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Jackson v. New Jersey Manufacturers Insurance Co.

Decided: March 5, 1979.

MARGARET JACKSON AND LARRY JACKSON, PLAINTIFF-APPELLANTS,
v.
NEW JERSEY MANUFACTURERS INSURANCE COMPANY, P. E. ALBERT & SON, FORMERLY L. ALBERT & SON, BELLANCA CORPORATION, FORMERLY BELLANCA AIRCRAFT CORPORATION, AND OLSON BROTHERS, INC., DEFENDANTS-RESPONDENTS



On appeal from the Superior Court of New Jersey, Law Division, Essex County.

Lora, Michels and Larner. The opinion of the court was delivered by Michels, J.A.D.

Michels

Plaintiffs appeal from (1) a summary judgment in favor of defendant P. E. Albert & Son; (2) judgments of involuntary dismissal entered at the conclusion of their proofs in favor of defendants New Jersey Manufacturers Insurance Company (Manufacturers), Bellanca Corporation (Bellanca) and Olson Brothers, Inc. (Olson),*fn1 and (3) an order denying their motion for a new trial.

On or about October 25, 1973, Larry Jackson (hereinafter referred to as plaintiff) sustained a severe crushing injury to his hand while operating a rubber sheeting mill during the course of his employment with Waldon Roberts Rubber Company (Roberts). The rubber sheeting mill was manufactured and installed in the Roberts plant in Newark, New Jersey, by L. Albert & Son sometime in 1931 -- more than 42 years before the accident. Plaintiff instituted this action against defendants P. E. Albert & Son, Bellanca, Olson and Manufacturers seeking to recover damages for the personal injuries he sustained in the accident. His wife sued per quod. He claimed that at the time of the accident the mill should have been equipped with a point-of-operation guard and sought to impose tort liability upon P. E. Albert & Son,

Bellanca and Olson, as successors to L. Albert & Son, the manufacturer of the mill, on the theory that they failed to warn Roberts of "new, updated or improved safeguards desirable or required on equipment [the mill] in the field," and of the inherent danger and potential risks of the rubber mill as of 1973. Specifically, plaintiff claimed that L. Albert & Son as the manufacturer and installer of the mill, and these defendants, as its successors, should have known that point-of-operation safeguards were required to be on the mill at the time of the accident, and that they had a duty and ample opportunity prior to the accident to advise Roberts to install such safeguards. Plaintiff also contended that Manufacturers, as the workers' compensation insurance carrier for Roberts, was negligent in inspecting the rubber mill and in failing to notify Roberts of the hazardous condition of said mill and to require it to correct the condition and up-date the mill with effective point of operation safeguards.

Prior to trial the judge granted P. E. Albert & Son's motion for summary judgment on the ground that it was not a successor to L. Albert & Son and, therefore, was not liable for the tortious conduct, if any, of L. Albert & Son in connection with the manufacture and installation of the rubber mill. Thereafter, the matter was tried on the claims against Manufacturers, Bellanca and Olson. At the conclusion of plaintiff's proofs on liability, judgments of involuntary dismissal were granted in favor of each of these remaining defendants. The judge essentially held that plaintiff failed to prove a prima facie case of negligence against Manufacturers in that he did not show that Roberts relied upon Manufacturers' inspection of the plant and equipment, including the mill, in maintaining the equipment and proving for the safety of its employees. Additionally, the judge held that plaintiff failed to prove that either Bellanca or Olson violated any standard of care in regard to the manufacture and installation of the rubber mill and therefore did not prove a prima facie case against them. Plaintiff's motion for a new trial was denied, and this appeal followed.

I.

Summary Judgment in Favor of P. E. Albert & Son

Plaintiff challenges the propriety of the grant of summary judgment in favor of P. E. Albert & Son. He claims that P. E. Albert & Son was formerly known as and is a successor to L. Albert & Son, and, therefore, is liable for the latter's tortious conduct, specifically its alleged failure to notify Roberts prior to the accident that point-of-operation safeguards should be installed on the rubber mill.

