
    Dwight C. Martin, Appellant, v Julius Dierck Equipment Co. et al., Respondents. Raymond Corporation, Third-Party Plaintiff, v Western Electric Corp., Third-Party Defendant.
    Submitted November 17, 1977;
    decided January 18, 1978
    
      POINTS OF COUNSEL
    
      Seymour Armstrong and Lawrence M. Rosenberg for appellant.
    I. The cause of action for breach of warranty accrued in the State of New York and CPLR 202 is not applicable. (Mendel v Pittsburgh Plate Glass Co., 25 NY2d 340; Blessing-ton v McCrory Stores Corp., 305 NY 140; Myers v Dunlop Tire & Rubber Corp., 69 Misc 2d 729, 40 AD2d 599; Victorson v Bock Laundry Mach. Co., 37 NY2d 395; Codling v Paglia, 32 NY2d 330.) II. The State with the most significant contacts with the issues to be determined is New York State, and the cause of action accrued in New York State. (Miller v Miller, 22 NY2d 12.) III. A triable issue of fact as to the effect of the tolling provisions of the revised 1950 Virginia Code (§ 8-33) is present.
    
      Jeffrey Silberfeld for Julius Dierck Equipment Co., respondent.
    I. The court below acted correctly when it resolved the question of where plaintiffs causes of action accrued by analyzing the "contacts” of the interested jurisdictions. (Babcock v Jackson, 12 NY2d 473; Auten v Auten, 308 NY 155; Myers v Dunlop Tire & Rubber Corp., 69 Misc 2d 729, 40 AD2d 599.) II. Upon analyzing the "contacts” of the interested jurisdictions, the court below correctly concluded that all of plaintiffs causes of action accrued in Virginia. (Daigle v Leavitt, 54 Misc 2d 651; Fullmer v Sloan’s Sporting Goods Co., 277 F Supp 995.) III. The court below correctly held that no questions of fact exist as to whether a certain tolling provision of Virginia’s Statute of Limitations became operative.
    
      Sidney A. Schwartz and John T. McDonald for Raymond Corporation, respondent.
    I. Plaintiffs causes of action accrued in the State of Virginia and are barred by virtue of the Virginia Statute of Limitations and CPLR 202. (Victorson v Bock Laundry Mach. Co., 37 NY2d 395; Babcock v Jackson, 12 NY2d 473; Auten v Auten, 308 NY 155; Sack v Low, 478 F2d 360; Codling v Paglia, 32 NY2d 330; Daigle v Leavitt, 54 Misc 2d 651; Lowell Wiper Supply Co. v Helen Shop, 235 F Supp 640; Chartener v Kice, 270 F Supp 432; Mendel v Pittsburgh Plate Glass Co., 25 NY2d 340; Schmidt v Merchants Desp. Transp. Co., 270 NY 287.) II. Raymond was at all times subject to suit in the State of Virginia and Virginia’s tolling statutes are factually inapplicable. In addition, no issue of fact was properly raised below regarding the amenability of Raymond to jurisdiction. (Jackson v National Linen Serv. Corp., 248 F Supp 962; Shapiro v Health Ins. Plan of Greater N. Y., 7 NY2d 56; Schillinger v North Hills Realty Corp., 15 AD2d 539, 11 NY2d 1044; Mallad Constr. Corp. v County Fed. Sav. & Loan Assn., 32 NY2d 285; Capelin Assoc, v Globe Mfg. Corp., 34 NY2d 338.)
   OPINION OF THE COURT

Jasen, J.

The novel question posed by this appeal is whether, for purposes of CPLR 202, plaintiffs causes of action for personal injury accrued in the jurisdiction in which he was injured or in the jurisdiction in which the vehicle alleged to have caused the injury was delivered.

Plaintiff, a resident of the District of Columbia, was injured in Arlington, Virginia, on June 7, 1968, at the warehouse of his employer, Western Electric, when a forklift truck he was operating allegedly malfunctioned, throwing him from the vehicle. The forklift was manufactured by defendant Raymond, a corporation with its principal place of business in Greene, New York, and sold to Western Electric on June 26, 1967 "f.o.b. Greene, New York” through defendant Dierck, a distributor with its principal place of business in New York City.

