Court Opinion

ID: 9757783
Source: CourtListenerOpinion
Date Created: 2023-08-28 22:58:53.83421+00
Date Added: 2024-06-11T07:28:44.290719
License: Public Domain

BECK, Judge,
concurring and dissenting:
Preliminarily, I acknowledge the majority’s careful and discerning treatment of this complex subject. Additionally, I note that the majority’s holding rests upon the preceden*472tial weight of current Pennsylvania cases.* However, I write to highlight the present trend which may be a pattern that should be considered. Having reviewed other jurisdictions’ resolution of the relationship between the Code1 and Section 402A of the Restatement,2 I am convinced that permitting both third-party beneficiaries and direct purchasers to sue within the Code’s four-year statute of limitations is more logically consistent with the Code’s express purposes. I, therefore, would remand as to Mr. Williams as well as to Mr. and Mrs. Banks.
As the majority explains, Pennsylvania case law is frought with repeated, if futile, attempts to reconcile decisions pursuant to the Code with pre-Code tort/contract law and with judicial rulings under Section 402A of the Restatement.
Over the years warranty actions metamorphosed dramatically. “[A]t early common law breach of warranty was a trespass action. As such, no privity was required. The later-developed indebitatus assumpsit was created as an alternative remedy. The privity requirement was later only applied to assumpsit.” Salvador v. Atlantic Steel Boiler Co. (“Salvador I”), 457 Pa. 24, 25 n. 1, 319 A.2d 903, 904 n. 1 (1974). Eventually, warranty became a “ ‘hybrid of both *473tort and contract ... [and operated] between parties not in privity of contract.’ ” Salvador v. Atlantic Boiler Co. (“Salvador I”), 224 Pa.Super.Ct. 377, 386, 307 A.2d 398, 403 (1973) (citations omitted), aff'd, 457 Pa. 24, 319 A.2d 903 (1974) .
Today, the Uniform Commercial Code establishes a statutory cause of action for breach of warranty. Nevertheless, courts have been reluctant to relinquish dependence upon common-law tort/contract warranty distinctions. See, e.g., Salvador v. Atlantic Boiler Co. (“Salvador II”), 256 Pa.Super.Ct. 330, 389 A.2d 1148 (1978), aff'd per curiam [without a published opinion], 492 Pa. 258, 424 A.2d 497 (1981), wherein the Superior Court asserted that the theory of recovery in a strict products liability suit under the Code sounded in tort and accordingly was subject to the two-year statute of limitations on personal injury actions. This hesitancy to function within the statutory framework of the Code has resulted in the very anomaly which the courts have struggled to avoid — legal asymmetry.
At present, if a direct purchaser and his employe are simultaneously injured in a fall from a defective ladder, the direct purchaser will have four years within which to sue for breach of warranty whereas the employe (third-party beneficiary) will have just two years within which to sue for breach of warranty. Compare Gardiner v. Philadelphia Gas Works, 413 Pa. 415, 197 A.2d 612 (1964) with the Superior Court’s analysis in Salvador II (Gardiner applied the Code’s four-year statute of limitations to a direct purchaser’s suit for personal injuries while Salvador II applied the two-year statute of limitations on personal injury suits to an action brought by an injured employe of a direct purchaser).
I believe that the judicial posture most consistent with the Code’s purposes 3 is that articulated by the Supreme Court *474of Texas in its well-reasoned opinion, Garcia v. Texas Instruments, Inc., 610 S.W.2d 456 (Tex.1980). Like Pennsylvania, Texas had a two-year statute of limitations on personal injury suits but had also adopted the Uniform Commercial Code which provided a four-year statute of limitations on suits alleging breach of a sales contract. In Garcia the Texas Supreme Court utilized the Code’s four-year statute of limitations to allow an employe’s (i.e., third-party beneficiary’s) action for personal injuries arising from a breach of the Code’s implied warranty of merchantability. “[A] statutory cause of action exists under the Code for personal injuries suffered as [a] result of a breach of implied warranty. The Code provides a statutory remedy, hence the traditional distinctions between tort and contract are not relevant.” Id. at 463 (emphasis added).
However, in Salvador II imposition of the two-year personal injury statute of limitations was premised not only upon the historical tort/contract dichotomy but also upon the Superior Court’s interpretation of Section 2-725 of the Code. In pertinent part Section 2-725 states:
(1) An action for breach of any contract for sale must be commenced within four years after the cause of action has accrued. By the original agreement the parties may reduce the period of limitation to not less than one year but may not extend it.
(2) A cause of action accrues when the breach occurs, regardless of. the aggrieved party’s lack of knowledge of the breach. A breach of warranty occurs when tender of delivery is made____
The court opined that “it takes a very strained reading of Section 2-725 to conclude that it was ever meant to apply to persons other than the contracting parties----” Id., 256 Pa.Superior at 341, 389 A.2d at 1154.
*475To the contrary, I find the wording of Section 2-725 as relevant to third-party beneficiaries as to direct purchasers. The initial sentence of Subsection (1) declares the general rule that an action for breach of a sales contract must be brought within four years from the accrual of the cause of action (defined in Subsection (2) as the occurrence of the breach when tender of delivery of the defective product is made). The precept contains no references to the parties to the sales contract; nor does it otherwise designate persons who may maintain an action.
