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ROTSHTEYN v. KLOS CONSTRUCTION

May 20, 2004.

INNA ROTSHTEYN and EUGENE STONE
v.
KLOS CONSTRUCTION, INC., et al



The opinion of the court was delivered by: THOMAS O'NEILL, Senior District Judge

MEMORANDUM

I. INTRODUCTION

Plaintiffs Inna Rotshteyn and Eugene Stone have filed a wrongful death action arising out of an October 5, 2001 accident which allegedly occurred while decedent Mikhail Rotshteyn was operating a downstacking machine manufactured by Agnati, S.p.A. in the scope of his employment at Acme Corrugated Box Company. Plaintiffs allege that United was the exclusive distributor of Agnati products in the United States under its "Strategic Alliance Agreement" with Agnati at the time of the accident and is therefore liable for strict products liability and breach of warranty in connection with the downstacker under Restatement (Second) of Torts Section 402 A. Plaintiffs have also asserted a negligence claim against United, claiming it had a duty to install electrical sensors or other types of safety devices along with the downstacker components Acme provided. Presently before me is defendant's motion for summary judgment. For the reasons stated below I will grant defendant's motion as to the strict liability and breach of warranty claims and will deny defendant's motion as to plaintiffs' negligence claim. II. BACKGROUND

  On October 5, 2001, Mikhail Rotshteyn, a general maintenance mechanic for Acme was killed in a workplace accident, allegedly while cleaning a hydraulic oil leak inside a downstacking machine manufactured by Agnati.*fn1 Acme is alleged to have purchased the downstacker on the used equipment market from Jet Corr, Inc. in Atlanta. Defendant United Container Machinery alleges it was hired to assist in the electrical installation of the previously used Agnati downstacking machine at Acme.*fn2 Defendant further asserts it was not involved with the design, manufacture or sale of the subject downstacking unit and that it was not hired to provide any type of safety analysis, engineering analysis, design opinion or any related evaluation or advice concerning the downstacker's safety. Plaintiffs assert that United was the exclusive distributor of Agnati products in the United States under its "Strategic Alliance Agreement" with Agnati at the time of the accident. The agreement is dated October 22, 1999. Plaintiffs further allege that in addition to installing the subject downstacker, defendant also supplied necessary parts for its installation and agreed to provide training for the new equipment.

  III. STANDARD FOR SUMMARY JUDGMENT

  Federal Rule of Civil Procedure 56(c) provides that summary judgment is appropriate if "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." The Supreme Court has recognized that the moving party "bears the initial responsibility of informing the district court of the basis for its motion, and identifying those portions . . . which it believes demonstrate the absence of a genuine issue of material fact." Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). After the moving party has filed a properly supported motion, the burden shifts to the nonmoving party to "set forth specific facts showing that there is a genuine issue for trial." Fed.R.Civ.P. 56(e). The nonmoving party may not rest upon the mere allegations or denials of the party's pleading. See Celotex, 477 U.S. at 324.

  I must determine whether any genuine issue of material fact exists. An issue is "material" only if the dispute over facts "might affect the outcome of the suit under the governing law." Anderson v. Liberty Lobby. Inc., 477 U.S. 242, 248 (1986). If the record taken as a whole in a light most favorable to the nonmoving party, "could not lead a rational trier of fact to find for the nonmoving party, there is no `genuine issue for trial.'" Matsushita Elec. Co. v. Zenith Radio, 475 U.S. 574, 587 (1986) (citation omitted). If the evidence for the nonmoving party is merely colorable, or is not significantly probative, summary judgment may be granted. Anderson. 477 U.S. at 249-50 (citations omitted).

  I. STRICT LIABILITY AND BREACH OF WARRANTY

  Strict products liability does not extend to mere installers of defective products. Malloy v. Doty Container, 820 F. Supp. 217, 222 (E.D. Pa. 1993). Restatement (Second) of Torts Section 402A, which has been adopted by Pennsylvania, states that:
(1) One who sells any product in a defective condition unreasonably dangerous to the seller or consumer or to his property is subject to liability for physical harm thereby caused to the ultimate user or consumer, or to his property, if (a) the seller is engaged in the business of selling such a product, and
(b) it is expected to and does reach the user or consumer without substantial change in the condition in which it is sold.
(2) The rule stated in Subsection (1) applies although
(a) the seller has exercised all possible care in the preparation and sale of his product, and
(b) the user or consumer has not bought the product from or entered into any contractual relation with the seller.
Comment f to Section 402A further explains that the section "applies to any manufacturer of such a product, to any wholesale or retail dealer or distributor. . . . It is not necessary that the seller be engaged solely in the business of selling such products." See also. Malloy v. Doty Conveyor, 820 F. Supp. 217, 220 (E.D. Pa. 1993). quoting Burch v. Sears, Roebuck & Co., 467 A.2d 615, 621 ( Pa. Super. 1983) ("seller" includes "all suppliers of a defective product in the chain of distribution, whether retailers, partmakers, assemblers, owners, sellers, lessors or any other relevant category"). Although defendant asserts it was only hired to install the downstacking machine in question, plaintiffs assert that defendant was, in fact, a distributor of Agnati products and is therefore strictly liable for installing a defective product.

