Tucson Industries, Inc. v. Schwartz

• Decision Date: 11 October 1972
• Docket Number: No. 10731-PR,10731-PR
• Citation: 108 Ariz. 464,501 P.2d 936
• Parties: TUCSON INDUSTRIES, INCORPORATED, an Arizona corporation, Wilhold Glues, Inc., a California corporation, Walter N. Boysen Co. of Southern California, a California corporation, Entz-White Lumber and Supply, Inc., an Arizona corporation, Ann Chamberlin and William George Bolon, Appellants, v. Helen SCHWARTZ and Jack Schwartz, her husband, Appellees.
• Court: Arizona Supreme Court

Page 936

501 P.2d 936

108 Ariz. 464

TUCSON INDUSTRIES, INCORPORATED, an Arizona corporation, Wilhold Glues, Inc., a California corporation, Walter N. Boysen Co. of Southern California, a California corporation, Entz-White Lumber and Supply, Inc., an Arizona corporation, Ann Chamberlin and William George Bolon, Appellants, v. Helen SCHWARTZ and Jack Schwartz, her husband, Appellees.

No. 10731-PR.

Supreme Court of Arizona, In Banc.

Oct. 11, 1972.

Rehearing Denied Nov. 14, 1972.

Snell & Wilmer by Arthur P. Greenfield, Phoenix, for appellants Wilhold Glues, Inc., Walter N. Boysen Co. of Southern Cal. and Entz-White Lumber and Supply, Inc.

O'Connor, Cavanagh, Anderson, Westover, Killingsworth & Beshears by Richard J. Woods, Phoenix, for appellants Tucson Industries, Chamberlin and Bolon.

Langerman, Begam & Lewis, P.A. by Robert G. Begam, Phoenix, for appellees.

HAYS, Chief Justice.

Helen Schwartz, hereinafter referred to as plaintiff, sued Wilhold Glues, Inc., Walter N. Boysen Company, Entz-White Lumber and Supply, Inc., Tucson Industries, Inc., Ann Chamberlin, and William Bolon, for convenience hereinafter referred to as Wilhold, Boysen, White, Tucson Industries, Chamberlin, and Bolon, respectively. Plaintiff recovered a $75,000 judgment against all six defendants and all appealed. The Court of Appeals affirmed as to the first three, and reversed and remanded as to the last three. Its decision is reported at 15 Ariz.App. 166, 487 P.2d 12. Petitions for review were filed by plaintiff and by the first three defendants, and were granted.

The decision of the Court of Appeals is vacated.

The building at 908 East Camelback Road in Phoenix was occupied by Frontier Carpets, plaintiff's employer, and by Wig World, a business owned by Tucson Industries. The latter occupies the major portion of the building. Both Frontier and the Wig World are air-conditioned by a system wherein both spaces have a common return air duct. Chamberlin and Bolon are employees of the Wig World.

In April, 1964, the Wig World was remodeling. This work included, among other things, interior painting and affixing Formica to various counters and fixtures.

Defendant Wilhold manufactures and markets a product called Contax Cement. One of its jobbers is Boysen. One of Boysen's retailers is White. Bolon bought some Contax Cement from Entz-White to glue the Formica to the fixtures in the Wig World. The remodeling took several weeks.

From April, 1964, plaintiff began to notice paint odors at work. On April 13 she became aware of a new and stronger smell emanating from the adjacent Wig World, which made her cough. On April 16 the smell was very strong, causing eye-watering and more coughing. At the end of the day when she went home she felt lightheaded and groggy. The next morning, although the air conditioner was on in her office, the smell seemed about the same. At about 1:30 P.M. Chamberlin turned on the air conditioner in the Wig World, and suddenly it seemed as if 'a bomb full of fumes' had been dropped in plaintiff's office. She obtained permission to go home. Her eyes were watering and her chest felt 'heavy.'

The next day her doctor hospitalized her with a diagnosis of 'chemical keratitis.' The outer layer of the cornea of each eye was blistered and loose. The doctor removed the damaged portions, expecting the tissue to regenerate in a few days. Instead, her condition grew progressively worse. She developed glaucoma and underwent two operations to relieve that condition. Later she developed cataracts which will require more surgery. Because of the fact that her eyes are damaged, the prognosis for success of further surgery is 'guarded' and she has a 40% Chance of becoming totally blind.

