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Ikerd v. Lapworth

December 4, 1970


Major and Castle, Senior Circuit Judges, and Fairchild, Circuit Judge.

Author: Castle

CASTLE, Senior Circuit Judge.

Plaintiff-appellant Joyce Ikerd brought suit in the District Court*fn1 against the defendants-appellees Susan Lapworth, d/b/a Cars, and Terre Haute Chrysler-Plymouth, Inc.,*fn2 seeking to recover damages for personal injuries she sustained when a 1960 Pontiac station-wagon automobile in which she was a passenger collided with a traffic signal in the divider strip at the south side of the intersection of U.S. Highway No. 41 and Walnut St. in Terre Haute, Indiana. The complaint alleges that as Robert Knoblett, the driver of the Pontiac, accelerated to pass another car the accelerator stuck, thus causing the automobile to proceed down the highway at a high rate of speed, go out of control, and strike the traffic signal. It is alleged that the accelerator was defective in that it had a tendency to stick in the open position, and right-of-recovery is predicated on the basis of implied warranty by, the negligence of, and strict product liability in the defendants.

Subsequent to the filing of the Ikerd action plaintiff-appellant Robert Knoblett brought a like suit, similarly based and grounded, against the defendants-appellees for injuries he sustained in the collision.

The Pontiac had been purchased by Knoblett on February 11, 1967 from Lapworth, a Clinton, Indiana, used-car dealer. It was a used-car which Chrysler, a Terre Haute, Indiana, automobile dealer, had acquired in October 1966 as a trade-in on the sale of a new car, and on December 8, 1966 had wholesaled to Lapworth along with five other usedcars. The collision occurred on March 7, 1967.

The answer filed by Chrysler in each of the actions included, inter alia, a defense based on the proposition that as a remote vendor who had sold the used-car to Lapworth, a used-car dealer, it was as a matter of law not liable to either plaintiff.

Chrysler filed a motion for summary judgment in each of the actions based on the pleadings (the respective complaint and the answer thereto), depositions on file (which included the depositions of Thomas E. Lapworth, manager of Lapworth; John A. Lowry, an employee of Lapworth; Robert E. McClelland, president of Chrysler; and John E. Fields, used-car manager for Chrysler), and an affidavit made by one of the counsel for Chrysler. Neither plaintiff filed any opposing affidavit. Objections to the entry of summary judgment were made on the basis that the pleadings, depositions, and answers to interrogatories on file in the case disclosed the existence of genuine material issues of fact requiring a trial. The District Court granted the motions for summary judgment in favor of Chrysler.

The two actions against the remaining defendant, Lapworth, were consolidated for trial. Lapworth's answer to Knoblett's complaint alleged contributory negligence by Knoblett in driving at excessive speed and while under the influence of intoxicating beverages, in failing to apply the brakes, and in failing to keep a lookout; and assumption of risk by Knoblett in driving at excessive speed while under the influence of intoxicating beverages with knowledge that the accelerator had a tendency to stick. Lapworth's answer to Ikerd's complaint included issues and affirmatives defenses based on allegations that prior to the collision Ikerd and Knoblett were engaged in drinking intoxicating beverages together and the intoxication of Knoblett was the direct and sole proximate cause of the collision and of any injuries resulting therefrom; and that the direct and sole cause of the collision was the negligence of Knoblett in driving at a high and dangerous rate of speed of approximately eighty miles per hour. The jury returned a verdict for Lapworth in each case and judgments were entered accordingly. Plaintiffs appealed and the appeals were consolidated.

Plaintiffs contend that the District Court erred in granting the motions of Chrysler for summary judgment. From the arguments advanced by plaintiffs in support of this contention it appears that it is predicated on the assumption that as a matter of law Chrysler was under a duty to inspect the traded-in Pontiac prior to selling it to Lapworth and to either remedy or give warning of any defective condition it found to exist (or reasonably should have found by a proper inspection) which might make operation of the automobile dangerous, such as a tendency in the accelerator to stick or a likelihood thereof due to worn or bent linkage, dirt in the mechanism, broken motor support, etc.

The pleadings, as supplemented by the depositions and affidavit relied upon in support of the motions for summary judgment, establish that Chrysler did not repair or recondition trade-ins it wholesaled to other dealers; that it did not inspect or make any repairs on the Pontiac prior to its sale to Lapworth, and that Chrysler expressly negated the giving of any warranty by it with respect to the automobile; that Lapworth's manager inspected the Pontiac and other used-cars it bought from Chrysler prior to making the purchase; and that Lapworth reconditioned the used-cars it purchased from Chrysler, if necessary, and took full responsibility for them. But the material which was before the court for consideration on the motions for summary judgment did not resolve in Chrysler's favor the question whether the defect complained of -- a tendency in the accelerator to stick in the open position -- existed at the time of the sale of the Pontiac to Lapworth, whether such a defect was a proximate cause of the collision, or several other subsidiary factual issues which would be material, and thus preclude the entry of summary judgment, if plaintiffs were correct in their assumption as to the controlling principle of law involved.

