*1 and, Kaye Richard KENNEDY (Plaintiffs
Kennedy, Appellant
below), International, INC.;
GUESS, Resources, Ltd. and
Inc.; Interasian Ltd., Manufacturers, below). (Defendants
Appellee 29S02-0211-CV-594.
No. Indiana.
Supreme Court 21, 2004.
April *3 Firm, Hovde, Law R. Hovde
Frederick
IN, Attorney
Appellant.
for
Indianapolis,
Robinson,
Mitchell, Yarling &
R.
Jeffrey
IN, Attorney
Appellee.
Indianapolis,
Lahn,
University
Indiana
M.
Seth
IN,
Law,
Addition-
Bloomington,
School
Appellee.
on behalf
Appearance
al
FROM
TO TRANSFER
PETITION
ON
AP-
OF
INDIANA COURT
THE
PEALS, NO. 29A02-0110-CV-674
SHEPARD,
Justice.
Chief
time cer-
the first
here for
consider
We
in the
liability provisions
tain strict
render
Liability Act that
Product
though they
liable
distributors
some
The case
product.
had
summary judg-
motions for
arises
corpo-
for two
granted
court
the trial
ment
involved
distribution
rate defendants
designer umbrella.
allegedly defective
defendants did not estab- Appeals
Court of
reversed. Kennedy
conclude the
We
(Guess,
judgment.
lish
were entitled to
injury may have negligence liability pro- with respect to a statutory provision treat- portionate to their product's role ing "principal distributor or seller" as design, manufacturing, and distribution. (2) manufacturer, whether 400 of History Facts and Procedural (Second) the Restatement imposes Torts Kaye Kennedy purchased duty "Guess" Callanen and Guess akin to *4 of a watch at a manufacturer. Department Lazarus Store in 22, Indianapolis on November 1996. aAs Standard of Review. Summary gift watch, for purchasing the she received judgment granted should be only if the a free bearing umbrella also the "Guess" by authorized Indiana Trial Rule 22, logo. May 1998, On Kaye's husband 56(C) shows that genuine there is no issue work, Richard took the to umbrella where of material fact and the moving party de a swung co-worker it from the handle. judgment serves as a matter of law. Ind. The umbrella's shaft separated from the 56(C). TR. We view the facts and reason handle and struck in Richard the nose and able inferences drawn from those facts in sinus, causing injury. light most favorable to the non-moving Carter, party. Wright v. 170, 622 N.E.2d amended, As the Kennedys' complaint (Ind.1993). Guess, sought damages against Inc., Cal- International, lanen Inc. (formerly known appeal On summary from judg CGI, Inc.), as Watches Man- ment, Bag Interasia reviewing court faces the same ufacturers, Ltd., Resources, and Interasian issues that were before the trial court and complaint Ltd. The asserted both negli- analyzes them way, the same although the genee and liability. strict trial court's decision is "clothed with a presumption of validity." Id. While the Interasia Bag, Hong Kong a corpora- non-movant bears the burden of demon tion, manufactured the umbrella. Intera- strating grant that the of summary judg Resources, sian York, in located is a New erroneous, ment was carefully we assess domestic affiliate of Bag. Interasia Callan- trial court's decision to ensure that the en, a corporation, Connecticut is licensed non-movant was not wrongly denied his or by products Guess market bearing the day her court. Id. logo, including the watch and um- brella at issue. Callanen and Guess filed Liability I. Strict Claim against cross-claims and Int- (the Liability Indiana's Product Act erasian Kennedys Resources. at- "Act") governs all brought by actions tempted service of process on Interasia against user or consumer a manufacturer Bag, but were unsuccessful. physical or seller for the harm caused
Callanen and Guess moved for summary product. 34-20-2-1, Ind.Code et seq. (1999).1 provides It in pertinent part that: judgment, which the trial granted. court 1978, adopted As the Act covered claims (Ind. Corp., Motors 486 n. 2001) negligence in tort (1983)). under the theories of (citing Ind.Code 33-1-1.5-1 liability. Progressive strict Ins. Co. v. General apply In it was amended to to strict unrea- the umbrella was alleges sells, leases, and Guess or otherwise who person because and defective sonably dangerous of commerce into the stream puts manufacture, assembly" unrea design, condition "the defective in a product sepa- shaft to any user or con caused its of the umbrella sonably dangerous during foreseeable or consumer's the handle the user's rate from or to sumer physi subject to property is use. to the that harm caused cal moved for and Guess if: consumer
user or
not
they
that
were
alleging
judgment
(1)
in the
consumer
is
user or
that
thus
umbrellas and
"manufacturers"
the seller should
persons
class of
To
summary judgment.
