Rosado v. Proctor & Schwartz, Inc., 66 N.Y.2d 21 (1985)

A manufacturer of a defective product cannot obtain indemnification from the purchaser when the purchaser’s employee is injured due to the manufacturer’s failure to provide adequate safety devices, even if the sales contract requires the purchaser to install such devices.

Summary

Hector Rosado, an employee of Comet Fibers, was injured while operating a garnett machine purchased by Comet from Proctor & Schwartz. The sales contract required Comet to install necessary safety guards, but the machine lacked adequate safeguards, leading to Rosado’s injuries. Rosado sued Proctor, who then sought indemnification from Comet. The New York Court of Appeals held that Proctor, as the manufacturer of a defective product, could not obtain indemnification from Comet, as Proctor had a non-delegable duty to ensure the machine was reasonably safe when it left their control. Allowing indemnification in this situation would undermine the policy goals of strict products liability.

Facts

Comet Fibers purchased a garnett machine from Proctor & Schwartz in 1970. The sales contract stipulated that Comet was responsible for installing safety guards and disconnect switches.
The machine was delivered without safety devices. Comet installed a mesh fence with a gap and doors that exposed moving parts when opened.
Hector Rosado, a Comet employee, was injured when his hand came into contact with unprotected chains and gears while cleaning the machine, which was often operated with the safety gate open.

Procedural History

Rosado sued Proctor & Schwartz.
Proctor initiated a third-party action against Comet, seeking contribution and indemnity.
The trial court dismissed Proctor’s indemnification claim. Comet settled with Rosado, precluding Proctor’s contribution claim.
Proctor settled with Rosado before a verdict and appealed the dismissal of its indemnification claim.
The Appellate Division affirmed the dismissal, and Proctor appealed to the New York Court of Appeals.

Issue(s)

Whether a manufacturer of a defective product can obtain indemnification from the purchaser when the sales contract requires the purchaser to install safety devices and the purchaser’s employee is injured due to the absence of such devices.

Holding

No, because the manufacturer has a non-delegable duty to provide a reasonably safe product, and allowing indemnification in this circumstance would undermine the public policy goals of strict products liability.

Court’s Reasoning

The court distinguished between contribution and indemnity, noting that contribution involves distributing the loss among tortfeasors, while indemnity shifts the entire loss to another party.
Indemnity arises from contract, either express or implied. Proctor conceded there was no express agreement for indemnification.
The court rejected Proctor’s argument for implied indemnity, stating that strict products liability is not akin to vicarious liability; manufacturers are held accountable as wrongdoers and must ensure their products are reasonably safe when they leave their control. The court stated that “a prima facie case is not established unless it is shown, among other things, that in relation to those who will use it, the product was defective when it left the hands of the manufacturer because it was not reasonably safe”.
The court disagreed with the Sixth Circuit’s decision in Proctor & Schwartz v. United States Equip. Co., which allowed a similar indemnity claim, stating that the manufacturer is in the best position to determine appropriate safety devices, particularly when the dangers do not vary by job site.
The court emphasized that “Preventing injuries in the first place is the primary public policy underlying the doctrine of strict products liability.”
Allowing manufacturers to shift their duty of care through boilerplate contract language would erode the incentive to maintain safety and sanction the marketing of dangerous machines.
The court distinguished McDermott v. City of New York, where indemnification was allowed because the manufacturer breached a duty to the injured plaintiff, whereas in this case, Proctor sought to recover from Comet based on a contract between them, despite Proctor’s breach of duty to Comet’s employee.