Opinion
99 Civ. 4863 (JFK).
January 28, 2002.
Michael B. Golden, Robinson Cole LLP, New York, NY., For Plaintiff.
Lloyd Herman, D'Amato Lynch, New York, NY., For Defendant/Third Party Plaintiff Hunter Fan Co., Inc.
Joseph J. Gulino, Gulino Ryan, P.C., New York, NY., For Defendant Capitol Lighting of Paramus, Inc.
Richard Lambert, Lambert Weiss, New York, NY., For Third Party Defendant Lionel Hampton.
Eugene T. Boule, Wilson, Elser, Moskowitz, Edelman Dicker LLP, New York, NY., For Third Party Defendant Lincoln Plaza Associates.
OPINION and ORDER
Before this Court are Cross Motions for summary judgment of Defendant/Third Party Plaintiff Hunter Fan and Defendant Capitol Lighting of Paramus. Hunter Fan moves to dismiss the claims of plaintiff The Travelers Indemnity Company of Illinois and all cross-claims and counter claims. Capitol Lighting moves to dismiss the claims of plaintiff Travelers Indemnity Company and seeks indemnification, costs and attorneys' fees from Hunter Fan. For the reasons outlined below, the Court denies all motions.
Background
Plaintiff the Travelers Indemnity Company of Illinois ("Travelers") was and still is an Illinois corporation with its principal place of business located in Hartford, Connecticut. See Am. Compl. ¶ 4. Defendant/Third Party Plaintiff Hunter Fan, Inc. ("Hunter") was and still is a Delaware corporation with its principal place of business located in Memphis, Tennessee. See id. ¶ 5. Defendant Capitol Lighting of Paramus, Inc. ("Capitol") was and still is a New Jersey corporation with its principal place of business located at Route 17, Paramus, New Jersey. See id. ¶ 7. Third Party Defendant Lionel Hampton ("Hampton") was, at all relevant times, the lessee and resident at 20 West 64th Street, Apt. 28K, New York, New York. See id. ¶ 12.
This Court has jurisdiction pursuant to 28 U.S.C. § 1332 because the action is between citizens of different states and the matter in controversy exceeds the sum of $75,000, exclusive of interest and costs.
On January 7, 1997, a fire broke out in Hampton's apartment. The fire allegedly started in Hampton's bedroom when a halogen lamp fell over onto the bed setting fire to the bed linens. There is no evidence as to exactly how the lamp tipped over. The fire consumed Hampton's apartment and caused damage to the building, other apartments in the building, and three individuals. Travelers had issued property insurance policies to the owners and various tenants of the building, and pursuant to those policies paid out over one million dollars in claims arising from this fire. Travelers brought this subrogation action against Hunter and Capitol seeking reimbursement with interest of the amounts it had paid to settle these claims.
In its Amended Complaint, Travelers alleges that in or before February 1996, Hunter imported, distributed, and/or sold certain Halogen Adjustable Arm Torchiere Floor Lamps, model number 20727BL in black and model number 20727WH in white. Travelers alleges that Hunter distributed lamps to Defendant Capitol for resale to the public. Hampton's assistant Caprice Titone ("Titone") had purchased two lamps for Hampton, and purchased the fire-causing lamp (the "Lamp") at Capitol. Hampton's valet Rubin Cox ("Cox") assembled the Lamp. Hampton used both lamps in his bedroom in a position whereby the adjustable arm was horizontal to the floor allowing the shade and bulb to point toward the floor ("the downbridge position"). The first lamp fell over at least once burning a hole into the bedroom carpet. That lamp later broke and Hampton began to use the second lamp. Travelers alleges that the Lamp was defectively designed because, despite representations on the packaging, the Lamp did not meet applicable standards; the Lamp was inherently dangerous became the halogen bulb it required can reach temperatures of up to 970 degrees Fahrenheit; and the instructions furnished with the Lamp failed to warn of the Lamp's instability. Travelers asserts eight claims for relief including causes of action in strict liability, breach of warranty, and negligence. Hunter now moves for summary judgment to dismiss all claims brought by Travelers and all cross-claims and counter claims. Capitol moves to dismiss Travelers' claims and asserts claims for full indemnification and reimbursement of all costs, disbursements and legal fees from Hunter.
