July 1995 NY Bar Exam
Questions & Sample Answers

Question Four

ON MARCH 10, 1990, Dan, the owner and operator of a heav equipment rental business in Albany, New York, rented and delivere a new crane to Con, a general contractor who was buildin Riverview, a high rise apartment building in Albany. Dan als provided the services of Dan's employee, Op, to operate the crane Dan had purchased the crane new from Man, the manufacturer, and ha not used it before renting it to Con.

On June 10, 1990, Pete, a mason employed by Con, was seriousl injured while working on a lower floor of Riverview when he wa struck by a steel beam which had fallen out of the load lockin device which was part of Dan's crane.

On May 15, 1993, Pete commenced an action against Dan in Suprem Court, Albany County, to recover damages for his injuries. Pete' complaint alleged that his injuries had been caused by a defect i the load locking device of the crane or, in the alternative, tha his injuries were caused by Op's negligent operation of the crane Dan's answer consisted of a general denial.

On July 1, 1994, Dan commenced a third party action against Man Dan's third party complaint alleged that the accident had bee caused solely by a defect in the load locking device of the cran and demanded judgment over against Man for the full amount of an judgment which Pete might recover against Dan. Man's answe consisted of a general denial and an affirmative defense that Dan' action was barred by the statute of limitations.

Pete's cause of action against Dan and Dan's third party actio against Man were tried together in June 1995 before the court and jury. At the trial, Pete offered proof of his injuries, medica expenses and lost wages. The only other proof offered by Pete wa that, while working at Riverview, he was injured when he was struc by a steel beam which hit him after it fell from a crane owned b Dan and operated by Dan's employee, Op.

The evidence offered by Dan on his case consisted o uncontroverted proof of Dan's purchase of the new crane from Ma and the uncontroverted testimony of Op that he was a qualifie crane operator thoroughly familiar with the cranes manufactured b Man. Op further testified that that he was operating the crane i accordance with the manufacturer's operating manual and that th steel beam fell from the load locking device for no apparen reason. After Dan rested, Man rested without offering any evidence.

Dan duly moved for judgment dismissing Pete's complaint on th ground that Pete had failed to prove a prima facie case agains Dan. Man duly moved for judgment dismissing Dan's third part complaint on the grounds that (i) Dan's third party action wa barred by the statute of limitations, and (ii) the evidence offere at trial was insufficient to establish a prima facie case agains Man. The court (1) denied Dan's motion and (2) denied both branche of Man's motion.

Before the case was submitted to the jury, Pete agreed on th record to settle his case against Dan for $250,000, and Pet discontinued his action against Dan on the merits. Thereupon Ma moved for judgment dismissing Dan's third party complaint agains Man on the ground that the settlement terminated all of Dan' rights against Man. The court (3) granted Man's motion.

Were the numbered rulings correct?

ANSWER TO QUESTION FOUR

(1) The court correctly denied Dan's motion to dismiss Pete' complaint. The issue is whether Pete has presented enough evidenc to prove a prima facie case of strict liability in tort and o negligence.

A merchant in the Chain of Commerce is strictly liable in tor for defects in a product if the defect existed in the product a the time it left the merchant's control and if that defect is th cause of the plaintiff's injury. A plaintiff may get to the jury o a negligence claim under the doctrine of res ipsa loquitur if h proves that he was injured by an instrumentality in the exclusiv control of the defendant and that the injury is not one tha ordinarily occurs in the absence of negligent conduct.

Pete presented evidence from which the jury could find that th crane was defective. He was hit by a falling beam. Evidence wa presented to the jury (by Dan) that the beam fell due to a defec in the locking device. Thus, the jury could find that the crane wa defective. The crane was still in Dan's control. It was rented t Dan by Con and operated by Dan's employee. If there was a defect it cannot be said that it occurred after the crane left Dan' control.

Pete has also satisfied the requirements of res ipsa loquitu listed above. Pete's injury was caused by the falling beam. Th beam fell from the crane. As noted above, the crane was in th exclusive control of Dan's employee.

Dan is liable in negligence if he owed a duty to Pete, breache that duty, Pete was injured, and the breach was the proximate caus of the injury. Pete's injury is not the kind of injury (being hi with a falling beam) that ordinarily occurs in the absence o negligence. Pete has also proven that Dan's employee had exclusiv control of the beam. While this technically means that Op is th one who could be liable in negligence, because Op was acting withi the scope of his employment, Dan is vicariously liable. Therefore res ipsa loquitur gets Pete to the jury on his negligence clai against Dan. Even though the negligence and strict liability claim are incompatible, Pete can present alternative theories o liability. Therefore, the court correctly denied Dan's motion.

(2) The court also correctly denied both branches of Man' motion. The issues are whether Dan's claim against Man fo indemnity is barred by the statute of limitations, and whether Da has established a prima facie case against Man for strict liabilit in tort.

When a person who is not named as a defendant may be alternatel liable, that person (or entity) can be impleaded as a third part defendant or separately sued for indemnification after entry o judgment against the original defendant. Under either approach, th action is one for indemnification. Under the CPLR, the statute o limitations for an action for indemnification is six (6) years fro the date judgment is entered against the original defendant.

In this case, Dan seeks indemnification from Man. No judgmen has yet been entered. Therefore, the statute of limitations has no yet begun to run.

If Dan is entitled to indemnification from Man, it is becaus Man is also strictly liable in tort because the crane wa defective. As noted above, a manufacturer is strictly liable i tort for injuries caused by a defective product if the defect wa present when the product left the manufacturer's control. Da presented evidence that no negligence occurred. Op testified tha he followed the operating manual. Dan also showed that he purchase the crane new from Man. Man did not present any evidence that th defect occurred after the crane left Man's control. Therefore, Da made out a prima facie case.

