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SWAYZE v. A.O. SMITH CORP.

August 30, 1988

PEGGY J. SWAYZE, Administratrix of the Estate of Gilbert "Buck" Alexander Swayze, PLAINTIFF
v.
A.O. SMITH CORPORATION, ET AL., DEFENDANTS



The opinion of the court was delivered by: HOWARD, JR.

 GEORGE HOWARD, JR., UNITED STATE DISTRICT JUDGE.

 On March 26, 1987, Gilbert A. "Buck" Swayze was killed in an industrial accident at Smith Fiberglass while operating a "stripper machine." Decedent's estate filed suit against a number of corporations, including Ameco, the alleged corporate successor to the original manufacturer of the machine. The complaint alleges implied warranty, negligence, and products liability.

 Ameco has filed a motion to dismiss, contending that as a successor corporation, it is not liable to plaintiff for any damages. Both plaintiff and Ameco have submitted numerous documents and responses in support of their positions. By order dated August 18, 1988, the Court advised the parties that it would treat the motion to dismiss as a motion for summary judgment and directed the parties to submit statements of material facts pursuant to Local Rule 29. On August 26, 1988, the Court conducted oral argument on the motion to dismiss. For the reasons stated below, the motion is granted.

 FACTS

 Plaintiff's decedent, an employee of Smith Fiberglass Products, Inc., in Little Rock, Arkansas, was killed in an industrial accident on March 26, 1987. The accident involved a "stripper machine" which plaintiff alleges was, in part, planned, designed, manufactured, assembled, sold, distributed and installed by Ameco Corporation or its predecessor in title and interest.

 The stripper machine was installed at the Dow-Smith plant in Little Rock, Arkansas as part of an overall operation known as a Six Head Winding Line. After the installation of the machine and dubbing of the Six Head Winding Line in 1964, A.M. & E and Dow-Smith or A.O. Smith had no further contact regarding the machine. The Six Head Winding Line, including the stripper, was a one-of-a kind special order machine which was never duplicated.

 In 1968, A.M. & E was voluntarily placed in receivership in the Milwaukee County Circuit Court pursuant to the Wisconsin Assignment for Benefit of Creditors Act. On April 22, 1968, Ro-Band Corporation, a Wisconsin corporation, purchased the physical assets of A.M. & E from the company's receiver pursuant to an order of the Milwaukee County Circuit Court. The bill of sale provided that Ro-Band acquire right, title and interest in all physical assets of A.M. & E except accounts receivable, life insurance and tax refunds or claims, free and clear of all liens and encumbrances. The sale was ratified, approved and confirmed by the Milwaukee County Circuit Court.

 Ameco contends that Ro-Band had no connection with A.M. & E. According to the affidavit of Gerald J. Achtor, the president of Ro-Band Corporation, Ro-Band retained about twenty percent of A.M. & E's work force and installed new management. Achtor also asserts that Ro-Band assumed no liabilities and paid off no creditors of A.M. & E. Its shareholders and directors were totally distinct from A.M. & E.

 Subsequent to its receivership, A.M. & E took no action to dissolve the corporation and was placed in bad standing by the Wisconsin Secretary of State on January 1, 1969 for inactivity due to the discontinuance of business. Although in bad standing, A.M. & E continued as a body corporate, duly and legally incorporated, and existing under the laws of Wisconsin, until a Certificate of Involuntary Dissolution was issued on January 18, 1979, pursuant to section 180.769(3) of the Wisconsin Statutes.

 After purchasing the physical assets of A.M. & E, Ro-Band assumed the lease for the building which formerly housed A.M. & E and established the "Ameco Division". This division manufactured items pursuant to special order. The Ameco Division continued to operate until September, 1975, at which time the assets of the Ameco Division were sold to John H. Kopmeier, Jr., and Heinz H. Schmeisser, who had no prior association with either Ro-Band or A.M. & E. The purchase was of tangible and intangible assets and included the sale of machinery, equipment, tools, fixtures, books, records, papers, documents, engineering drawings, designs and data, trademarks, trade names, copyrights, and patents. The agreement of sale entered into on September 30, 1975, contained the following provision:

 
Buyer is not assuming any obligations or liabilities of Seller of any kind whatsoever, including specifically, but not limited to, any obligations of Seller for product warranty claims, taxes . . ., any obligations to customers or suppliers of Seller, and any obligations of Seller to employees of Seller for services rendered prior to October 1, 1975, ...

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