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Zhao v. Skinner Engine Co.

United States District Court, Third Circuit

December 9, 2013

XIA ZHAO et al. Plaintiffs
v.
SKINNER ENGINE COMPANY et al. Defendants

MEMORANDUM

William H. Yohn Jr., Judge

This products liability action is brought by plaintiffs Xia Zhao and David Ehrmann for injuries suffered by Zhao in the course of her employment with West Pharmaceutical Services, Inc. (“West”). Three defendants remain: Farrel Corporation a/k/a HF Mixing Group (“Farrel Corp.”), HF Rubber Machinery, Inc. (“HF Rubber”), and Francis Shaw & Co., (Manchester) Ltd. (“Francis Shaw”). Francis Shaw has crossclaims against Farrel Corp. and HF Rubber seeking contribution and/or indemnification.

Farrel Corp. and HF Rubber (“Movants”) now move for summary judgment on all claims against them. The motion is opposed by Francis Shaw only.[1] For the following reasons, the motion for summary judgment will be granted.

I. Background

On June 28, 1984, West ordered a rubber extrusion machine known as a KO Intermix MK3 (“Intermix”) from the Skinner Engine Company (“Skinner”). (Purchase Order Form, June 28, 1984, Mov. Ex. B). On August 23, 1984, Francis Shaw—an English corporation and the erstwhile operator of a rubber machinery fabrication business (“the Business”)—confirmed the sale of an Intermix to Skinner, with reference number 2994. (Letter from Francis Shaw to Skinner, August 23, 1984, Mov. Ex. C). Nearly thirty years later, on April 7, 2010, Zhao was at the West facilities operating a machine stamped “Shaw KO Intermix MK3, No.2994” and “Feb. 1985.” (West Incident Report, Opp. Ex. B; Photographs of West Intermix, Mov. Ex. A). Attempting to clean the West Intermix, Zhao suffered extensive injuries to her right hand. (West Incident Report, Opp. Ex. B).

In December 1997, Francis Shaw sold the Business to Farrell Shaw Limited (“Farrel Ltd.”) via an asset purchase agreement entitled “Farrel Shaw Limited Acquisition of the Francis Shaw Rubber Machinery Business” (“Purchase Agreement”). (Purchase Agreement, Mov. Ex. E). Farrel Ltd. is a subsidiary of Farrel Corp., which is a party in this case.[2] Farrel Ltd. is not. In chief, the Purchase Agreement provided for Francis Shaw to “wholly discontinue carrying on the Business” and made Farrel Ltd. “exclusively entitled to carry on and continue the Business and hold itself as doing so in succession to [Shaw].” (Purchase Agreement, Mov. Ex. E). The Agreement transferred most related business assets, but stated that Farrel Ltd. acquired no liability with respect to “any act, neglect, default or omission” prior to the date of the Purchase Agreement. (Purchase Agreement, Mov. Ex. E). Farrel Ltd. operated the Business thereafter, and at least one former Francis Shaw employee carried over through the transition to work for Farrel Ltd. (Deposition of Jayantilal Mistry, Opp. Ex. G). In July 2006, West contacted Farrel Corp. seeking Intermix replacement parts and an Intermix maintenance manual. (Email from West to Farrel Corp., July 11, 2006, Opp. Ex. H). Farrel Corp. subsequently sold Intermix replacement seals and o-rings to West. (Sales Order, July 18, 2006, Opp. Ex. H).

After injuring her hand, Zhao brought suit against numerous defendants, among them Francis Shaw, Farrel Corp., and HF Rubber. Subsequently, Francis Shaw filed crossclaims against Movants seeking contribution and/or indemnification. As we close discovery, [3] Movants file for summary judgment on all claims against them.

II. Standard of Review

Summary judgment is appropriate when “the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a). “Where the record taken as a whole could not lead a rational trier of fact to find for the nonmoving party, there is no genuine issue for trial.” Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986) (internal quotation omitted).

“A party seeking summary judgment always bears the initial responsibility of informing the district court of the basis for its motion, and identifying those portions of the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, which it believes demonstrate the absence of a genuine issue of material fact.” Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986) (internal quotations omitted); El v. Se. Pennsylvania Transp. Auth. (SEPTA), 479 F.3d 232, 237 (3d Cir. 2007). The burden then shifts to the nonmoving party “to make a showing sufficient to establish the existence of . . . element[s] essential to that party’s case, and on which that party will bear the burden of proof at trial.” Celotex, 477 U.S. at 322. “If a nonmoving party fails to make [that showing], there is no issue as to a genuine issue of a material fact and thus the moving party is entitled to judgment as a matter of law” Lauren W. ex rel. Jean W. v. DeFlaminis, 480 F.3d 259, 266 (3d Cir. 2007).

“In evaluating the motion, ‘the court must draw all reasonable inferences in favor of the nonmoving party, and it may not make credibility determinations or weigh the evidence.’” Guidotti v. Legal Helpers Debt Resolution, LLC, 716 F.3d 764, 772 (3d Cir.2013) (quoting Reeves v. Sanderson Plumbing Prods., Inc., 530 U.S. 133, 150 (2000)). “[A]n inference based upon a speculation or conjecture, ” however, “does not create a material factual dispute sufficient to defeat entry of summary judgment.” Robertson v. Allied Signal, Inc., 914 F.2d 360, 382 n. 12 (3d Cir.1990).

III. Discussion

Movants’ brief asserts that (a) no evidence connects Farrel Corp. to the chain of production or distribution of the West Intermix; and (b) Farrel Corp. is not liable as a successor to Francis Shaw.[4] With respect to HF Rubber, the brief asserts that the record shows no material connection between HF Rubber and the West Intermix.

The response of Francis Shaw does not dispute that Farrel Corp. and HF Rubber were not involved in the design, manufacture, or sale of the West Intermix. Rather, Francis Shaw contends that summary judgment for Farrel Corp. is inappropriate because there are genuine issues of fact as to whether (a) the Purchase Agreement was a de facto merger; and (b) Farrel Corp. may have breached a duty to warn about the West Intermix ...


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