holding that three-year statute of limitations applies to actions for strict products liabilitySummary of this case from Underwriters v. Farley Grp.
Argued April 29, 1975
Decided July 2, 1975
Appeal from the Appellate Division of the Supreme Court in the Second Judicial Department, LEO BROWN, J., CHARLES RUBIN, J., FRANK S. SAMANSKY, J.
James J. Sentner, Jr. for appellant in the first above-entitled action. Herbert L. Fine for Livia Victorson and another, respondents in the first above-entitled action.
Leo Rothbard and Benjamin E. Gelerman for Stanley Kaplan, respondent in the first above-entitled action.
Joseph D. Ahearn and Daniel J. Coughlin for H. Greenwald, Inc., appellant in the second above-entitled action.
Herbert Dicker for Bock Laundry Machine Co., Inc., appellant-respondent in the second above-entitled action. Jerome Cooper for respondents in the second above-entitled action.
Sidney A. Schwartz and Irwin H. Haut for defendant-appellant and third-party defendant-appellant in the third above-entitled action.
Martin Levine and Joseph Friedberg for respondents in the third above-entitled action.
These three cases arise out of claims asserted against the manufacturer of allegedly defective products by remote users; the theory of liability is that which we have called strict products liability (Codling v Paglia, 32 N.Y.2d 330). We now hold that the period of limitation with respect to these claims begins to run at the date of injury and that the duration of such period is that found in CPLR 214 (subds 4, 5) under which there is a limitation of three years in actions for personal injury and property damage. (See 1 Weinstein-Korn-Miller, N Y Civ Prac, pars 214.13, 214.14, 214.15.) Accordingly, our court's holding to the contrary in Mendel v Pittsburgh Plate Glass Co. ( 25 N.Y.2d 340) must be overruled.
For criticism of Mendel see, e.g., Symposium on Mendel v Pittsburgh Plate Glass Co. (45 St John's L Rev 62).
Defendant Bock Laundry Machine Company manufactured and marketed a centrifuge extractor for use in apartment house laundry rooms and commercial laundromats to spin water out of laundry after washing and preparatory to its being placed in a dryer. In Victorson the extractor was sold in 1948 and the injury occurred in 1969; in Rivera the sale was in 1959, the injury in 1967; and in Brown the sale was in 1955 and the injury in 1965. The Appellate Divisions have properly unraveled the procedural complexities, presenting for our determination, on motions addressed to the pleadings, the questions as to when the Statute of Limitations began to run and for what period it continued.
Preliminarily we observe as a matter of analysis that, while one seeking to recover from a manufacturer for injuries sustained in consequence of an alleged defect in its product may be said to have but a single claim, that claim may be grounded in one or more of four causes of action or theories of liability. Depending on the factual context in which the claim arises, the injured plaintiff, and those asserting derivative claims, may state a cause of action in contract, express or implied, on the ground of negligence, or, as here, on the theory of strict products liability. In these cases now before us we are concerned only with claims based on the last theory. What we say here, therefore, should not be understood as in any way referring to the liability of a manufacturer of a defective product under familiar but different doctrines of the law of contracts for injuries sustained by a customer or other person with whom or for whose benefit the manufacturer previously has made a warranty or other agreement, express or implied. As indicated, it may be open to a particular plaintiff to base his case on contract liability or negligence or strict products liability, or on some combination thereof.
Some consideration of the theory of strict products liability is of assistance in the selection of the applicable Statute of Limitations. We acknowledge that for some years there has been a lively discussion as to whether this form of liability sounds in tort or in contract.
Initially we recognize the general distinction between these two areas of the law. "The fundamental difference between tort and contract lies in the nature of the interests protected. Tort actions are created to protect the interest in freedom from various kinds of harm. The duties of conduct which give rise to them are imposed by the law, and are based primarily upon social policy, and not necessarily upon the will or intention of the parties." (Prosser, Torts [4th ed], § 92, p 613.)
The development of what we now call the doctrine of strict products liability has been both tortuous and spasmodic (Codling v Paglia, supra; Goldberg v Kollsman Instrument Corp., 12 N.Y.2d 432; see discussion in Mendel v Pittsburgh Plate Glass Co., supra, dissenting opn, p 346 et seq.). In reaching and articulating our decision in Codling, we neither created nor discovered a new cause of action. On the contrary, in extending the remedy to plaintiffs who were neither buyers nor users of the product, we recognized in its modern guise a pre-existing theory of liability which had been evolving and maturing over the years, sometimes having been described by use of the phrase "breach of implied warranty".
