75 F.3d 1252 (8th Cir. 1996), 94-3629, Hiatt v. Mazda Motor Corp.

Docket Nº:94-3629.
Citation:75 F.3d 1252
Party Name:Jay HIATT, Appellant, v. MAZDA MOTOR CORPORATION, formerly known as Toyo Kogyo Co. Ltd.; Mazda Motor, of America, Inc., Appellees. MAZDA MOTOR CORPORATION, formerly known as Toyo Kogyo Co. Ltd.; Mazda Motor, of America, Inc., Third Party Plaintiffs, v. Rodney D. WADLOW, Appellee, Product Liability Advisory Council, Inc., Amicus Curiae.
Case Date:January 30, 1996
Court:United States Courts of Appeals, Court of Appeals for the Eighth Circuit

Page 1252

75 F.3d 1252 (8th Cir. 1996)

Jay HIATT, Appellant,

v.

MAZDA MOTOR CORPORATION, formerly known as Toyo Kogyo Co.

Ltd.; Mazda Motor, of America, Inc., Appellees.

MAZDA MOTOR CORPORATION, formerly known as Toyo Kogyo Co.

Ltd.; Mazda Motor, of America, Inc., Third Party Plaintiffs,

v.

Rodney D. WADLOW, Appellee,

Product Liability Advisory Council, Inc., Amicus Curiae.

No. 94-3629.

United States Court of Appeals, Eighth Circuit

January 30, 1996

Submitted May 15, 1995.

Page 1253

Appeal from the United States District Court for the Eastern District of Arkansas. Stephen M. Reasoner, Chief Judge, U.S.D.C.

James Schulze, Little Rock, Arkansas, argued. Also appearing (Darryl E. Baker, Little Rock, Arkansas, on the brief), for appellant.

Stephen R. Lancaster, Little Rock, Arkansas, argued (Roger A. Glasgow and Troy A. Price, on the brief), for appellees Mazda Motor Corp. and Mazda Motor of America.

Appellee, Rodney Wadlow's portion of the case was submitted on the briefs without oral argument. Appearing on the brief were James W. Tilley and Julia L. Busfield of Little Rock, Arkansas.

Page 1254

Before MAGILL, Circuit Judge, HENLEY, Senior Circuit Judge, and LOKEN, Circuit Judge.

HENLEY, Senior Circuit Judge.

Jay Hiatt filed this diversity of citizenship action to recover damages for injuries he suffered as a passenger in an automobile involved in a one-car accident on a rural road near Morrilton, Arkansas. Hiatt named as defendants in the action the manufacturer of the vehicle, Mazda Motor Corporation (Mazda Motor), and the distributor, Mazda Motor, of America Inc. (Mazda America) (Mazda Motor and Mazda America sometimes referred to herein collectively as Mazda).

Mazda then filed third-party claims for contribution against Rodney Wadlow, the driver of the automobile, and Lygwna Daughtry, the car's owner. The claim against Daughtry was dismissed before trial and the jury returned a verdict in favor of Mazda and against Hiatt. Judgment was entered on the verdict by the district court. 1 Hiatt filed a timely notice of appeal from the judgment of the district court under 28 U.S.C. § 1291. We affirm.

The relevant facts are summarized briefly here. On July 4, 1991, Hiatt and Wadlow attended a party where they and others consumed alcohol. Although the evidence showed that Wadlow exhibited signs of intoxication, Lygwna Daughtry agreed to loan Wadlow her 1983 Mazda 626 automobile and Hiatt and another man, Joel Thomas, agreed to ride with Wadlow.

Wadlow, the driver, and Thomas, the front seat passenger, did not fasten their seat belts. Sometime after the drive began, however, Hiatt became concerned about Wadlow's driving and Hiatt, riding in the back seat of the car, fastened his seat belt. At approximately 11:30 p.m., the car went off a winding road near Morrilton, Arkansas and struck a creek bank. Neither Wadlow nor Thomas was seriously injured. Hiatt, however, suffered severe injuries to his lower abdomen.

Hiatt, of Arkansas, sued Mazda Motor and Mazda America, both non-Arkansas corporations, in federal court alleging that his abdominal injuries were caused by the defective design of the car's rear seatbelt system. Mazda answered and, seeking contribution, filed third-party claims against both Wadlow and Daughtry under Federal Rule of Civil Procedure 14(a). Hiatt opposed the addition of Wadlow and Daughtry to the suit on grounds that his claim was solely one of defective design of the seatbelt system and that the potential liability of Wadlow and Daughtry in causing the accident was irrelevant. The district court overruled Hiatt's objections and allowed Wadlow and Daughtry to be impleaded.

Prior to trial, Hiatt filed a motion in limine seeking to exclude all evidence regarding the possible negligence of himself, Wadlow or Daughtry in causing the accident. Hiatt contended that his claim was only that--once the accident occurred--the seatbelt system caused him serious injury because of its defective design. The trial court overruled this motion.

