Spence v. Brown-Minneapolis Tank, Co.

• Decision Date: 27 June 2008
• Docket Number: No. 105,080.,105,080.
• Citation: 198 P.3d 395,2008 OK CIV APP 90
• Parties: Joey L. SPENCE, Mitch Johnson by and through Guardian, Bobbie Johnson, Bobbie Johnson, individually and, Crockett Johnson, individually, Plaintiffs/Appellants, v. BROWN-MINNEAPOLIS TANK, CO., Defendant/Appellee, SEFCO, Inc.; B&T Company; Great American Tank Company; SEFCO Equipment, L.L.C.; SEFCO-Edison BMT, L.L.C.; Edison Brown-Minneapolis Tank Oklahoma, L.L.C.; GATX Corporation, and Les Sutton, Defendants.
• Court: United States State Court of Criminal Appeals of Oklahoma. Court of Civil Appeals of Oklahoma

198 P.3d 395

2008 OK CIV APP 90

Joey L. SPENCE, Mitch Johnson by and through Guardian, Bobbie Johnson, Bobbie Johnson, individually and, Crockett Johnson, individually, Plaintiffs/Appellants, v. BROWN-MINNEAPOLIS TANK, CO., Defendant/Appellee, SEFCO, Inc.; B&T Company; Great American Tank Company; SEFCO Equipment, L.L.C.; SEFCO-Edison BMT, L.L.C.; Edison Brown-Minneapolis Tank Oklahoma, L.L.C.; GATX Corporation, and Les Sutton, Defendants.

No. 105,080. Released for Publication by Order of the Court of Civil Appeals of Oklahoma, Division No. 1.

Court of Civil Appeals of Oklahoma, Division No. 1.

June 27, 2008.

Certiorari Denied October 6, 2008.

Appeal from the District Court of Oklahoma County, Oklahoma; Honorable Vicki L. Robertson, Judge.

AFFIRMED

David W. Edmonds, Greg D. Givens, and Nevin R. Kirkland, Oklahoma City, OK, for Appellants.

Gerald E. Durbin, J. Logan Johnson, Katherine T. Loy, and R. Ryan Deligans, Oklahoma City, OK, and W.G. Steidley and Michelle Harris, Tulsa, OK, for Appellee.

Opinion by LARRY JOPLIN, Judge.

¶ 1 Plaintiffs/Appellants, Joey L. Spence (Spence) and Mitch Johnson (Johnson), as well as Johnson's parents in their individual and representative capacities, seek review of the trial court's order granting the motion for summary judgment of Appellee Brown-Minneapolis Tank Company (BMTCo)¹ on Plaintiffs' negligence and products' liability claims. Having reviewed the record, however, the trial court's order is affirmed.

¶ 2 Minneapolis Tank-MW (BMT-MW)² is a New Mexico L.L.C. based in Tulsa, Oklahoma. BMT-MW erected industrial tanks in Oklahoma and neighboring states, such as Texas and Arkansas, using plates of steel or similar metal weighing approximately 3,500 pounds to form the sides of a tank.

¶ 3 To brace, support, and move the plates into position for assembly, BMT-MW used "plate buggies." BMT-MW ordinarily built its own "plate buggies."³ However, in 2002, BMT-MW acquired some used "plate buggies" and other assets of ITEQ, a Utah tank erection company.⁴

¶ 4 Spence and Johnson worked for BMT-MW erecting tanks. On October 15, 2003, they were building an industrial water tank in Arkansas, using the "plate buggies" acquired from ITEQ. When a co-worker got his hand caught between the tank structure below and the sheet that was then being attached to the structure, Johnson rushed to help. As Johnson tried to free the co-worker's hand, one of the 3,500-pound plates fell inward, knocking both Johnson and Spence off the scaffolding upon which they stood.⁵ Johnson and Spence fell to the ground 35 feet below, suffering injury, and on September 27, 2005, Plaintiffs commenced the instant action, seeking actual and punitive damages on strict products' liability and negligence theories.

¶ 5 BMTCo filed a motion for summary judgment, attaching evidentiary materials demonstrating the facts we have recounted. BMTCo argued Oklahoma law governed Plaintiffs' claims,⁶ and that BMTCo owed no duty to Plaintiffs, unless deemed the alter-ego of BMT-MW, in which case, the workers' compensation exclusive remedy doctrine immunized it from liability.⁷ BMTCo also argued that, as a seller of a used product in the same condition as received, it bore no liability under either products' liability or negligence theories.⁸ Finally, BMTCo argued it was not a commercial seller of products in any sense, and therefore not subject to strict products liability.

¶ 6 Plaintiffs responded. Plaintiffs first argued Arkansas law should apply, because the accident occurred there.⁹ Plaintiffs also claimed that, because BMTCo sold surplus inventory on more than one occasion, BMTCo was a seller or supplier for purposes of maintaining its products liability claim. Plaintiffs asserted that, under both products' liability and negligence theories, BMTCo had a duty to warn of the dangers inherent in the plate buggies, but wholly breached its duty when it failed to warn.

