Weber Gallagher Simpson Stapleton Fires & Newby LLP

March 16, 2010 : Brian L. Calistri and Thomas Gerouolo win Commercial Dryer Products Claim Before Trial Court and NJ Appellate Division

Brian Calistri and Tom Geroulo prevailed before the New Jersey Appellate Division on March 16, 2010, which affirmed the trial court's dismissal in a complicated design defect/UCC claim. Calistri's client, the biggest off-brand manufacturer of commercial dryers in the country, faced a claim that its leading commercial dryer model was defectively designed, causing the tumblers to overheat and ignite the dryer's contents. According to the plaintiff, this alleged defect led to four separate fires at the plaintiff's commercial laundries.

In a lengthy opinion, the Appellate Division distinguished prior New Jersey precedent, which had held that under the Uniform Commercial Code (which provided the exclusive remedy for this claim under New Jersey law) the reasonableness of post-revocation use by a purchaser of goods was always a jury question. Here, despite the four fires, the plaintiff laundry claimed that economic hardship gave it no choice but to continue to use the dryers after the fires and after it formally revoked its acceptance of the units (as required by the UCC).

However, the Appellate Division distinguished the facts of this case from prior post-revocation use cases, such as Fablok Mills, where the buyer had been confronted with the "grim choice" of going out of business if it ceased using defective machinery after its UCC revocation. Calistri argued before the Appellate Division, and the court accepted, that despite this difficult precedent a distinction needed to exist where the purchaser's post-revocation use and conduct undermined the basis for the revocation in the first place. In affirming the dismissal, the Appellate Division highlighted the testimony of the plaintiff laundry's chief mechanic, who admitted that more strenuous duct cleaning and other maintenance efforts by his staff had stopped the dryer fires entirely. Thus, rather than burden the system with a jury trial as to the reasonableness of the plaintiff's post-revocation use of the dryers, the Appellate Division established an exception permitting preliminary dismissal where the plaintiff's post-revocation conduct had the effect of defeating the original basis for the revocation.