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Matched Legal Cases: ['§ 2', '§ 2', '§ 2', '§ 2', '§ 2', '§ 2']

| Hahn v. Atlantic Richfield Co.
Hahn v. Atlantic Richfield Co.
TERRANCE P. HAHN AND BARBARA HAHNv.ATLANTIC RICHFIELD CO., A PENNSYLVANIA CORPORATION AND JOHN DOE #1, EATON CORPORATION, MANUFACTURER AND/OR SUPPLIER OF THE CRANE, AND/OR SAFETY HOOK, AND/OR RIGGING AND JOHN DOE #2, CRANE RENTAL COMPANY AND FLUOR ENGINEERS & CONSTRUCTORS, THIRD AND PRICE STREETS, MARCUS HOOK, PENNSYLVANIA EATON CORPORATION, APPELLANT
APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA (D.C. Civil No. 74-2932)
Approximately two years after the accident, on November 30, 1974, Hahn and his wife filed a complaint in the Eastern District of Pennsylvania alleging negligence against several defendants: Atlantic Richfield, on whose property the accident occurred, Fluor Engineers, Hahn's employer, and, as a John Doe defendant, the manufacturer of the chain hoist. Because the hoist could not be located after the accident, Hahn asserted that he was unable to identify the manufacturer.*fn1 On June 30, 1976, the complaint was amended to substitute Eaton Corporation, the manufacturer of Yale hoists, as defendant. Eaton's answer to the complaint raised the defense that the action was barred by the Pennsylvania statute of limitations for personal injuries because Eaton had not been named as a defendant until more than two years had expired since the date of the injury.*fn2 Thereafter, on March 17, 1977, Hahn again amended his complaint to proceed against Eaton under Article 2 of the Uniform Commercial Code on the theory of breach of warranty of merchantability and fitness for a particular purpose. The amended complaint alleged that at the time Eaton sold the hoist to Fluor it contained a latent defect. No date of sale was averred, however. The district court ruled that the March 17 amendment related back to the June 30, 1976 amendment and concluded that the Code's four year limitations period of Article 2 would not bar Hahn's claim unless Eaton could show that it sold the hoist to Fluor more than four years before June 30, 1976, the date Eaton was joined as a party.*fn3
At trial, Hahn introduced opinion testimony of several eye witnesses to show how the accident had happened. In addition, testimony of two other pipefitters who were working with Hahn on the day of the accident was introduced to show that the hoist in question was a Yale One Ton hoist and that it was "new." See Appendix at 413a, 427a-28a. The hoist itself, however, was never introduced into evidence because it could not be located after the accident.*fn4 Hahn introduced no direct proof of sale. Instead, counsel read to the jury answers to certain interrogatories and requests for admissions by Eaton and Fluor showing that Eaton had manufactured a Yale One Ton chain hoist in 1971 or 1972 and that Fluor had supplied to the worksite the hoist involved in the accident.*fn5 Counsel for Eaton offered into evidence Exhibit DE-1, which was an agreement dated December 15, 1971 between Atlantic Richfield and Fluor that governed the work Fluor was performing at the refinery. Among the listed equipment that Fluor was responsible for supplying pursuant to the agreement was a single one ton hoist.
Eaton raises two arguments that merit our consideration. First, it argues that because this case was tried under the warranty provisions of Article 2 of the UCC, the sales article of the Code, the district court erred by submitting to the jury the issue of whether the chain hoist was defective at the time of sale in the absence of any evidence that Eaton actually sold the hoist to Fluor.*fn6 Appellee Hahn, while conceding that to recover for breach of warranty under the Code he must first show that a sale of the hoist from Eaton to Fluor was consummated, see Brief for Appellees at 20-21; see also U.C.C. §§ 2-102, -106; DeMatteo v. White, 233 Pa.Super. 339, 336 A.2d 355 (1975), nonetheless contends that the record contains ample evidence from which the jury could properly have inferred that such a sale did in fact take place.
