Union Supply Co. v. Pust

Citation583 P.2d 276,196 Colo. 162
Decision Date14 August 1978
Docket NumberNo. C-1174,C-1174
Parties, 2 A.L.R.4th 245, 25 UCC Rep.Serv. 134 The UNION SUPPLY COMPANY, a Colorado Corporation, Petitioner, v. Larry E. PUST and Holly Sugar Corporation, a New York Corporation, Respondents.
CourtSupreme Court of Colorado

Yegge, Hall & Evans, John R. Trigg, Jeffrey B. Stalder, Denver, for petitioner.

Bragg & Dubofsky, P. C., Douglas E. Bragg, Denver, for respondents.

LEE, Justice.

Certiorari was granted to review the decision of the court of appeals in Pust v. Union Supply Co., 38 Colo.App. 435, 561 P.2d 355. We affirm the judgment of the court of appeals.

This products liability case involves the doctrine of strict liability in tort, as applied to design defects and to a failure to warn. We also address the question whether strict liability and implied warranty can be extended to component part manufacturers. It is our conclusion that liability can be so extended in certain situations.

Plaintiff Larry E. Pust was injured on October 31, 1968, when his right arm was caught in the "nip point" of a conveyor at the Holly Sugar Corporation plant in Sidney, Montana. He was working in the wet pulp area of this sugar beet refining plant, and his principal activity was to keep the conveyor belts free from pulp so that they would not slip on their rollers. As he was cleaning off the pulp with a rod, somehow his hand was caught in the "nip point" and his arm was pulled in. As a consequence of this industrial accident, his right arm and part of his right shoulder had to be amputated.

Pust received approximately $25,000 in workmen's compensation benefits from Holly Sugar under the Montana Workmen's Compensation Act. Since Montana's act, like Colorado's, is an exclusive remedy statute, Holly Sugar was thereby immunized from "any other liability whatsoever" for the injury. Section 92-203, R.C.M.1947.

Pust filed a medical malpractice action in Montana against the physician and the hospital who had treated his injury. He charged negligence in permitting gas gangrene to develop in his arm and shoulder, eventually necessitating their amputation. This action was settled before trial. Pust received $67,000 and signed an "Agreement and Covenant Not to Sue Further," limited to the physician and hospital.

In 1971, Pust filed this products liability case against the Union Supply Company in Denver District Court. The complaint alleged that Union Supply had designed and manufactured the conveyor in the Holly Sugar plant, that the conveyor was defective, and that it was the proximate cause of Pust's injuries. Union Supply responded by joining Holly Sugar as a third-party defendant, seeking indemnification for any liability that it might incur. However, the trial court dismissed this third-party action before trial. On separate appeal, we held, in Holly Sugar Corp. v. Union Supply Co., Colo., 572 P.2d 148, that this dismissal was proper. This court ruled that Holly Sugar could not be held liable in such a common law indemnity action under either the Montana or the Colorado workmen's compensation law.

This case was tried before a jury on the theories of strict liability and implied warranty. Union Supply acknowledged that there were neither safety guards nor warnings at the site where Pust's injuries occurred. Pust presented expert testimony that the conveyor, which had no automatic cleaning device on the belt, was "defective" in that the "nip point" lacked safety guards, and no warning was given as to the hazards present at the "nip point." Neither the initial drawings by Holly Sugar nor the plans submitted by Union Supply provided for safety guards around the "nip point."

The bulk of the evidence was directed to the issue of exactly who was responsible for the design and manufacture of the conveyor. Holly Sugar had sent bid drawings, together with documents listing the various parts needed, to three conveyor suppliers, including the Union Supply Company. Union Supply was the low bidder and was awarded the contract. Union Supply then submitted its own drawings to Holly Sugar, substituting another manufacturer's components and allegedly adding mechanical engineering specifications necessary for manufacture.

Union Supply subcontracted out the manufacture of most of the component parts. It then shipped the conveyor in sections to Holly Sugar for on-site assembly. There was evidence that Union Supply redesigned and modified each of the sections of the conveyor. Some of these modifications were contained in a final manufacturing or assembly drawing sent by Union Supply to Holly Sugar. At the installation site, Holly Sugar added the following parts: a motor, conveyor belt, electrical controls, legs for support, stairs and walkways, and the counterweight.

