Doktor v. Werner Co.
762 F. Supp. 2d 494
E.D.N.Y2011Background
- Plaintiff Tim Doktor sues Werner Co., Old Ladder Co., New Werner Co., Werner Company, Inc., and Home Depot USA, N.A. in a personal injury action arising from a ladder fall.
- Plaintiff alleges the Ladder, identified as Werner Electro-master Model FS206S, was manufactured and marketed by Werner Defendants and sold by Home Depot.
- Defendants move to dismiss under Rule 12(b)(6), arguing successor liability does not attach and that the asset sale was free and clear of liabilities.
- Old Ladder Co., Inc. filed for Chapter 11 bankruptcy in 2006; assets were sold to Werner Co. under an APA that expressly excludes successor liability.
- The court denies the motion to dismiss at this stage, but grants leave for discovery on the ladder’s date of manufacture and the manufacturing entity, and may consider summary judgment after discovery.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Werner Defendants can be liable as successors | Doktor asserts potential successor liability despite asset sale and bankruptcy. | Werner Defendants contend there is no successor liability due to free-and-clear sale and lack of merger/continuity. | Denied for now; discovery on liability issues permitted |
| Whether the asset sale shielded Werner from liability under a free-and-clear provision | Free-and-clear sale does not bar liability if successor liability exists. | Free-and-clear sale precludes successor liability for the purchasing entity. | Not resolved; court considers discovery |
| Whether the Ladder’s year of manufacture and responsible entity can be determined through discovery | Discovery is appropriate to establish the manufacturing defendant and date of manufacture. | Evidence on manufacture date is unreliable at this stage and not proper for a Rule 12(b)(6) dismissal. | Denied; plaintiff may pursue discovery on manufacture date and identity |
| Whether Old Ladder continues to exist in a way that would negate mere continuation theory | Implied continuation could impose liabilities on successor. | Old Ladder exists as a liquidated trust; no continuation under the asset purchase. | Rejected as basis for imposing liability; not dispositive at this stage |
Key Cases Cited
- Cargo Partner AG v. Albatrans, Inc., 352 F.3d 41 (2d Cir. 2003) (substance of merger analysis in de facto continuations)
- Semenetz v. Sherling & Walden, 818 N.Y.S.2d 819 (N.Y. App. Div. 2006) (rejects extended carrier of strict product liability via successor liability)
- Diaz v. South Bend Lathe Inc., 707 F.Supp. 97 (E.D.N.Y. 1989) (mere continuation theory requires dissolution and continuity factors)
- In re Gucci, 126 F.3d 380 (2d Cir. 1997) (free-and-clear sale as paramount to bankruptcy-asset transactions)
- National Serv. Indus., Inc., 460 F.3d 201 (2d Cir. 2006) (explains successor liability exceptions and asset-purchase implications)