Ford Motor Co. v. Rice

• Decision Date: 04 December 1998
• Citation: 726 So.2d 626
• Parties: FORD MOTOR COMPANY v. Mary RICE et al.
• Court: Alabama Supreme Court

726 So.2d 626

FORD MOTOR COMPANY v. Mary RICE et al.

1970253.

Supreme Court of Alabama.

December 4, 1998.

Joseph S. Bird III, T. Michael Brown, and Kenneth M. Perry of Bradley, Arant, Rose & White, L.L.P., Birmingham; and Robert H. Turner, Marion, for appellant.

Joe R. Whatley, Jr., and Peter H. Burke of Cooper, Mitch, Crawford, Kuykendall & Whatley, L.L.C., Birmingham; R. Ben Hogan III of Hogan, Smith & Alspaugh, Birmingham; J.L. Chestnut of Chestnut, Sanders, Sanders & Pettaway, Selma; T. Roe Frazer II and Richard Freese of Langston, Frazer, Sweet & Freese, Jackson, MS; and Drayton Pruitt and Nathan G. Watkins of Pruitt, Pruitt and Watkins, Livingston, for appellee.

Samuel H. Franklin and Stephen J. Rowe of Lightfoot, Franklin & White, L.L.C., Birmingham, for amici curiae Product Liability Advisory Council, Inc., and Chamber of Commerce of the United States of America, in support of the appellant.

J. Mason Davis of Sirote & Permutt, Birmingham, for amicus curiae Greater Birmingham Area Chamber of Commerce, in support of the appellant.

Guy Tipton, Birmingham, for amicus curiae Alabama AFL-CIO.

SHORES, Justice.

Pursuant to Rule 5, Ala. R.App. P., this Court granted Ford Motor Company ("Ford") permission to appeal from an interlocutory order holding that Ford was not entitled to a summary judgment on the fraudulent-suppression claims of the named plaintiffs in this putative class action brought on behalf of Alabama residents who owned Ford Bronco II sport utility vehicles. We reverse and remand.

The named plaintiffs, Mary Rice, Brent Puckett, and Sandra Giles, are owners of Bronco II sport utility vehicles, a model manufactured and marketed by Ford between 1983 and 1990. The plaintiffs alleged that each Bronco II contains a design defect that causes it to have an undue propensity to roll over in sudden-avoidance maneuvers. The plaintiffs also asserted that, as a result of testing it had conducted, Ford was aware of the Bronco II's rollover propensity but had fraudulently suppressed that information in order to induce the plaintiffs to purchase their vehicles. No plaintiff alleged that his or her Bronco II had actually rolled over and thereby caused personal injuries or property damage. Instead, the plaintiffs maintained that they had been damaged by being induced to purchase vehicles that they say were worth less than they would have been worth if they had been what Ford had represented them to be. That is, the plaintiffs contended that they did not get what they bargained for, in that their vehicles, they said, contain a safety defect that Ford fraudulently failed to disclose, thereby suggesting that the vehicles did not possess such a flaw. The plaintiffs admitted that they could not point to any tangible adverse economic consequences flowing from the alleged defect, such as diminished resale value in comparison to similar vehicles. Notwithstanding the fact, the plaintiffs maintained that they could still recover compensatory damages measured by the cost to "repair" the defect by lessening the risk of rollover, through modifications to the vehicles' wheels, tires, and suspension. The plaintiffs also sought punitive damages, attorney fees, and equitable relief ordering Ford to furnish "full and effective warning" to class members regarding the rollover dangers and enjoining Ford from selling replacement parts other than those that lessen the risk of rollover.

Ford moved, under Rule 12(b)(6), Ala.R.Civ.P., to dismiss the complaint for failure to state a claim upon which relief can be granted. Ford argued specifically that, under this Court's decision in Pfizer, Inc. v. Farsian, 682 So.2d 405 (Ala.1996), the plaintiffs could not maintain their fraudulent-suppression claims because, Ford contended, they had not alleged that they had suffered any legally cognizable injury. After hearing oral arguments and receiving evidentiary materials from both sides, the trial court, treating Ford's motion as a motion for a summary judgment under Rule 56, Ala.R.Civ.P., denied it. See Rule 12(b), Ala. R. Civ. P.; Hornsby v. Sessions, 703 So.2d 932 (Ala.1997); and Travis v. Ziter, 681 So.2d 1348 (Ala.1996). The trial court then certified the plaintiffs' fraudulent-suppression claims as a class action, see Rule 23, Ala. R. Civ. P., with the named plaintiffs representing a class of all Alabama residents who, between August 26, 1993, and May 31, 1997, had owned Ford Bronco II vehicles. However, the trial court also certified the Pfizer question as a controlling issue of law for purposes of Rule 5, Ala. R.App. P., and we granted permission to appeal under that rule.