Admittedly, the second sentence of Subsection (1) does specifically mention the “parties”4 to the original agreement.5, 6 But the second sentence simply states that the parties to the original agreement may not (i) restrict the period for asserting an action to less than one year from the date on which the cause of action accrued or (ii) expand the statute of limitations to a period exceeding four years. Thus, the second sentence of Subsection (1) is similar in scope and intent to the second sentence of Section 2-818 (the rights of third-party beneficiaries) which provides that “[a] seller may not exclude or limit the operation of [Section 2-318].” Both “second sentences” acknowledge that as the contracting parties, only the seller and the direct buyer can negotiate the terms of the sales contract delimiting the available warranties and remedies for breach of warranty.
The necessity for this interdictory language is explained by Comment 17 to Section 2-318:
To the extent that the contract of sale contains provisions under which warranties are excluded or modified, or *476remedies for breach are limited, such provisions are equally operative against [third-party] beneficiaries of warranties ____ What ... [the second] sentence [of Section 2-318] forbids is exclusion of liability by the seller to the persons \i.e., third party beneficiaries] to whom the warranties which he has made to his buyer would extend under this section.
Therefore, the applicability of the general rule allowing four years for the commencement of an action is not limited by the second sentence of Subsection (1) solely to actions brought by direct purchasers.
As the Superior Court observed in Salvador II, “Section 2-725[ (2) ] also states that the cause of action accrues when the breach occurs, 'regardless of the aggrieved party’s lack of knowledge of the breach.’ [And] ... [Section 1-201 of] the Code defines an aggrieved party as anyone entitled to a remedy.” Id., 256 Pa.Superior at 342, 389 A.2d at 1155.
Construing Subsection (2) according to the facts before the court, in Salvador II, the Superior Court argued that “[i]t ... [could] not be said ... that Mr. Salvador [third-party beneficiary employed by a direct purchaser] was an aggrieved party on the date delivery of the boiler was tendered to his employer; at that time Mr. Salvador was not entitled to a remedy [because he had not yet incurred damages].” Id., 256 Pa.Superior at 342, 389 A.2d at 1155. Consequently, the court determined that Section 2-275 was not intended to cover actions by third-party beneficiaries.
However, a reading of Subsection (2) does not compel the court’s conclusion in Salvador II that only a person who suffers damages upon tender of delivery of a defective product can obtain relief pursuant to Section 2-725 of the Code.8 While the Code defines an aggrieved person as anyone entitled to a remedy, the Code does not place time constraints, other than those of Subsection (1), on a person’s ability to qualify for a remedy. The rule proclaimed in *477Subsection (2) is merely that whether a product contains a patent or a latent defect, the period stipulated under Subsection (1) for filing a warranty action begins to run upon the seller’s tender of delivery of the defective product to the direct buyer.
In his article “Products Liability — Another Word”9 John E. Murray, Jr., points to the case of Mendel v. Pittsburgh Plate Glass Co., 25 N.Y.2d 340, 305 N.Y.S.2d 490, 253 N.E.2d 207 (1969), overruled, Victorson v. Bock Laundry Machine Co., 37 N.Y.2d 395, 373 N.Y.S.2d 39, 335 N.E.2d 275 (1975), as an example of the absurd result supposedly required by including third-party beneficiaries in the class of persons covered by Section 2-725 (four-year statute of limitations) of the Code. In Mendel the New York Court of Appeals applied the Code’s four-year statute of limitations to bar the action of a non-purchaser who was injured seven years after the defective product was delivered and installed. According to the Mendel approach, the third-party beneficiary’s suit was precluded by the running of the Code’s four-year period before the third-party’s cause of action arose (i.e., the third-party beneficiary’s injury occurred seven years after delivery to the buyer).
But the Mendel result is not mandated in Pennsylvania. In Pennsylvania the Uniform Commercial Code and Section 402A of the Restatement (Second) of Torts afford alternative —not identical — causes of action in strict products liability. Salvador II; accord, Garcia; Redfield v. Mead, Johnson & Co., 266 Or. 273, 512 P.2d 776 (1973); see, e.g., Demise of Horizontal Privity on Pennsylvania Breach of Warranty Actions, 48 Temple L.Q. 807 (1975); The Tocsin Has Sounded: A Post-Mortem Examination of Privity of Warranty in Pennsylvania, 13 Duquesne L.Rev. 53 (1974-75); Speidel, The Virginia “Anti-Privity” Statute: Strict Products Liability under the Uniform Commercial Code, 51 Va.L.Rev. 804 (1965).
*478A few examples will demonstrate the disparity between the Code and Section 402A. While the Code comprises a comprehensive statutory scheme, Section 402A of the Restatement is a special exception carved from the extant body of tort law. Section 2-607 of the Code debars a remedy for the purchaser where the purchaser has failed to notify the seller of a breach within a reasonable time after the purchaser has discovered, or should have discovered, the breach.10 Section 402A of the Restatement does not contain a similar notice provision. See Comment m to Section 402A of the Restatement. Several Code sections permit the exclusion or modification of warranties and remedies. See, e.g., Sections 2-314, 2-316, 2-718, and 2-719; see also Comment 1 to Section 2-318. Section 402A of the Restatement does not allow disclaimers except to the extent that appropriate warnings or instructions in the use of a product may reduce a seller’s liability. See Comment j to Section 402A of the Restatement.
Thus, since the Code and Section 402A of the Restatement are not coterminous 11, a third-party beneficiary should be able to maintain an action under Section 402A within two years of the date on which he suffered an injury or should have discovered his injury, see, e.g., Bickell v. Stein, 291 Pa.Super.Ct. 145, 435 A.2d 610 (1981), or under the Code’s statutory framework within four years of tender of delivery *479of the defective product to the direct buyer.12 Peeke v. Penn Central Transportation Co., 403 F.Supp. 70 (E.D.Pa. 1975), aff'd [without a published opinion], 538 F.2d 320 (3rd Cir.1976); accord, Garcia.
I therefore, would remand as to Mr. Williams as well as to Mr. and Mrs. Banks.