Discussion
A motion for summary judgment may be granted under Fed.R.Civ.P. 56 if the entire record demonstrates that "there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250 (1986). The moving parties bear the burden of proving that no material facts are in dispute. Donahue v. Windsor Locks Bd. of Fire Comm'rs, 834 F.3d 54, 57 (2d Cir. 1987). When viewing the evidence, the Court must "assess the record in the light most favorable to the non-movant and draw all reasonable inferences in its favor." Delaware Hudson Ry. Co. v. Consol. Rail Corp., 902 F.2d 174, 177 (2d Cir. 1990); McLee v. Chrysler Corp., 109 F.3d 130, 134 (2d Cir. 1997). In determining whether a genuine issue of fact has been raised, a court "must resolve all ambiguities and draw all reasonable inferences against the moving party." Donahue, 834 F.3d at 57. Courts should "take care not to abort a genuine factual dispute prematurely and Thus deprive a litigant of his day in court."Id. at 55. Once the movant shows that there are no genuine issues of material fact, The opposing party must produce sufficient evidence to permit a reasonable jury to return a verdict in its favor, identifying "specific facts showing that there is a genuine issue for trial."Anderson, 477 U.S. at 248, 256. If the court finds that there are factual disputes regarding material issues, summary judgment is not appropriate.See id. at 249; see also Repp K R Music, Inc. v. Webber, 132 F.3d 882, 890 (2d Cir. 1997) ("Clearly, the duty of a court on a motion for summary judgment is . . . not to decide factual issues. In this regard, the court's task is issue identification, not issue resolution.").
I. Hunter's Motion for Summary Judoment A. Product Identification
Capitol has adopted Hunter's arguments in its cross-motion for summary judgment. Therefore all references to and decisions made based on arguments made by Hunter will apply to Capitol.
Hunter argues that it cannot be held liable because Travelers cannot prove that Hunter manufactured the Lamp. In a products liability action, the plaintiff bears the burden of proving that the defendant manufactured the product at issue. See 210 E. 86th St. Corp. v. Combustion Eng'g, Inc., 821 F. Supp. 125, 142 (S.D.N.Y. 1993). A plaintiff must establish by competent proof that the defendant manufactured and placed the injury-causing defective product into the stream of commerce. Healey v. Firestone Tire Rubber Co., 87 N.Y.2d 596, 601 (N Y 1996). The evidence of a manufacturer's identity must establish that it is "reasonably probable, not merely possible or evenly balanced" that defendant was the source of the offending product. Id. at 601-02; Moffett v. Harrison Burrowes Bridge Contractors, Inc., 266 A.D.2d 652, 654 (N.Y.App.Div. 1999). A manufacturer's identity may be established by circumstantial evidence, even if the allegedly defective product no longer exists.Healey, 87 N.Y.2d at 601. However, speculative or conjectural evidence of a manufacturer's identity is not enough. Id. at 602; see also Franklin v. Krueger Int'l, Inc., No. 96 Civ. 2408, 1997 WL 691424 at *4 (S.D.N.Y. Nov. 5, 1997) (finding plaintiff's attorney's mere assertions that the defective chair resembled a chair manufactured by defendant shown in a photograph insufficient evidence).
Hunter argues that its Model 20727 lamp is virtually identical to torchiere lamps manufactured or sold by numerous other companies and that there are several differences between Model 20727 and the Lamp, including differences in hole pattern and weight. Hunter claims that the marking "SF Made in Taiwan 211" found on the base of the Lamp is not used on Model 20727 lamps. Hunter claims it provides an Allen wrench and halogen bulb with every lamp and the absence of these items in the Lamp's packaging proves the Lamp was not a Hunter product. Capitol claims not to have sold any lamps during the relevant time period to Titone. Travelers has offered no evidence such as invoices, photos, other documents or deposition testimony to prove the Lamp's purchase thereby connecting it to a store and subsequently to a manufacturer.
