COMPEX INTERNATIONAL COMPANY, LIMITED V. STEPHEN C. TAYLOR; AND LAURA TAYLOR
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MODIFIED: JANUARY 25, 2007
RENDERED: OCTOBER 19, 2006
TO BE PUBLISHED
2005-SC-0228-DG
COMPEX INTERNATIONAL COMPANY, LIMITED
V.
APPELLANT
ON REVIEW FROM COURT OF APPEALS
2004-CA-0168-MR
BELL CIRCUIT COURT NO. 02-CI-0319
STEPHEN C. TAYLOR ; AND LAURA TAYLOR
APPELLEES
OPINION OF THE COURT BY JUSTICE ROACH
REVERSING
I. INTRODUCTION
This case involves a products liability claim for the alleged breach of an implied
warranty of merchantability . The Bell Circuit Court granted a motion to dismiss the
implied warranty claim against Appellant, Compex International Company, Ltd ., after
concluding that the parties lacked privity of contract . That portion of the circuit court's
judgment was reversed by the Court of Appeals, which held that the implied warranty
claim was permissible under KRS 355 .2-318, a statute in Kentucky's version of the
Uniform Commercial Code (U .C.C .) which extends liability under an implied warranty to
the family members and household guests of a product's buyers . Appellees, Stephen
and Laura Taylor, contend that the Court of Appeals was correct to remand the case
and argue that their implied warranty claim against Compex is viable, despite a lack of
contractual privity . We disagree and reverse the decision of the Court of Appeals.
II . BACKGROUND
The basic facts underlying this case are not in dispute and are set forth as
described in Appellees' Complaint. Appellees, Stephen and Laura Taylor, visited the
home of Stephen's parents in Bell County on or about July 14, 2001 . During the visit,
Stephen was injured when the chair he was sitting in collapsed, causing him to fall to
the ground . The chair, which his parents had purchased at a K-Mart store in
Middlesboro, had been manufactured by Compex.
Appellees filed a products liability action in the Bell Circuit Court naming Compex
and K-Mart Corporation as defendants and claiming damages under theories of
negligence, strict liability, breach of implied warranty, and loss of consortium .' The
parties entered an Agreed Order, dismissing without prejudice Appellees' claims against
K-Mart due to the company's pending bankruptcy. Compex filed its Answer to the
lawsuit, asserting that some or all of Appellees' claims were time-barred and that the
warranty claim, in particular, could not be maintained due to a lack of privity. In
December 2003, Compex filed a motion to dismiss Appellees' claims, asserting that
Appellees' claims for negligence, strict liability, and loss of consortium were barred by
the applicable statute of limitations . It is further argued that the warranty cause of action
There was a dispute at the trial court level and before the Court of Appeals regarding
the date the lawsuit was filed. Although Appellees claim former counsel mailed the original
complaint to the clerk's office in early July 2002, the document was not stamped filed by the Bell
Circuit Court clerk until July 19, several days after the one-year statute of limitations had expired
on Appellees' claims for negligence, strict liability and loss of consortium claims. After a
summons on the original Complaint was returned by the Secretary of State's office, a
subsequent complaint was filed on January 2, 2003. Following Appellant's motion to dismiss on
December 2, 2003, appellees' original counsel withdrew from the action, and appellees
proceeded with new counsel . Appellant was given notice of the lawsuit by Warning Order
Attorney on January 17, 2003.
failed to state a claim upon which relief could be granted because Appellees lacked
privity of contract with Compex and were not otherwise entitled to bring such a claim
under Kentucky's version of the U.C.C. Appellees' claims were dismissed as timebarred by an order of the trial court on December 24, 2003. In an Amended Order, the
trial court specified that Appellees' warranty claim had been dismissed due to the
court's determination that the parties lacked privity .
In an unpublished opinion, the Court of Appeals affirmed the trial court's
dismissal of the negligence, strict liability, and loss of consortium claims as time-barred,
but reversed the dismissal of Appellees' implied warranty claim . The court reasoned
that despite the parties' lack of privity, Appellees' warranty claim was valid pursuant to
KRS 355.2-318, a provision of the UCC which provides an exception to the privity
requirement for warranty liability to the family members and household guests of a
buyer of goods. This Court granted the company's motion for discretionary review to
consider the Court of Appeals' treatment of Appellees' warranty claims.
