Dorsey v. Honda Motor Co. Ltd.
| Decision Date | 11 September 1981 |
| Docket Number | No. 79-3845,79-3845 |
| Citation | 655 F.2d 650 |
| Parties | Glen K. DORSEY, Jr. and Barbara J. Dorsey, his wife, Plaintiffs-Appellants Cross Appellees, v. HONDA MOTOR COMPANY LTD. et al., Defendants-Appellees Cross Appellants. HONDA MOTOR COMPANY LTD., Defendant-Appellant Cross Appellee, v. CONTINENTAL CASUALTY COMPANY, Defendant-Appellee Cross Appellant. . Unit B |
| Court | U.S. Court of Appeals — Fifth Circuit |
Frates, Floyd, Pearson, Stewart, Richman & Greer, Gary D. Fox, Larry S. Stewart, Miami, Fla., for plaintiffs-appellants-cross appellees.
Anthony M. Lanzone & Assoc., Anthony M. Lanzone, Robert A. Calinoff, New York City, for defendants-appellees-cross appellants.
DeWolf, Ward, Morris, Wohlust, Jontz & O'Donnell, John L. O'Donnell, Jr., Thomas B. DeWolf, Orlando, Fla., for Honda Motor Company Ltd.
Akerman, Senterfitt & Eidson, John Edwin Fisher, Orlando, Fla., for Continental Cas. Co. Joe N. Unger, Miami, Fla., for Honda Motor Co. Ltd., American Honda Motor and Mission Ins.
Appeals from the United States District Court for the Middle District of Florida.
Before GODBOLD, Chief Judge, and MORGAN and HENDERSON, Circuit Judges.
Plaintiff, Glen K. Dorsey, Jr., suffered serious injuries when his 1971 Honda AN 600, a small automobile, collided with a full size Ford. In this Florida diversity case Dorsey and his wife Barbara sued the manufacturer, Honda Motor Company Ltd., (Honda), and the distributor, American Honda Motor Company, on several alternative grounds: negligent design, 1 negligent failure to warn of defects, strict product liability, and breach of implied warranty. Dorsey also joined as defendant Continental Casualty Company, Honda's liability insurer, as permitted under Florida law. 2 Continental acknowledges that if punitive damages are properly awarded against Honda and if such damages are covered by one of the liability insurers, it will be the insurer responsible.
The jury returned Rule 49 special verdicts in plaintiffs' favor on all theories of liability, and a special verdict finding that in the manufacture and distribution of the automobile Honda Motor Company acted "with wantonness, willfulness or reckless indifference to the rights of others." The jury awarded compensatory damages of $750,000 to Glen and $75,000 to Barbara and punitive damages to Glen of $5,000,000. 3 On motion for judgment n. o. v. the judge let stand the compensatory damages but set aside the punitive damages and entered a judgment under Rule 54(b) on the liability and damage issues.
The judge did not submit to the jury issues relating to coverage by Continental Casualty but, as permitted by Rule 49, entered non-jury findings and conclusions on these issues. Although the court had set aside the punitive damages awarded by the jury, for economy of judicial effort in case punitive damages were reinstated on appeal, the court held that Continental could not be liable under its policy for the punitive damage award, if reinstated. A second judgment was entered on these non-jury issues.
On appeal Dorsey asserts as error the judgment n. o. v. taking away punitive damages. By cross-appeal Honda contends that it was entitled to a directed verdict on liability issues, and that the district court erred in ruling that as a matter of law the insurance policy would not cover punitive damages.
We hold: (1) the court did not err in denying Honda's motion for directed verdict on liability; (2) the court erred in setting aside the punitive damages on motion for judgment n. o. v. and, therefore, we direct entry of judgment for Dorsey for the punitive damages awarded by the jury; (3) the holding that Continental is not liable for the punitive damage award is reversed and remanded for further consideration.
The following are the facts in the light most favorable to Dorsey, considered for the purpose of determining whether Honda was entitled to a directed verdict on liability and whether the judge erred in setting aside the award for punitive damages.
In the mid-1960's Honda developed a small, light-weight automobile with high gas mileage. It exported the vehicle to the United States and Europe to meet the demand for a low-price, economical car. The model sold in the United States, the AN 600, was the first automobile sold by Honda in this country. It weighed approximately 1,356 pounds.
Glen K. Dorsey purchased a new 1971 Honda AN 600 in early 1972. He chose the vehicle because it was economical and offered high gas mileage. Dorsey, who is approximately 6 ft. 1 1/2 in. tall, testified that he found the vehicle comfortable to drive and that it had adequate head and leg room. Dorsey was unaware of the AN 600's specific crash characteristics although he had a general awareness that if a large sedan hit a small vehicle such as a Honda the small vehicle might be severely damaged.