At the close of all the evidence, the district court granted Union Supply's motion to dismiss the complaint. On appeal, the court of appeals reversed the judgment dismissing Pust's complaint, and held that jury questions had been presented on the issues of strict liability and implied warranty. Pust v. Union Supply Co., supra. Union Supply cross-appealed from the dismissal of its third-party complaint against Holly Sugar. As already discussed, we separately resolved that issue in Holly Sugar's favor in Holly Sugar Corp. v. Union Supply Co., supra. Union Supply also cross-appealed several of the trial court's evidentiary rulings, but the court of appeals affirmed the trial court on these issues.

At the outset, we agree with the court of appeals that the trial court should have submitted the strict liability and implied warranty causes of action to the jury. As often stated, a trial judge should only invade the fact-finding function of the jury in the clearest cases when the facts are not in dispute. Romero v. Denver & Rio Grande Western Railway Co., 183 Colo. 32, 514 P.2d 626; Gossard v. Watson, 122 Colo. 271, 221 P.2d 353. The opinion of Nettrour v. J. C. Penney Co., Inc., 146 Colo. 150, 360 P.2d 964, contains the classic formulation of the standard a trial court must use in considering a motion for a directed verdict:

"In passing upon a motion for a directed verdict the trial court must view the evidence in the light most favorable to the party against whom the motion is directed. Every reasonable inference to be drawn from the evidence presented is to be considered in the light most favorable to such party. A motion for directed verdict can only be granted where the evidence, when so considered, compels the conclusion that the minds of reasonable men could not be in disagreement and that no evidence, or legitimate inference arising therefrom, has been received or shown upon which a jury's verdict against the moving party could be sustained. * * * "

There were many questions of fact critical to the determination of the ultimate issues involved in this case which should have been left for resolution by the jury. We now consider those matters in relation to the issues presented in this case.

I. RECOVERY BASED ON STRICT LIABILITY

In Hiigel v. General Motors Corp., Colo., 544 P.2d 983, this court expressly adopted the doctrine of strict liability in tort, based on the Restatement (Second ) Of Torts § 402A. Pust's strict liability claims were for: (1) design defects in the conveyor; and (2) failure to adequately warn of the hazards of working at the "nip point" of the conveyor. 1

A. Design Defects

This court has heretofore never had the occasion to decide whether a defect in the design of a product can form the basis of a claim in strict liability. The Colorado Court of Appeals declared, in Bradford v. Bendix-Westinghouse Automotive Air Brake Co., 33 Colo.App. 99, 517 P.2d 406, that § 402A is available in Colorado as a theory of recovery for design defects. We agree and now hold that if a product is unreasonably dangerous because of a defect in its design strict liability may lie. 2

We perceive no valid reason not to extend strict liability to design defects. A defective product may be equally hazardous to the ultimate user or consumer whether its defect arises from a flaw in manufacture or from a flaw in design. We observe that if a defect is in the design of a complete product line it is potentially dangerous to many more people than a physical flaw in one product would be. A defect in design may be more difficult to legally establish than a defect in manufacture, but courts and juries constantly wrestle with similar problems of proof in other areas of the law. See Twerski et al., The Use and Abuse of Warnings in Products Liability Design Defect Litigation Comes of Age, 61 Cornell L.Rev. 495 (1976).

Pust argues that this conveyor was defective in design for failure to attach safety guards and for failure to provide an automatic cleaning device. A number of cases have specifically held that the failure to provide safety devices can be the basis of a § 402A design defect case. E. g., Pike v. Frank G. Hough Co., 2 Cal.3d 465, 85 Cal.Rptr. 629, 467 P.2d 229; Wright v. Massey-Harris, Inc., 68 Ill.App.2d 70, 215 N.E.2d 465.

Pust further contends that Union Supply may be held strictly liable both as a designer and as a manufacturer of the component parts of a defectively designed conveyor system. We agree that each of these questions should have been submitted to the jury for its determination.

B. Liability of a Designer

Looking at the evidence in the light most favorable to Pust, we find ample evidence that Union Supply was a designer of this conveyor system. There was evidence that Union Supply added the mechanical and structural design, together with the necessary engineering specifications, without which the conveyor could not be built. Other evidence showed that Union Supply redesigned and modified each of the sections of the conveyor. One expert testified that while Holly Sugar did the "performance design" how much sugar beet pulp the conveyor would carry and how much power was needed Union Supply did...

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