Semenetz v. Walden

52 Citing cases

  1. Doktor v. Werner Co.

    762 F. Supp. 2d 494 (E.D.N.Y. 2011)   Cited 11 times
    Finding that the holding in Semenetz foreclosed the plaintiff's argument in a products liability case that successor liability could be imposed based on the continued marketing of the predecessor's defective product

    New York law provides clearly that a corporation that purchases the assets of another corporation is generally not liable for the liabilities of the seller. Douglas v. Stamco, 2010 WL 337043 *1 (2d Cir. 2010); New York v. Nat'l Serv. Indus., Inc., 460 F.3d 201, 209 (2d Cir. 2006); see Semenetz v. Sherling Walsen, 818 N.Y.S.2d 819, 820 (2006). Instead, successor liability attaches only where one of four established exceptions is present.

  2. Lelchook v. Société Générale de Banque au Liban SAL

    41 N.Y.3d 629 (N.Y. 2024)

    Although liability and jurisdiction are distinct legal concepts (see Kreutter v. McFadden Oil Corp., 71 N.Y.2d 460, 470, 527 N.Y.S.2d 195, 522 N.E.2d 40 [1988]), the principles animating one may inform the other. We have identified four exceptions to the general rule that a purchaser of assets is not liable for the seller’s torts: when "(1) [a corporation] expressly or impliedly assumed the predecessor’s tort liability, (2) there was a consolidation or merger of seller and purchaser, (3) the purchasing corporation was a mere continuation of the selling corporation, or (4) the transaction is entered into fraudulently to escape such obligations" (Schumacher v. Richards Shear Co., 59 N.Y.2d 239, 245, 464 N.Y.S.2d 437, 451 N.E.2d 195 [1983], citing Hartford Acc. & Indem. Co. v. Canron, 43 N.Y.2d 823, 825, 402 N.Y.S.2d 565, 373 N.E.2d 364 [1977]; see also Semenetz v. Sherling & Walden, Inc., 7 N.Y.3d 194, 196–198, 818 N.Y.S.2d 819, 851 N.E.2d 1170 [2006]). We have not extensively probed the rationale for these four exceptions.

  3. Lelchook v. Société Générale de Banque au Liban SAL

    41 N.Y.3d 629 (N.Y. 2024)

    Although liability and jurisdiction are distinct legal concepts (see Kreutter v. McFadden Oil Corp., 71 N.Y.2d 460, 470, 527 N.Y.S.2d 195, 522 N.E.2d 40 [1988]), the principles animating one may inform the other. We have identified four exceptions to the general rule that a purchaser of assets is not liable for the seller’s torts: when "(1) [a corporation] expressly or impliedly assumed the predecessor’s tort liability, (2) there was a consolidation or merger of seller and purchaser, (3) the purchasing corporation was a mere continuation of the selling coloration, or (4) the transaction is entered into fraudulently to escape such obligations" (Schumacher v. Richards Shear Co., 59 N.Y.2d 239, 245, 464 N.Y.S.2d 437, 451 N.E.2d 195 [1983], citing Hartford Acc. & Indem. Co. v. Canron, 43 N.Y.2d 823, 825, 402 N.Y.S.2d 565, 373 N.E.2d 364 [1977]; see also Semenetz v. Sherling & Walden, Inc., 7 N.Y.3d 194, 196-198, 818 N.Y.S.2d 819, 851 N.E.2d 1170 [2006]). We have not extensively probed the rationale for these four exceptions.

  4. Lelchook v. Societe Gen.e de Banque au Liban SAL

    2024 N.Y. Slip Op. 2081 (N.Y. 2024)

    We have identified four exceptions to the general rule that a purchaser of assets is not liable for the seller's torts: when "(1) [a corporation] expressly or impliedly assumed the predecessor's tort liability, (2) there was a consolidation or merger of seller and purchaser, (3) the purchasing corporation was a mere continuation of the selling corporation, or (4) the transaction is entered into fraudulently to escape such obligations" (Schumacher v Richards Shear Co., 59 N.Y.2d 239, 245 [1983], citing Hartford Acc. & Indem. Co. v Canron, 43 N.Y.2d 823, 825 [1977]; see also Semenetz v Sherling & Walden, Inc., 7 N.Y.3d 194, 196-198 [2006]). We have not extensively probed the rationale for these four exceptions.

  5. Ortiz v. Green Bull, Inc.

    10-CV-3747 (ADS)(ETB) (E.D.N.Y. Nov. 14, 2011)   Cited 15 times
    Finding plaintiff "plausibly alleged a de facto merger . . . such that he should be permitted to engage in limited discovery on the issue."