were entitled
subject being
reasonably foresee as
their contention
support
con-
by the defective
harm caused
or the
of the umbrella
"manufacturers"
dition;
seller, Callanen
principal distributor
(2)
engaged
the busi-
is
the seller
in affidavits
each submitted
and Guess
product;
selling
ness
employees to show
managerial
(3)
expected to and
for the stat
predicates
the factual
none of
with-
the user or consumer
does reach
can
under which
seller
utory exceptions
*5
condi-
the
alteration
out substantial
were met.2
a "manufacturer"
be deemed
by
product is sold
tion in which the
that neither
also stated
The affiants
lable
sought to be held
person
the
ownership in-
any
has
nor Callanen
this article.
under
manu-
Bag, the actual
in Interasia
terest
(1999). Actions for
§
Ind.Code
34-20-2-1
affiliate,
Re-
facturer,
Interasian
or
restricted to
liability in tort are
strict
They added that neither Guess
sources.
In-
products.
of defective
manufacturers
signifi-
or
owned in whole
nor Callanen is
deed,
the restriction
the statute states
Bag or Interasian
part by Interasia
cant
bluntly.
rather
Resources.
liability action based
product
A
satisfy
adequate to
This evidence
lability
may
in tort
of strict
doctrine
proving
and Callanen's burden
a
against
maintained
commenced or
be
"manu
they
that
are not
their contention
alleged to
product
seller of a
defined
of the umbrella as
facturers"
condition
possess a defective
contain or
would,
unrebutted,
Act,3
if
have
and
the
to the user or
unreasonably dangerous
judgment
under
warranted
is a manufac-
unless the seller
consumer
§ 34-20-2-8.
Indiana Code
part
of the
of the
product
turer
defective.
product alleged
be
to the motion
Callanen
response
In
Guess,
Kennedys replied that
the
The Kenne-
34-20-2-3
Ind.Code
in the
to hold the movants
entitled
Callanen were
liability
against
claim
dys' strict
product
1995,
director of
legisla-
an affidavit of its
mitted
only. Id. In
actions
licensing.
is now codified
course. Id. It
ture reversed
Code,
34,
20 of the Indiana
Title
Article
liability claims are
negligence and strict
both
Kennedys
contend that either
do not
3. The
cognizable
Act.
under the
manufacturer.
is the actual
Guess or Callanen
Indeed,
Guess,
appears
at 218.
of a fifteen-
an affidavit
2. Callanen submitted
Bag
actual
is the
undisputed that Interasia
U.S.A.,
manager
Watches
year
at Guess
brand
Id. at
of the umbrellas.
manufacturer
Callanen,
responsible
who was
division
sub-
gift
promotion. Guess
umbrella
provision
lawsuit
virtue of a
Act
no evidence that
any
Interasia
had
lability
imposes
through treating
cer-
contacts with
Indiana or had
knowl-
parties
though they
tain
were manufac-
edge that its umbrellas
were
be sold in
They
Indiana.
turers:
state that Callanen or-
If
dered
jurisdiction
a court is unable to hold
the umbrellas from its Connecticut
a particular
through
over
manufacturer of
office
Bag's
Interasia
affiliate Int-
part
or a
of a
product alleged to
(located
York)
erasian
Resources
in New
payment
defective,
and made
for the umbrellas from
then that
manufacturer's
principal distributor or seller over whom its Connecticut office. The umbrellas
may
jurisdiction
a court
hold
shall be
shipped
themselves were
Hong
Kong
considered,
for the purposes of this
to Callanen's Connecticut office.
chapter, the
prod-
manufacturer
above,
Based on the
Kennedys
argue
uct.
randomly
umbrellas
found their
(1999) (we'll
Ind.Code
34-20-2-4
call it way into
through
marketing
exception.)
