Oberg v. Honda Motor Co., Ltd.

• Decision Date: 25 September 1991
• Citation: 108 Or.App. 43,814 P.2d 517
• Court: Oregon Court of Appeals
• Parties: , 60 USLW 2138 Karl L. OBERG, Respondent, v. HONDA MOTOR CO., LTD.; Honda R & D Co., Ltd; and American Honda Motor Co., Inc., Appellants. A8709-05897; CA A61587.

Page 517

814 P.2d 517

108 Or.App. 43, 60 USLW 2138

Karl L. OBERG, Respondent, v. HONDA MOTOR CO., LTD.; Honda R & D Co., Ltd; and American Honda Motor Co., Inc., Appellants.

A8709-05897; CA A61587.

Court of Appeals of Oregon.

Argued and Submitted April 22, 1991.

Decided June 26, 1991.

Reconsideration Denied Sept. 25, 1991.

Jeffrey R. Brooke, Phoenix, Ariz., argued the cause, for appellants. With him on the briefs, were Paul G. Cereghini and Bowman and Brooke, Phoenix, Ariz., and James H. Gidley, Thomas W. Brown and Cosgrave, Vergeer & Kester, Portland.

William A. Gaylord, Portland, argued the cause, for respondent. With him on the brief, were Richard O. Thomas and Gaylord, Thomas & Eyerman, P.C., and Raymond F. Thomas and Royce, Swanson & Thomas, Portland.

Before WARREN, P.J., and RIGGS and EDMONDS, JJ.

EDMONDS, Judge.

Defendants ¹ appeal a judgment in favor of plaintiff in this product liability case. They make multiple assignments of error. We affirm.

At trial, plaintiff offered evidence that he was injured while riding a three-wheeled 1985 model Honda ATC 350X all-terrain vehicle (ATV) that was manufactured and sold by defendants. ² While his two brothers watched, he attempted to climb a steep embankment with the ATV. His brothers testified that one of them stood in the middle of a nearby road to serve as traffic lookout and that plaintiff was moving at "walking speed" when he went up the embankment. Although plaintiff was an experienced ATV operator, his first attempt to make it up the embankment was unsuccessful and he rolled back down. He tried again, leaning farther forward, and climbed until the front wheel reached the top of the embankment. At that point, the front wheel came off the ground and the ATV overturned backwards. It tumbled to the base of the embankment and came to rest on top of plaintiff. He sustained multiple facial fractures, lacerations to one of his eyes and damage to his inner ear. As a result, he underwent extensive reconstructive plastic surgery. At trial, he testified that he continued to experience double vision, headaches, reduced short-term memory and cognitive limitations.

Plaintiff alleged, inter alia, that defendants had failed to perform reasonable safety tests on the ATV and that they were negligent in selling it, when they knew or should have known that it was a defective product. The case was tried to a jury, which awarded damages. ³

Defendants moved for judgment notwithstanding the verdict, ORCP 63, and, in the alternative, for a new trial. ORCP 64. While those motions were pending, defendants discovered two previously unknown eyewitnesses to plaintiff's accident. According to defendants, the witnesses, James Ball and his daughter, Jennifer, would testify that, while they were travelling in a truck on the road near the site of plaintiff's accident, they first saw him at least 50 to 100 yards in the distance, moving at "running" speed, that is, 10 to 20 miles per hour. They did not see plaintiff start up the embankment, nor the accident itself, because of foliage on both sides of the road. No one was standing in the road as a lookout; plaintiff was not leaning as far forward on the ATV as he contended at trial; and, after the accident, the ATV came to rest near, but not on top of, plaintiff.

Jennifer was seven years old at the time of the accident. She and James made their statements nearly four years after the accident. James later said in an affidavit that he had read plaintiff's trial testimony regarding the accident and could not disagree with any of it. Defendants filed a second motion for new trial on the basis of the new evidence. The trial court denied all of the motions.

Defendants first assign as error the trial court's allowing plaintiff to read into evidence excerpts from several internal staff memoranda and an Advanced Notice of Proposed Rulemaking of the Consumer Product Safety Commission (CPSC) regarding ATV's. ⁴ The memoranda were dated from early 1984 to October, 1985. Defendants received all of the CPSC documents before plaintiff's accident. The excerpts said that, between January, 1982, and April, 1985, there were as many as 100,000 reported ATV-associated injuries and over 150 ATV-associated deaths in the United States. According to CPSC staff, a large number of the ATV accidents involved rearward "flip-overs" that resulted in "entrapment and crushing injuries to the driver." Two of the excerpts reveal that the "flip-overs" likely were a result of the "relatively light" front end of the ATV's as well as the "deceptive impression of stability given by a tricycle-type vehicle[.]"

