Court Opinion

ID: 9861209
Source: CourtListenerOpinion
Date Created: 2023-09-24 23:49:02.709547+00
Date Added: 2024-06-11T11:27:35.954233
License: Public Domain

Mr. JUSTICE RIZZI, dissenting: I believe the defendant’s motion to strike and dismiss should be denied. I would reverse the dismissal order and remand the case to the trial court. I The Law of Illinois Controls this Case The first and second opinions do not discuss whether the law of Illinois or Louisiana governs this case.1 I am compelled to decide this issue. If the law of Louisiana controls, the case cannot be maintained because, at the time of the occurrence, it had a one-year limitation period for personal injury actions and had not adopted the Uniform Commercial Code. If the law of Illinois controls, the case may be maintained, provided the complaint sufficiently states a claim for breach of implied warranty, because Illinois has adopted the Code, which has a four-year limitation period for breach of implied warranty actions. This suit was filed within the four-year period. Since I believe the Code is applicable in this case, I reach the conclusion that Illinois law governs the case because of section 1 — 105(1) of the Code. This section provides: “Except as provided hereafter in this Section when a transaction bears a reasonable relation to this State and also to another state or nation the parties may agree that the law either of this State or of such other state or nation shall govern their rights and duties. Failing such agreement this Act applies to transactions bearing an appropriate relation to this State." (Emphasis added.) (Ill. Rev. Stat. 1977, ch. 26, par. 1 — 105(1).) Uniform Commercial Code Comment 3 to section 1 — 105 states: “Where a transaction has significant contacts with a state which has enacted the Act and also with other jurisdictions, the question what relation is ‘appropriate’ is left to judicial decision. In deciding that question, the court is not strictly bound by precedents established in other contexts. Thus a conflict-of-laws decision refusing to apply a purely local statute or rule of law to a particular multi-state transaction may not be valid precedent for refusal to apply the Code in an analogous situation. Application of the Code in such circumstances may be justified by its comprehensiveness, by the policy of uniformity, and by the fact that it is in large part a reformulation and restatement of the law merchant and of the understanding of a business community which transcends state and even national boundaries.” (Emphasis added.) Ill. Ann. Stat., ch. 26, par. 1 — 105, Uniform Commercial Code Comment, at 27 (Smith-Hurd 1963). In the present case, defendant is an Illinois corporation, subject to the jurisdiction, benefits, and laws of Illinois. It must comply with the laws of Illinois in the conduct of its business. Its home office and nerve center of operations are in Illinois. Its business of leasing railroad boxcars to various shippers and industries extends throughout the United States, but it is all controlled through its home office in Illinois. In the regular course of its business in Illinois, defendant entered into a lease with Hershey Chocolate for the boxcar in question. The lease was executed in Illinois and was in effect at the time of the occurrence. Under the terms of the lease, Hershey was required to inform defendant promptly of the movements of the boxcar, dates it was loaded, nature of the commodities shipped, and its destination and routes. Hershey was also required to provide defendant with all other information involving the boxcar. Further, defendant was entitled to a mileage charge from the railroad companies using the boxcar. In addition, the lease provided that defendant was responsible for the maintenance and relevant repairs of the boxcar. On May 30,1973, defendant was notified that the floor of the boxcar was in disrepair. Hershey’s principal place of business is in Pennsylvania. The boxcar was loaded by Hershey and shipped via rail to purchasers of Hershey’s chocolate throughout the United States. The accident allegedly occurred as a result of defendant’s failure to repair the floor of the boxcar after having actual notice that it was in disrepair. The boxcar was in Louisiana at that time for the sole purpose of delivering a carload of Hershey chocolates to an A & P warehouse in New Orleans, Louisiana. These facts demonstrate that all pertinent provisions of the lease, under which the implied warranty arises, were effectively controlled in Illinois by defendant. At the time of the occurrence and relevant times leading up to the occurrence, the boxcar, including its maintenance, repairs, and operational movements, was effectively regulated in Illinois by defendant. Moreover, defendant’s duty to repair the boxcar is inseparably intertwined with defendant’s conduct in Illinois. Defendant had actual notice that the floor of the boxcar was in disrepair. If the duty to repair the boxcar was breached, the breach