In a simplistic sense it is obvious that this liability does not arise out of contract concepts if such concepts be thought of as the means for analyzing the jural relationship between two parties who have entered into a contractual relationship prior to the date on which injury is sustained. Here none of these plaintiffs had had any association with the manufacturer of the centrifuge extractors prior to being injured. Nor are these claims grounded in any contention that the liability of the manufacturer stems from its nonperformance of an obligation to plaintiffs arising out of an agreement, express or implied. Rather than arising out of the "will or intention of the parties", the liability imposed on the manufacturer under strict products liability, whether it be to purchaser, user, or innocent bystander, is predicated largely on considerations of sound social policy (Codling v Paglia, supra, pp 340-341).
That in the emerging growth and development of the law of liability in these matters, in the best traditions of the common law, it has from time to time been found useful in justification or exposition to use terminology familiar to the law of contracts rather than of torts should be neither surprising nor diverting. As we have recognized, depending on the factual context in which the issue arises or the alternative theory pursued by the litigant, the liability of the product-manufacturer could indeed have been grounded in contract rather than tort theory, or indeed sometimes in both. Historically it even appears that these two fields have not been so categorically discrete as we are sometimes inclined to suppose. As in other instances in the law, analysis and enlightenment are not always advanced when heavy reliance is placed on labels; indeed understanding may even be obscured.
(Salmond, Torts, pp 8-13 [10th ed, 1945] ["The true boundary-line between contract and tort is obscured by the recognition in the older law (a recognition which has not yet wholly ceased) of certain quasi-contractual obligations the breach of which is really a mere tort", at p 10]; Maitland, Historical Note on the Classification of the Forms of Personal Action, reprinted in Pollock, Torts, App A, p 451 [14th ed, 1939]; Green, Rationale of Proximate Cause, pp 44-55 ; Ames, The History of Assumpsit, and Salmond, The History of Contract, both studies collected in 3 Select Essays in Anglo-American Legal History, pp 259, 320 respectively ; see, also, Pollock, Contracts, pp 111-15 [12th ed, 1946]; Salmond and Williams, Contracts, § 2 [2d ed, 1945].)
Whatever may have been earlier doubt and confusion, the authorities are now in general agreement that strict products liability sounds in tort rather than in contract. "It has been said over and over again that this warranty — if that is the name for it — is not the old sales warranty, it is not the warranty covered by the Uniform Sales Act or the Uniform Commercial Code. It is not a warranty of the seller to the buyer at all, but it is something separate and distinct which sounds in tort exclusively, and not at all in contract; which exists apart from any contract between the parties; and which makes for strict liability in tort." (Prosser, Spectacular Change: Products Liability in General, 36 Cleveland Bar Assn J 167-168.) (Velez v Crane Clark Lbr. Corp., 33 N.Y.2d 117, 124-125 ["strict products liability sounds in tort rather than in contract"]; Goldberg v Kollsman Instrument Corp., supra, p 436 ["A breach of warranty, it is now clear, is not only a violation of the sales contract out of which the warranty arises but is a tortious wrong suable by a noncontracting party whose use of the warranted article is within the reasonable contemplation of the vendor or manufacturer"]; Restatement 2d, Torts, § 402A, comment m; Arrow Transp. Co. v Fruehauf Corp., 289 F. Supp. 170, 172; Hornung v Richardson-Merrill, 317 F. Supp. 183, 185; Rosenau v City of New Brunswick, 51 N.J. 130, 141-144; Abate v Barkers of Wallingford, 27 Conn S 46, 51-53; 3 Frumer Friedman, Products Liability, § 40.01, subd ; Products Liability: Strict Liability in Tort, Ann., 13 ALR3d 1057.)
Some further analysis is reassuring before jumping, knee-jerk-like, to the conclusion that if liability is grounded in tort, tort Statute of Limitations must automatically be applied. "[I]n applying the Statute of Limitations we look for the reality, and the essence of the action and not its mere name." (Brick v Cohn-Hall-Marx Co., 276 N.Y. 259, 264.)
