## Facts

- In 1967, a lawnmower was manufactured and sold by Kee Manufacturing Company, a sole proprietorship owned by Flechas J. Kee.
- In 1972, new owners purchased the business’s assets for cash and incorporated as Kee Manufacturing Company, Inc. (Kee, Inc.), acquiring the plant, inventory, goodwill, and the right to use the name.
- The asset purchase provided that Kee, Inc. did not assume the predecessor’s liabilities or obligations, and the former owner retained no interest in Kee, Inc.
- Kee, Inc. continued manufacturing lawnmowers using the same factory personnel and trade name and continued the general product line; it also supplied replacement parts for the model involved, though it later discontinued that model.
- In 1976, James M. Bernard, Jr. was injured while using the 1967 mower.
- Bernard and his mother sued Kee, Inc. for negligence, implied warranty, and strict liability, asserting successor liability for an allegedly defective product made by the predecessor.
- The trial court granted summary judgment to Kee, Inc.; the Second District Court of Appeal affirmed, creating conflict with a Third District decision that suggested broader successor-liability considerations.

## Issues

1. Whether an asset purchaser that continues the seller’s product line under the same trade name can be liable for injuries caused by a product manufactured and sold by the seller, despite nonassumption of liabilities and no traditional exception applying.
2. Whether Florida should adopt an expanded successor-liability theory in products cases, such as the “product line” theory.
3. Whether a court may consider the predecessor’s financial responsibility to impose successor liability outside the traditional exceptions.

## Decision

- The Florida Supreme Court approved the Second District’s affirmance of summary judgment for Kee, Inc.
- The court held Florida would not expand successor liability beyond the traditional corporate law rule and declined to adopt the product line theory.
- The court concluded none of the traditional exceptions to nonliability for asset purchasers applied on these facts.
- The court disapproved the conflicting approach to the extent it suggested broader successor liability, including reliance on the predecessor’s financial responsibility.

## Legal Principles

- As a general rule, an asset purchaser is not liable for the seller’s liabilities unless: (1) the purchaser expressly or impliedly assumes the obligations; (2) the transaction is a de facto merger; (3) the purchaser is a mere continuation of the seller; or (4) the transaction is fraudulent and intended to avoid liabilities.
- Continuation of a product line, use of the same trade name, retention of employees, and ongoing parts support do not, by themselves, establish the “mere continuation” exception; the traditional test focuses on continuity of ownership or control.
- Expanded successor-liability doctrines in products cases, including product line liability, are policy choices not adopted judicially absent legislative action.

## Conclusion

Florida applies the traditional asset-purchaser nonliability rule to products-liability claims and imposes successor liability only when one of the four established exceptions is satisfied; an asset purchaser that continues the seller’s product line is not liable for defects in products made and sold by the predecessor without such an exception.


Bernard v. Kee Mfg. Co., 409 So. 2d 1047 (Fla. 1982)