Loos v. Farmers Tractor and Implement Co., Inc., IP 88-1222-C.

CourtUnited States District Courts. 7th Circuit. United States District Court (Southern District of Indiana)
Citation738 F. Supp. 323
Docket NumberNo. IP 88-1222-C.,IP 88-1222-C.
PartiesMarshall A. LOOS and Betty Joan Loos, Plaintiffs, v. FARMER'S TRACTOR AND IMPLEMENT COMPANY, INC., and John Deere Company, Defendants.
Decision Date25 May 1990

Walter I. Rubin, Cincinnati, Ohio, Donald W. Ward, Feeney and Ward, Indianapolis, Ind., for plaintiffs.

William C. Moore, Steckbeck & Moore, Indianapolis, Ind., for defendant Farmer's Tractor.

Donald M. Snemis, Ice Miller Donatio & Ryan, Indianapolis, Ind., for defendant John Deere Co.

ENTRY ON CHOICE OF LAW ISSUE

McKINNEY, District Judge.

This cause is before the Court on a choice of law issue. At the Court's request, the parties filed additional briefs on this issue in light of two opinions handed down recently by the Indiana Supreme Court discussing the open and obvious danger rule. For the reasons set forth herein, the Court finds Indiana law should be applied in this cause.

I. FACTUAL BACKGROUND

This diversity action was brought by Ohio residents Marshall A. Loos and Betty Joan Loos, husband and wife. Defendant John Deere Company ("John Deere") is a Deleware corporation, with its principal place of business in Illinois and doing business in Indiana. Defendant Farmer's Tractor and Implement Company, Inc. ("Farmer's") is an Indiana corporation with its principal place of business in Indiana.

On July 5, 1983, the plaintiffs purchased from Farmer's a 1979 John Deere 4400 Combine. On October 20, 1986, while inspecting the engine compartment of the combine during a harvest in Ohio, plaintiff Marshall Loos suffered severe injuries to his right hand and forearm. The complaint seeks recovery from the defendants based on negligence, breach of express and implied warranties, and strict liability.

II. PROCEDURAL BACKGROUND

When the choice of law issue initially was briefed in this cause, the plaintiffs argued the substantive law of Ohio should govern this action. Defendant John Deere, on the other hand, argued for the application of Indiana law. On March 26, 1990, the plaintiffs withdrew their motion to apply Ohio law, citing two recent Indiana Supreme Court decisions, Koske v. Townsend Engineering Co., 551 N.E.2d 437 (Ind.1990), and FMC Corporation v. Brown, 551 N.E.2d 444 (Ind.1990). Noting that the withdrawal of the plaintiffs' motion did not alter the need to resolve the conflict of laws question, the Court Ordered additional briefing on the issue. The parties' supplemental briefs were filed April 30.

III. DISCUSSION

The parties now agree that Indiana law should be applied in this case because Indiana law parallels Ohio law in regard to the issues presented in this case. However, the Court cannot blindly accept the parties' conclusion on this point, and therefore must inquire into this issue for itself. This is particularly true in view of the fact that the parties disagree as to what the law is in Indiana.

The plaintiffs (who initially argued that Ohio law should be applied) contend that Indiana and Ohio law now are "essentially the same in all important respects" based on the Indiana Supreme Court's holdings in Koske and Brown. (Plaintiffs' Brief on Choice of Law Issue at 13.) In support of this contention, the plaintiffs state that until recently the only relevant differences between Indiana and Ohio law involved the application of the open and obvious danger rule in strict product liability actions. Due to the recent holdings in Koske and Brown, the plaintiffs assert, any conflict has been eliminated because the open and obvious danger rule does not apply to strict liability claims in either state.

Defendant John Deere agrees with the plaintiffs' conclusion that the laws of Indiana and Ohio are not in conflict, but for a different reason. John Deere argues that the Koske and Brown cases both were decided under the 1978 version of Indiana's Products Liability Act (the "Act"), and as such these holdings have no binding affect on this action, which is governed by the Act as amended in 1983. Therefore, John Deere contends that the open and obvious danger rule is applicable in strict liability cases in Indiana. John Deere further contends that Ohio law similarly recognizes the open and obvious danger doctrine in products liability actions.