  Plaintiff argues that although defendant was not a seller, strict liability should extend to defendant because "(1) a proposal was submitted on behalf of `United Agnati,' and . . . (2) the installation was conducted during United's partnership with Agnati S.p.A. whereby both parties mutually promised to be eachother's co-designer, co-manufacturer, and co-marketer of equipment, parts and services for the global corrugated box industry. . . ." (Pl.'s Br. in Opp. to Mot. for S.J. at 3). However, for Section 402A liability to attach, there be some nexus between the product sold, manufactured or distributed and the injury. Section 402A limits liability to "[o]ne who sells any product in a defective condition unreasonably dangerous to the user or consumer or to his property . . . for physical harm thereby caused to the ultimate user or consumer." (Emphasis added). "The imposition of strict products liability under § 402A requires that the defendant be in the chain of distribution of the defective product . . . to place the burden for compensating injuries on those who can control the defect and spread its costs through pricing." Malloy, 820 F. Supp. at 220. citing Burch v. Sears, Roebuck & Co., 467 A.2d 615, 621 (Pa. Super. 1983).

  Plaintiffs have not produced evidence to show that the particular downstacker that injured decedent was sold, manufactured, or distributed by defendant. The machine was sold to Acme on the used equipment market by Jet Corr, a third party. Plaintiffs have produced no evidence to show that defendant was involved in brokering the transaction between Acme and Jet Corr in any way. Further, although defendant's agreement with Agnati may allow for liability to attach with regard to downstackers manufactured during the course of their agreement, plaintiffs have not alleged that the downstacker in question was manufactured during the time period when defendant had agreed to be "co-designer, co-manufacturer, and co-marketer" of Agnati equipment.

  To allow strict liability to attach here, where defendant had no involvement with the sale, manufacture or distribution of the downstacker in question, would do nothing to further the policy behind strict liability. There is nothing defendant could have done to ameliorate any design defect or failure to warn while this downstacker was in the chain of distribution. Defendant's only involvement with this machine was after it was purchased. The justification for strict liability "`has been said to be that a seller . . . has undertaken and assumed a special responsibility' toward the user, that the public has the right to `rely upon the seller, that reputable sellers will stand behind their goods,' and that the proper persons to afford protection to consumers `are those who market the products.'" Tracey v. Winchester Repeating Arms Co., 745 F. Supp. 1099, 1108 (E.D. Pa., 1990) quoting Rest. (Second) of Torts § 402A cmt. c. Defendant assumed no such special responsibility here as it was not a seller, manufacturer or distributor of the equipment at issue and it is therefore not the proper person to afford protection to plaintiffs under a theory of strict liability. Another way of saying this is that "[a]bsent an element of causation, there can be no liability under § 402A" and because there is no nexus between the manufacture, sale or distribution of this downstacker and defendant, it is neither socially nor economically expedient to impose strict liability here. Tracey, 745 F. Supp. at 1108. I will therefore grant summary judgment in favor of defendant on the issues of strict liability and breach of warranty.*fn3

  II. NEGLIGENCE

  Plaintiffs have provided sufficient evidence to raise a genuine issue of material fact as to whether defendants undertook a duty to do more than merely assist with the electrical installation of the downstacking unit and therefore whether defendant could be liable in negligence to plaintiffs. "At a minimum, a defendant must be found to owe a duty of care before it can be held responsible for a failure to exercise that duty reasonably." Sacks v. Thomas Jefferson Univ. Hosp., 684 F. Supp. 858, 859 (E.D. Pa. 1988) (citations omitted). "[I]n order for liability to be imposed upon the actor, he must specifically have undertaken to perform the task that he is charged with having performed negligently, for without the actual assumption of the undertaking there can be no correlative legal duty to perform that undertaking carefully." Blewitt v. Man Roland, Inc., 168 F. Supp.2d 466, 469-70 (E.D. Pa. 2001), citing Restatement (Second) of Torts, § 324A. Section 324A of the Restatement (Second) of Torts states:
One who undertakes, gratuitously or for consideration, to render services to another which he should recognize as necessary for the protection of a third person or his things, is subject to liability to the third person for physical harm resulting from his failure to exercise reasonable care to protect his undertaking, if
(a) his failure to exercise reasonable care increases the risk of such harm, or
(b) he has undertaken to perform a duty owed by the other to the third person, or
(c) the harm is suffered because of reliance of the other or the third person upon the undertaking.
  ...

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