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BECK v. ROPER WHITNEY
September 27, 2001
DAVID BECK AND SANDRA BECK, PLAINTIFFS,
ROPER WHITNEY, INC., AND ROPER WHITNEY OF ROCKFORD, INC., A/K/A ROPER WHITNEY CO., MET-COIL-RWC, INC., ROPER INDUSTRIES, INC., FOREST INDUSTRIES, INC., C/O HENRY B. LAKE AND ROPER INDUSTRIES, INC., C/O PRENTICE HALL CORPORATE SYSTEMS, ALL AS SUCCESSORS IN INTEREST TO ROPER WHITNEY, INC., DEFENDANTS.
The opinion of the court was delivered by: John T. Curtin, United States District Judge
Presently before the court are cross-motions by the plaintiffs and two
of the defendants for summary judgment on the issue of successor
liability, as well as plaintiffs' motion to amend.
On April 23, 1999, plaintiff David Beck filed an action in New York
State Supreme Court, Erie County, against Roper Whitney, Inc.; and
against Roper Whitney of Rockford, Inc., a/k/a Roper Whitney Co.;
Met-Coil-RWC, Inc.; Roper Properties, Inc.; Forest Industries, Inc., c/o
Henry B. Lake; Roper Industries, Inc., c/o Prentice Hall Corporate
Systems, all as successors in interest to Roper Whitney, Inc. Mr. Beck
asserted claims for breach of warranty and failure to warn against Roper
Whitney, Inc., and strict products liability against all defendants.
These claims arose as a result of injuries Mr. Beck allegedly sustained
on April 24, 1996, when he was struck in the head by the arm of a sheet
metal brake manufactured in September 1981 by Roper Whitney, Inc. Item
1, Ex. A. Sandra Beck asserted a derivative claim for loss of
The action was timely removed to federal court by defendants Roper
Whitney, Inc.; Roper Properties, Inc.; and Roper Industries, Inc., c/o
Prentice Hall Corporate Systems. Item 1. All defendants, with the
exception of Forest Industries, Inc., c/o Henry B. Lake, answered the
complaint. Items 2, 4, 7. Former Magistrate Judge Carol E. Heckman
ordered that discovery be bifurcated into two phases: successor liability
issues and all other issues. Item 8. Magistrate Judge H. Kenneth
Schroeder, Jr., set out a scheduling order on the successor liability
issues. Items 10, 11.
After some discovery, defendant Met-Coil-RWC, Inc., filed a motion for
summary judgment on December 1, 2000, seeking to dismiss all claims and
cross-claims against it on the ground that it was not a successor to
Roper Whitney, Inc. Item 12. In support of its motion, Met-Coil-RWC,
Inc. provided an Affidavit from Katie Michael, Human Resources Director
of Met-Coil Systems Corp., and an Attorney's Affidavit with exhibits.
Plaintiffs then filed a Cross-Motion for Partial Summary Judgment,
seeking a determination that each of the defendants was a corporate
successor with respect to any liability which may be attributed to
defendant Roper Whitney, Inc., as the manufacturer of the sheet metal
brake which caused the injury to Mr. Beck. Plaintiffs also filed an
Attorney's Affidavit with exhibits in support of their motion. Item 16.
Defendant Roper Whitney of Rockford, Inc. (sued in its own name and as
Roper Whitney Co.), also filed a motion for summary judgment, supported
by an affidavit of Gary Strakeljahn, Vice-President and Chief Financial
Officer of Roper Whitney of Rockford, Inc. ("Roper-Rockford"), Item 19,
and opposed plaintiffs' motion for partial summary judgment. Item 23.
On February 20, 2001, plaintiffs filed a motion to amend the
complaint, Item 25, which was unopposed. Further briefing on successor
liability followed. Oral argument was to have taken place on September
7, 2001. The court instead determined that the motions could better be
decided on the papers and, with consent of counsel, considered the
motions submitted. For the reasons that follow, the court denies
Met-Coil-RWC, Inc.'s motion for summary judgment, denies Roper-Rockford's
motion for summary judgment, grants in part and denies in part
plaintiffs' motion for partial summary judgment, and grants plaintiffs'
motion to amend.
For the most part, the facts are uncontested, and are found in the
documents attached as exhibits to the various motions.