In March 1972 Dorsey's AN 600 collided with a standard size Ford automobile weighing approximately 3,600 pounds. The Honda was traveling at approximately 30 m. p. h. The Ford had braked and was barely moving, at 3 to 5 m. p. h. Dorsey was wearing his lap and shoulder belts and was driving with due care. In the collision, the left "A pillar," the post at the left of the windshield and between the windshield and window, deformed rearward more than ten inches. Dorsey's seat came off its track, ramming him forward and to the left. His seat belt did not adequately restrain him in the collision. Dorsey's legs were jammed against the front of the passenger compartment, causing compound fractures, and his head hit the deformed A pillar, causing massive permanent brain injury. This accident was the equivalent of a 20 m. p. h. barrier crash. 4
Before Honda began exporting the AN 600 to the United States employees of its wholly owned subsidiary, Honda Research and Development (Honda R&D) conducted crash tests on prototype vehicles in Japan. Honda R&D is not a party to this suit. These tests revealed that a dummy the size of an average adult male, restrained with lap and shoulder belts, would strike the interior front part of the passenger compartment in a 30 m. p. h. barrier crash test. In both a barrier crash test and a test collision against an average size American vehicle the dummy's head struck the A pillar, which had deformed inward. Despite the results of these tests and a recommendation by an employee of Honda R&D to enlarge the vehicle to improve safety, Honda exported the AN 600 to the United States without increasing the vehicle's size or body strength or warning purchasers of its crash characteristics.
In considering the sufficiency of the evidence to support the jury finding of willful, wanton or reckless conduct, it is of no moment that the substantial evidence of such conduct relates to employees of Honda R&D. In the pre-trial order joined in by plaintiffs, Honda and Continental, it was agreed that Honda contended:
that the vehicle manufactured by Honda Motor Company Ltd. was reasonably designed and manufactured and that Honda Motor Company, Ltd. used reasonable care in the design and testing of all the composite safety features incorporated in the vehicle.
The following principles of law were agreed upon:
1. Honda Motor Company Ltd., as the manufacturer is liable for any negligence of (sic "or") breach of warranty with respect to any component part which is defectively designed and manufactured even though such part may have been obtained from a third-party supplier.
2. Honda Motor Company Ltd. as manufacturer, impliedly warranted that the vehicle involved in this action was reasonably crashworthy, i. e., that reasonable care had been used in the design and manufacture of the car to eliminate unreasonable risk of foreseeable injury.
3. Honda Motor Company Ltd., as manufacturer, is strictly liable in tort if it placed on the market a product that is defective, i. e., unreasonably dangerous in that it failed to eliminate unreasonable risk of foreseeable injury.
4. Honda Motor Company Ltd., as a manufacturer, is under a duty to warn of any dangers inherent in the use of its vehicles in order to eliminate unreasonable risk of foreseeable injuries.
An issue of fact to be litigated was described as:
Whether reasonable care was used in the design and testing of the car so as to eliminate unreasonable risk of foreseeable injury?
By the pre-trial order, Honda, knowing that design and testing of the car had been done by Honda R&D, accepted responsibility for the acts of Honda R&D in design and testing. Thus, in assaying the evidence of wrongful conduct the acts of Honda R&D are treated as the acts of Honda.
At trial experts testified to a number of measures that would improve the AN 600's safety in collisions. These included lengthening the hood, enlarging the passenger compartment, installing a heavier engine, using heavier metals in construction, reinforcing the structure by using metal "bones" to fortify the passenger compartment and the A pillars, using a full frame out to the front bumper, redesigning the shoulder belt to reduce the likelihood of "submarining" the passenger, and making seat belts of a fabric with less elasticity.
The AN 600 design met certain federal Motor Vehicle Safety Standards in effect at the time governing seat assemblies, seat belt assemblies, fuel tank integrity, and displacement of the steering column. While the federal statute under which these regulations were passed preempts inconsistent state standards, 15 U.S.C. § 1392(d), compliance with the federal regulations "does not exempt any person from any liability under common law," 15 U.S.C. § 1397(c).
Honda contends that it was entitled to a directed verdict on all issues on the ground that the sole proximate cause of Dorsey's injuries was the comparative size of the two vehicles involved in the collision and that under so-called "crashworthiness" cases, notably Dreisonstok v. Volkswagenwerk, A.G., 489 F.2d 1066 (4th...
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