Williams v. West Penn Power Co.

460 A.2d 278, 313 Pa. Super. 461

Opinions

MONTEMURO, Judge:

In this appeal we are presented with the difficult question of what statute of limitations to apply in an action for breach of warranty brought by a direct purchaser as well as a third party for personal injuries under the Uniform Commercial Code¹ [hereinafter “Code”]. Our consideration of this issue necessarily involves a complicated and somewhat confusing interplay between case law and a literal application of the Code.

B & M Roofing Contractors [hereinafter “B & M”], a partnership, was hired by Bahr Brothers, a general contractor, to perform work at the Slovenian Hall Association of Broughton. On May 19, 1975, Daniel Banks, one of the appellants herein, a partner² in B & M, and Gerald Williams, also one of the appellants herein, and an employee of the same, were injured at the Slovenian Hall work site when a ladder platform hoist they were using contacted an electrical power line. B & M had purchased the ladder from the Commercial Services Company. As a consequence of the mishap, both appellants suffered severe electrical burns.

On May 20, 1977, both gentlemen, and Mrs. Banks, in a derivative action based on her husband’s injuries, filed a praecipe for writ of summons in trespass. Subsequently, on June 29,1977, a complaint in trespass and assumpsit was filed against West Penn Power company, the electrical power line supplier, the Bahr Brothers, the Slovenian Hall Association of Broughton, Reimann and Georger, Inc., the ladder manufacturer, and Commercial Services Company, the immediate seller. Specifically, the appellants pled counts in negligence, strict liability under Section 402A, Restatement of Torts 2d³, and breach of warranty pursuant to 13 Pa.C.S.A. § 2314, § 2315 and § 2318.⁴ All of the above named defendants, appellees herein, filed an answer and new matter alleging that the two-year personal injury statute of limitations⁵ barred both causes of action. Shortly thereafter they filed a motion for summary judgment. The lower court granted the motion, finding that although the appellants filed suit in trespass and assumpsit Salvador v. Atlantic Steel Boiler Company, 256 Pa.Super. 330, 389 A.2d 1148 (1978), affirmed per curiam, 492 Pa. 258, 424 A.2d 497 (1981), (Salvador II) nevertheless mandated the application of the two-year statute. In Salvador II, this court held that the two-year statute of limitations applies to a breach of warranty action for third party personal injuries instead of the four-year statute contained in the Code at § 2725(a)⁶. Notwithstanding the fact that the instant case involves a direct purchaser, appellant Banks, as well as a third party, appellant Williams, the lower court found Salvador II controlling:

Although Salvador [//] does, indeed, deal with an injury to a third party, its rationale and the cases and law review articles relied upon in Salvador [II], particularly the writings of Dean Murray, lead to the inescapable conclusion that the four-year statute of limitations is applicable only in those situations where a breach of warranty leads to some economic loss, but is inapplicable where the claim is for personal injury. Where the claim is for personal injury, the Superior Court has made clear that the two-year statute of limitations applies irrespective of whether the Complaint is labeled trespass or assumpsit.

Initially, for the sake of clarity, we shall set forth what is not disputed. First, there is no question that the counts in negligence and strict liability under 402A are barred by the two-year statute. Second, a prerequisite to an action for breach of warranty is that there must be a sale. Clearly, the only “sale” in the instant case was the transaction involving the ladder. As to West Penn Power Company, the Bahr Brothers and the Slovenian Hall Association of Broughton, there was no “sale” and therefore no viable breach of warranty claim. Third, Salvador II unequivocal ly disposes of Mr. Williams’ suit. He is, as an employee of B & M, a third party to the sale of the ladder and, therefore, his breach of warranty action is barred by the two-year statute of limitations. See Salvador II, supra. Fourth, Mr. Banks is a direct purchaser only from Commercial Services Company; he is a third party to the sale of the ladder from Reimann and Georger, Inc. to Commercial Services Company. Thus, under Salvador II, Mr. Banks’ action is likewise barred by the two-year statute of limitations. In sum, what remains is Mr. and Mrs. Banks’ breach of warranty claim against Commercial Services Company. It is to this aspect of the lawsuit that we must determine whether the Code’s four-year statute or the two-year personal injury statute applies. Specifically, does the rational enunciated in Salvador II logically extend to the instant situation where the direct purchaser is the injured party?

