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Daniels v. McKay Machine Co.

decided: October 17, 1979.

JAMES D. DANIELS, PLAINTIFF-APPELLANT,
v.
MCKAY MACHINE COMPANY AND WEAN UNITED, INC., DEFENDANTS, AND DOW CHEMICAL CO., DEFENDANT-APPELLEE.



Appeal from the United States District Court for the Southern District of Illinois, Alton Division. Nos. A 74 C 72 and 78 C 5066 - J. Waldo Ackerman, Judge.

Before Sprecher and Wood, Circuit Judges, and Campbell, Senior District Judge.*fn*

Author: Sprecher

The questions posed by this diversity case on appeal are (1) whether a state court's denial of summary judgment is the law of the case when, after removal, the federal court is faced with a similar motion for summary judgment; and (2) whether, under Illinois law, strict products liability applies to the lessor or seller of equipment causing injury when the lessor or seller is not in the business of selling such equipment and the lease or sale at issue is a one-time isolated transaction.

I

In 1953-1954, Dow Chemical Company installed a piece of equipment known as a "hot shear" at its manufacturing plant at Madison, Illinois. Dow modified the equipment in 1955, 1964 and 1969. In 1969, Dow leased its Madison plant and equipment to Phelps-Dodge Aluminum Products Corporation, including the hot shear. In 1971, Phelps-Dodge merged with Consolidated Aluminum Corporation, later known as Conalco.

The plaintiff was employed by Conalco, and in 1972 was injured when his right hand and arm were caught in the hot shear machine. In 1973, Conalco purchased the plant and equipment from Dow, including the hot shear machine.

The plaintiff originally filed his complaint in state court, alleging causes of action in several counts against several defendants. On December 10, 1976, Dow moved in the state court for summary judgment on Count I, a products liability count which applied only to Dow, attaching the affidavit of C. C. Armstrong, Manager of the Engineering and Metal Products Department of Dow. The affidavit stated in effect that Dow was not in the business of manufacturing or selling hot shear lines or any component parts, and that the sale of the subject hot shear line was a one-time isolated sale.

On July 13, 1977, the state court entered an order denying Dow's motion for summary judgment. On August 10, 1977, Dow filed its "motion to reconsider" the court's order of denial. The case was removed to federal court on April 14, 1978, prior to the state court's taking any action on the motion to reconsider.

On August 3, 1978, Dow filed a motion for summary judgment in federal court, attaching three affidavits, including those of Armstrong, Louis H. Washauer and Lloyd F. Lockwood. Armstrong's affidavit was the same one filed in the state court. The other two were substantially the same as Armstrong's affidavit.

The plaintiff filed a motion to strike Dow's motion, contending that the state court had denied the same motion, which then became the law of the case. Plaintiff also filed a motion to strike Dow's affidavits on the grounds that they were not made upon personal knowledge, that they set forth "conclusory facts," and that they set forth opinions and facts as to which the affiants were not competent to testify. Finally, the plaintiff opposed Dow's motions on the merits.

A magistrate who heard oral arguments on the motions recommended that summary judgment be entered on Count I in favor of Dow on the ground that Dow was not in the business of manufacturing, leasing or selling hot shear lines or component parts, and that the lease and later sale of the plant and equipment including the hot shear was an isolated transaction not in the usual course of Dow's business.

The plaintiff filed objections to the magistrate's proposed findings and recommendations but the district court found them correct in all respects and entered summary judgment for Dow. The court also made an express determination that there is no just reason for delay of any appeal. The plaintiff has appealed.

II

Plaintiff's first argument to be considered is whether, inasmuch as the three affidavits filed in support of the second motion for summary judgment are substantially the same in content as the single affidavit filed in support of the first motion, the first denial of the motion by the state court is the law of the case and binding upon the federal court.

After a case has been removed to federal court, "(a)ll . . . orders . . . had in such action prior to its removal shall remain in full force and effect until dissolved or modified by the district court." 28 U.S.C. § 1450.

Under Illinois practice, if multiple parties or multiple claims for relief are involved, an otherwise final judgment as to one or more but fewer than all of the parties or claims is considered final and appealable only if the trial court has made an express written finding that there is no just reason for delaying enforcement or appeal. Ill.Rev.Stat., c. 110A, § 304. Failure to make the express written finding results in an interlocutory order which is subject to revision and may be modified or vacated at any time. Inasmuch as the requisite express finding was not made in this case, the state court's denial of summary judgment was an interlocutory order as to the single count of ...


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