Travelers responds that, while there is no receipt for the Lamp's purchase, there is a reimbursement check from Hampton to Titone dated March 1, 1996, indicating that the lamp was purchased before that date. (Titone Trans. at 65) Titone testified that she purchased two lamps for Hampton at Capitol and Fortunoff stores in New Jersey. Travelers argues that because Fortunoff was granted summary judgment and only Capitol remains as a distributor, Capitol sold the Hunter lamp during the relevant time period. Herman Lebersfeld, President of Capitol, testified that Capitol only sold lamps manufactured by Kenroy International, a subsidiary of Hunter. In particular, Capitol sold Hunter Model 20727 lamps during the relevant time period. (Lebersfeld Trans. at 20-22) Capitol cannot account for the sale of every Hunter lamp making it possible that one Model 20727 lamp was purchased by Titone. Travelers submits that it has not been established whether an Allen wrench came with the Lamp. Hampton's valet Rubin Cox assembled the lamp and testified that he does not remember seeing the wrench nor does he remember looking specifically for one. (Cox Trans. at 121) In addition, the physical remains of the Lamp, including the measurements of almost all of Lamp components, match Hunter exemplar lamps. The diameter of the base of the Lamp and the base of both Hunter exemplar lamps is the same. (Crombie Aff. ¶ 8) The lower and upper support poles of Model 20727 have the same diameter, length and weight as those of the Lamp. (Crombie Aff. ¶ 10)
Travelers has presented sufficient circumstantial evidence to create an issue of fact regarding whether Hunter was the manufacturer of the Lamp and Capitol was the distributor. Hampton s reimbursement check to Titone establishes a time frame for the Lamp's purchase, during which time Capitol cannot account for all of its sales of Model 20727 lamps. The similarity between the Lamp and Model 20727 has been shown to a "reasonable probability." Travelers has met its burden. Summary judgment is denied.
B. Design Defect
A defectively designed product is one which, when it leaves the seller's hands, is in a condition not reasonably contemplated by the ultimate consumer and is unreasonably dangerous for it's intended use.Voss v. Black Decker Manuf. Co., 59 N.Y.2d 102, 107 (N.Y. 1983). A product may be defective when it contains a manufacturing flaw, is defectively designed, or is not accompanied by adequate warnings. Liriano v. Hobart Corp., 92 N.Y.2d 232, 237 (N.Y. 1998).
1. Design Defect
Travelers claims that the Lamp was defectively designed and inherently dangerous because the surface of the halogen bulb reaches temperatures of up to 970 degrees Farenheit, the Lamp does not include a heat shield or other protective device to prevent the bulb from making contact with flammable objects, and the Lamp's design caused it to be inherently unstable and susceptible to tipping over. See Am. Compl. ¶¶ 70, 76-77. Hunter argues that the Lamp's design was not faulty, but that Hampton's use of the lamp in The downbridge position was misuse which caused it to tip over and ignite the fire. The claims of design defect and product misuse are thus intertwined. Accordingly, because issues of fact remain on the claim of product misuse, see infra Part I.D., the design defect claim must also be submitted to a jury.
2. Duty to Warn
Travelers alleges that the instructions that accompanied the Lamp failed to adequately warn consumers of the dangers associated with its heat, lack of a protective shield or screen, and its instability. See Am. Compl. ¶¶ 84, 89-90. Analyzing a failure to warn claim is an intensely fact-specific process which includes assessing the feasibility and difficulty of issuing warnings under the circumstances, the obviousness of the risk from actual use of the product, the knowledge of the particular product user, and proximate cause. See Anderson v. Hedstrom Corp., 76 F. Supp.2d 422, 440 (S.D.N.Y. 1999). A manufacturer may not be liable if the risks were sufficiently obvious to the user without a warning. Because of the factual nature of the inquiry, whether a danger is obvious is most often a jury question. Id. at 441; Liriano, 92 N.Y.2d at 309. Hunter argues that the danger here was obvious to Hampton based on his prior experience with the lamp falling over and burning a hole in the rug. However, courts have cautioned that judges should be wary of taking the issue of liability away from juries, even in situations where the relevant dangers might seem obvious. Anderson, 76 F. Supp.2d at 447. Therefore, whether the danger of using the lamp in the downbridge manner was an obvious danger should be determined by a jury.
