Hubbard Mfg. Co., Inc. v. Greeson

Decision Date01 December 1987
Docket NumberNo. 68S01-8712-CV-1109,68S01-8712-CV-1109
PartiesHUBBARD MANUFACTURING CO., INC., Appellant (Defendant Below), v. Elizabeth GREESON, as Administratrix of the Estate of Donald F. Greeson, Deceased, Appellee (Plaintiff Below).
CourtIndiana Supreme Court

Peter G. Tamulonis, Donald L. Dawson, Kightlinger, Young, Gray & DeTrude, Indianapolis, for appellant.

C. Warren Holland, Michael W. Holland, Holland & Tabor, Indianapolis, for appellee.

SHEPARD, Chief Justice.

The question is whether an Indiana court should apply Indiana tort law when both parties are residents of Indiana and the injury occurred in Illinois.

Plaintiff Elizabeth Greeson, an Indiana resident, filed a wrongful death action in Indiana against defendant Hubbard Manufacturing Co., Inc., an Indiana corporation. The defendant corporation built lift units for use in cleaning, repairing, and replacing streetlights.

On October 29, 1979, Donald Greeson, plaintiff's husband and also a resident of Indiana, happened to be working in Illinois maintaining street lights. He died that day while using a lift unit manufactured by Hubbard in Indiana.

Elizabeth Greeson's suit alleged that defective manufacture of Hubbard's lift unit caused her husband's death. When she raised the possibility that Illinois products liability law should be applied to this case, Hubbard moved the trial court for a determination of the applicable law. The trial court found that Indiana had more significant contacts with the litigation but felt constrained to apply Illinois substantive law because the decedent's injury had been sustained there. The Court of Appeals expressed the opinion that Indiana law should apply but concluded that existing precedent required use of Illinois law. Hubbard Manufacturing Co. v. Greeson (1986), Ind.App., 487 N.E.2d 825.

We grant transfer to decide whether Indiana or Illinois law applies.

Greeson's complaint alleged two bases for her claim: "the defective and unreasonably dangerous condition of a lift type vehicle sold ... by the defendant" and "the negligence of the defendant." Both theories state a cause for liability based on Hubbard's manufacture of the vehicle in Indiana.

The differences in Indiana law and Illinois law are considerable. First, in Indiana a finding that the product represented an open and obvious danger would preclude recovery on the product liability claim. Bemis Co., Inc. v. Rubush (1981), Ind., 427 N.E.2d 1058, cert. denied 459 U.S. 825, 103 S.Ct. 57, 74 L.Ed.2d 61 (to impress liability on manufacturers the defect must be hidden and not normally observable). Under Illinois law, the trier of fact may find product liability even if the danger is open and obvious. Derrick v. Yoder Co., 88 Ill.App.3d 864, 43 Ill.Dec. 897, 410 N.E.2d 1030 (1980). Second, under Indiana law misuse would bar recovery. Ind.Code Sec. 33-1-1.5-4(b)(2) (Burns 1987 Supp.). In Illinois misuse merely reduces a plaintiff's award. Coney v. J.L.G. Industries, Inc., 97 Ill.2d 104, 73 Ill.Dec. 337, 454 N.E.2d 197 (1983) (comparative negligence applicable in strict liability). These differences are important enough to affect the outcome of the litigation.

Choosing the applicable substantive law for a given case is a decision made by the courts of the state in which the lawsuit is pending. An early basis for choosing law applicable to events transversing several states was to use the substantive law of the state "where the wrong is committed" regardless of where the plaintiff took his complaint seeking relief. Baltimore and Ohio Southwestern Railway Co. v. Reed (1902), 158 Ind. 25, 29, 62 N.E.2d 488, 489.

For contract cases, the choice-of-law rule dictated that the substantive law of the place where the breach took place governed the lawsuit. This Court modified the traditional rule in W.H. Barber Co. v. Hughes (1945), 223 Ind. 570, 63 N.E.2d 417. The modified rule allowed the state with the most significant contacts to apply its substantive law even if the breach occurred in another state. "The court will consider all acts of the parties touching the transaction in relation to the several states involved and will apply as the law governing the transaction the law of that state with which the facts are in most intimate contact." Id. at 586, 63 N.E.2d at 423. The modified rule provided our courts flexibility when a breach occurred in a state which had insignificant contact with the transaction.

The historical choice-of-law rule for torts, like contracts, was lex loci delicti commissi, which applied the substantive law where the tort was committed. Burns v. Grand Rapids and Indiana Railroad Co. (1888), 113 Ind. 169, 15 N.E. 230. The tort is said to have been committed in the state where the last event necessary to make an actor liable for the alleged wrong takes place.

Rigid application of the traditional rule to this case, however, would lead to an anomalous result. Had plaintiff Elizabeth Greeson filed suit in any bordering state the only forum which would not have applied the substantive law of Indiana is Indiana. Ingersoll v. Klein, 46 Ill.2d 42, 262 N.E.2d 593 (1970) ("most significant contacts" rule best serves the interest of Illinois...

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