Staudt v. Artifex Ltd.

• Decision Date: 10 August 1998
• Docket Number: No. 96-C-533.,96-C-533.
• Citation: 16 F.Supp.2d 1023
• Parties: Steven STAUDT and Tracy Staudt, Plaintiffs, v. ARTIFEX LTD. and Admiral Insurance Company, Defendants.
• Court: U.S. District Court — Eastern District of Wisconsin

16 F.Supp.2d 1023

Steven STAUDT and Tracy Staudt, Plaintiffs, v. ARTIFEX LTD. and Admiral Insurance Company, Defendants.

No. 96-C-533.

United States District Court, E.D. Wisconsin.

August 10, 1998.

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Ronald S. Goldser, Keelyn M. Friesen, Zimmerman & Reed, Minneapolis, MN, for Steven Staudt, Tracy Staudt.

Timothy J. Strattner, Schellinger & Doyle, S.C., Brookfield, WI, for Admiral Ins. Co.

Janice Merrill, Artifex Ltd., Maitland, FL, for Artifex Ltd.

DECISION and ORDER

MYRON L. GORDON, District Judge.

The plaintiffs, Steven and Tracy Staudt, who are husband and wife, filed this action on May 6, 1996, against Artifex, Ltd., the manufacturer of an allegedly defective bone screw device (or "spinal fixation" device) which was implanted into his spine and the insurer of Artifex, Admiral Insurance Company ["Admiral"]. This hardware is designed to be implanted in a patient's back by a doctor in performing corrective spinal surgery.

Presently before the court are two motions for summary judgment: (1) defendants' motion for summary judgment "Dismissing All Claims Against Defendants"; and (2) Admiral's motion for summary judgment for "Claims-Made Coverage." The motion for summary judgment dismissing all claims will be granted in part and denied in part. Admiral's motion for summary judgment "for claims-made coverage" will be granted.

I. SUMMARY JUDGMENT STANDARD

A motion for summary judgment will be granted when there are no genuine issues of material facts and the movant is entitled to judgment as a matter of law. Rule 56(c), Federal Rules of Civil Procedure. In order to succeed on a motion for summary judgment, the movant must show the following: (1) no genuine issue of material fact exists; and (2) its entitlement to judgment as a matter of law. See Celotex Corp. v. Catrett, 477 U.S. 317, 322-23, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). Only "genuine" issues of "material" fact will defeat an otherwise properly supported motion for summary judgment. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986); Patel v. Allstate Ins. Co., 105 F.3d 365, 370 (7th Cir.1997).

As defined by the United States Supreme Court, "material" facts are those facts which, under the governing substantive law, "might affect the outcome of the suit." Anderson, 477 U.S. at 248, 106 S.Ct. 2505. A dispute over such facts is "genuine" if "the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Id. Pursuant to the standard summary judgment procedure, the movant identifies for the court, "with reference to the record and to the law," the portions of the record that show that no genuine issues of material fact exist. See Logan v. Commercial Union Ins. Co., 96 F.3d 971, 979 (7th Cir.1996). Once the movant satisfies this step, the non-movant must produce evidence beyond the pleadings to show that there are genuine issues of material fact in order to survive a motion for summary judgment. Celotex Corp., 477 U.S. at 324, 106 S.Ct. 2548. Where the movant is the party who does not bear the burden of proof at trial, it "need only point to the insufficiency of the plaintiff's evidence to shift the burden to the plaintiff to raise genuine issues of fact as to each claim by substantial evidence." DeBraska v. City of Milwaukee, 11 F.Supp.2d 1020, 1025 (E.D. Wis. June 19, 1998), quoting First Pac. Networks, Inc. v. Atlantic Mut. Ins. Co., 891 F.Supp. 510, 513 (N.D.Cal.1995). If the evidence presented by the opposing party is "merely colorable," or is not "significantly probative," summary judgment may be granted. Anderson, 477 U.S. at 249-250, 106 S.Ct. 2505.

II. MOTION FOR SUMMARY JUDGMENT DISMISSING ALL OF THE CLAIMS

A. Undisputed Facts

As required under Local Rule 6.05(a), the defendants included with their motion for summary judgment proposed findings of fact which they believed constituted the factual propositions upon which there is no genuine issue of material fact. The plaintiffs did not file a response to the defendants' proposed findings. However, the plaintiffs did file additional proposed findings of fact which are also allegedly undisputed. See Local Rule 6.05(b)(2) (Permits the party opposing a motion for summary judgment to present additional propositions deemed to be relevant to the motion.) The defendants did not file a response to the plaintiffs' additional proposed findings although they are permitted to do so under Local Rule 6.05(c).

Upon deciding a motion for summary judgment, the court will conclude that there is no genuine issue of material fact as to any proposed finding of fact to which no proper response is set out. Stewart v. McGinnis, 5 F.3d 1031, 1034 (7th Cir.1993), cert. denied, 510 U.S. 1121, 114 S.Ct. 1075, 127 L.Ed.2d 393 (1994); Local Rule 6.05(d). Because neither party filed a response to the other's proposed factual assertions and because none of the respective factual propositions contradict each other, I conclude that the factual assertions proposed by the respective parties are admitted.

