Opinion
No. CV02-0078923S
July 25, 2003
MEMORANDUM OF DECISION
The plaintiff Silent Stalker, Inc. ("Silent Stalker") has brought this action asserting claims for contribution and indemnity against the defendant Vickers Engineering and the defendant Production Fabricators and Stamping ("Production Fabricators") arising out of the settlement by the plaintiff of a prior product liability action. The defendant Production Fabricators has moved to strike the contribution and indemnity claims against it. Specifically, Production Fabricators argues that the fourth and fifth counts of the plaintiff's amended complaint, which purport to assert claims of contribution and indemnification under the product liability statute, constitute claims for commercial loss which are barred by the product liability statute. Production Fabricators also contends that the sixth count of the plaintiff's amended complaint which asserts a claim of common-law indemnity should be stricken because it fails to sufficiently allege that Production Fabricators was in exclusive control of the situation giving rise to the injury.
"The purpose of a motion to strike is to contest the legal sufficiency of the allegations of any complaint to state a claim upon which relief can be granted. In ruling on a motion to strike, the court is limited to the facts alleged in the complaint. The court must construe the facts in the complaint most favorably to the plaintiff." (Citations and internal quotation marks omitted.) Novametrix Medical Systems v. BOC Group, Inc., 224 Conn. 210, 214 (1992). A motion to strike admits all facts well pleaded, but it does not admit legal conclusions or the truth or accuracy of opinions stated in the pleadings. Mingachos v. CBS, Inc., 196 Conn. 91, 108 (1985).
In its amended complaint, the plaintiff Silent Stalker alleges that Leslie Warren previously commenced a product liability action against it in which he claimed he was injured while using defective tree pegs sold by the plaintiff. Silent Stalker further alleges that a stipulated judgment in the amount of $650,000 was entered in that action on October 17, 2002 in favor of Leslie Warren and that it paid the judgment on CT Page 8722-cd December 1, 2002. Silent Stalker then brought the subject action against the defendants Vickers Engineering and Production Fabricators for contribution and indemnification. With respect to the defendant Production Fabricators, Silent Stalker alleges in its amended complaint that Production Fabricators assembled, installed or manufactured the tree pegs in a defective manner, proximately causing the injuries to Leslie Warren.
I
Product Liability Claims
Production Fabricators maintains that the fourth and fifth counts of the plaintiff's amended complaint, which purport to assert claims of contribution and indemnification under the product liability statute, fail to state claims upon which relief can be granted because they seek to recover commercial loss which is not allowed in a product liability action. The plaintiff contends that the bar to the recovery of commercial loss contained in the product liability statute does not apply to claims for indemnification or contribution. For the following reasons, I conclude that Production Fabricators has not established, under the facts alleged in the amended complaint, that the fourth and fifth counts fail to state a claim upon which relief can be granted.
It is not clear that the plaintiff may appropriately assert indemnity claims under both the product liability act and the common law. "[A] party is entitled to indemnification, in the absence of a contract to indemnify, only upon proving that the party against whom indemnification is sought either dishonored a contractual provision or engaged in some tortious conduct . . . [I]f a claim for indemnification is grounded in tort, reimbursement is warranted only upon proof that the injury resulted from the `active or primary negligence' of the party against whom reimbursement is sought." (Emphasis supplied. Citations omitted.) Burkert v. Petrol Plus of Naugatuck, Inc., 216 Conn. 65, 74 (1990). Arguably, the product liability act, rather than establishing an independent indemnity right, may simply allow an indemnity claim to be asserted under the common law. The defendant here however has not raised CT Page 8722-cj this issue in its motion to strike and I leave its determination to another day.
The product liability statute defines "harm" for purposes of a product liability action as follows: "`Harm' includes damage to property, including the product itself and personal injuries including wrongful death. As between commercial parties, `harm' does not include commercial loss." General Statutes § 52-572m (d). The product liability statute further provides that: "As between commercial parties, commercial loss caused by a product is not harm and may not be recovered by a commercial claimant in a product liability claim. An action for commercial loss caused by a product may be brought only under, and shall be governed by, title 42a, the Uniform Commercial Code." General Statutes § 52-572n (c).
