Sylvan R. Shemitz Designs, Inc. v. Newark Corp.

967 A.2d 1188, 291 Conn. 224, 2009 Conn. LEXIS 115
CourtSupreme Court of Connecticut
DecidedApril 21, 2009
DocketSC 17998
StatusPublished
Cited by7 cases

This text of 967 A.2d 1188 (Sylvan R. Shemitz Designs, Inc. v. Newark Corp.) is published on Counsel Stack Legal Research, covering Supreme Court of Connecticut primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Sylvan R. Shemitz Designs, Inc. v. Newark Corp., 967 A.2d 1188, 291 Conn. 224, 2009 Conn. LEXIS 115 (Colo. 2009).

Opinion

Opinion

PALMER, J.

Under General Statutes §§ 52-572m (d) 1 and 52-572n (c) 2 of the Connecticut Product Liability Act (act); see General Statutes § 52-572m et seq.; commercial losses, in contrast to damage to property, are not recoverable in a product liability action as between commercial parties. In this case, Elliptipar, Inc. (Ellipti-par), a division of the plaintiff company, Sylvan R. *227 Shemitz Designs, Inc. (plaintiff), sold to its customers a product containing a defective part that had been manufactured by the defendant General Electric Company (General Electric) and the defendant Regal-Beloit Corporation (Regal). 3 Thereafter, the plaintiff incurred costs for replacing the part and otherwise repairing damage to its product that had been caused by the defective part. The issue presented by this appeal is whether, under the act, those costs constitute damage to property and, therefore, are recoverable by the plaintiff against the defendants, or whether the costs represent unrecoverable commercial losses. We conclude, contrary to the determination of the trial court, that the costs constitute damage to property that the plaintiff may recover.

The record reveals the following relevant facts and procedural history. The plaintiff is a manufacturer of commercial and residential lighting fixtures. For many years, one of its divisions, Elliptipar, purchased capacitor boots (boots), an insulation product that is used in lighting fixtures, from Newark Corporation, a distributor of such products. The boots were manufactured by General Electric until 2004, when Regal acquired the manufacturing operation of General Electric. Since that time, Regal has manufactured the boots. Elliptipar used those boots in the manufacture of the lighting fixtures that it sold to its customers.

In approximately July, 2004, Elliptipar began receiving reports from its customers that lighting fixtures containing the boots were failing, often within two weeks of the time that the fixtures had been placed in operation. Elliptipar conducted an investigation and determined that the failure of the lighting fixtures was *228 caused by a defect in the boots that resulted in arcing and ignition. In response to the problem, Elliptipar repaired and, when necessary, replaced the lighting fixtures that had been damaged by the boots. Elliptipar also replaced the boots in those fixtures that had been sold but not yet damaged. In September, 2005, the plaintiff commenced the present action against the defendants, among others, to recover the costs that it had incurred in repairing and replacing the fixtures that Elliptipar had sold to its customers. The plaintiff alleged strict liability under the act, 4 and a breach of the implied warranty of merchantability under the Uniform Commercial Code (UCC). See General Statutes § 42a-2-314.

The defendants filed a motion to strike the plaintiffs strict liability claim on the ground that the claim sought damages for commercial loss between commercial parties, and that such damages are not recoverable under the act. The defendants also moved to strike the plaintiffs claim of breach of the implied warranty of merchantability, alleging, first, that the plaintiffs claim is barred by the exclusivity provision of the act; see General Statutes § 52-572n (a); 5 and, second, that the claim is legally insufficient under the UCC because it did not allege privity of contract between the parties.

The trial court granted the defendants’ motion to strike the plaintiffs strict liability claim. In support of its conclusion, the court explained that, under § 52-572n (a), a product liability claim may be asserted only “for harm caused by a product . . . .” (Internal quota *229 tion marks omitted.) The court further explained that, under the definitional section of the act; see General Statutes § 52-572m (d); 6 “ ‘[h]arm’ includes damage to property, including the product itself, and personal injuries including wrongful death” but “does not include commercial loss.” (Internal quotation marks omitted.) The court concluded that, although “the alleged damage to the light fixtures and boots was undoubtedly ‘damage to property’ with respect to the owners of the property at the time the property damage occurred, [the plaintiff] was not such an owner. [The plaintiff] admits in its complaint that the property in question had been sold to other customers. [The plaintiffs] damages came about because it had to repair [or] replace . . . [the light fixtures containing the defective boots] or otherwise pay for the property damage suffered by its customers. This was monetary damage. The damage to [the plaintiff], unlike the damage to its customers, was thus ‘commercial loss.’ ”

In reaching its determination, the trial court acknowledged that the act does not expressly “address the issue of whether an item of damages may be ‘damage to property’ as to one downstream purchaser and ‘commercial loss’ with respect to another.” The court reasoned, however, that its conclusion in the present case was consistent with the common-law principle that a claimant “ ‘may not recover in negligence for economic loss resulting from bodily harm to another or from physical damage to property in which the plaintiff has no proprietary interest.’ [4 F. Harper, F. James & O. Gray, Torts (2d Ed. 1986) § 25.18A, p. 619].”

The trial court also granted the defendants’ motion to strike the plaintiffs claim of a breach of the implied warranty of merchantability. Specifically, the court agreed with the defendants that the plaintiff could not *230 establish privity between the parties, and that the lack of privity was fatal to the plaintiffs claim.

On appeal, 7 the plaintiff contends that the trial court improperly concluded that, because the plaintiff did not own the property that had been damaged, the expenses that it incurred in remedying the damage caused by the defective boots constituted a nonrecoverable commercial loss. Although the plaintiff acknowledges that the act provides the exclusive remedy against a seller of a defective product; see, e.g., Hurley v. Heart Physicians, P.C., 278 Conn. 305, 325, 898 A.2d 777 (2006) (act “was intended to serve as the exclusive remedy for a party who seeks recompense for . . . injuries caused by a product defect” [internal quotation marks omitted]); the plaintiff also contends that, if we conclude that the trial court properly determined that the plaintiff does not have a remedy under the act, then we should reverse the trial court with respect to its ruling on the defendants’ motion to strike the plaintiffs claim of a breach of the implied warranty of merchantability. 8

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Cite This Page — Counsel Stack

Bluebook (online)
967 A.2d 1188, 291 Conn. 224, 2009 Conn. LEXIS 115, Counsel Stack Legal Research, https://law.counselstack.com/opinion/sylvan-r-shemitz-designs-inc-v-newark-corp-conn-2009.