ATTORNEYS FOR APPELLANT

Gene M. Jones      

Mark A. Lienhoop

LaPorte, Indiana      

ATTORNEYS FOR APPELLEE

Douglas K. Dieterly

David R. Kibbe

Stanley C. Fickle

Anne N. DePrez

South Bend, Indiana  

Larry G. Evans

Valparaiso, Indiana

Tracy C. Beggs

Chicago, Illinois  

	IN THE

	SUPREME COURT OF INDIANA

ESTATE OF WILLIAM F. SHEBEL, JR. 	)

by DOLORES SHEBEL, Personal		)

Representative,					)	

				 			)	

	Appellant/Cross Appellee			)	

	(Plaintiff below),				)	Indiana Supreme Court

 							)	Cause No. 46S03-9707-CV-417

		v.					)	

			 				)	Indiana Court of Appeals

YASKAWA ELECTRIC AMERICA, INC.	)	Cause No. 46A03-9509-CV-318

and MORI SEIKI CO., LTD.,			)

							)

	Appellees/Cross-Appellants		)

	(Defendants below).			)

							)

	APPEAL FROM THE LAPORTE SUPERIOR COURT

	The Honorable Michael D. Cook, Special Judge

	Cause No. 46D01-9309-CT-286

	ON PETITION TO TRANSFER

June 22, 1999

BOEHM, Justice.

	The Products Liability Act bars product liability claims for injuries sustained more than ten years after the product is delivered to its “initial user or consumer.”  See Ind. Code § 33-1-1.5-5 (1993).1   We hold that a “user or consumer” under this statute includes a distributor who uses the product extensively for demonstration purposes and that the ten year

statute begins with delivery for this use.  

Factual and Procedural Background

	On January 10, 1992, William Shebel, Jr. was struck in the chest and killed by a piece

of a computer controlled lathe.  The piece flew from the machine when it crashed as Shebel

was delivering a bill to Bruce Kaufman who was operating the lathe.2  Shebel’s Estate filed a products liability action against the manufacturer of the lathe, Mori Seiki Co., Ltd.,

(“Mori”) and an American affiliate of the company that manufactured the computer controller of the lathe, Yaskawa Electric America, (“Yaskawa”).3 

	The lathe involved in the accident was sold by its manufacturer, Mori, to Yamazen

Company, a trading company in Japan which in turn sold it to Yamazen, USA, Inc.,

(“Yamazen”) its American subsidiary.  The lathe was delivered to Yamazen on March 5,

1981.  Yamazen purchased the lathe for the purpose of using it in demonstrations at trade

shows, and in fact the lathe was used to make parts at three trade shows over the course of

the next year.  In January, 1982, the lathe was sold to Hasbach Company as a used “demo

machine,” but was returned in December of that year.  Aegis Sales and Engineering

Incorporated, then purchased the lathe as a used machine at a discount from Yamazen and

took delivery in January, 1983.  The computer on the lathe indicated that the machine had

been used for “hundreds” and “possibly thousands” of hours when it was delivered to Aegis. 

 After another intermediate owner, Kaufman purchased the lathe in early 1990.  

	Mori and Yaskawa moved for summary judgment, arguing that the Estate’s action was

barred by the statute of repose and alternatively that several other defenses required summary

judgment in their favor.  The trial court held that, as a matter of law, Yamazen was a “user

or consumer” of the lathe, and that uncontroverted facts established that Shebel’s injury

occurred more than ten years after the lathe was delivered to Yamazen.  Accordingly, summary judgment was entered for both defendants based on the statue of repose.

	The Estate appealed, arguing that the “initial user or consumer” of the lathe could not

be determined as a matter of law where conflicting inferences could be drawn from the facts.

The Estate also argued that genuine issues of material fact bore on the definition of “user or

consumer,” and that other issues precluded summary judgment. 

	The Court of Appeals, with Judge Garrard dissenting, reversed the trial court, holding

that, as a matter of law on these undisputed facts, Yamazen as a distributor was a “seller”

and not a “user or consumer.”  Estate of Shebel v. Yaskawa Elec. America, Inc., 676 N.E.2d 1091 (Ind. Ct. App. 1997).  We granted the defendants’ petition for transfer and now affirm

the trial court’s grant of summary judgment.

