WILLIAM KORNFEIND, Appellee v. NEW WERNER HOLDING CO., INC. & THE HOME DEPOT, INC., Appellants
No. 2398 EDA 2019
In the Superior Court of Pennsylvania
November 09, 2020
2020 PA Super 266
STRASSBURGER, J.
J-A13033-20
BEFORE: BENDER, P.J.E., LAZARUS, J. AND STRASSBURGER, J.*
OPINION BY STRASSBURGER, J.:
FILED NOVEMBER 09, 2020
New Werner Holding Co., Inc. (New Werner) and The Home Depot, Inc. (Home Depot) (collectively, Defendants) appeal by permission pursuant to
Background
Kornfeind is a lifelong resident of Illinois. On September 6, 2013, Kornfeind was standing on a 28-foot fiberglass extension ladder performing maintenance on his home in Illinois. According to Kornfeind, the ladder slid
The ladder was manufactured in Illinois in 1995 by Werner Co. f/k/a R.D. Werner Co., n/k/a Old Ladder Co. (Old Ladder Co.). Old Ladder Co. filed for bankruptcy in 2006, and in 2007, an investor group New Werner Holding Co., Inc. (New Werner) purchased certаin assets of and assumed certain liabilities from Old Ladder Co. New Werner is a Delaware corporation with corporate headquarters in Greenville, Pennsylvania.1 Although Kornfeind admits he is not positive as to the retailer, Kornfeind believes he purchased the ladder from Home Depot, Inc. (Home Depot) in the late 1990s. The parties do not agree where the ladder was designed, with Kornfeind pointing to evidence that the ladder was designed in Pennsylvania and New Werner insisting it was designed in Illinois.
Kornfeind commenced the instant matter in the Philadelphia County Court of Common Pleas via a writ of summons on September 3, 2015. Initially, the case was placed in deferred status due to Old Ladder Co.‘s bankruptcy. In 2016, a federal bankruptcy court granted Kornfeind relief from the automatic stay, and in 2017, the instant litigation resumed following the trial court‘s order returning the case to active status. Kornfeind filed a complaint on May 26, 2017, which he later amended on
Defendants moved to certify the denial orders as interlocutory orders immediately appealable by permission pursuant to
Standard of Review
We consider Defendants’ issues on appeal regarding the denial of summary judgment mindful of the following.
Our standard of review with respect to a trial court‘s decision to grant or deny a motion for summary judgment is well-settled:
A reviewing court may disturb the order of the trial court only where it is established that the court
committed an error of law or abused its discretion. As with all questions of law, our review is plenary. In evaluаting the trial court‘s decision to enter summary judgment, we focus on the legal standard articulated in the summary judgment rule.
Pa.R.C.P. 1035.2 . The rule states that where there is no genuine issue of material fact and the moving party is entitled to relief as a matter of law, summary judgment may be entered. Where the non-moving party bears the burden of proof of an issue, he may not merely rely on his pleadings or answers in order to survive summary judgment. Failure of a non-moving party to adduce sufficient evidence on an issue essential to his case and on which it bears the burden of proof establishes the entitlement of the moving party to judgment as a matter of law. Lastly, we will view the record in the light most favorable to the non-moving party, and all doubts as to the existence of a genuine issue of material fact must be resolved against the moving party.
Oberdick v. TrizecHahn Gateway, LLC, 160 A.3d 215, 219 (Pa. Super. 2017) (citing Thompson v. Ginkel, 95 A.3d 900, 904 (Pa. Super. 2014)).
Claims Against Home Depot
We begin with addressing the claims against Home Depot to facilitate ease of disposition. Home Depot argues that the trial court erred in denying Home Depot‘s motion for summary judgment because its only potential relationship to the matter is a possible sale of the alleged defective ladder. It contends Kornfeind did not set forth sufficient evidence to demonstrate that he bought the ladder from Home Depot, citing Kornfeind‘s statement that he “wasn‘t sure” where he bought it, and that it could have been one of three retailers, but he was “almost positive” it was Home Depot.
