64 N.Y.2d 407 | NY | 1985
Lead Opinion
OPINION OF THE COURT
On February 15, 1983 plaintiff instituted this action against defendants U. S. Suzuki Motor Corp. and Jim Moroney’s Harley-Davidson Sales, Inc., seeking to recover damages for injuries he sustained in a motorcycle accident which occurred July 7,1979. U. S. Suzuki Motor Corporation is the Japanese manufacturer’s distributor of the motorcycle in the United States and Jim Moroney’s Harley-Davidson Sales, Inc., is the retailer who sold the motorcycle to plaintiff. The tort causes of action against both defendants were barred by the three-year Statute of Limitations. Accordingly, plaintiff sought to recover on claims that defendants expressly and impliedly warranted the motorcycle safe, merchantable and fit for its intended use. On this appeal he presses only a claim based upon implied warranty pursuant to Uniform Commercial Code § 2-318. The issue before us is the timeliness of plaintiff’s action against defendant U. S. Suzuki Motor Corporation, specifically, whether the cause of action accrued on the date of sale to plaintiff by the retailer or on the date of transfer of the motorcycle by the distributor to its
Uniform Commercial Code § 2-725 provides that a cause of action for breach of a contract of sale must be commenced within four years after it accrues. The action accrues when the breach occurs and, in the absence of a warranty explicitly extending to future performance, a breach occurs when tender of delivery is made. Construing this language, Special Term denied defendant Suzuki’s motion for summary judgment and dismissed its affirmative defense alleging the Statute of Limitations. It held that the cause of action against the distributor accrued when the retailer sold the motorcycle to plaintiff on April 21, 1979. The Appellate Division reversed and dismissed the complaint, holding that plaintiff’s cause of action against the distributor accrued when the distributor tendered delivery to its immediate purchaser, March 30, 1978, and therefore that the action was time-barred because it was commenced more than four years later.
Actions to recover for personal injuries based upon implied warranty originally developed in an effort to impose strict liability on manufacturers and sellers for defects in their products. The action sounded in contract and, accordingly, when contract law was applied, the warranty was considered an incident of the sale and the cause of action for its breach accrued on tender of delivery (see, Mendel v Pittsburgh Plate Glass Co., 25 NY2d 340; Blessington v McCrory Stores Corp., 305 NY 140; 1 NY PJI2d 342, 1984 Cum Supp 155-156). Moreover, because recovery was permitted only by those in privity with the defendant, the cause of action accrued at the time of sale or tender of delivery from the seller to the purchaser in privity with him. Inasmuch as the purchaser usually had no contract with the manufacturer or distributor, he had no right to recover from him in an action on implied warranty (Martin v Dierck Equip. Co., 43 NY2d 583, 589-590). Indeed, following this reasoning, some States refused to recognize an implied warranty cause of action for personal injuries by a purchaser against a remote party under Uniform Commercial Code former § 2-318 (see, e.g., Southgate School Community School Dist. v West Side Constr. Co., 399 Mich 72, 247 NW2d 884). Others, including New York, developed certain narrow exceptions to the general rules governing the statutory and common-law actions to permit warranty actions for personal injuries notwithstanding the traditional requirement of privity (see, e.g., UCC former 2-318, L 1962, ch 553; Greenberg v Lorenz, 9 NY2d 195). As we noted in
Notwithstanding this state of the law, in 1975 the Legislature completely eliminated the requirement of privity for personal injury actions based on implied warranty by adopting a new section 2-318 of the Uniform Commercial Code (L 1975, ch 774). In doing so, it adopted the section recommended by the National Conference of Commissioners on Uniform State Laws in 1966 and described as Alternative B to section 2-318 (see, 1A ULA 53). Its purpose was to make uniform the law in the several jurisdictions desiring to expand the class of beneficiaries entitled to sue in implied warranty but which had not yet adopted the tort theory of strict products liability. Although the Code amendment was proposed to enable consumers to sue remote parties (see, 1975 NY Legis Ann, at 110), it was not entirely necessary in New York because we had decided they could do so in 1973 when we decided Codling v Paglia (32 NY2d 330) and other strict products liability cases following it.
