McKinnon v. F.H. Morgan & Co.

McKinnon v. F. H. Morgan & Co. (98-236); 170 Vt. 422; 750 A.2d 1026

[Filed 24-Mar-2000]


       NOTICE:  This opinion is subject to motions for reargument under
  V.R.A.P. 40 as well as formal  revision before publication in the Vermont
  Reports.  Readers are requested to notify the Reporter  of Decisions,
  Vermont Supreme Court, 109 State Street, Montpelier, Vermont 05609-0801 of
  any  errors in order that corrections may be made before this opinion goes
  to press.


                                 No. 98-236


Judy McKinnon	                                 Supreme Court

                                                 On Appeal from
     v.	                                         Franklin Superior Court


F. H. Morgan & Co., Inc., d/b/a	                 April Term, 1999
Center State Bicycles, Trek Bicycle Corp. 
and Shimano, Inc.


David A. Jenkins, J.

Matthew T. Daly of Doremus Associates, Burlington, for Plaintiff-Appellant.

Susan J. Flynn and Joshua L. Simonds of Affolter Gannon & Flynn, Burlington, 
  for Defendant-Appellee F. H. Morgan & Co.

Douglas D. Le Brun of Dinse, Knapp & McAndrew, P.C., Burlington, for 
  Defendant-Appellee Trek Bicycle Corp.

Walter E. Judge, Jr. of Downs Rachlin & Martin, PLLC, Burlington, for 
  Defendant-Appellee Shimano, Inc.


PRESENT:  Amestoy, C.J., Morse, Johnson, Skoglund, JJ., and Gibson, J. (Ret.),   
  Specially   Assigned


       MORSE, J.   Plaintiff Judy McKinnon is a Canadian citizen who was
  injured near her  home in Quebec when she fell off a bicycle her
  sister-in-law had purchased for her son in  Vermont.  She appeals the
  superior court's denial of her motion for partial summary judgment,  in
  which she asked the court to apply Vermont law to the issues of liability
  and damages in her 

 

  personal injury action against the retailer and manufacturers of the
  bicycle and its allegedly  defective components.  We conclude that the
  superior court correctly determined that Quebec law  should apply under the
  circumstances of this case, and accordingly affirm the court's decision.

       The material facts are undisputed.  Plaintiff is a Canadian citizen
  and a resident of Quebec.  In July 1992, plaintiff's sister-in-law
  purchased a Trek bicycle from defendant F.H. Morgan &  Company, a retail
  store doing business as Center State Bicycles in St. Albans, Vermont.  She 
  purchased the bicycle as a gift for plaintiff's son.  In June 1993,
  plaintiff brought the bicycle back  to F.H. Morgan for a tune-up and
  service.   On July 30, 1993, plaintiff was riding the bicycle two  blocks
  from her home in Quebec when one of the pedals "snapped off," causing her
  to fall and  injure her right hand.  She was treated for her injuries by
  various doctors and physical therapists  in Quebec over the following five
  months.  In connection with the ensuing litigation, plaintiff also 
  received treatment for her injuries in Burlington, Vermont in January 1996. 

       In July 1996, plaintiff filed suit in Vermont superior court, alleging
  negligence and breach  of contract against F.H. Morgan, and negligence and
  strict product liability against defendant Trek  Bicycle Corporation and
  defendant Shimano, Inc., the manufacturer of the pedal and crank shaft 
  components.  In response to the parties' cross-motions for partial summary
  judgment on the  choice-of-law question, the superior court ruled that
  Quebec law would apply at trial on all counts  to both liability and
  damages.  The court then granted plaintiff's motion for permission to
  appeal  its interlocutory ruling.  On appeal, plaintiff argues that Vermont
  law should apply to both her  contract and tort claims.

 (Page 3)

       This Court has adopted the Restatement (Second) of Conflicts for
  choice-of-law questions  in both tort and contract cases.  See Amiot v.
  Ames, 166 Vt. 288, 292, 692 A.2d 675, 677-78  (1997) (tort cases); Pioneer
  Credit Corp. v. Carden, 127 Vt. 229, 233, 245 A.2d 891, 894 (1968) 
  (contract cases).  Plaintiff first argues that the trial court should have
  applied Vermont law to her  breach-of-contract claim against F.H. Morgan
  under the considerations and guidelines contained  in § 188 (concerning
  choice of law with respect to contract issues) and §  6 stating general
  choice-of-law principles) of the Restatement.  We decline to consider §
  188 because, as all of the parties,  including plaintiff, have conceded in
  their statements of undisputed facts, this is a personal  injury/product
  liability action claiming damages for injuries allegedly caused by F.H.
  Morgan's  negligent conduct in servicing the bicycle and/or by the
  manufacturers in having placed a defective  product in the stream of
  commerce.  See Kinney v. Goodyear Tire & Rubber Co., 134 Vt. 571,  574-75,
  367 A.2d 677, 679 (1976) (authorities are in general agreement that strict
  liability sounds  in tort rather than in contract).  Notwithstanding
  plaintiff's  characterization of the various counts  in her complaint, her
  personal injury action sounds in tort, and thus we will consider the 
  Restatement's choice-of-law principles as they apply to tort cases.  Cf.
  Fitzgerald v. Congleton,  155 Vt. 283, 288, 583 A.2d 595, 598 (1990)
  (long-followed principle in Vermont is that nature  of harm done, rather
  than party's characterization of action, is governing factor in determining 
  which limitations period should apply).

