Hodder v. Goodyear Tire & Rubber Co.
| Decision Date | 06 May 1988 |
| Docket Number | C2-87-511,Nos. C3-87-419,s. C3-87-419 |
| Citation | 426 N.W.2d 826 |
| Court | Minnesota Supreme Court |
| Parties | , Prod.Liab.Rep.(CCH)P. 11,786 Dale L. HODDER, Respondent (C3-87-419), Appellant (C2-87-511), v. The GOODYEAR TIRE & RUBBER COMPANY, et al., Defendants, Petitioners, Appellants (C3-87-419), Respondents (C2-87-511), Pioneer Rim & Wheel Company, Respondent. The GOODYEAR TIRE & RUBBER COMPANY, Defendant and Third Party Plaintiff, Petitioner, Appellant (C3-87-419), Respondent (C2-87-511), v. REMER OIL COMPANY, INC., Third Party Defendant, Respondent. PIONEER RIM & WHEEL COMPANY, Defendant and Third Party Plaintiff, Respondent, v. ACHESON TIRE COMPANY, Arrowhead Equipment Company, Itasca Tire Company, Third Party Defendants, Respondents. |
Syllabus by the Court
1. Minn.Stat. Sec. 604.03 (1986), the useful life defense, is not a statute of repose. In this case, the manufacturer had a continuing duty to warn and this issue was adequately submitted to the jury. Other evidentiary rulings were proper.
2. Punitive damages, based in part on an erroneous theory, are reduced. The employer's recovery for medical expenses under Minn.Stat. Sec. 176.061, subd. 7 (1981), is calculated within the subdivision 6 formula.
3. No valid settlement offer was made under the offer-counteroffer provision of the prejudgment interest statute, and, therefore, preverdict interest applies to the entire compensatory judgment.
James B. Vessey, Kelley R. Lorix, Timothy E. Branson, Minneapolis, and Randall F. Hendircks, Kirk T. May, Dennis J. Dobbels, Kansas City, Mo., for appellants, Goodyear Tire & Rubber Co. and Motor Wheel Corp.
Paul E. Godlewski, Barna, Guzy, Merrill, Hynes & Giancola, Ltd., Minneapolis, and John C. Risjord, John C. Risjord & Associates, P.C., Kansas City, Mo., for Dale Hodder.
Geoffrey P. Jarpe, St. Paul, for Pioneer Rim & Wheel Co.
Robert J. McGuire, Minneapolis, for Arrowhead Equipment Co.
Phillip A. Pfaffly, Minneapolis, for Itasca Tire Co.
Austin Ditzler, Minneapolis, for Acheson Tire Co.
O.C. Adamson, II, W.D. Flaskamp, Charles E. Spevacek, Minneapolis, for Remer Oil Co.
William P. Studer, Michael Connelly, St. Paul, and Mark S. Anderson, Shirley A. Brantingham, St. Paul, amicus curiae for Minnesota Chamber of Commerce & Industry.
Harry Sieben, Jr., Minneapolis, amicus curiae for Minnesota Trial Lawyers Assn.
Wayne D. Struble, Minneapolis, amicus curiae for Liability Advisory Council and Motor Vehicle Mfrs. Assn.
Victor E. Schwartz, Liberty Mahshigian, Washington, D.C., amicus curiae for Product Liability Advisory Council and Motor Vehicle Mfrs. Assn.
Heard, considered, and decided by the court en banc.
This products liability case raises a variety of issues, including interpretation of the statutory "useful life defense," the duty to warn, and entitlement to punitive damages. Issues on allocation of a tort recovery between the injured employee and subrogated employer, as well as on prejudgment interest, are also presented. We affirm, for the most part, except for a reduction in punitive damages and a remand for reallocation of the tort recovery and readjustment of interest.
On December 19, 1981, plaintiff Dale Hodder, age 17, was seriously injured when the metal rim of a truck tire explosively separated while he was mounting the tire on a customer's logging truck. Hodder was then employed by Remer Oil Company, a service station in the small community of Remer in northern Minnesota. Hodder remembers he was to fix a flat tire on the truck but remembers little else.
The tire that exploded was mounted on a KWX multi-piece rim assembly made by defendant Goodyear Tire & Rubber Company. 1 This assembly consists of a heavy metal rim base, about which the tire with an inner tube is placed, plus a separate metal side ring that attaches to the rim. The rim base is split to facilitate getting the tire on and off; on assembly, the split ends must be carefully realigned and the side ring then fastens to and helps lock the rim base. There were other tires on the truck with an "L-type" rim. The L-type, in contrast with the K-rim, has a solid rim base but the side ring is split.
