Bingham v. Marshall & Huschart Machinery Co., Inc.

• Citation: 485 N.W.2d 78
• Decision Date: 13 May 1992
• Docket Number: No. 91-575,91-575
• Parties: Prod.Liab.Rep. (CCH) P 13,167 Lee A. BINGHAM and Christine Bingham, Husband and Wife, Appellants, v. MARSHALL & HUSCHART MACHINERY COMPANY, INC., Appellee.
• Court: United States State Supreme Court of Iowa

Page 78

485 N.W.2d 78

Prod.Liab.Rep. (CCH) P 13,167

Lee A. BINGHAM and Christine Bingham, Husband and Wife, Appellants, v. MARSHALL & HUSCHART MACHINERY COMPANY, INC., Appellee.

No. 91-575.

Supreme Court of Iowa.

May 13, 1992.

Gregory T. Racette of Hopkins & Huebner, P.C., Des Moines, for appellants.

John Werner and Daniel J. Hanson of Grefe & Sidney, Des Moines, for appellee.

Considered by McGIVERIN, C.J., and CARTER, NEUMAN, SNELL and ANDREASEN, JJ.

ANDREASEN, Justice.

A products liability suit was filed against an insolvent manufacturer and a seller of an allegedly defective machine. Prior to trial, the district court granted the seller's motion to dismiss the strict liability and implied warranty claims brought against it. The plaintiff's negligence claim proceeded to a jury trial. The jury returned a verdict against the plaintiffs and in favor of the seller. Appeal was taken from the pretrial dismissal and from the judgment entered upon the verdict. Issues are also raised regarding evidentiary rulings made during the negligence trial as well as to instructions given to the jury. Finding no error, we affirm.

I. Background.

In March of 1987, Lee Bingham severely injured his thumb while working with a straight-line table-feed drill at the John Deere Works (Deere) in Ankeny, Iowa. The drill was manufactured by Moline Tool Company (Moline). Deere purchased the drill from a distributor, Marshall & Huschart Machinery, Inc. (Huschart), in 1974.

As a result of his injuries, Bingham ¹ filed suit against Moline and Huschart alleging strict liability, breach of implied warranty, and negligence. Moline is insolvent and has been so declared by the United States Bankruptcy Court for the Northern District of Illinois' Eastern Division.

Bingham filed a motion to have the trial court declare the manufacturer insolvent and to hold Huschart liable for his injuries under Iowa Code subsection 613.18(1) (1989). Huschart countered with a motion to dismiss all of Bingham's claims. After hearing, the district court denied Bingham's motion and granted Huschart's motion in part; dismissing the strict liability and breach of warranty claims under subsection 613.18(1)(a). The court, however, preserved the negligence claim for trial.

Bingham then applied to this court for permission to file an interlocutory appeal. We denied the request. The negligence claim proceeded to trial. Numerous objections were made to evidentiary rulings and to the instructions submitted to the jury. The jury returned a verdict in favor of Huschart on all counts. Bingham appeals.

II. Products Liability--Iowa Code Section 613.18.

The term "product liability" relates to liability arising from injury or damage resulting from the use of a product. Product liability may involve causes of action stated in negligence, strict liability or breach of warranty. See generally 72 C.J.S. Products Liability §§ 2, 3 (Supp.1975); 63 Am.Jur.2d Products Liability §§ 1, 5-7 (1984).

Strict liability in tort was first recognized by this court in Hawkeye-Security Insurance v. Ford Motor Co., 174 N.W.2d 672, 684 (Iowa 1970). We adopted the principles of strict liability as found in Restatement (Second) of Torts section 402A. Id. Under these principles, a seller of a defective product may be held liable for harm to the ultimate user or to the user's property. Under comment (f) to section 402A, the term seller is defined as a person engaged in the business of selling products for use or consumption. The term seller included the manufacturer, wholesaler, dealer, distributor and retailer. Id. Strict liability was included in the definition of fault when, by statute, Iowa adopted comparative fault in 1984. 84 Iowa Acts, ch. 1293, § 1 (now codified at Iowa Code § 668.1).

With the adoption of 86 Iowa Acts chapter 1211, section 32, now codified at Iowa Code section 613.18, a statutory limitation was imposed upon strict liability and implied warranty claims against nonmanufacturers. The section provides:

1. A person who is not the assembler, designer, or manufacturer, and who wholesales, retails, distributes, or otherwise sells a product is:

a. Immune from any suit based upon strict liability in tort or breach of implied warranty of merchantability which arises solely from an alleged defect in the original design or manufacture of the product.

b. Not liable for damages based upon strict liability in tort or breach of implied warranty of merchantability for the product upon proof that the manufacturer is subject to the jurisdiction of the courts of this state and has not been judicially declared insolvent.

