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Nguyen v. Johnson Machine & Press Corp.

OPINION FILED MARCH 18, 1982.

MANH HUNG NGUYEN, PLAINTIFF-APPELLANT,

v.

JOHNSON MACHINE & PRESS CORPORATION ET AL., DEFENDANTS-APPELLEES.



APPEAL from the Circuit Court of Cook County; the Hon. PAUL F. ELWARD, Judge, presiding.

JUSTICE LINN DELIVERED THE OPINION OF THE COURT:

In 1978, the hands of plaintiff, Manh Hung Nguyen, were severed by a punch press manufactured by Bontrager Corporation. Bontrager had manufactured the punch press in 1960 and had sold it to plaintiff's employer in 1962.

Following his injury, plaintiff brought this action in the circuit court of Cook County against numerous defendants seeking damages based on strict liability in tort. Two of the defendants, Amsted Industries, Inc., and South Bend Lathe, Inc., filed motions for summary judgment which were granted by the trial court. The court found no just reason to delay enforcement or appeal of its order. Plaintiff appealed.

The primary issue is whether Amsted or South Bend Lathe can be liable to plaintiff as successor corporation to the business of Bontrager.

We affirm.

BACKGROUND

The punch press involved in this case was sold under a trade name as a "Johnson" press. Presses of this kind were originally manufactured and sold by Johnson Machine and Press Corporation in Elkhart, Indiana. In 1956, Bontrager purchased the assets of Johnson for cash. As part of the purchase, Bontrager also received one share of stock in Johnson so that Bontrager could continue to manufacture and sell presses under the Johnson name.

In 1960, Bontrager manufactured and leased the punch press to a party not involved in this case. On February 5, 1962, this press was sold and delivered to plaintiff's employer. On August 29, 1962, Amsted and Bontrager entered into a purchase agreement under which Amsted was to purchase all the assets of Bontrager for approximately $1.2 million. Under the agreement, Bontrager promised to dissolve its corporate entity as soon as reasonably possible after the completion of the sale. Amsted was to assume the liabilities and obligations of Bontrager necessary for the uninterrupted continuation of the business. However, Amsted specifically refused to assume any liability resulting from injuries incurred from the use of presses manufactured and sold by Bontrager.

Following completion of the sale, Amsted continued the manufacture and sale of the Johnson presses using Bontrager's plant in Elkhart. This business was carried on by one of Amsted's divisions, South Bend Lathe. South Bend Lathe also had a plant in South Bend, Indiana, and after several years all of the operations carried out in Elkhart were transferred to the South Bend plant and the Elkhart plant was sold.

Though the parties disputed some of the facts, for the purpose of the summary judgment motion it was assumed that South Bend Lathe manufactured the Johnson presses by using the same employees, assets, physical location, and middle-level management personnel that Bontrager had used. However, none of the shareholders, directors, or officers of Bontrager became shareholders, directors, or officers of Amsted or South Bend Lathe.

Following the sale, Amsted informed Bontrager's and Amsted's customers that Amsted would thereafter be manufacturing and selling the Johnson presses. In 1964, Bontrager was voluntarily dissolved. Until 1975, Amsted, through its South Bend Lathe division, continued the manufacture and sale of the Johnson presses. In 1975, Amsted sold all of the assets involving the Johnson presses to LWE, Inc. Thereafter LWE, Inc., changed its name to South Bend Lathe, Inc. (the other defendant that was granted summary judgment by the trial court). In 1978, plaintiff was injured.

OPINION

I

It is admitted that if Amsted could not be liable in this case then neither could South Bend Lathe, Inc. Accordingly, we will discuss this case with a view towards Amsted's possible liability ...


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