On April 24, 1996, plaintiff David E. Beck was working as an employee
of the Buffalo Sewer Authority. In the course of his employment, he was
struck in the head and injured by the arm of a sheet metal brake, Model
812, bearing Serial Number 664 9-81.*fn1 Plaintiff asserts that the
sheet metal brake was manufactured by defendant Roper Whitney, Inc., in
or about September 1981. However, since 1981, Roper Whitney, Inc., has
undergone a number of different corporate incarnations. Many of the
subsequent companies use various combinations and permutations of the
Roper and Whitney names, making the process of tracing the company's
successors complicated and confusing at best.
In 1981, Roper Whitney, Inc., was a wholly owned subsidiary of Roper
Industries, Inc., an Illinois corporation ("Roper Industries, Inc.
(Ill.)"). Item 12, Ex. A to Ex. E, p. 1.*fn2 Roper Whitney, Inc., was
located at 2833 Huffman Boulevard, Rockford, Illinois.
On June 29, 1982, Roper Whitney, Inc.'s separate corporate existence
ceased when it was merged into Roper Industries, Inc. (Ill.). At that
time, Roper Whitney, Inc., became a division of Roper Industries, Inc.
(Ill.). Item 12, Ex. B to Ex. E ("Plan and Agreement of Merger of Roper
Whitney, Inc., Enpo Pump Company, and Cornell Pump Company with and into
Roper Industries, Inc.").
On June 30, 1982, the assets and liabilities of the Roper Whitney,
Inc., division of Roper Industries, Inc. (Ill.) were transferred to
Dexter Holdings, Inc., Ex. C to Ex. E ("Transfer of Assets"), which then
changed its name to Roper Industries, Inc. (Del.). Item 12, Ex. D to Ex.
E ("Certificate of Amendment"). The Roper Whitney division of Roper
Industries, Inc. (Del.), became known as Roper Whitney Company Division.
Ex. F to Ex. E, p. 1.
Following the sale of the Roper Whitney division to Dexter, on June
30, 1982, Roper Industries, Inc. (Ill.) changed its name to Roper Pump
Company. On March 29, 1983, Roper Pump Company changed its name to Roper
Properties, Inc. At some point, It became a wholly owned subsidiary of
Roper Industries, Inc. (Del.). Item 12, Ex. F to Ex. E, p. 1.
On June 30, 1986, Roper Industries, Inc. (Del.) and Roper Properties,
Inc. (Ill.) entered into an agreement with Medart Acquisition Corporation
("Medart"), whereby Medart acquired the Roper Whitney Company Division as
a "going concern." Item 12, Ex. F to Ex. E (June 25, 1986 Purchase and
Sale Agreement), p. 1. By way of this transaction, the Roper Whitney
Company Division transferred substantially all of its assets to the newly
formed Roper Whitney Corporation "in exchange for which all of the issued
shares of capital stock" of said corporation "were issued to Roper
Industries, Inc. and Roper Properties, Inc." Id. On August 26,
1986*fn3, Roper Whitney Corporation (Ill.) stock was sold to Medart.
Item 12, Vignali Aff., ¶ 7(e); Ex. A to Ex. E (flow chart) and Ex. F
to Ex. E ("Purchase and Sale Agreement").
On March 14, 1988, Medart's subsidiary, Roper Whitney Corp. (Ill.) sold
certain assets and liabilities of the Roper Whitney Company Division,
"subject to certain specified liabilities and obligations" to Industries
Machinery Systems and Supply, Inc. ("IMSS"), a wholly owned subsidiary of
Met-Coil Systems, Inc. Item 12, Ex. G to Ex. E (March 14, 1988 Asset
Purchase Agreement), p. 1. The purchase price for the assets included a
$300,000.00 deposit in escrow of Met-Coil Systems stock. Id., p. 3.
Following this transaction, IMSS changed its name to Roper Whitney
Company, Inc., to reflect the purchase of certain assets by Met-Coil
Systems Corp. from Roper Whitney Corporation. Item 12, Ex. G, p. 1. On
April 6, 1988, Roper Whitney Corporation (Ill.) changed its name to Forest
Industries, Inc., Item 12, Ex. H to Ex. E ("Articles of Amendment").
In 1990, Medart filed for Chapter 7 Bankruptcy. Item 19, Roper-Rockford
Statement of Material Facts, ¶ 8(d).