On November 4, 1991, Dr. Sanford Larson performed spinal fusion surgery on the plaintiff, Steven Staudt, at Froedtert Memorial Lutheran Hospital ["Froedtert"] in Wauwatosa, Wisconsin. (Defendants' Proposed Findings ["Defendants' P.F."] ¶ 2; Staudt Proposed Findings ["Staudt P.F."] ¶ 2.) During the surgery, Dr. Larson implanted a spinal fixation device into Mr. Staudt which was manufactured by Artifex. (Defendants' P.F. ¶ 3; Staudt P.F. ¶ 3.) Mr. Staudt was not informed that any instrumentation would be implanted during the surgery. (Staudt P.F. ¶ 3.) At no time prior to the surgery did Mr. Staudt have any contact with any person employed by or representing defendant, Artifex, nor did Mr. Staudt ever see any advertising or promotional material concerning the Artifex "spinal fixation device" utilized in his surgery. (Defendants' P.F. ¶ 4.) No representations were made to the plaintiff about the spinal fixation device which would be used in his surgery. (Defendants' P.F. ¶ 5.)

In June 1992, Mr. Staudt slipped and fell while exiting a bait shop, breaking a screw and damaging the hardware in his back. (Defendants' P.F. ¶ 6; Staudt P.F. ¶ 4.) Mr. Staudt was transported to Froedtert where, upon viewing his x-ray, he knew that his spinal fixation device was broken or damaged. (Defendants' P.F. ¶ 7.) Mr. Staudt was not given any explanation by any doctor on the cause of his pain after the fall. (Staudt P.F. ¶ 4.) Dr. Larson did not provide Mr. Staudt with the results from the diagnostics tests, and Dr. Larson did not recommend any surgery. (Id.) Mr. Staudt did not understand the cause of his pain and no physician, including Dr. Larson, would opine that the pain was caused by the hardware. (Id.) In fact, Dr. Larson testified that the hardware was not the cause of his pain. (Staudt P.F. ¶ 5.)

The Artifex spinal fixation device was first manufactured in an engineer's garage and replicated the pedicle screw internal spinal fixation system device of another manufacturer — AcroMed. (Staudt P .F. ¶ 6.) The president of Artifex, Greg Baker, knew that the spinal fixation device he was manufacturing required clearance by the Food and Drug Administration, but he ignored the federal requirements on labeling and marketing. (Staudt P.F. ¶ 7.) Artifex conducted limited testing on its spinal fixation device but did not inform the surgeons of this fact. (Id.)

Surgeons who utilized this device assumed that thorough testing had been done on the Artifex spinal fixation device and relied on this belief. (Id.) Specifically, Dr. Larson assumed that testing had been completed on the spinal fixation device and relied on the representations of Artifex that such testing had been done. (Staudt P.F. 11.) Prior to the first implantation of the Artifex spinal fixation device in human beings, no controlled experimental studies, biological testing, biochemical testing or biomechanical testing had been done on the device. (Staudt P.F. ¶ 9.) Only one attempted cadaver implant was undertaken before the first patient implant was sold. (Id.)

The president of Artifex admits that the devices break, yet Artifex did not publish any warnings of the risks of the device. (Staudt P.F. ¶ 10.) The spinal fixation device manufactured by Artifex was shipped in bulk to Froedtert which received more than 100 screws, 30 rods, 20 clamps, 44 nuts and other components at one time. (Staudt P.F. ¶ 12.) According to Dr. Larson, the spinal fixation device was not manufactured especially for his use. (Staudt P.F. ¶ 13.) Artifex admits that it did not disclose the risks inherent in the spinal fixation device to surgeons nor did it disclose the fact that only limited testing had been done on the device. (Staudt P.F. ¶ 15.)

In the complaint, which was filed on May 6, 1996, the plaintiffs allege eight causes of action: (1) count 1 — strict liability resulting in bodily injury; (2) count 2 — negligence resulting in bodily injury; (3) count 3 — breach of implied and express warranty; (4) count 4 — intentional fraud; (5) count 5 — breach of Wis. Stats. § 100.18; (6) count 6 — intentional concealment of true facts concerning the internal spinal fixation devices; (7) count 7 — intentional infliction of emotional distress; (8) count 8 — loss of society and companionship (consortium) on the part of Mrs. Staudt. (Complaint.)

B. Law and Analysis

1. Counts 1 and 2: Strict Liability and Negligence

The defendants contend that counts 1 and 2 for strict liability and negligence should be dismissed because they are barred by the applicable statute of limitations. The plaintiffs argue that summary judgment is not warranted on this ground because a genuine issue of material fact exists as to whether their claims were filed within the statutory period. The plaintiffs contend that public policy and notions of justice mandate the timeliness of Mr. Staudt's claims and that class...