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GERALD WILLIAMS v. WEST PENN POWER COMPANY (11/10/83)

SUPREME COURT OF PENNSYLVANIA


decided: November 10, 1983.

GERALD WILLIAMS, DANIEL BANKS AND LINDA BANKS, HIS WIFE
v.
WEST PENN POWER COMPANY, A CORPORATION, REIMANN AND GEORGER, INC., A CORPORATION, COMMERCIAL SERVICES COMPANY, A CORPORATION, SLOVENIAN HALL ASSOCIATION OF BROUGHTON, PENNSYLVANIA AND JOHN J. BAHR, ALFRED J. BAHR AND NEIL R. BAHR, INDIVIDUALLY AND TRADING AND DOING BUSINESS AS BAHR BROTHERS, V. JERRY LEE MILBEE, INDIVIDUALLY AND B & M ROOFING CONTRACTORS, A PARTNERSHIP, AND DANIEL BANKS. APPEAL OF GERALD WILLIAMS, DANIEL BANKS AND LINDA BANKS, HIS WIFE. GERALD WILLIAMS, DANIEL BANKS AND LINDA BANKS, HIS WIFE, V. WEST PENN POWER COMPANY, A CORPORATION, REIMANN AND GEORGER, INC., A CORPORATION, COMMERCIAL SERVICES COMPANY, A CORPORATION, SLOVENIAN HALL ASSOCIATION OF BROUGHTON, PENNSYLVANIA AND JOHN J. BAHR, ALFRED J. BAHR AND NEIL R. BAHR, INDIVIDUALLY AND TRADING AND DOING BUSINESS AS BAHR BROTHERS, V. JERRY LEE MILBEE, INDIVIDUALLY AND B & M ROOFING CONTRACTORS, A PARTNERSHIP, AND DANIEL BANKS. APPEAL OF REIMANN AND GEORGER, INC., A CORPORATION

No. 51 W.D. Appeal Docket 1983, Appeal from the Order of the Superior Court Dated April 22, 1983, entered at 1121 Pittsburgh 1980, affirming in part & reversing in part the Order of the Court of Common Pleas of Allegheny County, Civil Division, dated November 3, 1980, entered at No. GD 77-11257. No. 52 W.D. Appeal Docket 1983, Appeal from the Order of the Superior Court Dated April 22, 1983, entered at 1121 Pittsburgh 1980, affirming in part & reversing in part the Order of the Court of Common Pleas of Allegheny County, Civil Division, dated November 3, 1980, entered at No. GD 77-11257

COUNSEL

Daniel B. Winters, Pittsburgh, for John J. Bahr, Alfred J. Bahr and Neil R. Bahr, etc.

David R. Johnson, John D. Rhodes, Pittsburgh, for Reimann & Georger, Inc.

Edward C. Milburn, Pittsburgh, for Jerry Lee Milbee, etc.

Robert Rade Stone, Pittsburgh, for Gerald Williams, Daniel Banks and Linda Banks.

W. Arch Irvin, Jr., Pittsburgh, for Slovenian Hall Ass'n.

George M. Weis, Pittsburgh, for West Penn Power Co.

Roberts, C.j., and Nix, Larsen, Flaherty, McDermott, Hutchinson and Zappala, JJ. Larsen, J., concurs in the result.

Author: Nix

[ 502 Pa. Page 559]

OPINION

These appeals question whether the statute of limitations for tort actions, 42 Pa.C.S.A. § 5524(2),*fn1 or the Uniform Commercial Code ("Code"),*fn2 section 2-725*fn3 is applicable in

[ 502 Pa. Page 560]

    suits brought under the Code that allege personal injury. We are not here reexamining the general question of the substantive right of a third party to sue under the Code for breach of warranty. Salvador v. Atlantic Steel Boiler Co., (" Salvador I ") 457 Pa. 24, 319 A.2d 903 (1974) disposed of that issue.

What is being urged is that either based upon a concept of privity or a theory of the nature of the claim, the breach of warranty provisions under the Code should be controlled by the tort statute of limitations.

