HOUSTON, LUZ M. v. MCNEILUS TRUCK AND MANUFACTURING, I ( 2015 )

SUPREME COURT OF THE STATE OF NEW YORK
Appellate Division, Fourth Judicial Department
897
CA 13-02210
PRESENT: SMITH, J.P., FAHEY, LINDLEY, WHALEN, AND DEJOSEPH, JJ.
LUZ M. HOUSTON, AS ADMINISTRATRIX OF THE ESTATE
OF ROBERT M. HOUSTON, SR., DECEASED,
PLAINTIFF-RESPONDENT,
V MEMORANDUM AND ORDER
MCNEILUS TRUCK AND MANUFACTURING, INC., ET AL.,
DEFENDANTS,
H LEASING COMPANY, LLC AND CLARENCE CENTER COFFEE
COMPANY & CAFÉ CORP., DEFENDANTS-APPELLANTS.
(APPEAL NO. 1.)
MARCUS & CINELLI, LLP, WILLIAMSVILLE (DAVID P. MARCUS OF COUNSEL), FOR
DEFENDANT-APPELLANT H LEASING COMPANY, LLC.
KENNEY SHELTON LIPTAK NOWAK LLP, BUFFALO (RICHARD T. SARAF OF
COUNSEL), FOR DEFENDANT-APPELLANT CLARENCE CENTER COFFEE COMPANY &
CAFÉ CORP.
LIPSITZ GREEN SCIME CAMBRIA LLP, BUFFALO (JOHN A. COLLINS OF COUNSEL),
FOR PLAINTIFF-RESPONDENT.
Appeals from an order of the Supreme Court, Erie County (James H.
Dillon, J.), entered April 18, 2013. The order, among other things,
denied the motion of defendant Clarence Center Coffee Company & Café
Corp. for summary judgment and denied in part the motion of defendant
H Leasing Company, LLC for summary judgment.
It is hereby ORDERED that the order so appealed from is modified
on the law by granting that part of the motion of defendant H Leasing
Company, LLC for summary judgment dismissing the strict products
liability cause of action and all related cross claims against it, and
as modified the order is affirmed without costs.
Memorandum: Plaintiff commenced this action against various
defendants, seeking damages arising from the death of decedent during
a garbage truck accident. Insofar as relevant here, plaintiff sought
damages from defendant Clarence Center Coffee Company & Café Corp.
(Clarence Coffee), the lessee of the property where the accident
occurred, for negligently permitting a dangerous condition to exist on
the leased premises, and also sought damages for negligence against
defendant H Leasing Company, LLC (H Leasing), which owned the truck
and leased it to another defendant that was H Leasing’s corporate
sibling. Also insofar as relevant here, Clarence Coffee and H Leasing
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moved for summary judgment dismissing the complaint and all cross
claims against them. Plaintiff opposed the motions and cross-moved
for leave to serve an amended complaint that would add a strict
products liability cause of action against H Leasing. H Leasing
opposed the cross motion, and also contended that, if the court were
to permit the amendment of the complaint, summary judgment should also
be granted in its favor on the new cause of action. Clarence Coffee
and H Leasing appeal from an order in which Supreme Court, inter alia,
denied Clarence Coffee’s motion, granted plaintiff’s cross motion and
granted that part of H Leasing’s motion with respect to the claim
arising from Vehicle and Traffic Law § 388, reserved decision on that
part of the motion with respect to the negligence claims against it,
and denied the remainder of the motion.
Contrary to the contention of Clarence Coffee, the court properly
denied its motion for summary judgment dismissing the complaint and
cross claims against it. The complaint alleged that Clarence Coffee
negligently permitted a dangerous condition to exist on the property
by failing to provide safe and unobstructed access to the dumpster
that decedent was attempting to empty into the garbage truck, and that
decedent’s injuries were the foreseeable result of that negligence.
We reject Clarence Coffee’s contentions that it established as a
matter of law that there was no dangerous condition, that the accident
was not the foreseeable result of any negligence on its part, and that
decedent’s negligence was the sole proximate cause of his injuries.