       The general choice-of-law principle for tort cases is that the rights
  and liabilities of the  parties are determined by the law of the state that
  "has the most significant relationship to the  occurrence and the parties
  under the principles stated in § 6."  See Restatement, supra, § 145(1). 
  But, as we stated today in another case addressing similar issues, before
  applying this general 

 

  principle, we must first ascertain whether a specific section of the
  Restatement applies to the  particular action or issue in dispute.  See
  Martineau v. Guertin, No. 98-181, slip op. at 3 (Vt.  Mar. 24, 2000).

       The present case, as noted, is a personal injury action.  Under § 146
  of the Restatement,  the "law of the state where the injury occurred
  determines the rights and liabilities of the parties"  in an action for
  personal injury unless another jurisdiction has a more significant
  relationship to  the occurrence and the parties under the general
  principles stated in § 6.  See Dorman v. Emerson  Elec. Co., 23 F.3d 1354,
  1359 (8th Cir. 1994) (§ 146 is devoid of language suggesting intent to 
  exclude product liability cases from scope of its place-of-injury
  presumption).  In short, Quebec  law is presumed to apply in this case
  unless plaintiff demonstrates that Vermont's interests in the  litigation
  override the place-of-injury presumption contained in § 146.  See
  Martineau, slip op.  at 4.

       The following broad principles are considered in determining whether
  one forum's  contacts are significant enough to override the presumption
  contained in a specific section of the  Restatement:

     (a) the needs of the interstate and international systems, (b) the 
     relevant policies of the forum, (c) the relevant policies of other 
     interested states and the relative interests of those states in the 
     determination of the particular issue, (d) the protection of justified 
     expectations, (e) the basic policies underlying the particular field of 
     law, (f) certainty, predictability and uniformity of result, and (g) 
     ease in the determination and application of the law to be applied.

  Restatement, supra, § 6(2).  The first three (or perhaps four) of these
  general principles carry the  greatest weight in the field of tort law. 
  See Miller v. White, 167 Vt. 45, 48, 702 A.2d 392, 394  (1997); Amiot, 166
  Vt. at 293, 693 A.2d  at 678.  Contacts to be taken into account in 

 

  applying the § 6 principles in tort cases are "(a) the place where the
  injury occurred, (b) the place  where the conduct causing the injury
  occurred, (c) the domicile, residence, nationality, place of  incorporation
  and place of business of the parties, and (d) the place where the
  relationship, if any,  between the parties is centered."  Restatement,
  supra § 145(2).

       Plaintiff contends that Vermont law should govern the parties' dispute
  because (1) the  retailer and the retail transaction occurred in Vermont; 
  (2) the parties' relationship centered in  Vermont, where the defective
  parts were bought and sold, and where the bicycle was serviced;  (3)
  Vermont has an interest in regulating retail transactions, deterring
  wrongful conduct, and  allowing liberal compensatory damages within its
  borders; and (4) Vermont's efforts at promoting  tourism would be dampened
  by not applying Vermont law to retail transactions occurring within  its
  borders.

       Defendants counter that Quebec law should apply because (1) plaintiff
  is domiciled in  Quebec; (2) the injury occurred in Quebec; (3) the bicycle
  was owned and used in Quebec; (4)  plaintiff's medical treatment was
  rendered in Quebec, and the vast majority of her medical costs  were
  incurred there; (5) only one of the three defendants was domiciled in
  Vermont; (6) plaintiff's  relationship to the manufacturers of the bicycle
  and the allegedly defective components was not  centered in Vermont; (7)
  the allegedly defective products were not manufactured in Vermont and  are
  marketed in Quebec; (8) Quebec has a vital interest in compensating its
  citizens injured by  internationally marketed products available in Canada;
  and (9) Vermont has an interest in  preventing forum-shopping.

       Notwithstanding the considerations offered by plaintiff, we find no
  compelling reasons for  applying Vermont law and overriding the presumption
  that the law of the place where the 

 

  injury occurred governs.  See Hickman v. Thomas C. Thompson Co., 592 F. Supp. 1282, 1286  (D. Colo. 1984) (state with most significant contacts in
  strict product liability action is place  where product was used, injury
  occurred, and plaintiff resided).  Plaintiff has failed to articulate  how
  any of the general guidelines contained in § 6 of the Restatement dictate
  applying Vermont  law in this case.  Indeed, plaintiff fails to even
  compare the law of Quebec with that of  Vermont  as it pertains to her
  suit.  While we may assume from her decision to sue defendants in Vermont 
  that the law here is more likely to provide her greater compensation for
  her injuries than Quebec  law, that fact, in and of itself, is an
  insufficient reason to apply Vermont law.  See In re Estate  of Johnson,
  158 Vt. 557, 560, 613 A.2d 703, 705 (1992) (discouraging forum shopping is 
  legitimate state interest).

