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Karst v. Shur-Company

Supreme Court of South Dakota

April 20, 2016

RICHARD KARST and SUSAN KARST, Plaintiffs and Appellants,
v.
SHUR-COMPANY n/k/a SHORMA COMPANY and WILSON TRAILER COMPANY, Defendants and Appellees

         Argued December 1, 2015.

          APPEAL FROM THE CIRCUIT COURT OF THE FOURTH JUDICIAL CIRCUIT CORSON COUNTY, SOUTH DAKOTA. THE HONORABLE MICHAEL W. DAY, Judge.

         G. BRYAN ULMER, III of The Spence Firm, LLC, Jackson, Wyoming and AARON D. EIESLAND of Johnson Eiesland Law Offices, PC, Rapid City, South Dakota, Attorneys for plaintiffs and appellants.

         JAMES A. POWER, J.G. SHULTZ of Woods, Fuller, Shultz & Smith, PC, Sioux Falls, South Dakota, Attorneys for defendant and appellee Shur-Company n/k/a Shorma Company.

         MITCHELL PETERSON, MELISSA C. HINTON of Davenport, Evans, Hurwitz & Smith, LLP, Sioux Falls, South Dakota, Attorneys for defendant and appellee Wilson Trailer Company.

         ZINTER, Justice. GILBERTSON, Chief Justice, and SEVERSON, Justice, and PORTRA, Circuit Court Judge, concur. KERN, Justice, concurs in part and dissents in part. PORTRA, Circuit Court Judge, sitting for WILBUR, Justice disqualified.

          OPINION

         ZINTER, Justice

          [¶1] Richard and Susan Karst sued Shur Company and Wilson Trailer Company on negligence and strict-liability causes of action.[1] Karsts alleged defective design and improper warnings relating to Shur's electric-tarp system that Wilson included on a grain trailer it sold to Richard. The circuit court granted summary judgment against Karsts on their failure-to-warn claims, and a jury found in favor of Defendants on Karsts' remaining claims. On appeal Karsts argue that the circuit court erred in instructing the jury, in granting summary judgment on the improper-warning claims, in permitting an assumption-of-risk defense to go to the jury, and in refusing to admit evidence of the warnings that were provided. We affirm.

         Facts and Procedural History

          [¶2] Richard Karst was in the business of trucking and buying and selling oats. He used a type of grain trailer that required a tarp to cover the cargo area. From 1980 until 2007, Richard used a manual-tarp system on his trailers.

          [¶3] In 2007, Richard purchased two new grain trailers from Wilson. Both were equipped with Shur's model 3500 electric-tarp system. The tarp system featured a " roll tube" that ran the length of the trailer. A tarp, when rolled around the roll tube, retracted to uncover the cargo area. The roll tube was attached to the front and rear of the trailer by a " flex arm" at each end. The tarp system used an electric motor to roll up the tarp, and the tarp was unrolled to cover the trailer with the assistance of torsion springs located where the flex arms attached to the trailer. A spline at the rear end of the roll tube allowed the use of a manual crank to roll and unroll the tarp when necessary. However, a metal sleeve located at the end of the rear flex arm fit over the spline and connected the flex arm to the roll tube. Consequently, to get access to the spline to unroll the tarp manually, the flex arm had to be disconnected from the roll tube by removing the sleeve.

          [¶4] On December 15, 2009, Richard loaded two trailers with oats at an elevator in McLaughlin. The lead trailer's tarp closed properly, but the pup trailer's electric-tarp system failed, leaving the roll tube and tarp in the open position. A warning label located on the rear flex arm warned that it was under spring tension and advised reading the manual before disassembling the flex arm. Although the manual similarly warned that the flex arms were under tension, the manual did not offer guidance on how to unroll a tarp stuck in the open position with the electric-tarp system engaged.

          [¶5] Because the tarp had to be closed before leaving the elevator, Richard climbed onto a platform on the back of the trailer to attempt to manually unroll the tarp. He attempted to hold the flex arm with one hand while using a hammer to knock the flex arm's metal sleeve off the roll tube to get access to the spline. As soon as the sleeve separated from the roll tube, the torsion springs caused the flex arm to spring toward Richard, knocking him to the ground. Richard suffered a fractured skull and permanent brain damage. As a result of the brain injury, he is unable to recall the accident.

