Nath v. National Equipment Leasing Corp.

LARSEN, Justice,

dissenting.

The question decided today is whether strict liability under the Restatement (Second) of Torts § 402A1 extends to those institutions which provide products to the public under financing leases.

The appellant suffered injury while working on a machine which had been leased to his employer by appellee, and appellant thereupon instituted suit, in the Court of Common Pleas of Allegheny County, to recover damages from appellee. A theory of liability asserted, inter alia, was that of strict liability under § 402A of the Restatement (Second) of *134Torts. The specific allegation in appellant’s complaint is that appellee leased or rented to appellant’s employer, under a contract captioned “Equipment Lease”, a wire and cable stripper, which machine was unreasonably dangerous in that it lacked a guard to protect a user’s hands from the machine’s cutting edges.

Appellant then filed a Motion for Partial Summary Judgment, requesting the trial court to rule that appellee was a “lessor-sellor under Section 402A of the Restatement of Torts 2d.” Although a court en banc denied the motion, the trial court certified the matter to the Superior Court, since the trial court had concluded that the controlling questions of whether § 402A extended to lessors was one as to which there was a substantial difference of opinion. After an affirmance by the Superior Court, we granted appellant’s petition for appeal and thereafter remanded the case to the trial court for further consideration, in light of our then-recently decided Francioni v. Gibsonia Track Corporation, 472 Pa. 362, 372 A.2d 736 (1977), wherein we stated that “[W]hat is crucial to the rule of strict liability is not the means of marketing but rather the fact of marketing, whether by sale, lease or bailment, for use and consumption by the public.”

Upon remand, the parties agreed to a trial in limine, limited to the issue of whether the lease in question was a commercial lease or a finance lease. The trial court concluded that the lease was a finance lease and that strict liability under 402A did not apply. The Superior Court affirmed and we granted appellant’s petition for appeal.

The principal basis for distinguishing between the legal consequences, in the context of strict liability, flowing from a financial lease as opposed to a commercial lease is stated in appellee’s brief:

When a lessor does not participate in the decision on specifications, selection, order, or delivery of the product, has advanced funds to the lessee to enable the lessee to be in a position to later purchase the product, and has retained a security interest to secure its loan of money, the *135policy behind section 402A should not apply to such a lessor.

Or as stated elsewhere in appellee’s brief: “It is the class of ‘lessors’ who are presumed to have that special knowledge of the product which justifies the imposition of the doctrine of strict liability.”

The elements reflected in the above statements are clearly keyed to “fault” or “negligence” concepts, and as such are at sharp variance with our clearly enunciated guidelines for strict liability. Azzarello v. Black Bros. Co., Inc., 480 Pa. 547, 391 A.2d 1020 (1978). Furthermore, as this Court had occasion to reiterate in Francioni v. Gibsonia Truck Corporation, supra, I find compelling Justice Traynor’s observation: “. . . public policy demands that responsibility be fixed wherever it will most effectively reduce the hazards to life and health inherent in defective products that reach the market.” Escola v. Coca Cola Bottling Co. of Fresno, 24 Cal.2d 453, 462, 150 P.2d 436, 440 (1944) (concurring opinion).

It is beyond dispute that in Pennsylvania the imposition of strict liability has been premised upon the need to relieve consumers of a burden which may be intolerable to one upon whom caprice has placed it and to shift that burden to those whose business it is to traffic in commerce. Nor am I persuaded that those who facilitate the placing of goods in commerce by providing indispensable funds for the purchase and subsequent financial leasing of goods play a role any less critical to hazard creation than such others as job wholesalers. The circumstance that wholesalers, financial lessors, and (often) retailers have little or no opportunity to inspect goods in which they deal is inconsequential, since strict liability is imposed without reference to whether caution was exercised or disregarded, if in fact the product was defective.

In Pennsylvania, we have consciously and consistently rejected an approach to strict liability which is predicated upon any element of fault, knowledge of trading parties (or *136lack thereof), consumer expectations, or other elements alien to defendant identification on bases other than their participation at any stage in the manufacture or marketing (in any fashion) of products. It is those parties-participant who have the capacity to spread the costs of injury over society at large and relieve those innocent victims of a defective product of what may be disastrous financial consequences. To afford a shield for institutions which play a vital and continuing role in product marketing would be to retreat from our basic and informing premise. Given the frequently indispensable role played in the marketing scheme by finance lessors, no justification can be advanced for affording the financial lessor the uniquely privileged position here urged by appellee.

The pertinent factors cited in Francioni v. Gibsonia Truck Corporation, supra, 472 Pa. 362, 368-369, 372 A.2d 736, 739 for extending Section 402A coverage to lessors are no less present and no less compelling in the context of financial leases. The availability of the lessor for redress, the incentive to safety, the possible prevention of the circulation of defective products, and finally cost-distribution for injuries sustained are all factors dictating 402A coverage no less for financial lessors than for commercial lessors, wholesalers, or retailers. Indeed I would expect that inclusion of finance lessors would enhance the likelihood of realizing these objectives, because of the greater number and diversity of interested parties.

For these reasons, I would reverse the order of the Superi- or Court which affirmed the common pleas court’s conclusion that appellee, as a finance lessor, was not within the scope of strict liability under Section 402A of the Restatement (Second) of Torts, and I would remand the case for further proceedings consistent with this conclusion.

FLAHERTY and KAUFFMAN, JJ., join in this dissenting opinion.

. § 402 A. Special Liability of Seller of Product for Physical Harm to User or Consumer

(1) One who sells any product in a defective condition unreasonably dangerous to the user or consumer or to his property is subject to liability for physical harm thereby caused to the ultimate user or consumer, or to his property, if
(a) the seller is engaged in the business of selling such a product, and
(b) it is expected to and does reach the user or consumer without substantial change in the condition in which it is sold.
(2) The rule stated in Subsection (1) applies although
(a) the seller has exercised all possible care in the preparation and sale of his product, and
(b) the user or consumer has not bought the product from or entered into any contractual relation with the seller.