Miller & Zois, LLC

IN THE CIRCUIT COURT FOR BALTIMORE CITY, MARYLAND

ESTATE OF PATRICIA MATTHEWS, By her personal representatives James Matthews, And CINDY MARIE MELTON, By her father and Next Friend, Steve Melton,                                     Plaintiffs, v MARYLAND MECHANICAL SYSTEM, INC.                                     Defendant	* * * * * * * * * * * * * *	CASE NO. 24-C-02-004042
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STATEMENT OF FACTS RELEVANT TO THIS MOTION

      This case involves the tragic death of Patricia Ann Matthews at the Domino Sugar Plant in Baltimore, Maryland. On July 28, 2000, Ms. Matthews was working at Domino Sugar Plant on a mechanical system built by the Defendant. Ms. Matthews’s job was to clean a strainer to the system twice a shift. While cleaning a stoppage in the pipe system with a co-worker, hot slurry¹ came out of a strainer. Ms. Matthews was caught in the path of the slurry. Ms. Matthews was taken to Bay View Medical Center where she remained conscious for six days and suffered in agony for 6 days until her death from third-degree chemical burns on almost 40% of her body.
      In 1996-97, Maryland Mechanical “re-built” a mechanical system for Domino Sugar. Indisputably, Domino Sugar designed the system. Plaintiffs now bring a strict liability design defect claim against the Defendant claiming that along the piping installed by Maryland Mechanical, there should have been a shut off valve in front of and upstream of the strainer, so she could work on it safely. Had that valve been installed, Plaintiffs contend, Patricia Matthews’s death would have been averted.
      The extent of the evidence Maryland Mechanical provided regarding their work is attached as Exhibit A, Maryland Mechanical’s Response to Request for Production of Documents. They have conspicuously not produced the original bid or any information that shows a complete listing of its costs in the manufacture of this system. In analyzing the only evidence provided to Plaintiffs, it appears that $27,950.24 was spent on parts and $10,450.00 as spend on labor. See Exhibit B. The remaining approximately $103,000.00 left unaccounted for in this $144,000.00 contract. These efforts were apparently spent installing two tanks that are not argued to be the mechanism of the product defect or of decedent plaintiff’s injury.

LEGAL DISCUSSION

I. Did Maryland Mechanical Manufacture a Product?
      Maryland Mechanical is expected to argue that strict liability is not a viable cause of action in this case because it did not provide a product. An examination of the Restatement (Second) of Torts, §402A, was adopted in Phipps v. General Motors, 278 Md. 337 (1976), is controlling but the Restatement leaves undefined the term "product." Other courts, in trying to define whether something is a product under Section 402A, have looked to the policy considerations underlying the strict liability doctrine. See "What Is or Is Not a Product Within the Meaning of Section 402A," 57 Marq. L. Rev. 625 (1974).
      Phipps offered the following policy considerations for the imposition of strict liability: (1) The cost of injuries caused by defective products should in equity be borne by the manufacturers that put such products on the market rather than the injured persons who are powerless to protect themselves; (2) imposing strict liability on manufacturers for defective products is equitable because it shifts the risk of loss to those better able financially to bear the loss; (3) consumer relies upon the seller in expecting that a product is safe for the uses for which it has been marketed, and that this expectation is better fulfilled by the theory of strict liability than traditional negligence or warranty theories; and (4) requirement of proof of a defect rendering a product unreasonably dangerous is a sufficient showing of fault on the part of the seller to impose liability without placing an often impossible burden on the plaintiff of proving specific acts of negligence. Phipps, at 343.
      These policy considerations are at play in the instant case. The cost of the injury is best borne by Maryland Mechanical, as opposed to a nine year-old Plaintiff in this case. Plaintiff’s decedent, who was required to clean this strainer as her job, also had every right to believe that this product was safe. Finally, Plaintiff will have the proof difficulties inherent in any products liability case if this case were to be tried on negligence only (e.g., trying to proof the subjective state of mind of the “Defendant” with respect to what it “knew”). This is particularly true in this case because Maryland Mechanical’s conduct occurred more than three years before Ms. Matthews was killed, increasing the difficulties in ascertaining all of the facts.² These problems are not as prevalent in regular negligence cases where information regarding the defendant’s conduct is more readily available. Accordingly, the rationale of applying strict liability to this case is met, underscoring that this case should fall under the purview of strict liability.
      Maryland law is relatively sparse as to what constitutes a product. In Miles Labs, Inc., v. Doe, 315 Md. 704 (1989), the court with little analysis determined blood to be a product, in spite of the fact that the cost of producing blood and blood derivatives primarily involves the labor of procuring the blood itself. Most jurisdictions find blood and blood derivatives to be a service. [See Liability of blood supplier or donor for injury or death resulting from blood transfusion, 24 A.L.R.4th 508.] Miles Labs, Inc. underscores the aggressive position the Court of Appeals takes with respect to what is a product, consistent with the policy articulated in Phipps.

