Denny v. Ford Motor Co.
| Citation | 87 N.Y.2d 248,639 N.Y.S.2d 250,662 N.E.2d 730 |
| Parties | , 662 N.E.2d 730, 64 USLW 2377, 28 UCC Rep.Serv.2d 15, Prod.Liab.Rep. (CCH) P 14,430 Nancy DENNY et al., Plaintiffs, v. FORD MOTOR COMPANY, Defendant. |
| Decision Date | 05 December 1995 |
| Court | New York Court of Appeals |
O'Melveny & Myers (John H. Beisner and Brian D. Boyle, Washington, DC, of the District of Columbia Bar, admitted pro hac vice, of counsel) and Gibson, McAskill & Crosby, Buffalo (Brian P. Crosby, of counsel), for defendant.
Paul F. McAloon, P.C., New York City (Paul F. McAloon, of counsel), John Scarzafava, Oneonta, and Cook & Butler, L.L.P. (Russell L. Cook, Jr., Houston, TX, of the Texas Bar, admitted pro hac vice, of counsel), for plaintiffs.
Herzfeld & Rubin, P.C., New York City (Michael Hoenig, David B. Hamm and Miriam Skolnik, of counsel), for Product Liability Advisory Council, Inc., amicus curiae.
Are the elements of New York's causes of action for strict products liability and breach of implied warranty always coextensive? If not, can the latter be broader than the former? These are the core issues presented by the questions that the United States Court of Appeals for the Second Circuit has certified to us in this diversity action involving an allegedly defective vehicle. On the facts set forth by the Second Circuit, we hold that the causes of action are not identical and that, under the circumstances presented here, it is possible to be liable for breach of implied warranty even though a claim of strict products liability has not been satisfactorily established.
As stated by the Second Circuit, this action arises out of a June 9, 1986 accident in which plaintiff Nancy Denny was severely injured when the Ford Bronco II that she was driving rolled over. The rollover accident occurred when Denny slammed on her brakes in an effort to avoid a deer that had walked directly into her motor vehicle's path. Denny and her spouse sued Ford Motor Co., the vehicle's manufacturer, asserting claims for negligence, strict products liability and breach of implied warranty of merchantability (see, UCC 2-314[2][c]; 2-318). The case went to trial in the District Court for the Northern District of New York in October of 1992.
The trial evidence centered on the particular characteristics of utility vehicles, which are generally made for off-road use on unpaved and often rugged terrain. Such use sometimes necessitates climbing over obstacles such as fallen logs and rocks. While utility vehicles are traditionally considerably larger than passenger cars, some manufacturers have created a category of down-sized "small" utility vehicles, which are designed to be lighter, to achieve better fuel economy and, presumably, to appeal to a wider consumer market. The Bronco II in which Denny was injured falls into this category.
Plaintiffs introduced evidence at trial to show that small utility vehicles in general, and the Bronco II in particular, present a significantly higher risk of rollover accidents than do ordinary passenger automobiles. Plaintiffs' evidence also showed that the Bronco II had a low stability index attributable to its high center of gravity and relatively narrow track width. The vehicle's shorter wheel base and suspension system were additional factors contributing to its instability. Ford had made minor design changes in an effort to achieve a higher stability index, but, according to plaintiffs' proof, none of the changes produced a significant improvement in the vehicle's stability.
Ford argued at trial that the design features of which plaintiffs complained were necessary to the vehicle's off-road capabilities. According to Ford, the vehicle had been intended to be used as an off-road vehicle and had not been designed to be sold as a conventional passenger automobile. Ford's own engineer stated that he would not recommend the Bronco II to someone whose primary interest was to use it as a passenger car, since the features of a four-wheel-drive utility vehicle were not helpful for that purpose and the vehicle's design made it inherently less stable.
Despite the engineer's testimony, plaintiffs introduced a Ford marketing manual which predicted that many buyers would be attracted to the Bronco II because utility vehicles were "suitable to contemporary life styles" and were "considered fashionable" in some suburban areas. According to this manual, the sales presentation of the Bronco II should take into account the vehicle's "suitab[ility] for commuting and for suburban and city driving." Additionally, the vehicle's ability to switch between two-wheel and four-wheel drive would "be particularly appealing to women who may be concerned about driving in snow and ice with their children." Plaintiffs both testified that the perceived safety benefits of its four-wheel-drive capacity were what attracted them to the Bronco II. They were not at all interested in its off-road use.
At the close of the evidence, the District Court Judge submitted both the strict products liability claim and the breach of implied warranty claim, despite Ford's objection that the two causes of action were identical. With respect to the strict products liability claim the court told the jury that "[a] manufacturer who places a product on the market in a defective condition is liable for injury which results from use of the product when the product is used for its intended or reasonably foreseeable purpose." Further, the court stated:
With respect to the breach of implied warranty claim, the court told the jury:
Neither party objected to the content of these charges.
In response to interrogatories, the jury found that the Bronco II was not "defective" and that defendant was therefore not liable under plaintiffs' strict products liability cause of action. However, the jury also found that defendant had breached its implied warranty of merchantability and that the breach was the proximate cause of Nancy Denny's injuries. Following apportionment of damages, plaintiff was awarded judgment in the amount of $1.2 million.
Ford subsequently moved for a new trial under rule 59(a) of the Federal Rules of Civil Procedure, arguing that the jury's finding on the breach of implied warranty cause of action was irreconcilable with its finding on the strict products liability claim. The trial court rejected this argument, holding that it had been waived and that, in any event, the verdict was not inconsistent.
On defendant's appeal, a majority at the Second Circuit held that defendant's trial conduct had not resulted in a waiver of the inconsistency issue. Reasoning that the outcome of the appeal depended upon the proper application of New York law, the court certified the following questions for consideration by this Court pursuant to article VI, § 3(b)(9) of the State Constitution and rule 500.17 of the Rules of the Court of Appeals (22 NYCRR 500.17): (1) whether the strict products liability claim and the breach of implied warranty claim are identical; (2) whether, if the claims are different, the strict products liability claim is broader than the implied warranty claim and encompasses the latter; and (3) whether, if the claims are different and a strict liability claim may fail while an implied warranty claim succeeds, the jury's finding of no product defect is reconcilable with its finding of a breach of warranty.
In this proceeding, Ford's sole argument is that plaintiffs' strict products liability and breach of implied warranty causes of action were identical and that, accordingly, a defendant's verdict on the former cannot be reconciled with a plaintiff's verdict on the latter. This argument is, in turn, premised on both the intertwined history of the two doctrines and the close similarity in their elements and legal functions. Although Ford recognizes that New York has previously permitted personal injury plaintiffs to simultaneously assert different products liability theories in support of their claims (see, Victorson v. Bock Laundry Mach. Co., 37 N.Y.2d 395, 400, 373 N.Y.S.2d 39, 335 N.E.2d 275), it contends that the breach of implied warranty cause of action, which sounds in contract, has been subsumed by the more recently adopted, and more highly evolved, strict products liability theory, which sounds in tort. Ford's argument has much to commend it. However, in the final analysis, the argument is flawed because it overlooks the continued existence of a separate statutory predicate for the breach of warranty theory and the subtle but important distinction between the two theories that arises from their different historical and doctrinal root.
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