Vaughn v. Chrysler Corporation
| Decision Date | 21 June 1971 |
| Docket Number | No. 663-69.,663-69. |
| Parties | Opal I. VAUGHN, Guardian of the Person and Estate of Johnnie E. Vaughn, Plaintiff-Appellee, Mid-Continent Casualty Company, Intervening Plaintiff-Appellee, v. CHRYSLER CORPORATION, a corporation, Defendant-Appellant. |
| Court | U.S. Court of Appeals — Tenth Circuit |
William G. Smith, Oklahoma City, Okl. (Leroy J. Patton of Fenton, Fenton, Smith, Reneau & Moon, Oklahoma City, Okl., on the brief) for defendant-appellant.
Mickey James of Green & James, Oklahoma City, Okl., for Mid-Continent Casualty Co.
Michael C. Stewart of Rinehart, Cooper & Stewart, Oklahoma City, Okl., for Opal I. Vaughn (Gus Rinehart, Oklahoma City, Okl., on the brief).
Before LEWIS, Chief Judge, HICKEY1 and HOLLOWAY, Circuit Judges.
This is a product liability case in which Chrysler Corporation, the sole defendant, appeals from an adverse judgment for damages entered in favor of plaintiff-appellee for personal injuries suffered by her ward and husband in a one-car automobile accident. The evidentiary facts upon which liability was premised in the action are not now in dispute and present a clear-cut question of law dispositive of the appeal.
The subject product was a Dodge truck manufactured by Chrysler Corporation. This corporation sold the truck to Chrysler Motors, a wholly-owned corporate subsidiary. Chrysler Motors then sold the truck to its wholly-owned subsidiary Dodge Trucks, Inc. Dodge Trucks is a retail truck dealer. This company sold the truck to another dealer, Clark Motor Company of Oklahoma City, and Clark sold the truck to the ultimate consumer leading to its use by the injured Vaughn.
While the truck was in the possession of Dodge Trucks the front axle was converted from a 5,000- to 7,000-pound axle and the steering assembly accommodated to the axle change. In making this change the holding clamp in the steering assembly was not securely clamped and the resultant unresponsive steering wheel caused the accident to occur. And in summation of the dispositive facts we consider the following to be pertinent:
1. The consumer bought from an authorized Chrysler dealer a new truck ordered to specification.
2. The dealer did not have the truck in stock and obtained the vehicle from another dealer, Dodge Trucks.
3. The truck was not defective in manufacture.
4. The truck became defective when altered by Dodge Trucks.
5. The defect caused the accident resulting in injury and damage to Vaughn.
6. Dodge Trucks is a wholly-owned subsidiary, once removed, of Chrysler Corporation, the original manufacturer.
7. The separate corporate organizations of Dodge Trucks and its parent Chrysler Motors are in no way sham. Each of these companies is adequately financed and performs a legitimate and independent function within the total corporate structure of Chrysler Corporation resulting in tax and organizational benefits to Chrysler Corporation.
8. The mechanical work done on the subject truck was not specifically known to, authorized by, and/or delegated by custom to Dodge Trucks as an incident of manufacture by Chrysler Corporation.
Against this factual background the trial court instructed the jury, in pertinent part as follows:
Evidence has been permitted to come before you in this case tending to show that the separate corporation, Dodge Trucks, Inc., made alterations on the Dodge truck in question by changing the factory installed front axle, from 5,000 pound type to 7,000 pound type, and during opening statements by the Court and counsel you were told that the defendant, Chrysler Corporation, as one of its defenses claimed that this alteration and modification of the truck by the separate legal entity Dodge Trucks, Inc., would exonerate and absolve the defendant Chrysler Corporation of liability herein. I instruct you, however, that as a matter of law and under the facts in this case the modifications made by Dodge Trucks, Inc., would not relieve Chrysler Corporation of liability in this case if you find that the said truck had a defective steering mechanism when it was delivered by the Clark Motor Company to Mr. Welborn. This is so because the truck was purchased by Welborn as a new vehicle and under the law of the State of Oklahoma a manufacturer is liable in tort when an article it places on the market proves to have a defect that causes injury to a human being and said manufacturer cannot escape such...
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