"domestic distributor"
promotions of Callanen and Guess and
Thus,
the Act
extend to Guess and
such is not a sufficient basis for exercising
only
if two conditions are met:
jurisdiction under
Indiana Trial Rule
(1) Callanen and Guess must be Interasia
A(A).
(Appellant's
App. at
citing
Bag's principal distributor or seller over
Sons,
North Texas
Donnelley
Steel v.
&
jurisdiction;
whom the court can hold
(mere
orandum demonstrate turer, claimant must also dated documents recent that more tend "principal is a distribu that the defendant address a different January 1998 reflected tor or seller." They argue that Bag. Interasia for investigate made no effort Kennedys a "seller" is when tells us what The code Interasia serve they could whether of Indiana Code says purposes it that "for address. the more recent 34-20, en- person means § seller"] ["a leasing selling in the business
gaged
possible
another
resale,
The existence of
consumption."
use or
for
by itself to rebut
enough
address is not
The code
34-6-2-136
Ind.Code
not be ob
jurisdiction could
means
"principal"
tell us what a
inference
does not
course,
rule,
is.
general
tained. The
or what a "distributor"
the mov
against
must be resolved
doubts
Dictionary
"princi-
defines
Black's Law
Medi
University
ing party. See
chief;
important or
leading; most
pal" as
Center,
Children
Riley Hospital
cal
considerable;
original. Blacks
primary;
(Ind.2000). Callan
umbrellas, agendas and coolers. The val-
fact,
of material
judgment
ue of items
bought
from Interasia
on this issue as to Callanen was not war-
Bag during
period
this six-month
ranted.
$235,000. All
about
pur-
documented
§
Negligence
II.
Claim
$617,000.
nearly
chases thus totaled
We first note that
400 of the Restate-
The volume of business estab
(Second)
ment
of Torts applies only to the
lished from the above evidence sufficiently
Kennedys' negligence claim and not
a genuine
establishes
issue of material fact
their
strict
claim. This is in ac-
as to whether Callanen is a "principal dis
400,
cord with comment b to
which re-
evidence, however,
tributor." Such
does
fers to sections dealing primarily with neg-
create
factual
issue as to whether
(§§ 394-98)
ligence
and with the decision
be deemed a "principal distrib
in Dudley where
Appeals
the Court of
utor."
It satisfies the second condition as
interpreted section 400
explained
to Callanen but not as to Guess.
supporting
rationale
provision's adop-
this
concerned,
Where Guess is
tion in terms of "negligence."
Dudley
See
designated information shows that Guess
Schmitt,
Sports
Co. v.
Ind.App.
sort,
is not a distributor or seller of any
principal or otherwise. Guess neither or
dered nor received the umbrellas at issue.
prevail
To
negligence
ac
It
possession
was never in
tion,
(1)
the claimant must establish:
manufacture,
umbrellas nor did it
supply,
(2)
(8)
duty,
duty,
breach of that
distribute,
assemble, design, or sell them.
injury resulting from that breach. Bam-
Rather,
simply
licensed its name to berger &
Indianapolis
Feiblemam v.
Pow
*8
placement
Callanen for
on
prod
various
Co.,
(Ind.Ct.
