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Klynsma v. Hydradyne, LLC

United States District Court, D. South Dakota, Western Division

September 30, 2015

KENNETH KLYNSMA & LINDA KLYNSMA, Personal Representatives of the Estate of ADAM D. KLYNSMA, deceased, Plaintiffs,
v.
HYDRADYNE, LLC, f/k/a HYDRADYNE HYDRAULICS, LLC; T.J. WELDING & FABRICATION CO.; CAMBCO INC., Defendants.

ORDER

JEFFREY L. VIKEN, Chief District Judge.

INTRODUCTION

Pending before the court are two motions for summary judgment and one motion to compel discovery. Defendant Hydradyne, LLC ("Hydradyne") moves the court for summary judgment on all of Kenneth and Linda Klynsma's ("plaintiffs'") claims.[1] (Docket 38). Hydradyne also seeks to compel plaintiffs' response to requests two, three and four of its second set of requests for production of documents. (Docket 32). Defendant T.J. Welding & Fabrication Co. ("TJW") moves the court for summary judgment on all of plaintiffs' claims. (Docket 60). Plaintiffs oppose all motions. The court previously granted defendants' unopposed motion for partial summary judgment on plaintiffs' claim for compensatory damages for the pain and suffering endured by Adam Klynsma ("Adam") before his death. (Docket 87). Defendant Cambco, Inc. ("Cambco") has not noticed an appearance in the case. The court first addresses defendants' motions for summary judgment followed by Hydradyne's motion to compel.

FACTS[2]

Hydradyne "is a Georgia limited liability company with an office address of 15050 FAA Boulevard, Ft. Worth, TX, 76155." (Docket 40 at ¶ 1).[3] Cambco, is a Texas corporation. (Docket 47-1 at p. 2). Cambco "designed the [Cambco] Cambering Machine model 420, serial number 200122 that was involved in Adam Klynsma's accident." (Docket 40 at ¶ 3).[4] "A [c]ambering [m]achine is a hydraulic machine designed to put a curve or camber into certain metal I-beams." (Docket 61 at ¶ 18). TJW contracted with Cambco to "[f]abricate and assemble one [Cambco] Model 420 cambering machine [serial number 200122] in strict accordance with [Cambco] drawings 1 through 4." (Dockets 61 at ¶ 2; 61-2). "On or about June 15, 2001, TJW contracted with [Cambco]... to assemble a portion of a machine, pursuant to plans and specifications provided entirely by [Cambco], which was then marketed and sold by [Cambco] as the Cambco Cambering Machine 420.'" (Docket 61 at ¶ 1). Cambco's purchase order to TJW stated:

[Cambco] shall furnish all hydraulic componets [sic] (cylinders, valves, power unit, hoses, fittings and two pins for framework). [TJW] shall furnish all other materials, and hydraulic fluid. All of the above for the total price of $10, 400.00. All drawings and other information furnished by [Cambco] shall remain the property of [Cambco], and shall be treated with strict confidentiality by [TJW]. The drawings shall not be used for any purpose other than completing this order unless expressly authorized in writing by [Cambco]. TJW shall be laboratory inspected.

(Docket 61-2).

"Other than the [p]urchase [o]rder and drawings, there were no other written agreements between TJW and [Cambco] (or any other entity) concerning the assembly or design of the [c]ambering [m]achine." (Docket 61 at ¶ 4). "Pursuant to the terms of the [p]urchase [o]rder [Cambco] provided all hydraulic components (cylinders, valves, power unit, hoses, fittings and two pins for framework)' for the [c]ambering [m]achine." Id. at ¶ 6. "TJW assembled the [c]ambering [m]achine in accordance with [Cambco's] plans and specifications using the hydraulic components provided by [Cambco] (cylinders, valves, power units, hoses, fittings and two pin[s] for framework)." Id. at ¶ 15.

