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Chraca v. U.S. Battery Mfg. Co.

Court of Appeals of Illinois, First District, Fifth Division

December 19, 2014

JEFF CHRACA, Plaintiff-Appellant,
v.
U.S. BATTERY MANUFACTURING COMPANY, Defendant-Appellee and YUHUAN COUNTY LITIAN METAL PRODUCTS COMPANY, LTD., Defendant)

Page 184

Appeal from the Circuit Court of Cook County. 11 L 005924. Honorable Moira S. Johnson, Judge Presiding.

For Appellant: Bryan J. O'Connor, O'Connor Law Group LLC, Chicago.

For Appellee: A. Mark O'Danovich, Bryan E. Curry, Bullaro & Carton PC. Chicago.

JUSTICE McBRIDE delivered the judgment of the court, with opinion. Justices Gordon and Reyes concurred in the judgment and opinion.

OPINION

Page 185

McBRIDE, JUSTICE.

[¶1] This appeal concerns the plaintiff's right under section 2-621 of the Illinois Code of Civil Procedure (735 ILCS 5/2-621 (West 2010)) (Code) to reinstate a product liability claim against one of the product's distributors, despite having served and obtained a default judgment against the alleged ultimate tortfeasor, the product manufacturer. Section 2-621 of the Code allows a nonmanufacturing defendant which identifies the product manufacturer to be dismissed from a product liability action. 735 ILCS 5/2-621(a) (West 2010). The dismissal, however, may be vacated at any time in certain circumstances, such as when the plaintiff subsequently demonstrates that the manufacturer is not subject to the jurisdiction of an Illinois court or is unable to satisfy any judgment. 735 ILCS 5/2-621(b)(3), (b)(4) (West 2010). The plaintiff here argues that the threshold for reinstatement was lowered by Kellerman v. Crowe, 119 Ill.2d 111, 518 N.E.2d 116, 115 Ill.Dec. 591 (1987), and that he met that lesser standard. The product distributor responds that the statute speaks for itself and this plaintiff did too little to pursue the manufacturer in mainland China before requesting reinstatement of another entity in the distributive chain. The trial court rejected the plaintiff's motion to reinstate and motion to reconsider the ruling. The plaintiff appeals those two rulings. For the reasons that follow, we reverse.

[¶2] The personal injuries that led to this lawsuit occurred in 2009, while plaintiff Jeffrey Louis Chraca was unpacking a shipment of golf cart batteries sent by defendant U.S. Battery Manufacturing Company (hereinafter U.S. Battery) to Chraca's employer, Chicago Battery d/b/a Interstate Batteries, in Skokie, Illinois. Chraca, who was 32 years old at the time, was lifting and carrying individual batteries with the assistance of a flexible, black strap that arrived with the shipment. Each of the " US-2200 XC" six-volt, deep-cycle golf cart batteries weighed roughly 63 pounds, and was 10 inches long, 7 inches wide, and 11 inches tall. Chraca's shoulder and neck were wrenched when the strap gave way. He has attributed the strap's failure to the fact that two metal hooks or U-shaped brackets which were riveted to each end separated from the strap. He contends the strap was " unreasonably dangerous for its foreseeable uses in that it did not function as intended." His employer has been compensating Chraca under the provisions of the Workers Compensation Act (820 ILCS 305/1 et seq. (West 2010)) (Chraca v. Interstate Batteries, 10 WC 01151) and in mid 2011 he filed this strict product liability action against distributor U.S. Battery.

[¶3] The defect alleged in a strict product liability action may be a manufacturing defect, a design defect, or a marketing defect (meaning a failure to give adequate instructions or warning). Restatement (Third) of Torts: Products Liability § 1 cmt a (1998).

[¶4] Under the common law, an injured consumer may bring allegations of strict product liability against all entities in the distributive chain, including the product's manufacturer, supplier, wholesaler, retailer, and commercial lessor. Murphy v. Mancari's Chrysler Plymouth, Inc., 381 Ill.App.3d 768, 772-73,

