Wangen v. Ford Motor Co.

• Decision Date: 27 June 1980
• Docket Number: Nos. 77-893,77-894,s. 77-893
• Parties: , 13 A.L.R.4th 1 Terri WANGEN, a minor, by her Guardian, Charles R. Wangen, Charles R. Wangen, Special Administrator of the Estate of Christopher DuVall, deceased, Charles R. Wangen, Special Administrator of the Estate of Kip Wangen, deceased, Charles R. Wangen, individually and Ramona M. Wangen, Plaintiffs-Respondents, v. FORD MOTOR COMPANY, Defendant-Appellant-Petitioner, and Robin DuVall, Patrick J. Hawley, Allstate Insurance Company, American Family Mutual Insurance Co., Thomas J. Curran, Milwaukee Mutual Insurance Co., and Republic National Life Insurance Co., Defendants. Robin DuVALL, Plaintiff-Respondent, v. FORD MOTOR COMPANY, Defendant-Appellant-Petitioner, and Patrick Hawley, Allstate Insurance Company, Thomas Curran and Milwaukee Mutual Insurance Co., Defendants.
• Court: Wisconsin Supreme Court

Page 437

294 N.W.2d 437

97 Wis.2d 260, 13 A.L.R.4th 1

Terri WANGEN, a minor, by her Guardian, Charles R. Wangen,

Charles R. Wangen, Special Administrator of the Estate of

Christopher DuVall, deceased, Charles R. Wangen, Special

Administrator of the Estate of Kip Wangen, deceased, Charles

R. Wangen, individually and Ramona M. Wangen, Plaintiffs-Respondents, v. FORD MOTOR COMPANY, Defendant-Appellant-Petitioner, and Robin DuVall, Patrick J. Hawley, Allstate Insurance Company,

American Family Mutual Insurance Co., Thomas J. Curran,

Milwaukee Mutual Insurance Co., and Republic National Life

Insurance Co., Defendants.

Robin DuVALL, Plaintiff-Respondent, v. FORD MOTOR COMPANY, Defendant-Appellant-Petitioner, and Patrick Hawley, Allstate Insurance Company, Thomas Curran and Milwaukee Mutual Insurance Co., Defendants.

Nos. 77-893, 77-894.

Supreme Court of Wisconsin.

Argued Jan. 7, 1980.

Decided June 27, 1980.

Walter L. Merten, Paul E. Schwemer (argued) and Merten & Schwemer, S. C., Milwaukee, on brief, for defendant-appellant-petitioner.

D. G. Graff (argued), for plaintiffs-respondents, Terri Wangen, Charles R. Wangen and Ramona M. Wangen; D. G. Graff Law Offices, S. C., Madison, on brief.

Johnson, Swingen & Sandell and Easton & Harms, S. C., Madison, for respondent, Robin DuVall.

ABRAHAMSON, Justice.

The central question on appeal is whether punitive damages are recoverable in a product liability suit based on negligence or strict liability in tort (sometimes referred to as strict products liability). We conclude that they are recoverable.

I.

This appeal involves two lawsuits which were commenced against Ford Motor Company and others as a result of an automobile accident on July 1, 1975 involving a 1967 Ford Mustang. The cases were consolidated and are before us at the pleading stage; all facts set forth are derived from the pleadings.

The occupants of the 1967 Ford Mustang involved in the accident were Robin DuVall, the driver, Terri Wangen, her sister, Kip Wangen, her brother, and Christopher DuVall, her son. Robin DuVall stopped her 1967 Ford Mustang at an intersection to make a left turn, and a car driven by Patrick J. Hawley ran into the rear end of the Mustang. The DuVall Mustang was pushed into the opposite lane of travel where it collided with a car driven by Thomas J. Curran. The Mustang's fuel tank ruptured, a fire ensued, and all occupants of the Mustang sustained severe injuries. Christopher DuVall and Kip Wangen died as a result of their injuries.

Two lawsuits were commenced. One is by Terri Wangen and Charles R. Wangen, as special administrator of the estates of Christopher DuVall and Kip Wangen, and Charles R. Wangen and Ramona M. Wangen, individually, against Ford Motor Company, Hawley, Curran, Robin DuVall and their respective insurance carriers. The second lawsuit is by Robin DuVall against Ford Motor Company, Hawley, Curran and their respective insurance carriers.

Plaintiffs in both lawsuits seek compensatory damages from all named defendants and punitive damages from Ford Motor Company.

The claim for compensatory damages against Ford is based on Ford's alleged negligence in the design, manufacture, assembly, sale and distribution of the 1967 Mustang and on Ford's strict liability in tort arising out of the sale of the 1967 Mustang in a defective condition unreasonably dangerous to users. Dippel v. Sciano, 37 Wis.2d 443, 155 N.W.2d 55 (1967).