Defendants argue that the CPSC excerpts are inadmissible hearsay. Plaintiff argues that the excerpts are not hearsay, because they were not offered for the truth of the matter asserted, but only to show that defendants were on notice that its ATV's could overturn rearward. In reply, defendants assert that admission of the evidence for that purpose is a "ruse," because it permits the jury to hear what otherwise is inadmissible evidence.

Hearsay is "a statement, other than one made by a declarant while testifying at the trial or hearing, offered in evidence to prove the truth of the matter asserted." OEC 801(3). In Sheedy v. Stall, 255 Or. 594, 597, 468 P.2d 529 (1970), the Supreme Court said:

"Where the out-of-court statement has relevancy both as evidence that the statement was made and also as evidence of the fact asserted in the statement, the problem is more difficult. This does not render the statement inadmissible, but limits the use to which the statement can be put."

Because plaintiff did not offer the CPSC excerpts to prove that his ATV was defective, they are not hearsay. They are admissible for the limited purpose of showing defendants' knowledge of the purportedly harmful characteristics of its product. See Reiger v. Toby Enterprises, 45 Or.App. 679, 682, 609 P.2d 402 (1980).

Defendants next argue that the CPSC excerpts are unfairly prejudicial, because they distort the subject and substance of the documents from which they were extracted. OEC 403 provides:

"Although relevant, evidence may be excluded if its probative value is substantially outweighed by the danger of unfair prejudice, confusion of the issues, or misleading the jury, or by considerations of undue delay or needless presentation of cumulative evidence."

No objection was made under OEC 403 expressly. Even if the objection was preserved, the court properly balanced the probative value of the evidence against its prejudicial effect. The evidence was probative regarding plaintiff's claim that defendants knew that their product was defective. Also, the trial court allowed defendants' expert witness to read additional portions of the CPSC documents into the record and add to them his interpretations and comments. Finally, the court twice instructed the jury that it was to consider the evidence only on the issue of notice. ⁵ Under the circumstances, the trial court did not abuse its discretion by admitting the evidence.

Defendants next argue that the CPSC excerpts should not have been admitted, because they violate the "substantial similarity" rule by referring to dissimilar accidents. That argument fails. Although the excerpts may have contained some evidence of dissimilar accidents, defendants did not seek to excise those portions from what was read to the jury, but instead objected to them in their entirety. Because the objections did not inform the trial court with particularity as to what evidence was objectionable, the court did not abuse its discretion. Stanfill v. TAT (U.S.A.) Corp., 76 Or.App. 332, 337, 709 P.2d 717 (1986), rev. den. 300 Or. 562, 715 P.2d 94 (1986); Meislahn v. Demorest, 48 Or.App. 631, 617 P.2d 322 (1980).

Defendants' second assignment of error challenges the jury's punitive damages award as unconstitutional and excessive. In particular, defendants assert that the punitive damages award violates their rights under Article I, section 16, of the Oregon Constitution ⁶ and the Fourteenth Amendment. We consider defendants' Oregon constitutional arguments first. Cole v. Dept. of Rev., 294 Or. 188, 190, 655 P.2d 171 (1982). ⁷

Article I, section 16, provides, in part:

"Excessive bail shall not be required, nor excessive fines imposed. Cruel and unusual punishments shall not be inflicted, but all penalties shall be proportional to the offense."

Defendants argue that, under section 16, a $5 million punitive damages award is either an excessive fine or a disproportional penalty. ⁸ No Oregon case has decided this issue. Article I, section 16, of the Oregon Constitution was modeled after the same section of the Indiana Constitution. See Carey, The Oregon Constitution 28 (1926). The Indiana Supreme Court, in recognition of the similarities between Article I, section 16, of the Indiana constitution and the Eighth Amendment, has concluded that section 16 requires no more and no less than the Eighth Amendment. Norris v. State, 271 Ind. 568, 394 N.E.2d 144 (1979). ⁹ The United States Supreme Court has held that the Eighth Amendment does not apply in civil actions between private parties. See Browning-Ferris Industries of Vermont, Inc. v. Kelco Disposal, Inc., 492 U.S. 257, 109 S.Ct. 2909, 106 L.Ed.2d 219 (1989). We hold likewise regarding section 16.

Defendants argue that the award of punitive damages violates the Due Process Clause of the Fourteenth Amendment. In particular, they assert that ORS 30.925 ¹⁰ gives the jury "standardless discretion to award punitive damages," because it "contains no requirement that the award be proportional to plaintiff's injury, no specific guidelines for fixing the amount of the award, and no maximum" and allows the jury to consider their net worth. They also assert that, because Oregon courts lack the power to review jury verdicts for excessiveness under Article VII (amended), section 3, of the Oregon Constitution, see Van...