Page 186

887 N.E.2d 569, 574, 320 Ill.Dec. 425 (2008); Hammond v. North American Asbestos Corp., 97 Ill.2d 195, 206, 454 N.E.2d 210, 216-17, 73 Ill.Dec. 350 (1983); Crowe v. Public Building Comm'n of Chicago, 74 Ill.2d 10, 15, 383 N.E.2d 951, 953, 23 Ill.Dec. 80 (1978) (extending strict liability to commercial lessors). Even though suppliers and sellers do not create defects, they put defective products into the stream of commerce and may be held strictly liable to the injured user. Hammond., 97 Ill.2d at 206, 454 N.E.2d at 216-17. Imposing liability upon nonmanufacturers " is justified on the ground that their position in the marketing process enables them to exert pressure on the manufacturer to enhance the safety of the product." Hammond, 97 Ill.2d at 206, 454 N.E.2d at 216; Graham v. Bostrom Seating, Inc., 398 Ill.App.3d 302, 306, 921 N.E.2d 1222, 1226, 337 Ill.Dec. 84 (2010) (the loss caused by unsafe products should be borne by those who derive economic benefit and create the risk of harm by placing products in the stream of commerce).

[¶5] In many cases, however, only the manufacturer is ultimately ordered to compensate the consumer for his injuries, and the product's suppliers and sellers waste resources defending themselves from the consumer's suit. Restatement (Third) of Torts: Products Liability § 1 cmt a. (1998); Crowe, 74 Ill.2d at 13, 383 N.E.2d at 952 (" Because the ultimate loss will ordinarily be borne, through indemnification, by the party that created the defect, the public policy concern is really who, between the injured user and the seller, should bear the initial loss." ). Therefore, in many jurisdictions, legislation immunizes nonmanufacturing defendants from strict liability under certain circumstances (Restatement (Third) of Torts: Products Liability § 1 cmt a. (1998)), even though this immunity may occasionally mean a consumer is left with no remedy at all (Restatement (Third) of Torts: Products Liability § 1 cmt e hist. n 2 (1998) (citing e.g., Saieva v. Budget Rent-A-Car of Rockford, 227 Ill.App.3d 519, 591 N.E.2d 507, 169 Ill.Dec. 334 (1992))). See also Kellerman, 119 Ill.2d at 113, 518 N.E.2d at 117 (defendants whose sole basis of liability is their role as members of the distributive chain are able to extract themselves from a product liability action at an early stage, before they incur the expense of fully litigating the dispute). The Illinois legislature has provided this immunity to nonmanufacturers in section 2-621 of the Code of Civil Procedure. 735 ILCS 5/2-621 (West 2010).

[¶6] Section 2-621 is applicable only to cases such as Chraca's that allege injury from defective products. Section 2-621 provides that " [i]n any product liability action based in whole or in part on the doctrine of strict liability in tort" (735 ILCS 5/2-621(a) (West 2010)), a court must order dismissal of a defendant other than the manufacturer when the following three things occur: (1) the defendant " file[s] an affidavit certifying the correct identity of the manufacturer of the product allegedly causing injury, death or damage" (735 ILCS 5/2-621(a)(West 2010)), (2) the plaintiff files a complaint against the manufacturer (735 ILCS 5/2-621(b) (West 2010)), and (3) the manufacturer has or is required " to have answered or otherwise pleaded" (in other words, the plaintiff has effectively served the manufacturer) (735 ILCS 5/2-621(b) (West 2010)). The Illinois statute also specifies, " Due diligence shall be exercised by the certifying defendant *** in providing the plaintiff with the correct identity of the manufacturer or manufacturers, and due diligence shall be exercised by the plaintiff in filing an action and obtaining jurisdiction over the manufacturer

Page 187

or manufacturers." 735 ILCS 5/2-621(b) (West 2010). Generally, when a defendant complies with the various requirements of section 2-621, its dismissal from the action is mandatory. Lamkin v. Towner, 138 Ill.2d 510, 532, 563 N.E.2d 449, 459, 150 Ill.Dec. 562 (1990). Exceptions to this rule exist. A court is not to order dismissal where a plaintiff shows that the certifying defendant (1) exercised significant control over the design or manufacture of the product or communicated with the manufacturer about the alleged defect, (2) had actual knowledge of the defect in the product, or (3) created the defect in the product. 735 ILCS 5/2-621(c) (West 2010).

[¶7] Additionally, the Illinois statute provides that a plaintiff may, " at any time," " move to vacate the order of dismissal and reinstate" the certifying defendant, " provided plaintiff can show" that the certifying defendant did not identify the correct manufacturer or if the manufacturer is judgment proof, either because the statute of limitations or repose on the plaintiff's claim has run, the manufacturer is not amenable to service of process or the jurisdiction of the court, or the manufacturer is unable to satisfy any judgment or reasonable settlement. 735 ILCS 5/2-621(b)(1)-(5) (West 2010).

