Malcolm v. Evenflo Co., Inc.

• Decision Date: 14 September 2009
• Docket Number: No. DA 08-0085.,DA 08-0085.
• Citation: 352 Mont. 325,2009 MT 285,217 P.3d 514
• Parties: Chad MALCOLM and Jessica Malcolm, Personal Representatives of the Estate of Tyler Malcolm, Plaintiffs and Appellees, v. EVENFLO COMPANY, INC., f/k/a Evenflo Juvenile Furniture Company and Evenflo Juvenile Furniture Co., Inc., Defendant and Appellant.
• Court: Montana Supreme Court

217 P.3d 514

2009 MT 285

352 Mont. 325

Chad MALCOLM and Jessica Malcolm, Personal Representatives of the Estate of Tyler Malcolm, Plaintiffs and Appellees, v. EVENFLO COMPANY, INC., f/k/a Evenflo Juvenile Furniture Company and Evenflo Juvenile Furniture Co., Inc., Defendant and Appellant.

No. DA 08-0085.

Supreme Court of Montana.

Argued February 25, 2009.

Submitted May 5, 2009.

Decided September 14, 2009.

For Appellant: James H. Goetz (argued), Goetz, Gallik & Baldwin, Bozeman, MT, Allan H. Baris, Moore, O'Connell & Refling, Bozeman, MT, Earl W. "Billy" Gunn and Charles L. Clay, Jr., Weinberg, Wheeler, Hudgins, Gunn & Dial, Atlanta, GA, Patrick J. Murphy, Williams, Porter, Day & Nevill, Casper, WY.

For Appellees: L. Randall Bishop (argued), Jarussi & Bishop, Billings, MT, Evan A. Douthit, Douthit, Frets, Rouse, Gentile & Rhodes, Kansas City, MO.

For Amicus Montana Trial Lawyers: Lawrence A. Anderson, Attorney at Law, Great Falls, MT.

For Amicus Montana Defense Trial Lawyers: Robert C. Lukes and Randall J. Colbert, Garlington, Lohn & Robinson, Missoula, MT.

For Amicus The Alliance of Automobile Manufacturers, Inc.: Randy J. Cox, Boone Karlberg, Missoula, MT.

Justice BRIAN MORRIS delivered the Opinion of the Court.

¶ 1 Chad and Jessica Malcolm (collectively Malcolms) sued Evenflo Company, Inc. (Evenflo) after their four-month-old son Tyler suffered fatal brain injuries in a rollover car accident. The Malcolms alleged that the Evenflo "On My Way" (OMW) child safety seat contained a design defect that caused Tyler's death. The Malcolms asserted strict liability in tort. Evenflo appeals from a judgment in the Sixth Judicial District, Park County, following a jury trial. We affirm in part, reverse in part, and remand for further proceedings.

¶ 2 We review the following issues on appeal:

¶ 3 Did the District Court abuse its discretion when it excluded Evenflo's evidence that the OMW model 207 complied with FMVSS 213 for the purposes of compensatory damages?

¶ 4 Did the District Court abuse its discretion by admitting evidence regarding the recall and test failures of the OMW model 206?

¶ 5 Did the District Court abuse its discretion by applying unfairly its FMVSS 213 evidentiary ruling with respect to compensatory damages?

¶ 6 Did the District Court abuse its discretion when it excluded Evenflo's FMVSS 213 compliance evidence with respect to punitive damages?

FACTUAL AND PROCEDURAL BACKGROUND

The "On My Way" Child Safety Seat

¶ 7 Evenflo manufactures child restraint systems, or child seats. Evenflo marketed the OMW as a rear-facing vehicle child safety seat intended for transporting infants weighing up to 20 pounds. Evenflo designed the OMW for use with or without its detachable base. The user routed the vehicle's seat belt through an enclosed seat belt "tunnel" on the base when they used the detachable base. The seat then latched into the base. The user also could unlatch the seat from the base and use it as a baby carrier. When used without the base, Evenflo designed the seat belt to be slipped into a U-shaped, open-ended plastic seat belt hook on one side of the seat. The user would route the seat belt over the seat's foot-end and through an open-ended plastic seat belt hook on the other side of the seat. The user then latched the seat belt into the vehicle's seat belt buckle.

¶ 8 The National Highway Traffic and Safety Administration (NHTSA) requires that all child restraint systems comply with the minimum requirements of Federal Motor Vehicle Safety Standard 213 (FMVSS 213). See 49 C.F.R. § 571.213 (2009). NHTSA required Evenflo to conduct internal testing of the OMW to determine if it complied with the FMVSS 213 standards. NHTSA and Transport Canada, the Canadian testing agency, conducted random audit FMVSS 213 tests in addition to Evenflo's internal testing.

¶ 9 FMVSS testing consists in part of a front-end sled test at speeds of 27-30 mph. See 49 C.F.R. § 571.213 (1994). In the sled test, the tester accelerates a child restraint seat and a test dummy to 30 mph and crashes it into a frontal barrier. The child restraint seat must manage the force from the crash "so that the forces imparted to the dummy are within tolerable limits." 67 Fed. Reg. 21806, 21812 (May 1, 2002). FMVSS 213 does not require side-impact, rear-impact, or rollover testing.

