Lou v. Otis Elevator Co.

17 Mass. L. Rptr. 354
CourtMassachusetts Superior Court
DecidedFebruary 18, 2004
DocketNo. 200100267
StatusPublished

This text of 17 Mass. L. Rptr. 354 (Lou v. Otis Elevator Co.) is published on Counsel Stack Legal Research, covering Massachusetts Superior Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Lou v. Otis Elevator Co., 17 Mass. L. Rptr. 354 (Mass. Ct. App. 2004).

Opinion

Fecteau, J.

Plaintiffs Kevin Lou (“Kevin”), his mother, Beilin Chen, and father, Jidoung Lou (collectively “Lou”) have brought this action against Otis Elevator Company (“Otis”) for injuries sustained by Kevin when he was four years old.2 While Otis’ original motion for summary judgment had been granted [14 Mass. L. Rptr. 649], the court granted reconsideration of this motion at Lou’s request; Lou served additional affidavits in opposition to Otis’ summary judgment motion, and a new hearing was held on March 28, 2003. Otis subsequently filed a Motion to Strike,3 which was denied, and renewed its Motion for Summary Judgment. For the reasons set forth below, Otis’ Renewed Motion for Summary Judgment is DENIED.

BACKGROUND

Taken from the record, the following facts are undisputed except as noted. Disputed facts and reasonable inferences therefrom are considered in the light most favorable to the non-moving party. Hub Associates, Inc. v. Goode, 357 Mass. 449, 451 (1970).

Kevin and his parents reside in Worcester County, Massachusetts. In October 1998, while riding down an escalator with his grandmother at the Changzhou Tianyuan Department Store in the People’s Republic of China (“China”), Kevin’s hand became entrapped in and was crushed by the escalator.

Kevin was dragged approximately ten step-lengths to within inches of the comb plate before a security guard manually activated an emergency shut-off switch. When the escalator stopped, Kevin’s right hand was one centimeter away from the comb plate, and his right hand stuck into and squeezed between the stair and the skirt panel. The rescue took one hour and was videotaped by Changzhou TV Studio. As a result of the accident, Kevin’s hand was nearly amputated, and he has undergone several surgeries requiring repeated hospital stays. Kevin continues physical therapy and continues to experience pain from this injury. Since 1978, escalators manufactured or installed in the United States have been required to have skirt obstruction devices, or switches fitted behind the skirt panels, which, when activated by displacement of the skirt panel would open the power circuit to the escalator’s driving machine. These skirt switches were available as an option on this escalator but were not installed. A skirt switch could have automatically shut off the power to the escalator.

Although a 4-millimeter step-to-skirt gap is acceptable in China, a narrower gap appears to be attainable. At the time of the accident, a dent or depression in the skirt panel of approximately 6 millimeters was noted at the location believed to be where Kevin’s hand became entrapped. According to European Standards for safety, escalator skirting should not yield more than 4 millimeters under a single force of 337 pounds. A published government report, “Anthrokids-Hand Measurements”4 identifies the mean diameter of a 4-year-old male’s finger to be over 10 millimeters. There was no protective device shielding the step-to-skirt gap.

The E510 model escalator at issue was “produced by the Tianjin Otis factory” and sold by China Tianjin Otis Elevator Company, Ltd (“CTOEC”) to the Changzhou Tianyuan Department Store in April 1997. The on-site assembly of the escalator took place between December 1997 and March 1998. Under the terms of its contract with the department store, CTOEC was responsible for “free repair” of the escalator for one year after acceptance of the installation. Although operational in January 1998, the escalator continued to have problems, in particular, abnormal vibration, banging and friction between the steps and the skirt panels. Teams of “Otis maintenance personnel” came frequently to adjust the side gaps and fix the friction, but these problems remained unsolved up to the date of Kevin’s injury. Although Otis had developed, and was using in other countries, a new Teflon_ coated skirt panel that offered a lower coefficient of friction, the subject escalator was equipped with stainless steel skirt panels. Otis ceased using stainless steel skirt panels in North America in 1983.

The Otis trademark name was prominently displayed on the subject escalator: “I have seen news footage of my son being extracted from the escalator . . . The video shows plainly that the name ‘Otis,’ and only that name, appears in large letters on the plate at the foot of the escalator.” Affidavit of Jidoung Lou, par. 14. Otis, a multinational, wholly-owned subsidiary of United Technologies, is incorporated in New Jersey, with a principle place of business in Farmington, and a usual place of business in Worcester, Massachusetts. CTOEC is a limited liability corporation headquartered in Tianjin, China. CTOEC’s Articles of Association dated July 16, 1984,5 identifies CTOEC as a joint venture made among “Tianjin [(Tianjin’)] . . .; Otis Elevator Company, a corporation of the State of New Jersey, United States... and China International Trust & Investment Corporation” (“CfflC”). In March 1994, Otis contributed an additional $12.3 million to the joint venture, increasing its investment to $78 million and acquiring 51% ownership in CTOEC. Of CTOEC’s ten board of directors, [356]*356Otis could appoint five, Tianjin could appoint four, and crac could appoint one.

Assistant Secretary and Deputy General Counsel for Otis, An-Ping Hsieh, claims that by “agreement dated March 22, 1994,” Otis transferred its 51% ownership of CTOEC to Otis Far East Holding, Ltd. The referenced March 22, 1994 Agreement of Share Transfer does not confirm that the transfer actually occurred: Otis “may transfer” its 51% ownership of CTOEC to Otis Far East Holding, Ltd, and any such transfers were to become “effective when the 2nd Amendment contract” was approved. The Second Amendment to the Articles of Association, however, continued to list Otis as a 51% owner of CTOEC. Lu Yaning, President of CTOEC, states, in the present tense, that “CTOEC is wholly owned by Otis Elevator (China) Investment Company, Ltd (“OCL”), a holding company established under the laws" of China. Likewise, Hsieh states, “Otis NJ and CTOEC are separate and distinct corporate entities. CTOEC is neither wholly owned nor virtually owned by Otis NJ.” Neither Yaning nor Hsieh affirmatively declare that Otis and CTOEC were separate and distinct entities at the time of the design, manufacture, sale, or installation of the escalator.

In November 1984, CTOEC and Otis also entered into a Technical Cooperation Agreement for the transfer of Otis’ elevator and escalator technology to CTOEC. Otis provided and granted CTOEC “the exclusive right to use Otis’ Know-How” in China. Know-How is defined to mean all: “(a) engineering and product design drawings, data, information; (b) process, production, installation, maintenance, testing, and inspection methods; (c) quality standards; (d) factory and general management methods; and (e) any other data, documents and information owned and furnished by Otis in accordance with the Technical Annex.” In March 1994, the Second Amendment to the joint venture contract modified the TCA “to provide additional high technology to be introduced into CTOEC. Specifically the E510 escalator... technology will be transferred to CTOEC.” Annex 1 to the TCA further describes the scope of the technological transfer. Otis agreed to provide factory renovation assistance such as the acquisition and installation of factory equipment, personnel training, and management assistance including the implementation of a quality control system.

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17 Mass. L. Rptr. 354, Counsel Stack Legal Research, https://law.counselstack.com/opinion/lou-v-otis-elevator-co-masssuperct-2004.