In Salvador II, the plaintiff was injured in May of 1967 when, during the course of his employment at United Machine & Tool Company, a boiler manufactured by Atlantic Steel Boiler Company exploded. As a result, plaintiff, Mr. Salvador, suffered severe bilateral hearing loss. Mr. Salvador, subsequently, on March 29, 1971 filed a writ of summons in assumpsit and trespass against Atlantic Steel Boiler, the S.H. English Company and Walter Mueller and his wife.⁷

The first time on appeal this court abolished the requirement of horizontal privity under § 2318 of the Code, finding Kassab v. Central Soya, 432 Pa. 217, 246 A.2d 848, 849 (1968) effectively overruled Hochgertel v. Canada Dry Corp., 409 Pa. 610, 187 A.2d 575 (1963) and permitted Mr. Salvador, as an employee of the purchaser, to maintain a suit for breach of warranty. Salvador v. Atlantic Steel Boiler Company, 224 Pa.Super. 377, 307 A.2d 398 (1973). This decision was affirmed by the Supreme Court in an opinion by Mr. Justice Roberts. Salvador v. Atlantic Steel Boiler Company, 457 Pa. 24, 319 A.2d 903 (1974).

The case was remanded to the trial court where the defendants argued in their answers and new matter that the appropriate statute of limitations (§ 2725) had expired. There was no dispute that Mr. Salvador’s 402A claim was barred by the two-year statute. The only question of viability concerned the breach of warranty claim. The defendants argued that § 2725 began to run from the tender of boiler and thus time had expired prior to the filing of Mr. Salvador’s suit. Further, the defendants contended that this was true no matter which sale was considered dispositive, i.e., from the 1962 original sale of the boiler to English, or from 1964, when United purchased English from the Muellers. Mr. Salvador argued that § 2725 did not begin to run until the date of the injury in May of 1967. The trial court agreed with the defendants and granted their motions for summary judgment on both the warranty and tort claims.

Both parties, apparently, conceded that § 2725 was applicable to Mr. Salvador’s status as a third party and therefore, the thrust of their arguments were directed solely to the appropriate time at which the cause of action accrued, i.e., the defendants argued for the date of delivery while, Mr. Salvador argued for the date of injury. This court found both arguments unpersuasive and went further, disagreeing that § 2725:

... under any construction, should be applied to third party personal injuries arising from a defective product. It is our view that the two-year statute of limitations should be uniformly applied to all such cases, and that the statute should ordinarily begin to run from the date of injury. Salvador II, supra, 256 Pa.Superior 335, 389 A.2d at 1151.

For the sake of brevity, the Salvador II rationale can be divided into three parts:

1) Toward achieving the desirable goal of legal symmetry, privity had been abolished whether a party sued in tort or in assumpsit. Webb v. Zern, 422 Pa. 424, 220 A.2d 853 (1966) (adoption of § 402A of the Restatement of Torts 2d); Kassab v. Central Soya, 432 Pa. 217, 246 A.2d 848 (1968) (abolition of requirement of vertical privity under § 2318) and Salvador v. Atlantic Steel Boiler (Salvador II), supra (horizontal privity abolished). In light of this development, the court believed that legal symmetry required the application of the two-year personal injury statute.

2) In order to reach the desired end, Salvador II necessarily had to distinguish two prior Supreme Court cases which seemingly held to the contrary. In Gardiner v. Philadelphia Gas Works, 413 Pa. 415, 197 A.2d 612 (1964) and Rufo v. Bastian-Blessing Company, 417 Pa. 107, 207 A.2d 823 (1965), the Supreme Court found § 2725 applicable to a purchaser’s breach of warranty action for personal injuries. Gardiner, supra, was distinguished as follows:

First, the Gardiners were purchasers of the natural gas so that they were in privity of contract and would have been entitled to recover for breach of warranty even under the doctrine of Hochgertel v. Canada Dry Corp., supra. Second, when Gardiner, supra, was decided the Code offered the only remedy for defective products which permitted the use of a strict liability theory, because Webb v. Zern, supra, had not been decided. Finally, Section 10-103 of the Code could not have repealed the two-year statute of limitations with respect to third party personal injuries because, as Hochgertel would establish, the Code provided no remedy for such injuries, except to the limited extent specifically set forth in Section 2-318. (Emphasis added) Rufo, supra, was distinguished on the same basis:

... the plaintiff was explicitly afforded a remedy under the Uniform Commercial Code as a purchaser of the defective product, and Pennsylvania had not yet adopted Section 402 A of the Restatement of Torts, 2d or an alternative remedy. (Emphasis added) .