II. Michalko v. Cooke Color & Chemical Corp. Is Directly on Point

       In Michalko v. Cooke Color & Chemical Corp., 451 A.2d 179 (N.J. 1982), the Supreme Court of New Jersey remarkably addressed almost the identical fact pattern as the instant case, involving a design defect where an employee was using a rebuilt piece of industrial equipment that was rebuilt by the defendant but designed by the employer. The plaintiff operated in the course of her employment a thirty-five ton transformer press. Occasionally, rubber strips from the press would fall out during the process. Her employer instructed her to hold them in a cavity of the machine with her left hand while she used her right hand to operate the press control panel. Following these instructions, she injured her left hand when it got stuck in the press. The press did not have safety devices that would have prevented plaintiff’s injury. Plaintiff’s employer built the product at issue. Prior to plaintiff’s injury, the defendant rebuilt the system according to the employer’s specifications. Defendant’s contract with the employer required it to follow the employer’s drawings and specifications.
      The New Jersey Supreme Court framed the issue as “whether an independent contractor that undertakes to rebuild part of a machine in accordance with the specifications of the owner has a legal duty to foreseable users of the machine to make the machine safe or to warn of the dangers inherent in its use.” Id. at 182. The court stated that in strict liability, the focus is on the product and not the defendant’s conduct. Id. The court held that strict liability principles apply equally to manufacturers who rebuild machines and manufacturers who make component parts, just as those principles apply tomanufacturers who produce new products. Id.
      Accordingly, the court ruled that when it is feasible for a contractor who is rebuilding a product to affirmatively incorporate safety devices and fails to install them, the manufacturer is deemed to have delivered a defective product. Id. at 183. Specifically, it said that the “fact that a product was built according to the plans and specifications of an owner does not constitute a defense based on strict liability for the manufacturer of a defective product where injuries are suffered by an innocent foreseeable user of the product.” Id.³ This is so even when the contractor would not have discovered the defect with due diligence. Id.

III. Michalko Ignores the Product/Service Distinction Because It Is Not Applicable in a Design Defect Case

     Michalko ignores the product/service distinction because parties cannot negligently design a service. In cases alleging a defective design in strict liability, the focus is not on the conduct of the manufacturer, but on whether the product itself is defective. Nissan Motor Co. v. Nave, 129 Md. App. 90, 118 (1999). Accordingly, the salient feature of a design defect is that it relates back to a product. Because a service necessarily involves “conduct” rather than a “product,” a court would be required to evaluate the defendant’s conduct if strict liability design defect cases were applied to services. Accordingly, a design defect claim must invariably involve a product.

IV. Under Anthony Pools, Maryland Mechanical is Manufacturer of a Product as a Matter of Law

     After a conference with the Court, defense counsel informed Plaintiffs for the first time that he believes strict liability is not applicable, contending that Anthony Pools v. Sheehan, 295 Md. 285 (1982) is controlling. If Anthony Pools is controlling, Defendant should be deemed a manufacturer or seller of a product as a matter of law.
      The plaintiff in Anthony Pools brought, among others, claims for breach of warranty and strict liability with regard to a personal injury suffered in the use of a diving board at a swimming pool constructed by the defendant. The trial court dismissed the breach of warranty claim and plaintiff’s strict liability claim went to the jury. After a defense verdict, plaintiff appealed.
      The Court of Special Appeals reversed on the warranty question, finding that defendant Anthony Pools was a seller and manufacturer as defined by the U.C.C. The Court of Appeals affirmed but on different grounds, finding that the appropriate test in determining whether the warranty applied was the “gravamen test.” Although the predominant purpose of the contract involved the sale of services rather than of goods, the court held that under the gravamen test, the contract contained an implied warranty of merchantability.
      A close reading of Anthony Pools underscores the Court’s view of what constitutes a product for the purposes of strict liability because, while there was an issue as to whether the breach of warranty claims should go to the jury (which was resolved in favor of the plaintiff), there was no issue or debate as to whether plaintiff’s strict liability claim should go to the jury even if the primary purpose of the transaction or the gravamen of the injury was a service. The Court of Special Appeals affirmed the trial court with respect to the strict liability design defect and its holding and rationale were adopted by the Court of Appeals.
      The Maryland Court of Appeals made clear why there is a distinction between a warranty and strict liability in its explanation of why it will not extend the strict liability rationale to breach of warranty claims:

