Walter v. Cessna Aircraft Co., 83-2069

Decision Date24 October 1984
Docket NumberNo. 83-2069,83-2069
Citation358 N.W.2d 816,121 Wis.2d 221
PartiesPaul WALTER and Jean Walter, Plaintiffs-Appellants, v. CESSNA AIRCRAFT COMPANY, a foreign corporation, Defendant-Respondent. *
CourtWisconsin Court of Appeals

Review Denied.

William P. Croke and Larry J. Britton of Prosser, Wiedabach & Quale, S.C., Milwaukee, for plaintiffs-appellants.

James P. O'Neill and Bruce A. Marshall of Arnold, Murray, O'Neill & Schimmel, S.C., Milwaukee, for defendant-respondent.

Before SCOTT, C.J., BROWN, P.J., and NETTESHEIM, J.

BROWN, Presiding Judge.

The issue is whether the trial court erred when it found, as a matter of law, that the facts did not warrant submission of a punitive damage question to the jury. We hold that the trial court did err and reverse.

On May 5, 1979, Paul Walter purchased a 1954 Cessna 195B airplane in Tampa, Florida. Walter, an experienced pilot, had been looking for this specific type of aircraft for some period of time because it was a five-passenger aircraft that, if properly maintained, was a rugged, safe airplane and could be purchased for far less than the cost of a new five-passenger plane. Prior to the sale, he flew the airplane several times and had a mechanic verify its airworthiness.

After the sale, Walter took his wife and children to Disney World in Orlando, Florida for several days. During this time, the plane was stored outdoors at an airport in Clearwater-St. Petersburg, Florida. While the Walters were away, a heavy rainstorm took place in the Tampa Bay area. Upon Walter's return, he and his family went to the airport. The plan was for Walter to fly the plane to the Tampa airport. His wife and children would drive a leased car to that airport and meet him. They would then fly home. In preparation for his flight, Walter had studied the owner's manual. He then took off from the airport, and moments later, the airplane crashed. Although Walter was not seriously injured, the plane was a total loss, and Walter sued Cessna.

His suit alleged, inter alia, that there was water in the fuel system, that this condition caused the plane's engine to fail, and that the plane was manufactured without fuel tank sump pump quick drains sufficient to allow pilots to alleviate fuel contamination. Walter then averred that Cessna was guilty of negligence because it had knowledge that failure to have quick drains added onto the plane would be dangerous; yet, nothing was done to warn of the plane's dangerous condition without the quick drains. (Although Walter alleged strict liability in design defect as well as negligence, the jury found no strict liability, and this is not a subject on appeal.) Additionally, Walter asked for punitive damages because he claimed that Cessna knew of this dangerous condition and yet failed to warn its customers, thereby recklessly endangering their lives.

The case went to trial, and at the end of the case, Cessna requested that the jury not be instructed on punitive damages. The court agreed and that is the issue on appeal.

The issue is not whether punitive damages are recoverable in a product liability suit based on negligence or strict liability in tort. That issue was decided in the exhaustive and well-considered opinion of Wangen v. Ford Motor Co., 97 Wis.2d 260, 294 N.W.2d 437 (1980). Nor is it necessary to determine what must be proven, over and above evidence of negligence or strict liability, in order for a punitive damages issue to be considered. Wangen decided that "[o]nly where there is proof of malice or willful, wanton, reckless disregard of plaintiff's rights can punitive damages be considered." Id. at 275, 294 N.W.2d at 446. In other words, there must be circumstances of aggravation in the tortious injury, i.e., outrageous conduct. Id. at 268, 294 N.W.2d at 442-43.

What we must determine is what factors the trial court should consider in deciding whether there is credible evidence for punitive damages to be considered by the jury. In other words, what are the threshold elements of outrageous conduct? We must reach this issue because the Wangen court charged trial courts with the duty to initially determine whether the evidence in a particular case establishes a proper case for the allowance of punitive damages and for the submission of the issue to the jury. Id. at 298, 294 N.W.2d at 457. Because trial courts are given that duty, it is imperative that they, and the bar as well, have guidelines for what kind of manufacturer conduct must be shown in order to meet the Wangen standard. Two law review articles, Owen,Punitive Damages in Products Liability Litigation, 74 Mich.L.Rev. 1258 (1976) [hereinafter cited as Owen] (cited in Wangen ) and Ghiardi and Kircher,Punitive Damage Recovery in Products Liability Cases, 65 Marq.L.Rev. 1 (1981) [hereinafter cited as Ghiardi and Kircher] point to the need for determining what type of conduct raises a manufacturer's behavior to a level which we call "reckless disregard." Both present a list of elements that courts can look to for instruction when faced with making a finding whether evidence of malice or willful, wanton, reckless disregard exists so as to make punitive damages a jury question. We will explore the rationale of these two articles.