Restrictions of time on claim assertion involve two aspects — how long shall the period be within which the claim may be asserted, and as of what date shall that period begin to run?
On principle, there having been no prior relationship between the parties in strict products liability cases, the cause of action if any there be, should accrue at the time the injury is sustained. To hold that it somehow came into being prior thereto would defy both logic and experience. "[I]t is all but unthinkable that a person should be time-barred from prosecuting a cause of action before he ever had one" (Mendel v Pittsburgh Plate Glass Co., supra, p 346). In this perspective the analogy in principle is to "tort" claims, that is claims for injury to person or property, as to most of which, although not all, the statute runs from the date of injury. (Schmidt v Merchants Desp. Transp. Co., 270 N.Y. 287, 299-301; Flanagan v Mount Eden Gen. Hosp., 24 N.Y.2d 427; Restatement, Torts, § 899, comment c, p 525; cf. 14 CJS, Case, Action on, §§ 1, 2.) By contrast, in contract actions the statute runs from the date of the breach of performance of the contractual obligation, in the present context, the date of sale of the defective product. (CPLR 213, subd 2; Uniform Commercial Code, § 2-725, subd .)
Then over how long a period thereafter should the injured party be allowed to assert his claim? As in other instances in which periods of limitation must be fixed, the answer depends on a nice balancing of policy considerations. "Any Statute of Limitations reflects a policy that there must come a time after which fairness demands that a defendant should not be harried; the duration of the period is chosen with a balancing sense of fairness to the claimant that he shall not unreasonably be deprived of his right to assert his claim" (Caffaro v Trayna, 35 N.Y.2d 245, 250). We identify no material factors which suggest that the period of limitation should be different where it is sought to impose liability on the manufacturer on the theory of strict products liability rather than on the theory of negligence. Substantially similar considerations are equally cogent and persuasive.
One argument of policy is pressed on us by appellants in these cases. Is it fair or reasonable, they ask, to hold a manufacturer liable for a defect in production many years after the product has left the manufacturer's plant? The predicament of the manufacturer is not then significantly different whether its liability in tort be grounded in theories of negligence or of strict products liability. One can observe that while passage of time may work a deterioration of the manufacturer's capability to defend, by similar token it can be expected to complicate the plaintiff's problem of proving, as he must, that the alleged defect existed at the time the product left the manufacturer's plant. (See discussion Mendel v Pittsburgh Plate Glass Co., 25 N.Y.2d 340, dissenting opn, p 351, supra.) In any event this consideration, of varying weight from case to case, cannot be accorded such significance as to dictate the outcome.
Again the authorities are now in general agreement that Statute of Limitations governing injuries to person or property are those properly applicable to strict products liabilities claims. (Hornung v Richardson-Merrill, 317 F. Supp. 183, supra; Williams v Brown Mfg. Co., 45 Ill.2d 418, 430-431; Nelson v Volkswagen of Amer., 315 F. Supp. 1120, 1121-1122; Holifield v Setco Ind., 42 Wis.2d 750; Rosenau v City of New Brunswick, 51 N.J. 130, supra; Arrow Transp. Co. v Fruehauf, 289 F. Supp. 170, supra; Abate v Barkers of Wallingford, 27 Conn S 46, supra.)
We observe in passing that the Uniform Commercial Code, in treating of the liability of a manufacturer of a defective product, applies only where such liability is predicated on a contractual obligation, express or implied. As such its provisions are not pertinent when liability is based on the tort doctrine of strict products liability. (Mendel v Pittsburgh Plate Glass Co., supra, pp 351-352; Heavner v Uniroyal, 63 N.J. 130; Rosenau v City of New Brunswick, supra; Abate v Barkers of Wallingford, supra; Suvada v White Motor Co., 32 Ill.2d 612; and see collection of authorities in Shanker, Strict Tort Theory of Products Liability and the Uniform Commercial Code: A Commentary on Jurisprudential Eclipses, Pigeonholes and Communication Barriers, 17 Western Reserve L Rev 5.)
Accordingly each of the several orders of the Appellate Division should be affirmed.
I join wholeheartedly in the majority's extension to these plaintiffs of the tort Statute of Limitations, running as it does from the dates of their injuries. In doing so, I note that it has required a choice between that and the Uniform Commercial Code's four-years-from-time-of-sale statute which the defendants have espoused.
