UNITED STATES DISTRICT COURT 

NORTHERN DISTRICT OF INDIANA 

FORT WAYNE DIVISION 

JERRY J. FOWLER AND MICHELE

FOWLER, 

 PLAINTIFFS, 

 VS. 

WERNER CO. D/B/A NEW WERNER

CO., A DELAWARE CORPORATION, NEW

WERNER HOLDING CO. (DE), INC.

F/K/A NEW WERNER HOLDING CO.

(DE), LLC D/B/A WERNER

HOLDING CO., A DELAWARE 

CORPORATION, LOWE’S COMPANIES,

INC., A NORTH CAROLINA 

CORPORATION, AND LOWE’S HOME

CENTERS, INC., A NORTH CAROLINA 

CORPORATION, 

 DEFENDANTS. 

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CAUSE NO. 1:13-CV-126-RLM-RBC

OPINION and ORDER 

 This matter is before the court on a summary judgment motion filed by 

defendants Werner Co. d/b/a New Werner Co., and New Werner Holding Co. 

(DE), Inc. f/k/a New Werner Holding Co. (DE), LLC d/b/a Werner Holding Co. 

The Werner defendants argue there is no genuine issue of material fact as to 

the claims asserted by plaintiffs Jerry Fowler and Michele Fowler. The Fowlers 

oppose the motion. Argument was heard on August 21, 2014. 

I. BACKGROUND
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 In July 2007, the Fowlers purchased a Type III six-foot aluminum 

Werner step ladder from a Lowe’s store in Fort Wayne. On April 29, 2011, Mr. 

Fowler used the ladder for a painting project. During the course of the project, 

he claims the ladder’s spreader or spreader arm broke, causing him to fall onto 

the ladder and the ground. As a result of the fall, Mr. Fowler sustained broken 

ribs, a lacerated spleen, damaged kidneys, and damaged vertebrae. 

 Werner Co. had designed and manufactured the ladder in 2001. In 2006, 

Werner Co. and three other companies1 filed for Chapter 11 bankruptcy relief 

in the United States Bankruptcy Court for the District of Delaware. New 

Werner Holding Co. (DE), LLC2 d/b/a Werner Holding Co., purchased the 

assets of the bankrupt entities for cash, a credit bid, and assumption of 

liabilities as limited and defined in the parties’ Asset Purchase Agreement. 

Before the bankruptcy court approved the sale, Lowe’s Companies, Inc. 

objected to the agreement’s “Assumed Liabilities” provision and requested 

confirmation that the purchaser would be liable for “all of Lowe’s product 

liability and indemnity claims.” Limited Objection and Reservation of Rights by 

Lowe’s Companies, Inc., together with its subsidiaries to Notice of Debtors’ Intent 

to Assume and Assign Certain Leases and Executory Contracts and Fixing Cure 

 

1 The three other companies were Werner Holding Co. (PA), Inc., Werner Holding 

Co. (DE), Inc., and WIP Technologies, Inc. 

2 In 2007, New Werner Holding Co. (DE), LLC became defendant New Werner 

Holding Co., Inc. Defendant Werner Co. is the operating company of New Werner 

Holding Co., Inc. Correspondingly, New Werner Holding Co., Inc. owns all the stock of 

Werner Co. 
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Amounts, at 3 In re Werner Holding Co. (DE), Inc., No. 06-10578 (KJC) (Bankr. 

D. Del. Apr. 25, 2007) (Doc. No. 44-11). The debtors later told the bankruptcy 

court the dispute was resolved and the proposed form of order altered 

accordingly. On April 25, 2007, the bankruptcy court approved the sale, Order: 

(1) Approving Sale of Substantially All of Debtors’ Assets Free and Clear of All 

Liens, Claims, Interests and Encumbrances; (2) Authorizing and Approving the 

Purchase Agreement[;] (3) Approving Assumption and Assignment and Sale of 

Certain Contracts and Leases; (4) Authorizing the Exemption of the Sale from 

Stamp and Similar Taxes; and (5) Granting Related Relief In re Werner Holding 

Co. (DE), Inc., No. 06-10578 (KJC) (Bankr. D. Del. Apr. 25, 2007) (Doc. No. 35-

4), and the related Asset Purchase Agreement, dated March 20, 2007 (Doc. No. 

