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Miller v. Nissen Corp.6/27/1990
Appellants, Warren G. Miller, individually and t/a Atlantic Fitness Products, Faye Miller, individually and t/a Atlantic Fitness Products, (collectively referred to hereinafter as "Atlantic Fitness,") and Frederick B. Brandt, allege that the Circuit Court for Baltimore City erred in granting Summary Judgment in favor of appellee, Nissen Corporation (referred to hereinafter as "Nissen") in an action for products liability.
We agree, and for the reasons set out below, we reverse.
In January, 1981, appellant Brandt, a plaintiff below, purchased a Model A Tredex Treadmill, manufactured by American Tredex Corporation ("American Tredex"), from Atlantic Fitness. In July 1981, pursuant to an Asset Purchase Agreement, Nissen bought all the assets of American Tredex, as well as its goodwill and the name, American Tredex. The former American Tredex Corporation assumed the name AT Corporation. In November 1982, appellant Brandt received correspondence and obtained replacement parts for the treadmill from Nissen. In October 1986, appellant Brandt, a surgeon, was injured when he caught one of his fingers in the treadmill's operating mechanism while performing an adjustment to the treadmill.
Litigation in this matter began on or about September 1, 1988, when Mr. Brandt and his wife, Annette Brandt, filed a complaint in the Circuit Court for Baltimore City against American Tredex, AT Corporation, Nissen and Atlantic Fitness, alleging negligence, strict liability, breach of express and implied warranties of merchantability and fitness, and loss of consortium as a result of the injury. On September 22, 1988, Atlantic Fitness answered the complaint, denying liability and asserting affirmative defenses. On December 2, 1988, Nissen answered, also denying liability and asserting affirmative defenses.
In May 1989, Nissen filed a Motion for Summary Judgment, contending that it was not responsible for any injuries involving equipment sold or manufactured by American Tredex prior to the date of the Asset Purchase Agreement, July 31, 1981. On May 23, 1989, Atlantic Fitness filed a cross-claim against Nissen for indemnity and contribution, as well as a Memorandum in Opposition to Nissen's Motion
for Summary Judgment, based on the fact that Nissen was liable as a successor in interest to American Tredex as a result of the continuity of enterprise between Nissen and American Tredex. Plaintiffs below filed an Answer to Nissen's Motion for Summary Judgment, as well as Mr. Brandt's Affidavit, stating that on November 30, 1982, Mr. Brandt purchased replacement parts for the treadmill from Nissen.
The trial court granted Nissen's Motion for Summary Judgment on July 26, 1989, and at the request of Atlantic Fitness, the trial judge entered a final order, rendering the matter appealable to this Court under Maryland Rule 2-602(b). The primary issues which all appellants raise include:
1. Whether the trial court erred in granting summary judgment for Nissen because it failed to acknowledge that Maryland recognizes the continuity of enterprise doctrine?
2. Whether the trial court erred in granting summary judgment since there existed a genuine dispute of material fact?
Our reversal of the trial judge's grant of summary judgment on these grounds eliminates the necessity of addressing additional issues raised by particular appellants.
Continuity of Enterprise
At the outset, we find it interesting to note that both the appellants and the appellee relied on the same line of cases to support their diametrically opposing claims regarding this issue. There are several possible expla
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