On appeal from the Superior Court of New Jersey, Law Division, Passaic County, the opinion is reported at 294 N.J. Super. 407 (Law Div. 1996).
Before Judges Baime, Brochin and Braithwaite.
The opinion of the court was delivered by: Braithwaite, J.A.D.
The opinion of the court was delivered by
This appeal involves the issue of product line successor liability Plaintiff, Ramon Class, was injured at work in November 1988, while operating a press that was manufactured in 1954. The original manufacturer of the press, American Roller Die Corporation (Ardcor), dissolved prior to the accident. Plaintiff initiated a product liability action naming various corporations as defendants. Three of those defendants, Lee Wilson Engineering Company, Inc. (Wilson), American Roll Tooling, Inc. (American), and P & F Industries (P & F), settled with plaintiff for $875,000, with each defendant paying $250,000. American paid plaintiff an additional $125,000 to settle a separate failure to warn claim that is not raised on appeal. The settlement agreement further provided that Wilson, American, and P & F retained the right to seek a judicial determination of their individual liability as alleged seriatim successors to the original manufacturer of the press and their rights and obligations inter sese.
The chain of succession of the Ardcor product line included Wilson, the first successor that owned and manufactured the product line from 1963 until 1968. Wilson then entered into a sales agreement with the second successor, P & F, that owned and stored the product line between 1968 and 1970, but did not manufacture any products. P & F entered into a sales agreement with American, the third successor, that has owned and continued to manufacture the product line since 1970.
In determining liability, the trial Judge relied on Ramirez v. Amsted Industries, Inc., 86 N.J. 332 (1981), and Nieves v. Bruno Sherman Corp., 86 N.J. 361 (1981), and imposed successor liability on both Wilson and American, and held them equally liable for plaintiff's damages. She found that P & F, was not subject to successor liability because it only owned and stored the assets, but did not manufacture the product line.
In addition, in construing the purchase agreement between Wilson and P & F, the Judge held that Wilson was obligated to pay P & F a stipulated amount of $29,000 that P & F expended in attorneys fees in defending the lawsuit by plaintiff.
Wilson appeals, asserting that the Judge improperly imposed successor liability upon it when American is a currently viable manufacturer. Essentially, Wilson argues that since American is still a viable entity, it should be solely liable for plaintiff's damages.
In the alternative, Wilson asserts that if successor liability was properly imposed, then the Judge erred in ordering equal payments by Wilson and American to satisfy plaintiff's damages. Wilson claims that it should only be responsible for an apportionment of the damages to plaintiff based on a contributive share of plaintiff's loss, measured by the number of years that each corporation owned and manufactured the Ardcor product line. Finally, Wilson contends that the Judge improperly determined that it should have to pay attorney fees and defense costs to P & F.
American cross-appeals, arguing that successor liability was improperly imposed upon it and that Wilson should be solely responsible for plaintiff's damages. Alternatively, American asserts that if both Wilson and American are responsible successors, they should pay an equal share of plaintiff's damages.
We affirm the trial Judge's determination that both Wilson and American are successor corporations and therefore are liable for plaintiff's damages under the product line theory, substantially for the reasons expressed by the trial Judge in her published opinion found at 294 N.J. Super. 407, 429-34 (Law Div. 1996). *fn1 However, we reverse the order directing an equal apportionment of damages between Wilson and American and hold that under these circumstances, plaintiff's damages should be apportioned based upon the number of years that the successor corporations manufactured the product line. We also reverse the order directing Wilson to pay attorneys fees and defense costs to P & F.
We need not reiterate the facts necessary for a resolution of the issues on appeal because they are fully set forth in the trial Judge's opinion. Suffice it to say, Wilson purchased Ardcor's "assets of every kind and description . . . ,except for certain listed assets not relevant here" on April 1, 1963. Id. at 413. Wilson continued the production of ...