The standards that govern our review of this evidentiary issue are familiar. A jury verdict carries with it the benefit of all reasonable inferences capable of being drawn therefrom, and an appellate court is bound to interpret the evidence in the light most favorable to the verdict winner. Continental Ore Co. v. Union Carbide & Carbon Corp., 370 U.S. 690, 696, 82 S. Ct. 1404, 1409, 8 L. Ed. 2d 777 (1962); Kademenos v. Equitable Life Assurance Society, 513 F.2d 1073, 1074 (3d Cir. 1975); Thomas v. E. J. Korvette, Inc., 476 F.2d 471, 474 (3d Cir. 1973). Any fact that the jury could have reasonably inferred from the evidence in favor of the verdict winner will be presumed to have been so inferred when the court reviews the record supporting the verdict. If, however, the record discloses that the evidence on which the verdict is based is so critically deficient of proof of an essential fact needed to support the verdict that the jury could only have ventured a guess about its occurrence, then a judgment notwithstanding the verdict is required. Denneny v. Siegel, 407 F.2d 433, 442 (3d Cir. 1969); see Neville Chemical Co. v. Union Carbide Corp., 422 F.2d 1205, 1210 n.5 (3d Cir. 1970).
Applying these precepts to the case at hand, we are left with the conclusion that Eaton is entitled to judgment notwithstanding the verdict. Proof of sale from Eaton to Fluor was an essential fact necessary to support the jury's verdict. The record evidence, however, even when interpreted most liberally in favor of Hahn, does not support the inference that a sale of the hoist from Eaton to Fluor was consummated. The jury could only have speculated about the occurrence of a sale. The evidence shows that Eaton manufactured and sold Yale One Ton hoists in 1971 or 1972; that the contract between Fluor and Atlantic Richfield called for a one ton hoist to be used by Fluor in performing work at the refinery; that Fluor supplied the hoist involved in the accident; and that the defective hoist was a Yale hoist and was "new" on the date of the accident. None of this evidence, however, tends to show, even remotely, how Fluor came to possess the hoist. It is possible that the hoist may have been obtained by lease, or by bailment; the rental of specialized equipment or machinery to contractors is commonplace.*fn7 The hoist may have been purchased as part of a bulk transfer. It may have been found by, or even given to Fluor. Or, as the jury inferred, it may have been purchased by Fluor from Eaton. Although all of these are conceivable possibilities, none of them can be properly inferred from the evidence presented at trial. There is simply no evidence, either direct or circumstantial, that would indicate how Fluor came to possess the hoist. We are left with no other determination but that the jury ventured a guess that the defective hoist was purchased by Fluor from Eaton. We conclude, therefore, that the record is legally insufficient to support a verdict in favor of Hahn because it lacks that "minimum quantum of evidence from which a jury might reasonably afford relief." Denneny v. Siegel, 407 F.2d at 439.
As previously stated, the accident occurred on December 14, 1972. The law suit, initially sounding in negligence, was instituted on November 12, 1974, but Eaton was not substituted as a defendant until June 30, 1976, more than three and one-half years after the accident. Because Pennsylvania law requires that personal injury claims be brought within two years of the date of injury, see note 2 supra, the complaint was amended on March 17, 1977, to allege breach of warranty under the UCC. The district court ruled that this latter amendment related back to June 30, 1976, for purposes of determining whether the suit was timely filed, and ruled further that because the complaint against Eaton now alleged breach of warranty under the UCC, the four-year provision of UCC § 2-725 would apply.*fn8 The court concluded that the suit was not barred because Eaton failed to shoulder its burden of proving that the sale to Fluor occurred more than four years before Eaton was entered as a party. Although we agree with the district court that the running of the statutory time period is an affirmative defense to be raised and proved by the defendant, we disagree that the UCC four-year provision would control this action. We predict, and when a federal court applies state law in a diversity case it is just that, a prediction, see Chuy v. Philadelphia Eagles Football Club, 595 F.2d 1265, 1286 (3d Cir. 1979) (in banc) (Statement of Aldisert, J.), that the Supreme Court of Pennsylvania, if faced with the factual complex of this case, would hold the two-year statute for personal injuries applicable to this suit.