Also, while I read Judge JONES' opinion to imply that the tort statute, as well as that of the code, would likewise have been applicable to the plaintiffs if, instead of being users or bystanders, they had been in privity with the sellers, it by no means lays the subject to rest. Of course, we need not reach that question here. But a future choice between the Statute of Limitations provisions of the code and that of tort law will be unavoidable in cases of consumer plaintiffs who come within the compass of the code, though I take leave to venture the opinion that the choice of the tort rule for all persons injured in such cases would both appear to partake of the virtues of simplicity and equality of application, and to be the logical end-product of the legal evolution hereinafter discussed.
I therefore believe that, while this subject is before us, it will serve a useful and stabilizing purpose to more precisely spell out the relationship between code and tort Statute of Limitations, especially since the resurrection of the historic and nationwide confusion which in the past has characterized the growth of law in these sometimes overlapping fields is almost sure to be attempted. (Shanker, Strict Tort Theory of Products Liability and the Uniform Commercial Code: A Commentary on Jurisprudential Eclipses, Pigeonholes and Communication Barriers, 17 Western Reserve L Rev 5; Littlefield, Some Thoughts on Products Liability Law: A Reply to Professor Shanker, 18 Western Reserve L Rev 10; Twerski, From Codling to Bolm to Velez; Triptych to Confusion, 2 Hofstra L Rev 489; Franklin, When Worlds Collide; Liability Theories and Disclaimers in Defective Product Cases, 18 Stan L Rev 974; Rapson, Products Liability Under Parallel Doctrines: Contrasts Between the Uniform Commercial Code and Strict Liability in Tort, 19 Rutgers L Rev 692; Reitz, Warranties and Product Liability: Who Can Sue and Where, 46 Temp LQ 527.)
The problem has arisen in the past largely because a cause of action for strict liability in tort was, by general agreement, regarded substantively the same as one brought in contract for breach of implied warranty, assuming the latter had been stripped of the recognized sales defenses of notice (Uniform Commercial Code, § 2-607), disclaimer (Uniform Commercial Code, § 2-316), and privity (Uniform Commercial Code, § 2-318). (See Prosser, Torts [4th ed], § 98, p 658, n 57; Markle v Mulholland's Inc., 265 Or. 259, 273 [concurring opn of Chief Justice O'CONNELL]; Dickerson, Was Prosser's Folly Also Traynor's?, 2 Hofstra L Rev 469, 478; Rapson, Products Liability Under Parallel Doctrines: Contrasts Between the Uniform Commercial Code and Strict Liability in Tort, 19 Rutgers L Rev 692.)
So, with the advent of the Uniform Commercial Code, which appeared to include personal injury recovery as an element of damages consequential to the breach of implied warranty within its embrace (Uniform Commercial Code, §§ 2-715, 2-719, subd ), it should not be surprising that controversy arose as to whether the code and its predecessor, the Uniform Sales Act, pre-empted the field. (See Price v Gatlin, 241 Or. 315; Markle v Mulholland's Inc., 265 Or. 259; Hawkins Constr. Co. v Matthews Co., 190 Neb. 546; Seely v White Motor Co., 63 Cal.2d 9; Cova v Harley Davidson Motor Co., 26 Mich. App. 602.)
However, overwhelming judicial authority throughout the country and a fair reading of legislative purpose make clear that the better argument by far is that legislative pre-emption of strict liability in tort was not intended by the drafters of the code. (See the cases and authorities already cited and the authorities collected in Mr. Justice SHAPIRO'S excellent opinion below [ 44 A.D.2d 316, 324]; see, also, Noel, Defective Products: Abnormal Use, Contributory Negligence, and Assumption of Risk, 25 Vand L Rev 93, n 4, wherein the writer points out that some 36 jurisdictions have approved of § 402A.) In fact the genesis of section 402A of the Restatement of Torts (comment m), as well as the code's New York legislative history (McKinney's Cons Laws of NY, Book 62 1/2 [1964 ed], pp 315-317), also leads inexorably to that conclusion. For instance, while proposed "§ 16-B" of the code was intended to be pre-emptive of recovery in tort, it was rejected on the very ground that it would not be acceptable to State Legislatures. (See Wade, Is Section 402A of the Second Restatement of Torts Preempted by the UCC and Therefore Unconstitutional?, 42 Tenn L Rev 123.) The drafters thus evinced their intent not to affect the independent development of tort law by having warranty and strict liability in tort impinge one on the other.