It is firmly established under our practice that a motion for summary judgment will be granted where the pleadings and affidavits or certifications do not show the existence of a genuine issue of material fact requiring disposition by a plenary trial. R. 4:46-2; Ruvolo v. American Cas. Co. , 39 N.J. 490, 499 (1963); Judson v. Peoples Bank & Trust Co. of Westfield , 17 N.J. 67, 73-75 (1954); Miller v. U.S. Fid. & Guar. Co. , 127 N.J. Super. 37, 40-41 (App. Div. 1974). Here, the pleadings and certifications submitted in connection with the motion established that there was no genuine issue of material fact as to P. E. Albert & Son's status, and therefore summary judgment was appropriate for the disposition of the claim against it. See Miller v. U.S. Fid. & Guar. Co., supra.

The principle is well settled that where one company sells or otherwise transfers all of its assets to another company the latter is not liable for the debts and liabilities of the transferor, including those arising out of the latter's tortious conduct, except where (1) the purchaser expressly or impliedly agrees to assume such debts and liabilities; (2) the transaction amounts to a consolidation or merger of the seller and purchaser; (3) the purchasing corporation is merely a continuance of the selling corporation, or (4) the transaction is entered into fraudulently in order to escape liability for such debts. McKee v. Harris-Seybold Co. , 109 N.J. Super. 555, 561-562 (Law Div. 1970), aff'd o.b. 118 N.J. Super. 480 (App. Div. 1972). See also, Wilson v.

Fare Well Corp. , 140 N.J. Super. 476, 484 (Law Div. 1976); Jackson v. Diamond T. Trucking Co. , 100 N.J. Super. 186, 192 (Law Div. 1968); Menacho v. Adamson United Co. , 420 F. Supp. 128 (D.N.J. 1976); 19 Am. Jur. 2d, Corporations , § 1546 at 922-924 (1965); 15 Fletcher, Cyclopedia of the Law of Private Corporations (rev. perm. ed. 1973), § 7122 at 187.

The uncontroverted proofs show that in 1906 Louis Albert and Israel H. Albert formed a partnership under the name of L. Albert & Son. Thereafter, on or about October 1, 1943, Philip E. Albert, a son of Israel H. Albert, became a partner in L. Albert & Son. In 1944 Israel H. Albert died. Sidney Albert, another son of Israel H. Albert, who also had earlier been made a partner in the firm, bought the entire interest of all of the other partners in 1955, including Philip E. Albert, and thereupon became the sole owner of the business. In 1956 Sidney Albert caused L. Albert & Son to be merged with Bellanca Aircraft Corporation (which became Bellanca Corporation), and L. Albert & Son became a division of Bellanca. The proofs further established that Philip E. Albert was employed by L. Albert & Son, Division of Bellanca, until 1958, when Bellanca liquidated this division. Philip E. Albert resigned from Bellanca at that time and started his own business under the name of Philip E. Albert, trading as P. E. Albert & Son. Sometime in the latter part of 1958 he purchased from Bellanca some of the inventory and fixed assets of its L. Albert & Son Division. He did not acquire the right to use the name "L. Albert & Son," said name being retained by Bellanca. Moreover, there was no proof that Philip E. Albert expressly or impliedly agreed to assume the debts or obligations of the L. Albert & Son Division when he purchased some of its inventory and fixed assets from Bellanca.

In the circumstances it is clear that P. E. Albert & Son was not formerly L. Albert & Son, and was not and is not a successor to that partnership. P. E. Albert & Son is a separate and distinct business entity which did not come

into existence until 1958 -- more than 27 years after the manufacture and installation of the rubber mill at the Roberts plant by L. Albert & Son. Consequently, liability cannot be visited upon P. E. Albert & Son for any alleged tortious wrong doing of L. Albert & Son or its successors, and thus, P. E. Albert & Son is not liable for the injury sustained by plaintiff while operating the mill.

Accordingly, the summary judgment in favor of P. E. Albert & Son is affirmed.

II

Judgment of Involuntary Dismissal of Claim Against ...


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