Current Issues Before the North Carolina Court of Appeals(1995 Paper)

Doug Abrams

I. THE STATUTE OF REPOSE AND MINORS

The interplay between North Carolina General Statute sections 1-50(6) and 1-17 has created serious issues for trial attorneys over the last decade. Assuming, without conceding, the constitutionality of 1-50(6), the language of 1-17 exempted minors from the harsh results of the statute of repose. In Bryant v. Adams, this Court interpreted 1-17 and its interplay with 1-50(6). Bryant v. Adams, 116, N.C. App. 448, 448 S.E.2d 832 (1994). The interpretation in Bryant unnecessarily limits the protections of 1-17. The sessions laws which enacted Chapter 99B and 1-50(6) specifically excluded 1-17. 1979 Sessions Laws Chapter 654.

The essential issue is whether the statute of repose can run against a child. In all other cases, a minor cannot have a claim for relief expire without (1) reaching majority or (2) having a guardian ad litem appointed. Bryant=s essential holding is correct that the statute of repose did not run in that case; however, the opinion contains dicta which should not be applied in future cases. For example, a minor who is injured in a seven year old General Motors Pick-up truck should not be precluded from obtaining compensation for injuries sustained as a result of a side-saddle explosion.

II. PRIVITY IN PRODUCTS LIABILITY CASES

The defense of privity has long lost its rational in products liability cases. If privity were a winter coat, there would be nothing left but shreds of unravelling material. The exceptions have so swallowed the rule that all the remains are unjust results. This Court should simply abandon privity as a defense for breach of warranty claims. North Carolina General Statute section 99B-2(b) permits buyers, members of the buyers= family, guests of the buyer, or employees of the buyer to bring a products liability claim for breach of warranty directly against the manufacturer. Thus, persons such as donees or bystanders would be covered. For example, if a Ford Bronco II were to roll over on the way from this meeting on I-40 and caused multiple deaths, the defense of privity could be applied to reach ridiculous results. If the car were given by the buyer to his niece for college graduation, the donee would not have a claim for breach of implied warranty against Ford. Similarly, bystanders who were killed as they worked on a flat tire on the side of I-40 would not have a breach of implied warranty claim. If the buyer and his wife were in the vehicle, however, they would have breach of implied warranty claims. The absurdity of this result demonstrates the fact that privity is not longer a logical defense.

III. EXCLUSIONS AND DISCLAIMERS OF WARRANTIES

In many products liability claims, the manufacturer will attempt to assert that the implied warranty of merchantability has been disclaimed or excluded. These manufacturers will attempt to point to a postage side sticker buried in the middle of an owners= manual. This type of purported disclaimer or exclusion of an implied warranty is insufficient. In reality, most states simply hold as a matter of public policy that a party may not exclude or disclaim the implied warranty of merchantability with respect to personal injury claims. Furthermore, Southeastern Adhesives Co. Funder Am., Inc., recognized that disclaimers had to be a basis of the bargain to be effective. In other words, putting an owners= manual in a glove compartment is insufficient to disclaim an implied warranty. Southeastern Adhesives Co. Funder Am., Inc., 89 N.C. App. 438, 366 S.E.2d 505 (1988). Only in the rarest of cases will consumers actually be involved in any negotiation over the terms of an implied warranty.

IV. NON-DELEGABLE DUTIES AND RESPONDEAT SUPERIOR

One aspect of the law closely related to products liability involves the doctrine of non-delegable duties. Under this doctrine a party may not escape liability for hazardous work by assigning the work to another entity. Additionally, the liability under non-delegable duty is a form of vicarious liability. Hendricks v. Leslie Fay, Inc., 273 N.C. 59, 62, 159 S.E.2d 362, 366 (1968)(A Contractor is vicariously liable for the negligence of a subcontractor where the non-delegable duty applies). See also, Brown v. Lumbermens Mut. Cas. Co., 90 N.C. App. 464, 369 S.E. 2d 367 (1988). Under certain circumstances, the Court must rule as a matter of law that certain activities involve dangerous instrumentalities such that the non-delegable duty doctrine will apply as a matter of law. See Woodson v. Rowland, 329 N.C. 330, 407 S.E.2d 222 (1991). Under this principle, an owner has a nondelegable duty to insure that proper precautions are taken when an activity involves hazardous activities. Deitz v. Jackson, 57 N.C. App. 275, 291 S.E.2d 282 (1982)(owner/contractor is liable for negligence of subcontractor where activity involved has potential for hazards). In Deitz, the North Carolina Court of Appeals discussed the difference between liability arising from direct negligence and liability arising from the vicarious liability of an owner/contractor. Deitz v. Jackson, 57 N.C. App. 275, 291 S.E.2d 282, 285 (1982). See also, Blevins v. Taylor, 103 N.C. App. 346, 407 S.E.2d 244 (1991). This rule imposes liability upon the owner/contractor for the negligent acts of another performing an "activity which would result in harmful consequences unless proper precautions" are taken. Deitz v. Jackson, 57 N.C. App. 275, 291 S.E.2d 282, 285 (1982). Such cases arise from the fact that the owner/contractor has a nondelegable duty; and is liable even where the owner/contractor has himself done "everything which could reasonably be required of him". Deitz v. Jackson, 57 N.C. App. 275, 291 S.E.2d 282, 285 (1982)(Citing Hendricks v. Leslie Fay, Inc., 273 N.C. 59, 62, 159 S.E.2d 362, 366 (1968)(Emphasis Added). Accordingly, liability in such cases arise from "vicarious liability." Deitz v. Jackson, 57 N.C. App. 275, 291 S.E.2d 282, 285 (1982)(Citing Hendricks v. Leslie Fay, Inc., 273 N.C. 59, 62, 159 S.E.2d 362, 366 (1968)).

The holdings in Woodson and Dietz are quite consistent. If an activity is hazardous as a matter of law, the law imposes upon the owner the same liability as if the subcontractor were his actual employee. In the case of an activity which is a mixed question of law and fact, the owner is not on notice that an activity would be hazardous and therefore the owner or contractor must have some form of notice, even indirect notice, that the specific activity engaged in was sufficiently hazardous that the insulation of independent contractor will not apply. This distinction is essential and this Court should be careful to maintain the differences between the two situations.