Alleging causes of action in negligence and breach of warranty against both defendants, plaintiff commenced the present action against Dierck on May 21, 1971, and against Raymond on June 25, 1971. Defendants moved for summary judgment, contending that pursuant to CPLR 202—our "borrowing” statute—New York must apply the Virginia Statute of Limitations, which provides "every action for personal injuries * * * shall be brought within two years next after the right to bring the same shall have accrued.” (Va Code [1950], § 8-24.) Defendants maintained that the causes of action for breach of warranty and negligence accrued without the State on May 6, 1969, the date of plaintiff’s 21st birthday, and were, therefore, barred by Virginia’s two-year Statute of Limitations.

Applying CPLR 202, Special Term held that the negligence causes of action "accrued”, for purposes of the borrowing statute, in Virginia—the place of the injury—rather than in New York—the place of manufacture and delivery. As to the breach of warranty causes of action, however, the court held that these causes of action "accrued” in New York. Consequently, since the court found the breach of warranty causes of action to have "accrued” in New York, Special Term held the borrowing statute inapplicable and plaintiff’s complaint timely under New York’s four-year Statute of Limitations for breach of warranty.

Although having concluded that the negligence causes of action "accrued” in Virginia and, therefore, that Virginia’s two-year Statute of Limitations governed plaintiff’s claim, Special Term denied defendants’ motion for summary judgment in its entirety, finding that factual issues existed as to whether Virginia’s Statute of Limitations was tolled due to plaintiff’s alleged inability to obtain jurisdiction over the defendants in Virginia.

On appeal, the Appellate Division reversed and granted defendants’ motions for summary judgment, holding that, for purposes of the borrowing statute, plaintiff’s breach of warranty, as well as negligence, causes of action "accrued” in Virginia, the jurisdiction which it believed had the greater interest in the litigation. In regard to the tolling of Virginia’s Statute of Limitations, the Appellate Division, finding that no question of fact existed, concluded that both defendants were amenable to jurisdiction in Virginia.

We hold that, for purposes of the "borrowing statute”, the negligence causes of action as well as the cause of action which plaintiff has labeled "breach of warranty” accrued in Virginia, and are therefore barred by Virginia’s two-year Statute of Limitations.

Viewed as pertaining to the remedy rather than the right, Statutes of Limitations have traditionally been characterized as procedural. (1943 Report of NY Law Rev Comm, p 143; Goodrich, Conflict of Laws [3d ed], § 85; Weintraub, Commentary on the Conflict of Laws 48.) Since under common-law rules matters of procedure are governed by the law of the forum, it has generally been held that the Statute of Limitations of the forum rather than that of the jurisdiction where the cause of action accrued governs the timeliness of a cause of action. (Leflar, American Conflicts Law, § 127.) To temper the rigid application of this rule, most States have enacted "borrowing” statutes which, although varying from State to State, "borrow” the foreign Statute of Limitations of the jurisdiction in which the defendant or both parties resided or the jurisdiction in which the cause of action accrued, if to do so would bar the plaintiff’s cause of action. (Leflar, American Conflicts Law, § 128; see, generally, Restatement, Conflict of Laws [2d], § 142, Comment f; Ester, Borrowing Statutes of Limitation and Conflict of Laws, 15 U Fla L Rev 33; Vernon, Statutes of Limitations in the Conflict of Laws: Borrowing Statutes, 32 Rocky Mt L Rev 287; Milhollin, Interest Analysis and Conflicts Between Statutes of Limitation, 27 Hastings LJ 1, 25-45.)

New York’s version of the borrowing statute, CPLR 202, provides: "An action based upon a cause of action accruing without the state cannot be commenced after the expiration of the time limited by the laws of either the state or the place without the state where the cause of action accrued, except that where the cause of action accrued in favor of a resident of the state the time limited by the laws of the state shall apply.” (Emphasis added.) Critical to the application of the borrowing statute is the determination of the jurisdiction in which a cause of action "accrues”. Before this determination can be made, however, it is necessary to characterize correctly the plaintiffs cause of action. Although denominated as a breach of warranty cause of action, plaintiffs claim in this case, in addition to his negligence claim, is in reality one in strict products liability. (See Victorson v Bock Laundry Mach. Co., 37 NY2d 395, 401-402.) Consequently, it is the jurisdiction in which plaintiffs strict products liability causes of action, as well as negligence causes of action, accrued that must be ascertained for purposes of applying the borrowing statute.

