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04/13/83 DEXTER HAMILTON v. SCM CORPORATION

April 13, 1983

DEXTER HAMILTON, PLAINTIFF-RESPONDENT,
v.
SCM CORPORATION, A FOREIGN CORPORATION, DEFENDANT-APPELLANT, BERKEL, INC., A FOREIGN CORPORATION, DEFENDANT-RESPONDENT



Appeal from an order of the Circuit Court for Milwaukee County: Patrick T. Sheedy, Judge.

Moser, P.j., Decker and Wedemeyer, JJ.

The opinion of the court was delivered by: Moser

SCM Corporation (SCM) appeals from a non-final order of the trial court, wherein the trial court denied SCM's motion for summary judgment. On August 30, 1982, we granted SCM's petition for leave to appeal a non-final order. *fn1 Because we hold that SCM is entitled to summary judgment as a matter of law, we reverse the order of the trial court and remand the cause with directions.

Dexter Hamilton (Hamilton) commenced this action against Berkel, Inc. (Berkel) and SCM for damages arising out of an injury caused while he was using an electrical meat grinding machine manufactured and sold by Enterprise Manufacturing Company (Enterprise). Hamilton's complaint alleges that both Berkel and SCM are successor corporations and have assumed all the liabilities and obligations of Enterprise.

The record establishes that the meat grinder in question was manufactured by Enterprise prior to 1956. In 1955, Enterprise merged into the Silex Company (Silex) with Silex continuing Enterprise's operations as the Enterprise division of Silex. On July 27, 1956, U.S. Slicing Machine Company (U.S. Slicing), Berkel's predecessor, entered into an agreement with Silex to purchase the industrial and commercial lines of Silex's Enterprise division. The meat grinder in question was the type of machine included in the sale. Paragraph 8 of this agreement provided as follows: "Enterprise-1956 agrees to assume all liabilities, obligations, contracts, orders for the purchase of material and warranties of First Party made in connection with the manufacture and sale of products assigned hereunder to Enterprise-1956 as part of the commercial and industrial line."

To facilitate this sale, a new corporation, Enterprise-1956, was formed. The board of directors of Enterprise-1956, voted to have the corporation cease operations and distribute its assets and property to U.S. Slicing, subject to all liabilities of Enterprise-1956. In 1970, U.S. Slicing changed its name to Berkel.

In 1960, Silex merged with the Proctor Electric Company. Silex was the surviving corporation and was renamed The Proctor-Silex Corporation (Proctor-Silex). In 1966, Proctor-Silex merged with SCM, with the surviving corporation retaining the name SCM.

Berkel and SCM have cross complained against each other for indemnification and contribution. SCM, by its amended cross complaint and amended answer to Berkel's cross claim, asserted that the question of SCM's right to indemnification has been fully adjudicated in the California case of SCM Corp. v. Berkel, Inc. *fn2

On May 26, 1982, SCM filed a motion for summary judgment on its cross claim for indemnification against Berkel. SCM argued that the judgment in the California case, SCM Corp. v. Berkel, Inc., *fn3 was entitled to full faith and credit under the United States Constitution and therefore it was entitled to full indemnification from Berkel for any costs of defending the action and for payment by Berkel of any judgment which may be awarded to Hamilton against SCM.

On July 14, 1982, the trial court, in a memorandum decision, denied SCM's motion for summary judgment. SCM appeals from this non-final order.

The sole issue on appeal is whether SCM is entitled to summary judgment as a matter of law because the judgment rendered by the California Court of Appeals determining the rights and liabilities of SCM and Berkel under the contract, is entitled to full faith and credit under the United States Constitution. Thus, an action in Wisconsin between the same parties to determine their rights and liabilities under the same contract is barred by the doctrine of res judicata.

SCM argues that the full faith and credit clause of the United States Constitution requires that the California judgment be recognized as valid in Wisconsin. We agree.

In SCM Corp. v. Berkel, Inc., *fn4 Berkel and SCM litigated the issue of whether Berkel assumed liability for claims arising out of the use of meat grinders manufactured by Enterprise similar to the one in question. In that case, Berkel and SCM entered into the following stipulation:

IT IS STIPULATED, . . . that the cross-complaints filed by said parties herein shall be deemed amended to include a request to determine all issues and a declaration of this court of the rights, liabilities and obligations of each of said parties to that certain agreement of July 27, 1956 by and between THE SILEX COMPANY, a corporation, ...


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