Cambco "designed the... [c]ambering [m]achine... that was involved in Adam Klynsma's [death]."[5] (Docket 45 at ¶ 3). TJW did not design, develop, inspect, test, market, advertise or label the cambering machine. (Docket 61 at ¶ 13). "TJW did not sell or distribute the [c]ambering [m]achine to the general public." Id. at ¶ 14. "None of the work performed by TJW broke or otherwise failed, but, rather, the cause of... [Adam Klynsma's death] was... an alleged design error."[6] Id. at ¶ 17.

Cambco "hired a third party entity to inspect and test the [c]ambering [m]achine at TJW's facility before the product shipped." Id. at ¶ 8. The third party inspected "the [c]ambering [m]achine welds (which it passed) on or about October 22, 2001." Id. at ¶ 9. Cambco "approved and accepted the [c]ambering [m]achine as being assembled in conformance with its specifications." Id. at ¶ 12. Cambco "arranged for the shipping of the [c]ambering [m]achine from TJW to [Adam Klynsma's] employer, Dakota Steel, on or about March 26[-28], 2002." Id. at ¶ 10. "TJW was not responsible for shipping the [c]ambering [m]achine to any end user, including [Dakota Steel]." Id. at ¶ 11. Cambco "sold and delivered the [c]ambering [m]achine to... Dakota Steel[] on or before April 15, 2002." Id. at ¶ 16. Alliance Trucking delivered the cambering machine to Dakota Steel. (Docket 40 at ¶ 6).

On April 1, 2008, Hydradyne and Cambco entered into a purchase agreement. (Docket 42-1). Cambco gave Hydradyne:

[W]ithout limitation, full access to and exclusive, except for [Cambco's] own use for reference, possession of all plans, drawings, specifications, customer records, website, [Cambco's] telephone number, business records, marketing information, pricing information, and any other documents and information, whether stored in written form or solely on computer, relevant or relating to the design, production, and/or sale of cambering machines designed by [Cambco].

Id. at p. 2.

Cambco further provided Hydradyne:

[W]ithout limitation, the exclusive right to build the cambering machines designed by [Cambco], in consideration for which [Hydradyne] shall pay to [Cambco] ten (10%) per cent [sic] of the purchase price of each unit sold for the first year commencing with the effective date of this agreement; nine (9%) of the purchase price of each unit sold during the second year of this agreement; eight (8%) of the purchase price of each unit sold during the third year of this Agreement; and continuing with a one percent decrease in said fee for each year thereafter until the completion of ten years from the date of the agreement....

Id.

Cambco granted Hydradyne "without limitation, the exclusive right to sell hydraulics and design kits' for cambering machines" under the same ten-year decreasing profit sharing arrangement outlined above. Id. at 3. In the purchase agreement Hydradyne acknowledged:

[Cambco] is the owner of the design, know-how", [sic] and process of designing and manufacturing [the] cambering machines, including the technical information, drawings, pictures, etc., which will be furnished to [Hydradyne], and [Hydradyne] agrees that all such information will remain the property of [Cambco] until the conclusion of the ten year royalty period, at which point the information will become the property of Hydradyne.

Id. at 4.

Hydradyne agreed to "make copies of all manuals distributed to customers purchasing cambering machines." Id . The purchase agreement provided "[a]ll cambering machines manufactured during the ten year period for royalty payments shall be marked with a serial number that can be traced to Hydradyne, as manufacturer." Id. at 4-5. The purchase agreement provided that "[i]t is understood and agreed that [Hydradyne] will sell the cambering machines it builds to customers of its own, as well as the current and former customers of [Cambco]." Id. at 5. Finally, Cambco represented that it was unaware of any prior claim brought or alleged as a result of "any alleged defect in the design of [the] cambering machines." Id. at 6-7; Docket 40 at ¶ 21.

Neither Dakota Steel nor TrueNorth Steel ("TrueNorth"), which acquired Dakota Steel, had a service contract for the cambering machine with Hydradyne prior to Adam's death.[7] (Dockets 40 at ¶¶ 12-13; 41-6 at pp. 2-3; 42 at ¶¶ 6-7). Adam was employed by TrueNorth at the time of his death. (Dockets 41-2 at pp. 9-11; 41-3). Neither Dakota Steel nor TrueNorth had experienced an incident with the cambering machine prior to Adam's death. (Dockets 40 at ¶¶ 14-15; 41-1 at p. 2).