          [¶6] Karsts later brought this suit on causes of action alleging strict liability and negligence (both for defectively designing the product and for failing to properly warn of the danger). Wilson moved for summary judgment on all claims, and Shur moved for summary judgment on the failure-to-warn claims. After Karsts responded to the summary judgment motions on the failure-to-warn claims, the circuit court determined that Karsts failed to produce evidence that Richard had read the provided warnings prior to the accident. The court concluded that in the absence of such evidence, Karsts would be unable to prove causation on their failure-to-warn claims. Consequently, the court granted summary judgment to Defendants on all failure-to-warn claims. The court also granted summary judgment to Wilson on Karsts' negligent-defective-design claim.[2] After a twelve-day trial, a jury returned a verdict in favor of Defendants on Karsts' surviving claims.

          [¶7] Karsts appeal, raising four issues[3]:

1. Whether Jury Instruction 20 on strict liability misstated South Dakota law and misled and confused the jury.
2. Whether the circuit court erred in granting summary judgment in favor of Defendants on Karsts' failure-to-warn claims.
3. Whether there was sufficient evidence to instruct the jury on assumption of the risk.
4. Whether Karsts should have been allowed to present evidence of the warnings actually given in order to counter testimony on assumption of the risk.

         Decision

         Jury Instruction 20--Strict Liability

          [¶8] " A trial court has discretion in the wording and arrangement of its jury instructions, and therefore we generally review a trial court's decision to grant or deny a particular instruction under the abuse of discretion standard. However, no court has discretion to give incorrect, misleading, conflicting, or confusing instructions . . . ." Vetter v. Cam Wal Elec. Coop., Inc., 2006 S.D. 21, ¶ 10, 711 N.W.2d 612, 615 (citations omitted). Therefore, " when the question is whether a jury was properly instructed overall, that issue becomes a question of law reviewable de novo." Id.

          [¶9] Karsts argue that Instruction 20 on strict liability misstated the law and confused and misled the jury in describing products that are in a " defective condition unreasonably dangerous" to the user. Because jury instructions " must be considered as a whole in determining if error was committed in giving or refusing to give certain instructions[,]" Degen v. Bayman, 90 S.D. 400, 406, 241 N.W.2d 703, 706 (1976), Karsts' argument requires consideration of Instructions 19 and 20 together. This case was submitted to the jury on a defective-design theory, and the parties agreed that the strict-liability question should be determined under what is commonly referred to as the risk-utility test. Accordingly, the court gave Instruction 19, which stated: " A product is in a defective condition unreasonably dangerous to the user if it could have been designed to prevent a foreseeable harm without significantly hindering its function or increasing its price." Instruction 20 stated:

A product can be dangerous without being unreasonably dangerous. Even if a product is defective in some manner, you must find that the defect renders the product " unreasonably" dangerous. A product is not in a defective or unreasonably dangerous condition merely because it is possible to be injured while using it.

         According to Karsts, Instruction 20 was not needed because " Instruction 19 gave the jury all of the law it needed to decide whether defendants were liable on a product-defect theory." Karsts more specifically contend: (1) that under South Dakota law, Instruction 20 incorrectly implied a separate unreasonably-dangerous test, that defectiveness and unreasonable dangerousness are not separate elements, and that the jury was not required to accept any level of danger in this product; (2) Instruction 20 derives from Restatement (Second) of Torts § 402A comment k (Am. Law Inst. 1965), which applies only to products that are unavoidably unsafe; (3) Instruction 20 gave no standard for differentiating between a dangerous product and an unreasonably dangerous product; and (4) Instruction 20 unfairly emphasized the Defendants' theory of the case.

