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Agurto v. Guhr

381 N.J. Super. 519, 887 A.2d 159 (App. Div. 2005)

PRODUCT LIABILITY; SELLERS—In interpreting the recognized exception under New Jersey’s Product Liability Act for the casual or occasional seller of goods, the term “casual” does not mean “once in a while”; it means “outside the ordinary course of business.”

A factory worker “was seriously injured when his arm was drawn into a glue mixing machine that [his employer had bought] from a seller.” The seller had obtained the machine eight years earlier from a company “in lieu of payment for work he had done for that company. He kept the machine in his warehouse for five years and then sold it to [the injured worker’s employer] in 1997.” The company that manufactured the machine was defunct at the time of the law suit. Consequently, the seller “was not protected by the exemption of the Product Liability Act for a seller that can’t identify the manufacturer of the defective product.” The seller testified “that he was an electrician who worked as an independent contractor providing installation and maintenance services for [the injured worker’s employer] and similar companies.” Also, he “admitted selling the machine in question to [the injured worker’s employer] and he admitted having additional machines at his warehouse.” In the prior five years he sold three other machines, but “claimed that the sales of machinery were a very small part of his business.” Lastly, he “attested that he had ‘occasionally put [the injured worker’s employer] in touch with used machine dealers for the purchase of dispersers,” and claimed not to have profited from any of those sales. The lower court granted summary judgment in his favor because it was unwilling to find that the seller “was a product seller under the Act.” The injured worker appealed and the Appellate Division stated “[t]he critical issue in this case is whether [the seller] was acting as a product seller when he sold the mixing machine to [the injured worker’s employer].” Under the Product Liability Act, a “product seller” is a person who, “in the course of a business conducted for that purpose: sells; distributes; leases; installs; ...repairs; maintains or is otherwise involved in placing that product in the line of commerce.” A broker “who takes possession of goods, or exercises control over them, and then transfers them to a buyer” is subject to strict liability. “On the other hand, a broker who does not take possession of the goods and merely facilitates a sale between the buyer and the seller, may not be considered to be a ‘seller.’” “There is also a recognized exception for the ‘casual’ or ‘occasional’ seller of goods ... the exception applies to occasional sales outside the regular course of the seller’s business.” Nonetheless, based on the Court’s analysis of New Jersey cases “in which this exception has been applied, [it] conclude[d] that the term ‘occasional’ does not mean ‘once in a while.’ It means that the selling of the goods at issue is not part of the ‘purpose’ of the seller’s business.” Here, the seller contended that “[he was] not, and never [had] been, in the business of such sales. He contend[ed] that his business was not ‘conducted for the purpose of selling used equipment.” The Appellate Division was distressed about the “mere” record and “conclude[d] that there [were] material disputes on the issues of whether of selling machinery was part of [the seller’s] business, even if it was a minor aspect of his business.” In light of the conflicting testimony, the Court felt that summary judgment was inappropriate. As to the issue of “whether [the seller was] a seller within the meaning of the Act,” the Court pointed out that “in the area of strict liability, ‘[i]t is for the Court to determine whether a legal duty will be imposed.’” Consequently, the Appellate Division directed that the court, rather than a jury, resolve the “threshold issue as to whether [the seller was] subject to the Act as a ‘product seller.’”

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