On August 27, 1993, Roper Whitney Company, Inc. (Ill.), located at the
Huffman Blvd. address in Rockford, Illinois, entered an Asset Purchase
Agreement with three investors (John K. Forlow, David Casazza, and Gautam
Gupta) "or a corporation to be formed by them" for certain assets,
including all assets used in the operation of its business, as well as
name "Roper Whitney," and assumed certain enumerated liabilities. Item
19, Ex. B. The three investors formed Roper Whitney of Rockford, Inc., on
December 6, 1993. Item 19, Ex. A. Roper Whitney Company, Inc.,
transferred its right, title, and interest in the name "Roper Whitney
Company" to Roper-Rockford on December 7, 1993. Item 19, Ex. D.
Roper-Rockford operates from the Huffman Street address in Rockford,
On October 30, 1993, Roper Whitney Company, Inc., changed its name to
Met-Coil-RWC, Inc. Item 19, Ex. C.
I. Standard for Summary Judgment
A motion for summary judgment may be granted only when it is shown that
"there is no genuine issue as to any material fact and that the moving
party is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c);
Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). The party seeking
summary judgment "bears the initial responsibility of informing the
district court of the basis for its motion, and identifying [which
materials] . . . it believes demonstrate the absence of a genuine issue
of material fact." Celotex Corp. 477 U.S. at 323. The substantive law
governing the case will identify those facts which are material, and
"[o]nly disputes over facts that might affect the outcome of the suit
under the governing law will properly preclude the entry of summary
judgment." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986).
Where parties have filed cross-motions for summary judgment asserting
the absence of any genuine issues of material fact, "a court need not
enter judgment for either party." Morales v. Quintel Entertainment,
Inc., 249 F.3d 115, 121 (2d Cir. 2001), citing Heublein, Inc. v. United
States, 996 F.2d 1455, 1461 (2d Cir. 1993). "Rather, each party's motion
must be examined on its own merits, and in each case all reasonable
inferences must be drawn against the party whose motion is under
consideration." Morales, 249 F.3d at 121 (citation omitted).
Defendants Met-Coil-RWC, Inc., and Roper-Rockford each move for summary
judgment, essentially on the grounds that as remote purchasers of
assets, they are not liable under the doctrine of successor liability for
plaintiffs' injuries. Plaintiffs cross-move for partial summary judgment
on the issue of successor liability, asserting that each of the named
defendants are corporate successors with respect to any liability which
may be attributed to defendant Roper Whitney, Inc. Plaintiffs further
argue that Nichols v. Roper-Whitney Co., et al., 843 F. Supp. 799
(D.N.H. 1994), has collateral estoppel effect not only on defendant Roper
Whitney Company, but also on Met-Coil-RWC, Inc., Roper-Rockford, and the
The rule on successor liability is well settled.
Generally, a corporation which acquires the assets of another is not
liable for the torts of its predecessor unless: `(1) [the successor
corporation] expressly or impliedly assumed the predecessor's tort
liability; (2) there was a consolidation or merger of seller and
purchaser; (3) the purchasing corporation was a mere continuation of the
selling corporation; or (4) the transaction is entered into fraudulently
to escape [tort liability] obligations.'
Before the court addresses the motions of Met-Coil-RWC, Inc., or
Roper-Rockford, it will first consider plaintiffs' summary judgment
argument on corporate successorship, and whether the New Hampshire
District Court's finding in Nichols v. Roper-Whitney Co., et al. has
collateral estoppel effect on this action.
None of the other defendants, i.e., Roper Properties, Inc., Roper
Industries, Inc. (Del)., or Forest Industries, Inc., have contested their
The doctrine of collateral estoppel, or issue preclusion, provides that
"`[w]hen an action between two parties terminates in a valid judgment, a
later action between the parties may be affected[,] [and possibly
barred,] even though it involves a different claim or cause of action.'"
Levy v. Kosher Overseers Assn. of America, Inc., 104 F.3d 38, 41 (2d
Cir. 1997), quoting James Fleming, et al., Civil Procedure, § 11.17,
at 607 (4th ed. 1992).
In order to apply the doctrine of collateral estoppel to bar litigation
of an issue,
(1) the issues in both proceedings must be identical,
(2) the issue in the prior proceeding must have been
actually litigated and actually decided, (3) there
must have been a full and fair opportunity for
litigation in the prior proceeding, and (4) the issue
previously litigated must ...