Salvador II, supra, 256 Pa.Superior 335, 389 A.2d at 1152-53.

3) The holding itself rested upon three considerations:

a) The remedy under the Code for third parties is entirely one of judicial creation and therefore the courts should decide the appropriate statute of limitations. Since the theory of recovery for personal injuries under § 2318 sounds in tort the personal injury statute of limitations is applicable.

b) It would take a strained interpretation of § 2725 to conclude that it applies to anyone but the contracting parties.

c) Uniformity of application of the two-year statute is the only solution to attain legal symmetry.

We are faced with an extremely difficult proposition. The Code explicitly provides, as Salvador II recognizes, for the recovery of consequential personal injury damages as set forth in pertinent part under § 2715:

(b) Consequential damages resulting from the seller’s breach includes ...

(2) injury to the person or property proximately resulting from any breach of warranty.

Salvador II did not consider the above Code language and the abolishment of privity as controlling. Rather, Salvador II emphasized the need for legal symmetry and restated Justice Roberts’ observation in Kassab, supra, that the caption atop the complaint should not dictate a distinction. Therefore, a suit for personal injuries, whether or not the theory of recovery was based on breach of warranty, negligence, or strict liability should be commenced within the same time period, especially since the adoption of § 402 A of Restatement of Torts, 2d in Pennsylvania. While we commend the result, we do not believe the logic employed therein was meant to or can be extended to the instant situation.

Problematically, the resolution of the issue in the instant case can be stated as follows: On the one hand, if we found that Salvador II indeed extended to the situation involving a direct purchaser, we would be ignoring the explicit and exact language contained in the Code which provides for the recovery of personal injury damages caused by a breach of warranty. There is also no doubt that primarily Salvador II distinguished Gardiner, supra, and Rufo, supra, which applied the four year statute to a breach of warranty action for personal injuries, on the basis that in those cases a direct purchaser was the injured party. On the other hand, if we find Salvador II’s rationale inapplicable we will have a very unfair result. Mr. Banks, a direct purchaser, will be permitted to maintain his breach of warranty action; however, Mr. Williams, as a third party, will not. This will be so even though both parties were injured at the same time, at the same place and by the same electrical charge. Obviously, this approach will create legal asymmetry within the context of a breach of warranty action in reestablishing privity when applying the appropriate statute of limitations based upon a right under the Code which recognizes no such restriction. If a party has the right to initiate a particular cause of action, he should likewise be accorded all that follows.

We can, however, find no way to avoid the explicit provisions contained in § 2715 and § 2725. Both provide a purchaser with a breach of warranty claim against a seller for personal injuries which can be brought within four years. We believe that the Code and § 402A provide alternative remedies. Each remedy should be effectuated by its particular statute of limitations and find dispositive what was stated in Gardner, supra, 413 Pa. at 419-20, 197 A.2d at 614:

In this Commonwealth we have always recognized that a personal injury claim based upon a breach of warranty is a distinct claim from a personal injury claim based on negligence: Cunningham v. Joseph Horne Co., 406 Pa. 1, 176 A.2d 648; Loch et ux. v. Confair et ux, 361 Pa. 158,162, 63 A.2d 24; Bonenberger v. Pittsburgh Mercantile Co., 345 Pa. 559, 561, 28 A.2d 913, 143 A.L.R. 1417. Under such circumstances, a holding that Section 2-725 controls in this instant situation will effect no change in the substantive law of the Commonwealth.

Bearing in mind the language of Sections 2-725, 2-715 and 1-103 and the basic purposes underlying passage of the Code and the need for uniformity in this area of the law, we have no hesitancy in construing Section 2-725 to mean exactly what its language says____

This appeal presents a question of first impression in the appellate courts of this Commonwealth. Our examination of Sections 2-725, 2-715 and 1-103 and the background of the Code indicates that is was the legislative intent that there be a four year period of limitations on all actions for breach of contracts for sale, irrespective of whether the damages sought are for personal injuries or otherwise. (Emphasis added — footnotes omitted)

The adoption of § 402A in Pennsylvania by the Supreme Court did not and could not vitiate what the legislature has provided in the Code and, accordingly, we find that § 2725 applies to a purchaser’s breach of warranty action for personal injuries.