Her action was brought on four theories: negligence, nuisance, breach of warranty, and strict liability. The trial court refused to submit to the jury the issues of contributory negligence and assumption of risk.

The Court of Appeals affirmed the judgment against Wilhold, Boysen and White, but reversed as to the other three defendants, and remanded for a new trial as to them in which the issues of contributory negligence and assumption of risk would be submitted to the jury. The last three defendants did not petition for review.

We shall discuss the issues in two parts. First, which reference to Wilhold, Boysen and White; and second, with reference to Tucson Industries and its two employees, Chamberlin and Bolon.

I

Strict liability is not a new concept--it dates back to the famous case of Rylands v. Fletcher, an English decision of the House of Lords, L.R. 3 H.L. 330 (1868). That case involved damage caused by a man's erecting on his own property, a large reservoir of water which broke and caused flood damage to his neighbors. For years, the Rylands v. Fletcher doctrine was limited and the courts refused to extend it to products, on the ground of lack of privity. Winterbottom v. Wright, 10 M. & W. 109, 152 English Reports 402 (Exch.1842). Gradually the doctrine was extended to products termed 'inherently dangerous.' Thomas v. Winchester, 6 N.Y. 397 (1852); MacPherson v. Buick Motor Company, 217 N.Y. 382, 111 N.E. 1050 (1916). Following these older cases, came Henningsen v. Bloomfield Motors, Inc., 32 N.J. 358, 161 A.2d 69 (1960); Greenman v. Yuba Power Products, Inc., 59 Cal.2d 57, 27 Cal.Rptr. 697, 377 P.2d 897 (1962); and Vandermark v. Ford Motor Co., 61 Cal.2d 256, 37 Cal.Rptr. 896, 391 P.2d 168 (1964).

These last three cases so broadened the rule that by 1964 the American Law Institute's Restatement (Second) of Torts § 402A, codified the then status of strict liability as follows:

'402A. Special Liability of Seller of Product for Physical Harm to User or Consumer

(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.

Caveat:

The Institute expressed no opinion as to whether the rule stated in this Section may not apply

(1) to harm to persons other than users or consumers. . . .'

This court was already thinking along the same lines. See Colvin v. Superior Equipment Co., 96 Ariz. 113, 118-119, 392 P.2d 778 (1964); Nalbandian v. Byron Jackson Pumps, Inc., 97 Ariz. 280, 287-288, 399 P.2d 681 (1965). In 1968, we eliminated the Restatement's caveat by permitting a nonuser (a passenger in a motorboat) to recover. O. S. Stapley Co. v. Miller, 103 Ariz. 556, 447 P.2d 248. In that case, we quoted Comment (c) of the Restatement, Supra, a part of which reads as follows:

'c. On whatever theory, the 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.'

Our Court of Appeals, In Caruth v. Mariani, 11 Ariz.App. 188, 463 P.2d 83, explained Stapley, Supra, saying:

'Strict tort liability is based on public policy. . . . Who should bear the loss? The injured member of the public or those persons who are in the chain of placing defective goods on the market? We choose to protect the member of the public since those involved in the chain of marketing can distribute the risk between themselves by means of insurance and indemnity agreements. . . .'

The rationale of the doctrine of strict liability is also expressed by the following quotation from Escola v. Coca-Cola Bottling Co. of Fresno, 24 Cal.2d 453, 150 P.2d 436:

'. . . Even if there is no negligence, however, public policy demands that responsibility be fixed wherever it will most effectively reduce the hazards to life and health inherent in defective products that reach the market. It is evident that the manufacturer can anticipate some hazards and guard against the recurrence of others, as the public cannot . . . the risk of injury can be insured by the manufacturer and distributed among the public as a cost of doing business.'

The above statements explain why we separate the first three defendants from the last three--the first three are in the chain of distribution of the product--the Contax Cement. Strict liability is not a doctrine that may be extended to one not in the business. If a woman buys a can of beans which she does not know is poisonous, she will not be held liable on any theory or strict liability, to her dinner guests who are poisoned by the product. Strict liability is a public policy device to spread the risk from one to whom a defective product may be a catastrophe, to those who marketed the product, profit from its sale, and have the know-how to remove its...