Warzynski v. Empire Comfort Systems, Inc., 904SC260

• Decision Date: 19 March 1991
• Docket Number: No. 904SC260,904SC260
• Parties: , 15 UCC Rep.Serv.2d 463 Timothy Glenn WARZYNSKI and wife, Nannette Harper Warzynski, Plaintiffs, v. EMPIRE COMFORT SYSTEMS, INC. Safel-Inelsa Orbaiceta, S.A. and Jenkins Gas Company of Pollocksville, North Carolina, Defendants.
• Court: North Carolina Court of Appeals

Page 801

401 S.E.2d 801

102 N.C.App. 222, 15 UCC Rep.Serv.2d 463

Timothy Glenn WARZYNSKI and wife, Nannette Harper Warzynski, Plaintiffs, v. EMPIRE COMFORT SYSTEMS, INC. Safel-Inelsa Orbaiceta, S.A. and Jenkins Gas Company of Pollocksville, North

Carolina, Defendants.

No. 904SC260.

Court of Appeals of North Carolina.

March 19, 1991.

Blanchard, Tucker, Twiggs & Abrams, P.A. by Charles F. Blanchard and Jerome P. Trehy, Jr., Raleigh, for plaintiff-appellant/appellee.

White & Allen, P.A. by John R. Hooten and John C. Archie, Kinston, for defendant-appellant/appellee Jenkins Gas Co. of Pollocksville, N.C.

Maupin Taylor Ellis & Adams, P.A. by Mark S. Thomas and M. Keith Kapp, Raleigh, for defendant-appellant Safel-Inelsa, S.A.

Harris and Associates by Thomas E. Harris and C. David Creech, New Bern, for the defendant-appellee Empire Comfort Systems, Inc.

EAGLES, Judge.

We first address the plaintiffs' and defendant Safel's appeal of the entry of summary judgment in favor of Empire Comfort Systems. Here, summary judgment was based on the sealed container defense of G.S. 99B-2(a). We hold that the trial court erred in granting summary judgment for Empire because a genuine issue of material fact existed as to whether Empire was the apparent manufacturer of the heaters. By so holding, we adopt § 400 of the Restatement (Second) of Torts and conclude that a seller who holds himself out to the public as the manufacturer of a product is not protected from products liability actions by G.S. 99B-2(a).

G.S. 99B-2(a) provides:

No product liability action, except an action for breach of express warranty, shall be commenced or maintained against any seller when the product was acquired and sold by the seller in a sealed container or when the product was acquired and sold by the seller under circumstances in which the seller was afforded no reasonable opportunity to inspect the product in such a manner that would have or should have, in the exercise of reasonable care, revealed the existence of the condition complained of, unless the seller damaged or mishandled the product while in his possession; provided, that the provisions of this section shall not apply if the manufacturer of the product is not subject to the jurisdiction of the courts of this State or if such manufacturer has been judicially declared insolvent.

Here, the parties direct their arguments to the exceptions to the sealed container defense of G.S. 99B. We conclude that none of the parties dispute that Empire acquired the heaters from Safel in sealed containers. The plaintiffs first contend that the trial court erred in granting summary judgment because Empire made express warranties regarding the heaters. As noted above, G.S. 99B-2(a) excludes actions for express warranties. We find plaintiff's argument that Empire made express warranties without merit. Empire advertised that it sold "America's most complete line of reliable, economical gas heating appliances." Under the Uniform Commercial Code "a statement purporting to be merely the seller's opinion or commendation of the goods does not create a warranty." G.S. 25-2-313(2). Under the facts presented, we cannot say that Empire's statement that the heater was "reliable" was so regarded by the Warzynskis as to be part of the reason for their purchase. See 3 A. Squillante & J. Fonseca Williston on Sales § 17-5 (4th ed. 1974). Accordingly, we hold that the language in Empire's advertisement is merely puffing and not an express warranty.

Plaintiffs also argue that Empire is not entitled to assert the sealed container defense under G.S. 99B because Empire was more than a "mere conduit" in the distribution chain. We agree.