A. Determining the Existence of a Conflict

The first step in this Court's analysis is to determine whether Indiana and Ohio law are in conflict. As the Seventh Circuit Court of Appeals pointed out in In re Air Crash Disaster Near Chicago, Ill., Etc., 644 F.2d 594, 605 n. 3 (7th Cir. 1981), cert. denied, 454 U.S. 878, 102 S.Ct. 358, 70 L.Ed.2d 187 (1981), before applying the choice of law analysis all laws must be carefully examined to determine that a conflict actually exists. See also Verlan, Ltd. v. John L. Armitage & Co., 695 F.Supp. 950, 952 (N.D.Ill.1988) (conflicts rules are applied only when a difference in law makes a difference to the outcome). When there is no disagreement among the contact states, courts are instructed to apply the law of the forum state. Id., citing International Administrators, Inc. v. Life Insurance Co. of North America, 753 F.2d 1373, 1376 n. 4 (7th Cir.1985).1

The issue therefore is whether a significant conflict exists between the products liability and negligence laws of Indiana and Ohio. For starters, both Indiana and Ohio judicially adopted the Restatement (Second) of Torts § 402A. Compare Temple v. Wean United, Inc., 50 Ohio St.2d 317, 364 N.E.2d 267, 271 (1977) and Ayr-Way Stores, Inc. v. Chitwood, 261 Ind. 86, 300 N.E.2d 335, 340 (1973). Subsequently, both Indiana and Ohio adopted product liability statutes. Compare I.C. 33-1-1.5-1 et seq. and O.R.C. § 2307.71 et seq. Although Ohio's product liability statute was not adopted until January 5, 1988, after the occurrence of the alleged tort in this case, and therefore is not applicable in this action, the statute presumably is a codification of the Ohio common law. Both Indiana and Ohio recognize the assumption of risk defense. Compare I.C. 33-1-1.5-4(b)(1) and O.R.C. § 2307.76(B). In addition, nonforeseeable misuse of a product also is a defense in both jurisdictions. Compare I.C. 33-1-1.5-4(b)(2) and Bowling v. Heil, 31 Ohio St.3d 277, 511 N.E.2d 373, 377 (1987). Furthermore, neither state recognizes contributory negligence as a defense to strict products liability. Compare Koske, 551 N.E.2d at 441, and Bowling, 511 N.E.2d at 375. In the negligence realm, both Indiana and Ohio have adopted a system of modified comparative fault. Compare I.C. XX-X-XX-X and O.R.C. § 2315.19(A)(1).

In many respects, therefore, Indiana and Ohio negligence and product liability law are substantially the same in relation to the issues presented by this litigation. On this the parties agree. Significant disagreement exists, however, regarding whether the open and obvious danger rule is applied uniformly in Indiana and Ohio. In order to address this issue, it is first necessary to review the Koske and Brown decisions.

B. Koske and Brown

A brief examination of the facts and holdings in Koske and Brown reveals why John Deere argues that these cases are inapplicable to the case at bar, and likewise why the plaintiffs ask this Court to apply these holdings to this cause.

In Koske, a meat packing employee brought suit against the manufacturer of a meat skinner/slasher machine for injuries sustained when her hand became caught in the machine. The central issue before the court was the applicability of the open and obvious danger rule to claims arising under the Act. The court, after reviewing common law and the language used to incorporate this law into the Act, specifically held that the Indiana open and obvious danger rule does not apply to strict liability claims under the Act. Id. at 440-42.2 However, the court stated that the obviousness of a danger is relevant in determining whether a product was sold in a defective condition unreasonably dangerous, and in product strict liability in evaluating "the actual state of mind of the product user if the affirmative defense of incurred risk is asserted." Id. at 440-41.

In Brown, the widow of an electrocuted laborer brought a product liability action against the manufacturer of a crane, alleging that the crane was in a defective condition unreasonably dangerous to users. The manufacturer claimed in part that incurred risk, misuse, and open and obvious danger negated its liability. The court first cited to Koske for the proposition that the open and obvious danger rule does not apply to strict liability claims under the Act. Brown at 446. The court stated, "It is now clear that evidence tending to prove an observable danger or defect of a product is simply that, evidence relevant and material to the issue of whether the product was defective and unreasonably dangerous and to the statutory affirmative defense of incurred risk." Id. The court went on sustain the appellate court's holding that the open and obvious danger rule is not an affirmative defense, but rather an essential element of the plaintiff's case.3

With these decisions in mind, the Court now addresses the specific issue of whether Indiana and Ohio law are in conflict on the applicability of the open and obvious danger rule in the context of this litigation.

C. Open and Obvious Dangers in Indiana and Ohio

As discussed previously, defendant John Deere claims that Indiana and Ohio apply the open and obvious danger rule in products liability actions, and in support of this notion argues that Koske and Brown are irrelevant to this action because they were decided prior to the 1983 amendments to the Act, by which this case is governed. The plaintiffs counter that the open and obvious danger doctrine is not a defense to strict liability in Indiana or Ohio,4 but add that the obviousness of the danger is relevant in both jurisdictions in evaluating the subjective state of mind or actual awareness of the plaintiff of the risk if the defendant...

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