In reaching this conclusion, we observe that a cause of action for breach of warranty is a contractual remedy—a remedy which seeks to provide the parties with the benefit of their bargain. It is, in essence, a remedy designed to enforce the agreement, express or implied, of the parties and to place them, should one of the parties fail to perform in accordance with the agreement, in the same position they would have been had the agreement been performed. (See Victorson v Bock Laundry Mach. Co., 37 NY2d 395, 401, supra; Wade, Is Section 402A of the Second Restatement of Torts Preempted by the UCC and Therefore Unconstitutional, 42 Tenn L Rev 123, 127.)

On the other hand, a cause of action for negligence or for strict products liability seeks to provide a remedy for an individual injured because of another’s violation of an obligation imposed not by contract, but by law. It does not attempt to afford the injured party the benefit of any bargain, but rather endeavors to place him in the position he occupied prior to his injury. In other words, negligence and strict products liability causes of action seek to make the injured party "whole”. (See Victorson v Bock Laundry Mach. Co., 37 NY2d 395, 401, supra; Prosser, Torts [4th ed], § 92, p 613; Wade, Is Section 402A of the Second Restatement of Torts Preempted by the UCC and Therefore Unconstitutional, 42 Tenn L Rev 123, 127.)

Consequently, a plaintiff who is not in privity with the seller of the product which is alleged to have caused his injury possesses a cause of action in negligence or strict products liability as opposed to what has often been incorrectly labeled breach of warranty. In this regard, we have stated on a previous occasion: "Whatever may have been earlier doubt and confusion, the authorities are now in general agreement that strict products liability sounds in tort rather than in contract. 'It has been said over and over again that this warranty—if that is the name for it—is not the old sales warranty, it is not the warranty covered by the Uniform Sales Act or the Uniform Commercial Code. It is not a warranty of the seller to the buyer at all, but it is something separate and distinct which sounds in tort exclusively, and not at all in contract; which exists apart from any contract between the parties; and which makes for strict liability in tort.’ ” (Victor-son v Bock Laundry Mach. Co., 37 NY2d 395, 402, supra, quoting Prosser, Spectacular Change: Products Liability in General, 36 Cleveland Bar Assn J 167-168.)

The effect of the rule in the Victorson case (supra) and the analysis in this case is not to raise again the "citadel of privity”. On the contrary, the rule announced in that case and the analysis in the present case manifests the flowering in New York of the doctrine of strict products liability making unnecessary the distortions previously required to permit injured plaintiffs to recover from those who put defective products into the stream of commerce. The doctrine was presaged long before the Victorson case. (E.g., Goldberg v Kollsman Instrument Corp., 12 NY2d 432, 436-437; Codling v Paglia, 32 NY2d 330; Restatement, Torts 2d, § 402A.) It was followed in Micallef v Miehle Co. (39 NY2d 376). Removal of the distortions prevents the all but inconceivable result reached in Mendel v Pittsburgh Plate Glass Co. (25 NY2d 340), overruled in Victorson v Bock Laundry Mach. Co. (37 NY2d 395, supra)—a result that could follow if the breach of warranty action in this case is viewed as having accrued in New York before the plaintiff had been injured, and therefore before he had a cause of action. The point of all this is that strict products liability displaces the need for a "warranty” action by third parties. But if a third party chooses to sue in "warranty”, thus restricting the scope of the damages he may recover (cf. Sears, Roebuck & Co. v Enco Assoc., 43 NY2d 389), he may not nevertheless by asserting that the cause of action arose at the time of the manufacturer’s tender of delivery contend that his cause of action "accrued” before in fact it had.

Moreover, CPLR 202 antedates the latest development of strict products liability doctrine as it antedates the Uniform Commercial Code. When it speaks of "accrual” of a cause of action, it must logically refer to a cause of action upon which a lawsuit may be brought, even if damages could not be fully assessed until later. That plaintiff Martin could have sued defendants before he was employed on the Virginia project by his employer, let alone before he was injured, makes no sense in law or justice. If a true breach of warranty action accrued to him on the delivery f.o.b., New York of the defective forklift, he could have sued then and there in New York.

