The Dallas Court of Appeals has reversed a trial court summary judgment order dismissing a products liability action based on the 15-year statute of repose.
Jennifer Parks, Individually and as Guardian of the Person and Estate of Samuel Rivera Gama, and Nicolasa Gama Dale v. Ford Motor Company (No. 05-21-00632-CV; filed December 6, 2022) arose from a rollover accident involving a 2001 Ford explorer. Plaintiffs brought suit against Ford, alleging the vehicle’s defective design made it susceptible to rollovers and that the vehicle lacked sufficient roof strength to withstand rollover accidents. Ford moved for summary judgment on grounds that plaintiffs’ claim was time-barred by the 15-year statute of repose in a products liability action against a manufacturer or seller. § 16.012(b), CPRC. Here the accident occurred on May 23, 2014, and plaintiffs filed the lawsuit on May 17, 2016. Ford argued that the vehicle was sold to the dealer on May 9, 2000, so plaintiffs should have filed suit within 15 years of that date. The trial court granted Ford’s summary judgment motion and ordered that plaintiffs take nothing. Plaintiffs appealed.
The court of appeals reversed. At issue was whether a fact question existed as to the date of the sale of the vehicle. Ford produced documentary and deposition testimony indicating that, in accordance with Ford’s standard procedures, the newly manufactured vehicle was released to the dealer on May 9, 2000, and that payment was due from the dealer on or about that date. Ford’s witnesses repeatedly stated that for Ford’s business purposes, the release date is considered the date of sale. Ford also produced deposition and documentary from a virtually identical case in which the U.S. Fifth Circuit Court of Appeals held that the release date of a Ford vehicle was the date of sale. Camacho v. Ford Motor Co., 993 F.3d 308 (5th Cir. 2021). Plaintiffs countered that a fact issue existed as to the date of sale because Ford’s documentation did not show when the dealer actually paid for the vehicle and Ford’s witnesses made allegedly inconsistent statements regarding dealer payments after the release date. Plaintiffs also argued that since Ford’s witnesses were self-interested, their testimony could not support summary judgment unless the testimony was “clear, positive, and direct, otherwise credible and free from contradictions and inconsistencies, and could have been readily controverted.” Rule 166a(c), TRCP.
Relying on lengthy passages from Ford’s deposition testimony, the court concluded that Ford’s witnesses gave inconsistent and contradictory testimony regarding the date of “sale,” although the testimony was perfectly clear about the date of release and Ford’s business practice of considering the vehicle “sold” at the time of release. The court, however, accepted plaintiffs’ contention that although the evidence is clear about the release date, Ford’s witnesses presented contradictory evidence showing that the dealer doesn’t always pay the purchase price at the time of release, but often later than that. The court also brushed aside the 5th Circuit decision that “release” means “sale” as not binding and distinguishable because Rule 166a does not apply. Ford thus did not conclusively establish the date of sale that triggered the 15-year statute of repose.
This opinion appears very problematic to us. Based on the excerpts from the record quoted by the court, there is no question that Ford records a vehicle as sold on the date of release to the dealer. It might be noted that 43 TAC § 215.144 requires the dealer to maintain records that verify its ownership of vehicles it buys and sells to third parties. In other words, once the dealer has a vehicle in its possession, it must record title before it can offer the vehicle for sale. The payment processing part of the equation does not alter the reality of the transfer of title, that is, the “sale.” This evidence satisfied the Fifth Circuit, but not the Fifth Court of Appeals. Though it is technically true that a federal decision on the same issue does not bind a state court, the court’s attempt to distinguish Camacho is unconvincing and itself produces an inconsistency in Texas law.
All things being equal, we hope that Ford takes this up to SCOTX. Although we could be wrong, we would guess that every manufacturer sells vehicles to independent dealers pretty much the way Ford does. That’s the way the market works. If the Dallas Court of Appeals is right and dealers really don’t “own” the vehicles a manufacturer releases to them until some unspecified date when payments are trued up, the statute of repose may well become a dead letter as applied to motor vehicle manufacturers. At the very least, this decision will make it virtually impossible for vehicle manufacturers to obtain summary judgment on the statute of repose. Put another way, this case is not of the one-off variety that relies on a quirky fact situation. And, in view of the way the market for pre-owned vehicles has flourished in recent years, it could have very significant implications for the industry and the civil justice system as a whole.
