Opinion ID: 1708793
Heading Depth: 1
Heading Rank: 2

Heading: Manufacturer's Motion

Text: The operative allegation against the manufacturer McWane is that it is strictly liable in tort for manufacturing and placing into the stream of commerce a defective product, in that the pipe was of inadequate quality. The applicable period of repose is contained in Neb.Rev.Stat. § 25-224 (Cum. Supp.1984), which in relevant part reads: [A]ny product liability action, except one governed by section 2-725, Uniform Commercial Code or by subsection (5) of this section, shall be commenced within ten years after the date when the product which allegedly caused the personal injury, death, or damage was first sold or leased for use or consumption. The statute does not define the meaning of the phrase first sold ... for use or consumption, nor does it have an independent, clear meaning of its own. Does the phrase mean when the product is first placed into the stream of commerce by the manufacturer or when possession of the product is relinquished for ultimate use or consumption? Neb.U.C.C. § 2-106(1) (Reissue 1980) defines sale as the passing of title from the seller to the buyer for a price (Section 2-401). Under Neb.U.C.C. § 2-401(2) (Reissue 1980), title, unless the parties agree otherwise, passes to the buyer at the time and place at which the seller completes his performance with reference to the physical delivery .... One difficulty with attempting to apply § 2-401 to product liability cases is that it is not clear who is the seller and who is the buyer. On the state of the record in this case, either Sides, Martig, or Witherspoon could be considered to be the buyer, just as either McWane, Sides, or Martig could be considered to be the seller. The Uniform Commercial Code definition of sale, then, does not help us define sold in this context. When statutory language is ambiguous and must be construed, recourse should be had to the legislative history for the purpose of discovering the intent of the lawmakers. Worley v. City of Omaha, 217 Neb. 77, 348 N.W.2d 123 (1984). During a legislative committee hearing, Senator DeCamp, a sponsor of the bill, in response to a concern as to when the period would begin to run on a piece of equipment manufactured by one but installed by another, stated, The date for use or construction. Banking, Commerce and Insurance Committee Hearing, L.B. 665, 85th Leg., 2d Sess. 71 (Jan. 23, 1978). Senator Bereuter said the following: I think when a bulldozer is sold to Lincoln Equipment the statute of repose does not begin unless they would be using it as a part of their own operation, not as a wholesaler, or not as a retailer. However, when that bulldozer is sold to an ultimate consumer, that is a contractor who uses the bulldozer repeatedly for his own business, then the statute of repose begins. The fact that that contractor may sell the bulldozer to another contractor doesn't mean that the eight year period starts over, because it has been in the hands of an ultimate consumer, a contractor who uses a bulldozer to construct dams. The fact that he may sell it does not start it over. The eight year period runs from the time that it is sold to the first contractor, right up until the eight year period [later amended to 10 years], no matter whether or not it has changed ownership. When you're dealing with a product that goes to a wholesaler and consumer ... excuse me, wholesaler or retailer the statute of repose has not begun. It does not begin until the ultimate consumer takes hold of it, and at that time the minutes begin ticking off on that eight year period. That is my understanding. Floor Debate, L.B. 665, 85th Leg., 2d Sess. 6861 (Feb. 27, 1978). See, also, Floor Debate, supra at 6853-59, for expressions of similar understandings of the phrase. Winters v. Sears, Roebuck and Co., 554 S.W.2d 565 (Mo.App.1977), held that sold, as used in Restatement (Second) of Torts § 402 A(1)(b) (1965), which deals with the liability of a seller of a defective product, does not have the technical meaning but indicates the time at which defendant relinquished control or possession of the product. 554 S.W.2d at 572. Shoppers World v. Villarreal, 518 S.W.2d 913 (Tex.Civ.App. 1975), interpreted sold, for the purposes of Restatement § 402 A, supra, to mean when a shopper in a self-service store picks up an item from the seller's shelf. Webster's Third New International Dictionary, Unabridged 2523 (1968), defines use as the act or practice of using something and the fact or state of being used (a lamp in daily [use] for over 50 years). It defines consumption as the act or action of consuming or destroying (the [consumption] of organic matter by fire). Id. at 490. Black's Law Dictionary 1381 (5th ed. 1979) defines use as [t]o make use of, to convert to one's service. It defines consumption as the [a]ct or process of consuming; ... destruction. Id. at 287. South Texas Irr. Systems, Inc. v. Lockwood Corp., 489 F.Supp. 256 (W.D.Tex. 1980), decided that tangible chattels purchased for resale are not purchased for use. Other cases have defined use as something done customarily or habitually, a practice of doing a certain act. Revzan v. Nudelman, 370 Ill. 180, 18 N.E.2d 219 (1938); Bradley Supply Co. v. Ames, 359 Ill. 162, 194 N.E. 272 (1934); Estate of Shaff v. Stein, 171 Misc. 376, 14 N.Y.S.2d 117 (1939). Courts have defined the word consumption as meaning to destroy the substance of, to use up, expend, or waste. Material Service Corp. v. McKibbin, 380 Ill. 226, 43 N.E.2d 939 (1942); Berry-Kofron Dental Lab. Co. v. Smith, 345 Mo. 922, 137 S.W.2d 452 (1940); Revzan v. Nudelman, supra . The foregoing legislative history and analysis convince us that the pipe was first sold for use when its possession was first surrendered to Witherspoon, that is, when he took possession of the house of which the pipe was a part. Although the record does not tell us when that event occurred, it must be inferred, in the absence of proof to the contrary, to have taken place not earlier than when construction of the house was completed. Therefore, the pipe was not relinquished to Witherspoon's possession until late December of 1970. Having been filed within the 10-year period thereafter, the suit is not barred by the statute of repose embodied in § 25-224.