35-5), between the debtors and Werner Holding Co. (DE), Inc. The parties 

contend that different sections of the bankruptcy court’s order — that point to 

the Asset Purchase Agreement and agreements between the Lowe’s Companies 

and the Werner defendants — determine the Werner defendants’ liability. The 

pertinent sections of the documents are reproduced as needed in the 

discussion that follows. 

 The Fowlers allege that the Werner defendants are liable for their injuries 

contractually, pursuant to the Indiana Product Liability Act, and under 

common law theories of negligence, gross negligence, and/or recklessness. The 

Fowlers also assert a claim under the Indiana Consumer Protection Act. The 

Werner defendants seek summary judgment and contend they aren’t liable 
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because they didn’t expressly assume the liabilities of the company which 

manufactured the ladder and didn’t design, manufacture, or market the ladder. 

II. STANDARD OF REVIEW

 A movant is entitled to summary judgment if no genuine dispute as to 

any material fact exists and the movant is entitled to judgment as a matter of 

law. FED. R. CIV. P. 56(a). The court must construe all facts in the light most 

favorable to the nonmoving party and draw all reasonable inferences in favor of 

the nonmoving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 

(1986). The movant initially has the burden to show there is a lack of evidence 

to support the nonmoving party’s case. Celotex Corp. v. Catrett, 477 U.S. 317, 

325 (1986). If, based on the evidence of record, a reasonable factfinder could 

return a verdict for the nonmoving party, summary judgment must be denied. 

Kodish v. Oakbrook Terrace Fire Prot. Dist., 604 F.3d 490, 507 (7th Cir. 2010). 

III. DISCUSSION

A. Contractual Liability 

 The Werner defendants first argue they didn’t contractually assume the 

liabilities of the company that manufactured the ladder in 2001 when they 

purchased the assets of the bankrupt company six years later. They point to 

the provision in the bankruptcy court’s order regarding the general assumption 

of liabilities created by the sale. 

Except as expressly provided in the Purchase Agreement or the 

Ancillary Documents, Buyer is not assuming nor shall it or any 
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affiliate of Buyer be in any way liable or responsible, as a 

successor or otherwise, for any liabilities, debts, or obligations of 

the Debtors in any way whatsoever relating to or arising from the 

Debtors’ ownership or use of the Purchased Assets prior to the 

consummation of the transactions contemplated by the Purchase 

Agreement or the Ancillary Documents, or any liabilities calculable 

by reference to the Debtors or their operations or the Purchased 

Assets, or relating to continuing or other conditions existing on or 

prior to the Closing Date, which liabilities, debts, and obligations 

are hereby extinguished insofar as they may give rise to liability, 

successor or otherwise, against Buyer or any affiliate of the Buyer. 

Bankruptcy Court Order Approving Sale, at ¶ 9. The Werner defendants 

conclude that based on the bankruptcy court’s order, they can’t be held liable 

as a matter of law. Such a blanket statement overlooks the exception to the 

general rule found in the first sentence of the provision — “Except as expressly 

provided in the [Asset] Purchase Agreement or the Ancillary Documents.” 

Section 2.3 of the Asset Purchase Agreement contains the expressly assumed 

liabilities of the purchaser, and subsection (d) specifically addresses customer 

product liability. The purchaser assumed 

[a]ll Liabilities of any Seller in respect of the product liability claims 

of the customers of Sellers listed on Schedule 2.3(d) . . . that exist 

as of immediately prior to the Closing; provided, however, Buyer 

will assume any Liability of Sellers to any customer of any Seller 

that is not listed on Schedule 2.3(d) (which would otherwise have 

been assumed by Buyer had such customer been listed on 

Schedule 2.3(d)), but only to the extent that such Liability is or 

becomes an allowed administrative expense claim of Sellers’ 

estates pursuant to Section 503(b) of the Bankruptcy Code. 

