Heller v. U. S. Suzuki Motor Corp.
488 N.Y.S.2d 132, 40 U.C.C. Rep. Serv. (West) 917, 64 N.Y.2d 407 (1985)
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Rule of Law:
For a breach of implied warranty claim under the Uniform Commercial Code, the four-year statute of limitations begins to run when the party being sued tenders delivery of the product to its immediate purchaser, not when the product is ultimately sold to the end-use consumer.
Facts:
- On March 30, 1978, U. S. Suzuki Motor Corporation, a distributor, sold a motorcycle to Bakers Recreational Equipment, Inc.
- Bakers Recreational Equipment, Inc. then transferred the motorcycle to Jim Moroney’s Harley-Davidson Sales, Inc., a retailer.
- On April 21, 1979, Jim Moroney's Harley-Davidson Sales, Inc. sold the motorcycle to Heller.
- On July 7, 1979, Heller sustained injuries in an accident while riding the motorcycle.
Procedural Posture:
- On February 15, 1983, Heller filed suit against U. S. Suzuki Motor Corp. and Jim Moroney’s Harley-Davidson Sales, Inc. in the New York Supreme Court, Special Term (the trial court).
- Defendant U. S. Suzuki Motor Corp. moved for summary judgment, asserting the four-year statute of limitations under UCC § 2-725 barred the implied warranty claim.
- The Special Term denied Suzuki's motion, holding the cause of action accrued on the date of the retail sale to Heller.
- Suzuki, as appellant, appealed the trial court's order to the Appellate Division of the Supreme Court (the intermediate appellate court).
- The Appellate Division reversed the Special Term's order and dismissed the complaint against Suzuki, holding the action was time-barred because the cause of action accrued on the date Suzuki delivered the motorcycle to its immediate purchaser.
- Heller, as appellant, appealed the dismissal to the New York Court of Appeals (the state's highest court).
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Issue:
Does a cause of action for breach of implied warranty against a remote distributor accrue, for purposes of the UCC § 2-725 statute of limitations, on the date the distributor tenders delivery of the product to its immediate purchaser?
Opinions:
Majority - Simons, J.
Yes. A cause of action for breach of implied warranty against a remote distributor accrues on the date that party tenders delivery of the product to its immediate purchaser. UCC § 2-725 explicitly states that a breach occurs and the cause of action accrues when 'tender of delivery is made.' Although the Legislature amended UCC § 2-318 in 1975 to eliminate the privity requirement for personal injury warranty claims, it did not amend the accrual rule in § 2-725. The court must assume the Legislature intended no change to the accrual rule. This interpretation promotes the UCC's purpose of providing commercial certainty and predictability for businesses, as starting the limitations period at the date of retail sale would create an unpredictable and potentially indefinite period of liability for remote parties like manufacturers and distributors.
Dissenting - Meyer, J.
No. A cause of action for breach of implied warranty against a remote distributor should accrue on the date the product is delivered to the ultimate consumer. The Legislature's 1975 amendment to UCC § 2-318, which eliminated privity, was intended to grant consumers a direct right of action against manufacturers. A warranty from a manufacturer to a consumer cannot logically exist, and therefore cannot be breached, until there is a consumer who has received the product. The majority's holding creates the paradoxical result that a consumer's cause of action could be time-barred before it ever comes into existence, a result contrary to the liberal construction mandated by the UCC.
Analysis:
This decision solidifies a strict, textualist interpretation of UCC § 2-725's 'tender of delivery' rule for the accrual of warranty claims. It prioritizes commercial predictability and legislative deference over a more consumer-protective approach that would align the statute of limitations with the consumer's purchase date. The ruling establishes a clear, bright-line rule but creates a potential trap for consumers, as their warranty claims against remote manufacturers may expire before they even purchase the product. This outcome reinforces the distinction between contract-based warranty claims and tort-based strict products liability claims, the latter of which accrues at the time of injury and remains a vital remedy for injured consumers.
