Mahan Volkswagen, Inc. v. Hall

• Decision Date: 31 August 1982
• Docket Number: No. 01-81-0658-CV,01-81-0658-CV
• Citation: Mahan Volkswagen, Inc. v. Hall, 648 S.W.2d 324 (Tex. App. 1982)
• Parties: MAHAN VOLKSWAGEN, INC., et al., Appellants, v. Hilda HALL, et al, Appellees. (1st Dist.)
• Court: Texas Court of Appeals

Page 324

648 S.W.2d 324

MAHAN VOLKSWAGEN, INC., et al., Appellants, v. Hilda HALL, et al, Appellees.

No. 01-81-0658-CV.

Court of Appeals of Texas Houston (1st Dist.).

Aug. 31, 1982.

On Motion for Rehearing Dec. 30, 1982.

Arno Krebs, John Werner, Claude Treece, Houston, for appellants.

Daniel Goforth, Lorance & Thompson, Wayne Adams, Houston, for appellees.

Before EVANS, C.J., and WARREN and BASS, JJ.

OPINION

EVANS, Chief Justice.

This is an appeal from a judgment entered on the jury's verdict in a personal injury action. The plaintiffs are the surviving mother and children of Ms. Leslie D. Head, deceased.

Shortly after midnight on June 26, 1975, Ms. Head was driving her automobile southbound on a two-lane road in Harris County. For some reason, Ms. Head's vehicle suddenly crossed to the left over the northbound lane of the road, striking a culvert, and then hitting a utility pole broadside. Ms. Head died as a result of injuries sustained in the accident.

The vehicle being driven by Ms. Head, a 1973 Hornet, had been manufactured by appellant American Motors Sales Corporation ("American Motors"), and was purchased by Ms. Head, as a used car, two days prior to the accident from one of American Motors' franchise dealers, the appellant Astro/AMC Jeep, Inc. ("Astro"). The car had originally been acquired by Astro from American Motors, and on July 23, 1973, Astro sold it as a new car to Robert Scardino, who then gave the car to his daughter, Amanda Monaghan. On April 30, 1975, Ms. Monaghan traded the car to appellant Mahan Volkswagen, Inc. (Mahan), and on June 3, 1975, Mahan wholesaled the car to D.A. Taylor Auto Sales, who sold it back to Astro on June 12, 1975.

When the car was examined after the accident, the brake system was found to be defective, but whether this defect had existed at the time the car left the manufacturer or whether it was the result of the dealer's repair work, or the decedent's own misuse, were matters of spirited controversy in the trial of the case.

In response to special issues, the jury found in favor of the plaintiffs on issues of products liability against American Motors, Astro, and Mahan, and also on negligence issues against Astro. The jury failed to find that Ms. Head had been driving her vehicle while under the influence of intoxicating liquor or that she was operating her car at an excessive rate of speed. The jury also found that Astro had failed to disclose to Ms. Head that the automobile brakes were defective, and that this failure constituted a false, misleading, or deceptive act or practice.

On the basis of the jury's verdict, the court awarded the plaintiffs $404,910.00 as actual damages against American Motors and Astro, and an additional $809,820.00 against Astro as treble damages under the Deceptive Trade Practice/Consumer Protection Act, Tex.Bus. & Comm.Code, § 17.41 et seq. The trial court also decreed that American Motors recover from Astro 40%, and that Astro recover from American Motors 60% of any amounts paid by them, respectively, in satisfaction of the judgment for actual damages. The trial court entered a take nothing judgment in favor of Mahan. Both American Motors and Astro appeal from the judgment, and the plaintiffs also appeal, claiming that a judgment should have been entered against Mahan and that the amount of damages awarded against American Motors should have been trebled.

AMERICAN MOTORS LIABILITY

The first six points of error asserted by American Motors, the car manufacturer, challenge the legal and factual sufficiency of the evidence to support the jury's findings that the car's brake system was defective and unreasonably dangerous when it left American Motors' possession and that such defect was a producing cause of the accident. Under these points, American Motors argues that the brake system was completely changed after the car left its control, and, therefore, that the defect existing at the time of the accident could not have been present when the car left its possession. These points are overruled.

There was testimony from which the jury could have concluded that the car's brake system was defective at the time it left American Motor's possession. Amanda Monaghan testified that the first time she drove the car, the brakes pulled to the left. She said that she made at least six attempts to have Astro's service department fix the problem, but it was never able to correct the defective condition. Amanda's father, Robert Scardino, gave similar testimony.