Standard of Review

	Summary judgment is appropriate when the designated evidence shows that there is

no genuine issue of material fact and that the moving party is entitled to judgment as a matter

of law.  Ind. Trial Rule 56 (C); see also Meridian Mut. Ins. Co. v. Auto-Owners Ins. Co., 698 N.E.2d 770, 773 (Ind. 1998).  Although the Estate has the burden of persuading us that the

grant of summary judgment was erroneous, we carefully assess the trial court’s decision to

ensure that the Estate was not improperly denied its day in court.  Erie Ins. Co. v. George, 681 N.E.2d 183, 186 (Ind. 1997); Mullin v. Municipal City of South Bend, 639 N.E.2d 278, 280-81 (Ind. 1994).  All facts and reasonable inferences drawn from those facts are construed

in favor of the Estate.  Foster v. Auto-Owners Ins. Co., 703 N.E.2d 657, 659 (Ind. 1998); Wright v. Carter, 622 N.E.2d 170, 171 (Ind. 1993).

Initial User or Consumer 

	The threshold question in this case is whether Yamazen, who received the lathe in March of 1981, was a “user or consumer” of the lathe.  If so, the Estate’s action for damages

resulting from the January 1992 accident is barred by the statute of repose found at Indiana

Code § 33-1-1.5-5(b) (1993).  That statute provides that “a product liability action must be

commenced . . . within ten years after the delivery of the product to the initial user or

consumer.”4  The wisdom of this policy is for the legislature.  Dague v. Piper Aircraft Corp., 275 Ind. 520, 528, 418 N.E.2d 207, 212 (Ind. 1981).  Indiana, along with several other states,5 has enacted a  statute of repose to bar lawsuits after a product-related initiating event.  See 4 Louis R. Frumer & Melvin I. Friedman, Products Liability § 26.05[1] (1998).  The policies underlying this provision have been described as both a concern for the lack of reliability and availability of evidence

after long periods of time and a public policy to allow manufacturers, after a lapse of a

reasonable amount of time, to plan their affairs with a degree of certainty, free from

unknown potential liability.  Id. (citing Johnson v. Star Mach. Co., 530 P.2d 53, 56 (Or. 1974)).  Presumably there is also an underlying assumption that after ten years a product failure is due to reasons not fairly laid at the manufacturer’s door.  In any event, the

legislature has determined that a product in use for ten years is no longer to be the source of

its manufacturer’s liability.  The wisdom of this policy is for the legislature.  Dague v. Piper Aircraft Corp., 275 Ind. 520, 528, 418 N.E.2d 207, 212 (Ind. 1981).    The starting point for this ten year period is the “delivery to the initial user or consumer.”  The term “user or

consumer” was defined at the time relevant to this case as: 

	a purchaser, any individual who uses or consumes the product, or any other person 

	who, while acting for or on behalf of the injured party, was in possession and control 

	of the product in question, or any bystander injured by the product who would 

	reasonably be expected to be in the vicinity of the product during its reasonably 

	expected use.  

Ind. Code § 33-1-1.5-2 (1993).  As a matter of syntax, this language is susceptible to the reading that any “purchaser,” including a distributor or retailer, is a “user or consumer.” 

However, it was early held, and we agree, that “user or consumer” does not include one who

merely acquires and resells.  Thiele v. Faygo Beverage, Inc., 489 N.E.2d 562 (Ind. Ct. App. 1986);  Whittaker v. Federal Cartridge Corp., 466 N.E.2d 480 (Ind. Ct. App. 1984).6

	The Estate cites Whittaker for the proposition that the identity of the “initial user or consumer” is a question of fact that cannot be resolved on summary judgment.  Whittaker closes with the statement that the timeliness of the complaint presented a question of fact. Id. at 484.  However, on the facts before it, Whittaker held that delivery to an intermediary retailer did not trigger the statute of repose because the retailer as a matter of law was not a

“user or consumer.”  There remained only a failure of the moving party to establish when the

first user or consumer took delivery, not a dispute over any factual proposition. 

	We agree with the Court of Appeals in this case that “[w]ho is a ‘user or consumer’

is a purely legal question.”  Estate of Shebel v. Yaskawa Elec. America, Inc., 676 N.E.2d 1091, 1092 (Ind. Ct. App. 1997); see also State ex rel. Paynter v. Marion County Superior Court, 264 Ind. 345, 350, 344 N.E.2d 846, 849 (1976) (whether entity falls within statutory term is a question of law).

	Also relying on Whittaker, the Estate argues that Yamazen, as a distributor, was a seller7 and therefore cannot be a “user or consumer.”  Whittaker did express the view that the terms “seller” and “user or consumer” are mutually exclusive.  466 N.E.2d at 482. 

However, the Court of Appeals has acknowledged more recently that a “seller” may become

a “user or consumer.”  In Wenger v. Weldy, 605 N.E.2d 796 (Ind. Ct. App. 1993), the court held that the statute of repose began to run when the defendant, a distributor, transferred a

hay baler from his business inventory and used it in his farming operation.  Whittaker may have been correct that the “seller” before it was not also a “user or consumer,” but Wenger demonstrates that the two terms are not mutually exclusive, at least in the sense that one who acquires for resale may by subsequent use become a “user or consumer.”  