The Court of Common Pleas granted a motion for summary judgment based on the view that all of the claims were barred under the two-year tort statute of limitations. The Superior Court affirmed in part and reversed in part, ruling that the Banks' action against Commercial Services Company was governed by section 2-725 of the Code. Williams v. West Penn Power Co., Pa. Super. , 460 A.2d 278 (1983).*fn4

I.

Gerald Williams was an employee of B & M Roofing Contractors ("B & M"), a partnership, on May 19, 1975 when

[ 502 Pa. Page 561]

    a ladder platform hoist,*fn5 which he and his employer, Daniel Banks, were lowering, contacted a high tension electric power line. Both Mr. Williams and Mr. Banks suffered severe electrical burns throughout their bodies as a result of the ladder's conducting electricity from the high tension wires through them. Additionally, Mr. Williams lost two toes on his right foot and Mr. Banks' left leg was amputated below the knee.

Reimann and Georger, Inc. manufactured the ladder alleged to be defective in design and construction. It was purchased by B. & M., of which Mr. Banks was a partner, from Commercial Services Company, a seller and distributor of ladders, hoists and commercial equipment. The complaint does not allege the date of purchase of the ladder; however, the brief submitted to this Court by Reimann and Georger, Inc., indicates the injuries were inflicted "the same day the ladder was purchased".

On May 20, 1977, Mr. Williams and Mr. and Mrs. Banks filed a praecipe for writ of summons in trespass in the Court of Common Pleas of Allegheny County. On June 29, 1977 a complaint in trespass and assumpsit was also filed in that court. In responsive pleadings, the defendants by way of new matter asserted the two-year tort statute of limitations. On motion for summary judgment, all claims of the plaintiffs were dismissed on November 3, 1980. This result was justified by Judge Wekselman's interpretation of the holding of the Superior Court in Salvador v. Atlantic Steel Boiler Co. (" Salvador II "), 256 Pa. Super. 330, 389 A.2d 1148 (1978) affirmed per curiam, 492 Pa. 257, 258, 424 A.2d 497 (1981). He held the two-year tort statute of limitations applicable to all breach of warranty actions where the damages claimed are personal injury.

On appeal to the Superior Court, Judges Montemuro and Rowley, while maintaining the tort/contract dichotomy, did not interpret Salvador II as broadly as did Judge Wekselman.

[ 502 Pa. Page 562]

They resurrected an additional dichotomy of direct buyer/injured third party previously discredited by this Court in products liability cases. By this decision Mr. Williams, as an employee who did not purchase the ladder, was denied the benefit of section 2-725 of the Code. That court also held that Mr. Banks, under Salvador II, could not maintain an action against the manufacturer who placed the ladder in the stream of commerce although he could proceed against the retail seller. It was emphasized that distinctions were made for statute of limitation purposes and not for substantive ones. Judge Beck, in a concurring and dissenting opinion, emphasized the legally asymmetrical result reached by the majority and noted the present trends in the resolution of what appears to be a conflict between section 402A of the Restatement (Second) of Torts*fn6 and the Code.*fn7 For reasons that follow, we are of the view that the four-year statute of limitations provided in the Code is applicable to all breaches of warranty claims brought under the Code including those for personal injury.*fn8

[ 502 Pa. Page 563]

II.

At the outset it is clear that the actions in trespass brought by plaintiffs under § 402A of the Restatement (Second) of Torts are time-barred. Thus, we only address the question of the appropriate statute of limitations for that portion of the complaint entitled assumpsit which charges a breach of warranty attributed to Commercial Services Company, seller of the ladder, and Reimann and Georger, Inc., manufacturer of the ladder.*fn9

An action for breach of warranty originally sounded in tort, being an action on the case for false warranty of an "undertaking" and fraud. It arose from the warrantor's consent to be bound. Later the element of consent was not required, but the "undertaking" and the existence of a warranty deemed the action to be one of contract.*fn10 As assumpsit became more exclusively a contract action, the requirement of an "undertaking" or agreement fathered the defense of lack of privity between the plaintiff and defendant.*fn11

[ 502 Pa. Page 564]

By the time the Code was first adopted, it was clearly established through case law, see, Loch v. Confair, 361 Pa. 158, 63 A.2d 24 (1949), that actions for breach of warranty in sales contracts were limited to the immediate or original buyer in reliance upon the rule of privity of contract.