This approach was extended in Salvador v. Atlantic Steel Boiler Co., 457 Pa. 24, 319 A.2d 903 (1974) (Salvador I ), a case factually similar to the case at hand, in which the supreme court abolished the requirement of horizontal privity in breach of warranty cases. Salvador, an employee of a company that purchased a boiler from the defendant, suffered severe bilateral hearing loss when the boiler exploded near his work station. Because Salvador was not considered to be in horizontal privity with the purchaser of the boiler, the trial court dismissed his complaint. The superior court reversed, 224 Pa.Super. 377, 307 A.2d 398 (1973), and the supreme court affirmed, overruling Hochgertel v. Canada Dry Corp., 409 Pa. 610, 187 A.2d 575 (1963).*fn9 In so doing, the court relied heavily on its opinions in Webb v. Zern and Kassab v. Central Soya, once more reiterating a concern that the same result be reached in a law suit alleging product defect irrespective of whether the action is brought in trespass or assumpsit. Speaking again through Justice Roberts, the court stated:
Because the manufacturer is now a guarantor, the "harsh and unjust result" is worked on the plaintiff who may recover for his injury or loss if his complaint is in trespass, but on identical facts would be denied relief if the pleading is captioned "Complaint in Assumpsit." See Kassab, supra at 229, 246 A.2d at 853. This anomalous situation is certainly to be avoided. Thus "(with) Pennsylvania's adoption of Restatement 402a, the same demands of legal symmetry which once supported privity now destroy it." Id.
Kassab and Salvador I, the most recent pronouncements of the supreme court in this area, are strong evidence that the Gardiner and Rufo decisions would not be extended to control Hahn's claim of breach of implied warranty. Both Gardiner and Rufo involved direct contract actions for consequential damages brought by purchasers of the defective goods. Even if Gardiner were correct that the Pennsylvania legislature intended to preempt the tort limitations statute as it related to buyers actions for product defect, this would not mean that the same intent applied to actions by non-purchasers for breach of implied warranty.*fn10 Furthermore, the rationale underlying Kassab, that the resolution of identical controversies should not depend on the caption atop the complaint, does not support an approach requiring that § 2-725 be applied to this action.
Dean Murray also suggests that an application of § 2-725 to non-purchaser actions would circumvent the objective of Kassab as well as the purpose of the personal injury statute of limitations that governs strict liability actions in Pennsylvania. Because Code warranty actions are required to be commenced within four years from the date of delivery to the buyer, it is conceivable that many injured non-purchasers could be barred from ever bringing their actions prior to the time their injury was caused by the defective product. Likewise, if a non-purchaser claimant is permitted to recover under the four-year Code provision, it will be by sheer accident because he has no relationship to the date of delivery of the defective product to the buyer. Id. at 270.*fn11 In this context, § 2-725 would act as a definition of the life of the warranty, possibly cutting off a non-purchaser's cause of action before it even accrues, instead of functioning as a statute of limitations, the purpose of which is to protect defendants from the prosecution of stale claims.
In light of the possible discrepancies that the application of § 2-725 could cause in this context, and based on the Kassab rationale of the desirability of consistency of results in products liability cases, we conclude that the Supreme Court of Pennsylvania would apply the personal injury statute of limitations to govern Hahn's claim of breach of implied warranty in the alleged sale of the defective hoist to his employer. We note that our holding on this issue comports with the result reached by the Superior Court of Pennsylvania in Salvador v. Atlantic Steel Boiler Co., 256 Pa.Super. 330, 389 A.2d 1148 (1978) (Salvador II ), allocatur granted, No. 455 (October 31, 1978), per Judge, now President Judge, Cercone.*fn12
The judgment of the district court will be reversed and the proceedings remanded with a direction to enter judgment in favor of the appellant.*fn13