Avery v. Maremont Corp.

Decision Date20 October 1980
Docket NumberNo. 78-2557,78-2557
Citation628 F.2d 441
PartiesRobert AVERY et al., Plaintiffs-Appellees Cross-Appellants, v. MAREMONT CORPORATION, Defendant-Appellant Cross-Appellee.
CourtU.S. Court of Appeals — Fifth Circuit

Ralph E. Hartman, Jack Pew, Jr., Dallas, Tex., for defendant-appellant cross-appellee.

Kelsoe, McDonald & Ayres, R. Jack Ayres, Jr., Michael F. Pezzulli, Samuel B. Paternostro, Dallas, Tex., for plaintiffs-appellees cross-appellants.

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

Before COLEMAN, Chief Judge, PECK, * and KRAVITCH, Circuit Judges.

COLEMAN, Chief Judge.

In 1974 eighteen year old Larry Avery bought a 1967 Mustang from his brother, thereafter setting out to modify the car for racing purposes. To elevate the rear end, he installed extenders between the normal shackles and the leaf springs and added expensive oversized tires. Unfortunately, the tires rubbed the fenders and were thereby cut up. Larry sought a solution for the tirerubbing problem, consulting two friends, Charles Nordmeyer and John Beckman. They advised that, based upon ads they had read, Gabriel "Hi Jackers" seemed to be the answer. On August 16, 1974, Larry went to Plano Tire and Rubber, where he bought two Gabriel Hi Jackers and had the seller to install them, whence came this rather intricate diversity litigation.

The shock absorbers were installed by a Plano teenaged employee, Bryan Roberts, who, most unfortunately, did the job incorrectly. The car rode very rough, so Larry and Nordmeyer flipped up the back seat and noticed that the shock absorbers "seemed loose". Larry was thinking of selling the car, so he let it set for two weeks.

On August 29, thirteen days after the installation, Larry and Nordmeyer took the car out at night. Larry pulled off a paved road onto a gravel road, whereupon the car began bouncing and swaying from side to side. Larry lost control of it and careened off the road, into a tree. The impact produced a severance of Avery's brain stem, reducing him to a quadruplegic with little chance of substantial recovery.

This tragic turn of events prompted Larry's parents to sue the shock absorber manufacturer, Maremont Corporation, on strict liability in tort and for violation of the Texas Deceptive Trade Practices Act.

Moreover, since they had no diversity, in state court Plano Tire and Rubber was sued for negligent installation to the Hi Jackers. Maremont impleaded Plano in federal court. Prior to the outcome of the federal court trial, the parents settled with Plano for The instant (federal) case was first tried to a jury in February, 1977, but ended in mistrial. On the second trial, the results of which generated this appeal, the jury found against Maremont on both theories of liability.

$80,000, with an accompanying stipulation that Plano had been negligent.

On strict liability in tort the jury returned the following answers:

VERDICT OF THE JURY

We, the jury, find in favor of the plaintiffs, Robert Avery and Barbara Avery, individually and as next friends for Larry Avery, and against the defendant, Maremont Corporation, on the basis of the doctrine of strict liability in tort. (Signed by the Jury Foreman).

FIRST QUESTION

Did you find that the defendant failed to provide a sufficient warning that Gabriel "Hijackers" shock absorbers were dangerous and not suitable for use on vehicles with oversize tires and special customizing equipment?

Answer: We did.

SECOND QUESTION

Did you find that the defendant failed to provide sufficient instructions as to the proper manner of installation and use of the Gabriel "Hijackers" shock absorbers?

Answer: We did.

THIRD QUESTION

Did you find that defendant established by a preponderance of the evidence that plaintiff Larry Avery misused the Gabriel "Hijackers" shock absorbers, and that such misuse partially produced and caused his accident and injuries?

Answer: We did.

FOURTH QUESTION

What percentage of plaintiff Larry Avery's accident and injuries was proximately caused by such misuse?

Answer: 74%.

The jury also found for plaintiffs on the Deceptive Trade Practices allegation (the jury answers on this aspect of the case will be listed later).

The verdict, as signed and returned into open Court, however, was for a single sum, $690,905.02.

Plaintiffs moved for judgment on the strict liability claim in the amount awarded by the jury or, in the alternative, judgment for approximately $7.5 million on the Deceptive Trade Practices claim. This was on the assumption that the $690 thousand award represented only 26% of total damages sustained, giving rise to the inference, which the jury had not articulated, that the damages amounted to.$2.5 million, which was to be trebled under the Texas Deceptive Trade Practices Act. Maremont moved for judgment n. o. v. on both claims. Judge Justice granted Maremont judgment n. o. v. on the Deceptive Trade Practices claim but entered judgment against Maremont for the amount specified in the verdict, $690,905.02.