The defendant maintains that the plaintiff's claims for full or partial reimbursement of the money it paid to settle the product liability action filed by Leslie Warren constitute claims between commercial parties to recover a commercial loss and that the above quoted statutory language prohibits such claims. I do not agree.
The product liability statute fails to define the term "commercial parties" or the term "commercial loss." Our appellate courts have not yet had an opportunity to put a judicial gloss on those terms. Trial courts CT Page 8722-ce have been thrust into this void. The result has been considerable disagreement both as to the scope of the definition of these terms and the applicability of the statute's commercial loss prohibition to contribution and indemnity claims.
The dispute among trial courts concerning the definition of "commercial loss" has revolved primarily around whether it includes property damage suffered by a commercial party as a result of a defective product. Compare Producto Machine Co. v. Ajax Magnethermic Corp., Superior Court, judicial district of Fairfield at Bridgeport, Docket No. 23 60 05 (November 10, 1987) (Burns, J.) (in which the court equated commercial loss to "economic injury, whether direct, incidental, or consequential, including property damage and damage to the product itself"), with American Manufacturers Mutual Ins. Co. v. Harrington Hoist, Inc., Superior Court, judicial district of New Haven at New Haven, Docket No. 26 23 69 (June 13, 1989) (Berdon, J.) (in which the court defined commercial loss as including loss of profits or consequential economic losses but not property damage and personal injuries). Whatever the propriety of including property damage in the product liability statue's definition of commercial loss, it was generally agreed that the term includes direct or consequential economic damages between commercial parties. See Connecticut General Life Ins. Co. v. Grodsky, 781 F. Sup. 897 (D. Conn. 1991).
A number of courts have seized upon this definition of commercial loss to strike third-party indemnity claims by defendants in product liability actions. The seminal case in this area is Smith v. Yankee Motor Inn, Superior Court, judicial district of New London at New London, Docket No. 523560 (July 22, 1994) (Leuba, J.). In Yankee Motor Inn, the plaintiff Dale Smith commenced an action against Yankee Motor Inn for injuries he received when a paper dispenser in a restroom at the Inn fell out of the wall when he attempted to pull paper out of it. Yankee Motor Inn subsequently brought a third-party complaint against Aliston Supply Co. claiming that the paper dispenser was defectively designed, assembled, manufactured or distributed by Allston and seeking indemnification for all of Yankee Motor Inn's potential liability to the plaintiff. The court, at Allston's request, struck the indemnification claim finding that Yankee Motor Inn and Allston were commercial parties and that Yankee Motor Inn's claim for payment of any judgment against it constituted a claim for economic losses barred by the commercial loss prohibition of the product liability statute.
A significant number of other trial courts have followed Judge Leuba's lead. See e.g., Gelormino v. J.C. Penney Company, Inc., Superior Court, judicial district of Litchfield, Docket No. CV960067840 (May 22, 1997) CT Page 8722-cf (Dranginis, J.); Amati v. Nallainathan, Superior Court, judicial district of Bridgeport, Docket No. CV 298653S (Sep. 4, 1996) (Ballen, J.), 17 Conn.L.Rptr. 679; Gurgino v. Castrogiovanni, Superior Court, judicial district of Hartford/New Britain at New Britain, Docket No. CV 9304580715 (Jun. 6, 1995) (Goldberg, J.), 14 Conn.L.Rptr. 417; and Kofkoff Feed, Inc. v. Agway, Inc., Superior Court, judicial district of New London at New London, Docket No. 522748 (Jan. 6, 1995) (Austin, J.), 13 Conn.L.Rptr. 247.