Although § 2-318*fn12 of the Code extended the cause of action for breach of warranty to members of the buyer's family, his household or a guest in the purchaser's home, this Court continued the requirement of privity as to an employee of the purchaser of a product in Hochgertel v. Canada Dry Corp., 409 Pa. 610, 187 A.2d 575 (1963) (horizontal privity).*fn13 Both horizontal privity, determinative of who may sue, and vertical privity, which decides who may be sued, have been considered undesirable.*fn14 The primary reasons

[ 502 Pa. Page 565]

    offered for the condemnation of the privity requirement centered upon the unfairness of insulating the remote manufacturer, who in fact made the defective product, and barring a non-buyer consumer who is in fact injured by that defect under present marketing practices.

The decision in Henningsen v. Bloomfield Motors, Inc., 32 N.J. 358, 161 A.2d 69 (1960), is considered the fall of privity in products liability cases. In that case an automobile made by Chrysler was sold to a dealer in Bloomfield. The dealer sold the automobile to Henningsen whose wife was injured when "something went wrong" with the steering gear. Mrs. Henningsen filed suit against Bloomfield Motors and Chrysler. The court held both defendants liable without a showing of negligence and without privity of contract. The court ruled that:

Accordingly, we hold that under modern marketing conditions, when a manufacturer puts a new automobile in the stream of trade and promotes its purchase by the public, an implied warranty that it is reasonably suitable for use as such accompanies it into the hands of the ultimate purchaser. Absence of agency between the manufacturer and the dealer who makes the ultimate sale is immaterial. 32 N.J. at 384, 161 A.2d at 84.*fn15

Thus, after this Court adopted section 402A of the Restatement (Second) of Torts in 1966, it logically followed that the fall of privity in products warranty would occur in

[ 502 Pa. Page 566]

Pennsylvania. In Kassab v. Central Soya, 432 Pa. 217, 246 A.2d 848 (1968) it was held that a purchaser of a product may maintain an action in assumpsit against a remote manufacturer for injury to commercial breed cattle caused by a breach of an implied warranty in the cattle feed. Kassab abolished vertical privity in assumpsit cases brought under the Code and indicated the Code should be construed as co-extensive with section 402A.*fn16 Chief Justice Roberts, then Mr. Justice Roberts, forcefully stated:

Vertical privity can no longer commend itself to this Court.

To retain this tort-contract dichotomy with its haphazard, crazy quilt of exceptions and appendages can only cause Justice VOELKER'S language (speaking for the Supreme Court of Michigan when that tribunal abolished the privity requirement) to ring painfully true for the law of this Commonwealth. In commenting on the state of Michigan law under privity it was said: "A court lacking a clear and understandable rule of its own can scarcely be expected to impart it to others. Legal confusion has inevitably resulted. Aggrieved plaintiffs have scarcely known whether to sue in deceit or fraud or for negligence or breach of warranty-or indeed whether it was worthwhile to sue at all." Spence v. Three Rivers Builders & Masonry Supply, Inc., 353 Mich. 120, 129, 90 N.W.2d 873, 878 (1958). We therefore hold that the lack of privity between appellants and Soya cannot insulate the latter from liability for breach of warranty. (Emphasis in original)

432 Pa. at 234-235, 246 A.2d at 856.

However, after Kassab, horizontal privity remained the law of this Commonwealth until the Superior Court, in Salvador v. Atlantic Steel Boiler Co., 224 Pa. Super. 377, 307 A.2d 398 (1973) foreshadowed this Court's decision in Salvador I. The Superior Court held the plaintiff-employee who sustained serious personal injuries when a steam boiler purchased

[ 502 Pa. Page 567]

    from the defendant by plaintiff's employer exploded was entitled to maintain his action in assumpsit for breach of implied warranty. Mr. Salvador had sued in trespass and assumpsit. The Superior Court's reasoning was that since Kassab had abolished vertical privity, it would be inconsistent and without any basis to disallow recovery for the lack of horizontal privity. Quoting from Dean Prosser in "Strict Liability to the Consumer", 69 Yale Law Journal 1099 (1960) the court approved the fact that "[i]f warranty is a matter of tort as well as contract, and if it can arise without any intent to make it a matter of contract, then it should need no contract; and it may arise and exist between parties who have not dealt with one another." 224 Pa. Super. at 386, 307 A.2d at 403.