As this Court has explained, notwithstanding the need to view the record in the light most favorable to the non-moving party,
[a] plaintiff cannot survive summary judgment when mere speculation would be required for the jury to find in plaintiff‘s favor. Juliano v. Johns-Manville Corp., 611 A.2d 238, 239 (Pa. Super. 1992) (stating that “[i]n the absence of sufficient evidence demonstrating that plaintiff worked with or near the asbestos materials of a particular defendant, a jury cannot find, except by speculation, thаt it was a defendant‘s product which caused plaintiff‘s injury. Speculation, however, is an inadequate basis for recovery.“). A jury is not permitted to find that it was a defendant‘s product that caused the plaintiff‘s injury based solely upon speculation and conjecture; “there must be evidence upon which logically its conclusion must be based.” Farnese v. Southeastern Pennsylvania Transp. Authority, 487 A.2d 887, 890 (Pa. Super. 1985). “In fact, the trial court has a duty to prevent questions from going to the jury which would require it to reach a verdict based on conjecture, surmise, guess or speculation.” Id. at 890. Additionally, a party is not entitled to an inference of fact that amounts merely to a guess or conjecture. Flaherty v. Pennsylvania Railroad Co., 231 A.2d 179, 180 (Pa. 1967).
Krauss v. Trane U.S. Inc., 104 A.3d 556, 568 (Pa. Super. 2014).
The trial court did not address directly the issue of whether Kornfeind established claims against Home Depot based upon its sale of the ladder, although it referred to Home Depot as the seller of the ladder in its Rule 1925(a) opinion. See Trial Court Opinion, 12/5/2019, at 2. In support of his claims on appeal, Kornfeind points to his testimony that he “remember[s] buying ladders at Home Depot that were Werner ladders,”
Our review of Kornfeind‘s deposition reveals the following testimony. Kornfeind admitted that when he filed the lawsuit, he “wasn‘t sure where [he] bought the ladder.” Kornfeind Deposition, 5/8/2018, at 135. At the time of his deposition, Kornfeind was “almost positive” he bought the ladder at “a Home Depot” but admitted he was not “certain.” Id. Kornfeind also testified that Menards and Sears sold ladders in his town, a fact of which he was aware because he “spen[t] a lot of time in hardware stores.” Id. at 141-45. Although he did not recall buying a ladder at Sears “because their prices are higher,” Kornfeind acknowledged that “probably” bought a ladder at Menards at some point in his life. Id.
Kornfeind testified that he had bought only one extension ladder in his life. Id. He remembers buying “ladders at Home Depot that were Werner.” Id. When asked if he was “aware of any facts ... to suрport the claim that [he] bought [the extension ladder] from Home Depot,” Kornfeind responded,
[t]he way I have always said it was Home Depot is my choice a hundred percent for buying things, but I don‘t have any facts or proof. I don‘t know if I used the word facts but I don‘t have any proof that I bought it at a Home Depot.
Id. Specifically, Kornfeind did not have a sales receipt, a memory of an associated purchase, or any other corroborating fact to prove that he purchased the ladder at Home Depot. Id.
In short, Kornfeind offers no evidence to prove that he purchased the ladder at issue at Home Depot except his own testimony, but even when viewed in the light most favorable to him, his testimony is equivocal and uncertain. To find it was a ladder sold by Home Depot that caused Kornfeind‘s injuries would require the jury to use “conjecture, surmise, guess or speculation.” Krauss, 104 A.3d at 568. Accordingly, we conclude that the trial court erred by denying Home Depot‘s motion for summary judgment.
Application of Illinois‘s Statute of Repose Through Pennsylvania‘s Borrowing Statute to the Strict Liability Claim Against New Werner
Having resolved the claims against Home Depot, we now proceed to address the issues presented by New Werner. Its first issue concerns Pennsylvania‘s borrowing statute and the Illinois Statute of Repose. Illinois has a statute of repose regarding product liability, but Pennsylvania does not have an analogous statute. The relevant subsection of Illinois‘s statute of repose provides as follows.
