Delaney v. Towmotor Corp.

Towmotor Corp. (defendant), a forklift manufacturer, sold forklifts throughout New York, distributed solely through A. A. Moore, Inc. (Moore) (defendant). Towmotor developed a new forklift model with an overhead guard manufactured by Marine & Industrial Equipment Co. (Marine) (defendant). The overhead guard was welded to the front of the forklift with rigid U-bolts, which did not allow movement, resulting in fragility. As a courtesy, Towmotor loaned one of its newly designed forklifts to its customer T. Hogan & Sons (Hogan), so that Hogan could test it out. Weeks later, William Delaney (plaintiff), a Hogan employee, was injured by the collapse of the overhead guard of the loaned forklift. Delaney sued Towmotor, Moore, and Marine in federal district court for claims of negligence and strict liability. In response to Delaney’s strict-liability claims, Towmotor argued that under implied-warranty concepts, a manufacturer’s duty to a consumer does not attach until the moment of sale. Towmotor also argued its duty was limited under bailment concepts. Towmotor argued there was no sale of the forklift because Towmotor only loaned the forklift to Delaney’s employer. The district court jury found in favor of Towmotor on the negligence claim. The jury found in favor of Delaney on the claim of strict liability, finding the overhead guard was defectively attached to the forklift. Towmotor appealed to the United States Court of Appeals for the Second Circuit.