 

Asset Purchase Agreement, at 16-17. The assumed liabilities fall within two 

categories: (1) product liability claims that existed prior to the sale for 

customers of Sellers listed on Schedule 2.3(d); and (2) allowed administrative 
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expense claims for customers of Sellers not listed on Schedule 2.3(d). Schedule 

2.3(d), titled Assumed Customer Product Liability Claims, states, in its entirety: 

All of Seller’s customers with the exception of: 

Home Depot 

Kawan Lama 

MAB Paints 

Sears 

 

(Doc. No. 35-4, at 31). Lowe’s was a customer, as the objection to this provision 

during the bankruptcy proceedings showed, and so included in the assumed 

product liability claims that existed prior to the sale closing. The Werner 

defendants argue, and the court agrees, however, that the Fowlers’ claim didn’t 

exist before the 2007 bankruptcy sale because the fall occurred years later, in 

2011. Under the general sections of the bankruptcy court’s order and the Asset 

Purchase Agreement, the Werner defendants didn’t contractually assume 

liability for the Fowlers’ claim. 

 The Fowlers respond that the Werner defendants expressly assumed 

liability for ladders sold at Lowe’s stores and that liability stems from two 

different provisions in the bankruptcy court’s order. First, the Fowlers refer to 

Section 2.3 of the Asset Purchase Agreement (approved by the bankruptcy 

court’s order) that contains the expressly assumed liabilities of the purchaser. 

Pursuant to subsection (a), the purchaser assumed “[a]ll Liabilities of any 

Seller under the Seller Agreements . . . .” In Section 2.1(e), “Seller Agreements” 

are defined to be all contracts listed or described in Schedule 2.1(e), which 

includes “open, existing or on-going agreements and/or purchase orders with 
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Sellers’ service providers, vendors or customers.” (Doc. No. 44-10, at 6). The 

Fowlers contend the Lowe’s contracts with the bankrupt entities were open, 

existing or on-going agreements and the Werner defendants consequently 

assumed all liabilities related to ladders sold through Lowe’s stores under the 

then existing Lowe’s agreements. 

 Second, the Fowlers refer to a provision of the bankruptcy court’s order 

they say resulted from an objection filed by Lowe’s Companies, Inc. to the 

debtors’ notice of intent to assume and assign certain leases and contracts in 

the sale. The objection referenced “a number of ongoing obligations from the 

Debtors to Lowe’s under the Lowe’s Contracts, including, without limitation, (i) 

Lowe’s right of indemnification for product liability and other claims involving 

Debtors’ products and (ii) customer product claims arising from Lowe’s 

performance under the Lowe’s Contracts” and sought confirmation that the 

purchaser/assignee would “honor any and all of the Debtors’ obligations to 

indemnify Lowe’s for Indemnity Claims, whether such claims involve accidents 

or conduct occurring before or after the Petition Date and whether such claims 

are allowed administrative claims or not.” Lowe’s Obj., at ¶¶ 4, 5(b). At a 

hearing, counsel for the debtors told the bankruptcy court the objection was 

resolved and changes were made to the proposed form of order accordingly. 

Transcript of Apr. 25, 2007 Hearing, at 10 In re Werner Holding Co. (DE), Inc., 

No. 06-10578 (KJC) (Bankr. D. Del. Apr. 25, 2007) (Doc. No. 44-12). The 

bankruptcy court approved the sale the next day, and the Fowlers claim the 
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following provision of the bankruptcy court’s order regarding the relationship 

between Lowe’s and the Werner defendants was the result of those 

negotiations: 

Notwithstanding [the assumed liabilities clause of the purchase 

agreement], the Debtors are hereby authorized, effective only as of 

the Closing and in accordance with [sections of the bankruptcy 

code], to: (a) assume all (but not less than all) Lowe’s Agreements; 

(b) sell, assign, and transfer to Buyer all (but not less than all) 

Lowe’s Agreements in each case free and clear of all Encumbrances 

(except as provided in this decretal paragraph); and (c) execute and 

deliver to Buyer, such assignment documents as may be necessary 

to sell, assign and transfer all (but not less than all) Lowe’s 

Agreements. For the avoidance of doubt, upon the assignment of 

the Lowe’s Agreements to the Buyer, the Buyer will be required to 

perform all obligations under the Lowe’s Agreements, including, 

but not limited to, the provision of any customer programs or 

indemnity obligations, if such obligations are set forth in or arise 

out of the Lowe’s Agreements. 

