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Holloway v. State

Decided: March 22, 1989.

CONSTANCE HOLLOWAY, PLAINTIFF,
v.
STATE OF NEW JERSEY, DEFENDANT-THIRD PARTY PLAINTIFF, V. MUSKIN CORPORATION, MUSKIN INC., KDI SYLVAN POOLS, INC., AND PELICAN SWIM & SKI CENTER, INC., THIRD PARTY DEFENDANTS-FOURTH PARTY PLAINTIFFS, V. SK PLASTICS CORPORATION, FOURTH PARTY DEFENDANT



Bernhard, J.s.c.

Bernhard

[237 NJSuper Page 72] This is a pre-trial motion brought by Muskin Inc., the third party defendant-fourth party plaintiff, in a products liability

case for an Order granting Summary Judgment under R. 4:46-1 et seq. in favor of the third party defendant-fourth party plaintiff, Muskin Inc., against all parties on all claims.

On July 10, 1981 the plaintiff Constance Holloway was injured while an inmate at the Correctional Institution for Women ("the Institution") in Clinton, New Jersey. On that date, the plaintiff went for a swim in an above-ground swimming pool (4 feet deep, 24 feet in diameter) located at the Institution. The pool was owned and maintained by the defendant, State of New Jersey (the "State"). At one point the plaintiff climbed upon a swimming pool deck which was erected by the Institution's maintenance department. The plaintiff dove into the swimming pool and injured her back and neck, ultimately resulting in quadriplegia.

The swimming pool in question was purchased by the State of New Jersey on June 13, 1974 from the third party defendant-fourth party plaintiff, Sylvan Pools, Inc. The third party defendant-fourth party plaintiff, Muskin Corporation, manufactured the swimming pool. Sometime prior to the incident, a replacement pool liner was purchased by the defendant State from Pelican Swim & Ski Center Inc., the third party defendant-fourth party plaintiff. The replacement liner was manufactured by the fourth party defendant, SK Plastics Corp.

In February of 1981, six months prior to the injury of the plaintiff, U.S. Leisure Incorporated ("U.S. Leisure"), purchased assets of the Leisure Products Group of Amcord, Inc. from Gifford-Hill, Inc. The purchase included the assets of Little Lake Industries, a manufacturer of outdoor redwood furniture, and substantially all of the assets of Muskin Corporation, a manufacturer of above-ground swimming pools and other swimming-related products for an amount over 24 million dollars. After the purchase of the assets of Muskin Corporation, U.S. Leisure began to manufacture above-ground swimming pools in February of 1981.

On October 28, 1983, U.S. Leisure amended its Articles of Incorporation changing its name to Muskin Inc.

The State, defendant-third party plaintiff, charged Muskin Inc., third party defendant-fourth party plaintiff, with (1) strict liability as a successor corporation to Muskin Corporation for manufacturing defects in the Muskin pool ("products-line" theory) and (2) liability for breach of a continuing duty to warn.*fn1

Muskin Inc. now moves for summary judgment, arguing that Muskin Inc. should be relieved from liability as a successor corporation under New Jersey case law since Muskin Corporation is a "viable" corporation; and failure to find "successor corporation liability", as a matter of law, removes any after-sale duty to warn the plaintiff of dangers related with the product.

I. Strict Products Liability Claim

In the 1981 case of Ramirez v. Amsted Industries, Inc. 86 N.J. 332 (1981), the New Jersey Supreme Court enunciated the standard for determining successor liability where one corporation acquires substantially all of the manufacturing assets of another corporation, and the successor corporation continues essentially the same manufacturing operation as the predecessor corporation.

The court in Ramirez held that "where one corporation acquires all or substantially all the manufacturing assets of another corporation . . . the purchasing corporation is "strictly liable for injuries caused by defects in units of the same ...


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