Estate of Spinosa

Decision Date24 April 1980
Docket NumberNo. 79-1050,79-1050
Citation621 F.2d 1154
PartiesESTATE of Joan E. SPINOSA, by Hazel Dittrich, Administratrix. ESTATE of Laurie Ann SPINOSA, by Hazel Dittrich, Administratrix. Paul SPINOSA, Plaintiffs, Appellees, v. INTERNATIONAL HARVESTER COMPANY, Defendant, Appellant.
CourtU.S. Court of Appeals — First Circuit

John Czeciuk, Manchester, N. H., with whom E. Paul Kelly, and Cullity & Kelley, Manchester, N. H., were on brief, for defendant, appellant.

David C. Engel, Exeter, N. H., with whom Shute, Engel & Frasier, P. A., Exeter, N. H., was on brief, for plaintiffs, appellees.

Before COFFIN, Chief Judge, KUNZIG, Judge, U. S. Court of Claims, * and CAMPBELL, Circuit Judge.

KUNZIG, Judge.

This is a diversity case seeking damages for wrongful death and personal injury arising from a single-vehicle traffic accident that occurred almost seven years ago in New Hampshire. The issues presented primarily involve rulings on evidentiary matters and the lower court's refusal to rule on certain products liability issues as matters of law. These are delineated specifically below. We can find no error by the district court and affirm its judgment in favor of plaintiffs.

Background

The accident out of which this litigation arose occurred on June 20, 1973, on the Isaac Frye Highway in Wilton, New Hampshire. Joan E. Spinosa was driving a 1966 International Harvester pickup truck down that highway. Her husband, Thomas Spinosa, had bought the truck second-hand in 1971, and in it with her were her daughter, Laurie, and a son, Paul. At some point, a hole developed in the brake tubing of the four-wheel drive vehicle, causing a loss of hydraulic fluid and hydraulic pressure within the braking system. Mrs. Spinosa was unable to control the vehicle as it approached a curve at the foot of a hill, and it crashed into a bridge abutment. She died two weeks later. Laurie Spinosa died in the crash, and her brother, Paul, was injured.

After a three-week trial in the United States District Court for the District of New Hampshire, a jury returned a verdict in favor of plaintiffs. 1

Defendant then filed this appeal, citing six alleged errors by the district judge. The issues raised may be grouped as follows: I. Did the district judge err when he excluded (a) evidence of prior pleadings in other actions by the plaintiffs, (b) evidence of the effect of income tax on future earnings of the decedents, and (c) evidence of the remarriage of Thomas Spinosa? II. Did the district judge err (a) in refusing to rule that Thomas Spinosa's failure to have the vehicle inspected was an intervening cause of the accident, and (b) by refusing to rule as a matter of law that International Harvester had fulfilled its duty to design a reasonably safe vehicle? Finally, III. Did the district judge err in refusing to order a special verdict?

Though we hold the court did not err in any of its rulings on these issues, we will nonetheless consider each in turn.

I.

Exclusions from evidence

(a) Admissibility of prior pleadings

International Harvester argues that the district court erred when it excluded from evidence prior pleadings in New Hampshire courts by the same plaintiff (administratrix of the decedents' estates) against Thomas Spinosa. Relying on Bellavance v. Nashua Aviation & Supply Co., 99 N.H. 10, 104 A.2d 882 (1954), International Harvester states that under New Hampshire law the pleadings of plaintiffs in other actions may be introduced in subsequent actions to prove inconsistency in the claims asserted by the plaintiff. The pleadings defendant sought to introduce alleged that the deaths of Mrs. Spinosa and her daughter were caused by the negligent failure of Thomas Spinosa to maintain the truck and have it properly inspected and licensed. International Harvester argues it should have been allowed to show the jury an inconsistency in plaintiff's claim that in Federal court plaintiff submitted that the deaths resulted from International Harvester's defective truck, while in State court plaintiff alleged that the deaths resulted from Thomas Spinosa's failure to maintain the truck.

Plaintiffs-appellees respond that it is not inconsistent for suit to be brought successively against Thomas Spinosa and the manufacturer of the motor vehicle, since the pleadings in the prior suit claimed that Spinosa's actions were a cause, not the sole cause of the accident. Mihoy v. Proulx, 113 N.H. 698, 700, 313 A.2d 723, 724 (1973). Since there is no inconsistency, plaintiffs-appellees argue, the pleadings are inadmissible since Bellavance states such pleadings are admissible only to show inconsistency in claims asserted by a plaintiff.

