This is a motion for summary judgment against plaintiff, third-party plaintiff and all cross-claimants, brought by Chem-Oil Equipment Corp., defendant and third-party defendant in a multi-party products liability case. It arises out of an industrial employee's accident on a used, modified machine and requires determination of the previously untested strict liability exposure of a used machinery broker in the following factual circumstances.
Jorge Ortiz was injured in 1977 by the blades of a plastic pelletizer*fn1 he operated at Ultra-Poly when it accidently started while he was cleaning its chamber through an unprotected porthole.
The machine cuts pellets from thermoplastic material extruded into a chamber through which water flows. It was manufactured
by defendant Farrell Co. for defendant Dow Chemical as a prototype to Dow's specifications, designed as a component in a system of several machines. Dow bought the pelletizer in 1964, and in 1965 placed a guard and safety interlock over one of its two portholes, the second being inaccessible as set up in the Dow plant.
In 1968 Dow notified Chem-Oil, a machinery broker, that the machine was "surplus." Pursuant to their written agreement, Chem-Oil sought and found an acceptable purchaser, defendant Glopak Corp. Under this Dow/Chem-Oil agreement, sales were to be "as is" and Dow was to retain title until Chem-Oil received payment from a purchaser. There is no indication in the moving papers, however, that the sale to Glopak was made on "as is" terms.
Pursuant to their agreement, Dow approved the sale and after it was consummated Chem-Oil kept 20% and turned over to Dow 80% of the selling price.
Although movant characterizes its role in Dow's machine disposal process as only that of a passive broker, the terms of its agreement with Dow provided in part:
Dow makes no warranty of any kind, either expressed or implied, as to the condition, safety, use or performance of any item, or items, designated as surplus and offered to Chem-Oil for sale. Chem-Oil does hereby assume any and all responsibility and liability in connection with or arising out of the handling of the items by Chem-Oil or the sale thereof after designation thereof as surplus and acceptance by Chem-Oil.
Glopak, a New Jersey used machinery dealer, took delivery in 1969 after inspecting the pelletizer at the Dow site. When delivered, it lacked either pelletizing blades or a motor drive so that it was inoperable without rework, which Chem-Oil did not and could not do.
Defendants Barbara Martin, Harold Martin and Reuben Hewter were principals of Glopak and of defendant, third-party plaintiff B.J. Martin Company. The machinery dealer ultimately sold the pelletizer to Ultra-Poly in 1975, but did ...