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Johnson v. Cyklop Strapping Corp.

Decided: October 6, 1987.


On appeal from the Superior Court, Law Division, Bergen County.

Pressler, Bilder and Muir, Jr. The opinion of the court was delivered by Pressler, P.J.A.D.


The jury in this personal injury-products liability action returned a substantial verdict in favor of plaintiff Woodrow Johnson, Jr., against defendant Levine Industries, Inc. The trial had proceeded against Levine alone after the judge denied Levine's application for relief from summary judgments earlier entered which had dismissed all claims, including Levine's cross-claims for contribution and indemnity, against the other two defendants, Cyklop Strapping Corporation and FMC Corporation. Levine appeals, claiming not that there was any error in the trial itself but rather, in essence, that it was improperly denied its right to pursue its cross-claims. We agree with this contention. We are persuaded that Levine's motion for relief from the summary judgments in favor of Cyklop and FMC was incorrectly denied, the fundamental error of the trial judge lying in his mistaken application to interlocutory orders of the standards for relief from final dispositions prescribed by R. 4:50-1. Having concluded, moreover, that Cyklop and FMC were erroneously relieved prior to trial from all responsibility for plaintiff's injury, we further hold that the rectification of this error must be accomplished without affecting plaintiff's right to the benefit of his verdict against Levine.

This is how the important procedural issues involved in the appeal came about. Plaintiff Woodrow Johnson, Jr., had been employed as a foreman by Polyfilm, Inc., a manufacturer of, among other products, plastic bags. Plaintiff's duties included the task of loading the finished product on skids and then securing the skids with strapping material fastened by a buckle. On December 3, 1981, plaintiff, while performing this task, was tightening the strapping material when the strap broke, hurling the buckle into his left eye. As a result of the trauma, he permanently lost his vision in that eye. His ensuing complaint, which alleged a causative defect in the design and manufacture of the strapping material, joined a number of defendants identified as distributors or manufacturers of the strapping. By the time the critical procedural events took

place, however, the only actively participating and potentially liable defendants were Levine, Cyklop and FMC, each of whom, in addition to their perfunctory denials of the allegations of the complaint and their assertions of apparently frivolous affirmative defenses thereto, had also cross-claimed against the other two for contribution and indemnification.

After some discovery proceedings had been engaged in, both FMC and Cyklop moved for summary judgment dismissing all claims against it. While plaintiff opposed both motions, Levine, inexplicably, did not participate in either.*fn1 According both plaintiff and Levine the benefit of all favorable facts and inferences, the record on the jointly heard motions showed the following facts. Levine, although it manufactures some packaging goods, is only a distributor of the strapping material here in question. It sells this material in rolls in the same form in which it purchases it from the manufacturer without alteration or processing of any kind. Polyfilm was one of Levine's strapping customers, and plaintiff testified, both on deposition and at trial, that the strapping which broke had arrived in a shipment from Levine to Polyfilm on the very day of the accident. Levine's potential liability as a link in the distributive chain was thus established.

As to the liability of the other two defendants, the import of the deposition testimony of Alan Levine, Levine's manager of operations, was that Levine had originally purchased the strapping material only from FMC, which manufactured it. In November 1980 FMC sold its entire industrial packaging division, including its remaining inventory, to Cyklop, which appears to have been created as a subsidiary of its parent German company for the purpose, among others, of continuing the business of that FMC division. All FMC customers were appropriately

notified of this succession by Cyklop.*fn2 Thus, after November 6, 1980, Levine purchased strapping only from Cyklop. Mr. Levine further testified on deposition that during the 13-month period between the date of the transfer from FMC to Cyklop and the date of the plaintiff's accident, Levine made regular purchases from Cyklop, generally in three-month intervals, as well as regular sales to Polyfilm. Relying on Levine's average three-month turnover in inventory, Mr. Levine believed that the December 3, 1981 shipment to Polyfilm, which had contained the allegedly defective strapping, had most probably come from Cyklop. He could not, however, be certain that that shipment or part of it had not come to it from FMC prior to November 6, 1980, since Levine did not have a regular system of inventory management, the boxes of material were not labelled as to origin, and Mr. Levine was unable, despite his search therefor, to locate any conclusive inventory record.

Levine's inability to identify with certainty the manufacturer of the December 3, 1980 shipment to Polyfilm was the gravamen of FMC's and Cyklop's summary judgment motions. The motion judge, focusing on the question of the manufacturer of the goods rather than on the question of the identity of the party from whom Levine had purchased them, was of the view that plaintiff's failure conclusively to establish the manufacturer's identity was fatal to his claims against both FMC and Cyklop. He also concluded that the circumstances respecting these two defendants did not invoke the doctrine of Anderson v. Somberg, 67 N.J. 291 (1975), cert. den. 423 U.S. 929, 96 S. Ct. 279, 46 L. Ed. 2d 258 (1975), under which plaintiff's burden of proving which of several defendants is actually culpable shifts to the burden of each defendant to exclude itself from culpability. And finally, the judge was of the view that the successor liability doctrine enunciated by Ramirez v. Amsted Industries,

Inc., 86 N.J. 332 (1981), was not applicable to Cyklop's acquisition from FMC since Cyklop had purchased only a division of FMC, leaving FMC itself intact as a viable, continuing and responsible entity.*fn3 Accordingly, on February 15, 1985, the judge entered summary judgments dismissing all affirmative claims made by all other parties against both FMC and Cyklop.

Approximately a year later, while preparing for a then scheduled but ultimately adjourned March 1986 trial date, Levine fortuitously discovered old inventory records which had, it claimed, long since been haphazardly placed in an unused desk drawer. Among them was a card on which its running inventory balances of strapping material were noted. An entry on the card apparently showed that in May 1981, after the sale by FMC to Cyklop but prior to the accident, Levine's strapping inventory was zero.*fn4 If this were in fact so, then Levine would have conclusively established that its December 3, 1981 shipment to Polyfilm was sold to it by Cyklop even if it could not establish whether Cyklop had manufactured it or had itself received it from FMC as part of the FMC inventory included in the sale to it of the FMC industrial packing division. Armed with this information, Levine on February 10, 1986, moved pursuant to R. 4:50-1 for relief from the summary judgments. More particularly, it relied on R. 4:50-1(b) which authorizes the court to relieve a party from a final judgment or order on the basis of "newly discovered evidence which would probably alter the judgment or order and which by due diligence could not

have been discovered in time to move for a new trial under R. 4:49." Without evaluating the significance of the "new evidence" offered, the motion judge denied Levine's application on the ground that the "due diligence" requirement of the rule had not been met. Trial of plaintiff's claims against Levine, the thus sole remaining defendant, took place in June 1986. The jury's unanimous response to the special interrogatories posed to it was that Levine had supplied strapping material to Polyfilm which was not reasonably safe for its intended use. ...

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