Hutt v. Gibson Fiber Glass Products, Inc.

• Decision Date: 19 September 1990
• Docket Number: No. 89-5731,89-5731
• Parties: Prod.Liab.Rep.(CCH)P 12,587 Joseph D. HUTT, Administrator of the Estate of Kathy Sue Deuser; Jack S. Deuser, Jr.; and Todd Deuser, Co-Administrators of the Estate of Jack S. Deuser, Plaintiffs-Appellants, v. GIBSON FIBER GLASS PRODUCTS, INC., et al., Defendants, Fuhry, Inc., Defendant-Appellee.
• Court: U.S. Court of Appeals — Sixth Circuit

Page 790

914 F.2d 790

Prod.Liab.Rep.(CCH)P 12,587

Joseph D. HUTT, Administrator of the Estate of Kathy Sue

Deuser; Jack S. Deuser, Jr.; and Todd Deuser,

Co-Administrators of the Estate of Jack

S. Deuser, Plaintiffs-Appellants, v. GIBSON FIBER GLASS PRODUCTS, INC., et al., Defendants, Fuhry, Inc., Defendant-Appellee.

No. 89-5731.

United States Court of Appeals, Sixth Circuit.

Argued Feb. 2, 1990.

Decided Sept. 19, 1990.

F. Thomas Conway, William J. Nold, Eugene L. Mosley (argued), Miller, Mosley, Clare & Townes, Louisville, Ky., for plaintiffs-appellants.

Robert Stopher (argued), Boehl, Stopher, Graves & Deindoerfer, David Johnstone, Alagia, Day, Marshall, Mintmire & Chauvin, Gary Anderson, Rice, Seiller, Cantor, Anderson & Bordy, Louisville, Ky., for defendant-appellee.

Before MERRITT, Chief Judge, and JONES and RYAN, Circuit Judges.

NATHANIEL R. JONES, Circuit Judge.

Plaintiffs-appellants, Joseph D. Hutt, administrator of the estate of decedent Kathy Sue Deuser, Jack S. Deuser and Todd Deuser (collectively referred to as "the Administrators") appeal the district court's grant of summary judgment in favor of defendant Fuhry, Inc. For the following reasons, we affirm in part and reverse in part.

I.

On July 29, 1986, Jack and Kathy Deuser were electrocuted while swimming near the houseboat of Jack's brother, Courtney Deuser, in Harrod's Creek, Jefferson County, Kentucky. At the time of their deaths, the houseboat was docked at a marina owned by Steven and Charlene Habbich.

Gibson Fiber Glass Products, Inc. (Gibson) had manufactured the houseboat with a dual voltage electrical system: an alternating current (AC) circuit connected to electrical outlets on shore, and a direct current circuit (DC) drawing power from batteries. The circuits were designed to be electrically isolated from each other, and each operated on a two-wire rather than a three-wire system. The Deusers' deaths resulted from the malfunction of a switch in a light fixture on the houseboat, which caused the AC current to flow from the shore hookup into the switch, through the metal base of the fixture and then into the DC circuit. When the DC current attempted to ground itself through the outdrive of the boat, the water became electrified, killing the Deusers. Investigation subsequent to the accident showed that Gibson employees had removed the grounding wire from the light fixture prior to its installation on the houseboat.

On January 8, 1987, the Administrators filed suit against Challenger Circle F Inc. (Circle F), which manufactured the switches; Fuhry Inc. (Fuhry), which manufactured and assembled the light fixture; Gibson, which manufactured the houseboat; Courtney Deuser, owner of the houseboat; Stephen and Charlene Habbich, who owned the boat dock; and Underwriter's Laboratory, Inc. This complaint, originally filed in Jefferson County (Kentucky) Circuit Court, was removed to the United States District Court for the Western District of Kentucky, Chief Judge Johnstone presiding, after the Administrators settled with all defendants except Fuhry. The Administrators agreed as part of the settlement to indemnify the settling defendants should they be found liable to the remaining defendants. Upon completion of discovery, Fuhry moved for summary judgment.

