Muncie Power Products v. United Technologies Auto.

• Citation: 328 F.3d 870
• Decision Date: 15 May 2003
• Docket Number: No. 01-4146.,01-4146.
• Parties: MUNCIE POWER PRODUCTS, INC., Plaintiff-Appellant, v. UNITED TECHNOLOGIES AUTOMOTIVE, INC., Defendant-Appellee.
• Court: United States Courts of Appeals. United States Court of Appeals (6th Circuit)

328 F.3d 870

MUNCIE POWER PRODUCTS, INC., Plaintiff-Appellant, v. UNITED TECHNOLOGIES AUTOMOTIVE, INC., Defendant-Appellee.

No. 01-4146.

United States Court of Appeals, Sixth Circuit.

Argued March 14, 2003.

Decided and Filed May 15, 2003.

David P. Kamp (argued and briefed), White, Getgey & Meyer, Cincinnati, Ohio, for Plaintiff-Appellant.

Donald J. Mooney, Jr. (argued), Joseph P. Thomas (briefed), Ulmer & Berne, Cincinnati, Ohio, for Defendant-Appellee.

Before COLE, GILMAN, and BRIGHT, Circuit Judges.^*

OPINION

COLE, Circuit Judge.

Plaintiff-Appellant Muncie Power Products, Inc. ("Muncie") appeals summary judgment granted for Defendant-Appellee United Technologies Automotive, Inc. ("UTA") in this diversity suit for contribution. Using Ohio's choice-of-law rules, the United States District Court for the Southern District of Ohio concluded that Indiana law applied to Muncie's claim. Because Indiana does not permit actions for contribution, the district court then granted UTA's motion for summary judgment on Muncie's contribution claim. Muncie argues that even under Ohio choice-of-law rules, Ohio law, which recognizes claims for contribution, should apply instead of Indiana law. For the reasons stated below, we AFFIRM the decision of the district court.

I. BACKGROUND

A. Factual Background

Muncie sells specialized parts to the trucking industry. In 1969, in consultation with Amos Plastics ("Amos"), Muncie designed a polyethylene hydraulic tank. From 1969 until 1976, the tank was manufactured by Amos at its Rotocast Plant in Indiana and sent to Muncie's facilities in Indiana for installation of diffusers and supply ports. In 1976, Muncie, working with engineers at the Rotocast Plant, redesigned the tank and thereby eliminated the need to install the diffusers and supply ports. In 1977, Alma Plastics Company purchased the Rotocast Plant, and in 1984 UTA acquired all the stock of Alma Plastics. According to the terms of the Stock Purchase Agreement, UTA was liable for any products liability claims after 1986.

In 1994, William Bowling was severely and permanently injured in Cincinnati, Ohio while driving behind a truck on which one of Muncie's hydraulic tanks was mounted. The tank, manufactured at the Rotocast Plant some time between 1977 and 1981, spilled hydraulic fluid onto the highway. The wet highway surface caused Bowling's car to skid out of control and crash. In 1995, Bowling filed a complaint in Ohio state court against the driver of the truck, the owner of the truck, and Muncie, asserting claims for design defect, manufacturing defect and failure to warn. Bowling sought both compensatory and punitive damages and the trial was bifurcated to consider first the issues of liability and compensatory damages, and second the issue of punitive damages. On May 7, 1998, a jury returned a verdict for Bowling in the amount of $1,500,000 for compensatory damages, finding the driver, owner, and Muncie jointly and severally liable and apportioning seventy-five percent of the damages to Muncie, and twenty-five percent to the driver and owner of the truck. A partial judgment was entered by the district court on May 15, 1998. In an effort to avoid the next stage of the trial regarding Bowling's claim for punitive damages, the parties settled the case for a total of "$2,100,000 in compensatory damages." Muncie, individually and through its insurers, agreed to pay $1,725,000 and the rest, $375,000, was paid by the driver and owner of the truck. In connection with the settlement, Bowling signed a "Full Release of All Claims and Demands" on June 1, 1998, releasing Muncie and its insurer from any future liability.

B. Procedural History

On December 24, 1995, after Bowling filed his lawsuit, Muncie asserted third-party claims against UTA. However, on December 20, 1996, Muncie voluntarily dismissed its claims against UTA as a third-party defendant. On February 26, 1999, after the trial and settlement, Muncie filed a complaint against UTA in Ohio state court seeking contribution and/or indemnification. UTA removed the case to federal district court on March 24, 1999 based on the diversity of the parties. On July 14, 1999, UTA filed two motions: (1) a motion to bifurcate the issue of Muncie's right to contribution from the underlying product liability issues; and (2) a motion to stay discovery regarding the issue of product liability. Both motions were granted on October 21, 1999.