On the afternoon of April 26, 2012, Adam attempted to straighten a highway expansion joint, a weldment, in the cambering machine. (Docket 41-2 at pp. 9-10). The highway expansion joint was approximately 15 feet long, 7 inches tall and 1 foot wide, weighing approximately 1600 pounds. Id. at 10. Adam "fabricated [two] hangers from flat bar and tubular steel to further support the weldment in the camber[ing] machine." Id . "[T]his was a new type of expansion joint weldment that TrueNorth Steel had never built before and that this was the first attempt at straightening a weldment of this type." (Docket 41-2 at p. 14). "Upon experiencing problems with tolerance levels, [Adam] went to his supervisor Shannon Hanson for direction." (Docket 40 at ¶ 23). Ms. Hanson told Adam that she and Bradley Wentz, the person in charge of quality control at TrueNorth, would tackle the project with Adam in the morning. (Docket 41-3 at pp. 3-5).

The next morning, April 27, 2012, Adam, by himself, began working on the cambering weldment. Id. at 14-15. Ms. Hanson assumed that Adam would begin working on the weldment while she was at the morning's production meeting. Id. at 15-17. During Adam's work on the weldment at the cambering machine, "[a]s more pressure was applied the weldment began to slip and become unstable[, and] the weldment suddenly released from the camber machine and was propelled upwards and backwards toward [Adam]." (Docket 41-2 at p. 15). The weldment struck Adam in the head and knocked him backward onto the floor before coming to rest on his chest. Id . The cause of Adam's death was blunt force trauma. Id.

Hydradyne first received information relating to the cambering machine incident in May 2012 when Jim Rudlang of TrueNorth contacted Matt Strum about hydraulic components needed for modifications. (Docket 40 at ¶ 17). Except for Adam's death, Hydradyne was not aware of any other incidents involving its cambering machines. Id. at ¶ 18.

DISCUSSION

1. Standard Applicable to Summary Judgment Motions

Under Fed.R.Civ.P. 56(a), a movant is entitled to summary judgment if the movant can "show[] that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Only disputes over facts that might affect the outcome of the case under the governing substantive law will properly preclude summary judgment. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). "[T]he mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment; the requirement is that there be no genuine issue of material fact." Id. at 247-48 (emphasis in original).

In determining whether summary judgment should issue, the facts and inferences from those facts must be viewed in the light most favorable to the nonmoving party. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587-88 (1986). In order to withstand a motion for summary judgment, the nonmoving party "must substantiate [their] allegations with sufficient probative evidence [that] would permit a finding in [their] favor on more than mere speculation, conjecture, or fantasy.'" Moody v. St. Charles County, 23 F.3d 1410, 1412 (8th Cir. 1994) (citing Gregory v. Rogers, 974 F.2d 1006, 1010 (8th Cir. 1992)).

In assessing a motion for summary judgment, the court is to "consider only admissible evidence and disregard portions of various affidavits and depositions that were made without personal knowledge, consist of hearsay, or purport to state legal conclusions as fact." Howard v. Columbia Public School District, 363 F.3d 797, 801 (8th Cir. 2004); see Fed.R.Civ.P. 56(e) (a party may not rely on his own pleadings in resisting a motion for summary judgment; any disputed facts must be supported by affidavit, deposition, or other sworn or certified evidence). The nonmoving party's own conclusions, without supporting evidence, are insufficient to create a genuine issue of material fact. Anderson, 477 U.S. at 256; Thomas v. Corwin, 483 F.3d 516, 527 (8th Cir. 2007); Torgerson v. City of Rochester, 643 F.3d 1031, 1042 (8th Cir. 2011) ( en banc ).

2. TJW's Motion for Summary Judgment

The court first addresses TJW's motion for summary judgment as to plaintiffs' strict liability claims for a design defect and failure to warn, negligence and breach of warranty.