          [¶10] First, Instruction 20 did not misstate South Dakota-strict-liability law. Karsts incorrectly presume that the phrase " defective condition unreasonably dangerous" is a single element that does not include an unreasonably-dangerous inquiry. This Court adopted the rule of strict liability expressed in the Restatement (Second) of Torts § 402A. Peterson v. Safway Steel Scaffolds Co., 400 N.W.2d 909, 912 (S.D. 1987). Under this rule, a seller is strictly liable for physical harm caused by a product in a defective condition unreasonably dangerous to the user or consumer. Restatement (Second) of Torts § 402A. The rule " applies only where the defective condition of the product makes it unreasonably dangerous to the user or consumer." Id. § 402A cmt. i (emphasis added). Although we have not formally adopted the Restatement (Third) of Torts: Products Liability (Am. Law Inst. 1998),[4] it similarly imposes strict liability for defective design " when the foreseeable risks of harm posed by the product could have been reduced or avoided by the adoption of a reasonable alternative design . . ., and the omission of the alternative design renders the product not reasonably safe [.]" Id. § 2(b) (emphasis added). Thus, both the Restatement (Second) and Restatement (Third) rules contemplate a causal relationship between two elements: a defect must " make" or " render" a product unreasonably dangerous (not reasonably safe). As we have previously said, " [s]trict liability requires that the product be defective and unreasonably dangerous." Peterson, 400 N.W.2d at 912 (emphasis added). Numerous courts--in cases involving a variety of products that are not inherently dangerous--agree.[5]

          [¶11] Karsts further contend that Instruction 20 was erroneously taken from Restatement (Second) of Torts § 402A comment k, which applies only to products that are unavoidably unsafe (for example, medicines that cause serious side effects but treat deadly illnesses). Karsts point out that the tarp system was not such a product. Instruction 20 was not, however, taken from comment k. Rather, each of Instruction 20's three sentences finds its origin in Restatement (Second) of Torts § 402A comment i, which states in part:

The rule stated in this Section applies only where the defective condition of the product makes it unreasonably dangerous to the user or consumer. Many products cannot possibly be made entirely safe . . . . The article sold must be dangerous to an extent beyond that which would be contemplated by the ordinary consumer who purchases it, with the ordinary knowledge common to the community as to its characteristics.

(Emphasis added.) Thus, Instruction 20's first sentence (" A product can be dangerous without being unreasonably dangerous." ) and third sentence (" A product is not in a defective or unreasonably dangerous condition merely because it is possible to be injured while using it." ) come from the second and third sentences of comment i quoted here. Likewise, Instruction 20's second sentence (" Even if a product is defective in some manner, you must find that the defect renders the product 'unreasonably' dangerous." ) comes from the first sentence of comment i quoted here. Instruction 20 was not improperly taken from § 402A comment k language that applies only to products that are unavoidably unsafe.

          [¶12] Karsts next contend that additional instructions were required to define unreasonably dangerous.[6] Instruction 21, however, told the jury: " In determining whether the . . . [t]arp system was defective and unreasonably dangerous you may consider whether Shur Co. complied with the generally recognized state of the art . . . ." Moreover, it is " not error to refuse to amplify the instructions given which substantially cover the principle embodied in the requested instructions." Degen, 90 S.D. at 407, 241 N.W.2d at 706-07 (quoting Peters v. Hoisington, 72 S.D. 542, 554, 37 N.W.2d 410, 416 (1949)). Here, the root words at issue are reasonable and dangerous. These are ordinary words without unusual legal meaning, and absent a request for a more specific instruction, instructing the jury with ordinary words is generally considered sufficient. See Jorgenson v. Dronebarger, 82 S.D. 213, 218, 143 N.W.2d 869, 872 (1966).[7] Although we think a definition should be given if requested, there was no request for additional specificity in this case.[8]

          [¶13] Karsts finally argue that Instruction 20 unfairly emphasized Defendants' theory of the case. But as we have previously explained, " [s]trict liability requires that the product be defective and unreasonably dangerous." Peterson, 400 N.W.2d at 912 (emphasis added). Accordingly, Instruction 18 required Karsts to prove both elements: that the tarp system " was in a defective condition which made it unreasonably dangerous to Richard Karst[.]" Instruction 20 simply recognized that because both elements were required, it was not sufficient for the jury to determine merely that some danger was attendant to use of the product. Thus, Instruction 20 did not unfairly emphasize a defense theory of the case. Karsts also failed to object to Instruction 20 on this ground. " An attorney must be clear when objecting to jury instructions 'so the trial court is advised of what possible errors exist and be granted the opportunity to correct any instructions.'" Parker v. Casa Del Rey-Rapid City, Inc., 2002 S.D. 29, ¶ 15, 641 N.W.2d 112, 118 (quoting Sundt Corp. v. State by & through S.D. Dep't of Transp., 1997 S.D. 91, ¶ 17, 566 N.W.2d 476, 480). Therefore, Karsts waived this argument for appeal.