 Although I fully recognize a panel of the Superior Court cannot overrule either the Superior Court’s en banc decision in Salvador v. Atlantic Boiler Co. (“Salvador II”), 256 Pa.Super.Ct. 330, 389 A.2d 1148 (1978), or the Pennsylvania Supreme Court's per curiam affirmance of Salvador II at 492 Pa. 258, 424 A.2d 497 (1981), I write to present what I perceive as not only the better resolution of the instant subject matter but also the method of resolution increasingly preferred in our sister jurisdictions.

. Uniform Commercial Code ("Code"), Act of April 6, 1953, P.L. 3, as amended, 12A P.S. §§ 1-101 et seq., revised and reenacted by the Act of October 2, 1959, P.L. 1023, and transferred by the Act of November 1, 1979, P.L. 255, without substantive change, to 13 Pa.C.S. §§ 1101 et seq. “Pennsylvania was the first state to adopt the Uniform Commercial Code____” Hochgertel v. Canada Dry Corp., 409 Pa. 610, 612, 187 A.2d 575, 577 (1963).

. Section 402A of the Restatement (Second) of Torts (1965). The Pennsylvania Supreme Court adopted Section 402A of the Restatement in Webb v. Zern, 422 Pa. 424, 220 A.2d 853 (1966).

. Section 1-102(1) of the Code, 12A P.S. § 1-102(1), states that the Code "shall be liberally construed and applied to promote its underlying purposes and policies.” Section 1-102(2) of the Code, 12A P.S. § 1-102(2), lists the Code’s purposes and policies as: "(a) to simplify, *474clarify and modernize the law governing commercial transactions; (b) to permit the continued expansion of commercial practices ...; (c) to make uniform the law among the various jurisdictions." Similar provisions now appear in Section 1102 of the Code, 13 Pa.C.S. § 1102. See Gardiner v. Philadelphia Gas Works, 413 Pa. 415, 197 A.2d 612 (1964).

. Section 1-201 of the Code defines the word "party” as being different from the expression “third party” and as signifying “a person who has engaged in a transaction or made an agreement within this title [i.e., Code].”

. Section 1-201 of the Code defines the word "agreement” to include a contract of sale.

. See footnote 10, infra.

. See Kassab v. Central Soya, 432 Pa. 217, 232-33, 246 A.2d 848, 855-56 (1968), on the use of the comments to the Code.

. See Johnson v. Hockessin Tractor, Inc., 420 A.2d 154 (Del.Super.Ct. 1980) and cases cited therein; Garcia v. Texas Instruments, Inc., 610 S.W.2d 456 (Tex.1980) and cases cited therein.

. 35 U.Pitt.L.Rev. 255 (1973-74).

. Although the wording of Section 2-607 unmistakably links the notice requirement to the time of the buyer's acceptance of the seller’s goods, Comment 5 to section 2-607 explains that the notice requirement nevertheless applies to third-party beneficiaries despite the third parties' uninvolvement with acceptance of the goods. Comment 5 states that the third parties should notify the seller within a reasonable time after an injury has occurred. Compare language of Section 2-607 with language of Section 2-725(2).

. As previously stated, efforts to make the Code coextensive with Section 402A of the Restatement do not avoid legal asymmetry. Under the reasoning of Salvador v. Atlantic Steel Boiler Co. (“Salvador, II"), 256 Pa.Super.Ct. 330, 389 A.2d 1148 (1978), aff'd per curiam [without a published opinion], 492 Pa. 258, 424 A.2d 497 (1981), a direct purchaser and a third-party beneficiary who are simultaneously injured in the same incident have different periods within which to assert their claims.

. Denying third-party suits under the Code's statute of limitations while permitting direct purchasers’ suits under the Code’s statute of limitations suggests a return to restrictive privity concepts now in disrepute in this Commonwealth. Salvador v. Atlantic Steel Boiler Co. (“Salvador I"), 224 Pa.Super.Ct. 377, 307 A.2d 398 (1973), aff'd, 457 Pa. 24, 319 A.2d 903 (1974); Kassab.