	It is uncontroverted that Yamazen sold lathes, and, as the trial court acknowledged,

Yamazen is “generally a distributor.”  However, the trial court went on to conclude that “[i]n

this instance however, they clearly became a user or consumer of this lathe.”  Isolated or

incidental use may not be sufficient to render a distributor a user, but here the undisputed

facts establish repeated and extensive use of the lathe.  Yamazen purchased the lathe for use

as a demonstration model.  The lathe was first used within weeks of delivery at a March

1981 show to manufacture several hundred parts.  The lathe was then shipped to Colorado

in June 1981 for another trade conference and then to Oregon for a show in September of

that year.  It was next sold as used equipment to Aegis.  Dorsey Roth, the owner of Aegis,

stated that when he checked the computer on the lathe to determine how many hours the

machine had been used before he acquired it, the computer revealed that the lathe had been

run in “the hundreds at least and possibly in the thousands” of hours. 

	These designated facts demonstrate that Yamazen “used” the machine to manufacture

parts at trade shows.  This is not a case of possession of the lathe only for resale or for

assembling its component parts.  See Thiele, 489 N.E.2d at 562 (distributor was not a “user or consumer”); Whittaker, 466 N.E.2d at 480 (retailers who stored and sold gun and ammunition were not “users or consumers”); Wilson v. Studebaker-Worthington, Inc., 699 F. Supp. 711 (S.D. Ind. 1987) (assembler of turbine was not “user or consumer”); but see Ferguson v. Modern Farm Sys., Inc., 555 N.E.2d 1379, 1386 (Ind. Ct. App. 1990) (constructing grain bin with component parts was “first use”).  In contrast, Yamazen used the lathe for its intended end use -- the production of machined parts.  If uncontroverted,

these facts establish Yamazen as a “user” as this term is employed in the Act.  The statute

of repose is triggered by “delivery to the initial user or consumer.”  In Wenger the defendant initially purchased the product for inventory and “delivery to the user” did not occur until

the defendant transferred the product to his farm. 605 N.E.2d at 798.  Here, because

Yamazen ordered the lathe for demonstration purposes and began using the lathe at a trade

show within the month of receipt, “delivery to the initial user” took place in March of 1981. 

	The Estate contends that genuine issues remain and points to the affidavit of its expert

William Wachs.  Apart from expressing an opinion on the legal issue whether Yamazen was

a “user,” Wachs notesd that the date Aegis accepted the lathe was January 12, 1983; before

delivery to Aegis, the machine had not previously been used to manufacture parts used in any

manufacturing process or commerce; and Aegis received a new machine warranty.  Wachs

also noted that some documentation identified the lathe as a 1983 (not 1980) model.  

	Wachs’s opinion that “the first user/consumer of ‘the lathe,’ was Aegis” is a legal

conclusion inadmissible under Indiana Rule of Evidence 704(b).  Trial Rule 56(E) requires

that affidavits opposing summary judgment “set forth such facts as would be admissible in

evidence . . . .”  See Rubin v. Johnson, 550 N.E.2d 324, 327 (Ind. Ct. App. 1990) (assertions of legal conclusions in an affidavit are insufficient under Trial Rule 56(E)).

	Wachs’s other assertions do not establish a genuine issue of material fact.  The date

that Aegis accepted the lathe is not contested and is irrelevant to whether Yamazen first

“used or consumed” the lathe in 1981.  It is equally irrelevant whether the lathe was used to manufacture parts used in any manufacturing process or commerce.  The critical question is

whether the machine was “used.”  Its wear and tear and useful life are the thrust of the

statutory provision, not what happens to the products it makes.  Whether Yamazen was

willing to issue a warranty for the lathe as a new model also says nothing about the status of

a prior user.  Frequently used products are warranted as new for various reasons including

the manufacturer’s confidence in the product or willingness to accept the risk of a shorter

life.  Finally, the identification of the lathe on an invoice as a 1983 model does not controvert

the undisputed fact that the lathe was manufactured in 1980. 

	In sum, Yamazen was the “initial user or consumer” when it used the lathe to produce

parts at three trade shows in 1981.  Because the accident in Kaufman’s shop took place in

1992, more than ten years after delivery to Yamazen for that purpose, the Estate’s action is

barred by Indiana Code § 33-1-1.5-5 (1993).  Accordingly, the defendants are entitled to

summary judgment.

Conclusion

	The decision of the trial court is affirmed.  Because the statute of repose bars the

Estate’s cause of action, there is no need to address the additional issues raised by the

parties.

	SHEPARD, C.J., and DICKSON, SULLIVAN and SELBY, J.J., concur.