When the Legislature amended section 2-318, it did not amend the limitations period provided in section 2-725 of the Code, however, and notwithstanding the elimination of the requirement of privity, it remains the law that a cause of action against a manufacturer or distributor accrues on the date the party charged tenders delivery of the product, not on the date that some third party sells it to plaintiff (Doyle v Happy Tumbler Wash-O-Mat, 90 AD2d 366; Fazio v Ford Motor Corp., 69 AD2d 896; 1 Weinberger, New York Products Liability § 11.04; cf. Rosenau v City of New Brunswick, 93 NJ Super 49, 224 A2d 689). It may be inferred from the amendment of section 2-318, as the dissent does, that the Legislature, by removing the prior requirement of privity, intended the date of retail sale to be the date of accrual, even for causes of action against others in the distributive chain. The short answer to that argument is that the Legislature did not say so and inasmuch as it did not amend section 2-725 to alter the existing rules on the subject we assume it intended no change (McKinney’s Cons Laws of NY, Book 1, Statutes § 222).
This interpretation does not result in plaintiff’s remedy being foreclosed before his cause of action accrued (see, dissenting opn, at p 415, n 4). Plaintiff was injured 15 months after Suzuki sold the motorcycle to Bakers Recreational Equipment, Inc., but lie waited almost four more years before instituting this suit. His rights have been lost by his own delay, not by any construction we place on the statute. Furthermore, our interpretation does not limit available remedies generally. A consumer who acts within three years of the accident or four years from the date of sale, as the pertinent statutes provide, may now maintain causes of action in New York to recover against both immedia te and remote parties based on express or implied warranty, negligence or strict products liability (see, Voss v Black & Decker Mfg. Co., 59 NY2d 102,106). Thus, there is no need or occasion for us to reinterpret section 2-725 in a manner contrary to its language and past usage. If the limitation period for causes of action based upon warranty is to be extended by fixing a new date of accrual, the Legislature should make that change.
Accordingly, the order of the Appellate Division should be affirmed, with costs.
Dissenting Opinion
(dissenting). Prior to 1975 Uniform Commercial Code § 2-318 authorized an action by one injured in person by breach of warranty but limited a seller’s warranty liability to “his buyer,” members of the buyer’s family or household and guests in the buyer’s home. As thus written the provision
The amendment made by chapter 774 of the Laws of 1975 removed the words “who is in the family or household of his buyer or who is a guest in his home”. Its effect was to extend the warranties provided for by the UCC, not only horizontally but vertically, for after amendment the section contained no reference to the buyer and made the seller’s warranty run to “any natural person if it is reasonable to expect that such person may use, consume or be affected by the goods and who is injured in person by breach of the warranty.”
The majority accepts the premise that despite the absence of privity a manufacturer is liable to a purchaser from a dealer in the manufacturer’s product for a breach of warranty resulting in injury to the purchaser,
Primary among those reasons is the misconception involved in the majority’s reasoning (majority opn, at p 411) that the 1975 amendment was not necessary because it had been previously held in Codling v Paglia (32 NY2d 330) that a consumer had a
But although amendment of section 2-318 was necessary to broaden consumer rights, amendment of section 2-725 was not. This follows from the facts that there cannot be a warran ty running from manufacturer to consumer until there is a consumer and that in the nature of the transaction there is no consumer until delivery by the dealer-retailer of the product to a particular purchaser. Thus the “tender of delivery” which brings into operation the manufacturer’s warranty to the consumer is from the dealer to the purchaser, not from the manufacturer i;o the dealer.
