Ramirez v. Amsted Industries, Inc.

In the 1940s, the Johnson Machine and Press Company (Johnson) manufactured power presses. In 1956, Bontrager Construction Company (Bontrager) acquired all the assets and one share of Johnson. Bontrager then began manufacturing the Johnson press line of products. In 1962, pursuant to a purchase agreement, Amsted Industries, Inc. (Amsted) (defendant) acquired all the assets of Bontrager, including the single share of Johnson stock and the Johnson assets, including the manufacturing plant that had manufactured the Johnson press line under both Johnson and Bontrager ownership. Bontrager distributed the proceeds from the sale to shareholders, and Bontrager was dissolved. As part of the purchase agreement, Amsted disavowed liability for any obligation not expressly named in the purchase agreement. Amsted or an Amsted subsidiary continued to manufacture Johnson power-press machinery. Amsted eventually dissolved Johnson. In 1975, Efrain Ramirez (plaintiff) was injured while using an allegedly defective Johnson Model 5 power press. The power press was manufactured by Johnson in 1948 or 1949. Ramirez filed suit against Amsted as a successor corporation, claiming negligence, breach of warranty, and strict liability for defective design and manufacturing. Amsted moved for summary judgment, arguing that its purchase of the Johnson assets did not include an assumption of liability for damages arising from the machinery Johnson had manufactured. The trial court granted Amsted’s summary-judgment motion, explaining that Amsted, as a successor corporation, did not assume liability for machinery manufactured by Johnson, because the Johnson assets had been purchased for cash and the purchase agreement limited the purchaser’s liability. Ramirez appealed. The appellate court reversed, holding that a successor corporation was liable for personal injuries arising out of equipment manufactured by a selling corporation if the business of the selling corporation continued in an unchanged manner. Amsted appealed.