Bylsma v. R.C.WilleyHumanTouch

2017 UT 85, 416 P.3d 595
Utah Supreme Court·Decided December 1, 2017·No. Case No. 20140484·Published·Cited by 19 cases

Opinion

Chief Justice Durrant

Introduction

¶ 1 This appeal requires us to consider whether the Liability Reform Act (LRA), Utah Code sections 78B-5-817 through 823, immunizes passive retailers from products liability claims in cases where the manufacturer is a named party. Richard and Melinda Bylsma asserted claims for strict products liability, breach of warranty, and contract rescission against R.C. Willey. The district court dismissed the tort and warranty claims under the "passive retailer" doctrine as articulated by our court of appeals in Sanns v. Butterfield Ford. 1 R.C. Willey then stipulated to liability on the rescission claim and tendered payment of the purchase price. Both parties sought an award of attorney fees, 'but the district court denied their requests because it concluded that neither party had prevailed.

¶ 2 We conclude that the LRA does not create immunity for retailers, whether "passive" or not, and we therefore overrule our court of appeals' conclusion to the contrary in Sanns. In so doing, we hold that the LRA

*600 does not upend our longstanding precedent that retailers-just as distributors, wholesalers, manufacturers, and any others in the chain of distribution-are strictly liable for breaching their duty not to sell a dangerously defective product. To the contrary, the LRA reveals the legislature's intent to specifically preserve our strict products liability doctrine. We thus harmonize the relevant statutory language, avoid conflating the distinct legal doctrines of strict products liability and negligence, and honor the legislature's intent to retain the essential tenets of our strict products liability doctrine.

¶ 3 We accordingly reject the passive retailer doctrine and reverse the district court's dismissal of the Bylsmas' claims against R.C. Willey for strict products liability and breach of warranty. We also vacate the district court's decision declining to award attorney fees to the Bylsmas, and we remand for proceedings consistent with this opinion.

Background

¶ 4 Melinda Bylsma purchased a reclining chair with a foot-massage attachment from R.C. Willey as a gift for her husband, Richard Bylsma. 2 Rather than delivering a soothing massage, the unit crushed his right foot.

¶ 5 The Bylsmas brought suit against R.C. Willey and Human Touch, the alleged manufacturer of the chair. They asserted three claims against R.C. Willey. First, they claimed that the chair was "unreasonably dangerous" in light of the risk of injury it presented. Second, they asserted a claim for breach of implied warranties of merchantability and fitness for a particular purpose under the Uniform Commercial Code (UCC). Finally, they sought rescission of their contract and restitution of the purchase price.

¶ 6 After more than a year of litigation, R.C. Willey moved to dismiss the Bylsmas' tort and warranty claims on the basis of its alleged immunity under the so-called "passive retailer" doctrine recognized in Sanns v. Butterfield Ford. 3 The Bylsmas opposed that motion. They challenged the passive retailer doctrine as incompatible with the Liability Reform Act (LRA), Utah Code sections 78B-5-817 through 823, and as infringing their rights under the Open Courts and Uniform Operation of Laws Clauses of the Utah Constitution.

¶ 7 The district court granted R.C. Willey's motion based on the passive retailer doctrine, dismissing the Bylsmas' tort and warranty claims, leaving only the claim for rescission of the contract. R.C. Willey then stipulated to liability on the rescission claim and tendered payment of the purchase price.

¶ 8 Both R.C. Willey and the Bylsmas sought to recover attorney fees under the terms of the security agreement entered into between them. Although that agreement expressly authorized only "costs of collection" incurred by R.C. Willey, the Bylsmas asserted a reciprocal right to fees under Utah Code section 78B-5-826. R.C. Willey opposed the Bylsmas' motion and also filed a cross-motion seeking an award of its own attorney fees. The district court denied the fee requests because it found that neither the Bylsmas nor R.C. Willey qualified as a "prevailing party."

¶ 9 The Bylsmas filed a timely notice of appeal, claiming error in the dismissal of their claims under the passive retailer doctrine and in the district court's refusal to grant their request for attorney fees. We have jurisdiction under Utah Code section 78A-3-102(3)(j).

Standard of Review

¶ 10 The Bylsmas raise two issues on appeal. The first is whether the district court erred in dismissing their tort and warranty claims. "We review a decision granting a motion to dismiss 'for correctness, granting *601 no deference to the decision of the district court.' In so doing, we 'accept the plaintiff's description of the facts alleged in the complaint to be true, but we need not accept extrinsic facts not pleaded nor need we accept legal conclusions in contradiction to the pleaded facts.' " 4

¶ 11 The second issue is whether the district court erred in denying the Bylsmas' motion for attorney fees under the reciprocal attorney fee statute, Utah Code section 78B-5-826. We review legal questions regarding the availability of attorney fees for correctness. 5 Where a statute or contract provides that attorney fees are to be awarded to a "prevailing party," we review a district court's determination of whether a party "prevailed" for an abuse of discretion. 6

Analysis

¶ 12 We begin by reversing the district court's dismissal of the Bylsmas' strict products liability and breach of warranty claims. We do so based on our rejection of the court of appeals' conclusion in Sanns v. Butterfield Ford 7 and its progeny 8 that "passive retailers" are immunized from liability under the LRA in cases where the manufacturer is named in the suit. We correct the Sanns court's misreading of the LRA by noting that, because the statute preserves our strict products liability doctrine, retailers like R.C. Willey-along with all others in a product's chain of distribution-are strictly liable for breaching their duty not to sell a dangerously defective product. 9

¶ 13 We then provide guidance to the district court for how to proceed with these claims on remand. In particular, we clarify that the LRA's requirement that the fact-finder apportion "fault," which includes strict liability, does not require apportionment of fault among strictly liable defendants. Instead, the LRA requires that strictly liable defendants who all breached the same duty (a duty not to sell the same dangerously defective product) be treated as a single unit for purposes of fault allocation.

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Bylsma v. R.C.WilleyHumanTouch, 2017 UT 85, 416 P.3d 595 (Utah 2017).

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Bylsma v. R.C.WilleyHumanTouch
2017 UT 85 (Utah Supreme Court, 2017)