The K-rim which injured Hodder was manufactured in 1955, 26 years before the accident. The rim was corroded and worn but there was also evidence the component parts were in serviceable condition at the time of the explosion. Goodyear had been making K-rims since the 1920's, and possibly a quarter million are still in circulation. Manufacture of the KWX was discontinued in 1962. After 1955, Goodyear became aware of the danger of pressurized separation of its multi-piece rim asemblies. By the 1970's, Goodyear was using safety films, posters, manuals, advertising, and promotion of OSHA standards to make known information on maintenance and repair of K-rims and to warn about dangers associated with misassembly or use of worn parts. Hodder never saw any of this material.
In 1955, Goodyear was producing and selling K-rims and L-rims. The KWX rim (the kind involved in Hodder's accident) was a K-rim with a lighter rim base, put on the market in 1955, apparently for use, as was the L-rim, for lighter load trucks; however, in later years both the KWX and the L-rim came to be used generally on heavier load trucks. A single-piece rim was invented in 1953 but not until some years later did it gain acceptance in the industry and on the market.
Dale Hodder sued Goodyear and its subsidiary, Motor Wheel Corporation, and the defendants, in turn, brought in Remer Oil Company, plaintiff's employer, as a third party defendant. Remer Oil counterclaimed for benefits it was required to pay for its employee under the Workers' Compensation Act.
During trial, plaintiff dropped its claim of a manufacturing defect. The jury, answering special interrogatories, found no design defect in the K-rim; no negligence on Hodder; 42.5 percent causal negligence each on Goodyear and Motor Wheel, and 15 percent negligence on Remer Oil. Goodyear and Motor Wheel's negligence was found to be for failure to warn. The jury awarded compensatory damages of $3,368,916 and punitive damages of $12.5 million. The jury also found that the "useful life" of the involved KWX rim had expired at the time of Hodder's accident and that Hodder was not negligent in failing to determine that the useful life had expired. Goodyear and Motor Wheel appeal from a denial of their post-trial motions and the judgment, and Hodder appeals the allocation of his tort recovery and an interest item. We granted accelerated review to this court.
Minn.Stat. Sec. 604.03, subd. 1 (1986), provides that in a products liability action, "it is a defense to a claim against a designer, manufacturer, distributor or seller of the product or a part thereof, that the injury was sustained following the expiration of the ordinary useful life of the product." (Emphasis added.) Subdivision 2 states, "The useful life of a product is not necessarily the life inherent in the product, but is the period during which with reasonable safety the product should be useful to the user." The subdivision goes on to say this period "shall be determined by reference to the experience of users of similar products," and then lists some of the factors to be taken into account. 2
In this case the statute was read to the jurors, and, in answer to special questions, the jury found that the K-rim's useful life had expired and Hodder was not negligent in failing to have determined the useful life had expired. In denying Goodyear's post-trial motions, the trial court ruled that the useful life defense was inapplicable because, the jury having found the K-rim was not accompanied by adequate warnings, there never was a period during which with reasonable safety the rim was useful to the user. In other words, by the statute's own definition, the K-rim never had a useful life.
Hodder, of course, agrees with the trial court's ruling. Alternatively, Hodder argues the useful life defense is simply one factor for the jury to consider in determining fault. Goodyear, on the other hand, says the useful life defense is just that, a defense, a complete bar to any injury occurring after the useful life of the product has expired. Both parties select remarks made in the legislative hearings on the useful life defense which support their position. We think the legislative history is inconclusive, but this much is certain: The legislature was concerned about expanding products liability and intended to limit open-ended liability for aging products. The question for us is to what extent that purpose has been accomplished.
Section 604.03 is not a typical statute of repose. A statute of repose starts the limitation period for bringing an action from the date of manufacture or sale of the product, unlike a statute of limitations which starts from the date of injury. A typical statute of repose will specify a presumptive number of years after which an action cannot be brought. 3 Here, however, the limitation period is determined by the trier of fact after injury occurs. The jury makes this determination by "reference to users of similar products," and takes into account, among other things, natural deterioration, progress of the art, climatic and other peculiar local conditions, repair practices, the useful life as specified by the manufacturer, and any user modification.
The statute's useful life concept is ambiguous. It is not clear if useful life refers to the life of the particular product involved which caused the injury, or if the life of that particular product is to be measured by the useful life of all like products made by that particular manufacturer, or by the life of some generic product or industry norm. The statute seemingly tries to encompass all three approaches, but this presents problems. The particular product involved in the accident may conceivably have several different life spans...
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