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HomeMy WebLinkAbout93-3356 CivilGARRY AND VICTORIA MARTIN, INDIVIDUALLY and GARRY AND VICTORIA MARTIN t/d/b/a CREEKSIDE FARMS, Plaintiffs Vo PURINA MILLS, INC. and FRANKLIN FEED AND SUPPLY COMPANY, Defendants IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA CIVIL ACTION--LAW No. 3356 CIVIL 1993 IN RE: PLAINTIFFS' MOTION FOR PARTIAL SUMMARY JUDGMENT BEFORE HESS, OLER and GUIDO, JJ. ORDER OF COURT AND NOW, this 1 lth day of June, 1999, upon consideration of plaintiffs' motion for partial summary judgment, and for the reasons stated in the accompanying opinion, the motion is granted to the extent that Defendant Franklin Feed & Supply Company is estopped from denying that it breached the contract of sale of feed to plaintiffs sub judice, but is otherwise denied. Thomas J. Finucane, Esq. Wingerd and Long 500 Trust Company Building 14 North Main Street Chambersburg, PA 17201 Attorney for Plaintiffs BY THE COURT, esley Oler~/.rd., J. Charles W. Rubendall, II, Esq. Keefer, Wood, Allen & Rahal 210 Walnut Street P.O. Box 11963 Harrisburg, PA 17108-1963 Attorney for Defendant Franklin Feed & Supply Company Robert M. Frankhouser, Jr., Esq. Roy O. Connaughton, Esq. Hartman, Underhill & Brubaker, LLP 221 East Chestnut Street Lancaster, PA 17602-7254 Attorneys for Defendant Purina Mills, Inc. GARRY AND VICTORIA MARTIN, INDIVIDUALLY and GARRY AND VICTORIA MARTIN t/d/b/a CREEKSIDE FARMS, Plaintiffs Vo PURINA MILLS, INC. and FRANKLIN FEED AND SUPPLY COMPANY, Defendants IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA CIVIL ACTION -- LAW No. 3356 CIVIL 1993 IN RE: PLAINTIFFS' MOTION FOR PARTIAL SUMMARY JUDGMENT BEFORE HESS, OLER and GUIDO, JJ. OPINION and ORDER OF COURT OLER, J., June 11, 1999. In this civil case, purchasers of certain livestock feed have sued the seller and manufacturer for over $400,000.00 in damages which allegedly resulted from consumption of the feed by the purchasers' dairy herd.~ For disposition at this time is a motion by the plaintiffs for partial summary judgment (against the seller). The basis for plaintiffs' motion is collateral estoppel. More specifically, plaintiffs contend that earlier litigation between the parties resolved the issue of the faulty nature of the product adversely to the seller, that the doctrine of collateral estoppel forecloses further disputation of the matter by the defendant in this litigation, and that judgment should be entered in favor of plaintiffs and against defendant as to liability. 1 The action contains counts against both defendants for negligence, strict liability under Section 402A of the Restatement (Second) of Torts, breach of contract of sale of goods by violation of express and/or implied warranties under the Uniform Commercial Code, and punitive damages, as well as a non-Commercial Code count for breach of contract against Defendant Franklin Feed and Supply Company. For the reasons stated in this opinion, plaintiffs' motion for partial summary judgment will be granted to a limited degree. STATEMENT OF FACTS Plaintiffs Garry and Victoria Martin operate a dairy farm known as Creekside Farms in Mercersburg, Franklin County, Pennsylvania.2 Defendant Franklin Feed & Supply Company (hereinafter defendant) is a business entity which sells animal feed products, having its principal place of business in Chambersburg, Franklin County, Pennsylvania? Pursuant to an oral agreement commencing in November of 1991, the defendant sold feed to plaintiffs for their dairy herd.4 According to plaintiffs' complaint, the recipe for the feed was changed, in accordance with a recommendation of defendant's nutritionist, in February of 1992.5 The new recipe, it is alleged, (a) contained an ingredient (urea) which was, at the level involved, contraindicated by another component of the herd's diet, (b) was not accompanied by a required warning tag, and (c) had been expressly proscribed by the purchasers .6 Plaintiffs accepted the feed.7 The herd suffered deleterious health effects, including 2 Plaintiffs' complaint, paragraph 1; answer with new matter of Defendant Franklin Feed & Supply Company, paragraph 1. 