The issue “whether a dangerous or defective condition exists on the
property of another so as to create liability depends on the peculiar
facts and circumstances of each case and is generally [one] of fact
for the jury” (Trincere v County of Suffolk, 90 NY2d 976, 977
[internal quotation marks omitted]; see Bielicki v Excel Indus., Inc.,
104 AD3d 1318, 1318), and “[q]uestions concerning what is foreseeable
are generally left to a jury to determine” (Baker v Sportservice
Corp., 142 AD2d 991, 993). Here, Clarence Coffee failed to meet its
initial burden on the motion with respect to all of those issues, and
thus the court properly denied its motion (see generally Alvarez v
Prospect Hosp., 68 NY2d 320, 324).
We agree with H Leasing, however, that the court erred in denying
that part of its motion for summary judgment dismissing the strict
products liability cause of action and all related cross claims
against it. We therefore modify the order accordingly. Initially, we
note that H Leasing has not presented any argument in support of its
contention that the court erred in granting plaintiff’s cross motion
for leave to serve an amended complaint containing that cause of
action, and we thus assume, arguendo, that the court properly granted
the cross motion. We also note that, contrary to the dissent’s
conclusion, the court denied that part of H Leasing’s motion for
summary judgment dismissing the strict products liability cause of
action. H Leasing initially moved for summary judgment dismissing the
complaint against it, when the complaint contained a single cause of
action, for negligence, against H Leasing. In opposition to that
motion, plaintiff alleged that recovery was also sought pursuant to
Vehicle and Traffic Law § 388, and, in addition, plaintiff cross-moved
for leave to amend the complaint to include a strict products
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liability cause of action against H Leasing. In reply, H Leasing
opposed the cross motion and contended that section 388 did not apply,
so it should be awarded summary judgment on such a claim. In the
alternative, H Leasing also asked the court to grant summary judgment
in its favor on the strict products liability cause of action if the
court permitted plaintiff to amend the complaint. In the order on
appeal, the court granted summary judgment in favor of H Leasing with
respect to the Vehicle and Traffic Law § 388 claim, reserved decision
with respect to the negligence cause of action, and denied H Leasing’s
motion in all other respects. Consequently, the final denial could
only have referred to that part of the motion for summary judgment
dismissing the strict products liability cause of action because all
of H Leasing’s requests in the motion other than that had been
resolved by the remaining clauses in the pertinent ordering paragraph.
We conclude that the court erred in denying that part of the
motion. “It appears universally accepted as New York law that strict
products liability will not apply to finance lessors which merely
offer the use of money to acquire goods but otherwise neither market a
product nor place it in the stream of commerce” (Gonzalez v Rutherford
Corp., 881 F Supp 829, 846 [ED NY]; see Bickram v Case I.H., 712 F
Supp 18, 22 [ED NY]). We reject plaintiff’s contention that H Leasing
is the owner and lessor of the truck, and it is therefore subject to
strict products liability because it is in the business of leasing
equipment. The cases permitting strict products liability actions
against lessors involve leasing entities that either actually take
possession of the equipment at issue and lease it to the public (see
e.g. Wengenroth v Formula Equip. Leasing, Inc., 11 AD3d 677, 680; see
generally Winckel v Atlantic Rentals & Sales, 159 AD2d 124, 128-129),
or are financing arms of the manufacturer (see e.g. Motelson v Ford
Motor Co., 101 AD3d 957, 959, affd ___ NY3d ___ [Nov. 18, 2014]). In
those situations, the principles of strict products liability may
properly be applied to such lenders in order to further the policy
goals of such liability, i.e., ensuring that products are safe by
permitting an action to go forward “when imposing liability would
provide injured consumers with a greater opportunity to commence an
action against the party responsible, fix liability on one who is in a
position to exert pressure on the manufacturer to improve the safety
of the product, or ensure that the burden of accidental injuries
occasioned by products would be treated as a cost of production by
placing liability upon those who market them” (Brumbaugh v CEJJ, Inc.,
152 AD2d 69, 71). Such goals would not be served by allowing a strict
products liability cause of action against H Leasing, however, because
it did not take possession of the truck, it is not in the business of
leasing equipment to the general public, and it is a financial arm of
the purchaser of the truck, not the manufacturer (cf. id. at 70-71).
