Doan v. Consumer Testing Laboratories, Inc.
| Decision Date | 09 April 1998 |
| Docket Number | No. CIV. 97-5184.,No. CIV. 97-5149.,No. CIV. 97-5079.,CIV. 97-5079.,CIV. 97-5149.,CIV. 97-5184. |
| Citation | 2 F.Supp.2d 1209 |
| Parties | Laura May Kimball DOAN, Plaintiff, v. CONSUMER TESTING LABORATORIES, INC., Consumer Testing Laboratories Taiwan, and Gulf Underwriters Insurance Company, Defendants. |
| Court | U.S. District Court — Western District of Arkansas |
Samuel M. Reeves, Gocio & Dossey, Bentonville, AR, John W. de Gravelles, de Gravelles, Palmintier & Holthaus, Baton Rouge, LA, for Laura May Kimball Doan.
Kelly P. Carithers, Davis, Cox & Wright, Fayetteville, AR, for Consumer Testing Laboratories, Inc.
This case is currently before the court on the motion for summary judgment of the separate defendant Gulf Underwriters Insurance Company, and plaintiff's response thereto. For the reasons set forth below, the motion will be granted.
For purposes of discussion, we will summarize the allegations as they appear in the complaint. On or about November 26, 1993, plaintiff purchased a chair from Wal-Mart Stores, Inc. ("Wal-Mart"), at its store in Jennings, Louisiana. Plaintiff alleges that she was injured when the chair fell over on December 6, 1993.
Plaintiff alleges that the accident and resulting injuries were the direct and proximate result of the negligence of, inter alia, Consumer Testing Laboratories, Inc. ("CTL"). CTL is incorporated and has its principal place of business in Massachusetts, and is also doing business in Bentonville, Arkansas.
The substance of plaintiff's complaint is that CTL was negligent in the following respects: (1) in failing to properly test and/or investigate this product prior to giving its approval to said product to be sold to the public by Wal-Mart; (2) in failing to properly instruct and/or warn regarding the use and/or possible dangers and/or risks associated with the use of this chair prior to giving its approval to said product; and (3) failing to act with the required degree of care commensurate with the existing situation. Plaintiff contends that Gulf Underwriters Insurance Company ("Gulf") is liable for the negligent acts of its insured, CTL.
The procedural background of this case is circuitous and lengthy, however, for purposes of discussion, the court will briefly review the history of this case. Plaintiff originally sued Wal-Mart Stores, Inc. ("Wal-Mart"), the seller of the allegedly defective chair, and Victory Land Entertainment Co., Ltd. ("Victory Land"), the manufacturer of the chair, and their respective insurers, in the United States District Court for the Western District of Louisiana, Lake Charles Division. See, Laura May Kimball Doan v. Wal-Mart Stores, Inc., et al., No. 94-1602 (W.D. La. filed May 27, 1994). On October 31, 1995, CTL was named as a defendant in Doan v. Wal-Mart. In addition, plaintiff commenced this case against Gulf in the United States District Court for the Western District of Louisiana, Lake Charles Division. See, Laura May Kimball Doan v. Gulf Underwriters Insurance Co., No. 96-2482 (W.D. La. filed October 23, 1996).
Plaintiff subsequently settled with Wal-Mart and Victory Land and they were dismissed from the lawsuit with prejudice. Thereafter, by memorandum opinion dated May 30, 1996, the district court in Louisiana found that it did not have personal jurisdiction over CTL, and thus, it dismissed CTL from the case, and the Fifth Circuit affirmed.
Prior to the dismissal in Doan v. Wal-Mart, plaintiff filed this lawsuit in the Western District of Arkansas on May 23, 1997, docketed as Civil No. 97-5079. A few days later, on May 28, 1997, plaintiff filed an identical lawsuit against CTL in the United States District Court Western District of Massachusetts.1 On September 10, 1997, plaintiff moved the district court in Massachusetts to transfer the case to this court pursuant to 28 U.S.C. § 1404(a), and the motion was granted on the same day. Therefore, the Massachusetts case was ordered transferred to this district, and was docketed as Civil No. 97-5149.2 On October 22, 1997, pursuant to Rule 42 of the Federal Rules of Civil Procedure, the court ordered the two cases consolidated.
On September 29, 1997, in light of the above cases pending in the Western District of Arkansas, plaintiff filed a motion in the district court in Louisiana to transfer Doan v. Gulf, the motion was granted, and the Gulf case was ordered transferred to this court. By court order dated January 20, 1998, the court consolidated all three cases.
Summary judgment is appropriate only when there is no genuine issue of material fact, so that the dispute may be decided on purely legal grounds. Holloway v. Lockhart, 813 F.2d 874 (8th Cir.1987); Fed.R.Civ.P. 56. The Supreme Court has issued the following guidelines for trial courts to determine whether this standard has been satisfied.
