Justices: Product Liability Act’s statute of repose can’t be extend for post-sale repair

Indiana Supreme Court justices Monday answered in the negative a question of whether the Indiana Products Liability Act’s statute of repose may apply to a judicially-created exception to the rule, finding it could not be extended by a manufacturer’s post-delivery repair, refurbishment or reconstruction of a disputed product.

Indiana justices in November accepted a certified question from the U.S. District Court for the Northern District of Indiana in a case in which Bradley Estabrook was seriously injured in a workplace accident. His foot was nearly sheared off by unmanned, computer-controlled machinery installed by Mazak Corporation.

At issue in Bradley A. Estabrook v. Mazak Corporation, 19S-CQ-590, is the Product Liability Act’s statute of repose, which provides that a product liability action must be commenced within two years after the cause of action accrues but not more than 10 years after the product was first delivered to the buyer.

In 2016, Estabrook filed a product-liability suit against Mazak based on the court’s diversity jurisdiction, alleging the machine that injured him was unsafe due to a design defect.

Both parties agreed the strict application of the statute of repose to the delivery date of the machinery was in July 2003, which would bar Estabrook’s cause of action. However, both also identified a judicially-created exception to the statute of repose whereby the rebuilding or reconditioning of the product could restart the statutory clock.

The certified question posed to the Supreme Court asked: “Can the statute of repose codified in Ind. Code § 34-20-3-1(b) be extended by post-sale repair/refurbishment/reconstruction of the product and, if so, what is the appropriate test to be used to determine whether the seller has done sufficient work to trigger the extension?”

In its March 2 opinion, the justices answered the certified question in the negative, holding that I.C. 34-20-3-1(b) is a statute of repose that cannot be extended by a manufacturer’s post-delivery repair, refurbishment or reconstruction of the disputed product. It also noted the one exception for an action accruing “at least eight (8) but less than ten (10) years” after initial delivery did not apply in Estabrook’s case because his injury was sustained 11 years after his employer received the product.

Additionally, the Supreme Court declined Estabrook’s invitation to adopt an exception under Denu v. Western Gear Corp., 581 F. Supp. 7, 8 (S.D. Ind. 1983), that would restart the 10-year statute of repose when a manufacturer’s refurbishment efforts yield a “new product” because “the statute’s plain meaning does not permit it and because the task is not susceptible of a clear, bright-line legal rule.”

“As we have noted, the statute is straightforward. It contains only one exception irrelevant here,” Justice Geoffrey Slaughter wrote. “And it does not mention ‘repair’, ‘refurbishment’, ‘reconstruction’, or any comparable term that would authorize restarting the limitations clock when a manufacturer’s subsequent, post-delivery actions have purportedly transformed the ‘product’ initially delivered. Given these textual constraints, we decline to interpret the statute of repose to include an exception for product modifications that the legislature could have enacted but did not.

The court further rejected Estabrook’s two other proposed grounds for adopting a “new-product” exception – stare decisis and legislative acquiescence.

Additionally, the justices found that like Dague v. Piper Aircraft Corporation, 275 Ind. 520, 418 N.E.2d 207 (1981), the conjunction separating the accrual and repose provisions is best interpreted in reading “or” as if it were “and”.

“We elaborate here only to make clear that we do not disregard the disjunctive ‘or’ lightly or because doing so suits our own policy preferences. Rather, we conclude that that is the only interpretation consistent with the legislature’s stated preferences, as reflected in the entirety of its enactment,” the justices concluded.