(b) Subject to the provisions of subsections (c) and (d) no product liability action based on the doctrine of strict liability in tort shall be commenced except within the applicable limitations period and, in any event, within 12 years from the date of first sale, lease or delivery of possession by a seller or 10 years from the date of first sale, lease or delivery of possession to its initial user, consumer, or other non-seller, whichever period expires earlier, of any product unit that is claimed to have injured or damaged the plaintiff, unless the defendant expressly has warranted or promised the product for a longer period and the action is brought within that period.
New Werner contends that pursuant to Pennsylvania‘s borrowing statute,
Pennsylvania‘s “borrowing statute” provides as follows.
§ 5521. Limitations on foreign claims
(a) Short title of section. -- This section shall be known and may be cited as the “Uniform Statute of Limitations on Foreign Claims Act.”
(b) General rule. -- The period of limitation applicable to a claim accruing outside this Commonwealth shall be either that provided or prescribed by the law of the place where the claim accrued or by the law of this Commonwealth, whichever first bars the claim.
(c) Definition. -- As used in this section “claim” means any right of action which may be asserted in a civil action or proceeding and includes, but is not limited to, a right of action created by statute.
New Werner interprets the statute to include statutes of repose under the phrase “period of limitation.” Defendants’ Brief at 16-20. New Werner relies heavily on a statement by our Supreme Court that the purpose of the borrowing statute is to “unequivocally ... prevent a plaintiff who sues in Pennsylvania from obtaining greater rights than those available in the state where the cause of action arose.” Defendants’ Brief at 20-23 (citing Gwaltney v. Stone, 564 A.2d 498, 501 (Pa. 1989)). New Werner criticizes the trial court‘s reliance upon the short title of the statute, emphasizing that it is not controlling. Id. at 22. It cites to cases from a myriad of other states that have interpreted their respective state‘s borrowing statutes as encompassing a statute of repose. Id. at 23-27.
The trial court rejected New Werner‘s assertion in its motions for summary judgment that the borrowing statute includes borrowing another state‘s statute of repose. Instead, the trial court held that “as a matter of law,” the borrowing statute “is explicitly limited to statutes of limitations and does not include statutes of repose.” Trial Court Opinion, 9/24/2019, at 5. The trial court found the language of the borrowing statute to be “clear” and applicable only to statutes of limitation, emphasizing that the “very title of the Pennsylvania law, the ‘Uniform Statute of Limitations on Foreign Claims Act,’ precludes its application to statutes of repose.” Id., citing
It appears that the issue of whether the Pennsylvania borrowing statute includes statutes of repose is an issue of first impression within this Commonwealth. To resolve this dispute, we must interpret the language of the borrowing statute. “We review a question of statutory interpretation de novo, and the scope of our review is plenary.” Frempong v. Richardson, 209 A.3d 1001, 1009 (Pa. Super. 2019). We also keep the following principles in mind.
When engaging in statutory construction, a court‘s duty is to give effect to the legislature‘s intent and to give effect to all of a
statute‘s provisions. 1 Pa.C.S. § 1921(a) . The best indication of legislative intent is the plain language of the statute. In ascertaining the plain meaning, we consider the statutory language in context and give words and phrases their common and approved usage. When statutory language is clear and unambiguous, courts must give effect to the words of the statute and must not disregard the text to implement its objective.1 Pa.C.S. § 1921(b) . Only if the statute is ambiguous, and not explicit, do we resort to other means of discerning legislative intent.1 Pa.C.S. § 1921(c) .
Roverano v. John Crane, Inc., 226 A.3d 526, 535 (Pa. 2020) (quotation marks and some citations omitted). Furthermore, while “[t]he title and preamble of a statute may be considered in the construction thereof, ... [t]he headings prefixed to titles, parts, articles, chapters, sections and other divisions of a statute shall not be considered to control but may be used to aid in the construction thereof.”
Our Supreme Court has explained the distinctions between a statute of repose and a statute of limitations by quoting the following passage from the United States Supreme Court.