Section 6-5-102, Ala.Code 1975, provides, "Suppression of a material fact which the party is under an obligation to communicate constitutes fraud. The obligation to communicate may arise from the confidential relations of the parties or from the particular circumstances of the case." This Court has written: "The elements of a suppression claim are 1) a duty to disclose the facts, 2) concealment or nondisclosure of material facts by the defendant, 3) inducement of the plaintiff to act, and 4) action by the plaintiff to his injury." Foremost Ins. Co. v. Parham, 693 So.2d 409, 423 (Ala.1997), citing Wilson v. Brown, 496 So.2d 756 (Ala.1986).

This appeal involves only the element of actual injury, concerning which this Court has stated:

"`"... [F]raud, without damage, or damage, without fraud, gives no cause of action; but, where these two do occur, there an action lieth." Einstein, Hirsch & Co. v. Marshall & Conley, 58 Ala. 153, 160 [1877]; Wall v. Graham, 192 Ala. 396, 399, 68 So. 298, 299 [1915].

"`"... Deceit and injury must concur.... Damage is of the essence of the action of deceit; an essential element to the right of action, and not merely a consequence flowing from it." Wall v. Graham, supra.'"

Boswell v. Liberty Nat'l Life Ins. Co., 643 So.2d 580, 581 (Ala.1994), quoting Pihakis v. Cottrell, 286 Ala. 579, 583, 243 So.2d 685, 688 (1971).

The main issue argued by the parties in this appeal is the applicability of Pfizer, Inc. v. Farsian, supra. In that case, Farsian, the recipient of an artificial heart valve, which had not failed, filed an action in an Alabama state court alleging that the valve's manufacturer had fraudulently induced him to purchase the valve by misleading him about the rate of failure of the same model valve in other recipients. Farsian asserted, among other things, that the manufacturer had marketed the valve "despite knowing of serious manufacturing problems that directly related" to valve failures in other recipients. 682 So.2d at 406. While he admitted that his own valve was, and always had been, functioning properly, Farsian claimed injury by maintaining that his valve, "with its higher rate of fracture and risk of death, [was] worth less than the valve would have been worth if it had been what [the manufacturer] represented it to be." Id. at 407. He also sought to recover damages for emotional distress and for expenses to have his valve surgically removed and replaced. Id. After the case was removed to a federal court, the United States Court of Appeals for the Eleventh Circuit certified to this Court the following question:

"Does a heart valve implantee have a valid cause of action for fraud under Alabama law if he asserts that the valve's manufacturer fraudulently induced him to have the valve implanted when the damages that he asserts do not include an injury-producing malfunction of the product because the valve has been and is working properly?"

682 So.2d at 406. We answered that the plaintiff could not recover, explaining as follows:

"Regardless of how Farsian pleads his claim, his claim is in substance a product liability/personal-injury claim—Farsian seeks damages because of the risk that his heart valve may one day fail. Alabama courts have never allowed a recovery based on a product that, like [the plaintiff] Farsian's valve, is and has been working properly. Each of our prior cases in which fraud or other intentional conduct was alleged has involved a failure, a malfunction, or an accident that involved the defendant's products and which injured the plaintiff....

"Under Alabama law, Farsian's fear that his valve could fail in the future is not, without more, a legal injury sufficient to support his claim....

"....

"Farsian's heart valve has not failed. Instead, it has been working properly and as intended by its manufacturer.... Although the parties see different theories of this case—Farsian relying upon Alabama fraud law, while [the manufacturer] argues in the context of product liability law—we conclude that the answer to the certified question, whether it is couched in terms of fraud law or in terms of product liability law, must be that Farsian does not now have a cause of action for damages, because the valve has not failed."

Id. at 407-08 (citations omitted).

Ford argues that Pfizer precludes the plaintiffs' claims in this case. Ford emphasizes that because none of the plaintiffs avers that his or her own vehicle has rolled over, the alleged defect of which the plaintiffs complain has never manifested itself in their vehicles. Ford contends that, just as the plaintiff in Pfizer could not recover under a fraud theory for the risk that his heart valve might fail in the future, the plaintiffs here cannot recover under a theory based solely upon the risk that their Bronco II vehicles could one day roll over. We agree that this case is controlled by Pfizer and that the plaintiffs' claims of injury are insufficient to sustain their action alleging fraudulent suppression.

The plaintiff in Pfizer maintained that he had suffered an economic loss because his valve's risk of failure was higher than what the manufacturer had represented it to be. However, based upon the plaintiffs' concession that his heart valve had never manifested the defect that had affected similar valves in other persons, we held that the...