By Robert B. Barnett Jr., J.D.
The Fifth Circuit ruled that Texas’s 15-year statute of repose begins to run on the date the vehicle was released to the dealer and that the statute tolling the time for minors did not apply.
A products liability suit against Ford Motor Company involving injuries to four people in a truck rollover accident was barred because the start date of the Texas 15-year statute of repose in products-liability cases was the date the truck was released to the dealership, which was more than 15 years after the date suit was filed, the U.S. Court of Appeals for the Fifth Circuit has ruled, affirming a Texas district court’s dismissal of the case. Furthermore, the fact that one of the four parties injured was a minor at the time of the accident did not toll the statute on his claims. Crucial to the decision was the distinction between a statute of limitations and a statute of repose-the latter being absolute and can even cut off rights of action before they accrue (Camacho v. Ford Motor Co., March 30, 2021, Willett, D.).
Background. A driver, his wife, and their two sons were seriously injured in 2017 when their 2004 Ford F-150 truck rolled over in Mexico. On January 10, 2019, they filed a products-liability suit against Ford in Texas federal court. The court granted summary judgment to Ford, ruling that the suit was barred by §16.012(b) of the Texas Civil Practice and Remedies Code, which contains a 15-year statute of repose. Under the statute, claims must be filed in products-liability cases before the end of 15 years "after the date of the sale of the product by the defendant." The law provides no definition of "the date of the sale of the product." The district court ruled that the date of the sale was October 5, 2003, which was the date that Ford transferred the newly manufactured truck to the dealership. The court also rejected the claim that the statute should be tolled because one of the sons was a minor at the time of the accident. The injured parties appealed the decision to the Fifth Circuit in New Orleans.
Date of sale. The injured parties urged the court to accept the definition of "first sale" contained in Texas’s Certificate of Title Act. Under that law, the date of sale would have been either January 10, 2004, when the first purchaser of the truck filed a title application, or January 21, 2004, when the Texas DMV issued the title. Using either date, the complaint would have been timely filed.
The court instead used the definition of "sale" from the Texas Uniform Commercial Code, which provides that a sale occurs when title passes to the buyer at the time and place at which the seller completes his performance of physical delivery of the goods. Under this definition, the sale occurred on October 6, 2003, when Ford delivered the vehicle to the dealership. The court resorted to the UCC because it comported with the plain meaning of "sale" within a context similar to that contemplated by the statute of repose. The Certificate of Title Act, on the other hand, defined "first sale" rather than "sale." If the date of sale was accepted as the date the dealership sold the truck, the part of the statute that says "by the defendant" would be read out because the dealership was not the defendant. Also, the Certificate of Title Act applies only to the first sale, whereas the statute of repose applies to all product-liability claims.
Applying different standards to the repose period for different products "would be an untenable result," according to the appellate court. In addition, the Certificate of Title Act provides that the UCC controls when the two laws conflict.
As a result, the Fifth Circuit concluded that the statute of repose began to run in October 6, 2003, which meant that a suit filed on January 10, 2019, was not filed within the required 15 years under the statute of repose.
Minor tolling. The injured parties argued that even if the claims were barred by the statute of repose, the claim of one of the boys should not be barred because he was a minor at the time of the accident. The Texas statute that tolls actions against minors until they turn 18 years of age uses the term "limitations period" (Texas Civil Procedure and Remedies Code §16.001).
The question then was: Does the term "limitations period" apply to the products-liability statute of repose? The appellate court said no. The answer lay in the difference between statutes of limitations and statutes of repose. Statutes of repose establish an absolute protection against infinite potential liability. Statutes of limitations operate procedurally to bar the enforcement of a bar; statutes of repose, on the other hand, take away the right completely. Thus, under the right facts, a statute of repose could cut off rights of action before they ever accrue, which would have happened under these facts if the truck rollover had occurred after October 6, 2018. The Texas statute involving the tolling of cases while the plaintiff is a minor uses the expression "when the cause of action accrues." This is the language of statutes of limitations, not statutes of repose. As a result, the Fifth Circuit concluded that the Texas statute on minors did not apply to the products-liability statute of repose.
Therefore, the Fifth Circuit affirmed the lower court’s ruling.
The case is No. 20-50422.
Attorneys: Ronald Wright Armstrong, II (Armstrong Firm, P.L.L.C.) for Jose L. Camacho, Maria Camacho, Fabian E. Camacho and Luis E. Camacho. William Mennucci (Thompson, Coe, Cousins & Irons, L.L.P.) for Ford Motor Co.
Companies: Ford Motor Co.
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