Bankruptcy Court Order Approving Sale, at ¶ 15. The Fowlers claim the “Lowe’s 

Master Standard Buying Agreement” dated February 19, 1996 (Doc. No. 47-2) 

is a “Lowe’s Agreement,” and as such, pursuant to paragraph 15, the 

purchaser must perform all obligations under the contract. Further, they argue 

that agreement contains a “Hold Harmless & Indemnity Policy.” 

 The Werner defendants reply that any contractual indemnity obligation is 

to Lowe’s as a customer and not end-user customers like the Fowlers. From 

this, the Werner defendants reason that they aren’t directly liable to an enduser of a ladder purchased at a Lowe’s store; they must simply indemnify 

Lowe’s if it is found to be liable to an end-user. The Fowlers didn’t have the 

opportunity to respond to this argument that was first raised in the reply. In 
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the end, the parties agree the Werner defendants have contractually agreed to 

indemnify the Lowe’s defendants for product liability claims. They differ in 

opinion as to the legal consequences of this contractual obligation. The Fowlers 

claim the Werner defendants are directly liable to end-users of the product 

through their liability to Lowe’s. In their reply, the Werner defendants claim 

they are directly liable to Lowe’s and Lowe’s alone. Indiana law appears to be 

well-settled that an injured party has no right of direct action against the 

tortfeasor’s indemnitor, Central States Grain Co-operative v. Nashville 

Warehouse & Elevator Corp., 48 F.2d 138, 140 (7th Cir. 1931), so the 

bankruptcy court’s order and the Lowe’s Agreement don’t give the Fowlers any 

right to sue the Werner defendants. At best (from the plaintiffs’ perspective), 

the contract vests in the Werner defendants a duty to indemnify Lowe’s for any 

damages Lowe’s might be required (or agree through settlement) to pay. 

The court reaches this conclusion hesitantly. Given the way the briefing 

unfolded in this case, the Fowlers haven’t had a chance to disagree with the 

proposition that Indiana law gives no right of direct action against indemnitors. 

The principle appears — to the court — too well settled to demand additional 

investment of attorney time and party expense through further briefing or 

motion practice. But if the Fowlers disagree, and think there is a right of direct 

action in Indiana, the court will welcome a motion to reconsider. 

Another word is in order concerning the briefing of this motion. After 

reading the Werner defendants’ brief and turning to the Fowlers’ opposing brief, 
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the court was surprised to learn the facts the Werner defendants omitted from 

their submission. Because it was left to the Fowlers to be the first to discuss 

the indemnification provision, they were left without a chance to respond to 

what the Werner defendants posited about the indemnification provision in 

their reply. Some of those challenges were ameliorated by oral argument, but 

the Werner defendants’ cherry picking from the bankruptcy court’s order and 

the Asset Purchase Agreement in their opening brief casts a long shadow over 

the Werner defendants’ credibility with the court. As the court of appeals 

explained last month: 

We caution [movants] tempted to adopt this approach to summary 

judgment practice that it quickly destroys their credibility with the 

court. 

This approach to summary judgment is also both costly and 

wasteful. If a district court grants summary judgment in a party’s 

favor based on its mischaracterizations of the record, the judgment 

will in all likelihood be appealed, overturned, and returned to the 

district court for settlement or trial. This course is much more 

expensive than simply pursuing a settlement or trying the case in 

the first instance. Further, the costs incurred while engaging in 

these shenanigans stand a real chance of being declared excessive 

under 28 U.S.C. § 1927, even if the abusive party prevails at trial 

on remand. Risking such pitfalls in the hope of avoiding a trial is a 

dramatic miscalculation of the risks and rewards of each 

approach. 

Malin v. Hospira, Inc., No. 13-2433, 2014 WL 3896175, at *6 (7th Cir. Aug. 7, 

2014).

