Nancy L. Bly, Administratrix of Wayne A. Bly, Deceased, Appellee, v. Otis Elevator Company, a New Jersey Corporation, Appellant, 713 F.2d 1040 (4th Cir. 1983)

Otis Elevator Co. appeals from a final judgment in the district court, entered on a general jury verdict, holding it liable on a breach of warranty theory for personal injuries suffered by plaintiff's decedent. Because there was error in the jury instructions regarding the manufacturer's duty to warn as an element of the warranty of merchantability, we vacate the judgment and remand for a new trial.

* Plaintiff's decedent, Wayne Bly, was injured while operating a lift truck at the Avtex Fibers Plant in Virginia where he was employed. The truck was equipped in the front with a lift mechanism used to transport large canisters throughout the factory, and in the rear with a shin-high guard designed to provide protection from objects encountered while the truck was travelling in reverse. Operators of this and other lift trucks owned by Avtex stand on a small platform at the rear of the truck with their torso facing forward to maneuver the steering and other controls. Because the large canisters impair visibility to the front, the trucks are driven in reverse around the plant, necessitating that operators look over their shoulders in the direction of travel.

The particular truck Bly was driving when he sustained injury was manufactured by Baker Raulang Co., which sold the truck to the predecessor-in-interest of Avtex in 1944. Baker Raulang last exercised control over the truck in 1948, when it modified the truck's lift mechanism.

The parties agree that Bly was injured in September 1979 when he backed his truck without looking behind him and ran into a canister perched on the front-end lift of another truck. Because that canister was raised off the floor, the shin-high guard on Bly's truck slipped underneath, and Bly was crushed between the canister and the controls of his truck.

Bly's mother, as administratrix of his estate, then instituted the present wrongful death action against Otis Elevator Co.--the successor-in-interest to Baker Raulang--seeking relief on the basis of negligence and breach of warranty for alleged defects in the lift truck. The district court granted Otis's motion for directed verdict on the negligence count, holding as a matter of law that Bly's contributory negligence barred recovery. Accordingly, the case went to the jury solely on a theory of breach of the implied warranty of merchantability.

On appeal from the judgment entered on a jury verdict for the plaintiff, Otis contends there was insufficient evidence to support a verdict on this theory, and that the trial court's jury instructions erroneously included a charge on the manufacturer's duty to warn. We sketch briefly the contours of an action for breach of warranty, and then turn to the merits of these claims.

II

Under Virginia law, which the parties agree controls resolution of this diversity action, manufacturers and sellers of defective products can be held liable on theories of negligence and breach of the implied warranty of merchantability. See Featherall v. Firestone Tire & Rubber Co., 219 Va. 949, 961-64, 252 S.E.2d 358, 367 (1979); Logan v. Montgomery Ward & Co., 216 Va. 425, 428, 219 S.E.2d 685, 687 (1975); see also Va.Code §§ 8.2-314, 8.2-318 (1965). A personal injury or wrongful death claimant may recover for breach of warranty under Virginia law by establishing "(1) that the goods were unreasonably dangerous either for the use to which they would ordinarily be put or for some other reasonably foreseeable purpose, and (2) that the unreasonably dangerous condition existed when the goods left the defendant's hands." Logan v. Montgomery Ward & Co., 216 Va. at 428, 219 S.E.2d at 687. A product can be "unreasonably dangerous" if defective in assembly or manufacture, see, e.g., Matthews v. Ford Motor Co., 479 F.2d 399, 400 (4th Cir. 1973), if imprudently designed, see, e.g., Dreisonstok v. Volkswagenwerk, A.G., 489 F.2d 1066, 1071 (4th Cir. 1974), or if not accompanied by adequate warnings about its hazardous properties, see, e.g., Spruill v. Boyle-Midway, Inc., 308 F.2d 79, 85-86 (4th Cir. 1962).

