Ott v. Alfa-Laval Agri, Inc.
| Decision Date | 01 February 1995 |
| Docket Number | ALFA-LAVAL,No. F017724,F017724 |
| Citation | 37 Cal.Rptr.2d 790,31 Cal.App.4th 1439 |
| Court | California Court of Appeals Court of Appeals |
| Parties | , Prod.Liab.Rep. (CCH) P 14,162 Carl L. OTT et al., Plaintiffs and Appellants, v.AGRI, INC. et al., Defendants and Appellants. |
Plaintiffs, owners of a family dairy farm, sued defendants, milking machine manufacturers, for lost profits and general and punitive damages. After a jury trial and various posttrial proceedings, judgment was entered for plaintiffs on two counts and for defendants on the remaining counts. Both parties appeal, raising more than 20 issues arising from virtually every stage of the case. Upon full consideration of the dispositive contentions of the parties, we conclude the trial court should have entered judgment for defendants on all counts. The published portion of our discussion concerns the appropriate factors in a negligence action for determining the recoverability of economic damages absent injury to person or property.
Plaintiffs, husband and wife, owned a dairy farm in Stanislaus County. They operated the farm with their two adult sons.
In 1970, plaintiffs purchased an automatic milking system manufactured by defendants (the 1970 system). The milking system was composed of several separate parts. At each of eight milking stalls there was a milking "claw." Four teat cups were attached by hose to the claw. Each teat cup held a disposable rubber liner that fit over the cows' teats during milking. The claw collected the milk and transferred it through a vacuum line to a collection tank.
The teat cups were held on to the cow by low level vacuum from an electric pump. When milking began, a higher vacuum was supplied by a larger electric pump. The vacuum produced by the larger pump was controlled by a pulsator so that it produced a suckling effect at the teat. The vacuum could be adjusted by means of a vacuum controller. A milk-flow sensor switch turned off the high vacuum pump when the udder emptied.
All of this equipment, except the collection tank, was manufactured by or for defendants and was known as the DeLaval 200 System. The system was sold to plaintiffs by defendants' local independent distributor, Modesto Dairy Supply (MDS). Because plaintiffs' system was the first of its kind installed in the western United States, an employee of defendants was present during MDS's installation of the milking system.
Plaintiffs were satisfied with the 1970 system, and continued using it uneventfully for the next 15 years.
In 1985, there was a surplus of milk production capacity in the United States, and, according to plaintiffs, creameries were raising milk quality standards as a means of seeking to control supply. Plaintiffs decided it was necessary to modernize their milking system to improve milk quality. They purchased from MDS the defendants' latest milking system. That system was known as the SST system, an acronym for solid-state takeoff, and is referred to herein as the 1985 or SST milking system.
The SST system operated much as the 1970 system had, and used the same high vacuum pump, vacuum controller, pulsators, claws and teat cups. There were two primary differences between the 1970 system and the SST system. First, the SST did not use a low-vacuum line to keep the teat cups attached. Second, the SST used a circuit board connected to the milk-flow sensor to cause the vacuum to shut off when milking was completed. As a result, the cups were immediately removed from the teats when milking was completed.
The eight SST circuit boards were powered by 24-volt current provided by a single transformer. Installation diagrams required the transformer to be grounded. The SST circuit board and control switches were assembled by defendants in a plastic waterproof box designed to be placed near each milking stall. A dairy barn is at times wet and dirty, however, so plaintiffs directed MDS to remove the circuit boards from the control box, and to mount the circuit boards near the 24-volt transformer in a cleaner, drier part of the barn. MDS did so.
Soon after the installation of the SST system in 1985, plaintiffs began noticing problems with the system. Initially, the teat cups were coming off too soon, so all the milk was not being evacuated from the cows' udders. After modification of the equipment and changes in milking procedures, that problem subsided to an extent. However, plaintiffs began seeing high somatic cell counts 1 and many cows were "drying off" too soon. 2
Plaintiffs sought assistance with the milking system from MDS and defendants' regional representative, and sought solutions to the perceived problems through consultations with their feed supplier, veterinarian and others. Eventually, plaintiffs became convinced their problems were caused by stray voltage emanating from the milking system and shocking the cows while they were being milked. 3
In early 1988, plaintiffs contacted defendants about this problem. In addition, plaintiffs hired an electrical consultant, Urwyler, who came to the farm to investigate the problem. The electrical consultant disconnected the ground on the low-voltage side of the transformer, and plaintiffs' problems seemed to abate for a time.