¶ 7 On August 1, 2007, the trial court held a hearing on the motion for summary judgment. By order filed August 29, 2007, the trial court granted judgment to BMTCo. Plaintiff appeals, and the matter stands submitted for accelerated review on the trial court record.¹⁰

¶ 8 This court must review a grant of summary judgment by a de novo standard. Prudential Ins. Co. of America v. Glass, 1998 OK 52, ¶ 3, 959 P.2d 586, 588. Review on summary judgment examines the pleadings and evidentiary material submitted to the trial court and views all inferences and conclusions that can be drawn in the light most favorable to the party opposing the motion. Johnson v. Mid-South Sports, Inc., 1991 OK 17, 806 P.2d 1107. Summary judgment is proper only when there is no genuine issue of material fact. Prudential Ins. Co. of America, 1998 OK 52, ¶ 3, 959 P.2d at 588. If there is no substantial controversy as to any material fact and one of the parties is entitled to judgment as a matter of law, the order of the trial court granting summary judgment should be affirmed. Rule 13(e), Rules for the District Courts of Oklahoma, 12 O.S., Ch. 2, App.

¶ 9 On summary judgment, BMTCo asserted, inter alia, that it was not a seller or supplier "engaged in the business" of selling or supplying plate buggies and could not be held under strict tort liability for Plaintiffs' injuries. Plaintiffs countered that the evidence arguably showed BMTCo was engaged in the practice of selling surplus tank erection equipment, having three times previously purchased and sold assets of tank erectors, including the ITEQ assets.¹¹

¶ 10 By judicial decision, Oklahoma recognizes a claim of strict products' liability. Kirkland v. General Motors Corp., 1974 OK 52, 521 P.2d 1353. In Arkansas, strict products' liability is imposed by statute. See, Berkeley Pump Co. v. Reed-Joseph Land Co., 279 Ark. 384, 653 S.W.2d 128 (1983). Importantly, both Oklahoma and Arkansas impose strict products' liability according to the rule announced by the Restatement of Torts (Second) § 402A (1965). Kirkland, 1974 OK 52, ¶¶ 12, et seq., 521 P.2d at 1358 et seq.; Berkeley Pump Co., 653 S.W.2d at 131.

¶ 11 Plaintiff nevertheless argued that, because the accident occurred in Arkansas, the strict liability law of that state should control, and that Arkansas law imposed strict liability on a "supplier engaged in the business of ... selling ... or otherwise distributing" a "defective, unreasonably dangerous product," including a "used" product sold "as-is." See, A.C.A. §§ 4-86-102, 16-116-102; Nationwide Rentals Co. v. Carter, 298 Ark. 97, 765 S.W.2d 931 (1989); Petrus Chrysler-Plymouth v. Davis, 283 Ark. 172, 671 S.W.2d 749 (1984). Defendant responded, arguing that both Oklahoma and Arkansas strict liability law is derived almost verbatim from § 402A with only minor linguistic differences, and that the result of the application of either Oklahoma or Arkansas law would be the same. See, e.g., Allenberg v. Bentley Hedges Travel Serv., Inc., 2001 OK 22, 22 P.3d 223.

¶ 12 We are unpersuaded by Plaintiff's argument. First, neither Petrus nor Nationwide discuss the element of "engaged in the business."¹² Second, and while there are indeed minor linguistic differences between the judicially-imposed rule of strict liability in Oklahoma and the statutory strict liability of Arkansas, the fact remains that the law of both Oklahoma and Arkansas follows the rule of § 402A. Ultimately, the law of both Oklahoma and Arkansas imposes strict liability only on sellers or suppliers who are engaged in the business of selling or supplying. We therefore need not engage in any choice of law analysis.

¶ 13 In this respect, § 402A provides:

(1) One who sells any product in a defective condition unreasonably dangerous to the user or consumer or to his property is subject to liability for physical harm thereby caused to the ultimate user or consumer, or to his property, if

(a) the seller is engaged in the business of selling such a product, and

(b) it is expected to and does reach the user or consumer without substantial change in the condition in which it is sold.

(2) The rule stated in Subsection (1) applies although

(a) the seller has exercised all possible care in the preparation and sale of his product, and

(b) the user or consumer has not bought the product from or entered into any contractual relation with the seller.

The policy underlying imposition of strict products liability is well established:

[T]he justification for the strict liability has been said to be that the seller, by marketing his product for use and consumption, has undertaken and assumed a special responsibility toward any member of the consuming public who may be injured by it; that the public has the right to and does expect, in the case of products which it needs and for which it is forced to rely upon the seller, that reputable sellers will stand behind their goods; that public policy demands that the burden of accidental injuries caused by products intended for consumption be placed upon those who market them, and be treated as a cost of production against which liability insurance can be obtained; and that the consumer of such products is entitled to the maximum of protection at the hands of someone, and the proper persons to afford it are those who market the products.

Restatement of Torts 2d, § 402A, comment c. Moreover:

The rule does not, however, apply to the occasional seller of food or other such products who is not engaged in that activity as a part of his business. ... The basis for the rule is the ancient one of the special responsibility for the safety of the public undertaken by one who enters into the business of supplying human beings with products which may endanger the safety of their persons and property, and the forced reliance upon that undertaking on the part of those who purchase such goods. This basis is lacking in the case of the ordinary individual who makes the isolated sale, and he is not liable to a third person, or even to his buyer, in the...