We agree with plaintiffs-appellees. In Bellavance, supra, plaintiff originally instituted suit against the pilot of an airplane claiming the pilot's negligence was the sole cause of an airplane crash. Plaintiff then sued the company that owned the airplane, claiming that the actions of the company were the sole cause. This claim is indeed inconsistent, as there can not be two sole causes of an accident. In the face of such an inconsistency, the court in Bellavance admitted the prior pleadings.

In the instant case, however, there is no such inconsistency. It is not inconsistent for suit to be brought against the owner and the manufacturer of the vehicle, since both can have a role in the plaintiff's injury. Mihoy, supra at 700, 313 A.2d at l724. Without such inconsistency, and since pleadings in prior law suits are not evidence of the facts in any particular subsequent suit, Slocinski v. Radwan, 83 N.H. 501, 507, 144 A. 787, 790 (1929), the district court had discretion to exclude such material as irrelevant. Absent evidence of abuse of that discretion, we will not upset its ruling. 2

International Harvester also urges that the district court erred when it excluded from evidence the settlement agreement that resulted from the earlier state court proceeding. This contention, however, runs afoul of the statutory prohibition against introduction of such evidence. New Hampshire RSA 507:7-c (Supp.) states that "(E)vidence of a settlement with . . . one or more persons liable in tort for the same injury . . . shall not be introduced in evidence in a subsequent trial by jury of an action against any other tortfeasor to recover damages for the injury or wrongful death. . . ."

While Rule 408 of the Federal Rules of Evidence recognizes an exception to the policy embodied in the quoted state statute and admits into evidence such agreements when admitted for the purpose of impeaching the testimony of the party agreeing to the settlement, the district judge properly ruled that the agreement could not function to impeach Thomas Spinosa's testimony, since Spinosa was asked at trial and testified to the fact that he had been sued in state court.

(b) Tax effect on future earnings

International Harvester contends that it should have been allowed to introduce evidence on the impact income taxes would have had on the future earnings of the decedents. Since damages in wrongful death actions are based largely on projected future earnings of the decedent, International Harvester argues that the damages paid here should have been discounted by a sum representing the income tax liability the decedents would have incurred on such lost future earnings.

Plaintiffs-appellees reply that, although there is no New Hampshire case law on point, the majority rule is that the effect of income tax can not be considered in computing damages. Kennett v. Delta Air Lines, Inc., 560 F.2d 456 (1st Cir. 1977); see Cunningham v. Rederiet Vindeggen A/S, 333 F.2d 308 (2nd Cir. 1964); Damages, Considering Income Taxes, 63 A.L.R.2d 1393, 1398-1404, Sec. 2,4(a) (1959).

The chief New Hampshire case cited by International Harvester in support of its argument that taxes should be considered in mitigation of a damage award, McLaughlin v. Union Leader Corp., 100 N.H. 367, 127 A.2d 269 (1967), dealt with a rather different issue and involved a contract action, rather than one sounding in tort. 3

This court has followed the majority rule before, Kennett, supra, and we see no reason why the majority rule should not be followed here. We note with interest, however, the Supreme Court's recent decision in Norfolk and Western Railway v. Liepelt, --- U.S. ----, 100 S.Ct. 755, 62 L.Ed.2d 689 (1980), in which the Court held that evidence of the tax effect on future earnings should be considered in computing awards under the Federal Employers' Liability Act. Nonetheless, we do not think the district judge erred in excluding such evidence. Without the guidance of a New Hampshire ruling on the issue, the district judge's refusal to deviate from the rule followed by a majority of the states was entirely reasonable, particularly since the Court's Norfolk and Western decision does not mandate an across-the-board change in the majority rule regarding computation of a decedent's projected future earnings. But see Turcotte v. Ford Motor Co., 494 F.2d 173, 184-85 (1st Cir. 1974) (Rhode Island law required accounting for taxes). It must be borne in mind that we are dealing with New Hampshire law (or lack thereof) in a diversity situation. This is not a Federal Employers' Liability Act case as was Norfolk and Western. Moreover, our research indicates that the Norfolk and Western case stands against a mountain of contrary state authority (circa 28 states do not consider tax impact; 6 do). See annot., 63 A.L.R.2d 1393, 1398-1404, §§ 2, 4(a), 5 (1959 & Later Case Service 1976 & Supp. 1979). We hold the majority rule was correctly followed by the district judge in this case.

(c) Evidence of Thomas Spinosa's remarriage

Similarly, we can find no merit in International Harvester's contention that it should have been allowed to introduce into evidence, for purposes of mitigating damages, the fact that Thomas Spinosa remarried.

International Harvester maintains that...

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