Light
er &
Callanen, hand, on the other duty, however, was not questions are of law for the summary judgment entitled to on this is court be appropriate disposi Kennedy's sue. provided evidence by summary Qual an in tion judgment. Holt v. ference that Callanen is the principal dis Sales, Inc., (Ind. ity Motor 776 N.E..2d 361 tributor, so required Callanen was to Ct.App.2002). rebut
784 consid to be of commerce in the stream Kennedys ar the Dudley Sports, Citing Guess, manufacturer." apparent them ered owe Callanen that Guess
gue and/or not this does think at 'We 765 N.E.2d can Callanen duty because and/or to respect Callanen. true with of hold manufacturers" "apparent considered 400 § 400. Section under umbrella the Sports Dudley argues Callanen as his own puts out who "One provides, because, as the to it inapplicable § 400 are another chattel shows, name Callanen's record undisputed though liability as subject to the same is way and it no umbrella is not 4 Restatement manufacturer." its he were manufac- umbrella's as the itself out held (1965). (Second) 14.) Torts 400 of for Transfer Pet. (Appellees' turer. employed Dudley Sports court The has oc "holding out" Whether negli- for the liable hold a vendor 400 to view from the judged should be curred the ven- where the manufacturer genee of examining public, purchasing of the point the name on placed dor induced has been public the whether the actual was of who no indication gave the actual was the vendor believe rea- Dudley court The manufacturer. See Hebel product. of the manufacturer soned: 368, 65 IIl. 92 TIL.2d Equipment, Sherman his name exelusive- puts a vendor When There N.E.2d Dec. indicating way in no ly product, on a Kennedys were the suggest that nothing to another, the product of it is the manu was the Callanen induced to believe that the ven- induced believe public is question. the umbrella facturer of prod- the the manufacturer dor was "Guess"; was the umbrella only name on rely public the This causes uct. belief nowhere to be was name "Callanen" the the vendor. When upon skill found. manner, in this held out products that Callanen their claim support To has no available purchaser the ultimate manufac- as the umbrella's held out itself the true ascertaining who is means heavily on the turer, Kennedys rely act of conceal- By this manufacturer. a trade- had and Guess fact that Callanen prod- ment, vouches for the vendor gave Cal- agreement which licensing mark re- manufacturer's uct and assumes products bear- right to distribute lanen the own. as his sponsibility does name. Such ing the Guess A at 273. Dudley Sports, as the held itself out suggest in Lucas v. reached conclusion was similar per- the consumer's From manufacturer. (Ind.Ct. Dorsey Corp., 609 N.E.2d to do with nothing had spective, Callanen our first represents case This App.1998). There is umbrella. of the the manufacture liability of trade- explore occasion lead a that would to Callanen no reference mark licensors. that it was to believe purchaser reasonable umbrella. the manufacturer Appeals reversed
The Court to use permitted That Callanen finding this claim summary judgment on to hold insufficient byis itself name as to Guess fact remains question of that "a manufacturer" "apparent as an it liable exer or both or Callanen whether Guess rule. Callanen Dudley Sports under of involvement requisite degree cised *9 gift by by lease or sale or persons, either third (a) who defines "one 400 4. Comment supplies "anyone who of loan." puts out a chattel" use of use or for the their own to others for 785 manufacture, assemble, or design, explained jurisdic- did not Justice Peters that in Any the umbrella. involvement test Cal- tions where "additional involvement" is re- lanen had with the umbrella occurred after quired, various factors determine whether designed it was and manufactured. While there is sufficient involvement purchase Callanen did the umbrellas for stream of commerce entity such that an distribution, it received umbrellas al- "apparent an manufacturer." Id. at 83-85. ready packaged for distribution from Int- Some factors courts examine to make this 94.) Bag. (Appellant's App. erasia at Gen- right determination are the licensor's erally, open Callanen did not even product design, control over the the fees packaging going unless it was to send less trademark, received for the use of the particular than ten umbrellas to a store. trademark, prominence supply Id. components, participation in advertisement presented Callanen sufficient evidence degree and the of economic benefit to be to demonstrate it did not hold itself gained licensing agreement. from the Id. out as a manufacturer. The burden thus case, In the Petrol Plus General Motors Kennedys shifted to the to demonstrate had licensed the use of its trademarked otherwise, carry have failed to Dextron II transmission fluid. The fluid their burden. The trial court was correct actually by other com- grant judgment on panies, subject to testing, GM and eventu- negligence claim. ally by sold to Burkert Petrol Plus. The reach a We different conclusion as Connecticut court held that General Mo- to whether Guess could considered an entity tors was not an out" "put "apparent manufacturer." in way since "GM was no involved jurisdictions impose
Some
sale, leave, gift
with the
or loan of the
trademark licensors without
additional
defective automatic transmission fluid."