Statutes of limitations and statutes of repose both are mechanisms used to limit the temporal extent or duration of liability for tortious acts. Both types of statute can operate to bar a plaintiff‘s suit, and in each instance time is the controlling factor. There is considerable common ground in the policies underlying the two types of statute. But the time periods specified are measured from different points, and the statutes seek to attain different purposes and objectives....
In the ordinary course, a statute of limitations creates “a time limit for suing in a civil case, based on the date when the claim accrued.” Black‘s Law Dictionary 1546 (9th ed. 2009) (Black‘s); see also Heimeshoff v. Hartford Life & Accident Ins. Co., 571 U.S. 99, 105 (2013) (“As a general matter, a statute of limitations begins to run when the cause of action
‘accrues’ -- that is, when ‘the plаintiff can file suit and obtain relief‘“). Measured by this standard, a claim accrues in a personal-injury or property-damage action “when the injury occurred or was discovered.” Black‘s 1546.... A statute of repose, on the other hand, puts an outer limit on the right to bring a civil action. That limit is measured not from the date on which the claim accrues but instead from the date of the last culpable act or omission of the defendant. A statute of repose “bar[s] any suit that is brought after a specified time since the defendant acted (such as by designing or manufacturing a product), even if this period ends before the plaintiff has suffered a resulting injury.” Black‘s 1546. The statute of repose limit is “not related to the accrual of any cause of action; the injury need not have occurred, much less have been discovered.” 54 C.J.S., Limitations of Actions § 7, p. 24 (2010) (hereinafter C.J.S.). The repose provision is therefore equivalent to “a cutoff,” Lampf, Pleva, Lipkind, Prupis & Petigrow v. Gilbertson, 501 U.S. 350, 363 (1991), in essence an “absolute ... bar” on a defendant‘s temporal liability, C.J.S. § 7, at 24.
Although there is substantial overlap between the policies of the two types of statute, each has a distinct purpose and each is targeted at a different actor. Statutes of limitations require plaintiffs to pursue “diligent prosecution of known claims.” Black‘s 1546. Statutes of limitations “promote justice by preventing surprises through [plaintiffs‘] revival of claims that have been allowed to slumber until evidence has been lost, memories have faded, and witnesses have disappeared.” Railroad Telegraphers v. Railway Express Agency, Inc., 321 U.S. 342, 348-349 (1944). Statutes of repose also encourage plaintiffs to bring actions in a timely manner, and for many of the same reasons. But the rationale has a different emphasis. Statutes of repose effect a legislative judgment that a defendant should “be free from liability after the legislatively determined period of time.” C.J.S. § 7, at 24; see also School Board of Norfolk v. United States Gypsum Co., 360 S.E.2d 325, 328 (Va. 1987) (“[S]tatutes of repose reflect legislative decisiоns that as a matter of policy there should be a specific time beyond which a defendant should no longer be subjected to protracted liability.” (internal quotation marks omitted)). Like a discharge in bankruptcy, a statute of repose can be said to provide a fresh start or freedom from liability.
“Another distinguishing characteristic is the corresponding legal effect of each statute.” Graver v. Foster Wheeler Corp., 96 A.3d 383, 387 (Pa. Super. 2014). In Pennsylvania, “statutes of limitations are a form of procedural law that bar recovery on an otherwise viable cause of action. Conversely, statutes of repose operate as substantive law by extinguishing a cause of action outright and precluding its revival.” Id. (citations omitted). Accord Freeman v. Williamson, 890 N.E.2d 1127, 1133 (Ill. App. 2008) (holding that the Illinois statute of repose differs from a statute of limitations in that the statute of repose is substantive rather than procedural).
