Kemp v. Miller

• Decision Date: 16 April 1990
• Docket Number: A-C,No. 88-1911,88-1911
• Citation: 453 N.W.2d 872,154 Wis.2d 538
• Parties: , 58 USLW 2652, Prod.Liab.Rep. (CCH) P 12,439 Mary Ellene KEMP, and Walter Albert Kemp, Plaintiffs-Appellants, v. Goldie Marie MILLER, and Civilian Health & Medical Program of the Uniform Services, Defendants, Budget Rent-ar Systems, Inc., a foreign corporation, Defendant-Third Party Plaintiff-Respondent-Cross Appellant, Ford Motor Company, a foreign company, Third Party Defendant-Cross Respondent.
• Court: Wisconsin Supreme Court

Page 872

453 N.W.2d 872

154 Wis.2d 538, 58 USLW 2652,

Prod.Liab.Rep. (CCH) P 12,439

Mary Ellene KEMP, and Walter Albert Kemp, Plaintiffs-Appellants, v. Goldie Marie MILLER, and Civilian Health & Medical Program of the Uniform Services, Defendants Budget Rent-A-Car Systems, Inc., a foreign corporation Defendant-Third Party Plaintiff-Respondent-Cross Appellant Ford Motor Company, a foreign company, Third Party Defendant-Cross Respondent.

No. 88-1911.

Supreme Court of Wisconsin.

Argued Jan. 25, 1990.

Decided April 16, 1990.

Lew A. Wasserman, Milwaukee, for plaintiffs-appellants.

David A. Roth and Peregrine Law Offices, on brief, Milwaukee, and Neil D. O'Connor, argued, O'Connor & Schiff, Chicago, Ill., on brief, for defendant-third party plaintiff-respondent-cross appellant.

James R. Clark, argued, Jerome M. Organ, Foley & Lardner, Milwaukee and Gary L. Hayden and Ford Motor Company, of counsel, Dearborn, Mich., for third party defendant-cross respondent.

CECI, Justice.

This case is before the court on certification from the court of appeals, pursuant to sec. (Rule) 809.61, Stats. The plaintiffs, Mary Ellene Kemp and Walter Albert Kemp, commenced a personal injury action against the defendant, Budget Rent-A-Car Systems, Inc. (Budget), alleging, inter alia, that Budget had rented a defective and unreasonably dangerous vehicle to Mary Kemp. The plaintiffs further alleged that Budget was strictly liable in tort for injury sustained by the plaintiffs as a result of the defective and unreasonably dangerous condition of the vehicle. Budget, in turn, commenced a third-party action against Ford Motor Company (Ford), the manufacturer of the vehicle, alleging that if the rental car were in fact defective, Budget would be entitled to indemnification or contribution from Ford in accordance with law.

The plaintiffs appeal and Budget cross-appeals from a judgment of the circuit court for Milwaukee county, Patricia S. Curley, Circuit Judge. The circuit court granted summary judgment in favor of Budget and Ford, dismissing the complaint and the third-party complaint filed against those parties. In granting summary judgment, the circuit court ruled that Budget was not a manufacturer or a seller of products under Wisconsin's strict products liability law and that the plaintiffs had, therefore, failed to state a claim against Budget. The circuit court further ruled that, even if the plaintiffs had stated a products liability claim, there was insufficient evidence in the record from which a reasonable jury could conclude that the rental car was defective at the time that it left the possession and control of either Budget or Ford.

Two issues are presented on this appeal. The first issue is whether a commercial lessor may be held strictly liable in tort for damages resulting from the lease of a defective and unreasonably dangerous product; and, if so, whether such liability is limited to manufacturing and design defects or whether it extends to defects occurring after the product leaves the manufacturer. The second issue is whether the circuit court erred in granting summary judgment to Budget and Ford. We hold that a commercial lessor may be held strictly liable in tort for damages resulting from the lease of a defective and unreasonably dangerous product and that such liability extends both to manufacturing and design defects and to defects arising after the product leaves the manufacturer. We further hold that the circuit court erred in granting summary judgment in this case. Accordingly, we reverse the judgment of the circuit court.

The facts of this case follow. On January 29, 1985, Mary Ellene Kemp (Kemp) rented a 1984 Ford Tempo GL from Budget's airport office in Milwaukee, Wisconsin. The rental car had been manufactured by Ford and had been purchased new by Budget from an authorized Ford dealer. Kemp drove the car to Kenosha, Wisconsin, where she picked up her two sisters, Nora Coan and Goldie Miller (Miller). The sisters then drove together to Craigsville, West Virginia, where they attended their brother's funeral.

