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DONALD JOHN NATH v. NATIONAL EQUIPMENT LEASING CORPORATION (12/17/81)

decided: December 17, 1981.

DONALD JOHN NATH, JR., APPELLANT,
v.
NATIONAL EQUIPMENT LEASING CORPORATION, APPELLEE



No. 81-1-4, Appeal from the Order of the Superior Court of Pennsylvania at No. 653 April Term, 1979, dated November 7, 1980, affirming the order and judgment of the Court of Common Pleas of Allegheny County, Civil Division, at No. 3802 April Term, 1974.

COUNSEL

Kenneth W. Behrend and Mark B. Aronson, Behrend, Aronson & Morrow, Pittsburgh, for appellant.

Daniel M. Berger, Pittsburgh, amicus curiae.

Randall J. McConnell and Dickie, McCamey & Chilcote, James R. Miller, Pittsburgh, for appellee.

O'Brien, C. J., and Roberts, Nix,*fn* Larsen, Flaherty, Kauffman and Wilkinson, JJ. Larsen J., filed a dissenting opinion in which Flaherty and Kauffman, JJ., joined.

Author: Nix

[ 497 Pa. Page 127]

OPINION OF THE COURT

This is an action in trespass brought in the Court of Common Pleas of Allegheny County, 282 Pa. Super. 142, 422 A.2d 868 in which appellant seeks to recover damages sustained from an injury suffered during the course of his employment. On March 29, 1972 the left hand of David John Nath, appellant, became caught in the gears and blades of a wire and cable stripping machine which did not provide a guard to protect the user's hands. Mr. Nath lost three fingers and part of the hand. His employer, Keystone Metals Company (now Keystone Resources) obtained the machine from the Rigby Manufacturing Company, which made it. Keystone asked appellee, National Equipment Leasing Corporation (National) to finance the purchase. Keystone had ordered the machine, bargained for the purchase price and received the initial invoice of $1,875.00.

Appellee borrowed money from the Pittsburgh National Bank (PNB) in order to provide the funds for Keystone's purchase. Rigby Manufacturing Company accommodated National's request to reinvoice the machine to show appellee as owner. Appellee then prepared a lease schedule for the machine and a financing statement to be filed in accordance with the security interest provisions of the Uniform Commercial Code. 13 Pa. C.S.A. §§ 1101 et seq. The lease was assigned to PNB as security in case National defaulted on its

[ 497 Pa. Page 128]

    loan obligation. The security statement showed National to be a secured party and Keystone a debtor. The machine was later sold by Keystone during the lease term (in March of 1975) to a company in California and the proceeds turned over to National. Appellant, in another action based upon the same injury, filed in the United States District Court for the Western District of Pennsylvania against Rigby Manufacturing Company, secured a verdict of $175,000.00.

On December 16, 1975, appellant's motion for partial summary judgment as to the applicability of the Restatement (Second) of Torts § 402A*fn1 to appellee was denied by a court en banc. That court concluded the appellate courts of Pennsylvania had not extended Section 402A to lessors. A week later, the lower court certified the case for appeal to the Superior Court, pursuant to 17 P.S. § 211.501. On January 5, 1976, the Superior Court denied appellant's Petition for Allowance of Appeal. Appellant then petitioned this Court for allowance of an appeal. On March 3, 1976 the petition was granted. On June 3, 1977, we remanded the case to the lower court, Nath v. Nat'l Equipment Leasing Corp., 473 Pa. 178, 373 A.2d 1105 (1977) (Nath I), in view of the fact that

[s]ubsequent to the action of the court below, [we] handed down . . . Francioni v. Gibsonia Truck Corporation, 472 Pa. 362, 372 A.2d 736 . . . wherein we reasoned:

[ 497 Pa. Page 129]

'What is crucial to the rule of strict liability is not the means of marketing but rather the fact of marketing, whether by sale, lease or bailment, for use and consumption by the public.'

Id. [472 Pa. at 367] 372 A.2d at 738.

Thus, in view of our holding that the strict liability of Section 402[A] is to be extended to a supplier of chattels, even though the marketing device employed is a lease, we now vacate the order denying the motions for partial summary judgment and remand the cause for further consideration in view of our ...


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