III

We dispose quickly of Otis's contention that the evidence adduced on trial was insufficient to support the jury verdict.¹ 

The primary theory of plaintiff's breach of warranty claim was that the lift truck as designed was defective and "unreasonably dangerous" because its shin-high guards provided inadequate protection to the operator in rear-end collisions. In support of this theory, plaintiff produced substantial expert and documentary evidence which if accepted by the jury indicated that, by the 1940's when this truck was manufactured and sold, industry and government circles had recognized the need for waist-high guards on such lift trucks as a reasonable means of ensuring greater safety. Cf. Dreisonstok v. Volkswagenwerk, A.G., 489 F.2d 1066, 1073 (4th Cir. 1974) ("if an article can be made safer and the hazard of harm may be mitigated 'by an alternative design or device at no substantial increase in price,' then the manufacturer has a duty to adopt such a design"). In light of this evidence suggesting that waist-high guards reflected prevailing industry views on the appropriate level of operator protection at the time this lift truck was manufactured and sold, coupled with expert testimony opining that the truck was, in this sense, defective in design, a jury could certainly conclude that a lesser standard of protection was "unreasonable" and a breach of the warranty of merchantability that proximately caused Bly's death.²  See Foster v. Ford Motor Co., 616 F.2d 1304, 1311 (5th Cir. 1980); Weakley v. Fischbach & Moore, Inc., 515 F.2d 1260, 1268-69 (5th Cir. 1975).

A jury verdict that unquestionably rested upon this theory of defective design would accordingly have been unassailable. That this was the basis of the verdict is not, however, certain, and in consequence the matter does not end here.

IV

In addition to her theory of defective design, plaintiff sought to prove at trial that Otis, and its corporate predecessor, had breached the warranty of merchantability by failing to warn of the hazards of operating the lift truck. She asserted that the machine should have been accompanied, when sold in 1944 and refitted in 1948, by instructions and warnings concerning its potential dangers.³  Moreover, plaintiff introduced evidence that Otis had been notified in 1977 of a similar accident involving the same truck at the Avtex plant, in which an operator named Harry Wilson had been killed,⁴  to demonstrate Otis's further obligation at that later date to warn Avtex about the lift truck.

The trial court charged the jury on plaintiff's theory that "in the original design in '44, '48, and after the learning of the '77 death of Wilson ... it was necessary that the defendant give a warning in order for the forklift not to be unreasonably dangerous or cause an unreasonable risk of injury to users of the lift." The court summarized the factual elements that could give rise to this putative duty to warn, and then observed: "It was not a continuing duty to warn. This duty ended in '44 and at the latest '48. However, you may find, provided the conditions for a requirement of such a warning existed, a renewal of that obligation after notice of the Wilson death."⁵ 

We disagree with the general contention advanced by Otis on appeal that the trial court, by instructing on the duty to warn, necessarily erred by injecting negligence principles into a case being tried solely on a theory of breach of warranty. A manufacturer or seller that fails to warn of the dangers of its products can be held liable, in appropriate circumstances, either on a theory of negligence, see Featherall v. Firestone Tire & Rubber Co., 216 Va. 949, 961-64, 252 S.E.2d 358, 367 (1979); Restatement (Second) of Torts § 388 (1965), or on a theory of implied warranty, see Reid v. Eckerds Drugs, Inc., 40 N.C.App. 476, 482-83, 253 S.E.2d 344, 348-49 (N.C.Ct.App.), review denied, 297 N.C. 612, 257 S.E.2d 219 (1979), or strict liability in tort,⁶  see Greiner v. Volkswagenwerk Aktiengeselleschaft, 540 F.2d 85, 91 (3d Cir. 1976); Martinez v. Dixie Carriers, Inc., 529 F.2d 457, 465 (5th Cir. 1976); Jackson v. Coast Paint & Lacquer Co., 499 F.2d 809, 812 (9th Cir. 1974); Restatement (Second) of Torts § 402A comments h, j (1965). A manufacturer may breach its implied warranty of merchantability by failing to warn or instruct concerning dangerous propensities or characteristics of a product even if that product is flawless in design and manufacture. See Reid v. Eckerds Drugs, Inc., 40 N.C.App. at 482-83, 253 S.E.2d at 348-49; cf. Davis v. Wyeth Laboratories, 399 F.2d 121, 128 (9th Cir. 1968) (failure to warn gives rise to strict liability in tort, even where no manufacturing or design flaw). In essence, the product is rendered "unreasonably dangerous" by the absence of proper warnings or instructions. See Barber v. General Electric Co., 648 F.2d 1272, 1277 (10th Cir. 1981); Karjala v. Johns-Manville Products Corp., 523 F.2d 155, 158 (8th Cir. 1975); Alman Brothers Farms & Feed Mill, Inc. v. Diamond Laboratories, Inc., 437 F.2d 1295, 1303 (5th Cir. 1971).

This duty to warn under a theory of implied warranty or strict liability in tort is obviously similar, in many respects, to the manufacturer's duty to warn under a negligence theory.⁷  But it differs in critical aspects important to the resolution of this appeal.

