Whether a defendant who admits to the design, manufacture, assembly and installation of a protective guarding system, but who is not regularly engaged in the sale or manufacture of such systems, may be held liable under strict products liability or negligent design theory for injuries resulting from the use of the system.
No. A "casual manufacturer" cannot be held liable under strict products liability or negligent design theory. A casual manufacturer has merely a duty to provide to the buyer adequate warnings with respect to known defects that are not obvious or readily discernable.
Plaintiff was an employee of Knowlton Specialty Papers ("Knowlton"), a paper company. Plaintiff was injured on October 24, 1990, while operating a paper embossing unit owned by Knowlton. As a result of this accident, Plaintiff lost four of his fingers. Knowlton had acquired the paper mill and its contents, including paper embossing unit at issue, approximately three and a half years prior to the accident. The embossing unit had originally been purchased by Defendant, Filtration Sciences in 1966 from the third party plaintiff Black Clawson Company. In the years proceeding the accident, Defendant made several alterations to the embossing unit, including the addition of a saturator/dryer line, and the design and installation of a protective guarding system. On October 24, 1990, the system failed and Plaintiff's hand was severely injured. Plaintiff brought a personal injury suit based on strict products liability, negligent design, failure to provide adequate warnings and breach of warranty theories. Plaintiff asserted that Defendant was liable for its design, manufacture, installation, lack of warning, maintenance and sale of the saturator/dryer line and safety guarding system which had been added, over the years, to the embossing unit by Defendant.
After a period of discovery, Defendant made a motion for dismissal asserting that it could not be held liable under strict products liability, negligence, breach of warranty or failure to warn theories. Although admitting to its design, assembly and installation of the guarding system, Defendant argued that these acts were done solely for its own use, and not with any intent to sell these items or designs to the public. Defendant claimed that it was merely a "casual/occasional" seller in the marketplace for embossing units and therefore that it could not be held liable under theories of strict products liability or negligent design. The supreme court accepted Defendant's argument and granted Defendant's motion for summary judgment. The court stated that "more than one casual sale of an item 'manufactured' or 'assembled' by a business for its own use and not for sale to the public is required to maintain a negligence claim against it." With regard to the allegations of failure to warn, the court found that under the circumstances of the instant case Defendant had adequately discharged its duty to warn. The Appellate Division affirmed the summary judgment for the reasons stated by the trial court. The Court of Appeals granted leave to appeal and affirmed.
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