But assuming that plaintiff may sue in breach of warranty in contract, it still is true that his cause of action accrued only when he was injured in Virginia. To hold otherwise is to repeat the now overruled holding in Mendel v Pittsburgh Plate Glass Co. (25 NY2d 340, supra), a rule that would have barred a plaintiff’s cause of action before it ever came into existence.

The dissenters refer to section 2-318 of the Uniform Commercial Code as amended. They agree the critical amendment of that section was enacted after the operative events here and thus is inapplicable to the core issue in this case. We therefore view unnecessary further discussion of this section except to note the likelihood of disagreement as to its effect should a case arise in which its applicability may properly be considered.

In the present case, plaintiff, a resident of the District of Columbia, was injured in Virginia during the course of his employment. Defendants, the manufacturer (Raymond) and distributor (Dierck) of the allegedly malfunctioning forklift, both are corporations with their principal places of business in New York. No contract of sale, without more, made between plaintiff’s employer and the manufacturer and distributor of the forklift could create any liability to plaintiff. (See Victor-son v Bock Laundry Mach Co., 37 NY2d 395, 402-403, supra.) Plaintiff possessed no cause of action, in tort or in contract, any where in the world until he was injured in Virginia. (See Mendel v Pittsburgh Plate Glass Co., 25 NY2d 340, 348 [dissenting opn], overruled in Victorson v Bock Laundry Mach. Co., 37 NY2d 395, supra.)

Consequently, for purposes of the borrowing statute, CPLR 202, plaintiff’s causes of action in negligence and strict products liability accrued in Virginia, the place of the injury. Since Virginia would apply a two-year Statute of Limitations to plaintiff’s causes of action (see Caudill v Wise Rambler, 210 Va 11; Sides v Richard Mach. Works, 406 F2d 445; Tyler v Street & Co., 322 F Supp 541), we hold that they are untimely.

In barring plaintiffs causes of action, we observe that no expectation interest of the nonresident plaintiff is frustrated by application of the Virginia Statute of Limitations. Defendants and plaintiff’s employer, Western Electric, entered into the contract of sale for the forklift intending the vehicle to be used in Virginia. In fact, it was extensively used at Western Electric’s warehouse for a year prior to the accident. As the Appellate Division aptly observed: "The life’ of the forklift in [New York] was limited to a dormant and transitory interval between its manufacture and shipment to its ultimate destination in Arlington, Virginia.” (52 AD2d 463, 467.) On these facts, plaintiff cannot express surprise at the application of Virginia’s Statute of Limitations.

The question remains, however, whether Virginia’s Statute of Limitations was tolled because of the inability of plaintiff to secure jurisdiction over defendants in Virginia. In this regard, we find it unnecessary to decide whether defendants engaged in a "persistent course of conduct” or derived "substantial revenue from goods used or consumed or services rendered in [Virginia]”, thus rendering themselves amenable to jurisdiction under Virginia’s long-arm statute. (Va Code [1950], § 8-81.2.) Section 8-33 of the Virginia Code, the tolling provision applicable in the present case, provided for the tolling of the Statute of Limitations during the absence of a defendant from Virginia only if the defendant had resided in Virginia before the cause of action accrued against him. Since defendants were not residents of Virginia before plaintiff’s cause of action accrued against them, Virginia’s two-year Statute of Limitations could not have been tolled. Not having been residents prior to the accrual of plaintiff’s causes of action, defendants’ absence from Virginia is irrelevant. Consequently, plaintiff’s causes of action for negligence and strict products liability are untimely.

Accordingly, the order of the Appellate Division should be affirmed, with costs.

Gabrielli, J. (dissenting in part).

Although I am in accord with much of the majority’s discussion of CPLR 202, I cannot concur in the court’s dismissal of the plaintiff's independent cause of action for breach of warranty. Today’s decision raises anew the once toppled walls of the citadel of privity (see Codling v Paglia, 32 NY2d 330), and casts a shadow over that realm of the law which defines the right to recover for personal injuries caused by defective products; but the result reached is mandated neither by precedent, logic nor statute.