The statutory phrase at issue in the instant case, “period of limitation,” plainly invokes a temporal aspect. Because both statutes of repose and statutes of limitatiоn limit a plaintiff‘s rights due to time, we agree with New Werner that the term “period of limitation” is broad enough to encompass either type of statute. But New Werner‘s argument fails to account for the remainder of the words in the borrowing statute. “When interpreting a statute, courts must presume that the legislature did not intend any statutory language to exist as mere surplusage; consequently, courts must construe a statute so as to give effect to every word.” Commonwealth by Shapiro v. Golden Gate National Senior Care LLC, 194 A.3d 1010, 1034 (Pa. 2018). The borrowing statute refers to a “period of limitation applicable
The legislature‘s use of the phrase “period of limitation” in connection with the phrase “аpplicable to a claim accruing outside this Commonwealth,” suggests that the legislature intended to include only statutes of limitations and not statutes of repose because only statutes of limitations are related to accrual of a claim. While this meaning is most likely, it is reasonably conceivable that once the claim accrued and the lawsuit was instituted the legislature intended to apply any period of limitation to the claim. Accordingly, there is some ambiguity in the wording of the statute. See Scioli Turco, Inc. v. Prioleau, 207 A.3d 346, 351 (Pa. Super. 2019) (“A term is ambiguous if, when it is read in context, it has more than one reasonable interpretation.“).
Nevertheless, the short title puts any ambiguity to rest. The legislature chose to instruct that the borrowing statute be known as the “Uniform Statute of Limitations on Foreign Claims Act.”
We are not convinced by New Werner‘s efforts to persuade us to disregard the plain language of all of the words of the statute in context with the short title. The legislature specifically referenced accrual, which is a term applicable only to statutes of limitations. Moreover, notwithstanding this Court‘s recognition that the purpose of the borrowing statute is to avoid a plaintiff from obtaining greater rights than available in the state where the cause of action arose, we cannot ignore the legislature‘s explicit and unambiguous use of the term statute of limitations in the short title. See
Furthermore, Gwaltney, the case repeatedly quoted by New Werner, is not helpful to its argument. The case did not involve a statute of repose, and in context the quote New Werner relies upon is related to the statute of limitations.
Borrowing statutes similar to the one adopted in Pennsylvania have been enacted for the following general reasons: (1) to create a uniform system of conflict of laws dealing with statutes of limitations; (2) to prevent forum shopping; (3) to remove the possibility of perpetual liability; and (4) to benefit residents of the enacting state. The primary effect of borrowing statutes is to prevent a plaintiff from gaining more time to bring an action merely by suing in a forum other than the forum where the cause of action accrued. The provisions of Pennsylvania‘s borrowing statute unequivocally evince the legislative intent to prevent a plaintiff who suеs in Pennsylvania from obtaining greater rights than those available in the state where the cause of action arose.
Pennsylvania‘s borrowing statute provides that for claims accruing outside of Pennsylvania, the period of limitations shall be prescribed by the limitations period of the place where the claim accrued or by the law of Pennsylvania, whichever is shorter. Under Pennsylvania law, a claim accrues when and where the injury is sustained. The accident occurred in Tennessee; hence, the cause of action accrued in Tennessee. Pursuant to the Pennsylvania borrowing statute, the Tennessee one year statute of limitations is the proper limitations period to be applied in the case sub judice.
Gwaltney, 564 A.2d at 503 (citations omitted; emphasis added).
Nor are we persuaded by New Werner‘s citation to various out-of-state cases holding that certain other states’ borrowing statutes include statutes of repose. See Defendants’ Brief at 23-27 (referring to court decisions in Delaware, California, Illinois, New York, Wiscоnsin, and Texas, which have interpreted their respective states’ borrowing statutes to include statutes of
statutes of repose in borrowing statutes is by no means universal in other jurisdictions. See, e.g., Rice v. Dow Chemical Co., 875 P.2d 1213, 1217 (Wash. 1994) (“We hold that statutes of repose do not fall under the statute of limitations borrowing statute,
As our sister state‘s high court has observed,
[a] review of the law in other jurisdictions has revealed other states have different borrowing statutes, and thus, various analytical approaches are utilized in applying the differing statutes. Regarding the different methodologies used in other jurisdictions, we note that it is difficult to formulate a legal principle capable of easy application.
Hayes v. Roberts & Schaefer Co., 452 S.E.2d 459, 461-62 (W.Va. 1994).