3 Plaintiffs' complaint, paragraphs 3-4; answer with new matter of Defendant Franklin Feed & Supply Company, paragraphs 3-4. 4 Plaintiffs' complaint, paragraph 8; answer with new matter of Defendant Franklin Feed & Supply Company, paragraph 8. Plaintiffs' complaint, paragraph 9. 6 Plaintiffs' complaint, paragraphs 11-15. 7 See complaint, paragraph 5, and answer, paragraph 5, Franklin Feed & Supply Co. v. Martin, A.D. No. 1993-60 (Franklin County). 2 some fatalities, from its ingestion of the feed, according to plaintiffs' complaint.8 In February of 1993, the defendant sued the plaintiffs in Franklin County for failure to pay for the feed? The plaintiffs asserted as a defense that the feed had been unsuitable.~° A compulsory arbitration hearing~l in the Franklin County case was held on February 7, April 6, and June 22, 19957 At the arbitration hearing, plaintiffs defended on the grounds that defendant breached the contract (a) by including an expressly proscribed ingredient in the feed,~3 (b) by supplying a product which was unmerchantable,TM and (c) by supplying a product which was unfit for its particular purpose? In the arbitration proceeding, the burden of proving defendant's breach, as defendant's counsel noted, was upon plaintiffs.~6 8 Plaintiffs' complaint, paragraph 10. 9 See complaint, Franklin Feed & Supply Co. v. Martin, A.D. No. 1993-60 (Franklin County). ~o See answer with new matter, Franklin Feed & Supply Co. v. Martin, A.D. No. 1993- 60 (Franklin County). ~ See Act of July 9, 1976, P.L. 586, § 2, as amended 42 Pa. C.S. § 7361; Pa. R.C.P. 1301 et seq. ~2 N.T., Franklin Feed & Supply Co. v. Martin, A.D. No. 1993-60 (Franklin County). ~3 N.T. 5 (February 7, 1995), 131-32 (June 22, 1995), Franklin Feed& Supply Co. v. Martin, A.D. No. 1993-60 (Franklin County). ~4 See N.T. 138 (June 22, 1995), Franklin Feed & Supply Co. v. Martin, A.D. No. 1993-60 (Franklin County). ~5 N.T. 136 (June 22, 1995), Franklin Feed & Supply Co. v. Martin, A.D. No. 1993-60 (Franklin County). ~6 N.T. 5 (February 7, 1995), Franklin Feed & Supply Co. v. Martin, A.D. No. 1993- 60 (Franklin County); see infra text. 3 On June 22, 1995, the arbitrators found in favor of plaintiffs (defendants therein).17 No findings of fact or discussion accompanied the award.~8 Defendant did not appeal from the unsuccessful prosecution of its claim.19 Plaintiffs commenced the present action against defendant in Cumberland County by a praecipe for writ of summons on October 22, 1993. Plaintiffs' complaint was filed on December 19, 1995. DISCUSSION With respect to summary judgment, Pennsylvania Rule of Civil Procedure 1035.2 provides as follows: After the relevant pleadings are closed, but within such time as not to unreasonably delay trial, any party may move for summary judgment in whole or in part as a matter of law (1) whenever there is no genuine issue of any material fact as to a necessary element of the cause of action or defense which could be established by additional discovery or expert report, or (2) if, after the completion of discovery relevant to the motion, including the production of expert reports, an adverse party who will bear the burden of proof at trial has failed to produce evidence of facts essential to the cause of action or defense which in a jury trial would require the issues to be submitted to a jury. With respect to collateral estoppel, the Pennsylvania Commonwealth Court has indicated the following: 17 Award, June 22, 1995, Franklin Feed & Supply Co. v. Martin, A.D. No. 1993-60 (Franklin County). 