On the eve of trial, because of concern about the possible application of the Arkansas comparative fault statute, Mazda moved to dismiss its third-party claims against Wadlow and Daughtry. Hiatt opposed the motion as to Wadlow on the ground that his fault, if any, should be compared with the combined fault of defendant Mazda and third-party defendant Wadlow. The district court overruled the motion to dismiss as to Wadlow but dismissed the third-party claim against Daughtry.

At no point did Hiatt assert any claims directly against Wadlow or Daughtry. Although Rule 14(a) would have permitted Hiatt to file such additional claims once the third-party defendants were impleaded, the complete diversity required between plaintiff and all defendants would have been destroyed because Wadlow and Daughtry were both Arkansas residents. Hiatt did pursue a separate action against Wadlow in Arkansas state court.

Page 1255

At trial, Mazda and Hiatt contested proposed jury instructions on the issue of comparative fault. Mazda contended that under Arkansas law plaintiff Hiatt's fault should be compared with defendant Mazda's fault and Hiatt could recover only if his comparative fault was less than that of Mazda's. Hiatt argued that, once Wadlow was added as a third-party defendant, Hiatt was entitled to recovery if his fault was less than the combined fault of Mazda and Wadlow. The district court agreed with Mazda and instructed the jury that it should compare Hiatt's fault only with that of the two Mazda entities and not with that of the third-party defendant Wadlow:

If the fault of Jay Hiatt is of less degree than the fault of Mazda Motor Corporation and Mazda Motor of America, then Jay Hiatt is entitled to recover any damages which you may find he has sustained as a result of the occurrence after you have reduced them in proportion to the degree of his own fault.

On the other hand, if Mazda Motor Corporation and Mazda Motor of America were not at fault, or if the fault of Jay Hiatt is equal to or greater in degree than the fault of Mazda Motor Corporation and Mazda Motor of America, then Jay Hiatt is not entitled to recover any damages.

Jury Instruction No. 32, Trial Transcript at 1550-51. Based on this instruction as to the law, the jury found in favor of Mazda and denied Hiatt recovery for his injuries.

Hiatt raised two issues in this appeal, but only one remains for our decision here. First, Hiatt contended that the district court erred by overruling his motion in limine to exclude evidence that did not directly relate to his claim that the seatbelt system was defectively designed. In his reply brief, Hiatt withdrew this issue from his appeal. Second, Hiatt urged that the district court erred as a matter of law in instructing the jury to compare Hiatt's fault, if any, only with that of Mazda and not with that of Wadlow. Our discussion of that issue follows.

It is, of course, well-settled that in a suit based on diversity of citizenship jurisdiction the federal courts apply federal law as to matters of procedure but the substantive law of the relevant state. Erie R.R. Co. v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188 (1938). Much ink has been spilled on the subtleties and ambiguities of the substance versus procedure distinction, see, e.g., Ely, The Irrepressible Myth of Erie, 87 Harv.L.Rev. 693 (1974), but the general rule has remained firm in the jurisprudence of the federal courts. See Walker v. Armco Steel Corp., 446 U.S. 740, 744-48, 100 S.Ct. 1978, 1982-84, 64 L.Ed.2d 659 (1980). See generally, Boner, Erie v. Tompkins: A Study in Judicial Precedent, 40 Tex.L.Rev. 619 (1962); Friendly, In Praise of Erie--And of the New Federal Common Law, 39 N.Y.U.L.Rev. 383 (1964).

In the present case, there is no dispute among the parties that the substantive law of Arkansas--the forum state and the state where the relevant events occurred--governs Hiatt's liability claim against Mazda. The parties do dispute, however, the proper application of the Arkansas law of comparative fault, where, as here, there is a third-party claim for contribution.

The Arkansas comparative fault statute adopts a modified comparative fault approach, providing that:

(a) In all actions for damages for personal injuries or wrongful death or injury to property in which recovery is predicated upon fault, liability shall be determined by comparing the fault chargeable to a claiming party with the fault chargeable to the party or parties from whom the claiming party seeks to recover damages.

(b)(1) If the fault chargeable to a party claiming damages is of a lesser degree than the fault chargeable to the party or parties from whom the claiming party seeks to recover damages, then the claiming party is entitled to recover the amount of his damages after they have been diminished in proportion to the degree of his own fault.

(2) If the fault chargeable to a party claiming damages is equal to or greater in degree than any fault chargeable to the party or parties from whom the claiming party seeks to recover damages, then the claiming

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party is not entitled to recover such damages.

(c) The word "fault" as used in this section includes any act, omission, conduct, risk assumed, breach of warranty, or breach of any legal duty which is a proximate cause of any damages sustained by any party.

Ark.Code Ann. § 16-64-122 (1995) (emphasis added). Thus, in a simple negligence case under Arkansas law, the relative fault of the plaintiff is compared to the relative fault of the defendant and the plaintiff may recover damages only if his fault is less than the defendant's fault. See Riddell v. Little, 253 Ark. 686, 488 S.W.2d 34, 36 (1972); Bonds v. Snapper Power Equipment Co., 935 F.2d 985, 987 (8th Cir.1991).

In a case where there are multiple defendants, the Arkansas statute provides that a plaintiff is allowed to...

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