To the extent that analysis of borrowing statutes in other states is helpful, such analysis should focus on the statutes that, like Pennsylvania‘s, are modeled on the Uniform Statute of Limitations on Foreign Claims Act of 1957. Section 1927 of the Statutory Construction Act provides that “[s]tatutes uniform with those of other states shall be interpreted and construed to effect their general purpose to make uniform the laws of those states which enact them.”
Besides Pennsylvania, only two other states, Oklahoma and West Virginia, adopted the Uniform Statute of Limitations on Foreign Claims Act, a uniform statute approved by the uniform law committed in 1957.7 Consolidated Grain & Barge Co., 212 P.3d at 1174 n.10. The goal of the Uniform Statute of Limitations on Foreign Claims Act was to standardize and simplify borrowing statutes around the United States that had sprung up to
Like Pennsylvania, West Virginia has not decided whether its borrowing statute includes statutes of repose within the term “period of limitation.” However, the Supreme Court of Oklahoma has considered the issue and decided it does not, at least as to the particular statute of repose at issue in
Like Oklahoma, Pennsylvania views statutes of limitations as procedural laws that bar a party‘s right to a remedy, and statutes of repose as substantive laws that “wholly extinguish a party‘s cause of action upon the expiration of the time period.” City of Philadelphia v. City of Philadelphia Tax Review Bd. ex rel. Keystone Health Plan East, Inc., 132 A.3d 946, 952 (Pa. 2015). Accordingly, we find the Oklahoma Supreme Court‘s analysis of Oklahoma‘s substantively similar statute to be persuasive, and the similarities to Pennsylvania law further convince us the Pennsylvania legislature intended the phrase “period of limitation” in Pennsylvania‘s borrowing statute to include only statutes of limitations, not statutes of repose. Given the reference to accrual, the short title of the statute, and the purpose of the uniform law, we affirm the trial court‘s order deсlining to borrow Illinois‘s statute of repose and denying the motions for summary judgment.
Application of the Illinois Statute of Repose to the Strict Liability Claim Against New Werner Through Choice of Law Analysis
New Werner next asks us to decide whether the trial court erred by not applying Illinois‘s statute of repose under a choice-of-law analysis. It argues the trial court erred by treating Illinois‘s statute of repose as a procedural law, and asserts there is a true conflict between the law of Illinois and Pennsylvania regarding repose because Illinois adopted a defendant-protective rule and Pennsylvania protected plaintiffs by not adopting such a rule. Defendants’ Brief at 30-32.
New Werner argues Illinois law should also apply on the issue of whether New Werner, as a purchaser of Old Ladder Co.‘s assets in 2007, could be held liable for the ladder designed, manufactured, and sold before New Werner came into existence as an entity. Id. It notes that
Furthermore, because there is a true conflict between the states’ laws, New Werner argues that Illinois law should apply because the injury occurred in Illinois, and Illinois has more interest in having its laws applied and the more significant relationship to the occurrence and parties. Id. at 36. It points out that the ladder was manufactured and sold in Illinois,
New Werner finally argues that the trial court erred by concluding that the location of the design was relevant to the analysis and dispute the trial court‘s assertion that a choice-of-law analysis was premature due to the dispute over the design location. Id. at 43. New Werner asserts that the location of the design has no bearing in a strict liability matter; what matters, according to New Werner, is the condition of the product, and only Illinois has an interest in addressing a product that was manufactured and sold within its borders. Id. at 44-46.
Our Supreme Court recently described the standard courts must use when analyzing whether a conflict of law exists.
Courts conduct a choice-of-law analysis under the choice-of-law rules of the forum state. Pennsylvania courts first consider whether a “true conflict” exists between the two states. This is because in some instances the purported conflict is ultimately revealed to be a “false conflict” — meaning that the laws of both
states would produce the same result, or that one of the states has no meaningful policy-based interest in the issue raised.
Melmark, Inc. v. Schutt by & Through Schutt, 206 A.3d 1096, 1104 (Pa. 2019) (citations omitted).