It should be noted that Man may have believed Dan was suing on straight strict liability theory and not for indemnification. I that was the case, the statute of limitations would have barred th action.

(3) The court erred in granting Man's motion. The issue i whether a settlement by a defendant bars an action by tha defendant against a third party defendant for indemnification Settlement of an action bars the settling defendant from seeking o being sued for contribution. Contribution is the amount of defendant's assessed fault that is paid to the plaintiff by anothe defendant, usually in a joint and several liability situation Settlement by one defendant also reduces a co-defendant liabilty b the amount of the settlement or the percentage of the settlin defendant's fault.

As noted above, this is an action for indemnification, no contribution. Actions for indemnification are not barred b settlement. Therefore, the court erred in granting Man's motion.

ANSWER TO QUESTION FOUR

(1) The court was correct in denying Dan's motion for summar judgment against Pete.

Pete's claim alleges that Op was negligent. The first issue i whether Dan can be held liable for Op's negligence. In New York master will be held liable for his servant's negligence i performed in the course of employment. Here, Op was Dan's employe and when Dan provided Op's services to Con that is still within th scope of his employment for Dan. Thus Dan will be liable on respondeat superior theory.

As for Pete's negligence claim against Dan, he has made out prima facie case of negligence. The elements of negligence tha must be shown are that the plaintiff (here Pete) was foreseeable Here, Op was working with Pete at the same construction site. Th other elements that must be shown are that the defendant breached duty of care owed to the foreseeable plaintiff. Op had a duty t operate the crane as a reasonably prudent person under the same o similar circumstances. Although Pete cannot point to specifi conduct by Op that breached this duty, he can use the doctrine o res ipsa loquitur. Res ipsa loquitur will save a plaintiff from directed verdict when he is unable to show a specific breach. H must show that the act that occurred is not the type of act tha ordinarily occurs unless someone is negligent and he must show th instrumentality causing the act was in the exclusive control of th defendant. Here Pete has shown this because steel beams do no usually fall without negligence and the crane was in the exclusiv possession of Op. Additionally, the plaintiff must show damages Here Pete has shown a personal injury.

Although in that Dan may be able to show that Pete was negligen as well and under a comparative negligence theory, his award woul be reduced, Dan will be unable to obtain summary judgment.

Pete is also suing Dan on a strict liability theory. Pete claim that there was a defect in the load locking device in the cran which caused his injury.

In order to state a claim for strict liability for products, th plaintiff need not be in privity with the leaser. Leasers, lik manufacturers, can be held strictly liable in New York fo defective products. Here Dan, as a leaser, can be liable to Pete Additionally the plaintiff must show that he was a foreseeable use making a foreseeable use of the product. In this case, Pete woul assert that Op was making a foreseeable use of the crane by liftin objects at a construction site. Additionally, Pete must show tha there was not a substantial change in the crane (product) since i left the defendant's possession. Additionally, the plaintiff mus show that there was either a manufacturing defect (a defectiv product that comes off the asembly line with "normal" products - no requirement of negligence) or a design defect (that the produc can be made safer at a small cost and will be just as efficien with the proposed changes). Here, Pete needs to present evidence o some defect. This could be proved during trial by Dan's evidenc that the crane was new and the instructions were properly followe in operating it. Thus the court was correct in denying Dan's motio to dismiss.

Additionally, it must be noted that Pete's claims for negligenc and products liability were commenced within the statutory thre year period. Also, Pete is not limited in his remedy to workers compensation because he is suing a third party. Even though Op wa working with him, Op is not a co-employee.

(2) The court was correct in denying Man's two motions.

i) Man claims that Dan's third party action was barred by th statute of limitations. Dan impleaded Man after the three yea statute of limitations had run if Pete was to sue Man on product liability. However, Dan wants to be indemnified, or at the ver least receive contribution from Man if Dan is held liable to Pete The statute of limitations on a contribution or indemnificatio action is six years from the date payment is sought. Here it woul be six years after Dan were forced to pay Pete. Although if Man wa to be sued on warranty liability, the statute of limitations o four years would have commenced at the time Man delivered the cran to Dan. Here, Dan wants Man to indemnify him.

In order to implead a third party the moving party may implea after the answer is served. Although some impleaders are allowed a of right, if the moving party delays then the other party can tr to show it is prejudicial to them. Here though, all Dan wants fro Man is to be indemnified, which will not hurt Pete's claim agains Dan.

ii) The evidence offered at trial against Man did not warrant dismissal.

A manufacturer can be held strictly liable for a product defec even though someone else may have been negligent in operating thei product. Thus, even if Op was negligent, if the product wer defective then Man could still be held liable.

Dan bought the crane from the manufacturer and then leased it t a third party. Thus Dan and Man were in privity (even though no required) and Dan made a foreseeable use of the crane. At trial Dan's evidence shows that the crane was new when he purchased i from Man and Op testified he followed the instructions despite th fact that the accident occurred three years after Dan purchased th crane from Man. Provided that Dan shows the crane was no substantialy changed in those three years, the facts of the cas lead one to infer that the product was defective due to a design o manufacturing defect. However, this is not specified. Man shoul have offered evidence to rebut the inference that the acciden occurred due to a non-products defect.

Thus the court did not err in denying both of Man's motions. I it turns out Op was negligent, this can serve to reduce the awar but will not bar it completely.

(3) The court incorrectly granted Man's motion.

The big issue is after one party settles, can the settling part seek indemnification or contribution against a non-settling party.

In New York, a settling party may later pursue money from non-settling party and vice versa if the claim is one o indemnification, but not contribution. If Man is found liable t Dan on the basis of the court action, an indemnification clai still exists and Dan could potentially recover his entire $250,00 settlement from Man.

Thus, the court was incorrect in granting Man's motion.