture the original manufacturer's product line; and (3) the transaction between the defendant and the original manufacturer did not cause the destruction of the plaintiff's remedy against the original manufacturer?

II. Whether a new trial is required on the issue of successor liability because the verdict is against the weight of the evidence or based on either or both of the following prejudicial error committed by the trial court: (1) Giving a jury charge on the product line exception that failed to accurately instruct the jury about the three threshold elements that must be proven before successor liability can be imposed, which clearly erroneous instruction misled and confused the jury; and (2) excluding evidence that was directly relevant to negating the existence of the three threshold elements under the product line exception?

III. Whether the trial court erred as a matter of law by refusing to mold the verdict to exclude the emotional distress damages awarded under a strict liability theory to those plaintiffs who did not suffer any physical injury?

IV. Whether the trial court erred in failing to bifurcate the trial of liability and damages where the evidence on damages was likely to evoke the jury's sympathies, making it impossible to dispassionately assess the separate and independent liability questions?

Brief for Appellants at 3.

¶ 6 Appellants are the successor corporation to TBC and their first issue involves application of the product line exception. At the outset, we note that the parties hotly dispute the contours and legal standard governing the product line exception in Pennsylvania. Brief for Appellants at 6-9; Brief of Appellees at 11-18. As such, we will review our jurisprudence on this area of the law.

¶ 7 "With respect to successor liability in this Commonwealth, it is...