474 F.3d 188 (5th Cir. 2006), 04-41362, Hodges v. Mack Trucks Inc.

Docket Nº:04-41362, 04-41764 and 05-40686.
Citation:474 F.3d 188
Party Name:James Edwin HODGES; Beverly Hodges, Plaintiffs-Appellees-Cross-Appellants, v. MACK TRUCKS, INC., Defendant-Appellant-Cross-Appellee. James Edwin Hodges; Beverly Hodges, Plaintiffs-Appellants, v. Indiana Mills & Manufacturing, Inc., et al., Defendants, Mack Trucks, Inc., Defendant-Appellee. James Edwin Hodges; Beverly Hodges, Plaintiffs-Appellees, v
Case Date:December 27, 2006
Court:United States Courts of Appeals, Court of Appeals for the Fifth Circuit
 
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474 F.3d 188 (5th Cir. 2006)

James Edwin HODGES; Beverly Hodges, Plaintiffs-Appellees-Cross-Appellants,

v.

MACK TRUCKS, INC., Defendant-Appellant-Cross-Appellee.

James Edwin Hodges; Beverly Hodges, Plaintiffs-Appellants,

v.

Indiana Mills & Manufacturing, Inc., et al., Defendants,

Mack Trucks, Inc., Defendant-Appellee.

James Edwin Hodges; Beverly Hodges, Plaintiffs-Appellees,

v.

Indiana Mills & Manufacturing; et al., Defendants,

ABF Freight System, Inc., Intervenor-Appellant.

Nos. 04-41362, 04-41764 and 05-40686.

United States Court of Appeals, Fifth Circuit.

December 27, 2006

Appeals from the United States District Court for the Eastern District of Texas (2:03-CV-183)

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Leon René Russell, Dallas, TX, Carl R. Roth, Michael Charles Smith (argued), The Roth Law Firm, Marshall, TX, for James & Beverly Hodges.

Sidney Katherine Powell (argued), Law Offices of Sidney Powell, Asheville, NC, Deborah Ann Pearce, Powell & Pearce, New Orleans, LA, for Mack Trucks, Inc.

Alexander Nelson Beard (argued), Bishop & Hummert, Darryl Jan Silvera, The Silvera Firm, Dallas, TX, for ABF Freight System, Inc.

Appeals from the United States District Court for the Eastern District of Texas.

Before DAVIS, BARKSDALE and DeMOSS, Circuit Judges.

RHESA HAWKINS BARKSDALE, Circuit Judge:

These three appeals arise out of a product-liability, diversity action for injuries sustained because of a secondary collision in Texas, involving a tractor-trailer manufactured by Mack Trucks, Inc. (Mack). Mack seeks judgment as a matter of law and, in the alternative, a new trial, claiming, inter alia, the district court improperly both admitted expert testimony and excluded evidence concerning the use, or nonuse, of his seatbelt by James Hodges (Hodges), the injured driver of the truck. Hodges received a multi-million dollar verdict. He and his wife, Beverly Hodges (the Hodges), contest her not also being awarded damages and seek a new trial on that issue. Finally, ABF Freight Systems, Inc. (ABF), Hodges' employer and workers'-compensation provider, challenges the district court's rulings on its subrogation claim. A new trial and ABF's claim's being reconsidered are required. VACATED AND REMANDED.

I.

On 1 November 2002, a 16-year-old drove her vehicle into the path of an oncoming

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Mack truck, driven by Hodges, a 34-year veteran driver of large trucks. His cab was pulling two trailers, and the other vehicle hit the right front wheel of Hodges' truck, causing extensive damage. The truck swerved into the path of an oncoming car, breached a guard rail, and jack-knifed down an embankment. It came to rest with the nose of the tractor pointed up; the passenger-side door was damaged but the door frame and the cab were not deformed.

Hodges was ejected through the passenger side and sustained severe and permanent injuries, including paraplegia. (It is undisputed that, had he remained in the cab, his injuries would have been far less serious.) ABF, Hodges' employer, was self-insured and began paying Hodges workers' compensation.

ABF owned the truck. Its seatbelts were manufactured by Indiana Mills & Manufacturing (Indiana Mills). Its door latches, manufactured by KSR International, were installed by Mack.

In May 2003, the Hodges filed this action against Indiana Mills and Mack, claiming a design defect in the seatbelt caused Hodges to be ejected. (The Hodges had settled with the 16-year-old driver for $50,000.) In early 2004, the Hodges added a design-defect claim for the passenger-side door latch, asserting the defect caused the latch to fail after Hodges' truck was hit. That June, ABF intervened to protect its subrogation interests in workers' compensation paid to Hodges.

Prior to trial, Mack repeatedly, and unsuccessfully, challenged some of the Hodges' proposed expert witnesses being permitted to testify. Notwithstanding the district judge's concomitant extensive involvement and knowledge about the issues, the case was reassigned approximately two weeks before trial commenced on 23 August 2004. (Jury selection was during the week of 16 August.)