A. Strict Liability in Product Liability Cases[8]

South Dakota law controls the substantive issues in this diversity case. See Denekamp v. Hetronic USA, Inc., No. CIV. 06-5025-KES, 2008 WL 4646954, at *2 (D.S.D. Oct. 17, 2008) (citing Integrity Floorcovering, Inc. v. Broan-Nutone, LLC, 521 F.3d 914, 917 (8th Cir. 2008)). The South Dakota Supreme Court recognizes strict liability in tort for product liability cases and adopted the Restatement (Second) of Torts § 402(A). Engberg v. Ford Motor Co., 205 N.W.2d 104, 109 (S.D. 1973), disapproved on other grounds by Smith v. Smith, 278 N.W.2d 155 (S.D. 1979). Section 402A of the Restatement (Second) of Torts provides:

(1) One who sells any product in a defective condition unreasonably dangerous to the user or consumer or to his property is subject to liability for physical harm thereby caused to the ultimate user or consumer, or to his property, if
(a) the seller is engaged in the business of selling such a product, and
(b) it is expected to and does reach the user or consumer without substantial change in the condition in which it is sold.
(2) The rule stated in Subsection (1) applies although
(a) the seller has exercised all possible care in the preparation and sale of his product, and
(b) the user or consumer has not bought the product from or entered into any contractual relation with the seller.

(Restatement (Second) of Torts § 402A); see also Denekamp, 2008 WL 4646954, at *2.

In product liability cases, "[t]hree broad classes of defects have emerged: manufacturing defects where individual products within a product line are improperly constructed, design defects involving the entire product line, and defect by failure to properly warn or instruct users of a product where such failure renders the product hazardous." Peterson v. Safway Steel Scaffolds Co., 400 N.W.2d 909, 912 (S.D. 1987) (emphasis in original).

Plaintiffs assert defendants are strictly liable by reason of a design defect in the cambering machine and by a failure to warn. See Dockets 13 at ¶ 8; 63 at ¶ 17 (Plaintiffs do not dispute that none of the work performed by TJW broke or otherwise failed. Plaintiffs agree "the cause of Adam's death was a design error."). Plaintiffs assert the design of the cambering machine is defective because it failed to incorporate adequate protective devices to safeguard the operator from the expulsion of material from the cambering machine and because of the placement of the operator controls. (Docket 13 at ¶ 8). Plaintiffs also allege the defendants failed to warn or instruct that there was no machine guarding protecting the operator from the expulsion of material from the cambering machine. Id.

i. Design Defect

In a design defect claim, "[s]trict liability arises when a manufacturer sells any product in a defective condition unreasonably dangerous to the user or consumer...." Burley v. Kytec Innovative Sports Equip., Inc., 737 N.W.2d 397, 408 (S.D. 2007) (quoting Peterson, 400 N.W.2d at 912 (citations omitted)). "The plaintiff is not required to prove that the defendant[] knew or should have known of the defective nature of the product." Denekamp, 2008 WL 4646954, at *3 (citing Peterson, 400 N.W.2d at 912). "It is the unreasonableness of the condition of the product, not of the conduct of the defendant, that creates liability." Burley, 737 N.W.2d at 408 (citing Jackson v. Coast Paint & Lacquer Co., 499 F.2d 809 (9th Cir. 1974)).

The court can find no South Dakota case specifically addressing the extent to which a non-designing manufacturer following the specifications of the product's designer may be held strictly liable for an allegedly defective product. Denekamp, 2008 WL 4646954, at *3. When this absence of state authority occurs, Denekamp provides guidance:

When this court is applying South Dakota law and the South Dakota Supreme Court has not specifically addressed an issue, the court must determine what the state supreme court "would probably hold were it to decide the issue." Farr v. Farm Bureau Ins. Co., 61 F.3d 677, 679 (8th Cir. 1995). In resolving such questions, the court may consider relevant state precedent, analogous decisions, scholarly works, and other reliable dat[a]. See id. These data include judicial decisions from other jurisdictions whose doctrinal approach to legal matters is ...

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