Alley v. Gubser Development Co.
| Decision Date | 03 March 1986 |
| Docket Number | 83-2423 and 83-2424,Nos. 83-2415,s. 83-2415 |
| Citation | 785 F.2d 849 |
| Parties | Barbara Ann ALLEY and W.H. Alley, Plaintiffs-Appellants, Cross-Appellees, v. GUBSER DEVELOPMENT COMPANY, National Gypsum Company and Weyerhaeuser Company, Defendants-Appellees, Cross-Appellants. |
| Court | U.S. Court of Appeals — Tenth Circuit |
John S. Evangelisti (Karen V. Hendrick with him, on briefs), of LaFond & Evangelisti, Denver, Colo., for plaintiffs-appellants.
Hugh Q. Gottschalk (Robert E. Benson and Anne J. Castle, with him, on briefs), of Holland & Hart, Denver, Colo., for defendants-appellees Gubser Development Co. and Nat. Gypsum Co.
Lawrence W. Treece, of Bender & Treece, P.C., Denver, Colo., for defendant-appellee Weyerhaeuser Co.
Before BARRETT, McWILLIAMS and ANDERSON, Circuit Judges.
Gubser Development Company (Gubser), National Gypsum Company (NGC), and Weyerhaeuser Company (Weyerhaeuser) appeal from a final judgment, 569 F.Supp. 36 (1983), entered in favor of Barbara Ann and W.H. Alley (Alleys). The Alleys cross-appeal on the remitted judgment. Neither Weyerhaeuser nor NGC 1 challenge the compensatory damages awarded the Alleys. However, both Weyerhaeuser and NGC challenge the punitive damages awarded to Mr. Alley. The Alleys cross-appeal, challenging the district court's remittitur of punitive damages, denial of attorney fees under the Magnuson-Moss Act, and denial of prejudgment interest.
In April, 1978, the Alleys, after considerable "shopping," purchased a new "American" mobile home from Gubser d/b/a Best Mobile Homes (Best). At the time Best was a dealer for NGC, the manufacturer of the home. The home was built April 24, 1978, in accordance with a special order placed by Best with NGC on behalf of the Alleys. The Alleys moved into the home on April 27, 1978. Immediately after occupying the home the Alleys were bothered by an odor which burned and stung their eyes, noses, and throats. The Alleys complained to Best employees who related that the odor came from formaldehyde releasing products in the home, that the Alleys should "air-out" the home, and that the smell would go away.
Although the smell did not go away, the Alleys continued to reside in the home throughout the summer months. During this time the Alleys made a number of complaints to Best and others about the smell in their home. The Alleys were also treated by several doctors for various ailments, including Mr. Alley's treatment for hepatitis.
In August of 1978, the Alleys decided to move to Denver, Colorado, and soon thereafter On July 25, 1980, the Alleys brought suit against Gubser, NGC, and Weyerhaeuser, 2 seeking damages for permanent personal injuries and property loss as a result of exposure to formaldehyde gas in their home. The Alleys' complaint raised claims of enterprise liability, strict liability, negligence, breach of warranty, and alleged violations of the Consumer Product Safety Commission Act, the National Manufactured Home Construction and Safety Standards Act and the Magnuson-Moss Warranty Act.
the Alleys arranged to have their home moved to Colorado. After relocating in Colorado, the Alleys fell behind on their home payments. They filed for bankruptcy and vacated the home on November 18, 1978.
At trial, which extended over two weeks, the Alleys testified in detail relative to the problems created by the odor in their home and their attempts to have the problem corrected. Clarence Lott, a chemist for the Colorado Department of Health testified for the Alleys. He stated that products containing urea-formaldehyde can "off-gas" low levels of formaldehyde, and that at the time the air was tested in the Alleys' home, formaldehyde levels between .49 and .97 parts per million (ppm) were detected. Lott did not identify the source of formaldehyde in the home.
Dr. Beall, a board certified toxicologist, also testified as an expert for the Alleys. Dr. Beall testified, inter alia: there is a wide variability of individual sensitivity to formaldehyde; various wood products, including particle board, can off-gas formaldehyde; reports as early as 1905 discussed the effects of formaldehyde on people; and that in the 1970's there was information produced and circulated by "industry" on ways to mitigate or decrease the levels of formaldehyde that may be irritating to a person owning a mobile home. Although Dr. Beall did not define what he meant by "industry," the court allowed him to testify that, in his opinion, "industry" should have warned the public of the effects of formaldehyde.
The Alleys also presented the testimony of Edna Conyers who purchased the mobile home in October, 1979, less than one year after the Alleys vacated it. She testified that the home had an odor when she first moved into it but that "after you live in there a while, cooking odors and smoke and things like that kind of mask it (odor)." R., Vol. XVI at 736. She did not indicate any dissatisfaction with the home.
During trial Weyerhaeuser stipulated that it produced the paneling in the Alleys' home, that the paneling was produced from plywood "blanks," and that the adhesive used to glue the "blanks " together included urea-formaldehyde. Weyerhaeuser acknowledged that during the first four months of 1978, it sold particle board to the plant that built the Alleys' home and that all of the particle board it sold to the plant was purchased from Louisiana Pacific.