First, it is important to reiterate one of the most important teachings of Wangen and a case preceding it, Kink v. Combs, 28 Wis.2d 65, 135 N.W.2d 789 (1965). An intentional desire to injure is not a necessary component of a punitive damages case. Wangen, 97 Wis.2d at 267, 294 N.W.2d at 442. So, although a defendant may indeed be subject to punitive damages if the defendant has acted maliciously or willfully, it may also be subject to punitive damages if it acts in reckless disregard of the plaintiff's rights. Id. at 298-99, 294 N.W.2d at 457.

This is not to say that the Wangen court has equated "reckless disregard" with truly inadvertent or negligent conduct. Instead, Wangen defined reckless disregard as "[r]eckless indifference to the rights of others and conscious action in deliberate disregard of them...." Id. at 267, 294 N.W.2d at 442 (emphasis added), quoting Restatement (Second) of Torts § 908, comment b (1977). A plaintiff must look to the frame of mind of the wrongdoer as a necessary prerequisite to recovery of punitive damages. Id. at 268, 294 N.W.2d at 442-43. Although intent to injure is not necessary, some type of aggravated conduct (knowledge, at the least) is a needed component. Cf. Ghiardi and Kircher at 57. As Professors Ghiardi and Kircher point out, a defendant who is unaware of the product's defect can hardly be "consciously" or "recklessly" disregarding any other party's rights. Id. at 68. They also point out that in every case where punitive damages have been awarded, the defendant manufacturer was aware of the existing defect and was also aware of the serious danger of substantial harm posed by such defect. 1 Id. at 68-69. We conclude that Wangen, as well as other punitive damage cases in the products liability area, demands that the defendant have specific knowledge of a product's defect and its potential for harm before an exemplary award is appropriate. 2

Having reiterated the first element established by the Wangen court as necessary before punitive damages can be justified, we next turn to the second element. Both Professors Ghiardi and Kircher and Professor Owen define this second element as "fault on the part of the defendant." They state that once the defendant possesses knowledge of the nature of the defect and has determined the seriousness of the danger, failure to take some action, which the product and services demand, may result in reckless disregard. Id. at 84; Owen at 1362-63. The failure may consist of inadequate testing procedures, defective quality control, insufficient warnings or inadequate remedial procedures, such as product recalls or post-marketing warnings. Ghiardi and Kircher at 84. This fault of the defendant can occur during either the pre-marketing or post-marketing stages.

All of these are what Professor Owen calls "marketing conduct." Professors Ghiardi and Kircher sum up this element by stating that it:

involves nothing more than proving the defendant acted negligently with respect to the care it exercised in distributing the product to the public. When combined with the defendant's knowledge, this fault or negligence may rise to the level of "conscious disregard of the safety of others"....

Ghiardi and Kircher at 84.

These two elements must, however, reflect "a flagrant indifference to the public safety." Owen at 1369 (emphasis added). Our supreme court uses the word "outrageous" as an abbreviation of the term "flagrant indifference to the public safety." See Wangen, 97 Wis.2d at 267-68, 294 N.W.2d at 442. To determine whether there has been outrageous or flagrant conduct, Professor Owen suggests consideration of five factors. They are:

(1) the existence and magnitude in the product of a danger to the public;

(2) the cost and feasibility of reducing the danger to an acceptable level;

(3) the manufacturer's awareness of the danger, of the magnitude of the danger, and of the availability of a feasible remedy;

(4) the nature and duration of, and the reasons for, the manufacturer's failure to act appropriately to discover or to reduce the danger; and

(5) the extent to which the manufacturer purposefully created the danger.

Owen at 1369. He describes each factor as follows:

First, a manufacturer's fault in failing to deal with a product hazard increases with the magnitude of the resulting potential for harm to the public. Second, as the costs of reducing such a hazard to an acceptable level diminish, so also does the credibility of excuses for failing to do so. Third, as the manufacturer's awareness of the existence, magnitude, and means to reduce a product hazard increases, so too does its duty to address the...

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