We hold, therefore, that § 2725 applies to the Banks’ breach of warranty claim. However, there are no facts appearing on this record indicating the date upon which the sale of the ladder occurred. This will have to be resolved before it can be determined that Mr. and Mrs. Banks have filed a timely suit. Mr. Williams’ suit for breach of warranty is barred by the two-year personal injury statute because of our holding in Salvador II, affirmed per curiam by our Supreme Court.

Order is affirmed in part and reversed in part.

BECK, J., filed a concurring and dissenting opinion.

Footnotes

1

. Act of April 6, 1953, P.L. 3, as amended 12A P.S. § 1-101 et seq. The Act of 1953 was repealed and reincorporated within the framework of Pennsylvania Consolidated Statutes as Title 13, Act of November 1, 1979, P.L. 255, No. 86, 13 Pa.C.S.A. § 1101 et seq.

2

. There are various references on this record indicating that Daniel Banks is a partner in B & M. In any event, none of the appellees contest Mr. Banks’ status as a partner and, hence, purchaser of the ladder.

3

. § 402A. (1) one who sells any product in a defective condition unreasonably dangerous to the user or consumer or to his property is subject to liability for physical harm thereby caused to the ultimate user or consumer, or to his property, if

(a) the seller is engaged in the business of selling such a product, and

(b) it is expected to and does reach the user or consumer without substantial change in the condition in which it is sold.

(2) The rule stated in Subsection (1) applies although

(a) the seller has exercised all possible care in the preparation and sale of his product, and

(b) the user or consumer has not bought the product from or entered into any contractual relation with the seller.

Restatement (Second) of Torts, § 402A (1965)

4

. § 2314. Implied warranty: merchantability; usage of trade

(a) Sale by merchant. — Unless excluded or modified (section 2316), a warranty that the goods shall be merchantable is implied in a contract for their sale if the seller is a merchant with respect to goods of that kind. Under this section the serving for value of food or drink to be consumed either on the premises or elsewhere is a sale.

(b) Merchantability standards for goods. — Goods to be merchantable must be at least such as:

(1) pass without objection in the trade under the contract description;

(2) in the case of fungible goods, are of fair average quality within the description;

(3) are fit for the ordinary purposes for which such goods are used;

(4) run, within the variations permitted by the agreement even kind, quality and quantity within each unit and among all units involved;

(5) are adequately contained, packaged, and labeled as the agreement may require; and

(6) conform to the promises or affimations of fact made on the container or label if any.

(c) Course of dealing or usage of trade. — Unless excluded or modified (section 2316) other implied warranties may arise from course of dealing or usage of trade. 1979, Nov. 1, P.L. 255, No. 86, § 1, effective Jan. 1, 1980.

§ 2315. Implied warranty: fitness for particular purpose

Where the seller at the time of contracting has reason to know:

(1) any particular purpose for which the goods are required; and

(2) that the buyer is relying on the skill or judgment of the seller to select or furnish suitable goods;

there is unless excluded or modified under section 2316 (relating to exclusion or modification of warranties) an implied warranty that the goods shall be fit for such purpose. 1979, Nov. 1, P.L. 255, No. 86, § 1, effective Jan. 1, 1980.

§ 2318. Third party beneficiaries of warranties express or implied.

The warranty of a seller whether express or implied extends to any natural person who is in the family or household of his buyer or who is a guest in his home if it is reasonable to expect that such person may use, consume or be affected by the goods and who is injured in person by breach of the warranty. A seller may not exclude or limit the operation of this section.

1979, Nov. 1, P.L. 255, No. 86, § 1, effective Jan. 1, 1980.

5

. Act of June 24, 1895, P.L. 236, § 2, as amended 12 P.S. § 34, was repealed and reenacted by the Act of July 9, 1976, P.L. 586, No. 142, § 2, effective June, 1978, 42 Pa.C.S.A. § 5524(2).

§ 5524. Two year limitation

The following actions and proceedings must be commenced within two years:

(2) An action to recover damages for injuries to the person or for the death of an individual caused by the wrongful act or neglect or unlawful violence or negligence of another.

6

. § 2725. Statute of limitation in contracts for sale

(a) General rule. — An action for breach of any contract for sale must be commenced within four years after the cause of action has occurred. By the original agreement the parties may reduce the period of limitation to not less than one year but may not extend it.

7

. In 1962 the boiler was sold by Atlantic Steel to the S.H. English Company which was owned by the Muellers. In 1964 Mr. Salvador's employer, United Machine, bought the business from the Muellers.