Schumacher v. Richards Shear Co., Inc.

• Decision Date: 17 June 1982
• Citation: 452 N.Y.S.2d 736,88 A.D.2d 1071
• Parties: Otto F. SCHUMACHER et al., Appellants, v. RICHARDS SHEAR COMPANY, INC., Appellant, and Logemann Brothers Company, Inc., Respondent.
• Court: New York Supreme Court — Appellate Division

Page 736

452 N.Y.S.2d 736

88 A.D.2d 1071

Otto F. SCHUMACHER et al., Appellants, v. RICHARDS SHEAR COMPANY, INC., Appellant and Logemann Brothers Company, Inc., Respondent.

Supreme Court, Appellate Division Third Department.

June 17, 1982.

Hinman, Howard & Kattell, Binghamton (James S. Gleason, Binghamton, of counsel), for appellants Otto F. Schumacher et al.

Treman & Clynes, Ithaca (Norbert H. Schickel, III, Ithaca, of counsel), for appellant Richards Shear Co., Inc.

Kramer, Wales & McAvoy, Binghamton (Thomas J. Hickey, Binghamton, of counsel), for respondent.

Before MAHONEY, P. J., and SWEENEY, KANE, CASEY and MIKOLL, JJ.

MEMORANDUM DECISION.

Appeal from an order of the Supreme Court at Special Term, entered April 8, 1981 in Tioga County, which granted defendant Logemann Brothers Company, Inc.'s motion for summary judgment dismissing plaintiffs' complaint and defendant Richards Shear Company, Inc.'s cross claim.

In January, 1964, defendant Richards Shear Company, Inc. (Richards Shear) sold to Wallace Steel and Supply Company, plaintiff's employer, a hydraulic shearing machine designed and manufactured by it for use in cutting scrap metal.

On April 17, 1978, plaintiff lost the sight of his right eye when he was struck by a piece of metal thrown from that machine while he was operating it in the course of his employment. In this action, it is his contention that the shearing machine was defective in design and manufacture in that it did not have a protective guard or shield to prevent metal from being thrown by the machine and that defendants should have warned users of the existing dangerous condition, or taken corrective action to remedy it.

Logemann Brothers Company, Inc. (Logemann) is included as a defendant by virtue of a "License and Sales Agreement" dated January, 1968 wherein Richards Shear granted to Logemann, among other things, the exclusive right to manufacture and sell certain Richards Shear products, improvements, inventory, and the trade name "Richards". This transaction was, essentially, a sale of all assets for thereafter Richards Shear discontinued its business although it still survives as a corporate entity with minimal assets. The following month, Logemann notified Wallace Steel of its acquisition of Richards Shear and of its availability to replace parts and service equipment. Logemann serviced the Richards Shear machine at Wallace Steel in Ithaca, New York, and left it in normal running order. Other than complying with requests for replacement parts, the sole contact between Logemann and Wallace Steel prior to the commencement of this action was an advisory letter dated April 16, 1976, wherein Logemann notified the president of Wallace Steel that it had entered into a service contract with a named individual to provide service for Richards Shear machinery.

In dismissing plaintiff's complaint against Logemann, Special Term found there was no factual basis upon which it could be cast in liability as a "successor" to Richards Shear. We agree.

There is no evidence of a merger or consolidation of the two companies, nor was there any express or implied assumption of liability by Logemann. It is not alleged that there was any fraudulent purpose in the acquisition of Richards Shear products so that it could escape any potential liability, nor can it be established that Logemann is the mere continuation of Richards Shear. Accordingly, none of the criteria needed to establish liability as a "successor" have been met (Hartford Acc. & Ind. Co. v. Canron,...