       By failing to provide a comparative statement demonstrating an actual
  conflict of laws,  plaintiff hampers any examination of policy
  considerations underlying those laws.  As far as we  can tell, the most
  compelling consideration in this suit is Quebec's interest in protecting
  its citizens  from harm allegedly caused by corporations that market their
  products both in the United States  and Canada.  See Collins v. Trius,
  Inc., 663 A.2d 570, 573 (Me. 1995) ("Canada has  demonstrated a profound
  interest in achieving a measure of uniformity in tort recovery among 
  Canadian residents."); Dorman, 23 F.3d  at 1360-61 (Canada's interest in
  protecting its citizens  from injuries occurring in Canada and setting
  standards for manufacture and distribution of  products within its borders
  is at least as significant as Missouri's interest in assuring that its 
  corporations comply with adequate design standards; accordingly, Canadian
  law governs because  plaintiffs failed to overcome § 146's presumption in
  favor of applying law of jurisdiction where  injury occurred).  Plaintiff
  fails to demonstrate that this interest is thwarted 

 

  by applying Quebec law.

       Plaintiff fares no better upon examination of the § 145(2) factors. 
  The place where the  injury occurred - the factor generally considered to
  be most significant in personal injury cases,  particularly when it
  coincides with the place of the plaintiff's domicile - calls for the
  application  of Quebec law.  The residence or place of business of the
  parties is mixed, and the other two  factors - the place where the wrongful
  conduct occurred and the place where the parties'  relationship was
  centered - are ambiguous under the facts of this case.  See Alison v. Ite
  Imperial  Corp., 928 F.2d 137, 140 (5th Cir. 1991) (suggesting that center
  of relationship between parties  in product liability case is place where
  victim came in contact with allegedly defective product).

       Comparing the present case with our recent choice-of-law cases
  concerning automobile  accidents further demonstrates that the
  place-of-injury presumption should apply here.  In two of  those cases, we
  did not apply the place-of-injury presumption because another jurisdiction
  plainly  had significant contacts exceeding those of the jurisdiction where
  the accident occurred.  For  example, in Miller, 167 Vt. at 53, 702 A.2d  at
  397, a case involving a single-car accident in  Quebec, we held that
  Vermont law applied because both of the parties were domiciled in  Vermont,
  their relationship centered in Vermont, the car that they were operating
  was registered  and insured in Vermont, and they were returning to Vermont
  from a brief trip across the Canadian  border when the accident occurred.

       The converse situation existed in Myers v. Langlois, 168 Vt. 432, 435,
  721 A.2d 129, 131  (1998), where Quebec residents were involved in an
  accident during a short day-trip to Vermont  in a car registered and
  insured under Quebec law.  Noting that, like Miller, the case  

 

  primarily concerned allocation of post-event losses, and that the social
  and economic repercussions  of the accident would be felt in Quebec, we
  concluded that the parties' common residency and  relationship in Quebec
  was more significant than the fact that the accident and wrongful conduct 
  had occurred in Vermont.  See Myers, 168 Vt. at 437, 721 A.2d  at 132;
  Miller, 167 Vt. at 52,  702 A.2d  at 396; see also Priestman v. Canadian
  Pac. Ltd., 782 F. Supp. 681, 685 (D. Me. 1992)  (rejecting place-of-injury
  presumption where injured person resided and worked in Maine, was  injured
  in Quebec after being called to work there on emergency basis, and was
  hospitalized and  cared for in Maine after initial hospitalization in
  Canada); Collins, 663 A.2d  at 573 (rejecting  place-of-injury presumption
  where bus driver and passengers involved in accident were all  Canadian
  residents, bus was registered in Canada, and passengers had purchased
  tickets in Canada  for week-long round trip between Canada and New York).

       On the other hand, in Martineau, slip op. at 8, we applied the
  place-of-injury presumption  because the various factors contained in § 6
  and § 145(2) did not favor any particular jurisdiction  to a significant
  degree.  In Martineau, the residency of the parties and their relationship
  to each  other with respect to the underlying occurrence did not plainly
  point to one particular forum,  making it a close call as to which law
  should be applied.  See id.  A similar situation exists here.  Accordingly,
  the superior court correctly applied the Restatement's place-of-injury
  presumption  in ruling that Quebec law would govern the parties' dispute.

       Affirmed.


                                       FOR THE COURT:
                                                                     

                                       _________________________________________
                                       Associate Justice