On March 16, 2000, UTA filed a motion for summary judgment on Muncie's contribution and indemnification claims. In holding that Indiana, rather than Ohio, law applied to the case, the district court found that Indiana does not recognize claims for contribution among joint tortfeasors and granted in part UTA's motion for summary judgment. However, the district court denied UTA's motion for summary judgment on Muncie's indemnification claim and lifted the previously granted stay of discovery. Discovery then revealed that Muncie did not have a valid claim for indemnification, and Muncie voluntarily dismissed its indemnification claim on October 12, 2001. Muncie filed this timely notice of appeal from the grant of summary judgment on its contribution claim on October 23, 2001.

II. DISCUSSION

A. Standard of review

This Court reviews the district court's summary judgment decision de novo. See Watkins v. Battle Creek, 273 F.3d 682, 685 (6th Cir.2001). Summary judgment should be granted when "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." FED.R.Civ.P. 56(c). Summary judgment is appropriate if a party who has the burden of proof at trial fails to make a showing sufficient to establish the existence of an element that is essential to that party's case. See Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). In deciding a motion for summary judgment, the court must view the factual evidence and draw all reasonable inferences in favor of the nonmoving party. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986). The nonmoving party must set forth specific facts showing that there is a genuine issue for trial. A genuine issue for trial exists "if the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986).

B. Choice of law

Federal courts sitting in diversity must apply the choice-of-law rules of the forum state. Klaxon Co. v. Stentor Elec. Mfg. Co., 313 U.S. 487, 496, 61 S.Ct. 1020, 85 L.Ed. 1477 (1941); Tele-Save Merch. Co. v. Consumers Distrib. Co., 814 F.2d 1120, 1122 (6th Cir.1987). Therefore, the district court was required to apply Ohio choice-of-law rules. In tort actions, Ohio traditionally relied upon lex loci delicti, the place where the tort occurs, in determining the law to be applied in actions requiring the court to decide on the choice of law. However, the Ohio Supreme Court held in Morgan v. Biro Manufacturing, 15 Ohio St.3d 339, 342, 474 N.E.2d 286 (1984), that lex loci delicti would no longer be presumed to apply when a choice of law was at issue. The court held that Ohio courts must look instead to the balancing test set forth in the RESTATEMENT (SECOND) OF CONFLICT OF LAWS, beginning with section 146, in determining which state's law to apply. Morgan, 15 Ohio St.3d at 341-42, 474 N.E.2d 286 ("[I]t is apparent that the traditional rule of lex loci delicti is still viable in Ohio, but is no longer used to automatically determine the prevailing state law. Other interests of the states involved within the controversy must be thoroughly analyzed.... We hereby adopt the theory stated in the Restatement of the Law of Conflicts."); see also Charash v. Oberlin Coll., 14 F.3d 291, 296 (6th Cir.1994) (explaining that Ohio now applies the Restatement analysis rather than lex loci delicti); Lawson v. Valve-Trol Co., 81 Ohio App.3d 1, 4, 610 N.E.2d 425 (Ohio App.1991) (same); Barile v. Univ. of Va., 30 Ohio App.3d 190, 193, 507 N.E.2d 448 (Ohio App., 1986) (same). Therefore, in Ohio, a party may overcome the presumption that the law of the place where the injury occurs will be applied to a tort action, if it can demonstrate that another state has a more significant relationship to the action.

RESTATEMENT (SECOND) OF CONFLICT OF LAWS § 146 (1971) governs personal injuries and states that:

In an action for a personal injury, the local law of the state where the injury occurred determines the rights and liabilities of the parties, unless, with respect to the particular issue, some other state has a more significant relationship under the principles stated in § 6 to the occurrence and the parties, in which event the local law of the other state will be applied.

Though section 146 instructs courts to apply the rule of lex loci delicti, it requires the application of the law of another state if that state has a "more significant relationship" to the injury.

Section 145 of the Restatement, which governs torts generally, sets forth the analysis to be undertaken by courts in a tort action in determining whether another state has a "more significant relationship." This section directs courts to consider four factors and states in relevant part:

(1) The rights and liabilities of the parties with respect to an issue in tort are determined by the local law of the state which, with respect to that issue, has the most significant relationship to the occurrence and the parties under the principles stated in § 6.

(2) Contacts to be taken into account in applying the principles of § 6 to determine the law applicable to an issue include:

(a) the place where the injury occurred,

(b) the place where the conduct causing the injury occurred,

(c) the...