          [¶14] We conclude that when considered as a whole, the instructions correctly stated the law of strict liability in this jurisdiction. The circuit court did not err in giving Instruction 20.

         Summary Judgment--Failure to Warn

          [¶15] Summary judgment is appropriate " if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." SDCL 15-6-56(c). " The evidence must be viewed most favorably to the nonmoving party and reasonable doubts should be resolved against the moving party. The nonmoving party, however, must present specific facts showing that a genuine, material issue for trial exists." Peters v. Great W. Bank, Inc., 2015 S.D. 4, ¶ 5, 859 N.W.2d 618, 621 (quoting Saathoff v. Kuhlman, 2009 S.D. 17, ¶ 11, 763 N.W.2d 800, 804). " Entry of summary judgment is mandated against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial." Nationwide Mut. Ins. Co. v. Barton Solvents Inc., 2014 S.D. 70, ¶ 10, 855 N.W.2d 145, 149 (quoting Hass v. Wentzlaff, 2012 S.D. 50, ¶ 11, 816 N.W.2d 96, 101). A showing is not sufficient unless " the party challenging summary judgment substantiate[s its] allegations with sufficient probative evidence that would permit a finding in [its] favor on more than mere speculation, conjecture, or fantasy." Id. (quoting Quinn v. Farmers Ins. Exch., 2014 S.D. 14, ¶ 20, 844 N.W.2d 619, 624-25).

          [¶16] The circuit court granted Wilson's and Shur's motions for summary judgment on all failure-to-warn claims. The court observed that Karsts did not identify any evidence that Richard ever read the provided warnings. Therefore, the court concluded as a matter of law that Karsts were unable to establish a causal link between the alleged inadequate warnings and Richard's injury. On appeal, Karsts argue that summary judgment was inappropriate for several reasons. First, they contend that the failure to read an irrelevant warning does not bar a failure-to-warn claim. Second, they contend that they presented sufficient evidence to raise a genuine factual dispute whether Richard read the manual. Third, they contend that Richard is entitled to a presumption that he read the warnings. Fourth, they contend that the failure to read a warning does not preclude a failure-to-warn claim alleging improper placement of a warning.

          [¶17] Karsts first contend that the failure to read an irrelevant warning does not bar a failure-to-warn claim. They assert that the provided warnings were irrelevant because " Defendants did not warn of the hazards associated with removing the sleeve when the tarp was stuck open." They also assert that the logic of the instruction manual was circular: according to the manual, the first step in converting the system from electric to manual is to " close the tarp," but the first step in operating the tarp (when the electric system fails) is to convert the system from electric to manual. Thus, Karsts contend that notwithstanding the lack of a " causal link between the warnings and the incident, a purported failure to read [irrelevant] warnings . . . should not preclude a claim based on the lack of warnings about performing an 'open tarp' conversion." Defendants respond that " it is simply impossible for a plaintiff who cannot prove that he or she ever read and relied upon a warning to show that alleged inadequacies in the warning's content caused the accident[.]"

          [¶18] Causation is a necessary element of a failure-to-warn claim, whether pursued under a negligence or strict-liability theory. Barton Solvents, 2014 S.D. 70, ¶ 17, 855 N.W.2d at 150-51. In order to prove causation in a failure-to-warn claim, " [a] plaintiff must show that adequate warnings would have made a difference in the outcome, that is, that they would have been followed." Gen. Motors Corp. v. Saenz ex rel. Saenz, 873 S.W.2d 353, 357 (Tex. 1993); see also Payne v. Novartis Pharms. Corp., 767 F.3d 526, 531-32 (6th Cir. 2014) (" The key inquiry is whether, 'had additional warnings been given, the plaintiff would not have sustained her injuries.'" (quoting Smith v. Pfizer Inc., 688 F.Supp.2d 735, 746 (M.D. Tenn. 2010))). A " [p]laintiff's failure to read the available warning and instruction literature harms the ability to prove that a different warning would have changed his conduct." 2 David G. Owen & Mary J. Davis, Owen & Davis on Prods. Liab. § 11:20 (4th ed. 2014). Therefore, courts generally hold that a plaintiff's failure to read a given warning precludes establishment of the causation element even if the warning is arguably inadequate. See Johnson v. Niagara Mach. & Tool Works, 666 F.2d 1223, 1225 (8th Cir. 1981) (" [A]n issue as to the adequacy of a warning necessarily presupposes that the operator has read the warning." ); Palmer v. Volkswagen of Am., Inc., 904 So.2d 1077, 1084 (Miss. 2005) (" The presence or absence of anything in an unread owner's manual simply cannot proximately cause a plaintiff's damages." ); Burley v. Kytec Innovative Sports Equip., Inc., 2007 S.D. 82, ¶ 37 n.7, 737 N.W.2d 397, 410 n.7 (accepting premise of defendant's argument that a student athlete injured by exercise equipment did not read the instruction manual and therefore could not establish proximate cause, but rejecting argument because the athlete's trainer, who was responsible for and oversaw the athlete's use of the equipment, had read the manual). The circuit court correctly concluded that Richard's failure to read the provided warnings would be fatal to a liability theory premised on the content of those warnings because causation could not be established.