There is nothing foreign about such a concept. Not only does it underlie the strict liability action recognized in Codling v Paglia (32 NY2d, at p 339, supra), but also in Martin v Dierck Equip. Co. (43 NY2d 583), relied on by the majority, we held that a warranty cause of action arose in Virginia where the injuiy occurred rather than in New York where the product was delivered. The reasoning on which that holding was based was that “if a third party chooses to sue in ‘warranty’ * * * he may not nevertheless by asserting that the cause of action arose at the time of the manufacturer’s tender of delivery contend that his cause of action ‘accrued’ before in fact it had”
The majority’s citation of Doyle v Happy Tumbler Wash-O-Mat (90 AD2d 366) suggests that the rationale for its holding is its agreement with Doyle’s reasoning that (at p 370) “ ‘tender of delivery’ * * * is more readily applicable to commercial transactions between a seller and buyer.” But Doyle’s restrictive reading of “tender of delivery” not only makes it possible that the newly expanded cause of action could be barred by limitations before it came into existence, a result we should not lightly infer was intended by the Legislature, but also wholly overlooks the fact that the amended section 2-318 is a part of the Uniform Commercial Code, which directs that, “The remedies provided by this Act shall be liberally administered to the end that the aggrieved party may be put in as good a position as if the other party had fully performed” (§ 1-106 [1]) and that, “This Act shall be liberally construed and applied to promote' its underlying purposes and policies” (§ 1-102 [1]). The fact that “tender of delivery” may connote a buyer-seller relationship does not exclude interpretation of the phrase as it relates to a buyer’s cause of action against the manufacturer to" refer to the tender of delivery made by the seller-distributor as the manufacturer’s conduit to the buyer,
No greater support for the majority’s conclusion is provided by the suggested relationship (majority opn, at p 412) between limitations, the record keeping procedures of modem business and the unpredictable period of exposure that results if the action accmes on sale to the plaintiff. While that apparently was the origin of the four-year period established by UCC 2-725 (1) when it was adopted in 1964 (see, Comment to the original section), strict products liability was not then generally recognized. With our acceptance in Codling v Paglia (supra), of the strict liability concept, however, and our subsequent holding that the three-year tort limitations period accrued from the date of injury (Victorson v Bock Laundry Mach. Co., supra), the unpredictability of the manufacturer’s exposure became for him a way of life and record keeping procedures were no longer sufficiently significant “to dictate the outcome” as to limitations (Victorson v Bock Laundry Mach. Co., 37 NY2d, at p 404, supra). No more so should those considerations determine when a purchaser’s warranty action against a remote manufacturer accrues with respect to the expanded warranty action authorized by the 1975 amendment to UCC 2-318.
The final basis for my disagreement with the majority is that the cases holding that the UCC’s four-year limitation period begins to run in favor of a manufacturer only from the date of the retail sale are more numerous (and those that state reasons more closely reasoned) than those on which the majority rely. Of the latter Doyle v Happy Tumbler Wash-O-Mat (supra), has been discussed above, and Fazio v Ford Motor Corp. (69 AD2d 896) concerned an action brought more than four years after the consumer’s purchase from the retailer and, therefore, is not in point.* ***
There are, in contrast, a number of cases holding timely an action against a manufacturer brought within four years of the consumer’s purchase (Singer v Federated Dept. Stores, 112 Misc 2d 781; Bort v Sears, Roebuck & Co., 58 Misc 2d 889; Berry v Searle & Co., 56 I11 2d 548, 309 NE2d 550; Ouellette v Sturm, Ruger & Co., 466 A2d 478 [Me]; Waldron v Armstrong Rubber Co., 64 Mich App 626, 236 NW2d 722; Gillespie v American Motors Corp., 51 NC App 535, 277 SE2d 100; Redfield v Mead, Johnson & Co., 266 Ore 273,512 P2d 776; Williams v West Penn Power Co., 502 Pa 557, 467 A2d 811; Commercial Truck & Trailer Sales v McCampbell, 580 SW2d 765 [Tenn]; Rapp Co. v Whitlock Equip. Corp., 222 Va 80,279 SE2d 133; Patterson v Her Majesty Indus., 450 F Supp 425; see, McCarthy v Bristol Labs., 61 AD2d 196, on later appeal 86 AD2d 276; Falker v Chrysler Corp., 119 Misc 2d 375). The holding in many of those cases is equivocal in that the decision does not articulate the basis for its conclusion. But the Singer, Bort, Ouellette and Patterson cases are squarely in point and their reasoning (that UCC 1-102 [1] requires courts to construe its provisions liberally [Singer]; that “otherwise the warranties of all manufacturers would be mere paper words with plaintiffs having to prove negligence in every case” [Bort, 58 Misc 2d, at p 890, supra]; “[o]nly when plaintiff came into possession of the gun * * * did he achieve the status of a foreseeable user which could serve as the predicate for the assertion of warranty liability” [Ouellette, 466 A2d, at p 483 (Me)]; the fact that the Legislature in abolishing vertical and horizontal privity sought to protect the ultimate user requires the conclusion that the cause of action accrues when the user receives the product [Patterson]) is for me persuasive.
