Helmer v. Goodyear Tire & Rubber Co.

• Decision Date: 12 July 2016
• Docket Number: No. 15-1214,15-1214
• Citation: 828 F.3d 1195
• Parties: David Helmer ; Felicia Muftic; Felicia Muftic as personal representative of the Estate of Michael Muftic, on behalf of themselves and all others similarly situated, Plaintiffs-Appellants, v. Goodyear Tire & Rubber Co., an Ohio corporation, Defendant-Appellee.
• Court: U.S. Court of Appeals — Tenth Circuit

828 F.3d 1195

David Helmer ; Felicia Muftic; Felicia Muftic as personal representative of the Estate of Michael Muftic, on behalf of themselves and all others similarly situated, Plaintiffs-Appellants

v.Goodyear Tire & Rubber Co., an Ohio corporation, Defendant-Appellee.

No. 15-1214

United States Court of Appeals, Tenth Circuit.

July 12, 2016

Rick D. Bailey, Burg Simpson Eldredge Hersh & Jardine, Englewood, Colorado (Diane Vaksdal Smith, David K. TeSelle, and Seth A. Katz, Burg Simpson Eldredge Hersh & Jardine, Englewood, Colorado, Gary E. Mason, Whitfield Bryson & Mason LLP, Washington D.C., Michael Flannery, and Katherine Van Dyck, Cuneo Gilbert & Laduca LLP, St. Louis, Missouri, and Washington D.C., with him on the briefs), for Plaintiffs-Appellants.

David L. Lenyo, Garfield & Hecht, P.C., Aspen, Colorado (L. Michael Brooks, Jr., Wells, Anderson & Race, LLC, Denver, Colorado, Chad J. Schmit, Garfield & Hecht, P.C., Aspen, Colorado, Roger P. Thomasch, and David M. Strauss, Ballard Spahr LLP, Denver, Colorado, with him on the brief), for Defendant-Appellee.

Before KELLY, McKAY, and LUCERO, Circuit Judges.

LUCERO, Circuit Judge.

Plaintiffs David Helmer and Felicia Muftic¹ represent a certified class of homeowners who contend a radiant-heating hose, the Entran 3, manufactured by Goodyear Tire & Rubber Company (“Goodyear”) suffered design defects leading to cracks and leaks. At trial, Goodyear argued the leaks were caused by third parties' improper installations. The jury returned a verdict in favor of Goodyear, concluding the Entran 3 was not defectively designed. On appeal, Plaintiffs argue that insufficient evidence supported the district court's instruction on nonparty fault. They further argue that the district court failed to require proof of a necessary fact before instructing the jury regarding Colorado's presumption that a product is not defective if ten years have passed since it was first sold. Colo. Rev. Stat. § 13–21–403(3). We conclude that any error in the third-party liability instruction was harmless, and the inclusion of the instruction as to the presumption was proper. Exercising jurisdiction under 28 U.S.C. § 1291, we affirm.

I

In the late 1980's, Goodyear designed and manufactured the Entran 3 hose for Chiles Power Supply Company d/b/a Heatway Radiant Floors and Snowmelting (“Heatway”). The hose is used to convey hot fluid to provide radiant heating in structures, including homes. Thus, it is installed permanently under flooring, in walls and ceilings, and in concrete. The parties do not dispute that Entran 3 has an expected useful life of greater than forty years. From 1992 to 1996, Goodyear produced approximately thirty-three million feet of Entran 3, which it sold exclusively to Heatway. Heatway provided a product guarantee to homeowners and published an installation manual for the hose. In 1996, Goodyear ceased manufacture of Entran 3 because “the potential for product related claims over [rode] the commercial justification for pursuing th[e] market.”

Entran 3 hoses were installed in the Colorado homes of Plaintiffs Helmer and Muftic. Helmer's hose was installed when his home was built in 1992-93, and was first observed leaking in April 2010. He suffered severe leaks in the fall of 2013. The Muftics' hose was installed in 1994-95, and developed serious leaks in June 2010 and December 2014. At trial, Plaintiffs presented evidence that Entran 3 hoses had developed splits or leaks in five other Colorado homes as well.

In 2012, Plaintiffs filed this class action alleging defective design. They presented evidence that the ethylene-propylene diene monomer (“EPDM”) rubber used in the inner layer of Entran 3 was not suitable to carry hot liquid for the lifetime of a home, and that a design defect caused inconsistent thickness and bonding between the layers of the hose, allowing oxygen to permeate into the system. Plaintiffs claim these design choices destined the product to crack, leak, and burst from foreseeable use.