          [¶19] Karsts alternatively contend that they presented " evidence that, when viewed in the light most favorable to the Karsts, [established that Richard] read the warnings." It is not disputed that due to the nature of his injury, Richard cannot remember whether he read the provided warnings prior to the accident. Therefore, Karsts rely on the depositions of three other witnesses. First, Wilson's sales manager, Richard Gase, stated in his deposition that he " would . . . tell customers that [he] thought there was very good information in [the] owner's manual and that it was important to read through it." Second, one of Karsts' expert witness, Dr. Laughery, opined in his deposition that Richard " was a guy who wasn't in a hurry . . . and . . . who, by all the things that I read, was responsible, that had he been given adequate information, adequate warnings, he would have complied with them." Finally, one of the employees at the grain elevator, Todd Hauck, stated in his deposition that he saw Richard climb up to the work platform on the back of the trailer, climb down and read " something," ask for a wrench, then climb back up to the platform and release the flex arm from the roll tube.

          [¶20] The foregoing evidence was not sufficient to resist summary judgment. " Where the theory of liability is failure to warn adequately, the evidence must be such as to support a reasonable inference, rather than a guess, that the existence of an adequate warning may have prevented the accident before the issue of causation may be submitted to the jury." Conti v. Ford Motor Co., 743 F.2d 195, 198 (3d. Cir. 1984); see also Barton Solvents, 2014 S.D. 70, ¶ 10, 855 N.W.2d at 149. Mr. Gase's statement about unidentified customers and " good information" creates no inference that Richard actually read the specific warnings that are at issue in this case. So also, Dr. Laughery made clear that his opinion whether Richard may have read the supplied warnings prior to the accident was speculative. Dr. Laughery conceded that he was not making any assumptions on whether Richard read the owner's manual prior to the accident. In fact, Dr. Laughery indicated that Richard's behavior was typical of someone who either did not recall that the owner's manual included a section on converting from electric to manual use or someone who had not read the manual in the first place.[9] Finally, Mr. Hauck could not identify what it was that he saw Richard read immediately prior to the accident. Mr. Hauck was not even sure whether the reading material consisted of a book or a single sheet of paper. Moreover, Richard testified that he kept all of the instruction manuals for his trailers in his workshop, and the relevant manual was not found at the accident site where Mr. Hauck observed Richard reading " something." Thus, Karsts' evidence was insufficient to create a question of fact for a jury: it did not " permit a finding in [their] favor on more than mere speculation, conjecture, or fantasy." See Barton Solvents, 2014 S.D. 70, ¶ 10, 855 N.W.2d at 149 (quoting Quinn, 2014 S.D. 14, ¶ 20, 844 N.W.2d at 624-25).

          [¶21] Nevertheless, Karsts contend that Richard was entitled to a presumption that he read the provided warnings prior to the accident. They point out that in the context of moving-vehicle accidents, " [t]here is a presumption, in the absence of evidence to the contrary, that a person killed in an accident was exercising due care for his protection at, and immediately before, the accident." Dehnert v. Garrett Feed Co., 84 S.D. 233, 236, 169 N.W.2d 719, 721 (1969). They further point out that this presumption has been extended to accidents resulting in amnesic plaintiffs. SeeSchultz & Lindsay Constr. Co. v. Erickson, 352 F.2d 425, 434 (8th Cir. 1965). According to Karsts, " reading warnings is ...


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