Vaughn v. Daniels Co. (West Virginia), Inc., 14S01-0602-CV-37.

• Decision Date: 07 February 2006
• Docket Number: No. 14S01-0602-CV-37.,14S01-0602-CV-37.
• Citation: 841 N.E.2d 1133
• Parties: Stephen L. Vaughn and Melinda Vaughn, Appellants (Plaintiffs below), v. DANIELS COMPANY (WEST VIRGINIA), INC and Solar Sources, Inc., Appellees (Defendants below).
• Court: Indiana Supreme Court

841 N.E.2d 1133

Stephen L. Vaughn and Melinda Vaughn, Appellants (Plaintiffs below), v. DANIELS COMPANY (WEST VIRGINIA), INC and Solar Sources, Inc., Appellees (Defendants below).

No. 14S01-0602-CV-37.

Supreme Court of Indiana.

February 7, 2006.

COPYRIGHT MATERIAL OMITTED

J. Kevin King, Peter Campbell King, Columbus, for Appellants.

Jeffrey W. Ahlers, Todd C. Barsumian, Evansville, for Appellee, Daniels Company, Inc.

R. Steven Johnson, Terre Haute, for Appellee, Solar Sources, Inc.

Knight S. Anderson, Indianapolis, James D. Johnson, Evansville, for Amicus Curiae, Defense Trial Counsel of Indiana.

On Petition To Transfer from the Indiana Court of Appeals, No. 14A01-0111-CV-408.

BOEHM, Justice.

We hold that "use" of a product under the Indiana Products Liability Act does not include assembly and installation where the seller retains an obligation or arrangement with the purchaser to deliver a fully assembled and installed product. Because the plaintiff was injured in the process of installing the product on behalf of its supplier, he is not a consumer or user of the product that had not yet been assembled as required by the purchaser and has no claim under the PLA. For this reason, his negligence claim is not governed by the PLA.

Factual and Procedural History

At some time before December 1995, Daniels Company, Inc. contracted with Solar Sources, Inc. to design and build a coal preparation plant on Solar's premises in Cannelburg, Indiana. As part of its contract with Solar, Daniels was to design and install a heavy media coal sump. Based on Daniels's design, the West Virginia Steel Corporation manufactured the unassembled coal sump and shipped it to Solar's Cannelburg site. Daniels subcontracted with Trimble Engineers and Constructors, Inc. to construct the coal plant, including assembly and installation of the sump.

On December 12, 1995, plaintiff Stephen Vaughn, an employee of Trimble, was injured when he fell approximately fifteen feet from the top of the sump in the process of assembling it. He had been standing on a metal grating approximately two feet below the upper rim of the sump, attempting to assist others in affixing a large pipe at the top of the sump. When the pipe was placed by a forklift, other Trimble employees attached a chain to it, and the forklift moved away As the forklift withdrew, the pipe fell off the sump, pulling Vaughn with it. Although he was aware of the danger, Vaughn was not wearing a safety belt. He suffered multiple injuries in the fall.¹

Vaughn sued both Daniels and Solar, alleging negligent design, manufacturing, and maintenance of the sump and the processing plant. He also asserted a strict liability claim against Daniels under the Indiana Products Liability Act ("PLA"). Vaughn's wife Melinda claimed loss of consortium.

Both Daniels and Solar moved for summary judgment. The trial court granted both motions for summary judgment, concluding that neither Daniels nor Solar owed Vaughn a duty of care, and that Vaughn was not a "user" or "consumer" of the coal sump within the meaning of the PLA.

The Vaughns appealed, claiming that the trial court erred in determining that Vaughn was not a "user" or "consumer" under the PLA and in finding no negligence in the design of the facility. They also contended that the trial court erred in striking a portion of an affidavit that the Vaughns had designated in opposition to the motions for summary judgment. The Court of Appeals affirmed summary judgment for both Solar and Daniels on the Vaughns' negligence claims and reversed the summary judgment for Daniels on Stephen Vaughn's product liability claim. Vaughn v. Daniels Co., Inc., 777 N.E.2d 1110, 1139 (Ind.Ct.App.2002).

I. Solar's Motion to Strike Expert's Affidavit

At the outset we deal with Solar and Daniel's motions to strike portions of the affidavit of David MacCollum which the Vaughns designated in response to the defendants' motions for summary judgment. The trial court admitted all of the designated evidence except paragraph 17 of MacCollum's affidavit.

Daniels and Solar assert that MacCollum's affidavit relied on two documents that constitute hearsay and are not self-authenticating. MacCollum states that he reviewed the documents entitled "Design, Procurement, and Construction of the Cannelburg Preparation Plant for Solar Sources, Inc."² and "Defendant Daniels Health and Safety Policy" and that these documents are "the type of information normally relied upon by me in the field of my experience in providing opinions." Indiana Trial Rule 56(E) provides:

Supporting and opposing affidavits shall be made on personal knowledge, shall set forth such facts as would be admissible in evidence, and shall show affirmatively that the affiant is competent to testify to the matters stated therein. Sworn or certified copies not previously self-authenticated of all papers or parts thereof referred to in an affidavit shall be attached thereto or served therewith.

