Products Liability Law Daily Indiana high court rejects argument that post-sale repair or refurbishment of product extends statute of repose
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Tuesday, March 3, 2020

Indiana high court rejects argument that post-sale repair or refurbishment of product extends statute of repose

By Kathleen Bianco, J.D.

The plain language of Indiana’s statute of repose contains no exception that would restart clock following product repair, refurbishment, or reconstruction.

The period for filing a claim in a products liability suit brought by an employee who severely injured his ankle while using industrial machinery for loading pallets was not extended by post-sale repair or refurbishment of the product, the Indiana Supreme Court ruled in answering a question certified from the U.S. District Court for the Northern District of Indiana (Estabrook v. Mazak Corp., March 2, 2020, Slaughter, G.).

A maintenance technician was employed by General Products Corporation, an auto parts manufacturer located in Angola, Indiana. The manufacturer of the pallet loading system, Mazak Corporation, is a wholly owned subsidiary of Yamazaki Mazak Corporation, a Japanese manufacturer of Computer Numerically Controlled (CNC) machinery. In 2014, while the employee was working inside the "Palletech System"—Mazak’s unmanned system for loading and stocking pallets of manufactured goods that is at issue in this case—the employee dropped a wrench that he was using for the repairs. As he bent over to retrieve the wrench, his right foot inadvertently went through the gap at the bottom of the loader door of the Palletech System. The employee’s foot was nearly sheared off above the ankle. As a result, he has undergone several surgeries, including an ankle fusion. If the fusion fails, amputation of the foot above the ankle will be required.

The employee brought a products liability action against Mazak, the manufacturer of the pallet system. The defect alleged was a gap located at the bottom of the loader doors. Its purpose was to allow a forklift to come in underneath the pallet and pick the pallet up. From 2011 through 2014, work was performed on the pallet system. On December 6, 2011, the manufacturer replaced several components on the upper part of the pallet loader robot.

At the onset of the trial, the district court reasoned that the main issue was whether a judicially created exception to the statute of repose existed whereby the rebuilding or reconditioning of the product can re-start the statute of repose clock. The Indiana Products Liability Act (IPLA) governs all products liability actions in Indiana regardless of the substantive legal theory. The IPLA’s statute of repose states that a products liability action must be commenced: (1) within two years after the cause of action accrues; or (2) within ten years after the delivery of the product to the initial user or consumer. The parties agreed that the strict application of the statute of repose to the delivery date of the Palletech System in this case would bar the employee’s cause of action. However, both parties have identified a judicially created exception to the statute of repose whereby the rebuilding or reconditioning of the product can re-start the statutory clock. The primary dispute between the parties was how that exception applied. While several courts have considered the applicability of such an exception, no Indiana court with controlling authority has provided any relevant guidance. As such, the district court asked the Indiana Supreme Court to weigh in on whether the applicable statute of repose can be extended by post-sale repair/refurbishment/reconstruction of a product and, if so, what would be the appropriate test to be used to determine whether the work done was sufficient to trigger the extension.

Statute of repose. The plaintiff asked the state high court to adopt an exception that would restart the ten-year statute of repose when a manufacturer’s refurbishment efforts yield a "new product." This would require the court to craft a test for assessing when modifications to a product result in a new product. The court declined to do so based on its determination that the statute’s plain meaning does not allow it and because the task is not amenable to a clear, bright-line legal rule.

In addressing the certified question, the Indiana high court asserted that the statute is unambiguous and contains only one exception. The statute requires a plaintiff to bring suit "within ten (10) years after the delivery of the product to the initial user or consumer." The single exception applies to an action accruing "at least eight (8) but less than ten (10) years" after initial delivery. This exception allows an action to be filed after the ten-year period, but within two years of accrual where the claim arises between eight and ten years after the initial delivery. In the case here, the worker was injured 11 years after initial delivery of the product, so under the plain meaning of the statute, his claim was time-barred because it did not accrue less than ten years after delivery of the goods. Having determined that under the plain language of the statute no exception exists related to the repair, refurbishment, or reconstruction of goods, the court answered the certified question in the negative, holding that the Indiana statute of repose cannot be extended by a manufacturer’s post-delivery repair, refurbishment, or reconstruction.

The case is No. 19S-CQ-590.

Attorneys: John C. Theisen (Theisen & Associates, LLC) for Bradley A. Estabrook. Edward Devries (Wilson Elser Moskowitz Edelman & Dicker LLP) for Mazak Corp.

Companies: Mazak Corp.

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