Your old junk could come back to haunt you
A good friend in the lawsuit business alerted us the other day to an important, recent decision of the Oregon Supreme Court that could reach down into the pockets of anyone in the state who has ever used Craigslist or a garage sale to unload used goods -- or anyone who's ever sold their home, for that matter. The case is Bailey v. Lewis Farm, Inc., and the full text of the court's opinion is here.
The facts of the case are pretty simple. May Trucking had a Paccar tractor-trailer that it drove about 500,000 miles over six years. Then it sold it to another party, who in turn sold it to Lewis Farms. About a year after May had gotten rid of the truck, the wheels came off on the highway due to an axle failure. They hit a car, which then crashed and burned, and the car's owner, Jerome Bailey, was badly hurt. Bailey sued Paccar, Lewis, and May. His allegations against May were that it had negligently failed to maintain the axle, and that that failure is what caused the awful accident.
May said it couldn't possible be liable to Bailey, because it sold the truck a year before the axle failure. Lewis was responsible for the safety of the vehicle it was operating, said May, and so May should be off the hook to Bailey. May moved to dismiss the case, arguing that even if it were negligent, it had no duty to Bailey, and that the harm Bailey suffered wasn't reasonably foreseeable when May owned the tractor-trailer.
No way, said the court. Just because Lewis had a duty to Bailey doesn't mean that May was relieved of its obligation to act reasonably in maintaining the truck. And of course the harm could be reasonably foreseeable -- if you let your truck run down without proper maintenance, it's no surprise if somebody gets hurt in an accident as a result.
And so back the case goes to Multnomah County Circuit Court, where May may very well have to pay up whatever damages Paccar and Lewis aren't covering -- at least if it's proven that May was negligent, and that its negligence caused the axle to fail. (Evidence on those points hasn't been presented yet.)
How far does the rule of this case go? Would it cover tools that you unloaded at a garage sale last year? How about the house you sold last year, or five years ago? Surely, it would cover that used car you got rid of, although the court hinted that maybe you'd be off the hook if the dangerous condition was obvious when you sold it, or if you traded the car in at a dealership.
What can you do to protect yourself? I doubt that your insurance covers it -- at least auto policies end when the vehicle is sold, and I'd be surprised if a standard homeowners policy wouldn't work the same way. There's no way to get a release in advance from everyone who might be hurt by breakdowns of your former stuff while it's in the hands of future owners whom you don't even know.
I suppose you could try to make the person who buys your junk sign a contract that says from here on out, they'll pay for any harm that's caused by problems with the stuff, even if it's due to crummy maintenance by you. Those ought to be some interesting negotiations. Particularly at the garage sale. And that contract's only as good as the future credit of the person you're dealing with. Heck, in a lot of cases you probably wouldn't even take their check.