Four expert witnesses testified regarding the condition of the brakes after the accident. All agreed that the left front brake seal leaked, allowing grease to leak on the drum and brake shoes, and that this condition could have caused the car to pull to the left when the brakes were applied. One of the experts, Lavert LaRue, testified that, in his opinion, the brake system was defective when the car came out of the factory.

American Motors contends that evidence shows that the brake system was substantially altered by Astro during its efforts to repair the defective condition, i.e., that Astro had "overturned" the right front wheel by grinding it down too thin and had replaced the brake seals, shoes and linings. Thus, it argues that because its inspection records showed no defect when the car left its possession, and since there was testimony indicating alterations of the brake system by Astro, the plaintiffs failed to meet their burden of showing that the car was defective when it left the manufacturer and that such defect was a producing cause of the accident.

A manufacturing defect may be established by circumstantial evidence. Thiele v. Chick, 631 S.W.2d 526 (Tex.App.--Houston [1st Dist.] 1982). Where, as in the instant case, there is a latent defect, it is unnecessary for the plaintiff to rebut by direct evidence all of the conceivable possibilities which would account for the defective condition, other than the existence of the defect at the time of sale. Darryl v. Ford Motor Co., 440 S.W.2d 630 (Tex.1969).

Although there was evidence from which the jury could have reached a contrary conclusion, it was entitled to infer from all the circumstances before it that the car's brakes had been defectively manufactured and that this condition existed when the car was first sold. The jury could also have inferred from the evidence that this defective condition caused the car to pull to the left when the brakes were applied, and that this was a producing cause of the accident. American Motor's first six points of error are overruled.

In its seventh and eighth points of error, American Motors contends that the evidence was legally and factually insufficient to support the jury's finding on American Motors' right to control Astro's warranty repair work on the car. In its ninth point of error, American Motors asserts that it is entitled to indemnity from Astro, since its liability may be based only upon vicarious liability for Astro's negligent repairs of the car. Because of the jury's findings against American Motors on the products liability issues, it is liable to the plaintiffs even if it is not liable for the faulty repair work of Astro. However, we will consider the merits of its contentions under those points.

It is the position of American Motors that, because the terms of its dealer's franchise agreement with Astro specifically disclaim any agency relationship between the dealer and the manufacturer, Astro must be considered an independent contractor, and that American Motors cannot be held responsible for Astro's negligence.

Although the disclaimer of agency contained in the dealer-manufacturer franchise agreement does indicate the absence of an agency relationship between the manufacturer and its dealers, there was also evidence from which the jury could have concluded that American Motors had the right and the responsibility to control the details of warranty repair work done by its franchise dealers. The franchise agreement requires dealers to perform services for consumers in accordance with procedures "from time to time specified by American". Furthermore, the American Motors Buyer Protection Plan refers to an overall warranty plan between the dealer, the consumer, and American Motors, under which warranty repair work was guaranteed by American Motors through the dealership. Thus, the jury was entitled to conclude that Astro's repair work on the plaintiffs' vehicle was performed pursuant to the guaranteed requirements of performance stipulated in the Buyer Protection Plan. American Motors's seventh, eighth, and ninth points of error are, therefore, overruled.

American Motors' points of error fourteen, sixteen, and eighteen assert that the evidence established, as a matter of law, that the decedent failed to maintain proper control of her car, that she was driving at an unreasonable rate of speed, and that she was driving while intoxicated. In its points of error 15, 17, and 19, it contends that the jury's failure to find against the plaintiffs on such issues was against the great weight and preponderance of the evidence. The defensive issues of contributory negligence, even if answered favorably to American Motors, would not bar a recovery based on products liability, and we need not consider American Motors' arguments with respect to those issues. Because the issue on the question of her driving while intoxicated was conditionally submitted as defensive theory of misuse, we will consider the evidence on that issue. Astro's ninth point of error also addresses this issue.

Dr. Jachimczyk, the county medical examiner, testified that he had not performed the autopsy on the deceased, but that the records of his office showed that the alcohol level in her spinal fluid was .156%, or .056% over the legal limit for intoxication. According to his testimony, the autopsy showed that the decedent had very little liquid or food in her stomach, and virtually no urine in...