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Bussell v. Dewalt Products Corp.

Decided: October 9, 1992.

GUY BUSSELL, PLAINTIFF-RESPONDENT AND CROSS-APPELLANT,
v.
DEWALT PRODUCTS CORPORATION AND JOHN DOE, DEFENDANTS



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

Shebell, A.m. Stein and Conley. The opinion of the court was delivered by Shebell, J.A.D.

Shebell

Plaintiff, Guy Bussell, suffered the amputation of his thumb and three fingers on June 27, 1980 when he was operating a radial arm saw at his place of employment in Princeton, New Jersey. A detailed procedural history of this case is required for an understanding of the issues raised concerning appellant-Black and Decker's liability as a successor manufacturer.

On July 8, 1981, plaintiff filed a complaint in the Law Division and named DeWalt Products Corporation (DPC), the manufacturer, and John Doe, the party responsible for repair and maintenance of the saw, as defendants. A jury rendered a verdict against DPC in the amount of $600,000 on the basis that the saw was not reasonably safe for its intended purposes. Judgment was entered against DPC in the sum of $792,000 on March 23, 1984, reflecting the amount of the jury verdict and $192,000 in prejudgment interest.

On May 24, 1984, plaintiff filed a notice of motion to compel posting of a bond. DPC informed the court that it would not seek a stay of execution and that plaintiff could attempt to execute on any of DPC's assets that it could locate in New Jersey in accordance with court rules.

DPC appealed the judgment to this court. We reversed the lower court's judgment on the grounds that the Judge failed to charge the jury that the damage award was not subject to

federal or state income tax. Bussell v. DeWalt Products Corp., 204 N.J. Super. 288, 498 A.2d 787 (App.Div.1985). The Supreme Court granted certification and reversed, reinstating the judgment of the trial court. Bussell v. DeWalt Products Corp., 105 N.J. 223, 519 A.2d 1379 (1987).

On February 24, 1987, plaintiff moved for an order seeking judgment against Black & Decker (U.S.) Inc. (Black & Decker) as DPC's successor in interest, or, in the alternative, against Home Insurance Company, Black & Decker's insurance carrier. On March 9, 1987, plaintiff's motion to amend the judgment was removed by Black & Decker to the United States District Court. Plaintiff moved to remand to our state courts, and the federal district court granted plaintiff's motion on April 6, 1987. Black & Decker appealed to the Court of Appeals for the Third Circuit; however, on April 30, 1987, the Court of Appeals dismissed the proceedings on the grounds that it lacked jurisdiction. The federal district court remanded the matter back to our Law Division on May 5, 1987.

On June 23, 1987, the Law Division held that "there was only one party defending this action, and that was Black & Decker through its carrier, Home Insurance," and entered judgment against Black & Decker. However, plaintiff's motion to join Home Insurance Company was denied. Black & Decker appealed the granting of plaintiff's motion to amend the judgment. On August 15, 1988, we ruled that the Judge's determination that Black & Decker had the opportunity to be heard and participated in the suit from the outset was correct. However, we found that Black & Decker's liability under the theory of successor liability pursuant to Ramirez v. Amsted Industries, Inc., 86 N.J. 332, 431 A.2d 811 (1981), "was never presented before the trial court." Because of this, we remanded the matter "for a plenary hearing to determine Black & Decker's liability under Ramirez." Black & Decker petitioned the Supreme Court for certification, and plaintiff filed a cross-petition. Both petitions were denied.

On remand, Black & Decker filed a motion in the Law Division seeking an order dismissing all proceedings against it. This motion was denied on March 3, 1989. Black & Decker then filed a motion for disqualification, requesting an order that the motion Judge be disqualified from all further proceedings on the basis of statements made by the Judge during the March 3, 1989 hearing. On July 22, 1989, the Judge vacated all orders he had previously entered after our August 15, 1988 remand.

On August 15, 1989, Black & Decker refiled its motion seeking an order dismissing all proceedings. The Assignment Judge of Mercer County, who had assumed handling of the case, concluded that Black & Decker had participated in the proceedings and waived any due process issues that may have been present. By order dated December 18, 1989, he denied Black & Decker's motion to dismiss and ordered that discovery on the issue of successor liability be completed within 150 days.

On February 16, 1990, Black & Decker moved for summary judgment. The Judge noted that the only issue to be determined was successor liability under Ramirez. The court denied summary judgment and rejected Black & Decker's request for a jury trial and the argument that Maryland law should govern.

In the interim, plaintiff had filed an action against Home Insurance Company on the grounds of misrepresentation. Home Insurance Company settled this claim for $150,000 on April 7, 1992.

On January 3, 1992, the Assignment Judge filed his written opinion holding that Black & Decker was liable to plaintiff for the judgment. On February 3, 1992, judgment was entered in favor of plaintiff in the amount of $1,241,317.81, reflecting the $600,000 jury award of March 21, 1984 and prejudgment interest in the amount of $641,317.81.

Black & Decker appeals, and plaintiff cross-appeals asserting that the award of prejudgment interest should have run only until the date of the original judgment on March 21, 1984 and that interest thereafter constituted post-judgment interest.

On September 25, 1991, the parties entered a stipulation of facts in connection with the Ramirez hearing that had forty-two joint exhibits attached. These facts primarily focus on the corporate transactions from the time DPC manufactured the saw through Black & Decker's acquisition of the assets of DPC.