Professor Karl Llewellyn, during discussion of what eventually became section 2-318 of the Uniform Commercial Code, indicated that the distinction to be drawn was between tort and commercial law, not between negligence and commercial law. (Wade, supra, p 138, n 25.)
The clearest confirmation of that appears from a study of how those of provisions of the code concerned with the three crucial areas of notice of defect, disclaimer and privity make exceptions for consumer injury cases. As to the requirement that the purchaser give the seller notice of a defect within a reasonable time, found in section 2-607 of the Uniform Commercial Code, the code drafters stated in comment 4 that a "'reasonable time' for notification from a retail consumer is to be judged by different standards". (Italics supplied; McKinney's Cons Laws of NY, Book 62 1/2, Uniform Commercial Code, p 502.) With regard to disclaimer requirements, the code's permissiveness in section 2-316 is read both in the light of subdivision 2 of section 2-719's provision that limitations of liability for damages in personal injury cases are prima facie unconscionable, as well as that of section 2-302, which gives courts the power to apply the doctrine of unconscionability as a matter of law to any contractual matter which calls for it. And the requirement of privity, in section 2-318, is accompanied by a specific statement (in comment 3) that the expansion of the privity doctrine is to be left to the courts in consumer cases.
There has been considerable ferment as to whether it makes any sense to apply a rule of prima facie unconscionability to limitation of damages but not to total disclaimers of damages. (See Franklin, When Worlds Collide: Liability Theories and Disclaimers in Defective Product Cases, 18 Stan L Rev 974, 995; Rapson, Products Liability Under Parallel Doctrines: Contrasts Between the Uniform Commercial Code and Strict Liability in Tort, 19 Rutgers L Rev 692, 710.) In Velez v Craine Clark Lbr. Corp. ( 33 N.Y.2d 117) this court indicated that disclaimers negotiated by a consumer might well be valid under proper circumstances; as I read it, that comment in no way contradicts the thesis here.
Therefore, it is fair to conclude not only that the code requirements impliedly recognize a cause of action in tort but that, if strict liability in tort had not evolved, the code might well have arrived at the same or a similar substantive stance itself. Indeed, a careful reading of section 2-725 of the code (or the comments to it), where the four-year-from-time-of-delivery limitation is set out, points up the complete absence of references to personal injury and third-party beneficiary actions. The inference is that the intent was to deal exclusively with commercial transactions. Expressed in the drafter's own statement of statutory purpose, the aim was: "To introduce a uniform statute of limitations for sales contracts, thus eliminating the jurisdictional variations and providing needed relief for concerns doing business on a nationwide scale whose contracts have heretofore been governed by several different periods of limitation depending upon the state in which the transaction occurred. This Article takes sales contracts out of the general laws limiting the time for commencing contractual actions and selects a four year period as the most appropriate to modern business practice. This is within the normal commercial record keeping period." (Emphasis added.)
The emphasis thus makes quite clear that the statute was meant to cover "contractual" actions only. Furthermore, to the extent that uniformity was the desideratum of this statute, such a goal is not possible under the tort rationale, since the several States have varying tort Statutes of Limitation, beyond our power to standardize. (Murray, Products Liability — Another Word, 35 U Pitt L Rev 255.) Moreover, the policy decision differentiating consumer injury actions from ordinary commercial transactions exemplified by the sections previously cited seems best furthered by a reading of section 2-725 as equally flexible and directed toward the commercial, not the consumer-injury, cause of action.
Accordingly, analysis and history not only bear out the force of the dichotomy, in the frame of reference of this case, between a tort and contract, as pointed out by Judge JONES, but also leave no reasonable remaining doubt that neither the provisions of the code nor the intent behind it result in their pre-emption of any tort causes of action.
Chief Judge BREITEL and Judges JASEN, GABRIELLI, WACHTLER and COOKE concur with Judge JONES; Judge FUCHSBERG concurs in a separate opinion.
In each case: Order affirmed, with costs. Question certified answered in the affirmative.