By David Yucht, J.D.
In Pennsylvania, statutes of "limitations" are procedural, preventing recovery on otherwise viable claims. Statutes of "repose," however, are substantive laws that extinguish claims outright.
In a case of first impression, a state appellate panel in Pennsylvania held that Pennsylvania’s borrowing statute did not encompass statutes of repose. Consequently, a Pennsylvania trial court did not err by refusing to dismiss a case brought by an injured consumer against a ladder manufacturer based on Illinois’ statute of repose. Additionally, the location in which the allegedly defective ladder was designed was a matter of dispute, which prevented the granting of summary judgment as to the manufacturer, and a bankruptcy court order did not necessarily cut off the manufacturer’s successor liability. However, because the injured consumer had no non speculative evidence that Home Depot sold the subject ladder, the trial court should have granted summary judgment to the retailer (Kornfeind v. New Werner Holding Co., Inc., November 9, 2020, Strassburger, E.).
In 2013, a consumer fell off a 28-foot extension ladder while performing maintenance on his home in Illinois. Allegedly, the ladder slid downward, causing him to fall and sustain severe injuries. The ladder was manufactured in Illinois in 1995 by Old Ladder Co. Old Ladder filed for bankruptcy in 2006, and New Werner Holding Co., Inc. purchased certain assets of and assumed certain liabilities from Old Ladder. New Werner is a Delaware corporation with headquarters in Pennsylvania. Although the consumer was not positive about where he had purchased the ladder, he believed he had purchased it from Home Depot. The consumer filed a complaint in 2017 in Pennsylvania state court, alleging strict product liability and negligence claims against the manufacturer and retailer. The trial court denied summary judgment motions filed by both companies. The companies appealed.
Summary judgment-proof. The appellate panel reversed the decision of the trial court denying summary judgment as to Home Depot. In resolving summary judgment motions, courts must view the factual allegations in a "light most favorable to the non-moving party." However, allegations must be supported by more than "mere speculation." Here, the consumer testified that he "wasn’t sure where [he] bought the ladder." He was "almost positive" he bought the ladder at Home Depot but admitted he was not certain. Specifically, he 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. To find that the subject ladder was sold by Home Depot, a jury would need to guess.
Statutes of repose. In addressing the issue of first impression, the panel affirmed the trial court’s refusal to dismiss the case based on Illinois’ statute of repose. Illinois’ statute of repose bars strict liability suits from being filed more than 12 years after the date of sale. If Illinois’ statute of repose applied, the strict product liability claims here would be time-barred. Pennsylvania has no similar law. Under Pennsylvania’s "borrowing" statute, the applicable limitations period to a claim accruing outside Pennsylvania is either the foreign jurisdiction’s or Pennsylvania’s, whichever is shorter. The appellate court agreed with the lower court that Illinois’ statute of repose was not a statute of "limitations." Among other reasons, the panel noted that in Pennsylvania, statutes of "limitations" are procedural laws that prevent recovery on otherwise viable claims. Statutes of "repose," however, are substantive laws that extinguish claims outright. Since Illinois’ statute of repose was not a statute of limitations, the panel agreed that it did not apply to this case under Pennsylvania’s borrowing statute.
Choice of law. The panel agreed with the trial court that there was a dispute of material fact about the location of the ladder’s design. Which state’s law applied was significant because under Illinois law, a successor in interest, such as New Werner, is not liable for the design defects attributable to its predecessor. Pennsylvania recognizes a "product line exception" under which successors in interest can be found liable. The trial court determined that it was premature to conduct a choice of law analysis here because all the consumer’s claims focused on the allegedly faulty design of the ladder. New Werner insisted that the ladder was designed in Illinois, which was where it was manufactured. However, the consumer pointed to evidence which allegedly demonstrated that the ladder was designed at Old Ladder Co.’s headquarters in Pennsylvania. Because the consumer was a resident of Illinois who was injured at home and the ladder was purchased in Illinois, Illinois law may be the state law that applies. However, the site of the conduct at issue-the design-will influence the choice of law analysis concerning which state had a more significant relationship to this case. New Werner operated in Pennsylvania and had corporate headquarters there. The consumer’s claims focused on the lack of safety features in the design. If the product was designed in Pennsylvania by a Pennsylvania corporation, the trial court could find that Pennsylvania had more of an interest in ensuring that its policies were achieved.
Successor liability. New Werner did not convince the panel that the trial court erred in denying summary judgment on successor liability grounds. Although the court in the Old Ladder bankruptcy action ordered that Old Ladder’s assets be transferred to New Werner free of any claim even if arising after the commencement of the bankruptcy case, the state appellate panel noted that many courts have held that bankruptcy orders do not "preempt all possible future successor liability claims" and cannot discharge the claims of individuals who did not suffer injury prior to the bankruptcy, because such individuals would have no notice of the bankruptcy in violation of their due process rights. Here, New Werner failed to set forth any law regarding the interplay between federal bankruptcy law and state successor liability.
The case is No. 2398 EDA 2019.
Attorneys: Kevin Roberts Marciano (Marciano & MacAvoy, PC) for William Kornfeind. Michael J. Dunn (Law Offices of Michael J. Dunn, L.L.C.) for New Werner Holding Co., Inc. and The Home Depot, Inc.
Companies: New Werner Holding Co., Inc.; The Home Depot, Inc.
MainStory: TopStory SofLReposeNews DefensesLiabilityNews SCLIssuesNews JurisdictionNews DesignManufacturingNews ToolsHardwareNews IllinoisNews PennsylvaniaNews
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