If there is a true conflict, the court then moves to the next stage of the inquiry. As this Court has explained,
[i]n addressing which substantive law to apply, we employ the conflict-of-law principles that our High Court framed in Griffith v. United Air Lines, Inc., [203 A.2d 796 (Pa. 1964)]. In Griffith, our Supreme Court altered its approach in determining which substantive law to apply in tort cases. Prior to that decision, Pennsylvania followed the lex loci delicti rule, which applied the substantive law of the place where the tort was committed. Id. at 801. However, the High Court abandoned that mechanical approach in favor of a methodology that combined the “government interest” analysis and the “significant relationship” approach of sections 145 and 146 of the Restatement (Second) of Conflicts[.]
***
S[ubs]eсtion 145(2) of the Restatement (Second) of Conflicts sets forth the contacts to be considered in applying the analysis required under Griffith. They include:
(a) the place where the injury occurred;
(b) the place where the conduct causing the injury occurred;
(c) the domicile, residence, nationality, place of incorporation and place of business of the parties; and
(d) the place where the relationship, if any, between the parties is centered.
Restatement (Second) of Conflict of Laws § 145 (1983).
(a) the needs of the interstate and international systems;
(b) the relevant policies of the forum;
(c) the relevant policies of the other interested states and the relevant interests of those states in determination of a particular issue;
(d) the protection of justified expectations;
(e) the basic policies underlying the particular field of law;
(f) certainty, predictability and uniformity of result; and
(g) ease in the determination and application of the law to be applied.
Id. § 6.
Stange v. Janssen Pharmaceuticals, Inc., 179 A.3d 45, 64-65 (Pa. Super. 2018) (some citations omitted).
Moreover, [Section] 146 of the Restatement (Second) establishes a presumption in personal injury cases that favors the application of the law of the state where the injury occurred unless another state has a more significant relationship to the occurrence and the parties. That section provides:
In an action for a personal injury, the local law of the state where the injury occurred determines the rights and liabilities of the parties, unless, with respect to the particular issue, some other state has a more significant relationship under the principles stated in [Section] 6 to the occurrence and the parties, in which event the local law of the other state will be applied.
In the instant case, the trial court determined that it was premature to conduct a choice-of-law analysis, reasoning that all of Kornfeind‘s claims center around the design of the ladder. New Werner insists that the ladder was designed in Illinois, which is where it was manufactured. New Werner‘s Motion for Summary Judgment, 1/7/2019, at ¶ 2. Kornfeind, on the other hand, counters with evidence he says demonstrates that the ladder was designed at Old Ladder Co.‘s headquarters in Pennsylvania. Kornfeind‘s Response to Motion for Summary Judgment, 2/6/2019, at ¶ 2; Kornfeind‘s Memorandum in Support of Response to Motion for Summary Judgment, 2/6/2019, at 37 (citing deposition testimony, documents, design drawings, and labeling indicating that the ladder was designed in Pennsylvania). The trial court deemed the location of the design to be a dispute of material fact, rendering it unable to resolve at the summary judgment stage which state had the more significant relationship to the action. Trial Court Opinion, 9/24/2019, at 9-11.
Kornfeind is a resident of Illinois. He purchased the ladder in Illinois. He was injured in Illinois. Under the presumption set forth in section 146 of the Restatement, Illinois very well may be the state law that should apply. However, we agree with the trial court that the site of the conduct at issue — i.e., the alleged negligent design — may influence the analysis of whether
Although Defendants stress Kornfeind‘s lack of personal connection to Pennsylvania, which state has the most significant relationship is not as clear-cut as New Werner portrays in its argument. While where the product was designed may not be determinative, we cannot say at this stage that it would not have an impact upon the choice-of-law analysis. See Melmark, 206 A.3d at 1107 (noting that “the overriding consideration is which state has ‘a priority of interest in the application of its rule of law’ so as to vindicate the policy interests underlying that law” but “[b]ecause of the focus on competing policies, such analysis tends to be fact-sensitive“). Both of the parties cite to a myriad of cases to support their respective arguments, but neither points to a negligent design case where a product was designed in a different state from where it was manufactured. Both Kornfeind‘s strict product liability and negligence claims focus on the lack of safety features in the design; if the product was designed in Pennsylvania by a Pennsylvania corporation, the trial court may find Pennsylvania has more of an interest in ensuring that its policies behind its laws are achieved, and
Negligence Claims Against New Werner
In its third issue, New Werner argues the trial court erred by denying its motion for summary judgment because Kornfeind failed to establish negligence claims against it. Defendants’ Brief at 51. Specificаlly, New Werner argues it did not exist at the time the ladder was designed, manufactured, or sold to Kornfeind, and its purchase of Old Ladder Co‘s assets does not render them liable for any negligence by Old Ladder Co. in the past. Id. at 52-53. It relies heavily on an April 26, 2007 bankruptcy order in Old Ladder Co.‘s bankruptcy, claiming that the order prohibits New Werner from being held liable due to any negligence by Old Ladder Co. Id. at 53.