The inquiry performed is the threshold inquiry of determining whether there is a need for trial—whether, in other words, there are genuine factual issues that properly can be resolved only by a finder of fact because they may reasonably be resolved in favor of either party.
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250, 106 S.Ct. 2505, 2511, 91 L.Ed.2d 202 (1986). See also AgriStor Leasing v. Farrow, 826 F.2d 732, 734 (8th Cir.1987); Niagara of Wisconsin Paper Corp. v. Paper Industry Union—Management Pension Fund, 800 F.2d 742, 746 (8th Cir.1986).
The Eighth Circuit Court of Appeals has advised trial courts that summary judgments should be cautiously invoked so that no person will be improperly deprived of a trial of disputed factual issues. Inland Oil & Transport Co. v. U.S., 600 F.2d 725, 727 (8th Cir.1979). In Counts v. M.K.-Ferguson Co., 862 F.2d 1338 (8th Cir.1988), the court, reviewing the burdens of the respective parties, stated:
[T]he burden on the party moving for summary judgment is only to demonstrate, i.e., "[to] point[] out to the District Court," that the record does not disclose a genuine dispute on a material fact. It is enough for the movant to bring up the fact that the record does not contain such an issue and to identify that part of the record which bears out his assertion. Once this is done, his burden is discharged, and, if the record in fact bears out the claim that no genuine dispute exists on any material fact, it is then the respondent's burden to set forth affirmative evidence, specific facts, showing that there is a genuine dispute on that issue. If the respondent fails to carry that burden, summary judgment should be granted.
Id., 862 F.2d at 1339, (quoting, City of Mt. Pleasant, Iowa v. Associated Elec. Coop., Inc., 838 F.2d 268, 273-74 (8th Cir.1988) (citations omitted) (brackets in original)).
However, the Court of Appeals for this circuit has also held that the court, in ruling on the motion for summary judgment, must give the non-moving party "the benefit of all the reasonable inferences that can be drawn from the underlying facts." Fischer v. NWA, Inc., 883 F.2d 594, 598-99 (8th Cir. 1989) (citing, Trnka v. Elanco Products Co., 709 F.2d 1223, 1225 (8th Cir.1983)).
Gulf brings its motion for summary judgment on the basis that Arkansas has no statute providing for a direct cause of action against a liability insurance carrier when the insurer is a for-profit corporation. Thus, Gulf contends that plaintiff's direct action against Gulf is not a viable cause of action. Therefore, Gulf contends that it is entitled to judgment as a matter of law.
Plaintiff contends that she commenced this action against Gulf pursuant to Louisiana's direct action statute, La.Rev.Stat. Ann. § 22:655 (West 1995), and that such action is proper under Louisiana law. Therefore, the threshold question in this case is which state's laws apply to this cause of action. As this is a diversity case, Arkansas choice-of-law rules are applicable. Klaxon Co. v. Stentor Electric Mfg. Co., 313 U.S. 487, 61 S.Ct. 1020, 85 L.Ed. 1477 (1941).
Under Arkansas law, the choice of law question is resolved by application of the five choice-influencing considerations developed by Dr. Robert A. Leflar. See, Wallis v. Mrs. Smith's Pie Co., 261 Ark. 622, 628-29, 550 S.W.2d 453, 456 (1977). These considerations are: (1) predictability of results; (2) maintenance of interstate and international order; (3) simplification of the judicial task; (4) advancement of the forum's governmental interests; and (5) application of the better rule of law. Id. See also, Robert A. Leflar, et al., American Conflicts Law (4th Ed.1986).
We first note that there is a conflict between the laws of Arkansas and Louisiana. Arkansas' direct action statute permits a direct cause of action against the liability insurer of a "cooperative non-profit corporation, association, or organization, or by any municipality, agency, or subdivision of a municipality, or of the state, or by any improvement district or school district, or by any other organization or association of any kind or character and not subject to suit for tort" for the negligent acts of its agents or employees. Ark.Code Ann. § 23-79-210(a)(1) (Repl.1992). It is undisputed that CTL is a for profit corporation, and thus, plaintiff could not bring this action against Gulf under the laws of the State of Arkansas.3
Louisiana's direct action statute, on the other hand, provides that:
A. No policy or contract of liability insurance shall be issued or delivered in this state, unless it contains provisions to the effect that the insolvency or bankruptcy of the insured shall not release the insurer from the payment of damages for injuries sustained or loss occasioned during the existence of the policy, and any judgment which may be rendered against the insured for which the insurer is liable which shall have become executory, shall be deemed prima facie evidence of the insolvency of the insured, and an action may thereafter be maintained within the...
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