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Indemnity Insurance Company of North America v. Gross-Given Manufacturing Co.

September 16, 2009

INDEMNITY INSURANCE COMPANY OF NORTH AMERICA A/S/O/ SPRINGFIELD TOWNSHIP SCHOOL DISTRICT, PLAINTIFF,
v.
GROSS-GIVEN MANUFACTURING COMPANY AND RIH, INC. F/K/A ROWE INTERNATIONAL, INC. DEFENDANTS.



The opinion of the court was delivered by: Schiller, J.

MEMORANDUM

Plaintiff Indemnity Insurance Company of North America ("ACE-INA") brings this action against Defendants Gross-Given Manufacturing Company ("Gross-Given") and RIH, Inc. ("Old Rowe") for damages sustained as a result of a vending machine that was manufactured by Old Rowe. The vending machine caught fire and caused property damage to an elementary school, which was insured by Plaintiff. Plaintiff asserts causes of action in negligence, strict liability, and breach of warranty, and claims that Gross-Given is liable as a successor in interest to Old Rowe. Presently before this Court is Defendant's motion for summary judgment as to all three causes of action. Also before this Court is Plaintiff's cross-motion for partial summary judgment on the issue of successor liability.

For the reasons that follow, Defendant's motion will be granted in part and denied in part, and Plaintiff's motion will be granted in part and denied in part.

I. BACKGROUND

According to ACE-INA, a July 26, 2007 fire at Erdenheim Elementary School was caused by a Showcase Jr. vending machine located in the teacher's lounge.*fn1 The machine was manufactured by Old Rowe.

On March 28, 2003, Gross-Given and Old Rowe entered into an asset purchase agreement, whereby Gross-Given acquired substantially all of the assets of Old Rowe's vending machine business. The Asset Purchase Agreement provided in relevant part that:

1.1 Purchase and Sale of Vending Assets

Subject to the terms and conditions of this Agreement, and except for the Excluded Assets (as defined in Section 1.2), at Closing Seller agrees to sell, and Buyer agrees to purchase, all of Seller's right, title and interests in substantially all of the assets and personal property of Seller used exclusively in Seller's Vending Business, tangible and intangible, wherever located, as they shall exist at the time of Closing ("Vending Assets"), free and clear of all Encumbrances, including, but not limited to, all of the following described assets, rights and properties:

(a) Inventory

Except for those items of Inventory described on Schedule 1.2 (Excluded Assets), Buyer is acquiring all Inventories used exclusively in the Vending Business. At Closing, Seller will deliver to Buyer a list, certified by it to be complete and correct, of all the material items of Inventory existing and to be acquired by buyer as of the Closing Date, including the location of such items of Inventory ("Closing Inventory List"). (Def.'s Mot. for Summ. J. Ex. C [Asset Purchase Agreement] at 1-2.) The agreement also granted Gross-Given the right to all equipment, customer contracts, other contracts, licenses, intellectual property assets, and goodwill related to the entire vending machine line. Id. Under Section 1.2 of the agreement, Gross-Given could exclude certain assets from the Asset Purchase Agreement. Neither Section 1.2, nor any other section of the agreement excludes any aspect of the Showcase Jr. Vending machine. Thus, the Showcase Jr. was part of the asset purchase, and currently belongs to Gross-Given.*fn2 Additionally, Gross-Given explicitly assumed the product warranties of Old Rowe. (Asset Purchase Agreement at 6.)

Gross-Given operated Old Rowe's vending machine product line in the same capacity as had Old Rowe. It also advertised that it would be taking over Old Rowe. (Pl.'s Resp. in Opp'n to Mot. for Summ. J. and Pl.'s Mot. for Partial Summ. J. Ex. D [Edgerton Dep.] at 37.)

In September of 2003, Old Rowe entered into bankruptcy. In October, all remaining assets of Old Rowe were acquired by the Harbour Group/RWI Acquisition Corporation (hereinafter "New Rowe") free and clear of all liens, claims, and interests.

II. STANDARD OF REVIEW

Summary judgment may be granted "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." FED.R.CIV.P. 56(c). The role of the trial court is to determine whether there are material factual issues that merit a trial. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247- 48, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). In making that determination, the court must give the nonmoving party the benefit of all reasonable inferences that might be drawn from the underlying facts. See Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986); Sempier v. Johnson and Higgins, 45 F.3d 724, 727 (3d Cir.1995) (en banc). A court must, however, avoid making credibility determinations or weighing the evidence. Reeves v. Sanderson Plumbing Prods., 530 U.S. 133, 150, 120 S.Ct. 2097 (2000); see also Goodman v. Pa. Tpk. Comm'n, 293 F.3d 655, 665 (3d Cir. 2002). Summary judgment is appropriate if the court finds that the record "could not ...


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