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Friday, January 17, 2020

Utah Supreme Court rules retailers not immune under Liability Reform Act

By Angela Underwood | Jan 4, 2018

SALT LAKE CITY (Legal Newsline) – The Utah Supreme Court has concluded that the state's Liability Reform Act does not create immunity for retailers and has reversed a district court's dismissal of a lawsuit.

Chief Justice Matthew Durrant and justices Christine Durham and Constandinos Himonas found favor with appellants Richard and Melinda Bylsma for their product liability, breach of warranty and contract rescission claims against appellee R.C. Willey that were dismissed by a district court under the passive retailer doctrine. The opinion was filed Dec. 1.

"We accordingly reject the passive retailer doctrine and reverse the district court’s dismissal of the Bylsmas’ claims against R.C. Willey," the court ruled. "We also vacate the district court’s decision declining to award attorney fees to the Bylsmas, and we remand for proceedings consistent with this opinion."

R.C. Willey rejected the warranty and tort claims over an allegedly defective foot massage chair and attorney fee request based on sections of the Liability Reform Act (LRA) that protects passive retailers from product liability claims when a manufacturer is a named as a party in the complaint.  

Discussing the case under Sanns v. Butterfield Ford precedent, Durrant detailed how the panel of judges concluded that the LRA does not offer retailers immunity under Sanns, specifically noting that retailers like distributors, wholesalers, manufacturers are accountable for breaching contracts when selling a dangerously defective product.

“We thus harmonize the relevant statutory language, avoid conflating the distinct legal doctrines of strict products liability and negligence, and honor the legislature’s intent to retain the essential tenets of our strict products liability doctrine,” Durrant wrote in the opinion.

Continuing to consider the dismissal of the Bylsmas’ tort and warranty claims as well as attorney fees, Durrant noted the basis of rejection under Sanns. First Durrant explained how the legislature intended the LRA to provide protection.

“The LRA defines ‘fault’ as 'any actionable breach of legal duty, act, or omission proximately causing or contributing to injury or damages,'” Durrant wrote in the opinion, adding the conclusion is specifically backed by the Product Liability Act (PLA) statue, “That same definition also includes the defenses against such claims: 'misuse, modification, or abuse of a product.'”

Addressing R.C. Wiley’s argument that LRA should be defined to create passive retailer immunity, Durrant wrote in the appeal how R.C. Wiley “claims that such immunity is the only way to preserve the legislative prohibition on a defendant being liable for any amount exceeding its equitable proportion of fault,” but further noted, “the concurrence in this case makes a different argument for interpreting these same provisions of the LRA, but its approach, too, fails to maintain the essential aspects of our strict products liability doctrine.”

Under the continued analysis, Durrant then stressed why attorney fees denied should be added due to the district court's incorrect inference that the LRA barred actions for implied indemnity.

“Because R.C. Willey can no longer be thought of as a prevailing party on the product liability and warranty claims, there is no longer a basis for the decision to deny the Bylsmas their fees even on the face of the district court’s opinion,” Durrant wrote in the opinion.

Associate Chief Justice Thomas Rex Lee and Justice John Pearce concurred and dissented in ruling.

“To the above extent I agree with the majority’s ultimate conclusion that the LRA abrogates passive retailer immunity,” Lee wrote in the opinion, adding his decision is based on the fact that it is at least possible that a factfinder could attribute fault to a passive retailer. “It is not, as the majority asserts, because the LRA has preserved the joint and several liability scheme often associated with strict liability.”

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