For the foregoing reasons I would reverse the order of the Appellate Division and reinstate Special Term’s dismissal of the limitations defense.
Chief Judge Wachtler and Judges Kaye and Alexander concur with Judge Simons; Judge Meyer dissents and votes to reverse in a separate opinion in which Judge Jasen concurs.
Order affirmed, with costs.
. The 1975 amendment adopted Alternative B, proposed by the Editorial Board of the Uniform Commercial Code in 1966, which was “designed for states * * * that desire to expand the class of beneficiaries” (1A ULA 54, Official Comment 3).
. Jaffee Assoc. v Bilsco Auto Serv. (58 NY2d 993) is not to the contrary for it involved not personal injury but economic loss (see, 89 AD2d 785).
. In view of that construction of “tender of delivery” the majority’s reference to “past usage” (majority opn, at p 412) is difficult to understand.
. Judge Breitel, as he then was, dissenting in Mendel, had called it “all but unthinkable that a person should be time-barred from prosecuting a cause of action before he ever had one” (25 NY2d, at p 346), and Judge Jerome Frank put it even more forcefully in his dissent in Dincher v Marlin Firearms Co. (198 F2d 821, 823): “Except in topsy-turvy land, you can’t die before you are conceived, or be divorced before ever you marry, or harvest a crop never planted, or bum down a house never built, or miss a train running on a nonexistent railroad. For substantially similar reasons, it has always heretofore been accepted, as a sort of legal ‘axiom,’ that a statute of limitations does not begin to run against a cause of action before that cause of action exists, i.e., before a judicial remedy is available to the plaintiff.”
. Prosser, Law of Torts, at 651 (4th ed): “The middleman is no more than a
. Not in point for like reason, though not cited by the majority, are JR ¿vera v Berkeley Super Wash (44 AD2d 316, 326, affd 37 NY2d 395); Reis v Pfizer, Inc. (61 AD2d 777); Weinstein v General Motors Corp. (51 AD2d 335); Johnson v Hockessin Tractor (420 A2d 154 [Del]); Cumberland Val. Joint School Auth. v Halderman, Inc. (23 Pa D&C3d 616); see, Garcia v Texas Instruments (610 SW2d 456 [Tex]); Garvie v Duo-Fast Corp. (711 F2d 47); Quadrini v Sikorsky Aircraft Div. (425 F Supp 81, 505 F Supp 1049).
. Accord, 3A Framer and Friedman, Products Liability § 40.02, at 12-34: “It would seem that the courts which apply the time-of-sale rale will hold that the action accrues when plaintiff purchases the product from the retailer. If a warranty is held to extend to a remote purchaser, which is the effect of abrogating privity, it cannot on principle be breached before the product is purchased by him.”
. It is no answer, as the majority suggests (at p 412), that its interpretation “does not limit available remedies generally” or that this plaintiff waited more than three but less than four years before suing. The issue is not what other remedies might have been available but what the Legislature intended when in 1975 it amended UCC 2-318. That plaintiff may have had other remedies now outlawed furnishes no basis for the majority’s restrictive reading of what the UCC says is to be liberally construed and liberally administered.