111 . ANALYSIS
The sole issue presented in this case is whether Appellees' implied warranty
claim was properly dismissed by the trial court.2 Appellees offer two central arguments
in support of their position that the claim was dismissed improperly . First, they claim
that under Kentucky law privity of contract is not a prerequisite for an action to recover
2 Although Appellees argued in the Court of Appeals that their claims for
negligence, strict liability, and loss of consortium were wrongly dismissed as time-barred
under the applicable statute of limitations, they did not present that argument for review
by this Court.
damages due to the breach of an implied warranty, an argument that was rejected by
the Court of Appeals. Alternatively, they argue that their implied warranty claim should
not have been dismissed because it falls within the exception to the privity requirement
defined in KRS 355.2-318 . Neither of these arguments is convincing .
In support of their first claim, Appellees rely solely on Griffin Industries, Inc. v.
Jones, 975 S .W.2d 100 (Ky. 1998), which stated that "privity is not a prerequisite to the
maintenance of an action for breach of an implied warranty in products liability actions ."
Id. at 102 (citing Dealers Transport Co., Inc. v. Battery Distributing Co., 402 S .W.2d 441
(Ky. 1965)).3 But this statement in Griffin mischaracterized the holding in Dealers .
While there is no question that the Dealers Court openly entertained the idea of
disposing of privity as a prerequisite for products liability actions involving breach of
warranty, the Court ultimately declined to endorse that view, deciding that the concept
of strict liability, as defined in Section 402A of the Restatement (Second) of Torts, was
the better approach.4
3 Interestingly, the primary question presented to the Court in Griffin concerned
the application of the occasional seller exception to the doctrine of strict liability as set
forth in Section 402A. Although the plaintiff in the case had pursued a claim for breach
of warranty before the trial court, that claim had been decided by summary judgment
and was not before the Court . As such, the Court's statement regarding warranty
claims seems entirely superfluous .
4 "We think we would do no judicial violence to hold that the law in this
jurisdiction is that privity is not a prerequisite to maintenance of an action for breach of
implied warranty in products liability cases, upon the authority and reasoning enunciated
in Henningsen v. Bloomfield Motors, 32 N.J . 358, 161 A.2d 69, 75 A.L.R.2d 1 . However,
we are persuaded to the view expressed in Section 402A of the American Law
Institute's revised Restatement of the Law of Torts approved in May, 1964 . . . ."
Dealers, 402 S .W.2d at 446 .
Moreover, this Court confirmed the limits of the Dealers opinion in Williams v.
Fulmer, 695 S .W .2d 411, 413 (Ky. 1985) ("The opinion of our Court in Dealers
Transport Co. , supra, adopted the theory of strict liability in tort as set out in Section
402A of the Restatement (Second) of Torts. This states a cause of action for physical
harm (to person or property) caused by a product defect against the manufacturer or
commercial seller of a product, not to be confused with the cause of action for breach of
warranty against a commercial seller as set out in the U.C.C ."). Justice Leibson, who
wrote the opinion for a six-vote majority (Justice Vance concurred in result only), left no
doubt that privity remains a prerequisite for products liability claims based on warranty,
concluding forcefully: "We have no precedent for abolishing privity where liability is
based on the sales contract ." Id . at 414. As such, Appellees' reliance on Griffin is
misplaced.
Of course, our recognition of the privity requirement is only the first step in this
case. As the Court acknowledged in Williams , "if liability is based on sale of the
product, it can be extended beyond those persons in privity of contract only by some
provision of the U .C.C. as adopted in Kentucky. The only provision of the U.C .C.
extending breach of warranty in injury cases is KRS 355.2-318 . . . ... 695 S.W.2d at
413. The Court of Appeals held, and Appellees now argue, that the warranty claim in
this case should have been allowed to proceed pursuant to KRS 355.2-318, but such an
approach would effectively ignore the privity requirement for claims of this type. The
statute reads as follows:
A seller's warranty whether express or implied extends to any natural
person who is in the family or household of his buyer or who is a guest in
his home if it is reasonable to expect that such person may use, consume
or be affected by the goods and who is injured in person by breach of the
warranty . A seller may not exclude or limit the operation of this section.
(emphasis added) . As discussed above, a seller's warranty protections are only
afforded to one with whom there is privity of contract, or, to use the terms of the statute,
a "seller's" warranty protections are only afforded to "his buyer ." Although the statute
provides an exception to the privity requirement, that exception is limited to its clear
terms and includes only those individuals who enjoy the specified relationship with the
buyer. While the Court of Appeals correctly acknowledged that Stephen Taylor's
parents were "buyers" under the broad definition of that term in the U.C.C.,5 it failed to
acknowledge that they had no buyer-seller relationship with Compex. The exception set
forth in KRS 355.2-318 is simply inapplicable in the absence of an underlying
contractual relationship. Thus, Appellees' implied warranty claim was properly
dismissed by the trial court.