The allegations in support of recovery of punitive damages from Ford Motor Company are that Ford knew that the fuel tanks on this and other 1967 Mustangs were dangerously defective before and after the manufacture of the car in question; that corrective design changes were made in models manufactured after this particular model but prior to the date of the instant accident; that Ford failed to warn users of the car of the potential danger both after the danger became apparent and after Ford had changed the design to reduce the danger; that Ford failed to recall, repair or modify the defective vehicles after the defect became apparent in order to avoid the expense of those procedures and to prevent potential lost sales caused by adverse publicity; and that Ford's conduct in failing to warn, repair or recall the known defective vehicles constituted intentional, deliberate, reckless, willful, wanton, gross, callous, malicious and fraudulent disregard for the safety of users of Ford's product.

Ford Motor Company moved to dismiss all allegations in both complaints relating to punitive damages under sec. 802.06(2)(f), Stats., on the ground that the complaints for punitive damages fail to state a claim against the defendant, Ford Motor Company upon which relief can be granted. ¹ The circuit court denied Ford's motion, concluding that punitive damages may be awarded in product liability cases given a satisfactory evidentiary basis. Review of the circuit court's order was sought, and the court of appeals, in an unpublished decision (May 31, 1979) divided the complaint for punitive damages into five categories of actions and concluded that punitive damages are recoverable in some and not in others. Specifically the court of appeals concluded (1) punitive damages are recoverable in a products liability suit for compensatory damages predicated on strict liability in tort; (2) punitive damages are not recoverable in a product liability suit for compensatory damages predicated on negligence; (3) punitive damages are recoverable in an action which survives the death of the injured person; (4) punitive damages are not recoverable in a wrongful death action; and (5) punitive damages are recoverable by parents in an action for damages for loss of society and companionship of a child but not in an action for damages for loss of the minor's earning capacity and medical expenses. We hold that the complaints state a claim for punitive damages in each of these five categories except number (4), the wrongful death action. ²

We shall turn first to the question of whether punitive damages are recoverable in a product liability action predicated on negligence or strict liability, and we shall turn then to recovery of punitive damages in a survival action, in a wrongful death action, and in an action by a parent for damages resulting from injury to a child.

II.

Ford Motor Company's argument that punitive damages have no place in product liability cases rests on three grounds: (A) Punitive damages have traditionally been awarded in tort actions in which compensatory damages are premised on defendant's commission of an intentional, personal tort, and recovery of punitive damages should not be allowed in product liability suits in which compensatory damages are premised on the defendant's negligence or on strict liability. (B) The claim for punitive damages characterizing Ford's conduct as willful, deliberate, wanton, malicious, and reckless all elements of gross negligence is insufficient because the concept of gross negligence has been abolished in Wisconsin. (C) Punitive damages are unnecessary in product liability cases to effect punishment and deterrence, which are the objectives of imposing punitive damages in the traditional tort action, and the elimination of punitive damages in all products liability cases is in the public interest because the recovery of punitive damages produces economically and socially undesirable results.

A.

Ford Motor Company asserts that punitive damages are recoverable only in actions based on intentional, personal torts, and are not recoverable in product liability actions which are grounded in negligence or strict liability. Ford argues that the concept of punitive damages is antithetical to the theories of negligence and strict liability because punitive damages are based on the defendant's intentional conduct. Ford's argument is premised on two assumptions: that intentional conduct is the only conduct justifying punitive damages and that the same facts which justify compensatory damages must be sufficient to justify punitive damages. This court has never adopted this view of punitive damages.

Punitive damages are in the nature of "a demand arising out of a single injurious occurrence," a "theory of relief arising out of the same transaction or occurrence," a "remedy." Wussow v. Commercial Mechanisms, Inc., 97 Wis.2d 136, 143, 146, 293 N.W.2d 897, 901, 902 (of even date herewith). See also Draeger v. John Lubotsky Motor Sales, Inc., 56 Wis.2d 419, 202 N.W.2d 20 (1972).

This court has rested its analysis of punitive damages not on the classification of the underlying tort justifying compensatory damages but on the nature of the wrongdoer's conduct. ³ Although the usual aggravating circumstances required for the recovery of punitive damages are often found as substantive elements of the tort itself, this court has said a claim for punitive damages may be supported by proof of aggravating circumstances beyond those supporting compensatory damages.

Punitive damages rest on allegations which, if proved, demonstrate a particular kind of conduct on the part of the wrongdoer, which has variously been characterized in our cases as malicious conduct or willful or wanton conduct in reckless disregard of rights or interests.

This court has not required proof of an intentional desire to injure, vex or annoy, or proof of malice, in order to sustain an award for punitive damages. "(M)alice or vindictiveness are not the sine qua non of punitive damages." Kink v. Combs, 28 Wis.2d 65, 79, 135 N.W.2d 789, 797 (1965). It is sufficient if the injured party shows a reckless indifference to or disregard of the rights of others on the part of the wrongdoer. "Reckless indifference to the rights of others and conscious action in deliberate disregard of them . . . may provide the necessary state of mind to justify punitive damages." 4 Restatement (Second) of Torts sec. 908, comment b, p. 465 (1977). Some commentators speak of the behavior...