Throughout the trial the defendants defended on the basis that although they were aware of the odor related problems with formaldehyde, they were unaware of the serious health related problems as alleged by the Alleys. The defendants introduced the testimony of Dr. Kornberg, who stated that none of Mr. Alley's medical problems "can be related to his formaldehyde exposure at that time," and that "the exposure was insufficient to cause any permanent damage of any sort; and the substance is not known to cause problems at this concentration beyond a very short period." Id. at 996.
The trial court admitted several exhibits proffered by the Alleys to which NGC and Weyerhaeuser vigorously objected. First, NGC objected to Plaintiffs' Exhibits 136 and 137 which detailed the odor problems encountered by a purchaser of an American Second, Weyerhaeuser also vigorously objected to the court's admission of Plaintiffs' Exhibits 266, 302, 320, 352, and 331. These exhibits, which were obtained from Weyerhaeuser files, discussed formaldehyde odor problems emanating from particle board and the need to correct the problem. Although Weyerhaeuser acknowledged the fact that the exhibits came from its files and "appeared" to be on Weyerhaeuser's stationary, Weyerhaeuser argued that the documents were irrelevant because they all related to particle board and not to paneling; thus, because it did not manufacture any of the particle board in the Alley home, but only the paneling, the exhibits were inadmissible.
mobile home in November, 1969. While stipulating to the authenticity of the letters, NGC argued that the letters were unsubstantiated and overly prejudicial because they contained the statement that the odor in the home nauseated the owner, who was pregnant, and that her doctor had suggested that she stay somewhere else during the last month of her pregnancy.
Prior to admitting the exhibits, the trial court specifically ruled that Weyerhaeuser could not be held liable on an enterprise theory on the particle board:
THE COURT: Well are you going to have any evidence to connect it up--no, I don't think we can connect it up, because you haven't told me where in the complaint the allegation is. There is simply no enterprise liability theory against Weyerhaeuser on the particle board in your complaint.
* * *
* * *
That is the court's opinion; and I think that is very clear in the complaint, and there is just no allegation of enterprise liability against Weyerhaeuser on the particle board.
The court will rule that that is not the case. R., Vol. XX at 1125-1126. Inasmuch as Louisiana-Pacific had manufactured the particle board in the Alleys' home, Weyerhaeuser was dismissed on an enterprise liability theory with respect to the particle board. However, Weyerhaeuser remained in the case with respect to particle board on claims of implied breach of warranty, products liability, and negligent failure to warn.
Approximately midway through presentation of their defense, Weyerhaeuser and NGC moved for directed verdicts. In arguing for a directed verdict dismissing all the Alleys' claims against it, Weyerhaeuser contended that there was insufficient evidence to support a finding that its paneling in the Alley home had off-gassed, much less that it off-gassed to an extent sufficient to create the injuries of which the Alleys complained. (R., Vol. XXI at 1358-1359.) Weyerhaeuser further argued for a directed verdict on all claims for punitive damages on the basis that although the evidence established "an awareness of an odor problem," there was "no evidence that Weyerhaeuser knew that the paneling could cause physical harm to people and acted with a wanton and reckless disregard of the harm to people that might be caused by disregarding that concern." Id. at 1365.
NGC moved for a directed verdict by incorporating Weyerhaeuser's motion in total. Id. at 1378. In its motion for a directed verdict on Alleys' punitive damage claim, NGC argued, inter alia: Alleys' complaints were directed to an odor problem; the Alleys did not make health related complaints and did not relate any serious problems to Best or NGC; although Best and NGC may not have properly responded to the Alleys' complaints about smell in the home, which gave rise to the level of negligence, there is no evidence that the actions of Best and NGC gave rise to willful and wanton conduct supportive of punitive damages. Id. at 1380-86.
Prior to ruling on Weyerhaeuser's and NGC's motions for a directed...
To continue reading
Request your trial
-
IN RE AIR CRASH DISASTER AT STAPLETON INTERN.
...similarly configured contact states. Thus, case law serves as a source for analogy rather than absolute rules. 8 Alley v. Gubser Development Co., 785 F.2d 849, 855 (10th Cir.), cert. denied, 479 U.S. 961, 107 S.Ct. 457, 93 L.Ed.2d 403 (1986) and Malandris v. Merrill, Lynch, Pierce, Fenner &......
-
Cook v. Rockwell Intern. Corp.
...their operation of Rocky Flats. I disagree. The only legal authority Defendants cite in support of this contention, Alley v. Gubser Development Co., 785 F.2d 849 (10 th Cir.1986), held only that a manufacturer's mere use of wood products containing formaldehyde, in a manner consistent with ......
-
Baudanza v. Comcast of Massachusetts I
...280 (1977) (permitting appeal on antitrust count despite acceptance of remittitur on fraud and deceit count). Cf. Alley v. Gubser Dev. Co., 785 F.2d 849, 856-857 (10th Cir.), cert. denied, 479 U.S. 961, 107 S.Ct. 457, 93 L.Ed.2d 403 (1986) (rejecting appeal on calculation of interest and at......
-
Bartholic v. Scripto-Tokai Corp.
...damages claims, it is within the province of the jury to determine the proper amount of punitive damages." Alley v. Gubser Dev. Co., 785 F.2d 849, 855 (10th Cir.1986). "The question of the sufficiency of evidence to justify an award of exemplary damages, however, is a question of law for th......