Due to a comparatively rapid rate of development, the body of law which deals with recovery for personal injuries caused by defective products comprises a seemingly complex, and perhaps somewhat inconsistent admixture of both common law and statute. Much of the law in this area is a creature of judicial fiat rather than of legislative action, and has developed on a case-by-case basis as a matter of common law. Until fairly recently, the absence of privity precluded recovery without proof of negligence (see Turner v Edison Stor. Battery Co, 248 NY 73). In an increasing number of decisions, beginning with Greenberg v Lorenz (9 NY2d 195), the court began to weaken the walls of the citadel. That process culminated n our decision in Codling wherein we held that "under a doctrine of strict products liability, the manufacturer of a defective product is liable to any person injured or damaged if the defect was a substantial factor in bringing about his injury or damages” (32 NY2d, at p 342). Subsequently, in Victorson v Bock Laundry Mach. Co. (37 NY2d 395), we held that an action in strict products liability sounds in tort rather than in contract, and consequently found the tort limitations period and accrual principles applicable to such actions.

Today this court in effect holds that no cause of action for breach of warranty can lie in favor of a person not in privity with the seller. Implicit in this holding is the rationale that since such a person may now have a cause of action for strict products liability, it is no longer necessary to afford him an action for breach of warranty as well. Whether the converse will also be true, and a person who is in privity of contract be foreclosed from bringing an action in strict products liability (see De Crosta v Reynolds Constr. & Supply Co., 49 AD2d 476, affd on other grounds 41 NY2d 1100), or whether such a person will be subject to the torts Statute of Limitations in any action to recover for personal injury, appear to remain open questions (see, generally, Victorson, supra, at pp 407-408 [concurring opn]). Although there is a certain elegant simplicity to the majority’s approach, that alone appears insufficient reason to reconstruct the privity barrier and thereby foreclose recovery by those individuals whose claims are barred by the tort, but not by the contract limitations period.

Neither Victorson nor any of our other holdings require this result. Indeed, in Victorson we explicitly recognized the continuing validity of a separate cause of action based upon a breach of warranty: "Preliminarily we observe as a matter of analysis that, while one seeking to recover from a manufacturer for injuries sustained in consequence of an alleged defect in its product may be said to have but a single claim, that claim may be grounded in one or more of four causes of action or theories of liability. Depending on the factual context in which the claim arises, the injured plaintiff, and those asserting derivative claims, may state a cause of action in contract, express or implied, on the ground of negligence, or, as here, on the theory of strict products liability. In these cases now before us we are concerned only with claims based on the last theory. What we say here, therefore, should not be understood as in any way referring to the liability of a manufacturer of a defective product under familiar but different doctrines of the law of contracts for injuries sustained by a customer or other person with whom or for whose benefit the manufacturer previously has made a warranty or other agreement, express or implied. As indicated, it may be open to a particular plaintiff to base his case on contract liability or negligence or strict products liability, or on some combination thereof’ (37 NY2d, at p 400). Subsequently, in Micallef v Miehle Co. (39 NY2d 376, 382), we again noted the existence of a separate cause of action for breach of warranty accruing in favor of a person not in privity with the seller. Similarly, other courts and various commentators have consistently interpreted our decisions in Victorson and Codling as affording an injured party not in privity with the seller, the vehicle of a cause of action in either negligence, strict products liability, breach of warranty, or some combination thereof, depending on the facts of the particular case (see, e.g., Ribley v Harsco Corp., 57 AD2d 234; Murphy v General Motors Corp., 55 AD2d 486; Powell v Gates-Chili Cent. School Dist., 50 AD2d 1079, 1080; Survey of NY Practice, 50 St John’s L Rev 181; see, also, Potsdam Welding & Mach. Co. v Neptune Microñoc, 57 AD2d 993).

