Young v. Robertshaw Controls Co.

• Decision Date: 15 November 1984
• Parties: Gail E. YOUNG, Individually and as Administratrix of the Estate of John A. Young, Deceased, Appellant-Respondent, v. ROBERTSHAW CONTROLS COMPANY, Uni-Line Division, Respondent-Appellant, et al., Defendants. (And Two Third-Party Actions.)
• Court: New York Supreme Court — Appellate Division

Page 891

481 N.Y.S.2d 891

104 A.D.2d 84

Gail E. YOUNG, Individually and as Administratrix of the Estate of John A. Young, Deceased, Appellant-Respondent, v. ROBERTSHAW CONTROLS COMPANY, Uni-Line Division,

Respondent-Appellant, et al., Defendants.

(And Two Third-Party Actions.)

Supreme Court, Appellate Division,

Third Department.

Nov. 15, 1984.

DeGraff, Foy, Conway, Holt-Harris & Mealey, Albany (Frederick C. Riester and F. Douglas Novotny, Albany, of counsel), for appellant-respondent.

Fischer, Hughes, Bessette & Edwards, Malone (Henry A. Fischer, Malone, of counsel), for respondent-appellant.

Before KANE, J.P., and CASEY, WEISS, YESAWICH and LEVINE, JJ.

YESAWICH, Justice.

The lawsuit underlying these appeals has its origin in a 1977 explosion of a propane gas water heater which resulted in the death of John Young, plaintiff's deceased spouse. It is alleged the explosion was occasioned by a defective control valve manufactured by defendant Robertshaw Controls Company (hereinafter defendant) and that despite knowledge of the product's defectiveness, defendant failed to recall the valves or to adequately warn dealers and the public of the danger. It is contended further that defendant withheld facts about the peril from consumers and additionally misled the Consumer Products Safety Commission (CPSC) regarding the extent of the risk. In August of 1979, plaintiff commenced this action against defendant and various codefendants. The complaint, as amended, asserts theories of negligence, breach of warranty, strict products liability and fraud. Compensatory damages for decedent's conscious pain and suffering and wrongful death are sought. Plaintiff in her individual capacity seeks both compensatory and punitive damages for personal injuries allegedly sustained, and for loss of consortium.

Defendant appeals from two orders of Special Term. By order entered December 7, 1983, plaintiff was permitted to amend her complaint to add seven causes of action. See 123 Misc.2d 580, 474 N.Y.S.2d 886. As administratrix, plaintiff was given leave to plead causes of action for conscious pain and suffering and wrongful death predicated on fraud. Individually, she was allowed to allege a fraud-based cause of action for loss of consortium between the date of the accident and decedent's death, as well as four separate causes of action for personal injury and property damage grounded in negligence, breach of warranty, strict tort liability and fraud. Additionally, plaintiff was accorded the right to assert a prayer for punitive damages in the five individual causes of action advanced by her.

The second order entered on December 7, 1983 enabled plaintiff, individually, to further amend the complaint to add a claim for punitive damages for loss of consortium in the seventh, eighth and ninth causes of action wherein defendant was charged with bringing about decedent's death through negligence, breach of warranty and strict tort liability, and further denied defendant's cross motion for reargument.

Defendant's threshold objection to both of these orders is that the proposed amendments are patently insufficient on their face because, as a matter of law, a fraud cause of action is not cognizable and punitive damages are unavailable in a derivative action for loss of consortium. The essential elements of a cause of action for fraud are the intentional misrepresentation of a material fact, reliance thereon and an injury resulting from the misrepresentation (Channel Master Corp. v. Aluminum Ltd. Sales, 4 N.Y.2d 403, 407, 176 N.Y.S.2d 259, 151 N.E.2d 833). Where representations are made to the public at large for the purpose of influencing the action of anyone who may act upon those representations, a common-law cause of action for fraud lies in favor of any individual who acts upon them and is injured thereby (Kuelling v. Lean Mfg. Co., 183 N.Y. 78, 85-86, 75 N.E. 1098).