A manufacturer has a duty to warn against latent dangers resulting from foreseeable uses of its product of which it knew or should have known, as well as a duty to warn of the danger of unintended uses of a product which are reasonably foreseeable. Liriano, 92 N.Y.2d at 237. A manufacturer may also be liable for failure to warn of foreseeable misuse. Id. at 240. Hunter argues That use in the downbridge position was not foreseeable because the Lamp was not depicted for use as a reading lamp. Hunter's expert Warren testified that proper use of the lamp was indicated by the diagrams, description as "torchiere" and the nature of the assembly. However, no language regarding what Hunter considered the "proper" configuration of its Model 20727 lamp is stated anywhere on the box, or anywhere on Hunter's Assembly Instructions. (Crombie Aff. ¶ 20) Paragraph 6 of Model 20727's Assembly Instructions states: "[t]he set screw is used to limit the movement of the arms. Raise the arm to a vertical position. Use the Allen wrench provided to turn in the set screw. To adjust the position of the arm assembly, loosen the adjusting handle, position the arms to the desired angle, then tighten the adjusting handle." Hunter's instructions allowed for adjustment to any position. The instructions do not warn against using the lamp in the downbridge position. Because the adequacy of warnings furnished by a manufacturer to avoid any foreseeable misuse by a consumer presents questions of fact, Johnson v. Johnson Chem. Co., Inc., 588 N.Y.S.2d 607, 610 (N Y App. Div. 1997) summary judgment is denied on this ground.
Additionally, there is an issue of fact as to proximate cause. Travelers must show that the presence of a warning would have caused Hampton and his staff to change their behavior. Where "a warning would not have given [a user] any better knowledge of the [product's] danger than he already had from prior use or than was readily discernible from observation, the absence of a warning could not have proximately caused his injuries." Barnes v. Pine Tree Mach., 261 A.D.2d 295, 295-96 (N.Y.App.Div. 1999). It is unknown whether, if Hunter had issued a warning against doing so, Hampton and his staff would not have used the lamp in the downbridge position. Hunter argues that the warning would not have had an effect because Hampton's prior experience with the first lamp falling over and burning the rug did not cause him to change his behavior. Hampton argues that because a serious fire did not result from these previous incidents, he was not aware of the possible damage. Further, because the first lamp ultimately broke, Hampton and his staff could have concluded that it fell over because it was always broken. Hunter contends that Cox's testimony regarding how similar he believed the two lamps to be shows that Hampton and his staff were aware of the dangers. (Cox. Trans. at 130) Therefore, there is an issue of fact as to what effect a warning would have had on the behavior of Hampton and his staff. Summary judgment is denied.
C. Subsequent modification
Hunter argues that it cannot be held liable because Cox improperly assembled the Lamp by not using the Allen wrench it claims it provides with every Model 20727 lamp. Hunter argues that using the lamp in the downbridge position would not have been possible had the setscrews been properly tightened with the Allen wrench. Hunter argues that this faulty assembly and use of the lamp in an unintended manner constituted a subsequent modification to the lamp.
When a consumer makes a subsequent modification which substantially alters the product and is the proximate cause of plaintiff's injuries, the manufacturer cannot be held liable. Robinson v. Reed-Prentice, 49 N.Y.2d 471, 485 (N.Y. 1980) (emphasis added). A user's substantial modifications of a product that render a safe product defective are not the manufacturer's responsibility. Id. at 479. Material alterations that destroy the "functional utility of a key safety feature" are not a manufacturer's responsibility. Id. at 480. When a product's design incorporates a certain safety feature, a manufacturer may be held liable under a design defect theory even though the removal of that safety feature caused the accident, provided the product was purposefully manufactured to permit its use without the safety guard. Lopez v. Precision Papers, 67 N.Y.2d 871, 873 (N.Y. 1986).
Hunter claims that the setscrews were a safety device; however, Hunter did not submit evidence that the setscrew was intended or marked as a safety device. There were no warnings or instructions regarding using the lamp in a particular manner. Further, it is unclear whether the Allen wrench was in the box of the lamp Hampton purchased allowing for the recommended assembly. Therefore, issues of fact remain regarding substantial modification and summary judgment is denied.