It is clear then, that nowhere have we held that a party not in privity is bereft or deprived of a cause of action for breach of warranty. This does not mean, of course, that we could not so hold now, were the question one of common law alone: Since our decision in Victorson, however, the Legislature has amended section 2-318 of the Uniform Commercial Code (L 1975, ch 744), which now provides as follows: "§ 2-318. Third Party Beneficiaries of Warranties Express or Implied. A seller’s warranty whether express or implied extends to any natural person if it is reasonable to expect that such person may use, consume or be affected by the goods and who is injured in person by breach of the warranty. A seller may not exclude or limit the operation of this section.” The language of the statute is clear, precise and unambiguous; its import is plain. It provides that any natural person who may reasonably be expected to "use, consume or be affected by the goods” shall be a third-party beneficiary to any warranties created by the sale, be they express or implied, and be they entered into voluntarily or imposed by operation of law. As a third-party beneficiary, anyone who falls within the protected class may, of course, bring a direct action for breach of warranty against the seller (see Uniform Commercial Code, § 2-318, comment 2; § 2-318, New York Annotations). Such a cause of action is independent of the strict products liability cause of action which we recognized in Codling and characterized as tortious in Victorson; it is instead a contractual remedy created solely by the provisions of the Uniform Commercial Code and the terms of the contract between the buyer and the seller (see Donnelly & Donnelly, Commercial Law, 27 Syracuse L Rev 277, 279). As such, it is appropriate that it be governed by the limitations period and accrual rules prescribed in section 2-725 of the Uniform Commercial Code. Although section 2-318 of the Uniform Commercial Code is not specifically applicable to this case since the cause of action accrued prior to the effective date of the amendment, I would nonetheless apply the principles inherent in the statute, and especially its obvious purpose of removing the privity barrier. It would seem rather incongruous at this late date for this court to act to reconstruct those very barriers which we have previously dismantled (see, e.g., Codling v Paglia, 32 NY2d 330, supra), and at a time when the Legislature has enunciated public policy and has so plainly indicated its approval of the direction of our earlier decisions.

Although section 2-725 does not speak directly to the situs of a cause of action for breach of warranty, it does provide that a cause of action such as this accrues at the time of tender of delivery. This being so, it would appear to follow logically that such an action would also accrue at the place of tender of delivery (see Myers v Dunlop Tire & Rubber Corp., 40 AD2d 599), which in this case was New York; and I do not think that this conclusion should change simply because the damages sought to be recovered are the result of personal injuries rather than the more traditional contract damages, for the code itself specifically allows recovery for personal injuries as consequential damages for breach* of contract or warranty (Uniform Commercial Code, § 2-715). Regardless of the nature of the damages sought to be recovered, the basis for liability is the sale of a defective product, and it is at the time of delivery of that product that the cause of action for breach of warranty accrues even though the defect may not reveal itself and the consequential damages be created until years later. There is no longer any need to strain to avoid this result in breach of warranty cases involving personal injuries, for our recognition of an independent action based on strict products liability and accruing as of the date of the injury serves to prevent the injustice which might possibly otherwise result from such a rule.

The majority of the court today apparently disregards the fact that by amending section 2-318 the Legislature has in large part eliminated the privity barrier to a traditional breach of warranty action on behalf of an injured person who is not a direct party to the sales contract; and apparently finds no inconsistency between this legislative death blow to privity and today’s decision to resurrect that concept. I cannot agree. The effect of the statutory scheme is clear: section 2-318 delineates the class of individuals in whose favor warranties run, and that class certainly includes this plaintiff. To determine when and where his cause of action for breach of warranty accrued, as distinguished from his cause of action based in strict products liability, one need only turn to that section of the code we have already discussed which deals with accrual, to wit, section 2-725.

For the reasons stated above, I would hold that the plaintiff has stated a cause of action for breach of warranty, that this cause of action accrued in New York, and that thus the borrowing statute (CPLR 202) is not applicable; rather the four-year Statute of Limitations provided in section 2-725 of the Uniform Commercial Code is applicable and the action was timely brought.

Therefore, the order of the Appellate Division should be modified accordingly, and the case remitted to Supreme Court for trial with respect to the breach of warranty cause of action.

Chief Judge Breitel and Judges Jones and Wachtler concur with Judge Jasen; Judge Gabrielli dissents in part and votes to modify in a separate opinion in which Judges Fuchsberg and Cooke concur.

Order affirmed, with costs. 
      
       Virginia’s present tolling provision, section 8.01-229, no longer requires a defendant’s residency in Virginia before accrual of a cause of action to toll the Statute of Limitations during a defendant’s absence from Virginia. (1977 Va Acts, ch 617, eff Oct. 1, 1977.)
     