Falling Merchandise - Trail Talk 12-1-98

TRIAL TALK

COLORADO TRIAL LAWYERS ASSOCIATION

December/January 1998

Lawyers On The Side Of People

Volume 47 Issue 10

Product Liability

Product or Premises?
Recovery Against Manufactures for Injuries Caused by
Defective Equipment Installed on Real Property

By Jeffery A. Hymen, Esq. and Richard B. Levin, Esq.

anufacturers are strictly liable for injuries caused by defects in the products they sell. However, if the injury in question was caused by the failure cia piece of equipment or component that was built or installed as a part of a building, beware. Any claim against the manufacturer of the piece of equipment or component based on the theory of strict products liability may be dismissed based on the defendant manufacturer's claim that the equipment or component is not a "product" for purposes of products liability law. The builder or property owner may be left as the responsible party and the injured party may have no choice but to seek recovery pursuant to Colorado's Premises Liability Act.1

The question of whether a product is an Improvement to real property is important because the resolution of the issue may determine whether the action may go forward or if it is barred by the statute of repose governing improvements to real property. A stature of repose, unlike a statute of limitations, Amay bar a claim before the injury occurs2 The statute of limitations for most negligence and strict liability actions is two years after the cause of action arises.3 A cause of action does not arise until the injury occurs. Under Colorados statute of repose for improvements to real property, actions against architects, contractors, builders, builder vendors, engineers or inspectors are barred if brought more than six years after substantial completion of an improvement to real property.4 The bar precludes actions alto gether where the injury does not occur within six years of completion of constwction. Property owners and others in control of the property at the time of the improvements are expressly excluded from the bar.5

Consequently, if the court deems a piece of equipment that injures a person an improvement to real property, that person's claim against the manufacturer may be barred if the improvement was installed more than six years before the incident in question.6 This has several very practical effects, all adverse to the plaintiff. First, if the manufacturer is not a defendant, strict liability is not available and the plaintiff must prove negligence. Second, the plaintiff must prove the negligence of the property owner, not just that of the manufacturer. The property owner may not have known or had reason to know of the defect. Third, the plaintiff's recourse is limited to the insurance and assets of the property owner, not that of the manufacturer.

This article addresses the question of whether a piece of equipment or component installed on the subject premises, such as a sliding glass door, a septic system, a stairway, a grain silo, a tennis court, a pool, a window, a gas or electric furnace, insulation, a stucco wall, a foundation, a roof, a radiant heating system, a hot tub, a gas-fired water heater, a temperature valve for a hot water line, a patio deck, a sewage system, an automatic of manual sliding glass door, a big screen home television, a stove, a garage door opener, an elevator or an escalator, are products for purposes of Colorado's Product Liability Act.7 Alternatively, as some manufacturers have claimed, once the piece of equipment or component is installed on the premises it is not a "product", but a fixture that is not subject to Colorado's Product Liability Act.8

This article was inspired by the recent case of Scott v. The City and County of Denver, d/b/a Denver International Airpon ("DIA") and Montgomery Elevator Company. ("Montgomery").9 In Scott, the court was faced with the issue of whether an escalator was a "product" or was an improvement to real property. Mrs. Scott was injured at DIA when she was thrown down an escalator that stopped suddenly, allegedly due to a defective design.

Montgomery filed a Motion for Partial Summary Judgment claiming that since the escalator was an improvement to real property, it was not a "product" for purposes of Colorado's Product Liability Act and that accordingly, the Scotts' product liability claims should be dismissed. Montgomery also argued that the Scotts' product liability claims should be dismissed because Montgomery was not a "manufacturer."10

Acknowledging that there is no Colorado authority specifically extending strict liability to actions involving escalators, the trial court granted Montgomery's motion based on the Colorado court of appeals holding in Wright v. Creative Corporation,11 where the court held that strict products liability does not apply to the installation of a sliding glass door in a home because it is an improvement to real property.



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