Ortiz v. HPM CORP.
285 Cal. Rptr. 728, 234 Cal. App. 3d 178, 91 Cal. Daily Op. Serv. 7647 (1991)
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Rule of Law:
A plaintiff who personally observes an injury-producing event while it is still in progress and is aware that it is causing injury to a closely related victim satisfies the contemporaneous observation requirement for a claim of negligent infliction of emotional distress. Separately, a company that makes a one-time, isolated sale of used machinery from its own operations is considered an 'occasional seller' and is not subject to strict products liability.
Facts:
- Alberto Ortiz and Maria Lugo Ortiz were husband and wife who both worked for Colonial Engineering.
- On November 6, 1983, after a meal break, Maria Ortiz noticed a machine had stopped working and went to tell her husband, a foreman, to fix it.
- She approached the machine where Alberto Ortiz was working, told him about the other machine, and started to walk away.
- When he did not respond, she went back and discovered him trapped inside the mold area of the machine, being actively pressed between its parts.
- The machine was still running and exerting pressure on him; she observed that he was limp and blood was dripping from his arm.
- The machine had been originally purchased by Celanese Corporation, which modified it for its own use.
- After using the machine for several years, Celanese sold it as part of a one-time sale of used equipment when it shut down its Southern California facility.
Procedural Posture:
- Alberto and Maria Lugo Ortiz filed a lawsuit in a California trial court against HPM Corporation (the manufacturer) and Celanese Corporation (the original owner), among others.
- On a motion by the defendants, the trial was bifurcated, with the issue of liability to be tried before the issue of damages.
- At the conclusion of the plaintiffs' case-in-chief on liability, the trial court granted Celanese Corporation's motion for nonsuit, removing it from the case.
- The trial court also granted a motion for nonsuit from defendant HPM Corporation as to Maria Ortiz's cause of action for negligent infliction of emotional distress.
- The liability phase proceeded to the jury, which returned a verdict finding HPM Corporation negligent but apportioning 90% of the fault to Alberto Ortiz.
- Following a separate trial on damages, a final judgment was entered.
- The Ortizes (appellants) appealed the judgment, including the trial court's orders granting the nonsuits, to the California Court of Appeal.
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Issue:
Does a plaintiff who arrives on the scene and witnesses a loved one being actively and continuously crushed by a machine, even if she did not see the initial moment of impact, satisfy the requirement of contemporaneously observing the injury-producing event for a claim of negligent infliction of emotional distress? Secondarily, is a company that sells used machinery from its own manufacturing operations as part of a one-time plant closure considered to be 'in the business of selling' that product for the purposes of strict products liability?
Opinions:
Majority - Epstein, J.
Yes, as to the first issue. A plaintiff who personally observes an injury-producing event while it is still in progress and is aware that it is causing injury to the victim satisfies the contemporaneous observation requirement for negligent infliction of emotional distress. The court distinguished this case from Thing v. La Chusa, where the plaintiff arrived after the event was over and only saw its consequences. Here, Maria Ortiz did not just find her husband after the accident; she witnessed the machine actively and continuously crushing him. The court reasoned that the 'injury-producing event' was still occurring when she observed it. Therefore, the 'bright line' rule from Thing was not intended to deny recovery to a plaintiff who observes an event in progress, as opposed to one who arrives after the fact. No, as to the second issue. A company that makes a one-time, isolated sale of used equipment from its own operations is an 'occasional seller' and is not subject to strict products liability. The court found that Celanese was not in the business of selling molding machines; it was a consumer of the machine that later disposed of it in an isolated transaction. Following the Restatement (Second) of Torts § 402A and precedent like Balido v. Improved Machinery, Inc., the court held that strict liability applies to entities in the commercial chain of distribution, not to one-time occasional sellers.
Analysis:
This decision clarifies the 'contemporaneous observation' requirement for bystander negligent infliction of emotional distress claims established in Thing v. La Chusa. It establishes that witnessing an injury-producing event 'in progress' is sufficient, preventing the rule from being applied so rigidly as to bar recovery for those who witness a prolonged, continuous injury, even if they miss the initial moment of impact. The ruling also reinforces the 'occasional seller' doctrine in strict products liability, providing a clear safe harbor for companies selling used capital assets outside their normal course of business. This protects companies from the high standard of strict liability when engaging in common transactions like liquidating assets from a closed facility.