In Salvador I we overruled Hochgertel and affirmed the Superior Court, using this language:

Today, as the Superior Court correctly recognized, a manufacturer by virtue of section 402A is effectively the guarantor of his products' safety. See Webb v. Zern [422 Pa. 424, 220 A.2d 853] supra; Kassab v. Central Soya, supra. Our courts have determined that a manufacturer by marketing and advertising his product impliedly represents that it is safe for its intended use. We have decided that no current societal interest is served by permitting the manufacturer to place a defective article in the stream of commerce and then to avoid responsibility for damages caused by the defect. He may not preclude an injured plaintiff's recovery by forcing him to prove negligence in the manufacturing process. Webb v. Zern. Neither may the manufacturer defeat the claim by arguing that the purchaser has no contractual relation to him. Kassab v. Central Soya. Why then should the mere fact that the injured party is not himself the purchaser deny recovery?

Because the manufacturer is now a guarantor, the "harsh and unjust result" is worked on the plaintiff who may recover for his injury or loss if his complaint is in trespass, but on identical facts would be denied relief if the pleading is captioned "Complaint in Assumpsit." See

[ 502 Pa. Page 568]

    were hurt in the same accident and sustained equally grievous injuries.

III.

The Superior Court in Salvador II strayed into error by embracing a tort/contract dichotomy.*fn17 The inherent fallacy of such a dichotomy is that in the area of products liability we enter the borderland of tort and contract. It is not a question of whether a claim sounds in tort or assumpsit. Rather it sounds in both. Therefore, there is no legitimacy in attempting to use such a dichotomy as the predicate for distinction as to the limitation to be given the action. See Kassab v. Central Soya, supra.

Some jurisdictions have attempted legislatively to remedy the problem in this area by specifically drafting statutes of limitation in the field of products liability.*fn18 Here we are faced with the question of whether to apply the Code statute of limitations. For the reasons stated, the mere fact the breach of warranty claim seeks recovery for personal injuries does not justify deviating from the Code's prescribed limitations.

So too there is also no justification in restoring the concept of privity. The extension of liability under the Code

[ 502 Pa. Page 570]

    to persons not in privity with those in the chain of manufacture and marketing does not validate the application of the tort statute of limitations. The Code itself did not limit its breach of warranty claims to direct purchasers. Comment three to section 2-318 regarding Third Party Beneficiaries of Warranties Express or Implied clearly states:

The first alternative expressly includes as beneficiaries within its provisions the family, household, and guests of the purchaser. Beyond this, the section in this form is neutral and is not intended to enlarge or restrict the developing case law on whether the seller's warranties, given to this buyer who resells, extend to other persons in the distributive chain.

In view of our impressive case law criticizing the use of privity, Kassab v. Central Soya, supra, and Salvador I, supra, and the lack of symmetry that will result in this area if we were to follow the dictates of Salvador II, such a course of action would clearly be a disservice to our jurisprudence. Neither is it warranted since it is not mandated by the Code nor required by our precedent. We therefore now express our disapproval of the holding in Salvador II. We rule today that section 2-725 of the Code applies to all breach of warranty actions brought under the Code and that no exception will be made merely because the claim seeks to recover for personal injury. Thus all claimants receiving injury in the manner of Mr. Williams and Mr. Banks have the option of proceeding in tort, governed by the tort statute of limitations, or under the Code, governed by the Code statute of limitations.

IV.

Accordingly, the Order of the Superior Court sustaining the motions of Commercial Services Company and Reimann and Georger, Inc., for summary judgment against Mr. Williams is reversed. The Order of the Superior Court sustaining the motion of Reimann and Georger, Inc., for summary judgment against the Banks is reversed. The Order of the Superior Court reversing the court of common pleas' grant

[ 502 Pa. Page 571]

    of the motion of Commercial Services Company for summary judgment against the Banks is affirmed. The matter is remanded to the court of common pleas for further proceedings consistent herewith.


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