19 See Martins' Brief in Support of Motion for Partial Summary Judgment, at 2; Franklin Feed's Brief in Opposition to Motions for Summary Judgment by PMA and Garry and Victoria Martin, at 9. 4 The doctrine of collateral estoppel prevents the relitigation by the same parties of issues that have been decided on their merits. The elements of collateral estoppel are: 1) the issue decided in an earlier case is identical to that presented in the later action; 2) there was a final judgment on the merits in the earlier action and the issue decided was essential to that judgment; 3) the party against whom the estoppel claim is asserted was a party or in privity with a party in the earlier adjudication; and 4) the party against whom the estoppel is claimed had a full and fair opportunity to litigate the issue in the prior action. Borough of Prospect v. Bauer, 715 A.2d 1244, 1245 (Pa. Commw. Ct. 1998). Collateral estoppel may not apply when "[t]he party against whom preclusion is sought had a significantly heavier burden of persuasion with respect to the issue in the initial action than in the subsequent action; the burden has shifted to his adversary; or the adversary has a significantly heavier burden then he had in the first action .... "Restatement (Second) of Judgments § 28(4) (1982). Finally, with respect to the burden of proof where a seller of goods is suing for collection of the purchase price, the buyer has accepted the goods, and the defense is that the seller breached the contract of sale, the burden is upon the buyer to prove the breach. Act of November 1, 1979, P.L. 255, § 1, 13 P.S. § 2607(d). In the present case, (a) the issue of whether defendant breached its contract of sale with plaintiffs is identical to an issue which the arbitrators decided in the Franklin County action, (b) the issue was essential to resolution of the earlier case and judgment was entered on the merits, (c) defendant, against whom estoppel is claimed, was a party to the earlier adjudication, and (d) defendant had a full and fair opportunity to litigate the issue in the prior action.TM The record does not support a conclusion that any exception to the general rule of issue preclusion exists herein? Pursuant to the doctrine of collateral estoppel, therefore, defendant is precluded from disputing the fact that it breached its contract of sale with plaintiffs. On the other hand, the more specific issues of the form of the breach--e.g., whether an express or implied warranty was breached--and whether a harmful product resulted have not been resolved by the earlier judgrnent. Consequently, the following order, more limited in effect than that requested by plaintiffs, will be entered: ORDER OF COURT AND NOW, this 1 lth day of June, 1999, upon consideration of plaintiffs' motion for partial summary judgment, and for the reasons stated in the accompanying opinion, the motion is granted to the extent that defendant is estopped from denying that it breached the contract of sale of feed to plaintiffs subjudice, but is otherwise denied. BY THE COURT, Thomas J. Finucane, Esq. Wingerd and Long 500 Trust Company Building 14 North Main Street Chambersburg, PA 17201 Attorney for Plaintiffs /s/J. Wesley Oler, Jr. J. Wesley Oler, Jr., J. 20 The court is unable to agree with defendant that the record would support a finding that it did not have a full and fair opportunity to litigate the issue in the prior proceeding. 21 In this regard, it will be noted that the burden of proof with respect to defendant's breach did not shift in the two cases. 6 Charles W. Rubendall, II, Esq. Keefer, Wood, Allen & Rahal 210 Walnut Street P.O. Box 11963 Harrisburg, PA 17108-1963 Attorney for Defendant Franklin Feed & Supply Company Robert M. Frankhouser, Jr. Roy O. Connaughton, Esq. Hartman, Underhill & Bmbaker, LLP 221 East Chestnut Street Lancaster, PA 17602-7254 Attorneys for Defendant Purina Mills, Inc.