December/January 1998

Lawyers On The Side Of People

Volume 47 Issue 10

The trial court relied on the statements by the Wright court that trial courts should use a case by case approach in determining whether the provision of materials and the construction of a part or a whole of a structure, whether mass produced or custom designed, are activities subject to strict products liability.12 The Scott trial court also recognized that the purpose of strict liability is to

insure that the costs of injuries resulting from defective products are borne by the manufacturers that put such products on the market rather than by the injured persons who are powerless to protect themselves.13

Concluding that since applying strict product liability in the context of an escalator does not serve the purposes of strict liability, the trial court held that the Scotts' product liability claims were improper and should be dismissed. The court stated that even though there was substantial evidence that Montgomery pre-fabricated substantial portion of the escalator, there was substantial evidence that the escalator was a unique structure designed, constructed and installed to fit DIA. Accordingly, Colorado's Products Liability Act was not applicable.

The Scott court's ruling was based in part on a ruling in another case involving allegations of a defective escalator. In Wright v.The May Department Stores, Centric Elevator Corp., and Otis Elevator Corp. ("Otis"),14 the trial court held that Otis was entitled to judgment as a matter of law as to the plaintiffs' product liability claims. In Wright v. Otis, the plaintiffs alleged that the escalator inquestion was a defective "product" because the design allowed a child's hands to become caught between the moving and stationary components and because the escalator lacked adequate warnings for passengers concerning the dangers it posed. Otis' Motion for Summary Judgment was based on a claim that the ten-year statute of repose barred the plaintiffs' claims because the escalator in question was an improvement to real property. The plaintiffs claimed, as in Scott, that Otis was not a contractor or installer of an improvement to real property, but a "manufacturer" of a product." Accordingly, the plaintiffs claimed the ten-year statute of repose for improvements to real property did not apply, but rather the statute of limitations for products, thus affording the plaintiffs three years from the date the action accrued within which to commence the suit. Like the Scott court, the Wright v. Otis court noted that Otis manufactured certain components that went into the escalator, custom designed the escalator system in issue and built it to fit into the building in question.

Consequently, the court held that because the escalator became an improvement to real property, Otis was entitled to judgment as a matter of law.

Even though strict products liability appears to be well-suited to protecting individuals from defective equipment and components installed on premises, the viability of strict products liability as a theory of recovery in this context has been accepted to varying degrees by courts across the United States. Some courts have held that strict product liability is not applicable in the real property context because the building or land at issue is not a "product" and because extending the theory to the context or real estate is not supported by general policy considerations.16

Other courts have held that injuries and damages caused by defective equipment or components installed on property fall within the scope of strict products liability since they have determined that there is no difference between the mass production and sale of other goods and homes.17 These courts have held that the underlying policy of protecting the public from unsafe "products" is present in both instances. Some courts have reached the same result by concluding thathomes and buildings are themselves "products."18

Strict products liability is meant to protect the public from dangerous products.

COLORADO'S PRODUCTS LIABILITY ACT AS A BASIS FOR RECOVERY FOR INJURIES CAUSED BY DEFECTIVE EQUIPMENT OR COMPONENTS ON REAL PROPERTY

Unlike the traditional theories of recovery involving defective products, such as negligence and breach of express or implied warranties, strict liability in tort does not require proof of the defendant's negligence. 19

In order to establish a claim based on products liability, the plaintiff must prove that:

1. the product was defective;

2. because of the defect, the product was unreasonably dangerous;

3. the defect existed when the prod uct left the manufacturer's control;

4. the product was expected to and did reach the plaintiff, an expected user without a substantial change in its condition;