A contrary position has recently been taken in Johnson v. Chalmers, Superior Court, complex litigation docket at Tolland, Docket No. X07 CV99 0074165S (Nov. 30, 2000) (Bishop, J.), 29 Conn.L.Rptr. 43. In Chalmers, the plaintiff Lemond Johnson brought a product liability action against a number of defendants including Tri-Lift, Inc. ("Tri-Lift") for personal injuries he sustained while using a forklift. Tri-Lift brought a third-party complaint against NYK seeking indemnification for any judgment rendered in favor of Johnson. NYK filed a motion to strike the third-party complaint claiming that an adverse judgment is a commercial loss that is not within the scope of harm compensable under the product liability statute. The court denied the motion to strike the third-party complaint seeking indemnification. The court determined that the potential payment of monies to satisfy a product liability claim, rather than comprising commercial loss outside the scope of the product liability statute, constituted property damage compensable under the product liability act.
The court in Chalmers further ruled that the commercial loss exclusion was limited to economic loss arising from commercial transactions involving the buying and selling of goods and not to economic loss stemming from an underlying personal injury claim. In reaching this conclusion, the court relied on the analysis of the commercial loss provision of the product liability statute, § 52-572n (c) ("the commercial loss statute"), contained in Hartt v. Schwartz, Superior Court, judicial district of New Haven at New Haven, Docket No. 331912, (December 3, 1997) (Blue, J.), 21 Conn.L.Rptr. 52. In Hartt, the court eschewed the broad definition of commercial loss established in prior cases in favor of an interpretation of the commercial loss statute that establishes a dichotomy between two categories of cases: product liability cases governed by the product liability act and commercial cases governed by the Uniform Commercial Code (UCC). Under this view, the ban on the recovery of commercial losses between commercial parties is limited to those claims involving commercial parties who had contractual relations regarding the defective product and who have contractual remedies under the UCC. See also Stop Shop v. ABCD Refrigeration, Superior Court, complex litigation docket at Waterbury, Docket No. X01 CT Page 8722-cg CV000163760S (August 2, 2002) (Hodgson, J.), 33 Conn.L.Rptr. 20.
I agree with the result reached in Chalmers that the ban on the recovery of commercial losses between commercial parties contained in the product liability statute does not prevent the plaintiff in this case from asserting claims of contribution and indemnity for the reimbursement of monies paid to compensate a product user for personal injuries incurred from his use of a defective product. As the court did in Chalmers, I find persuasive the line of cases that limits the product liability statute's bar to the recovery of commercial losses between commercial parties to claims involving commercial parties with contractual relations concerning the product at issue who have remedies under the UCC. See Hart v. Schwartz, supra and Stop Shop v. ABCD Refrigeration, supra.
I do not share the court's view in Chalmers that monies paid to satisfy an underlying judgment constitute property damage compensable under the product liability statute. The traditional meaning of property damage is damage to or the loss of use of tangible property. Williams Ford, Inc. v. Hartford Courant Co., 232 Conn. 559, 583 (1995). There is nothing in the legislative language or legislative history of the product liability statute that justifies stretching the meaning of "damage to property," to include satisfaction of a judgment. See Williams Ford, Inc. v. Hartford Courant Co., supra, 232 Conn. 584 in which the court declined to include purely commercial losses in the term "damage to property" as used in General Statutes § 52-572h.
The view espoused in Smith v. Yankee Motor Inn and its progeny is attractive for its simplicity: commercial loss encompasses economic loss and payment of a product liability judgment constitutes economic loss; ergo, contribution and indemnity claims seeking reimbursement for such payments are claims for commercial loss outside the parameters of a product liability action. The fundamental flaw with this analysis is that it sweeps too broadly and whisks away contribution and indemnity claims that are clearly authorized by the provisions of the product liability statute. Section 52-572o (e) expressly authorizes an independent action for contribution and § 52-577a (b) has been interpreted to allow third-party contribution and indemnification claims, Malerba v. Cessna Aircraft Co., 210 Conn. 189, 196 (1989). Under the Yankee Motor Inn analysis, such actions for contribution or indemnity could never be brought by a party who paid to resolve a prior product liability action against other product sellers involved in the design, assembly or manufacture of the defective product.