¶ 10 Evenflo first manufactured the OMW model 206 in May of 1994. By February of 1995, Evenflo's internal testing indicated that the production model 206 was prone to failure of the plastic seat belt hooks and/or the adjacent plastic shell. Internal videotapes showed the OMW seats breaking apart in the area of the vehicle seat belt path. The breaking caused the OMW to come loose from the test sled's seat belt. The videotapes depicted the OMW ejecting from the sled due to the open belt hook design.

¶ 11 Evenflo briefly halted production of the OMW. Evenflo notified NHTSA on June 12, 1995, that it was going to conduct a "consumer corrective action/recall campaign" as the OMW did not meet the requirements of FMVSS 213. Evenflo represented to NHTSA that the hazard posed by the design of the OMW model 206 was a "separation" under the seat's cloth padding that resulted in a sharp edge that could cause a "cut or pinch" hazard to the child. Evenflo did not notify NHTSA that the OMW's belt hooks had broken off in some tests and that these breaks had caused the OMW to detach from the vehicle restraint system.

¶ 12 Evenflo had manufactured and sold approximately 200,000 OMWs at the time of the recall. Evenflo designed a plastic "retrofit kit" to be riveted into the underside of the safety seat. Evenflo mailed the plastic retrofit kit to the current OMW users. Evenflo described the recall as a "consumer corrective action" and instructed the OMW owners to install the plastic insert using double-sided tape. Evenflo also had approximately 55,000 OMW model 206s in its inventory at the time of the recall. Evenflo installed the retrofit kit on its unsold inventory. Evenflo rebranded the retrofitted OMWs as model 207x and sent all 55,000 seats to retailers.

¶ 13 Evenflo altered the plastic mold used to create the OMW at a total cost of $2500. Evenflo added ribs, gussets, and fillets and designated the modified OMW as model 207. Evenflo did not change the OMW's open belt hook design. Evenflo resumed production of the OMW model 207 in July of 1995.

¶ 14 In 1997, Ruthie Gonzales of Merced, California, reported to Evenflo that her retrofitted model 207 OMW's belt hook had broken off during a rollover accident. The OMW came loose from the seatbelt and ended up on her front dashboard. Devon Orneleas of Patterson, California, reported to Evenflo on August 10, 1999, that both belt hooks had broken off her production model 207 in a rollover accident. Ms. Orneleas testified that the OMW came loose from the vehicle seat belt and flew forward when the seat hooks fractured and broke away. Ms. Orneleas found her baby, still secured in the child seat, on the front seat floorboard after the rollover.

¶ 15 Ms. Orneleas testified that she had reported the incident because she wanted Evenflo to know "that they had a defective product and I wanted them to recall it." Ms. Orneleas testified that when she called Evenflo, the customer service representative said that "she was shocked and hadn't heard of that before." Ms. Orneleas further testified that Evenflo had called her back and told her that the OMW was designed to withstand only a 30 mph frontal crash, rather than the physical forces present in a rollover crash.

¶ 16 Evenflo denied that it had made this statement and claimed that Ms. Orneleas "must have misunderstood." Three other OMW owners also called Evenflo in the years before the Malcolm accident to report that seatbelts had slipped out of the open belt hook of the OMW in rollover, side-impact, and rear-end situations. Evenflo did not test the OMW in rear-end, side impact, or rollover scenarios before the Malcolm accident.

The Malcolm Accident

¶ 17 The Malcolms lived south of Livingston, Montana, on a ranch near Emigrant. Chad Malcolm was the fourth generation of the family to ranch in the area. A friend gave Jessica Malcolm the OMW while Jessica was pregnant with Tyler. Jessica called Evenflo to ask if the OMW model 207 was safe to use. Evenflo assured her that the OMW was not subject to any of their recalls and that the OMW was safe to use. Evenflo Director of Product Safety Randolph Kiser testified that Jessica Malcolm did not have a right to know about the cracking during testing or the owner reports of seatbelts slipping out of the open belt hooks unless Evenflo considered the problem to be a "rampant safety related defect."

¶ 18 Jessica Malcolm drove to Emigrant on the evening of July 16, 2000, in her 1996 Suburban to pick up pizza and a movie with her sister and her son Tyler. She then drove back south on Highway 89 toward the ranch. Malcolm's sister rode in the passenger seat and Tyler rode in the back in the OMW model 207 child seat. A northbound motorist swerved into Malcolm's lane and forced Malcolm off the road. The Suburban rolled three times, traveled down a steep incline, and stopped in a ditch. The accident occurred within sight of the Malcolms' ranch.

¶ 19 Jessica Malcolm did not suffer serious injury. Her sister sustained a severe head injury. The left belt hook of the OMW broke off during the rollover. The seat belt slipped out from the open-ended belt hook on the opposite side of the seat. The forces of the accident ejected the OMW from the Suburban. The OMW came to rest approximately 60 feet from the Suburban. Tyler remained strapped in the OMW. Tyler suffered brain injuries that resulted in his death.

Pretrial

¶ 20 The Malcolms' case sounded exclusively in strict liability in tort, design defect theory. The Malcolms claimed that the Evenflo OMW model 207 infant child safety seat constituted a defectively designed product that failed...