In this instance the complaint charges, and documentary evidence tendered by plaintiff indicates, that for a number of years prior to decedent's death defendant was aware its control valve was defective and represented a real danger to the public (there had apparently been more than 100 accidents resulting in 32 deaths and 77 injuries), yet it did not recall the controls nor attempt to alert the public to the risk, but embarked instead upon an affirmative course of conduct designed and calculated to conceal the problems with the control. Allegedly this concealment, which continued for several years after decedent's death, was undertaken with the intention of deceiving the public at large as to the continued fitness for use of this control valve which defendant had placed in commerce and minimizing recoveries in lawsuits generated by the faulty control. Although generally nondisclosure or concealment alone does not equate to actionable fraud (Simcuski v. Saeli, 44 N.Y.2d 442, 452, 406 N.Y.S.2d 259, 377 N.E.2d 713; Moser v. Spizzirro, 31 A.D.2d 537, 295 N.Y.S.2d 188, affd. 25 N.Y.2d 941, 305 N.Y.S.2d 153, 252 N.E.2d 632), it is a principle of long standing that "one who sells an article knowing it to be dangerous by reason of concealed defects is guilty of a wrong, without regard to the contract, and is liable in damages to any person, including one not in privity of contract with him, who suffers an injury by reason of his willful and fraudulent deceit and concealment" (Kuelling v. Lean Mfg. Co., supra, 183 N.Y. p. 89, 75 N.E. 1098).

As recently noted in Cover v. Cohen, 61 N.Y.2d 261, 473 N.Y.S.2d 378, 461 N.E.2d 864, this duty to warn of defects is a continuing one, hence:

A manufacturer or retailer may * * * incur liability for failing to warn concerning dangers in the use of a product which come to his attention after manufacture or sale, through advancements in the state of the art, with which he is expected to stay abreast, or through being made aware of later accidents involving dangers in the product of which warning should be given to users * * *

Although a product be reasonably safe when manufactured and sold and involve no then known risks of which warning need be given, risks thereafter revealed by user operation and brought to the attention of the manufacturer or vendor may impose upon one or both a duty to warn (id., 61 N.Y.2d at 274-275, 473 N.Y.S.2d 378, 461 N.E.2d 864).

The reasonableness of a manufacturer's response to evidence that its product is potentially dangerous is generally for the trier of fact to assess (id., 61 N.Y.2d at 276-277, 473 N.Y.S.2d 378, 461 N.E.2d 864). Having declared that defendant was engaged in an intentional and ongoing scheme to conceal the harm posed by its flawed controls, plaintiff stated a cause of action for fraud (see Butcher v. Robertshaw Controls Co., 550 F.Supp. 692). To the extent Special Term's order of December 7, 1983 recognizes that a common-law action for fraud has been set forth, it is affirmed. Whether, as alleged, a causal connection exists between the avowed misrepresentations and the injuries suffered need not be resolved at this, a pleading stage of the proceeding.

With respect to whether it was proper to authorize plaintiff in her various loss of consortium causes of action to maintain punitive damage claims, we note that it is well established that a spouse's action for loss of consortium is derivative, and not independent, of the injured spouse's claim; since at common law a decedent had no cause of action to recover for his death, his spouse had no derivative right to recover for loss of consortium due to that death (Liff v. Schildkrout, 49 N.Y.2d 622, 632-633, 427 N.Y.S.2d 746, 404 N.E.2d 1288; Osborn v. Kelley, 61 A.D.2d 367, 370, 402 N.Y.S.2d 463). The Legislature, in enacting the wrongful death statute, limited recovery to compensation for pecuniary injuries; being in derogation of the common law, the statute is strictly construed (see Memorandum of Law Revision Commission, N.Y.Legis.Doc., 1982, No. 65McKinney's Session Laws of N.Y., 1982, p. 2415). Because at the time of decedent's death herein punitive damages were unavailable in a wrongful death action, it necessarily follows that such damages are inaccessible to the widow, whose rights derive from those of her deceased spouse. Similar reasoning compels the conclusion that punitive damages are unavailable to plaintiff for loss of consortium between the date of the accident and decedent's death. Though the action by decedent's estate for conscious pain and suffering survives, by statute a punitive damage award is proscribed (EPTL 11-3.2). Inasmuch as punitive damages are unattainable in the direct action, they are likewise unobtainable in plaintiff's individual claim for consortium, which is interconnected with and stems from the direct action (see Maidman v. Stagg, 82 A.D.2d 299, 305, 441 N.Y.S.2d 711).

We decline plaintiff's invitation to apply the law of the ...