Karlsson v. Ford Motor Co.

• Citation: 45 Cal.Rptr.3d 265,140 Cal.App.4th 1202
• Decision Date: 27 June 2006
• Docket Number: No. B173022.,B173022.
• Court: California Court of Appeals
• Parties: Agneta KARLSSON et al., Plaintiffs and Respondents, v. FORD MOTOR COMPANY, Defendant and Appellant.

45 Cal.Rptr.3d 265

140 Cal.App.4th 1202

Agneta KARLSSON et al., Plaintiffs and Respondents, v. FORD MOTOR COMPANY, Defendant and Appellant.

No. B173022.

Court of Appeal, Second District, Division 8.

June 27, 2006.

Shook, Hardy & Bacon and Frank P. Kelly, III, San Francisco; Lewis, Brisbois, Bisgaard & Smith and Steven R. Lewis; Gibson, Dunn & Crutcher, Theodore J. Boutrous, Jr., Los Angeles, William E. Thomson and J. Christopher Jennings, San Francisco, for Defendant and Appellant.

Martin N. Buchanan; Esner & Chang and Stuart B. Esner, Los Angeles; Girardi & Keese, Thomas V. Girardi, Los Angeles, Howard B. Miller, Long Beach, and David R. Lira, Los Angeles; Law Offices of Marvin Kay and Marvin Kay, Los Angeles, for Plaintiffs and Respondents.

RUBIN, J.

Defendant Ford Motor Company (Ford) appeals from the judgment entered after a jury verdict in this product liability action awarded plaintiff Johan Karlsson more than $30 million in compensatory and punitive damages. We hold that evidence and issue preclusion sanctions that were ordered against Ford for various discovery violations were properly imposed before trial. We also hold that those sanctions were, for the most part, properly applied during the trial in the form of jury instructions, evidentiary rulings, and plaintiff's jury arguments, and that any errors by the court were harmless. We also conclude that, because the court imposed discovery sanctions after it had summarily adjudicated plaintiff's punitive damages claims in Ford's favor, the court was entitled to reconsider and vacate its summary adjudication order. The court also did not err when it imposed lesser sanctions against plaintiff for failing to preserve certain evidence. We next hold the court correctly denied Ford's new trial motion based on allegations of juror misconduct. Finally, plaintiff's claims were not preempted by federal seat belt regulations because Ford waived the issue. We therefore affirm the judgment.

FACTS AND PROCEDURAL HISTORY

On November 22, 1996, five-year-old Johan Karlsson (Johan) had his spine broken and became a paraplegic when the 1996 Ford Windstar minivan in which he was riding struck a 15-ton steel coil that fell off the back of a tractor trailer and into the middle of Interstate 5. The accident happened when the driver of that tractor trailer dozed off and rear-ended a truck in front of him. Also in the van with Johan were his mother, uncle, and four siblings (the Karlssons). The Karlssons and Johan sued the somnolent truck driver and his employer, TransContinental Transport (TCT).

The Windstar van had three rows of seating, and provided combination lap belt and shoulder harnesses for all of the seats but one—the center seat of the rear, third row bench, where Johan was seated. Instead of the so-called three point harness worn by the others, Johan was provided only a lap belt. While everyone else in the van was also injured, their injuries were less severe and all six of them made full recoveries. Johan's spinal injuries were consistent with something physicians call seat belt syndrome, when a passenger restrained by only a lap belt jackknifes over at the waist due to the force of the collision. Had Johan been wearing a three-point restraint, his injuries would have been no more severe than the other occupants of the Windstar. Johan's mother testified that she adjusted Johan's lap belt for him before starting their trip, making sure it fit snugly and rested low on his hips.

TCT cross-complained against Ford for indemnity, alleging that the van had been negligently designed, thereby contributing to Johan's injuries. The Karlssons and Johan eventually added Ford as a defendant to their action on two product liability theories—that the van had a design defect and that Ford failed to warn of known dangers associated with the use of the lap belt.

Johan and the Karlssons settled with TCT in exchange for $10 million and TCT's assistance in litigating the case against Ford. When the case eventually went to trial seven years later in September 2003, Johan was the only plaintiff and Ford was the only defendant. A jury found for Johan on both of his product liability theories and awarded him $10.45 million in economic damages, $20 million for pain and suffering, and $15 million in punitive damages. The parties stipulated to reduce the total verdict to $30,341,636.50 based on findings of comparative fault by TCT and the amount of the earlier TCT settlement. (Code Civ. Proc., § 877; Civ.Code, § 1431.2.)

