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Ramos v. Foam America, Inc.

United States District Court, D. New Mexico

August 13, 2018

REFUGIO RAMOS, Plaintiff,
v.
FOAM AMERICA, INC., et al., Defendants.

          ORDER DENYING PLAINTIFF'S MOTION FOR RECONSIDERATION

          CARMEN E. GARZA, CHIEF UNITED STATES MAGISTRATE JUDGE

         THIS MATTER is before the Court on Plaintiff's Motion for Reconsideration of April 5, 2018 Memorandum Opinion and Order (Doc. 229) (the “Motion for Reconsideration”), (Doc. 236), filed May 3, 2018; Defendants Great Northern Holding, LLC and Harrisonville Equipment Company's Response in Opposition to Plaintiff's Motion for Reconsideration (the “Response”), (Doc. 240), filed May 18, 2018; and Plaintiff's Reply in Support of Plaintiff's Motion for Reconsideration (the “Reply”), (Doc. 242), filed June 1, 2018. Having considered the briefs, the record of the case, and relevant law, the Court finds that Plaintiff's Motion for Reconsideration shall be DENIED.

         I. Background

         On April 5, 2018, the Court entered a Memorandum Opinion and Order finding that Defendants Great Northern Holding, LLC (“Great Northern”) and Harrisonville Equipment Company (“HECO”) are entitled to summary judgment on Plaintiff's claims for strict liability and negligence. (Doc. 229 at 18). Plaintiff alleges these Defendants are liable for injuries he sustained on November 19, 2013, while working on a roofing job when a tar lugger overturned, spraying and burning Plaintiff with hot tar. (Doc. 85 at 4). The tar lugger was manufactured by Defendant Reeves Roofing Equipment Co., Inc. (“Reeves”), and was purchased by Defendant C. Ortiz Corporation (“C. Ortiz) from a third party approximately ten years before the incident. (Doc. 173 at 3, ¶¶ 1-2); (Doc. 173-1 at 2). On October 15, 2012, Great Northern and Reeves entered into an Asset Purchase Agreement in which Reeves sold its assets to Great Northern, and on January 1, 2014, Great Northern assigned all of the assets it acquired from Reeves to HECO. (Doc. 173 at 4, ¶¶ 3, 7).

         Great Northern and HECO moved for summary judgment, contending they did not supply and had no connection to the tar lugger at issue, and that they are not liable as successors to Reeves because they never produced or marketed Reeves tar luggers and they did not assume Reeves' liabilities. (Doc. 173 at 6-8). In response to the motion for summary judgment, Plaintiff argued Great Northern and HECO are liable as successors to Reeves because they continued to advertise the Reeves tar lugger and the parts necessary to repair it, customers who ordered a tar lugger from Great Northern and HECO expected to receive a product from Reeves, and they manufactured a tar lugger that was similar to the Reeves' tar lugger, called the “Panther” lugger. (Doc. 178 at 1, 5-6).

         In considering the parties' contentions, the Court explained that the general rule under New Mexico law is that a successor corporation does not automatically acquire the liabilities or obligations of the predecessor corporation. (Doc. 229 at 6) (citing Garcia v. Coe Mfg. Co., 1997-NMSC-013, ¶ 11, 933 P.2d 243). There are four traditional exceptions to this rule, which apply where: (1) there is an agreement to assume the predecessor's obligations; (2) the transfer results in a consolidation or merger; (3) there is a continuation of the predecessor corporation; or (4) the transfer is made for the purpose of fraudulently avoiding liability. Garcia, 1997-NMSC-013, ¶ 12. Additionally, New Mexico recognizes the “product line” exception to the rule of successor nonliability. Id., ¶¶ 13, 21.

         The Court considered Plaintiff's contentions that Great Northern and HECO are liable as successors to Reeves under the de facto merger and product line exceptions, and found that the facts of this case do not satisfy either of those exceptions to the rule of successor non-liability. (Doc. 229 at 7-15). Therefore, the Court found Great Northern and HECO are entitled to summary judgment on Plaintiff's strict liability claim. Id. at 15. The Court further found that Great Northern and HECO did not have a duty to warn of alleged defects of the Reeves tar lugger, so Great Northern and HECO are also entitled to summary judgment on Plaintiff's negligence claim. Id. at 18.

         Plaintiff brings his Motion for Reconsideration under Fed.R.Civ.P. 59(e), and contends the Court erred in its consideration of whether the de facto merger and product line exceptions to the rule of successor non-liability apply in this case. (Doc. 229 at 1-13). In Response, Great Northern and HECO state that Plaintiff “addresses the same issues and facts that have been exhaustively argued throughout this case, ” and that the Court did not err in its findings. (Doc. 240 at 2-9). In his Reply, Plaintiff maintains that the facts of this case satisfy the de facto merger and product line exceptions to the rule of successor non-liability. (Doc. 242 at 2-6).

         II. Legal Standard

         A motion to reconsider under Fed.R.Civ.P. 59(e) may be granted in limited circumstances, such as when there is: (1) an intervening change in the controlling law; (2) new evidence previously unavailable; or (3) the need to correct clear error or prevent manifest injustice. Hayes Family Trust v. State Farm Fire & Cas. Co., 845 F.3d 997, 1004 (10th Cir. 2017) (quoting Servants of the Paraclete v. Does, 204 F.3d 1005, 1012 (10th Cir. 2000)). “[A] motion for reconsideration is appropriate where the court has misapprehended the facts, a party's position, or the controlling law. . . . It is not appropriate to revisit issues already addressed or advance arguments that could have been raised in prior briefing.” Servants of the Paraclete, 204 F.3d at 1012; see also Phelps v. Hamilton, 122 F.3d 1309, 1324 (10th Cir. 1997) (a Rule 59(e) motion for reconsideration “should be granted only to correct manifest errors of law or to present newly discovered evidence”); Otero v. Nat'l Distrib. Co., Inc., 627 F.Supp.2d 1232, 1237 (D.N.M. 2009) (a motion for reconsideration “is not a vehicle for relitigating old issues, presenting the case under new theories, securing a rehearing on the merits, or otherwise taking a second bite at the apple”).

         III. Analysis

         A. De Facto Merger Exception

         As stated, the general rule under New Mexico law is that a successor corporation does not automatically acquire the liabilities or obligations of the predecessor corporation, and New Mexico has only recognized five exceptions to this rule. Garcia, 1997-NMSC-013, ¶ 11. The exceptions to successor non-liability are found where: (1) there is an agreement to assume the purchased company's obligations; (2) there is an explicit consolidation or merger of the companies; (3) there is a continuation of the predecessor corporation; (4) the transfer is made for the purpose of fraudulently avoiding liability; or (5) the successor continues to produce and market the same product line, using the same designs, equipment, and name. Id., ¶¶ 12, 13, 17, 21.

         In response to Defendant's Motion for Summary Judgment, Plaintiff argued Great Northern and HECO are liable as successors under the de facto merger and product line exceptions. (Doc. 178 at 8-22). In the Memorandum Opinion and Order, the Court noted that New Mexico has not recognized de facto merger as an exception to the general rule of successor non-liability. (Doc. 229 at 7). Nevertheless, the Court acknowledged that the de facto merger factors are similar to the continuation of the corporation factors, which is an exception that is recognized in New Mexico. Id. (citing Berg Chilling Systems, Inc. v. Hull Corp., 435 F.3d 455, 468 (3rd Cir. 2006), which treated the de facto merger and continuation exceptions identically, stating “[t]he de facto merger exception is similar to the continuation exception, save that the latter focuses ...


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