Consequently, we agree with H Leasing “that strict products liability
should not be imposed upon [it], a finance lessor which merely offered
the use of money and neither marketed the machine nor placed it in the
stream of commerce” (Starobin v Niagara Mach. & Tool Works Corp., 172
AD2d 64, 65-66, lv denied 80 NY2d 753).
Finally, we reject plaintiff’s contention that H Leasing is
judicially estopped from contending that it is not in the business of
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leasing vehicles because it argued that it was in that business in
support of its contention that Vehicle and Traffic Law § 388 did not
apply due to the Graves Amendment (49 USC § 30106). “Judicial
estoppel may be invoked to prevent a party from inequitably adopting a
position directly contrary to or inconsistent with an earlier assumed
position in the same proceeding . . . , where the party had prevailed
with respect to the earlier position” (Lorenzo v Kahn, 100 AD3d 1480,
1482-1483 [internal quotation marks omitted]; see Zedner v United
States, 547 US 489, 504). Here, although H Leasing made that
argument, there is no evidence in the record before us that the court
accepted that contention in dismissing the section 388 claim, and we
thus conclude on the record before us that the doctrine does not apply
(see Kolodin v Valenti, 115 AD3d 197, 201-202; see also Matter of
Costantino, 67 AD3d 1412, 1413).
All concur except WHALEN and DEJOSEPH, JJ., who dissent in part and
vote to affirm in the following Memorandum: We must respectfully
dissent in part, because we cannot agree with the majority that
defendant H Leasing Company, LLC (H Leasing) is entitled to summary
judgment dismissing plaintiff’s cause of action for strict products
liability. As the majority notes, subsequent to defendants’ summary
judgment motions, plaintiff cross-moved for leave to amend the
complaint to include a strict products liability cause of action
against H Leasing. In reply, H Leasing opposed the cross motion and
asked Supreme Court to grant summary judgment in its favor on the
strict products liability cause of action should the court permit
plaintiff to amend the complaint. The majority concludes that the
language in the court’s order denying H Leasing’s motion “in all other
respects” shows that the court determined H Leasing’s motion for
summary judgment on the strict products liability cause of action. We
disagree, and would affirm the order.
Initially, we note that there is no dispute that H Leasing’s
original summary judgment motion did not contemplate dismissal of the
strict products liability cause of action because it had not been
pled. Plaintiff sought to amend the complaint to allege a strict
products liability cause of action, and the court granted that
request. H Leasing did not make a separate motion for summary
judgment with respect to that cause of action; instead, it merely
asked for summary judgment in reply papers, which is improper (see
Azzopardi v American Blower Corp., 192 AD2d 453, 454). Further,
summary judgment on strict products liability would also have been
premature because H Leasing never submitted an answer with respect to
that cause of action and thus never joined issue in that respect (see
CPLR 3212 [a]). Strict adherence to the joinder requirement is
required (see City of Rochester v Chiarella, 65 NY2d 92,101; Park
Ridge Hosp. v Richardson, 175 AD2d 631, 631), and summary judgment is
improper where plaintiff was allowed to amend the complaint but
defendant had not yet served an answer to the amended complaint (see
Organek v Harris, 90 AD3d 1512, 1513-1514).
We disagree with the majority’s conclusion that the order’s
language denying the motion “in all other respects” could only have
referred to the dismissal of the strict products liability cause of
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action because all of H Leasing’s requests in the motion other than
that had been resolved by the remaining clauses in the pertinent
ordering paragraphs. H Leasing’s motion for summary judgment
requested not only dismissal of plaintiff’s causes of action, but also
any and all cross claims against it. The ordering paragraphs did not
specifically address the granting or denying of the cross claims
against H Leasing, and thus in our view the language “in all other
respects” related to the court’s determination as to the cross claims,
not as the majority concludes, the strict products liability cause of
action.
Finally, summary judgment is also improper on the strict products
liability cause of action because the court did not have a copy of all
of the pleadings as required (see CPLR 3212 [b]), in the absence of an
answer by H Leasing with respect to the strict products liability
cause of action, and that failure warrants denial of the motion
regardless of whether it has merit (see generally Osgood v KDM Dev.
Corp., 92 AD3d 1222, 1223-1224).
Entered: January 2, 2015 Frances E. Cafarell
Clerk of the Court