On 14 August, Indiana Mills settled with the Hodges on the seatbelt claim for $1.4 million. The settlement structure provided for James and Beverly Hodges to each receive half of the settlement amount. Accordingly, only the defective-door-latch issue remained for trial, with Mack as the sole defendant.

On the eve of trial, as a result of that settlement, the Hodges moved to exclude all evidence of Hodges' use, or nonuse, of his seatbelt, pursuant to § 545.413(g) of the Texas Transportation Code, claiming the statute proscribed introducing such evidence in civil trials (seatbelt evidence). The motion was granted without written reasons being given.

During trial, the Hodges introduced expert testimony by Steven Syson. He testified: the door latch failed; and there was a safer alternative design available that would have substantially reduced the likelihood of Hodges' injuries. Mack's pretrial motions to exclude this testimony had been denied.

On 26 August, following approximately two and one-half days of testimony, the jury returned its verdict, finding Mack and the 16-year-old driver 60% and 40% liable, respectively, for Hodges' injuries. It awarded $7.9 million in damages, but awarded the entire amount to Hodges. In short, the jury awarded Beverly Hodges no damages for loss of household services and consortium.

That September, Mack moved for judgment as a matter of law (as it had done during trial) and, in the alternative, a new trial. The Hodges moved for a new trial on Beverly Hodges' damages claim. That November, the court denied those motions, without providing written reasons.

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In October, Indiana Mills had interpled its $1.4 million in settlement funds into the court's registry. As noted, under the agreed settlement terms, James and Beverly Hodges were to each receive $700,000. ABF claimed it was entitled to the entire amount, not just the $700,000 Hodges was to receive, for workers' compensation it had paid, as well as would pay in the future. That December, the district court held an evidentiary hearing on the funds' disbursement. Among other rulings, it denied ABF's request for reapportionment of the settlement amount, holding, inter alia, the intent of the settlement scheme was not to deprive ABF of its rights to subrogation or future credit. The funds have been disbursed.

II.

For this diversity-jurisdiction action, arising out of an accident in Texas, its substantive law applies. Erie R.R. Co. v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188 (1938). At issue is whether the district court erred in: (1) admitting Syson's expert testimony; (2) denying Mack judgment as a matter of law (JML); (3) excluding the seatbelt evidence; (4) failing to grant a new trial on Beverly Hodges' damages; (5) approving the apportionment of the Indiana Mills settlement amounts between the Hodges; and (6) assessing attorney fees and litigation expenses out of ABF's subrogation recovery and calculating its right to future credit.

We hold, inter alia : JML was properly denied; the court reversibly erred, however, by excluding the seatbelt evidence; and, therefore, a new trial is required. Accordingly, we need not address Beverly Hodges' damages claim, nor fully address ABF's claims. ABF's claims are remanded to the district court for it, inter alia, to consider whether the effect of the settlement was to settle around ABF's subrogation lien.

A.

Mack maintains: Syson's testimony should have been excluded, pursuant to Daubert v. Merrell Dow Pharm., Inc., 509 U.S. 579, 593-95, 113 S.Ct. 2786, 125 L.Ed.2d 469 (1993); and, even if admissible, it failed, as a matter of law, to prove the requisite safer alternative design for the Mack door latch. Therefore, Mack contends judgment should be rendered in its favor. In the alternative, it seeks a new trial. (In a footnote to its opening brief, Mack also addresses the testimony of the Hodges' accident-reconstruction expert, stating it should have also been excluded under Daubert. It is unclear whether Mack presents this as an issue for appeal. In any event, because we reverse based on the district court's exclusion of the seatbelt evidence, it is not necessary to address that expert's testimony.)

JML is proper when "a party has been fully heard on an issue during a jury trial and the court finds that a reasonable jury would not have a legally sufficient evidentiary basis to find for that party on that issue ... ". Fed.R.Civ.P. 50(a) (as amended effective 1 Dec. 2006); see also Fed. R. Civ. P. 50(b) (as amended effective 1 Dec. 2006) (post-trial JML). An appellate court, in deciding whether JML should have been awarded, must first excise inadmissible evidence; such evidence "contributes nothing to a legally sufficient evidentiary basis". Weisgram v. Marley, 528 U.S. 440, 454, 120 S.Ct. 1011, 145 L.Ed.2d 958 (2000) (internal quotations omitted). Therefore, we first address the contested admission of Syson's testimony. (Obviously, in deciding whether JML should be awarded Mack, the seatbelt evidence is not in play because it was excluded, not admitted. Instead, it comes into play in deciding

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whether, in the alternative, Mack is entitled to a new trial.)

1.

The admission of expert testimony is reviewed for an abuse of discretion. E.g., Stolt Achievement, Ltd. v. Dredge B.E. Lindholm, 447 F.3d 360, 366 (5th Cir. 2006). "District courts enjoy wide latitude in determining the admissibility of expert testimony, and the discretion of the trial judge and his or her decision will not be disturbed on appeal unless manifestly erroneous." Watkins v. Telsmith, Inc., 121 F.3d 984, 988 (5th Cir. 1997) (internal citations and quotations omitted; emphasis added).

Daubert ...

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