involvement
the stream of commerce.
distinguished
Id. at 38. This
GM's role
See, e.g.,
Joseph
Carter v.
& Sons
Bancroft
by
Co.,
from that played
Armour &
which
Co.,
(E.D.Pa.1973);
F.Supp.
Con-
high
the Connecticut
court had earlier held
Inc.,
398,
nelly
Uniroyal,
v.
75 TIlL2d
apparent
to be an
manufacturer of can of
(1979).
343,
Ill.Dec.
distributor possible a role as as play 271. 279 N.E.2d minor manufacturing design and overseeing the like Petrol is more case present The the mark order bearing products of Motors, Guess exer- Like General Plus. defense.5 "Sergeant Schultz" the preserve itself the over some control cised of con hardly in the best interest This is (like logo) of the but placement approving sumers. seller, manufactur- any role play did not er or distributor. Thus, conclude that we to assess plausible might well be It li- trademark should treat common law is, as the licensor a trademark whether for defec having responsibility censors as it, "subject to the same puts Restatement of com- in the stream products placed tive product] though [the he were liability as marks, only so bearing their but meree li- manufacturer," over the by pouring defects as liability for those much of in the manu- involvement level of censor's larger in the scheme relative role their On product. or distribution facture manufacturing, advertising, design, hand, approach creates such the other rightly Consumers distribution warrants. (either liability binary regime which bearing logos like products expect altogeth- manufacturer or as the the same over subject to some have been "Guess" non-existent) on the examination based er put their name sight by those who activity anything but. that is of commercial can those same consumers product, but pointed Peters that in modern commerce imagine
As Chief Justice well Plus, actually trademark licensors they buy may in Petrol have been products out Act to take duty under the Lanham have a someone else. prevent to detect and measures reasonable com process sorting out The of the trade deceptive uses misleading settings can well be fault in such parative Plus, They 579 A.Z2dat 32. mark. Petrol juries. Summary judgment left role likely ongoing to take some thus inap negligence claim was mark bearing their lest products in the propriate. associated with right loss of the they risk ownership of it. Conclusion system liability
A common law of material fact exist as issues Genuine that, supervi muscular when encounters a man- can deemed to whether Callanen licensor, imposes identi by a sion "principal under the distributor ufacturer however, manufacturer, that of the cal to to whether exception and also as or seller" opposi holder in the pushes the trademark successfully espi- conduct Safay- 'prisoners' would Dept. State Revenue In Indiana (Ind.1995) prison. an, onage operations we ex- from inside week, lovable, "Sergeant Schultz" defense: plained the incompetent, if And each refers, upon sergeant some clue Sergeant would stumble Schultz defense pursuing Hogan's Instead of activities course, of the character to the refrain however, leads, simply would Schultz these comedy, Ho- in the television that name declare, n-o-th-ing, Sergeant Schultz was as- "I know n-o-t-h-in- gan's Heroes. Corp. v. Sona g." Pharmaceutical guarding Ortho signed unenviable task of Cf. Inc., Distributors, F.Supp. Hogan men in a German and his Colonel (S.D.Fla.1987) Sergeant (rejecting Schultz during camp World War II. prisoner of war misrepresentation defense to fraudulent week, despite the best efforts of Each Klink, claim). commandant, camp's Colonel *11 "appar- motion, can held liable under the Guess relevant to Guess's so Guess is theory, precluding ent manufacturer" thus entitled to summary judgment. Therefore, summary judgment. we affirm result, I agree with the but not the in in part part, and reverse as indicated reasoning, as to Callanen's motion for sum above. mary judgment on the strict Hability claim. Callanen established that it was not the RUCKER, JJ., SULLIVAN and concur. umbrella, manufacturer of the desig but DICKSON, J., concurs in result without nated no establishing that it is separate opinion. not the "principal product distributor" of a by manufactured BOEHM, J., a manufacturer who can sepa- concurs in result with not be haled into court in Indiana DICKSON, J., in Be opinion joins. rate which plaintiffs'