The issues on appeal concern numerous rulings by the court before, during, and after the trial. Before trial, Ford was the subject of several discovery motions filed by Johan and TCT. As a result of the fifth such motion, the trial court imposed issue and evidence preclusion sanctions against Ford on the issues of warnings and the technical feasibility of a safer, alternative seat belt design, as well as on an attempt by Ford to conceal certain evidence during discovery. These sanctions were presented to the jury by way of jury instructions, formed the basis for some of Johan's witness examinations and jury arguments, and were used to limit the evidence Ford could present on its behalf. As a result of the sanctions ruling, the trial court also vacated its earlier summary adjudication order striking Johan's punitive damages claim, allowing the jury to reach the issue at trial. Ford in turn sought evidence sanctions against Johan, claiming he had lost a key piece of evidence: the rear bench seat of the Karlsson's Windstar. Ford was allowed to present evidence and make argument on that issue, and a general instruction on concealing evidence was given to the jury. During jury deliberations, one juror made comments to the others about having seen a new model Windstar that did not correct the absence of a three point belt in the center rear seat, and about having seen such belts in the mid-bench seat of another Ford vehicle. Those statements prompted an unsuccessful new trial motion based on juror misconduct.

On appeal, Ford contends that the discovery sanctions were not warranted and were excessive, and that the scope of those sanctions was improperly expanded during trial by virtue of comments by the court, the argument of Johan's counsel, various evidentiary rulings, and certain related jury instructions. Ford also contends that the trial court erred by: reinstating Johan's punitive damages claim based on the discovery sanctions; allowing Johan to argue that Ford's discovery abuses were grounds for awarding punitive damages; failing to sanction Johan because he did not preserve the rear bench seat of his parents' minivan; and by failing to order a new trial for jury misconduct. Ford also contends, for the first time on appeal, that Johan's claims are preempted by federal seat belt regulations.

BACKGROUND OF THE DISCOVERY SANCTIONS

1. Product Liability Theories Applicable at Trial

Under California law, there are three ways to hold a manufacturer strictly liable for injuries caused by its product: (1) if the product is defectively manufactured; (2) if it is defectively designed; or (3) if it is distributed without sufficient warnings or instructions about its potential for harm. (Arnold v. Dow Chemical Co. (2001) 91 Cal.App.4th 698, 715, 110 Cal. Rptr.2d 722 (Arnold).) A product is defectively manufactured if it contains some unintended flaw. (In re Coordinated Latex Glove Litigation (2002) 99 Cal.App.4th 594, 606, 121 Cal.Rptr.2d 301.) There are two tests for establishing a design defect: (1) under the consumer expectations test, if the plaintiff shows that the product failed to perform as safely as an ordinary consumer would expect when using the product in an intended or reasonably foreseeable manner; and (2) under the risk-benefit test, where the trier of fact is asked to balance the risk of danger inherent in the challenged design versus the feasibility of a safer design, the gravity of the danger, and the adverse consequences to the product of a safer design. (Arnold, at p. 715, 110 Cal.Rptr.2d 722.) A determination of the risk-benefit issue involves "technical issues of feasibility, cost, practicality, risk, and benefit [citation] which are `impossible' to avoid [citation]." (Soule v. General Motors Corp. (1994) 8 Cal.4th 548, 567, 34 Cal.Rptr.2d 607, 882 P.2d 298 (Soule).) In failure to warn cases, a flawlessly designed or manufactured product becomes defective if the manufacturer fails to warn of the product's dangerous propensities. (Finn v. G.D. Searle & Co. (1984) 35 Cal.3d 691, 699-700, 200 Cal. Rptr. 870, 677 P.2d 1147.)

The jury in this case was instructed on the theories of: (1) design defect under the risk-benefit approach; and (2) failure to warn. Under the design defect theory, Johan argued to the jury that Ford could have and should have installed a seat belt in the rear bench center seat that included some type of shoulder harness. Under the failure to warn theory, Johan argued to the jury that Ford did not adequately warn of the need to wear the lap belt properly, or of the magnitude of the harm that might follow as a result. Ford's primary defense was that the collision was a severe one and that Johan's seat belt was not properly adjusted. Ford also contended that at the time it manufactured the Karlsson's Windstar, it was not feasible to install a three-point restraint system in the rear bench center seat.

2. The Discovery Sanctions

Early on in the case, retired Judge Thomas F. Nuss was appointed as the discovery referee. He issued several reports concerning discovery disputes among the parties, which were then adopted by the trial court, albeit with some modifications. At issue here are several sanctions imposed by the court as a result of Judge Nuss's fifth interim report.¹

The fifth report was issued in April 2003 in response to a motion for discovery sanctions brought by TCT because Ford had supposedly given discovery responses...