D. Product Misuse
Hunter claims that Hampton's use of the Lamp in the downbridge position constitutes misuse and absolves Hunter of liability. A manufacturer may be liable for failing to warn of foreseeable misuse of its product. Liriano, 700 N.E.2d at 304. Foreseeability requires knowledge of a certain misuse by the particular defendant or in the industry generally. See Amatulli v. Delhi Constr. Corp., 77 N.Y.2d 525, 533 (N.Y. 1991). Without evidence of knowledge, a defendant will not be held liable. Id. However, even when a consumer admits misuse, a question of fact remains regarding liability. The general rule is that there may be liability in such cases when it is proved that the abnormal use was reasonably foreseeable. See Johnson Chem. Co., 588 N.Y.S.2d at 610. Whether a particular misuse is reasonably foreseeable is ordinarily a jury question. Id. When a jury might conclude that plaintiff misused the product in a way which ought to have been foreseen by the defendants, an issue of fact has been demonstrated as to whether the warnings furnished by the defendant manufacturer were adequate. Id. Here, whether Hampton's use of the lamp was foreseeable and required a warning is a question I fact for the jury. Accordingly, summary judgment is denied.
E. Breach of Warranty
Travelers has conceded to Hunter's arguments regarding the warranty claims. Accordingly, those claims are dismissed.
II. Capitol's Motion
Capitol moved for summary judgment adopting Hunter's arguments on product identification and defectiveness, and making a separate argument on Travelers' negligence claim. Additionally, Capitol seeks indemnification and reimbursement from Hunter. In response, Hunter argues first that Capitol violated Local Civil Rule 56.1 by not submitting a sworn statement of material facts. Local Civil Rule 56.1 requires there "be annexed to the notice of motion [for summary judgment] a separate, short and concise statement of the material facts as to which the moving party contends there is no genuine issue to be tried. Failure to submit such a statement may constitute grounds for denial of the motion." Local Civ. R. 56.1(a). The rule further states that "[e]ach statement of material fact by a movant or opponent must be followed by citation to evidence which would be admissible, set forth as required by Federal Rule of Civil Procedure 56(e)." Local Civ. R. 56.1(d). Capitol submitted only the Declaration of its counsel Joseph J. Gulino in support of its motion which makes references to exhibits in two paragraphs whet referring to its motion papers and to Lebersfeld's affidavit. (Gulino Decl. ¶¶ 5, 9)
Failure to comply with the requirements of Local Civil Rule 56.1 constitutes grounds for denial of a motion. MTV Networks v. Lane, 998 F. Supp. 390, 393 (S.D.N.Y. 1998) (denying defendant's motion for summary judgment because his papers failed to establish the absence of a factual dispute); see also Rossi v. New York City Police Dep't, No. 94 Civ. 5113 (JFK), 1998 WL 65999, at *4 (S.D.N.Y. Feb. 17, 1998) (denying plaintiff's motion for summary judgment for failure to comply with Local Civil Rule 56.1 by not annexing a short and concise statement of material facts). The moving party's failure to comply with the Rule is particularly troubling because the moving party bears the burden of demonstrating that there is no genuine issue of material fact. Reiss et al. v. County of Rockland, No. 84 Civ. 1906, 1985 WL 426, at *1 (S.D.N.Y. Mar. 19, 1985) (denying summary judgment where movant submitted no statement at all and granting leave to re-file in compliance with the rule). A court may decide not to consider any statements made by a party in their Rule 56.1 statement that are not supported by a citation to the record. See Shepard v. Frontier Communication Servs., 92 F. Supp.2d 279, 284 (S.D.N.Y. 2000) (granting defendants' motion for summary judgment where several statements of disputed facts were not supported by a citation to the record).
A district court has broad discretion whether to overlook a party's failure to comply with local court rules. Holtz v. Rockefeller Co., Inc., 258 F.3d 62, 73 (2d Cir. 2001). While this Court could deny Capitol's motion on the basis of Capitol's failure to comply with Local Civil Rule 56.1, there is no need to do so on that basis as Capitol's motion is denied on other grounds.
