|
Table of Contents
| Features | News
& Trends | Departments
| Experts | Classifieds
News & trends
March 2008 | Volume 44, Issue 3
Arizona high court upholds several-only liability in products cases
Susan J. Pannell, Associate Editor
The Arizona Supreme Court has held that a 1987 state law making joint-tortfeasor
liability several only, instead of joint and several, extends to strict
products liability actions and requires that fault be apportioned
among tortfeasors, even if this means that the plaintiff cannot recover
full damages because one or more of the defendants are insolvent.
The court affirmed a court of appeals ruling that the seller of
a water filtration system and the manufacturer of defective components
installed in the system could not be held jointly liable when the
system caused water damage in a home. Although one defendant had gone
out of business, the plaintiff could not recover full payment from
the other because the law abolished joint liability. (St. Farm
Ins. Cos. v. Premier Manufactured Sys., Inc., 172 P.3d 410 (Ariz.
2007).)
“Under this system of several-only liability, plaintiffs,
not defendants, bear the risk of insolvent joint tortfeasors,”
the court said. It added that the state constitution “provides
only that a statute cannot limit the ‘amount recovered’;
it is not a guarantee that the entire judgment will be collectible
from a single defendant or indeed from any of the responsible parties.”
A homeowner insured by State Farm Insurance Cos. discovered that
a leak in his water filtration system had damaged his home and personal
property. Premier Manufactured Systems, Inc., the seller of the system,
had included in its assembly some components made by Worldwide Water
Distributing, Ltd.
State Farm paid the homeowner $19,271 and then, as his subrogee,
sued Premier and Worldwide. The insurer argued that each was strictly
liable for distributing a defective product, and jointly and severally
liable for the whole amount of the homeowner’s damage.
The trial court rejected State Farm’s motion for summary judgment,
and State Farm and Premier entered into a stipulated judgment providing
that Worldwide was 75 percent at fault and Premier 25 percent at fault.
However, Worldwide, which did not answer the complaint, had gone out
of business and had no insurance coverage. The stipulation allowed
State Farm to appeal the trial court’s rejection of its joint-and-several-liability
argument, and it did so.
The court of appeals affirmed, holding that under a 1987 amendment
to the state’s Uniform Contribution among Tortfeasors Act, the
defendants’ liability was several only and fault must be allocated
between them, and that applying comparative-fault principles to strict
products liability actions did not violate the state constitution.
The state supreme court unanimously affirmed in an opinion by Justice
Andrew Hurwitz. The 1987 amendment establishes a system of comparative
fault, the court said, making each tortfeasor responsible for paying
its percentage “and no more.”
The court rejected State Farm’s argument that the abolition
of joint liability did not apply here by virtue of an amend;ment
provision that imposes joint liability where another person was acting
as “agent or servant” of the party.
“The mere purchase of a product from a supplier does not establish
a master-servant or principal-agent relationship between the buyer
and seller,” the court said.
“[I]n a strict products liability action, the various participants
in the chain of distribution are liable not for the actions of others,
but rather for their own actions in distributing the defective
product,” the court explained.
The court also rejected the argument that precluding joint and several
liability in a strict products liability action violates a provision
of the state constitution that ensures an injured claimant the right
to bring an action and bars statutory limitations on damages.
Several-only liability does not effectively abolish any causes of
action, the court concluded, because a claimant may still sue all
participants in a defective product’s chain of distribution.
Moreover, several-only liability does not limit the damages recoverable;
instead, it serves only to limit each defendant’s liability
to the damages resulting from his or her conduct and is consistent
with the state constitution, the court concluded.
Courts in other states, including California and Tennessee, have
held that participants in the chain of distribution may be jointly
and severally liable for an injury caused by a defective product.
The Arizona court, however, declined to take guidance from these decisions.
Table of Contents | Features
| News & Trends | Departments
| Experts | Classifieds
Frequently Asked Questions about TRIAL
| Past Issues of TRIAL
Send your comments and questions about
the online version of TRIAL to us at trial@justice.org
|
