Stump v. Indiana Equipment Co., Inc., 49A02-9105-CV-193

• Decision Date: 27 October 1992
• Docket Number: No. 49A02-9105-CV-193,49A02-9105-CV-193
• Citation: 601 N.E.2d 398
• Parties: , 19 UCC Rep.Serv.2d 748, Prod.Liab.Rep. (CCH) P 13,518 Leland STUMP and Sue Carole Stump, Appellants-Plaintiffs, v. INDIANA EQUIPMENT COMPANY, INC., Macallister Machinery Company, Inc., Steuben County Highway Department and the Steuben County Board of Commissioners, Appellees-Defendants.
• Court: Indiana Appellate Court

Page 398

601 N.E.2d 398

61 USLW 2376, 19 UCC Rep.Serv.2d 748,

Prod.Liab.Rep. (CCH) P 13,518

Leland STUMP and Sue Carole Stump, Appellants-Plaintiffs, v. INDIANA EQUIPMENT COMPANY, INC., Macallister Machinery Company, Inc., Steuben County Highway Department and the Steuben County Board of Commissioners, Appellees-Defendants.

No. 49A02-9105-CV-193.

Court of Appeals of Indiana Second District.

Oct. 27, 1992.

Rehearing Denied Nov. 25, 1992.

Transfer Denied Jan. 21, 1993.

John F. Vargo, Pardieck, Gill & Vargo, Seymour, Frank J. Price, Ricos & Price, Gloria K. Grinnan, Pardieck, Gill & Vargo, Indianapolis, for appellants-plaintiffs.

R.D. Zink, Meils Zink Thompson & Dietz, Indianapolis, for appellee-defendant Indiana Equipment Co. Inc.

Donald J. Graham, Nana Quay-Smith, Karl L. Mulvaney, Bingham Summers Welsh & Spilman, Indianapolis, for appellee-defendant MacAllister Mach. Co.

John D. Walda, John F. Lyons, Barrett & McNagny, Fort Wayne, for appellees-defendants Steuben County Highway Dept. and the Steuben County Bd. of Com'rs.

SULLIVAN, Judge.

Leland Stump and Sue Stump (hereinafter collective referred to as "Stump") appeal from the trial court's grants of summary judgment in favor of both Indiana Equipment Company and MacAllister Machinery Company. Steuben County Highway Department and the Steuben County Board of Commissioners (hereinafter collectively referred to as "Steuben County") cross-appeal the trial court's denial of their Motion for Summary Judgment.

We affirm in part, reverse in part, and remand for further proceedings.

The appeal involves an injury sustained by Stump while working with a piece of heavy equipment, a grader.

Stump presents three issues for our review, which we state as follows:

I. Whether Stump's actions against Indiana Equipment and MacAllister, respectively, are barred by the product liability statute of repose;

II. whether Indiana Equipment and MacAllister, respectively, owed a duty to Stump upon which a finding of negligence may be premised; and

III. whether Indiana Equipment and MacAllister, respectively, were absolved of liability resulting from the condition of the grader by virtue of the "as is" clause contained in the sales contract?

We note at the outset that Stump filed a motion with this court to dismiss the cross-appeal of Steuben County. Steuben County's Motion for Summary Judgment below was denied, while similar motions submitted by defendants Indiana Equipment and MacAllister were granted. Ordinarily, the denial of a summary judgment motion is not a final, appealable order from which an appeal will lie. Loving v. Ponderosa Systems, Inc. (1985) Ind., 479 N.E.2d 531, 532. Nevertheless, Ind. Rules of Procedure, Appellate Rule 4(B)(6) permits the taking of an interlocutory appeal in certain circumstances in which the trial court's ruling is not a final appealable order. In such instances, however, a trial court must certify its ruling for interlocutory appeal in accordance with the provisions of App.R. 4(B)(6). The record reveals that Steuben County did not seek certification of the denial of its summary judgment motion. Therefore, we hereby grant Stump's Motion to Dismiss the cross-appeal of Steuben County.

When reviewing a grant of summary judgment, we accept as true the facts alleged by the nonmoving party. Majd Pour v. Basic American Medical, Inc. (1990) 2d Dist. Ind.App., 555 N.E.2d 155.

The following facts are alleged by Stump: On August 13, 1986, Stump was employed by Hitzfield Excavating and was operating a 20-year-old Galion Motor Grader near Fort Wayne, Indiana. He had been operating the grader for a short period of time when he noticed that oil was spattering on the hood. Stump halted the grader, shifted into neutral gear, and shut off the motor. Stump then climbed off the grader and, with the assistance of another Hitzfield employee, removed the side panel which covered the motor. Although the two men could see oil spattered on the motor, they could not discern the precise location or severity of the leak. Stump decided that the best way to pinpoint the leak was to start the engine and watch the motor while it was running. In order to accomplish this, and in order to be in position to shut the motor off immediately should the need arise, Stump positioned himself on the ground beside the grader so that he could push the starter button and view the engine at the same time.