However, we are of the view that plaintiffs have posited error in the award of summary judgment in favor of Chrysler on an untenable premise -- the existence of a legal duty in Chrysler in connection with the sale of trade-ins to a used-car dealer which the undisputed facts and circumstances here involved do not support. We perceive no inherent principle of justice which visits upon Chrysler the liability here asserted and based on a defective condition in a used-car it sold to a used-car dealer in the manner here detailed. Plaintiffs refer us to no legal authority, or decision of an Indiana or other court, which recognizes or supports the existence of the duty plaintiffs claim Chrysler owed to a subsequent purchaser or third-party who might sustain injury because of a defect in the trade-in Chrysler sold to its vendee, a used-car dealer.

Plaintiffs cite numerous cases in which automobile manufacturers and dealers have been held liable for injuries resulting from the sale of an automobile in a defective condition to a consumer-customer. They conclude from these cases that the seller of a used-car is negligent, or accountable under the doctrine of strict product liability, if he sells the used-car in a defective condition to one who he should know will use or resell it without first remedying the defect. But plaintiffs concede that none of the cases they rely on involved a sale of a used-car from one dealer to another. Moreover, none of them involved such a sale under circumstances where, as here, warranty was negated, the used-car dealer purchaser inspected the car prior to purchase, and the seller was justified in relying upon the dealer-purchaser to make any necessary repairs on the car prior to its sale to a consumer-user.

And, plaintiffs' reliance upon Restatement (2nd) Torts, ยง 402a is misplaced in that plaintiffs ignore that where a remote seller is sought to be held liable for a defect which results in injury to an ultimate consumer or third-party the question is essentially one of whether the responsibility for discovery and prevention of the dangerous defect has been shifted to an intermediate party who is justifiably relied upon to inspect the product and remedy any dangerous defect.

The following observations made by the Ohio courts in Thrash v. U-Drive-It Co., 158 Ohio St. 465, 110 N.E.2d 419 and 93 Ohio App. 388, 113 N.E.2d 650, in connection with an analogous factual situation are pertinent here. In that case the plaintiff sued U-Drive-It Co. and Spot Motor Company. The former was engaged in the business of renting motor vehicles for hire to the public and the latter in buying and selling used automobiles and trucks. The complaint alleged that U-Drive-It traded a used truck to Spot; that the left front wheel was defective due to a mismatch of the lock ring with the rim; that Spot sold the truck to plaintiff's father on the representation that it was in good operating condition; that plaintiff was injured when the defect caused the lock ring to come off, releasing the tire with the result that the truck became unmanageable, left the road and rolled down an embankment. The Ohio Court of Appeals sustained the lower court's dismissal of the complaint as to U-Drive-It (93 Ohio App. 388, 113 N.E.2d 650, 51 Ohio Op. 164) and stated (pp. 655-656):

"The defendant U-Drive-It Company was charged with creating the dangerous condition, and with negligence in 'placing upon the market for eventual sale to the public a motor truck containing a latent and inherently dangerous defect, which would be hazardous to the life and limb of anyone in the vicinity of the truck, while it was being operated on the highway,' in failing to warn its vendee, the Spot Motor Company, of the condition of the truck, as well as its failure to notify the purchaser, Thrash, although it knew of the sale to Thrash, and knew that said truck would be used for the purpose for which it was designed.

On the theory that foresight of the consequences measures the creation of the duty and consequent liability, injury to third persons was not here to be reasonably foreseen as the result of the sale to the Spot Motor Company, in the absence of false representations.

In deciding this phase of the case, we must appraise and measure the interests, the experience and the business or economic sense of a community. Every one knows that it is common practice for owners of used cars to sell them or trade them in on other cars to secondhand dealers. The amount of money received from the sale or the amount of credit given on the purchase of another, is generally dependent on the make, age and condition of the vehicle. The used car dealer has general knowledge of the various degrees of imperfection in old and worn cars, and has the technical knowledge to ascertain defects and weaknesses, and he buys them on that basis. They are not sold with the knowledge or expectation that they will be resold to third persons without examination or tests. They are sold to a person or company engaged in and practicing a trade or business, ...

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