A number of commentators have advocated a more policy oriented approach to determining whether warranties of quality and fitness are implied with respect to goods sold as a part of a hybrid transaction in which service predominates. (citations omitted). To support their position, these commentators in general emphasize loss shifting, risk distribution, consumer reliance and difficulties in the proof of negligence. These concepts underlie strict liability in tort. (emphasis added). See Phipps v. General Motors Corp., 278 Md. 336, 363 A.2d 955 (1976).

Id. at 294. In other words, the court clearly acknowledged that regardless of how this issue is resolved with respect to U.C.C. questions, strict liability is viewed with a lens towards effectuating the policy goals set forth in Phipps that exist in the present case. This makes sense in the same way as Michalko: if the issue is design defect, it has to be a product at issue.

     In the final analysis, most products are, at least economically, more a function of labor than the cost of the raw materials. But that is not and should not be the standard of analysis. The question is “was a final product created such that it could be defectively designed.” Maryland Mechanical built and placed a finished product, a mechanical system, into the stream of commerce. As such, they should be held strictly liable, as a matter of law, for any defect that proximately causes injury.

V. Even if the U.C.C. Hybrid Product/Service Distinction Was Controlling, Defendant is Still a Seller/Manufacturer as a Matter of Law Under the Gravamen Test

     Assuming, arguendo, that this court determines that the mechanical system built by Maryland Mechanical is a hybrid product/service and the U.C.C. product/service distinction should be utilized, then the gravamen test should be used under Anthony Pools. The Court of Appeals held in Anthony Pools that:

Consumer goods that are sold which retain their character as consumer goods after completion of the performance promised to the consumer, and where monetary loss or personal injury is claimed to have resulted from a defect in the consumer goods, the provisions of the Maryland U.C.C. dealing with implied warranties apply to the consumer goods, even if the transaction is predominately one for the rendering of consumer services.

Id, at 298. Extrapolating this to the strict liability context, because this mechanical system “retained [its] character as consumer goods after completion of the performance,” the gravamen test would apply. This test examines the cause of the injury, namely, did the injury or damages arise because of a defective product or due to the conduct of the individuals rendering the accompanying services?⁴ In this case, the focus is not on the individuals who did the installation, the service aspect of the work. Instead, the defect is in the product itself, the piping around the strainer and the absence of a shutoff valve on the pipes. This design problem cannot be as the result of a service but only the product itself.⁵

CONCLUSION

    As a matter of law, Defendant manufactured a product. Accordingly, Plaintiff’s requests that this Court rule as a matter of law that Defendant manufactured a product and is therefore strict liability applies.

                                                                                    Respectfully submitted,

                                                                                    Ronald V. Miller, Jr.
                                                                                    Miller & Zois, LLC
                                                                                    Empire Towers, Suite 615
                                                                                    7310 Ritchie Highway
                                                                                    Glen Burnie, Maryland 21061
                                                                                    (410)553-6000
                                                                                    Counsel for Plaintiff

<sub>¹ Hot slurry is a mixture of water, sugar and chemicals heated to 180º.

²This problem is underscored by Plaintiff’s Motion in Limine Regarding Tank Levels.</sub>

³_{Accord Hendricks v. Ercole, 763 F.Supp. 505, 513 (Kan. 1991) (holding that a non-designing manufacturer can still be liable for design defects it did not cause under a strict liability theory). See also Anderson v. Olmstead Utility Equipment, Inc., 60 Ohio St. 3d 124 (1991) (plaintiffs were injured when a rebuilt "cherry picker" failed, causing them to fall. The defendant rebuilt the aerial system of the cherry picker truck and installed the rebuilt system pursuant to a contract with the owner which called for a full teardown of the system and replacement of necessary parts. The court found that the defendant, through its remanufacturing and rebuilding of the system, was a seller and a manufacturer and was, therefore, subject to liability under theories of strict liability in tort as well as breach of contract).}

⁴_{Of course, any design in a sense is the service, the thought of how something should be put together. But if this definition took hold, every product defect case would fail because it is the service part of the transaction.}

⁵_{There are additional reasons why, as a matter of fact, this system should be construed as a product as opposed to a service. But these appear to be issues of fact, not law.}

 

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