"A statute should be read as a whole and interpreted so as to give effect to all of its provisions." Pintavalle v. Valkanos, 216 Conn. 412, 418, 581 A.2d 1050 (1990). The purpose of this rule is to avoid construing the statutes in such a way as to create a conflict between statutes; "[s]uch . . . reconciliation is especially important in dealing with provisions that are enacted as part of the same legislation. Malerba v. Cessna Aircraft Co., 210 Conn. 189, 195, 554 A.2d 287 (1989)." Elliot v. Sears, Roebuck Co., 229 Conn. 500, 512 (1994). By adopting the construction of the commercial loss section of the product liability statute, § 52-572n (c), suggested in Hartt v. Schwartz and followed in Johnson v. Chalmers, its provisions can be harmonized with the provisions of the product liability statute which authorize actions for contribution, § 52-572o (e), and actions for indemnity, § 52-577a (b). CT Page 8722-ch
In this case, the allegations of the plaintiff's complaint do not reveal whether Silent Stalker, Inc. and Production Fabricators had a contractual relationship with respect to the tree pegs at issue or whether Silent Stalker has any remedy for its claims under the UCC. As a result, the factual allegations of the complaint do not establish, as Production Fabricators urges in its motion to strike, that the plaintiff's claims for contribution and indemnification constitute claims for commercial loss between commercial parties unrecoverable in the context of a product liability claim. See Stop Shop v. ABCD Refrigeration, supra. Accordingly, the motion to strike the fourth and fifth counts is denied.
It is uncertain whether Silent Stalker could claim recompense for the damages it paid to Leslie Warren for the personal injuries he received from using the defective product. Although the consequential damages that a buyer may claim under the UCC includes injury to persons, General Statutes § 42a-2-715, it does not ordinarily encompass such losses as pain and suffering. Gazo v. Stamford, 255 Conn. 245, 265-66 (2001).
II
Common-Law Indemnity Claim
Production Fabricators has also moved to strike the sixth count of the plaintiff's amended complaint which asserts a common-law indemnity claim. Production Fabricators contends that no reasonable juror could find that it was in exclusive control of the situation that caused injury to Leslie Warren.
"Ordinarily there is no right of indemnity or contribution between joint tortfeasors. Where, however, one of the defendants is in control of the situation and his negligence alone is the direct immediate cause of the injury and the other defendant does not know of the fault, has no reason to anticipate it and may reasonably rely upon the former not to commit a wrong, it is only justice that the former should bear the burden of damages due to the injury. Under the circumstances described, we have distinguished between `active or primary negligence,' and `passive or secondary negligence.' Indemnity shifts the impact of liability from passive joint tortfeasors to active ones." (Citations omitted; internal quotation marks omitted.) Skuzinski v. Bouchard Fuels, Inc., 240 Conn. 694, 697 (1997).
Silent Stalker's amended complaint must allege facts sufficient to establish at least four separate elements in order to maintain a common-law action for indemnity. These elements are:
(1) that the other tortfeasor was negligent; (2) that such negligence, rather than the plaintiff's, was the direct, immediate cause of the accident and injuries; (3) that the other tortfeasor was in control of the situation to the exclusion of the plaintiff; and (4) that the plaintiff did not know of such negligence, had no reason to anticipate CT Page 8722-ci it, and could reasonably rely on the other tortfeasor not to be negligent. Id. 698.
Ordinarily, the issue of whether the tortfeasor was in exclusive control of the situation is a question of fact to be resolved by the jury. Id. 704. In special circumstances, a court may find that, given the facts alleged in the complaint, no reasonable juror could find that the plaintiff had met its burden of establishing that defendant was in exclusive control of the situation causing the injury and grant a motion to strike the common-law indemnity claim. Id. 704-06.
Despite Production Fabricator's contention, this is not one of those special cases. In the sixth count of its amended complaint, Silent Stalker has alleged that Leslie Warren was injured when one of the tree pegs he was using broke, due to its being defective. It further alleges that Production Fabricators assembled, installed and/or manufactured the tree peg and did so in a defective manner. Given the nature of these allegations, it is for a jury to determine whether Production Fabricators was in exclusive control of the situation that gave rise to Leslie Warren's injuries.
III
Conclusion
In light of the above, the motion to strike the fourth, fifth and sixth counts of the plaintiff's amended complaint is denied.
BY THE COURT
Judge Jon M. Alander