Plaintiffs appeal the n. o. v. judgment. Maremont challenges the $690,905.02 judgment entered against it.

Maremont offers several alternative appellate arguments:

1. It should have been granted judgment n. o. v. on the strict liability claim because the record fails to show either the allegedly dangerous nature of the product or that the failure to warn caused Avery's injuries; OR

2. In assessing damages, the Court erred in failing to instruct the jury to consider Plano Tire and Rubber's misuse and, therefore, it is entitled to a new trial; OR

3. The Court erred in failing to adjust the award for the present value of the money; OR

4. The Court erred in failing to reduce the award by 50% because plaintiffs had settled with Plano; OR 5. The Court erred in failing to reduce the award by the actual amount Plano had paid in its settlement.

This case has been tried twice. The unusually able briefs and oral arguments satisfy us that both sides had the assistance of competent counsel and that all factual and legal aspects of the case have been explored to their outer limits.

Liability was to be determined by Texas law and the sufficiency of the evidence is governed by federal standards. Two Rivers Company v. Curtiss Breeding Service, 624 F.2d 1242 (5th Cir. 1980).

A careful exhaustive examination of the trial transcript leaves us with the view that on the factual issues the jury might have decided the issue of liability for either party as indeed there was one hung jury in this case, but we are fully satisfied that the evidence on the issue of strict liability in tort was sufficient to take the case to the jury, Boeing v. Shipman, 411 F.2d 365 (5th Cir. 1969). Therefore we need not, and do not, protract this opinion by a lengthy recitation of the evidence adduced on behalf of the respective litigants.

THE DECEPTIVE TRADE PRACTICES CLAIM

The jury found that Maremont had violated the Texas Deceptive Trade Practices Act, Section 17.46 V.T.C.A. Maremont sought, and the trial judge granted, judgment n. o. v. on this point. We affirm that action.

The Texas Deceptive Trade Practices Act forbids "False, misleading, or deceptive acts . . .," Article 17.46(a), V.T.C.A., and lists 23 examples of such acts. Sec. 17.46(b).

Avery accused Maremont of violating six specific parts of Sec. 17.46(b), the most important of which was 17.46(b)(7), "representing that goods or services are of a particular standard, quality, or grade, or that goods are of a particular style or model, if they are of another."

Viewing the complaint and verdict in the most favorable light, it was asserted that Maremont represented in its ads that its shock absorbers were safe for use on a customized car when they were not and further asserted that the shock absorbers were easy to install when they were not. These assertions do not fit easily into the 17.46(b)(7) mode, which seems more suited to a commercial fraud such as a representation that a car is new when it is actually used.

In any event, this question of Deceptive Trade Practices was submitted to the jury on a general verdict with six specific questions. Below are the jury's answers:

VERDICT OF THE JURY

We, the jury, find that defendant, Maremont Corporation, committed a deceptive trade practice (or practices) which adversely affected plaintiff Larry Avery. (Signed by the foreman of the Jury.)

QUESTION "A"

Did you find that defendant made false, inaccurate and untrue statements of the shock absorbers' performance characteristics?

Answer: We did.

QUESTION "B"

Did you find that defendant made false, inaccurate and untrue statements of the shock absorbers' safe and proper usage?

Answer: We did not.

QUESTION "C"

Did you find that defendant concealed material information in its advertising and sales promotions concerning the fact that the shock absorbers were unsafe for use on cars with oversize tires or with special customizing equipment?

Answer: We did.

QUESTION "D"

Did you find that defendant failed to disclose in its advertisements in clear and understandable language that the product was dangerous for use on cars with oversize tires or special customizing equipment?

Answer: We did.

QUESTION "E"

Did you find that defendant failed to disclose in its advertising and promotional materials that special installation instructions were required before the product could be safely installed or used?

Answer: We did.

QUESTION "F"

Did you find that defendant represented that its warranty card, which was not given to the customer until after the sale of the product, constituted a warning or the furnishing of safety information concerning the dangerous characteristics, if any, of the product?

Answer: We did not.

We begin our analysis by noting that in answer B the jury found that the manufacturer had not made false, inaccurate, and untrue statements concerning the safe and proper use of the shock absorbers.

In answer A, the jury found that the defendant...

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