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Simmons v. Mark Lift Industries10/24/2005
e on Brown, 128 S.C. 428, 123 S.E. 97. I would apply the analysis previously set forth to determine whether the successor is a mere continuation of the predecessor. Accordingly, I would answer "yes" to Question 2 and analyze it in the following manner.
Terex argues it cannot be held liable as a successor because it purchased the assets free and clear of all claims pursuant to the terms of a bankruptcy court order; the Full Faith and Credit Clause requires this Court give binding effect to the bankruptcy court order; and the Bankruptcy Code preempts a successor liability theory of recovery when the bankruptcy court approves the sale of assets. I disagree.
A. LANGUAGE OF BANKRUPTCY COURT ORDER
The 1991 purchase agreement between Mark and Terex stated " othing herein shall be construed as the assumption of or by Buyer of any liabilities of the Seller, including, without limitation, any liability for products manufactured or sold by Seller." The bankruptcy court order approving the sale provided that "[Mark] is authorized to sell the assets of its estate to Terex . . . on terms and conditions consistent with the Purchase Agreement and related attachments." The order stated that "the sale of the assets authorized hereby is free and clear of any and all liens and encumbrances as may presently attach to the assets. . . (emphasis added)." The order further stated that the "sale of assets shall be free and clear of all liens and encumbrances of those creditors who had adequate notice of the Debtor's motion and opportunity to appear and object at the time of the hearing on the Motion (emphasis added)."
Terex asserts the terms of the order and purchase agreement insulate it from product liability claims as the successor of Mark. Simmons asserts the bankruptcy court order does not bar liability in this instance because - while the purchase agreement expressly mentioned product liability claims that may arise in the future - the order did not. Citing the above-emphasized language, Simmons contends his product liability claim is not barred because it did not exist until he was injured in the 1999 accident; thus, it does not fall within the ambit of the order.
I would decline to resolve this question by attempting to parse the language of the order and purchase agreement as Simmons suggests. Instead, I would find that the order apparently incorporated the terms and conditions of the purchase agreement, which included the provision on future product liability claims purporting to insulate Terex from successor liability. The real question which must be answered is whether such a provision precludes a state law-based product liability action against Terex.
B. FULL FAITH AND CREDIT CLAUSE
Terex argues this Court is required by the Full Faith and Credit Clause to enforce the bankruptcy court order in its entirety, including the disclaimer of liability for future product liability claims. I disagree.
The Full Faith and Credit Clause, as well as the Full Faith and Credit Statute, are inapplicable. Simmons, who was injured in 1999, did not have an existing claim and never received notice of the bankruptcy proceeding before the sale of assets in 1991. A court of this state is not required by the Full Faith and Credit Clause to enforce a foreign state judgment or order when it is rendered by a court lacking personal or subject matter jurisdiction, or when it is rendered in violation of due process of law without notice and a fair opportunity to be heard. See Baker by Thomas v. General Motors Corp., 522 U.S. 222, 242 (1998) (Full Faith and Credit Clause and its implementing statute make the record of a judgment, rendered after due notice
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