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Winsor v. Glasswerks PHX2/4/2003
AFFIRMED
We are invited in this case to expand the scope of products liability actions to include successor corporations not involved in placing the product into the stream of commerce. We decline to do so, determining that any such modification of Arizona law is best left to the legislature.
FACTUAL AND PROCEDURAL BACKGROUND
On June 9, 1997, John Scott Winsor ("Winsor") was at a job site installing a pane of glass manufactured by Labrador Glass Specialties, d/b/a, LabGlas, Inc. ("LabGlas"). The pane of glass shattered and Winsor was seriously injured. In 1995, approximately two years prior to Winsor's injury , LabGlas entered into a purchase agreement to the effect that Glasswerks PHX, L.L.C. ("Glasswerks") became the owner (with limited exceptions) of all LabGlas' assets, tangible or intangible. The purchase agreement provided that Glasswerks "will not assume or be responsible for any liabilities or obligations of [LabGlas]" except those debts expressly stated. The agreement also provided that it was to "be governed by and construed in accordance with the laws of the State of California applicable to contracts made."
After his injury , Winsor filed a products liability action against Glasswerks as LabGlas' successor. Glasswerks moved for summary judgment relying on the general rules of successor liability recognized in Arizona. A.R. Teeters & Assocs., Inc. v. Eastman Kodak Co., 172 Ariz. 324, 836 P.2d 1034 (App. 1992). The general rule is that a successor corporation is not liable unless certain exceptions are met. For example, a successor is liable if the successor is "a mere continuation or reincarnation of the seller" or if "the transfer of assets to the purchaser is for the fraudulent purpose of escaping liability for the seller's debts." Id. at 329, 836 P.2d at 1039.
Winsor did not argue to the trial court under Teeters, and does not argue here, that Glasswerks is a "mere continuation" or that the purchase agreement was for the "fraudulent purpose of escaping liability" or that some other exception recognized in Arizona applies. Rather, Winsor argued to the trial court that California law applied and that Glasswerks was liable under the product line exception to the general rule as recognized in California. Ray v. Alad Corp., 560 P.2d 3, 11 (Cal. 1977).
The trial court determined that Arizona law, rather than California law, applied and granted Glasswerks' motion for summary judgment. Winsor then filed a motion for reconsideration urging the trial court to expand Arizona law to recognize the product line exception first announced in Ray. The trial court denied the motion. Winsor timely appealed. We have jurisdiction pursuant to Arizona Revised Statutes (A.R.S.) sections 12-120.21 (1992) and 12-2101(C)(1994).
DISCUSSION
This court reviews a summary judgment de novo. Great Am. Mortg., Inc. v. Statewide Ins. Co., 189 Ariz. 123, 125, 938 P.2d 1124, 1126 (App. 1997). Considering the facts in the light most favorable to the non-moving party, we will affirm if there is no material factual issue and the moving party is entitled to judgment as a matter of law. Estate of Hernandez v. Flavio, 187 Ariz. 506, 509, 930 P.2d 1309, 1312 (1997).
1. Choice of Law.
The first issue we must decide is whether Arizona or California law applies in this products liability action. Winsor argues that the choice of law provision in the purchase agreement between Glasswerks and LabGlas requires that California law apply to his claim. We disagree.
The choice of law provision in this matter applies to the contractual relationship between LabGlas and Glasswerks,
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