Plaintiffs rely on the Restatement (Second) of Torts which provides as follows: "One who puts out as his own product a chattel manufactured by another is subject to the same liability as though he were its manufacturer." Restatement (Second) of Torts § 400 (1965). Comment d provides:

[W]here it is clear that the actor's only connection with the chattel is that of a distributor of it (for example, as a wholesale or retail seller), he does not put it out as his own product and the rule stated in this section is inapplicable. Thus, one puts out a chattel as his own product when he puts it out under his name or affixes to it his trade name or trademark.... The mere fact that the goods are marked with such additional words as "made for" the seller, or describe him as a distributor, particularly in the absence of a clear and distinctive designation of the real manufacturer or packer, is not sufficient to make inapplicable the rule stated in this Section.... However, where the real manufacturer or packer is clearly and accurately identified on the label or other markings on the goods, and it is also clearly stated that another who is also named has nothing to do with the goods except to distribute or sell them, the latter does not put out such goods as his own. That the goods are not the product of him who puts them out may also be indicated clearly in other ways.

Restatement (Second) of Torts § 400 comment d (1965).

Our research disclosed only one case in which the appellate courts of this state have considered section 400 of the Restatement. The Supreme Court cited this section of the Restatement with approval in dicta in Rulane Gas Co. v. Montgomery Ward & Co., 231 N.C. 270, 56 S.E.2d 689 (1949).

Empire argues that section 400 is a form of strict liability and that it is contrary to the express language of G.S. 99B-2. We disagree. Section 400 is not a form of strict liability because it does not impose on sellers the absolute duty to make products safe. It merely provides that a seller is subject to the same liability as a manufacturer if the seller leads the public to believe that he is the manufacturer. Empire also contends that in Neihage v. Kittrell Auto Parts, Inc., 41 N.C.App. 538, 255 S.E.2d 315 (1979), disc. rev. denied, 298 N.C. 298, 259 S.E.2d 914 (1979), this Court rejected the argument that a company can be made liable for negligent manufacturing merely by putting its name on a product. In Neihage the Court held only that summary judgment was proper where plaintiff did not offer any evidence that the defendant represented or held itself out to the public as having designed or manufactured a steel punch.

We believe that § 400 and G.S. 99B-2 can be read together and do not conflict. In fact G.S. 99B-2 is consistent with § 402 of the Restatement (Second) of Torts. Section 402 provides:

A seller of a chattel manufactured by a third person, who neither knows nor has reason to know that it is, or is likely to be, dangerous, is not liable in an action for negligence for harm caused by the dangerous character or condition of the chattel because of his failure to discover the danger by an inspection or test of the chattel before selling it.

Restatement (Second) of Torts § 402 (1965).

Here, Empire and Safel shared the expenses of advertising the heaters and Empire serviced the heaters. The heaters also came with an "Empire Heating Appliance Limited Warranty." The record indicates that all of the advertising promoting the heaters referred to Empire and not to Safel. Nowhere in its advertising did Empire say that it was not the manufacturer nor did it say that the heater was manufactured in another country. One of Empire's promotional flyers for dealers and wholesalers called the Empire Corcho "America's best made and best-selling unvented gas wall furnace." Nothing on any of the packaging indicated that Safel was the manufacturer. The only evidence to indicate that Empire might not have manufactured the heater was a decal on the carton and the heater that said the heater was made in Spain. The decal did not refer to Safel at all. Therefore, we hold that a genuine issue of material fact exists as to whether Empire was the apparent manufacturer of the heaters. Accordingly, we reverse the trial court's entry of summary judgment for Empire.

Additionally, we hold that the trial court correctly found that Safel was subject to the jurisdiction of the courts of this state. Rule 4(j3) establishes procedures for service of process in a foreign country. The rule allows for service by any form of mail requiring a signed receipt and addressed and dispatched by the clerk of court to the party to be served. Rule 4(j3) also provides that proof of service may be made as prescribed in G.S. 1-75.10 and shall include an affidavit of "addressing and mailing" by the clerk of court. The trial court had before it an affidavit of "addressing and mailing" from the clerk of court and an affidavit from a representative of Federal Express that complied with the requirements of G.S. 1-75.10(4). Proper service is presumed when the provisions of Rule 4 are met. G.S. 1A-1 Rule 4(j2)(2). At the time the trial court considered Empire's motion for summary judgment, Safel had offered no evidence to rebut that presumption.

We also find no merit in Safel's argument that there was no basis for the court's exercise of personal jurisdiction. Under Bush v. BASF Wyandotte Corp., 64 N.C.App. 41, 51, 306 S.E.2d 562, 568 (1983), a corporation is subject to the jurisdiction of the courts of this state when it has "purposefully injected [its] product into the stream of commerce without any indication that it desired to limit the area of distribution of its product so as to exclude North Carolina." Here, Safel gave Empire an exclusive right to sell the heaters in the United States with no limit as to North Carolina. Under Bush v. BASF, Safel injected its product into the stream of commerce and subjected...