First, as the district court properly charged the jury, the duty to warn under an implied warranty theory focuses upon whether the lack of warning renders the product unreasonably dangerous; in contrast, a manufacturer will be liable in negligence for a failure to warn if its conduct is unreasonable.⁸  See Jackson v. Coast Paint & Lacquer Co., 499 F.2d 809, 812 (9th Cir. 1974); Woodill v. Parke Davis & Co., 79 Ill. 2d 26, 35, 37 Ill.Dec. 304, 308, 402 N.E.2d 194, 198 (1980); 2 L. Frumer & M. Friedman, Products Liability § 16A [f] [vi] (1982).⁹  Second, under a negligence theory the duty to warn is continuous and is not interrupted by manufacture or sale of the product, see Large v. Bucyrus-Erie Co., 707 F.2d 94 (4th Cir. 1983) (Winter, C.J., dissenting); W. Prosser, Law of Torts § 96, at 647 (4th ed. 1971), whereas the duty to warn under a theory of strict liability exists only at the time the product leaves the manufacturer's control, see Barber v. General Electric Co., 648 F.2d 1272, 1277 (10th Cir. 1981); Logan v. Montgomery Ward & Co., 216 Va. 425, 428, 219 S.E.2d 685, 687 (1975); 1 R. Hursh & H. Bailey, American Law of Products Liability § 4.13, at 674 (2d ed. 1974).¹⁰  This distinction clearly reflects the emphasis in strict liability upon the danger of the product rather than the conduct of a manufacturer: if a product is not rendered unreasonably dangerous by the absence of warnings when it leaves the manufacturer's control, it cannot at some later date "become" unreasonably dangerous due to the lack of warnings.

In light of this latter distinction, the trial court erred in instructing the jury that it could find a "renewal" of the duty to warn after Otis received notice in 1977 of the death of Wilson in circumstances similar to the accident suffered by plaintiff's decedent. Under the breach of warranty theory by which this case was submitted to the jury, the manufacturer's duty to warn, as relevant to determining whether the lift truck was "unreasonably dangerous" when manufactured and sold, could have arisen only in 1944 and 1948 when Baker Raulang had control over the truck. By instructing the jury that the duty to warn could be revived by subsequent notice of injuries, the district court introduced elements of a negligence cause of action for failure to warn not applicable where the controlling theory is breach of warranty. This instruction made possible a verdict based on an erroneous theory of liability. Accordingly, it fatally taints the general jury verdict, which cannot stand.

V

For the foregoing reasons, the judgment of the district court is vacated, and the case remanded for further proceedings consistent with this opinion.

VACATED AND REMANDED.

BUTZNER, Senior Circuit Judge, dissenting:

I agree with the court's exposition of the law. I disagree about application of the law to the jury instructions.

The only proof of the forklift's unfitness was its defective design which made it unreasonably dangerous when the manufacturer sold it.

The court correctly told the jury that in order for the plaintiff to recover she had to show that the forklift was unfit when it was made available for the buyer's use in 1944 or 1948. The instructions explained that the word "unfit" meant "reasonably dangerous or a condition that subjects the users of the forklift to an unreasonable risk of injury." The court emphasized the importance of the time for determining whether the forklift was unfit by telling the jury that they should consider the state of technology and art on the subject "as it was in the years 1944 and at the latest '48 because they are the crucial years when this product was in the--last in the possession of the defendant."

The instructions on warning must be considered in the context of the entire charge. They cannot be divorced from the following paragraph of the charge:

In order to find an obligation to warn, however, you must first find that there was an unfit condition to warn about and that a warning was necessary to prevent the forklift from being unreasonably dangerous or subjecting its users to an unreasonable risk of injury.

Thus, the jury could not base its verdict solely on a lack of warning in 1977. Under the instructions of the court, the jury first had to find "an unfit condition to warn about." The only "unfit condition" was defective design which the court had told the jury must be determined by the state of the art in the 1940's.

Parenthetically, if the manufacturer had fulfilled its warranty by giving adequate warning when it sold the forklift in the 1940's, the court's instruction about warning in 1977 would have injected error in the case. But this is not the situation, for the evidence is undisputed that the manufacturer gave no warning when it sold the defectively designed machine.

In sum, considering the charge as a whole, I believe that the instructions about warning did not mislead the jury. In order for the plaintiff to prevail, the jury was required to find that the forklift was unfit when it left the manufacturer's hands. Because the evidence was sufficient to support such a finding, I would affirm the judgment entered on the verdict of the jury.