Goodyear argued that the hose was not defectively designed, and that any leaking hoses resulted from improper installation. It presented evidence suggesting that whoever installed the relevant systems had used improper clamps and bent the hoses too tightly in most of Plaintiffs' homes. It also argued that Heatway negligently failed to provide custom designs, failed to install Entran 3 heating systems, and failed to provide necessary instructions for installation and maintenance of the systems, as promised to Goodyear. Specifically, David Maguire, the engineer in charge of developing Entran 3, testified that Heatway represented to Goodyear that it would design, supervise, inspect, test, and maintain every system it sold. Maguire documented these promises and representations in a trip report he prepared after a meeting with Heatway. He also testified the promises were never kept. Instead, Goodyear argued that Heatway generally sold Entran 3 hoses for installation by third parties and never inspected or tested the systems. Goodyear thus designated Heatway as a nonparty at fault under Colo. Rev. Stat. § 13–21–111.5(3)(b).

Goodyear also presented evidence that more than ten years had passed since Entran 3 first went on the market, and the parties agreed that no lawsuit had been filed alleging the hose was defective in the ten years after Entran 3 was first sold in Colorado. Goodyear thus invoked § 13–21–403(3), which imposes a rebuttable presumption that a product is not defective if ten years have passed since the product was first sold.

After the close of evidence, Plaintiffs moved for judgment as a matter of law under Fed. R. Civ. P. 50(a), arguing that Goodyear failed to offer any evidence to support Heatway's alleged nonparty fault, and that Goodyear was not entitled to the § 13–21–403 presumption. The district court ruled against Plaintiffs, finding sufficient evidence that Heatway may have contributed to the leaks by failing to inspect or install the systems. In addition, the district court determined the statutory presumption unambiguously applied. Accordingly, the court instructed the jury that if it concluded that a design defect in Entran 3 was a cause of the damages or losses, the jury must then determine whether improper installation contributed to the damages and decide the comparative percentages of fault attributable to Heatway and an installer. Similarly, the court's special verdict form instructed the jury to consider Heatway's liability only if it determined Goodyear had not defectively designed the Entran 3. The court also instructed that the jury must presume that the hose was not defective if it “was sold for the first time for use or consumption ten or more years before any claimed damages or losses were incurred by the Plaintiffs.”

During deliberations, the jury inquired of the court: “[w]hen did Heatway go out of business and why.” The court refused to answer because the question asked for additional evidence. Ultimately, the jury returned a verdict in favor of Goodyear, determining that the Entran 3 was not defectively designed. Because it did not find a design defect, the jury did not reach questions regarding nonparty fault. After trial, Plaintiffs filed a renewed motion for judgment as a matter of law pursuant to Rule 50(b), and a Rule 59 motion for a new trial, again raising the issues of Heatway's nonparty fault and the statutory presumption. The district court denied both motions and this appeal followed.

II

We review de novo a district court's decisions regarding Rule 50(a) and 50(b) motions, applying the same standards as the district court. Elm Ridge Expl. Co. v. Engle , 721 F.3d 1199, 1216 (10th Cir. 2013) ; Hardeman v. City of Albuquerque , 377 F.3d 1106, 1112 (10th Cir. 2004). In diversity cases “federal law governs the appropriateness of a Rule 50 motion, while the substantive law of the forum state controls the analysis of the underlying claims.” Wolfgang v. Mid-America Motorsports, Inc. , 111 F.3d 1515, 1522 (10th Cir. 1997). In reviewing the denial of judgment as a matter of law, we “determine whether there is evidence upon which the jury could have properly found a verdict for the nonmoving party.” Id. In other words, we may find error “only if the evidence points but one way and is susceptible to no reasonable inferences supporting the party opposing the motion.” Id. (quotation omitted). We “construe the evidence and inferences therefrom ... most favorably to the nonmoving party.” Id.

A

Plaintiffs suggest Goodyear presented insufficient evidence to support the instruction on Heatway's nonparty liability. Under Colorado law, a defendant may designate a nonparty at fault as a defense to liability. § 13–21–111.5(3)(b). Because Goodyear designated Heatway as a nonparty at fault, the jury instructions and the verdict form directed the jury to apportion liability if it decided that Entran 3 was defectively designed. Because the jury found Entran 3 was not defectively designed, it did not proceed to the subsequent questions on the verdict form concerning nonparty fault.

Even if Plaintiffs are correct that insufficient evidence supported Heatway's nonparty liability, the instruction did not affect the jury's verdict.² A jury's negative answer to a threshold question of liability may render a verdict form's subsequent erroneous questions harmless. See Allen v. Minnstar, Inc. , 97 F.3d 1365, 1369 (10th Cir. 1996). In Allen , the plaintiff alleged that a boat was unreasonably dangerous because passengers could be ejected during sharp turns. Id. at 1367. A jury returned a verdict in favor of the defendant manufacturer. Id. at 1367–68. On appeal, the plaintiff argued an instruction on the defense of misuse was improper. Id. at 1368. But because the jury found the boat was not unreasonably dangerous, it never reached the question of misuse. Id. at 1369. The challenged question thus played no part in the verdict, and the Allen court concluded there was “no error on...