The stipulations establish that DPC was incorporated in Pennsylvania in 1928 and its manufacturing enterprise was located in Lancaster, Pennsylvania. DPC manufactured only radial arm saws, and the radial arm saw that injured plaintiff was manufactured by DPC in 1941. On January 28, 1947, DPC changed its name to DeWalt, Inc. and continued to manufacture radial arm saws at the Lancaster plant. On September 26, 1949, DeWalt, Inc. entered into an agreement with American Machine and Foundry Company (AMF) for the sale of all DeWalt, Inc.'s assets in exchange for cash and shares of common stock of AMF. Under the terms of this agreement, AMF expressly assumed liabilities and all obligations of DeWalt, Inc. as of June 30, 1949.

On October 28, 1949, DeWalt, Inc. changed its name to D-W, Inc., and on that same date AMF formed a new corporation, DeWalt, Inc., in Pennsylvania. A few days later on November 1, 1949, the original DeWalt, Inc. assigned all of its assets to AMF. AMF then transferred all of the assets it had obtained from the original DeWalt, Inc. to the newly created DeWalt, Inc. in exchange for all of the outstanding stock of the newly formed DeWalt, Inc. In September 1952 D-W, Inc. was dissolved. The AMF-owned DeWalt, Inc. continued to manufacture only radial arm saws. All the saws it manufactured had the name DeWalt on them. On September 4, 1958, AMF, still the sole stockholder of DeWalt, Inc., liquidated and dissolved DeWalt, Inc., after the assignment of all the properties and assets of DeWalt, Inc. to AMF. After acquiring the properties and assets of DeWalt, Inc., AMF continued to manufacture radial arm saws through an unincorporated entity known as the DeWalt Division of AMF at the same Lancaster premises that DPC had occupied in 1928. The only products manufactured by

the DeWalt Division of AMF were radial arm saws that bore the trade name DeWalt.

In the late 1950s, Black & Decker discussed the possibility of expanding its product line into the radial arm saw business, and even though it had developed its own radial arm saw, it did not market it as the DeWalt Division of AMF appeared to be obtainable. Black & Decker concluded that it was better to purchase a company with a well-established name and product such as DeWalt. Another consideration was that Black & Decker would be able to use the patents that had originally been obtained by DPC.

On April 14, 1960, AMF formed a new DeWalt, Inc. in Delaware. On April 18, 1960, it was agreed that DeWalt, Inc. would issue 1,000 shares of DeWalt, Inc. common stock to AMF in exchange for all of the properties and assets of the DeWalt Division of AMF. On May 9, 1960, AMF and Black & Decker entered into an agreement and a plan of reorganization. Under this plan, AMF agreed to convey all of the DeWalt, Inc. stock to Black & Decker in exchange for 120,000 shares of the common stock of Black & Decker.

After Black & Decker purchased the stock of the third generation DeWalt, Inc. in 1960, the manufacture of products bearing the name DeWalt continued at the same premises in Lancaster; however, the line of products bearing the name DeWalt expanded to include other products in addition to radial arm saws.

In September 1964, Black & Decker decided to dissolve DeWalt, Inc. Pursuant to the plan of liquidation and dissolution, on September 26, 1964, Black & Decker received from DeWalt, Inc. all of its properties, assets, and good will. After DeWalt, Inc. was dissolved, Black & Decker continued to manufacture radial arm saws bearing the name DeWalt at the Lancaster premises.

When Black & Decker purchased the stock of DeWalt, Inc., it replaced the top management of DeWalt, Inc. with new personnel.

The sales representatives of the DeWalt Division of AMF who continued to work for DeWalt, Inc. were no longer independent, exclusive contractors and became employees of Black & Decker. In 1984 Black & Decker sold some of the manufacturing line of DeWalt saws to Lancaster Machinery Company. However, Black & Decker continued to manufacture the tenand twelve-inch radial arm saws bearing the name DeWalt, and it continues to produce radial arm saws bearing the name DeWalt today.

Pursuant to the transfer of assignment from DeWalt, Inc. in 1964, Black & Decker acquired all the properties, assets, business and good will of DeWalt; the know-how, trade secrets, inventions, patents, patent applications, trademarks, copyrights, and trade names of DeWalt, Inc.; plants, buildings, machinery, equipment, work in process, materials, and supplies; contracts and license agreements of all kinds, cash on hand, and all books and records covering the operations of the business of DeWalt. Further, by Instrument of Assumption dated September 26, 1964, Black & Decker agreed "to be liable for all obligations, debts and liabilities, both direct and contingent, of DeWalt of whatsoever nature and kind."

It is significant that after plaintiff filed his complaint against DPC, the sheriff on July 23, 1981 served Black & Decker's Division Controller of DPC, at its manufacturing plant in Lancaster, Pennsylvania. An answer was filed in the name of DPC by a New Jersey law firm hired by Home Insurance Company, the insurance carrier of Black & Decker.

I.

Black & Decker alleges a denial of due process asserting that plaintiff failed to file any pleading asserting a claim against it. Plaintiff counters that Black & Decker participated in the suit from the outset and that prior decisions by the Superior Court, Law Division and this court preclude Black &

Decker from raising the issue in this appeal because of the ...


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