B. General Rule – Indiana 

 The Werner defendants further argue they can’t be liable under Indiana 

law because when one corporation purchases the assets of another, the buyer 
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doesn’t assume the debts and liabilities of the seller. Sorenson v. Allied 

Products Corp., 706 N.E.2d 1097, 1099 (Ind. Ct. App. 1999). There are several 

exceptions to this general rule, but the exceptions can only be invoked if the 

predecessor corporation no longer exists. Id. 

 The Werner defendants claim no exception can apply because the 

bankrupt predecessor entities still exist and they have provided the plaintiffs 

with the address for service of process and the contact information for the 

liquidating trustee’s counsel. This argument isn’t persuasive. The entities 

declared bankruptcy eight years ago and the sale of substantially all of their 

assets was completed seven years ago. For all intents and purposes, the 

bankrupt entities no longer exist. See Id. (exceptions only apply “when the 

predecessor corporation no longer exists, such as when a corporation dissolves 

or liquidates in bankruptcy”); cf. South Bend Lathe, Inc. v. Amsted Indus., Inc., 

925 F.2d 1043, 1047 (7th Cir. 1991) (recovery under product-line exception 

theory barred because predecessor company remained a viable company 

capable of satisfying judgments against it). 

 An implied or express agreement between the buyer and the seller to 

assume the obligation is a recognized exception to the general rule that a buyer 

doesn’t assume the seller’s liabilities. Sorenson v. Allied Products Corp., 706 

N.E.2d 1097, 1099 (Ind. Ct. App. 1999). Reiterating the arguments 

surrounding contractual liability, the parties dispute whether this exception 

applies to the Werner defendants. As previously discussed, the Werner 
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defendants expressly agreed to indemnify Lowe’s for product liability claims – 

an obligation assumed when the Werner defendants purchased the assets of 

the bankrupt entities. But, that express agreement to indemnify Lowe’s doesn’t 

extend to the Fowlers. 

 The Fowlers alternatively argue that a “product-line exception” to the 

general rule could apply to the Werner defendants. In Guerroro v. Allison 

Engine Co., 725 N.E.2d 479 (Ind. Ct. App. 2000), the Indiana court of appeals 

discussed a product-line exception under which a party that acquired a 

manufacturing business and continued the output of the predecessor’s line of 

products was strictly liable for defects in units of the same product line that 

was previously manufactured and distributed by the predecessor. Id. at 483. 

Indiana courts haven’t adopted or disclaimed this exception. Id. at 487 (“The 

product line exception may be an appropriate means by which to balance the 

seemingly juxtaposed concepts of strict liability under the Indiana Product 

Liability Act, and freedom of contract – long supported by common law, as well 

as both state and federal constitutions.”). The Fowlers effectively ask this 

federal court to push Indiana law to a place the Indiana courts haven’t yet 

ventured. That’s the role of the state court, not of a federal court sitting in 

diversity. See Doe v. City of Chicago, 360 F.3d 667, 672 (7th Cir. 2004) (“A 

litigant who wants an adventurous interpretation of state law should sue in 

state court . . . rather than ask us to declare such an interpretation to be the 

law of” Indiana). 
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 The Werner defendants concede they contractually agreed to indemnify 

the Lowe’s defendants, but that liability doesn’t transfer to the Fowlers. The 

court declines to determine whether the product-line exception could apply in 

this situation because the exception has yet to be applied under Indiana law. 

No exception applies, so the Werner defendants are subject to the general rule; 

when they purchased the assets of the bankrupt company, they didn’t assume 

its liabilities. It follows that the Werner defendants aren’t liable under the 

Indiana Product Liability Act, common law theories of negligence, gross 

negligence, or recklessness (that, regardless, are subsumed by a Product 

Liability Act claim), the Indiana Consumer Protection Act, or a breach of a postsale duty to warn theory (that the court found didn’t exist under Indiana law in 

the co-defendants’ dismissal order). 

IV. CONCLUSION

 For the foregoing reasons, the defendants’ motion for summary judgment 

(Doc. No. 33) is GRANTED. 

SO ORDERED. 

 ENTERED: September 18, 2014 

 /s/ Robert L. Miller, Jr. 

 Judge 

 United States District Court