In an order entered on March 22, 1989, the district court ruled that Fuhry was entitled to summary judgment because Gibson's employees knew of the importance of attaching the grounding wire in the light fixture; therefore, Fuhry had no duty to warn. The court further ruled that because Gibson altered the light fixture when installing it, Fuhry was entitled to the defense of KRS Sec. 411.320(1), precluding liability when a product has been substantially changed or altered.

On March 1, 1989, the Administrators moved for reconsideration, claiming that Gibson's cutting off of the ground wire did not constitute an alteration within the meaning of the Kentucky products liability statute, and that the court had applied the wrong standard for summary judgment. On May 15, 1989, the district court denied the motion. In this denial, the court stated that the standard for summary judgment has remained the same since 1986 when it became the same as that of a directed verdict. Moreover, the court noted that an alternative ground for granting summary judgment existed under Kentucky law, because a defendant passively at fault for falling to detect a hazard may seek indemnity from the one who created the danger. Therefore, even if Fuhry were liable for failing to detect the faulty switch, it could recover from Circle F, the manufacturer. Since the Administrators had agreed to indemnify Circle F, the court found that any recovery granted from Fuhry would have to come from the Deusers' estates under the terms of the settlement. This timely appeal followed.

II.

This court has stated the appropriate standard for granting summary judgment:

[O]n a motion for summary judgment the movant has the burden of showing conclusively that there exists no genuine issue as to a material fact and the evidence together with all inferences to be drawn therefrom must be read in the light most favorable to the party opposing the motion.

Blakeman v. Mead Containers, 779 F.2d 1146, 1150 (6th Cir.1985) (citations omitted). A court deciding a motion for summary judgment must determine "whether the evidence presents a sufficient disagreement to require submission to a jury or whether it is so one-sided that one party must prevail as a matter of law." Anderson v. Liberty Lobby, 477 U.S. 242, 251-52, 106 S.Ct. 2505, 2512, 91 L.Ed.2d 202 (1986). Appellate review of a grant of summary judgment is de novo. Pinney Dock and Transport Co. v. Penn Cent. Corp., 838 F.2d 1445, 1472 (6th Cir.), cert. denied, 488 U.S. 880, 109 S.Ct. 196, 102 L.Ed.2d 166 (1988).

The Administrators argue that genuine issues of material fact exist as to three issues: 1) whether Fuhry had a duty to warn consumers against use of the light fixture in dual voltage systems; 2) whether Gibson's action in clipping the ground wire in the light fixture constitutes an alteration under the Kentucky products liability statute; and 3) whether the indemnification clause of the settlement agreement precludes judgment against Fuhry for malfunction of the fixture. These arguments will be addressed in order.

A.

The Administrators contend that Fuhry had a duty to warn installers of the light fixture not to use the fixture in a dual voltage application or a two wire system and not to remove the ground wire. Fuhry complains that the Administrators failed to raise this claim in the pleadings and raised it only in its motion for summary judgment, thereby precluding review by the court. Fuhry's claim is incorrect. In response to a motion before the state court on March 25, 1988, the Administrators raised the issue of Fuhry's breach of its duty to warn, and it is therefore properly before this court. Failure to warn when there is a duty to do so may give rise to an action in negligence or strict liability. The general rule, however, is that there is no duty to warn the user of a product when the user is aware of the product's danger. See Garrison v. Rohm & Haas Co., 492 F.2d 346, 352 (6th Cir.1974).

The district court addressed the duty to warn issue only as to Gibson's removal of the ground wire. The court found that the ground wire was designed to carry current which mistakenly flowed from a short circuit safely into a non-conductor and found that it is undisputed that Gibson's employees cut the wire and did not properly attach it to guard against malfunctions. The district court also found that Gibson's employees admitted they knew the purpose of the wire, that the fixture was to be used with a grounding circuit, and that Gibson was aware of the dangers of ignoring its safety function. The court therefore concluded that Fuhry had no duty to warn Gibson of the danger of removing the grounding wire from the fixture because Gibson knew of the relevant dangers.

The Administrators present two arguments on the issue of duty to warn. First, the Administrators assert that Carlos Green, Gibson's electrician, did not understand the danger of severing the grounding conductor because he was uneducated...