2. A person who is a retailer of a product and who assembles a product, such assembly having no causal relationship to the injury from which the claim arises, is not liable for damages based upon strict liability in tort or breach of implied warranty of merchantability which arises from an alleged defect in the original design or manufacture of the product upon proof that the manufacturer is subject to the jurisdiction of the courts of this state and has not been judicially declared insolvent.

In challenging the court's dismissal of the strict liability and implied warranty claims, Bingham argues that subsection 613.18(1)(a) does not give the seller a complete exemption from suit. Bingham asserts the general immunity is qualified or limited by the requirements of subsection 613.18(1)(b). He urges the intent of subsection 613.18(1) was to provide immunity to wholesalers, retailers, distributors and other sellers upon proof that the manufacturer was subject to the jurisdiction of Iowa courts and had not been declared judicially insolvent. We disagree with Bingham's construction of the statute.

In interpreting Iowa Code section 613.18, we keep our familiar rules of statutory construction in mind. See, e.g., American Asbestos v. Eastern Iowa Community College, 463 N.W.2d 56, 58 (Iowa 1990). The statute is divided into two subsections. Subsection 613.18(1) pertains to wholesalers, retailers, distributors and other sellers who are not the manufacturer or designer of the product and who do not assemble the product. Subsection 613.18(2) pertains to retailers who do assemble the products they sell.

Subsection 613.18(1) is itself divided into two paragraphs. Paragraph 613.18(1)(a) provides for immunity from suit when the potential claim arises solely from defects in the original design or manufacture of the product. Paragraph 613.18(1)(b) limits strict liability and implied warranty claims when the claims do not arise solely from an alleged defect in the original design or manufacture of the product. Examples of suits arising under paragraph 613.18(1)(b) include suits under strict liability for failure to warn about the dangers of a product. See, e.g., Cooley v. Quick Supply Co., 221 N.W.2d 763, 768-69 (Iowa 1974) (citing Restatement § 402A); LaCoste v. Ford Motor Co., 322 N.W.2d 898, 900 (Iowa App.1982); Prosser & Keeton on Torts § 99, at 695 (5th ed. 1984); 63 Am.Jur.2d Products Liability § 545 (1984).

There is no dispute that Huschart, the distributor, sold, but did not assemble, the drill. Thus, subsection 613.18(2) is inapplicable. It is also clear that Bingham's claim is one that arises solely from an alleged defect in the original design or manufacture of the product. Thus, subsection 613.18(1)(a) is applicable and provides Huschart with a statutory immunity from suit. Subsection 613.18(1)(b) does not impose a limitation upon the immunity protection of subsection 613.18(1)(a); it provides alternate protection against strict liability and breach of implied warranty for suits against nonmanufacturers where the defect was not in the original design or manufacture. Subsection 613.18(1)(a) provides a "person ... is immune from any suit based upon...." Subsections 613.18(1)(b) and (2) provide a "person ... is not liable for damages based upon ... upon proof that...." Although the statute is not a model of clarity, we believe the immunity protection of 613.18(1) is not dependent upon proof that the manufacturer of the product is subject to the jurisdiction of the courts of this state and has not been declared judicially insolvent as required in subsections 613.18(1)(b) and (2).

The district court was correct in granting Huschart's motion to dismiss Bingham's strict liability and implied warranty claims.

III. Evidentiary Rulings.

A trial court is granted a broad range of discretion in determining the admissibility of evidence and in giving instructions to the jury. We therefore review to determine whether the court abused its broad range of discretion. See e.g., State v. Harmon, 238 N.W.2d 139, 145 (Iowa 1979).

A. Evidence of Subsequent Remedial Measures.

Bingham claims that Huschart was negligent in failing to give proper safety instructions and warnings to Deere, the purchaser of the drill. Bingham offered evidence that Deere had changed the control mechanisms on the drill after he suffered his injuries.

Huschart objected to the evidence of Deere's subsequent remedial measures to the drill; citing both Iowa Rules of Evidence 407 and 403. However, it was eventually conceded that rule 407 did not prohibit the introduction of such evidence because the subsequent remedial measure had been taken by one other than the defendant. The court excluded the evidence based upon rule 403. Rule 403 permits the exclusion of relevant evidence when its probative value is substantially outweighed by the danger of unfair prejudice, confusion of the issues, or misleading of the jury.

We, like the federal courts and the trial court, believe that rule 407 does not prohibit the introduction of evidence of subsequent remedial measures if they are undertaken by a third party nondefendant. See Raymond v. Raymond Corp., 938 F.2d 1518, 1524 (1st Cir.1991) ("Rule 407 applies only to subsequent remedial measures taken voluntarily by the defendant.") (emphasis supplied) (citing cases). See...