    In Schumacher, a products liability case, the New York Court of Appeals declined to adopt the continuity of enterprise and product line exceptions because they were not applicable under the factual circumstances of the case. After more than a decade of conflicting decisions in the New York appellate courts, the New York Court of Appeals expressly rejected the product line exception in Semenetz v. Sherling & Walden, Inc., 7 N.Y.3d 194, 818 N.Y.S.2d 819, 851 N.E.2d 1170 (2006), on the grounds that: (1) the product line exception "threatens 'economic annihilation' for small businesses" and (2)"extending liability to the corporate successor places responsibility for a defective product on a party that did not put the product into the stream of commerce . . . is inconsistent with the basic justification for strict products liability, which is to place responsibility for a defective product on the manufacturer who placed that product into commerce". 7 N.Y.3d at 200-01, 818 N.Y.S.2d at 823-24, 851 N.E.2d at 1174-75 (internal quotation marks and citations omitted).

  6. BRG Corp. v. Chevron U.S., Inc.

    163 A.D.3d 1495 (N.Y. App. Div. 2018)   Cited 8 times

    We now reverse. It is undisputed that defendant, a foreign corporation with no present contacts in this State, is not subject to personal jurisdiction in New York under either CPLR 301 or 302(a) (seeSemenetz v. Sherling & Walden, Inc., 21 A.D.3d 1138, 1139–1140, 801 N.Y.S.2d 78 [3d Dept. 2005], affd on other grounds 7 N.Y.3d 194, 818 N.Y.S.2d 819, 851 N.E.2d 1170 [2006] ). Nevertheless, plaintiffs contend that personal jurisdiction exists over defendant because it ostensibly bears successor liability for a predecessor corporation that was itself subject to personal jurisdiction in New York.

  7. New York v. National Service Industries, Inc.

    460 F.3d 201 (2d Cir. 2006)   Cited 201 times
    Holding that a party is subject to liabilities and obligations that it expressly assumes

    Id. Even if Sweatland could be read to permit a finding of a de facto merger in the absence of continuity of ownership, its rationale for departing from the traditional common-law rule has been undermined by the recent decision of the New York Court of Appeals in Semenetz v. Sherling Walden, Inc., 7 N.Y.3d 194 (2006). In that case, defendant S W Edger Works, Inc. ("Edger Works"), an Alabama company, sold a band sawmill to Semenetz Lumber Mill, Inc. in 1998.

  8. NNA v. WABTEC CORPORATION

    CIVIL ACTION NO. 06-11950-DPW (D. Mass. Mar. 31, 2008)

    Nor could Wabtec be held liable for the torts of ASI based solely on the fact (as to which, in any event, there is no record support) that it currently produces the same pneumatic horn that ASI sold to the MBTA. New York, along with Massachusetts and a majority of states, has declined to adopt the "product-line" exception to the successor liability doctrine. See Semenetz v. Sherling Walden, Inc., 7 N.Y.3d 194, 196 (2006) (declining to adopt the exception); see also Guzman v. MRM/Elgin, 409 Mass. 563, 567 (1991) (surveying state case law and declining to adopt the exception). The product-line exception, which originated in California, Ray v. Alad Corp., 19 Cal.3d 22 (1977), holds that a party that acquires a manufacturing business and continues the output of its line of products assumes tort product liability for negligence and breach of warranty even if it is not liable under the traditional common law theory of successor liability.

  9. Colon v. Multi-Pak Corp.

    477 F. Supp. 2d 620 (S.D.N.Y. 2007)   Cited 31 times
    Granting summary judgment to the defendant where there was no continuity of ownership and where the predecessor did not dissolve until five years after the successor acquired the predecessor

    In re New York City Asbestos Litig., 789 N.Y.S.2d 484, 487 (N.Y.App.Div. 1st Dep't 2005) (citing Cargo Partner AG, 352 F.3d at 47. Although the New York Court of Appeals has not explicitly ruled that continuity of ownership is a necessary predicate to a finding of a de facto merger, the Second Circuit has embraced such a rule, based in part on the ruling of the Court of Appeals in Semenetz v. Sherling Walden, Inc., 7 N.Y.3d 194 (2006), which rejected the "product line" exception to the traditional successor liability rule: Although Semenetz concerned a different theory of successor liability, it clearly suggests that the New York Court of Appeals will not eviscerate traditional common-law norms of successor liability in tort cases.

  10. McIntyre v. Bradford White Corp.

    2020 N.Y. Slip Op. 51034 (Wash. 2020)

    Honeywell further demonstrated that it cannot be held liable to plaintiffs under a theory of successor liability. "A corporation that purchases another corporation's assets is not liable for the seller's torts, subject to four exceptions outlined in Schumacher v. Richards Shear Co., 59 NY2d 239, 464 N.Y.S.2d 437, 451 N.E.2d 195 [1983]" (Semenetz v Sherling & Walden, Inc., 7 NY3d 194, 196 [2006]). Honeywell demonstrated that none of the exceptions set forth in Schumacher apply, including the "de facto merger" and "mere continuation" theories advanced by plaintiffs.