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Montross v. Loggy Bayou

June 9, 2008

RONALD MONTROSS AND ANNETTE MONTROSS, PLAINTIFFS,
v.
LOGGY BAYOU, INC. A/K/A LOGGY BAYOU ENTERPRISES; LOGGY BAYOU INDUSTRIES; LOGGY BAYOU TREESTAND CO., INC.; LOGGY BAYOU TREE STANDS; LOGGY BAYOU COMPANY; LOGGY BAYOU ENTERPRISES OF ARKANSAS A/K/A HUNTING PRODUCTS RESEARCH, INC.; JOHN DOE; AND DICK'S SPORTING GOODS, INC., DEFENDANTS.



The opinion of the court was delivered by: Scullin, Senior Judge

MEMORANDUM-DECISION AND ORDER

I. INTRODUCTION

Plaintiffs originally commenced an action against Defendant Loggy Bayou, Inc. a/k/a Loggy Bayou Enterprises in New York State Supreme Court, Onondaga County, on August 5, 2005. See Defendant Dick's Sporting Goods, Inc.'s Statement of Material Facts ("Facts"), at ¶¶ 1-2. On April 2, 2007, Plaintiffs discontinued that action. See id. at ¶ 3.

On September 15, 2006, Plaintiffs commenced the present action in New York State Supreme Court, Onondaga County. See id. at ¶ 4. In that complaint, Plaintiffs named Loggy Bayou, Inc., a/k/a Loggy Bayou Enterprises, Loggy Bayou Industries, Loggy Bayou Treestand Co., Inc., Loggy Bayou Tree Stands, Loggy Bayou Company, Loggy Bayou Enterprises of Arkansas, and Dick's Sporting Goods, Inc. as Defendants. See id. at ¶ 5. On March 15, 2007, Plaintiffs served Defendant Dick's Sporting Goods, Inc. ("Dick's Sporting Goods") with a copy of the summons and complaint. See id. at ¶ 7.

On April 2, 2007, Plaintiffs filed an amended summons and complaint. See id. at ¶ 10. In their amended complaint, Plaintiffs named Loggy Bayou, Inc. a/k/a Loggy Bayou Enterprises, Loggy Bayou Industries, Loggy Bayou Tree Stands, Loggy Bayou Company, Loggy Bayou Enterprises of Arkansas a/k/a Hunting Products Research, Inc., John Doe, and Dick's Sporting Goods as Defendants. See id. at ¶ 11.

On April 10, 2007, Defendant Hunting Products Research, Inc. ("Hunting Products") executed a Consent to Removal in this action. See id. at ¶ 13. On April 12, 2007, after a diligent investigation established that all of the companies named "Loggy Bayou" no longer existed and, therefore, were incapable of giving consent to removal of this action, see id. at ¶ 12, Defendant Dick's Sporting Goods filed a Notice of Removal in this Court on the basis of complete diversity of citizenship between Plaintiffs and Defendants, see Dkt. No. 1.

All of Plaintiffs' causes of action arise out of an October 17, 2004 accident in which Plaintiff Ronald Montross fell out of a tree while hunting and sustained injury, including a left ankle fracture that required surgery. Plaintiffs claim that the injury resulted from his use of a defective tree stand that Loggy Bayou manufactured and that Plaintiffs purchased at Defendant Dick's Sporting Goods' DeWitt, New York store.

Currently before the Court are Defendant Hunting Products' motion for summary judgment and Defendant Dick's Sporting Goods' motion for summary judgment, both of which are unopposed.*fn1

II. DISCUSSION

A. Defendant Hunting Products' Motion for Summary Judgment

Defendant Hunting Products asserts that it is entitled to summary judgment because, although it purchased Loggy Bayou Enterprises of Arkansas pursuant to an Asset Purchase Agreement, it specifically did not assume any of Loggy Bayou Enterprises of Arkansas' liabilities. See Defendant Hunting Products' Memorandum of Law at 5. Furthermore, Defendant Hunting Products contends that none of the four exceptions to the rule that successor liability cannot be imposed on a corporation that purchases the assets of another corporation apply to this case. See id. at 6-9.

Alternatively, Defendant Hunting Products contends that (1) it never sold any products under the name Loggy Bayou Enterprises of Arkansas; (2) it never sold any products in boxes stating that Loggy Bayou Enterprises of Arkansas manufactured those products; (3) it never manufactured a tree stand with a climbing band, which is the component part that allegedly failed in the tree stand that Plaintiff Ronald Montross used; and (4) it never sold tree stands to Dick's Sporting Goods. See Declaration of Michael Smith ("Smith Decl.") at ¶¶ 7-10.

In Semenetz v. Sherling & Walden, Inc., 7 N.Y.3d 194 (2006), the New York Court of Appeals reiterated that "[a] corporation that purchases another corporation's assets is not liable for the seller's torts, subject to four exceptions outlined in Schumacher v Richards Shear Co. (59 NY2d 239 [1983])." Id. at 196. In Schumacher, the Court of Appeals had held that these four exceptions were "(1) [when 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 [was] entered into fraudulently to escape such obligations." Schumacher v. Richards Shear Co., Inc., 59 N.Y.2d 239, 245 (1983). The Court of Appeals further explained that the "mere continuation" exception "refers to corporate reorganization, however, where only one corporation survives the transaction; the predecessor corporation must be extinguished . . . ." Id. (internal citations omitted).

The record supports Defendant Hunting Products' argument that none of the four exceptions set forth in Schumacher apply to this case. First, Article III of the Asset Purchase Agreement between Loggy Bayou Enterprises of Arkansas and Hunting Products, titled Exclusion of Liabilities, provides that "Buyer does not and will not assume or become obligated to pay, perform or discharge and will not be responsible for, any liabilities or obligations of Seller, whether accrued, absolute, contingent or otherwise." See Smith Decl. at Exhibit "A" at Article III. Thus, not only did ...


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