A. Negligence
Capitol argues that it is not liable in negligence because the lamp was sold in a sealed container and no alterations were made to the lamp. Under New York law, a retailer can be held liable in negligence if it fails to detect a dangerous condition that it could have discovered during a normal inspection while the product was in its possession. See McLaughlin v. Mine Safety Appliances Co., 11 N.Y.2d 62, 68 (1962);Schwartz v. Macrose Lumber Trim Co., 270 N.Y.S.2d 875, 886-87 (N.Y.Sup.Ct. 1966). A seller has a duty to give reasonable warnings of known latent dangers. McLaughlin, 11 N.Y.2d at 68-69. However, a retailer cannot be held liable for injuries sustained from the contents of a sealed product even though a test to have uncovered a potential danger; no such obligation is imposed on a retailer. Brownstone v. Times Square Stage Lighting Co., Inc., 333 N.Y.S.2d 781, 782 (N.Y.App.Div. 197 2); Alfieri v. Cabot Corp., 235 N.Y.S.2d 753, 757 (N.Y.App.Div. 196 2) aff'd., 13 N.Y.2d 1027 (N.Y. 1963).
Lebersfeld testified that Capitol assembled several of its lamps, including Model 20727, as floor models for display and sale to customers. (Lebersfeld Trans. at 149-50, 160) Titone also testified that the lamps she purchased were on display in the store showrooms (Titone Trans. at p. 21, 38, 92) and that the salesperson demonstrated using the lamp with the bulb tilted toward either the ceiling or floor. (Id. at 24) Capitol claims the packages were sealed and it had no duty to inspect them. No evidence has been submitted regarding whether Capitol inspected the display lamps. An inspection of those lamps may have revealed a danger. Therefore an issue of fact remains as to whether Capitol met its duty to inspect. Summary judgment is denied.
B. Indemnification and Reimbursement
Capitol argues that it is entitled to indemnification and reimbursement for fees, costs and disbursements from Hunter. Capitol argued that it engaged in no wrongdoing and full responsibility lies with Hunter. Capitol's motion for indemnification is premature.
Indemnity obligations can be created by contract or implied in Law. Here there was no contractual agreement; the issue then is whether Capitol is entitled to common law indemnification. The right to indemnification may be implied by law to prevent an unfair result or the unjust enrichment of one party at the expense of another. Cochrane v. Warwick Assoc., Inc., 723 N.Y.S.2d 506, 508 (N.Y.App.Div. 2001). The right of common law indemnification belongs to parties found vicariously liable without proof of any negligence or active fault on their own part. Colyer v. K Mart Corp., 709 N.Y.S.2d 758, 759 (NY App. Div. 2000). A finding that Capitol was negligent would preclude an indemnity award. Because an issue of fact remains as to Capitol's negligence. this Court cannot at this time find Hunter liable indemnification. Capitol's motion is denied.
Capitol has moved to recover attorney's fees and costs incurred during this litigation. The universal rule is not to allow a litigant to recover damages for the amounts incurred in the successful prosecution or defense of its rights. Mighty Midgets Inc. v. Centennial Ins. Co., 47 N.Y.2d 12, 21-22 (N Y 1979). Under The American Rule, no attorneys' fees are recoverable absent express statutory authority for such an award. See Pennsylvania v. Delaware Valley Citizens' Council for Clean Air, 478 U.S. 546, 561-62 (1986); Jane Doe v. Karadzic, No. 93 Civ. 0878, 2001 WL 986545, at *2 (S.D.N.Y. Aug. 28, 2001). Here this is no statutory authority for an award. Therefore, Capitol's motion is denied.
Conclusion
For the reasons outlined above, Hunter's and Capitol's Motions for Summary Judgment are hereby denied. Capitol's motion for indemnification, and reimbursement for costs and fees is denied.
The parties are hereby given a Ready for Trial date of May 13, 2002. A copy of this Court's Pre-trial Requirements is forwarded to counsel with this Opinion.
SO ORDERED.