occurred in Illinois. In light of these circumstances and the considerations stated in Code Comment 3, the transaction clearly bears an appropriate relationship to Illinois under section 1 — 105(1) of the Code and Illinois law governs this case. II Section 2 — 315 of the Code is Applicable in this Case I agree with the conclusion in the first opinion that there is an implied warranty of fitness under section 2 — 315 of the Code.2 But I disagree with the rationale of the opinion in attempting to distinguish this lease transaction from other lease transactions insofar as a breach of warranty is concerned. In my judgment, any transaction in goods3 meeting the requirements of section 2 — 315 should carry with it an implied warranty of fitness regardless of whether the transaction is a sale or lease. (See Owens v. Patent Scaffolding Co. (1974), 77 Misc. 2d 992, 354 N.Y.S.2d 778; In re Vaillancourt (D. Me. 1970), 7 U.C.C. Rep. Serv. 748 (D. Me. 1970).) I feel that any distinction on this point is artificial. A modem judicial interpretation of the statute dictates that transactions in goods involving sales and leases should be treated alike. In view of the multitude of transactions in goods involving leases, and the like number involving sales, it would be an anomoly to subject these types of commercial transactions to different rules of law regarding warranties when the relevant effect of each is identical. In both transactions, one party seeks to acquire the right to use a product and the other seeks to transfer the right to use the product. (See Walter E. Heller & Co. v. Convalescent Home (1977), 49 Ill. App. 3d 213, 218, 219, 365 N.E.2d 1285, 1289; cf. Crowe v. Public Building Com. (1978), 74 Ill. 2d 10, 383 N.E.2d 80 (court equated lessor to a seller in a strict liability action).) With respect to implied warranties, it should make no difference whether the transfer is made by title or lease. For these reasons, I believe section 2 — 315 applies in this case. Ill Plaintiff is a Third Party Beneficiary Under Section 2 — 318 of the Code I disagree with the conclusion in the first opinion that plaintiff is not a third-party beneficiary under section 2 — 318 of the Code in this implied warranty action. Specifically, I cannot accept the determination that Berry v. G. D. Searle & Co. (1974), 56 Ill. 2d 548, 309 N.E.2d 550, is not applicable. Nor can I agree that this case should be decided on the basis of a lack of privity. Berry involved an implied warranty action under section 2 — 315 and 2 — 318 of the Code. The court held that lack of privity between a purchaser and a remote manufacturer is of no consequence in a breach of implied warranty action under the Code. In reaching its conclusion, the court stated (56 Ill. 2d 548, 553, 309 N.E.2d 550, 553): “The aforementioned Code provisions clearly demonstrate the legislative intent to create a statutory cause of action for breach of implied warranty to afford consumer protection to those who sustain personal injuries resulting from product deficiencies.” (Emphasis added.) In order to give full effect to this intention and, at the same time, take into account the developing case law concerning liability for defective products (see Suvada v. White Motor Co. (1965), 32 Ill. 2d 612, 210 N.E.2d 182; Dunham v. Vaughan & Bushnell Mfg. Co. (1969), 42 Ill. 2d 339, 247 N.E.2d 401; Berry; Winnett v. Winnett (1974), 57 Ill. 2d 7, 310 N.E.2d 1; Court v. Grzelinski (1978), 72 Ill. 2d 141, 379 N.E.2d 281; see also Restatement (Second) of Torts §402A (1965)), the implied warranty should apply to users and all persons who may reasonably be expected to be affected by a breach of the implied warranty regardless of privity. The first opinion emphasizes that by “electing to enact what was then Alternative A for section 2 — 318 in Illinois, we believe the legislature, consciously chose to limit a seller’s liability for breach of warranty to the specific classes enumerated therein.” (Emphasis added.) Yet in the very next paragraph of the opinion, the court accepts that an employee of the last purchaser may qualify as a beneficiary under section 2 — 318. If the conclusion of the court that “the legislature consciously chose to limit a seller’s warranty to the specific classes enumerated therein” is correct, then I do not believe the court can logically accept an employee of the last purchaser as a beneficiary under section 2 — 318. Certainly, an employee is not one of the “specific classes enumerated therein.” Contrary to the conclusion in the first opinion regarding the intention of the legislature, section 2 — 318 suggests that the legislature intended that “the section is neutral” as to whether it includes classes beyond those expressly enumerated. Specifically, Uniform Commercial Code Comment 3 to section 2 — 318, as it existed at the time the Code was adopted in 1961, reads: “This section expressly includes as beneficiaries within its provisions the family, household, and guests of the purchaser. Beyond this, the section is neutral ° ° (Emphasis added.) 