Indiana Evidence Rule 703 provides that: "Experts may testify to opinions based on inadmissible evidence, provided that it is of the type reasonably relied upon by experts in the field." The defendants do not challenge MacCollum's professional credentials and do not claim that these documents are not of the type reasonably relied upon by experts in the field. Accordingly, under Rule 703, the contested documents may be used by MacCollum in forming his opinions whether or not the documents are themselves admissible evidence.

Solar and Daniels also challenge MacCollum's affidavit on the ground that it contains inadmissible legal conclusions. Indiana Evidence Rule 704 permits opinions to embrace ultimate issues to be decided by the trier of fact, but prohibits opinions as to legal conclusions. MacCollum's opinions concerning engineering standards, procedures, and the design of the coal sump and facility are based on his expertise and are permitted by Evidence Rule 704. His opinions concerning reasonable care or proximate cause in paragraph 17 embrace ultimate issues to be decided by the trier of fact and therefore are admissible.³ See Rhodes v. Wright, 805 N.E.2d 382, 388 (Ind.2004) (the issue of proximate cause "is one usually left to the jury"); Stephenson v. Ledbetter, 596 N.E.2d 1369, 1372 (Ind.1992) ("Whether a particular act or omission is a breach of a duty is generally a question of fact.").

Solar and Daniels also contend that the opinions expressed by MacCollum lack foundation because he did not view the plant and reviewed only the documents setting forth Daniels's proposal. Hands-on experience, formal education, specialized training, study of textbooks, performing experiments and observation can provide the foundation for an expert's opinion. See Summit Bank v. Panos, 570 N.E.2d 960, 965 (Ind.Ct.App.1991), trans. denied (citing 13 W. Miller, Indiana Practice § 702.103, at 35-37 (1984)). Moreover, although Trial Rule 56(E) mandates that affidavits be made on personal knowledge, this does not mean that an expert must obtain his knowledge based solely on first-hand experience. See Bunch v. Tiwari, 711 N.E.2d 844, 849 (Ind.Ct.App.1999). MacCollum stated that his opinions were based on his engineering and construction management expertise and review of the documents setting forth Daniels's proposal. We conclude that MacCollum's prior experience and review of these documents provided a sufficient foundation and that it was not necessary for MacCollum to have seen the sump in person for him to render an expert opinion. We therefore conclude that the trial court erred in striking paragraph 17 of MacCollum's affidavit but correctly admitted the remaining portions of it.

II. Standard of Review

Summary judgment is appropriate when the designated evidence shows that there is no genuine issue of material fact and that the moving party is entitled to judgment as a matter of law. Ind. Trial Rule 56(C); see also Meridian Mut. Ins. Co. v. Auto-Owners Ins. Co., 698 N.E.2d 770, 773 (Ind.1998). Although the Vaughns have the burden of persuading us that the grant of summary judgment was erroneous, we carefully assess the trial court's decision to ensure that the Vaughns were not improperly denied their day in court. Erie Ins. Co. v. George, 681 N.E.2d 183, 186 (Ind.1997). All facts and reasonable inferences drawn from those facts are construed in favor of the Vaughns. Foster v. Auto-Owners Ins. Co., 703 N.E.2d 657, 659 (Ind.1998); Wright v. Carter, 622 N.E.2d 170, 171 (Ind.1993).

III. The Strict Liability Claim

The complaint asserts a strict liability claim against Daniels under the Indiana Products Liability Act, Indiana Code sections 34-20-1-1 through 34-20-9-1. The trial court determined that Vaughn was neither a "user" nor a "consumer" as those terms are defined in the Act, and therefore had no claim under the PLA. We agree. Section 34-20-1-1⁴ provides:

This article governs all actions that are:

(1) brought by a user or consumer;

(2) against a manufacturer or seller; and

(3) for physical harm caused by a product; regardless of the substantive legal theory or theories upon which the action is brought.

Indiana Code section 34-20-2-1 sets forth the requirements of a strict liability claim governed by the PLA. It provides:

[A] person who sells, leases, or otherwise puts into the stream of commerce any product in a defective condition unreasonably dangerous to any user or consumer or to the user's or consumer's property is subject to liability for physical harm caused by that product to the user or consumer or to the user's or consumer's property if:

(1) that user or consumer is in the class of persons that the seller should reasonably foresee as being subject to the harm caused by the defective condition;

(2) the seller is engaged in the business of selling the product; and

(3) the product is expected to and does reach the user or consumer without substantial alteration in the condition in which the product is sold by...