Finally, we must reiterate a key principle from Williams , namely, that, at least
since the advent of the U .C.C ., the scope of warranty protections in commercial
transactions is a matter of public policy that has been expressly decided by the General
Assembly . Contract liability for breach of warranty arises not from the common law, but
from the terms of the contract and the statutory provisions of the U .C.C. The concept of
implied warranty in particular is governed by two express sections of the U.C.C., KRS
355.2-314 and KRS 355 .2-315 . We have long observed that determinations as to
public policy are a matter for the General Assembly. See, e .g. , Commonwealth ex rel.
Cowan v. Wilkinson , 828 S.W.2d 610, 614 (Ky. 1992) ("The establishment of public
5 KRS 355.2-103(1)(a) states that "`Buyer' means a person who buys or contracts
to buy goods."
policy is granted to the legislature alone . It is beyond the power of a court to vitiate
an
act of the legislature on the grounds that public policy promulgated therein is contrary to
what the court considers to be in the public interest. It is the prerogative of the
legislature to declare that acts constitute a violation of public policy."). Appellees offer
an array of policy arguments to support their assertion that their implied warranty claim
should not have been dismissed . This Court need not decide the merits of such
arguments since the legislature expressly established the privity requirement . Whether
public policy demands the repeal of such a requirement is a question left to the
legislature .
IV. CONCLUSION
For the foregoing reasons, the judgment of the Court of Appeals is reversed and
the judgment of the Bell Circuit Court dismissing Appellees' claim for breach of an
implied warranty is hereby reinstated .
Lambert, CJ; Graves, McAnulty, Minton and Scott, JJ ., concur. Wintersheimer,
J., dissents by separate opinion .
COUNSEL FOR APPELLANT:
Robert I . Cusick, Jr.
Wyatt, Tarrant & Combs, LLP
500 West Jefferson Street
Suite 2800
Louisville, Kentucky 40202-2898
Mickey Todd Webster
Wyatt, Tarrant & Combs, LLP
250 West Main Street, Suite 1600
Lexington, Kentucky 40507
COUNSEL FOR APPELLEES:
Jason E. Williams
Farmer, Kelley, Brown & Williams
PO Drawer 490
London, Kentucky 40743-0490
Harold F . Dyche, II
Farmer, Kelley, Brown & Williams
PO Drawer 490
London, Kentucky 40743-0490
RENDERED : OCTOBER 19, 2006
TO BE PUBLISHED
,$upct Qlaurf o~' ~otfixr.r
2005-SC-00228-DG
COMPEX INTERNATIONAL COMPANY
APPELLANT
ON REVIEW FROM COURT OF APPEALS
04-CA-0168-MR
BELL CIRCUIT COURT NO. 02-CI-0319
V.
STEPHEN C. TAYLOR ; AND
LAURA TAYLOR
APPELLEES
DISSENTING OPINION BY JUSTICE WINTERSHEIMER
I must respectfully dissent from the majority opinion because the clear language
of KRS 355.2-318 extends an implied warranty to household guests of the buyers such
as the Taylors. The facts of this case indicate that the warranty claimed by the Taylors
is not barred and that the trial judge erred by dismissing it. Consequently, I would
remand this matter for further proceedings on the merits of the warranty claimed by the
Taylors .
'Sixprture Courf of ~6ufurhv
2005-SC-0228-DG
COMPEX INTERNATIONAL COMPANY, LIMITED
APPELLANT
ON REVIEW FROM COURT OF APPEALS
2004-CA-0168-MR
BELL CIRCUIT COURT NO . 02-CI-0319
V.
STEPHEN C . TAYLOR; AND LAURA TAYLOR
APPELLEE
ORDER DENYING PETITION FOR REHEARING
AND MODIFYING OPINION
The petition for rehearing filed by the Appellees, Stephen C. Taylor and Laura
Taylor, is hereby denied .
The Opinion of the Court rendered herein on October 19, 2006, is modified by
the substitution of pages 1 and 2, attached hereto, in lieu of pages 1 and 2 as originally
rendered. Said modification is to correct footnote 1 and does not affect the holding of
the Opinion or Dissenting Opinion as originally rendered .
All concur.
Entered : January 25, 2007.
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