111. Ann. Stat., ch. 26, par. 2 — 318, Uniform Commercial Code Comment, at 265, (Smith-Hurd 1963). Clearly, one would interpret this to mean that when the Code was adopted, the legislature intended to look to the judiciary to determine whether the classes of beneficiaries should be enlarged. Thus, by electing to adopt Alternative A, the legislature did not consciously choose to limit a seller’s liability for breach of warranty to the specific classes enumerated in the section. Rather, it merely intended to have the section remain neutral on this question and to let the judiciary decide whether to enlarge the classes of beneficiaries on a case-by-case basis. In 1 Anderson, Uniform Commercial Code §2 — 318:2 (1970 & Supp. 1978), the author states: “The form shown as Alternative A was substituted in 1951, limiting beneficiaries to the family, household and guests of the buyer. Beyond this, according to Comment 3, the section was neutral and was not intended to enlarge or restrict ‘the developing case law.’ * * * Alternative B is therefore promulgated in substantially the 1950 form, and Alternative C is drawn to reflect the trend of more recent decisions as indicated by Restatement of Torts 2d §402A * « * ”4 (Emphasis added.) Significantly, by developing case law, Illinois has adopted Restatement (Second) of Torts, section 402A. (Suvada, 32 Ill. 2d 61 2,621-22, 210 N.E.2d 182, 187; accord, Duham, 42 Ill. 2d 339, 343-44, 247 N.E.2d 401, 403-04.) This suggests to me that, by developing case law in Illinois, those persons included in Restatement (Second) of Torts, section 402A, should qualify as beneficiaries under section 2 — 318 of the Code. Section 402A of the Restatement expressly covers any user of the product even though he “has not brought the product from or entered into any contractual relation with the seller.” By case law, the principles of section 402A have been extended to include all persons who may reasonably be expected to be affected by the defective product. (E.g., Winnett, 57 Ill. 2d 7, 11, 310 N.E.2d 1, 4; Court, 72 Ill. 2d 141, 146, 151, 379 N.E.2d 281, 283, 285.) In summary, in order to give full effect to the legislative intent of sections 2 — 315 and 2 — 318 of the Code and, at the same time, take into account the developing case law concerning liability for defective products, an implied warranty should apply to users and all persons who may reasonably be expected to be affected by the breach of implied warranty regardless of privity. The decision in the first opinion is based upon lack of pivity, distinguishing between horizontal and vertical privity. I disagree with the position taken in the first opinion. I think it is a mistake to decide this case or any other personal injury case by exhuming concepts of privity in Illinois. In actions when the plaintiff is seeking to recover damages for personal injuries, Illinois courts have taken the position that liability or nonliability should not be decided on the basis of privity. In Tiffin v. Great Atlantic & Pacific Tea Co. (1959), 18 Ill. 2d 48, 162 N.E.2d 406, the court recognized that a breach of implied warranty action may be maintained against a seller of food even though there was no privity between the parties. In Suvada, the court abolished the doctrine of privity in product liability cases. In Rozny v. Marnul (1969), 43 Ill. 2d 54, 250 N.E.2d 656, the court abolished the requirement of privity in all tort cases. In Berry, the court held that lack of privity is of no consequence in a breach of implied warranty action between a purchaser of the product and a remote manufacturer. In eschewing privity, the Berry court recognized that tort liability and implied warranty liability are similar. 56 Ill. 2d 548, 554, 309 N.E.2d 550, 554. Plainly, in Illinois the process of adhering to or distinguishing the privity requirement has proved to be an unsatisfactory method of determining liability to persons who suffer personal injuries. Because of the difficulties in applying the doctrine, courts created artificial exceptions deemed necessary to achieve desirable results which were not always completely reconcilable. (Rozny, 43 Ill. 2d 54, 62, 250 N.E.2d 656, 660.) I do not believe this court should be treading this same beaten path. In my opinion, it does not make any sense to deny recovery to the plaintiff merely because he is an employee of A & P, and yet, in another case, allow recovery to a Hershey employee injured in the same accident, in a like manner, and as a result of the same defect in the product. The Rozny court’s statement relating to privity is apt here (43 Ill. 2d 54, 62, 250 N.E.2d 656, 660): “To eliminate any uncertainty still remaining after Suvada v. White Motor Co., 32 Ill. 2d 612, 617, we emphasize that lack of direct contractual relationship between the parties is not a defense in a tort action in this jurisdiction. Thus, tort liability will henceforth be measured by the scope of the duty owed rather than