cause complaint pleads that Cal- BOEHM, J., in concurring result. strictly defect, lanen is liable for the I allegation think that is sufficient under it, I disposition appeal As see of this is pleading notice to claim that Callanen is by governed the basic rules of either a manufacturer or a "principal dis judgment practice. plaintiffs plead The in tributor." Under Trial Rule 56 it is Cal- complaint they injured their in were lanen's burden to establish neither is the by They defective umbrella. case, 1) which by showing it could do plead negligent design and in manufacture 2) distributor, not a somebody is or else liability Count I and strict in Count IIL. 3) distributor, is principal Interasia's governed by Both counts are the Indiana susceptible Interasia is suit Liability Product Act. Ind.Code 34-20- Indiana. "principal Whatever distributor" plaintiffs 1-1 allege that means, any of these facts would negate (the trademark) licensor of the and person Callanen's status as a liable under (the distributor) are liable for a Liability the Product But Act. Callanen's in product by defect Inter- motion designated evidence estab get summary judgment, asia. To these lished none only of these. The reference by defendants must establish uncontro- designated evidence to Callanen's plaintiffs verted evidence that have no "principal status as a distributor" is the claim. bald assertion in an affidavit a Callanen Both Callanen establish executive that "Callanen princi is undisputed evidence that had no role pal seller or distributor for Interasian design or manufacture of the um- Manufacturers, LTD." As the majority brella. For the reasons majority holds, conclusion, this a legal not an gives, agree I that Guess be liable as assertion of facts. As such it is insufficient "apparent manufacturer" but Callanen support summary judgment. Meyer v. summary judgment is entitled to Builders, Inc., Marine And, negligence claim. majority as the (Ind.Ct.App.2003). So Callanen's mo holds, summary judgment as to Guess is tion should ground, be denied on that proper liability on the strict claim. Guess there is no need to consider the materials by undisputed established evidence that its the plaintiff opposition submitted in to the relationship sole is as trade- motion. mark licensor. It is therefore neither a manufacturer nor a I principal distributor also do not plaintiffs' believe the ef- liability and has no strict under the Prod- forts to serve Interasia relevant Liability uct plaintiffs designated Act. The Callanen's under the Product Lia- no evidence that controverted the facts liable, all, bility Act. if Callanen is as a from a of a distributor"
"principal *12 "un- Indiana is whom over
manufacturer Plaintiffs' fail- jurisdiction." to hold
able process service
ure to effect relates for
address used Intera- not to whether process,
service jurisdiction subject personal is
sia the record know from For all we
Indiana. operates majority, Interasia
cited Indiana, facility in manufacturing
major state, in this sued certainly could be Kong Hong headquarters moved its
but majority points As the address.
to a new liability tois
out, of distributor purpose responsible iswho
provide someone if into Indiana shipped
defective the reach of beyond manufacturer is personal Lack of of this State.
the courts manufacturer, not de- over the
jurisdiction service, test whether is the
fective De- in Indiana. can be sued
manufacturer curable, but process is service
fective subject
only if the manufacturer courts is this of Indiana jurisdiction jurisdiction." For to hold "unable
state well, I do not subscribe
that reason as resolving methodology of majority's motion.
Callanen's
DICKSON, J., joins. BLANCK, Appellant-Plaintiff,
Dean E. OF COR
INDIANA DEPARTMENT
RECTION, al., Appellees-De et
fendants.
No. 52A02-0309-CV-800. of Indiana. Appeals
Court of 30, 2004.
March April Ordered
Publication