In the order dated April 26, 2007, the bankruptcy court authorized the sale of Old Ladder Co.‘s assets to New Werner. New Werner‘s Motion for Summary Judgment, 1/7/2019, at Exhibit E. In its motion, New Werner quoted the following language from the order in support of its argument that it could not be liable for Kornfeind‘s injuries.
[New Werner] is not assuming nor shall it or any affiliates of [New Werner], be in any way liable or responsible, as a
successor or otherwise, for any liabilities, debts or obligations of [Old Ladder Co.] in any way whatsoever relating to or arising from the [Old Ladder Co.‘s] ownership or use of the purchased assets prior to the consummation of the transaction.” at ¶ 9
New Werner‘s Mоtion for Summary Judgment, 1/7/2019, at 23 (quoting Exhibit E at ¶ 9).
The trial court interpreted the order as applying to liabilities occurring prior to the transaction, and held that the bankruptcy order did not free New Werner from liability because Kornfeind‘s injury occurred after entry of the order. Trial Court Opinion, 12/4/2019, at 9 n.1. It also noted that New Werner did not account for any potential state law successor-in-interest liability theories separate from federal bankruptcy law. Id.
As New Werner did in its motion for summary judgment, it simply assumes in its brief that the bankruptcy order overrides any basis for successor liability under state law without any further analysis. Defendants’ Brief at 53. On appeal, New Werner now points to a different portion of the bankruptcy order, which states that the assets being purchased shall be transferred to New Werner “free and clear of ... any claim, whether arising prior to or subsequent to the commencement of these bankruptcy cases, arising under the doctrine of successor liability.” Defendants’ Brief at 54 (quoting New Werner‘s Motion for Summary Judgment, 1/7/2019, at Exhibit E at ¶ 8).
Even if New Werner were correct that the bankruptcy order intended to discharge New Werner of liability for Old Ladder Co.‘s negligence, the law
Conclusion
In sum, we conclude that the trial court erred by denying Home Depot‘s motion for summary judgment; Kornfeind has not produced non-speculative evidence he was injured by a ladder sold by Home Depot. In an issue of first impression, we hold that Pennsylvania‘s borrowing statute does
Order regarding Home Depot reversed. Order regarding New Werner affirmed.
Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 11/9/20
Notes
As the trial court explained,
Both Pennsylvania and Illinois have a general rule that when one corporation sells its assets to another corporation, the assets are transferred free and clear of all liabilities except valid liens and security interests. See [Schmidt v. Boardman Co.], 11 A.3d 924 (Pa. 2011); see also Hernandez v. Johnson Press Corp., 388 N.E.2d 778 (Ill. App. 1979). However, Pennsylvania and Illinois have carved out different exceptions to this rule that reflect the states’ divergent governmental interests.
Pennsylvania law provides that [New Werner] may be liable under the successor-in-interest rule for acquired product lines, a consumer-friendly approach. ...
Illinois law only provides for liability if a de facto merger occurred when the product line was acquired, a more business-friendly rule that places a higher burden on [Kornfeind].
Trial Court Opinion, 12/5/2019, at 7-8.