After he was contacted by plaintiffs, defendants' director of engineering retained the services of a stray-voltage consultant, and scheduled a visit at plaintiffs' farm. Defendant's stray-voltage consultant, Craine, and the director of engineering, Hunt, spent two days at plaintiffs' farm in March 1988. Craine examined the electrical aspects of the milking system and the dairy. Hunt observed milking procedures and conducted a general examination of the milking system; the evidence of the parties differed concerning the thoroughness of this examination.
At the end of the March visit, Hunt informed plaintiffs that the milking system was not causing their production problem, and that they should "look elsewhere." Accordingly, plaintiffs contacted the University of California Extension Service, which assembled a team of experts to evaluate plaintiffs' dairy operation. Plaintiffs also arranged for their own electrical consultant to be at the farm with this inspection team.
A few days before the scheduled arrival of the inspection team, Hunt and Craine came to the farm unannounced. They again conducted an examination of the farm for the next three days. At the end of the visit, Hunt again assured plaintiffs that defendants' equipment had nothing to do with plaintiffs' production problems. Hunt asked plaintiffs what they would do in light of Hunt's conclusions. Plaintiffs said they would continue with their plans for inspection by the extension service team.
The extension service team visited the farm in April 1988. A few days later, they sent a letter to plaintiffs with several suggestions for modifying their milking procedures. One suggestion was to lower the vacuum level of the milking machines. Plaintiffs made arrangements for MDS to change the vacuum level, but when the change was made, the milking machines fell off the cows. Plaintiffs restored the original vacuum level and called in another dairy supply company to evaluate the milking system.
Tony Betschart of Modern Milking Company examined and tested the system. He concluded plaintiffs needed a larger vacuum pump. He offered plaintiffs the opportunity for a "second opinion" by an independent milking equipment consultant. They agreed, and Betschart put Steven Jolley in touch with plaintiffs. After Jolley examined and tested the system, he too recommended a larger vacuum pump. Plaintiffs had the recommended pump installed immediately by Betschart in May 1988.
Betschart and Urwyler continued to search for stray voltage in the milking barn. In June 1988 they rewired the remote controller boards to eliminate stray voltage. Finally, in May 1988, plaintiffs and Betschart decided stray voltage was endemic to defendants' system, and plaintiffs directed Betschart to replace the remainder of the SST system. According to plaintiffs, their loss of production ended, and they began rebuilding their dairy herd.
This case went to trial on plaintiffs' second amended complaint, which asserted causes of action against both defendants and MDS, who settled with plaintiffs prior to completion of trial. On the first day of trial, five of the fifteen counts were determined to be against MDS only. The remaining 10 counts were alleged against defendants, in some cases alone and in some cases in conjunction with MDS. 4
At the close of plaintiffs' case, defendants moved for nonsuit. Plaintiffs were allowed to reopen, and they presented additional evidence. The court then granted defendants' motion for nonsuit as to counts 6, 7, 8, 9 and 11.
At the close of all evidence, defendants moved for a directed verdict. That motion was granted as to count 4 and in part as to count 2. As to both counts, the trial court found there was insufficient evidence of agency or any other basis to permit those counts to go to the jury on a vicarious liability theory. The court also determined there was insufficient evidence of negligence concerning the manufacture and design of the 1985 system to permit count 2 to go to the jury on that issue. The court limited counts 5 and 13 to issues arising out of the events of 1988 and afterward, and directed a defense verdict on the count 5 claim for punitive damages.
The case was submitted to the jury on four counts, and the jury returned special verdicts as follows:
Count 1, products liability, defense verdict;
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