On February 2, 1985, the sisters were traveling back to Wisconsin from West Virginia. At approximately 7:30 p.m., Miller was driving westbound on Interstate Highway 70 near Cambridge, Ohio. The road was wet from melting snow which had fallen earlier in the day. As the sisters approached an overpass on Interstate 70, they heard a loud noise which sounded like a gunshot or a blowout. Upon hearing the sound, Miller applied the brakes and the rental car fishtailed. Miller then lost control of the car. The vehicle first spun clockwise, causing the right front fender portion of the car to hit a bridge abutment. The vehicle then spun in the opposite direction and came to rest facing east in the right-hand lane of westbound traffic. The sisters quickly exited the vehicle.

Shortly thereafter, a semi truck approached the scene of the accident. The driver of the semi was traveling in the right-hand lane of westbound traffic when he observed the rental car in the middle of that lane. The driver attempted to avoid the rental car, but struck the car in the area of the right front fender. The individuals who towed the rental car from the scene of the accident informed the sisters that no tire had blown on the car but that the right front tie rod of the car was broken.

Kemp and her husband, Walter Albert Kemp, commenced an action against Miller and Budget for damages resulting from personal injuries sustained by Kemp during the one-car accident. The plaintiffs alleged that Miller had been negligent in controlling the vehicle and that Budget had been negligent in maintaining and servicing the vehicle. ¹ The plaintiffs further alleged that Budget was strictly liable in tort for damages resulting from the lease of a defective and unreasonably dangerous vehicle. Budget commenced a third-party action against Ford, alleging that Ford had manufactured and designed the vehicle and that if it were in fact defective, Budget would be entitled to contribution or indemnification from Ford in accordance with law. The plaintiffs did not sue Ford directly.

Budget subsequently filed a motion for summary judgment against the plaintiffs, arguing that it was neither a manufacturer nor a seller under Wisconsin's strict products liability law and that the plaintiffs had, therefore, failed to state a products liability claim against it. Budget further argued that even if the plaintiffs had stated a claim, they had failed to show that the vehicle was in a defective condition when it left Budget's possession and control. Ford similarly filed a motion for summary judgment against Budget, arguing, inter alia, that the plaintiffs had failed to show that the vehicle was in a defective condition when it left Ford's possession and control. In this regard, Ford's motion sounded against the plaintiffs.

In support of their respective motions, Budget and Ford relied on the affidavits of two consulting engineers who had been employed by Budget to examine the rental car and to test the fractured surfaces of the tie rod. The engineers concluded that the tie rod was not bent, cracked, or broken before the accident but that it broke during the accident when the rental car hit the bridge abutment or when the semi truck hit the rental car. Budget relied, in addition, on the deposition testimony of James Savignac who served as the operations manager of Budget's airport office in Milwaukee, Wisconsin, in February of 1985. Savignac testified that Budget follows a preventive maintenance program for all its rental cars and that, to his knowledge, no work had been performed on either the steering components or the body of the rental car prior to the time that it was delivered to Kemp. Savignac further testified that he was not aware of any consumer complaints or manufacturer recalls concerning the rental car prior to the time that it was delivered to Kemp.

In opposition to the motions for summary judgment, the plaintiffs relied, in part, on the deposition of Stanley Weiss, an engineer experienced in the failure of metallic systems. Weiss examined, inter alia, a tie rod exemplar identical to the right front tie rod of the rental car; the report of Budget's consulting engineers; the deposition of Miller relating the facts of the accident; and information supplied by the National Highway Traffic Safety Administration and Department of Transportation concerning manufacturer recalls, consumer complaints, and defect investigations on 1984 Ford Tempos. Based on his examination of those materials, Weiss gave his opinion, to a reasonable degree of engineering certainty, that the noise heard by the sisters prior to the accident was the breaking of the tie rod and that the broken tie rod substantially caused the accident.

The plaintiffs relied, in addition, on the deposition of Royce Donner, an engineer experienced in accident reconstruction and design and failure analysis. Donner reviewed photographs of the rental car after the accident; copies of the accident reports; the depositions of Miller and Kemp relating the facts of the accident; and the accident witness statements of Miller and the driver of the semi truck. Based on his review of those materials, Donner gave his opinion, to a reasonable degree of engineering certainty, that if the noise heard by the sisters was the breaking of the tie rod, then the tie rod "was substandard and most likely was defective."

The circuit court heard the motions for summary judgment on July 18, 1988. By order entered August 12, 1988, the circuit court granted summary judgment to Budget and Ford, dismissing the complaint and the third-party complaint filed against those parties. In granting the motions, the circuit court ruled that Budget was not a manufacturer or a seller of products under Wisconsin's strict products liability law and that the plaintiffs had, therefore, failed to state a products liability claim...