[¶8] After being served in Georgia, U.S. Battery retained Illinois counsel and filed a section 2-621(a) motion to be dismissed from Chraca's suit. 735 ILCS 5/2-621(a) (West 2010). The motion was supported by an affidavit from Fred Wehmeyer, an engineer who is U.S. Battery's senior vice president of product and process engineering. Wehmeyer stated that his employer never manufactured, designed, or exercised any control over the design or manufacture of carrying straps, did not create the alleged defects in the strap at issue, and had no knowledge of any alleged defects prior to Chraca's injury. Rather, if the strap had indeed come from U.S. Battery, then it was one that U.S. Battery had purchased from JessLink, Inc., which was a company located at 222 W. Pebble Creek Lane, Orange, California, 92865 (hereinafter JessLink). Wehmeyer said he personally reviewed photos of the strap, scrutinized his company's books and business records, and posed questions to JessLink to determine the identity of the strap's manufacturer. His investigation indicated JessLink obtained the strap from Shenyang Kaicheng Foreign Trade Company, Ltd., located in the city of Shenyang, China 11014. In addition, the trade company obtained the strap from the manufacturing company Yuhuan County Litian Metal Products Co. Ltd. (subsequently Yuhuan), which was located in China at Shuilong Industry Borough Kanmen, Yuhuan County, Zhejiang Province. In a follow up letter to Chraca, U.S. Battery restated in Chinese script the manufacturing company's name, address, and telephone and fax numbers and also specified the identity and cell phone number of the owner, Ji Rong Chen, in Chinese script.

[¶9] Chraca then asked the court for leave to file a first amended complaint adding allegations against Yuhuan and for the court to appoint APS International, Ltd. (subsequently APS) as a special process server to serve this new defendant in China. The court granted both requests as well as Chraca's subsequent motion for a default judgment against the strap manufacturer after it had been " served with Complaint and Summons in accordance with the Hague Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters." The People's Republic of China and the United States of America are both parties to the Hague Convention. See Hague Conference on Private International Law, Status table, Members of the Organisation,

Page 188

www.hcch.net/index_en.php?act=conventions.status& cid=17 (last visited Dec. 18, 2014). " The Hague Convention is a multinational treaty, which was first drafted in 1965, for the purpose of creating an appropriate means 'to ensure that judicial and extrajudicial documents to be served abroad shall be brought to the notice of the addressee in sufficient time.' [Citation.]" White v. Ratcliffe, 285 Ill.App.3d 758, 765, 674 N.E.2d 906, 911, 221 Ill.Dec. 113 (1996). In other words, the treaty specifies procedures for accomplishing foreign service of process. White, 285 Ill.App.3d at 765, 674 N.E.2d at 911.

[¶10] Chraca next filed a written response opposing U.S. Battery's dismissal. He argued in part that the Chinese strap manufacturer was " 'thumbing its nose' at this Illinois court" by " ignoring this action," and that this was sufficient grounds under Kellerman, 119 Ill.2d 111, 518 N.E.2d 116, 115 Ill.Dec. 591, to keep U.S. Battery in the case. Chraca provided an affidavit from one of his attorneys, Bryan J. O'Connor, Sr., stating that despite obtaining service through the APS agency, it was counsel's opinion that there was " no good faith basis to assert that Illinois has jurisdiction over [the manufacturer]" and that Chraca would be unable to collect on the default judgment. Chraca also filed an affidavit and supporting records from a paralegal employed by APS detailing how APS served Yuhuan in accordance with The Hague Convention. The paralegal explained that under the treaty, Chraca was entitled to a default judgment, but that a defaulted defendant would have one year to " reopen" the judgment. Chraca also filed his attorney's supplemental affidavit and a printout of an email conversation that counsel had in late August 2012 with a Mayer, Brown attorney, R. Terence Tung. In the email messages, attorney O'Connor had asked attorney Tung how to demonstrate to the court that there is " no reasonable expectation of ever collecting a judgment against the Chinese company," and Tung opined:

" 1. there is no arrangement for reciprocal enforcement of judgment between the U.S. and the People's Republic of China ('PRC') and as such, it is not possible ...

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