the artificial concepts of privity. Having discarded any remnants of the privity concept, we now concern ourselves with the scope of defendant’s liability using traditional tortious misrepresentation standards.” I feel this court should not pick up the discarded remnants of privity in personal injury actions and mold them back into our law, where they are destined for eradication again. IV The Four-Year Limitation Period in Section 2 — 725 of the Code Applies in this Case Defendant contends that section 2 — 725(1) is not applicable to this case.5 Defendant argues that a breach of implied warranty suit to recover for personal injuries, brought by a third-party beneficiary, must be filed within the two-year limitation in section 14 of the Limitations Act (Ill. Rev. Stat. 1973, ch. 83, par. 15), rather than the four-year limitation under the Code. Defendant also cites section 2 — 725(2) of the Code and argues that the period of limitation for breach of warranty should begin to run from the date of delivery of the boxcar to Hershey. Section 2 — 725(2) states that a “breach of warranty occurs when tender of delivery is made o « «” (Ill. Rev Stat. 1973, ch. 26, par. 2 — 725(2).) Defendant’s arguments are without merit. Section 2 — 725 was discussed by the court in Berry. In construing the statute, the court gave effect to the legislative intent and plain meaning of this section. In this regard, the court stated (56 Ill. 2d 548, 551-54, 309 N.E.2d 550, 552): “The primary issue presented for review is whether the four-year statute of limitations established by section 2 — 725(1) of the Code’s sales article governs an action brought for personal injury allegedly arising from a breach of implied warranty. # # e We therefore hold that section 2 — 725(1) sets forth the appropriate limitation period for personal injury actions predicated upon a breach-of-implied-warranty theory under the Code.” It is, therefore, inarguable that section 2 — 725(1) sets forth the appropriate limitation period for all personal injury actions based upon a breach of implied warranty theory under the Code. Accord, Morton v. Texas Welding & Mfg. Co. (S.D. Tex. 1976), 408 F. Supp. 7, 10-11. The limitation period under section 2 — 725(1) is “within 4 years after the cause of action has accrued.” (Ill. Rev. Stat. 1973, ch. 26, par. 2— 725(1).) The running of a statute of limitations assumes that during that period an injured party could have brought suit. Therefore, the period begins to run from the date of injury when the claim is for damages resulting from personal injury. (Morton, 408 F. Supp. 7, 11.) Plainly, the cause of action accrued on November 3,1973, the date plaintiff, Johnnie Knox, Jr., was injured. Defendant’s theory that the four-year limitation period began to run from the time of delivery of the boxcar to Hershey would produce absurd results. For instance, if the four-year limitation period begins to run from the date of delivery of the product in a breach of warranty action to recover for personal injury, the period of limitation would expire in many cases before the injury occurs. When the entire statute is examined in light of the intention of the legislature (see Berry, 56 Ill. 2d 548, 553, 309 N.E.2d 550, 553), it is clear that the four-year limitation period provided in section 2 — 725(1) applies to this case and the period began to run from the date Johnnie Knox, Jr., was injured. Since the suit was filed within this four-year period, defendant’s motion to strike and dismiss count I of the complaint should be denied. V Count II of the Complaint should not be Dismissed In the first and second opinions, my colleagues affirm the dismissal of count II of the complaint, which is a claim for loss of consortium brought by the wife of plaintiff, Johnnie Knox, Jr. Count II contains essentially the same relevant allegations as count 1.1 believe defendant’s motion to strike and dismiss count II should be denied for the same reasons that it should be denied as to count I. See Mitchell v. White Motor Co. (1974), 58 Ill. 2d 159, 317 N.E.2d 505; Ill. Rev. Stat. 1977, ch. 83, par. 15.1. Conclusion Accordingly, I believe defendant’s motion to strike and dismiss the complaint should be denied. I would reverse the dismissal order and remand the case to the trial court.   1 For convenience, the opinion designated as the “opinion of the court” shall be referred to herein as the first opinion. The opinion designated as the “specially concurring" opinion shall be referred to herein as the second opinion.    2 Section 2 — 315 of the Code is reproduced in the first opinion.    3 Section 2 — 102 provides, in relevant part, “[T]his Article applies to transactions in goods ° ° Ill. Rev. Stat. 1973, ch. 26, par. 2 — 102.    4 Alternatives B and C are reproduced in the first opinion.    5 Section 2 — 725(1) reads: “An action for breach of any contract for sale must be commenced within 4 years after the cause of action has accrued.” Ill. Rev. Stat. 1973, ch. 26, par. 2 — 725(1).