When Stump pushed the starter button, the motor came to life and the grader almost immediately began to move backward. Stump was able to jump away from the grader and escape injury initially, but he then observed that the grader was rolling toward a building in which people were working. Stump ran after the grader, caught up to it before it reached the building, and attempted to pull himself into the driver's seat. Just as Stump was mounting the grader, it struck a curb with such force that he was knocked to the ground. He fell in such a position that the grader's blade pinned him against the curb, and he suffered a traumatic amputation of both legs.

Based upon the various pleadings, depositions and exhibits, the Galion grader originally was equipped with a neutral safety switch which, if functioning correctly, would have prevented the grader from starting while in gear. The neutral safety switch is comprised of two components. The electronic component is a microswitch located in the wiring unit between the starter switch and the starter solenoid; this wiring unit is known as the starter harness. The mechanical component of the neutral safety switch consists of a linkage system located in or near the transmission. A post-accident inspection of the grader revealed that the starter switch was wired directly to the starter solenoid, thus bypassing the microswitch.

This particular grader was originally sold by Indiana Equipment to Steuben County in 1967. Steuben County owned and operated the grader continuously until sometime in 1985, when it decided to trade the Galion grader for a new grader. Accordingly Steuben County contacted MacAllister, a dealer of Caterpillar graders, and requested a bid for the purchase of a new grader. On October 29, 1985, a MacAllister employee inspected the Galion grader in order to estimate its value for trade-in purposes.

MacAllister eventually was awarded the bid and sold a new Caterpillar grader to Steuben County and accepted the Galion grader as a trade-in. MacAllister was aware that Hitzfield was interested in purchasing a used grader, and thus informed Hitzfield that the Galion grader formerly owned by Steuben County was for sale. Hitzfield's owner inspected the Galion grader and agreed to buy it "as is/where is" from MacAllister. Additionally, Hitzfield agreed to deliver the new grader from MacAllister to Steuben County while picking up the Galion grader, which was still in Steuben County's possession. On January 28, 1986, Hitzfield delivered the new grader to Steuben County and, after a brief discussion with the man who had operated the Galion grader for Steuben County, Hitzfield took possession of the Galion grader. Stump was injured approximately six months later.

When reviewing a grant of summary judgment, our task is the same as that of the trial court: we determine whether there was a genuine issue of material fact and whether the moving party was entitled to judgment as a matter of law. Lilge v. Russell's Trailer Repair (1991) 4th Dist. Ind.App., 565 N.E.2d 1146, 1148. All evidence must be construed in a light most favorable to the nonmovant, and any doubt as to the existence of a material issue must be resolved against the movant.

I. Statute of Repose

The trial court granted the summary judgment motions of both Indiana Equipment and MacAllister at least partially upon the ground that actions against both were barred by the statute of limitations applicable to products liability actions contained in I.C. 33-1-1.5-5 (Burns Code Ed.1992)--a so-called "statute of repose." The court's ruling was premised upon the fact that the grader had been delivered to Steuben County more than ten years prior to the accident. Stump argues that the statute of repose is inapplicable in the instant case.

I.C. 33-1-1.5-5 provides:

"(a) This section applies to all persons regardless of minority or legal disability. Notwithstanding IC 34-1-2-5, it applies in any product liability action in which the theory of liability is negligence or strict liability in tort.

(b) Except as provided in section 5.5 [IC 33-1-1.5-5.5] of this chapter, a product liability action must be commenced within two (2) years after the cause of action accrues or within ten (10) years after the delivery of the product to the initial user or consumer. However, if the cause of action accrues at least eight (8) years but less than ten (10) years after that initial delivery, the action may be commenced at any time within two (2) years after the cause of action accrues."

The statute of repose expressly applies to "any product liability action." The initial question, then, is whether the instant case is a product liability action. In making this determination, we are mindful that a proper interpretation of any particular section of a statute results only when the words in that section are considered in the context of the entire statute. Dague v. Piper Aircraft Corp. (1981) 275 Ind. 520, 418 N.E.2d 207, 210.

The product liability statute of repose commences to run upon the delivery of a product to the "initial user or consumer." Its purpose is to place a temporal limit upon liability for a product's defects. Dague, supra, 418 N.E.2d at 210. The defects to which the statute applies are those present "at the time it is conveyed by the seller to another party," I.C. 33-1-1.5-2.5 (Burns Code Ed.1992). It is therefore apparent that a "product liability action," as contemplated by the statute of repose, is an action in which the plaintiff complains of a defect which existed at or before...