Appellate Partner Gets Defense Result from Texas Supreme Court in Products Liability Case

Austin Appellate partner Bill Mennucci obtained a complete defense result when the Texas Supreme Court reversed the judgment of the Dallas Court of Appeals, and rendered judgment in favor of our client Ford Motor Company, restoring the trial court’s summary judgment in favor of Ford based on the Texas products liability statute of repose. The statute of repose requires a claimant sue the manufacturer or seller “before the end of 15 years after the date of the sale of the product by the defendant.”

Products Liability Claims More Than 15 Years After Sale

This products-liability case arose from the rollover of a 2001 Ford Explorer that left the Plaintiff severely and permanently disabled with a traumatic brain injury. Ford alleged Plaintiffs’ claim was barred by Texas’s 15-year products liability statute of repose, and produced evidence that Ford had sold the vehicle to an independent dealership in May 2000, more than 15 years before Plaintiffs filed suit in May 2016. The trial court granted Ford summary judgment.

The Plaintiffs appealed, and the Dallas Court of Appeals reversed the summary judgment, finding Ford had not conclusively proved that it “sold” the vehicle to the dealership more than 15 years before Plaintiffs filed suit. The Texas Supreme Court granted Ford’s petition for review, to address an issue of first impression under Texas law: what evidence is required to prove a “sale” of a product under the statute of repose?.

What Constitutes a "Sale" that Triggers the Statute of Repose?

The Texas Supreme Court reviewed the issue of whether Ford’s summary judgment evidence conclusively proved that Ford sold the vehicle to an independent dealership more than 15 years before the Plaintiffs filed suit, even though Ford could not produce direct evidence of the exact date it received payment from the dealership for the vehicle. The court of appeals had found that Ford’s failure to produce evidence of the exact date the dealer paid Ford for the vehicle meant Ford could not prove the “date of sale” under the statute of repose.

The Texas Supreme Court explained that the premise underlying the court of appeals’ analysis—that money must change hands before a sale is completed—is contrary to law. The Texas Supreme Court relied on the Uniform Commercial Code, Texas common law regarding “sales,” and on a similar recent Fifth Circuit case (Camacho v. Ford) to hold that a party need not prove the exact date it received payment for a product to complete a “sale” that triggers the products liability statute of repose since the sale is complete when the seller physically delivers the goods, even if the buyer has not made full payment. The Texas Supreme Court found Ford’s evidence that it sold the vehicle to a dealership more than 15 years before Plaintiffs filed suit to be “overwhelming.”