Prentis v. Yale Mfg. Co.

BOYLE, J.

This products liability action arose out of injuries sustained in an accident involving the operation of a hand-operated forklift manufactured by defendant. The procedural events leading up to this appeal include two trials and two reversals and remands for new trials by the Court of Appeals. Plaintiffs John Prentis and his wife, Helen, brought suit alleging both negligence and breach of implied warranty, predicating defendant manufacturer's liability upon the alleged defective design of the forklift. Although the trial judge included both negligence and breach of warranty in his statement of plaintiffs' theory of the case to the jury, he refused to give plaintiffs' requested instructions on breach of implied warranty. A judgment for the defendant, upon a jury verdict of no cause of action, was reversed by the Court of Appeals, which held that the trial court's failure to charge the jury as requested was reversible error, mandating a new trial. . . .

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The facts of this case are not seriously in dispute. In April of 1970, plaintiff John Prentis, who was employed as foreman of the parts department at an automobile dealership, sustained a hip injury in an accident involving the use of a forklift manufactured by defendant Yale Manufacturing Company and sold to plaintiff's employer in 1952. The forklift was a stand-up or walking type, termed by defendant a "walkie hi-lo" model, rather than a riding or sit down variety. It was operated by lifting its handle up, much like the handle of a wagon. The forklift was estimated by plaintiff to weigh about two thousand pounds and was powered by a large battery, which had to be recharged every night. The machine was equipped with a hand controlled "dead-man" switch which normally prevented it from moving if the operator let go of the handle or controls.

Mr. Prentis, who was sixty-three years old at the time of the accident, had been working at the automobile dealership for two years prior to his injury, and testified that he had occasionally operated the forklift during that period, although he had never been formally instructed as to its operation by his employer. He testified that he was aware of and had previously experienced problems with the machine. After use for five or six hours, the battery charge would run down and the machine would operate erratically. When the battery was low, Mr. Prentis said he would play the handle back and forth to get the machine to start and when he did this the machine was subject to power surges which he said could throw a person off balance if care was not taken. He testified that prior to his accident, the machine had broken through the garage door of the dealership five or six times due to such power surges.

The accident in which Mr. Prentis was injured occurred late in the day, and he testified that he was aware at the time that the battery charge on the forklift was running low. After using the machine to assist him in placing an engine inside the cargo area of a delivery van, while the forklift was in tow behind him on a slightly inclined ramp leading from the delivery bay, Mr. Prentis attempted to start the machine by working the handle up and down. When the machine experienced a power surge, he lost his footing and fell to the ground. It appears that plaintiff's injuries were a result of the fall only, as the machine did not hit or run over him, but continued past him and stopped when it ran into a parked car. Mr. Prentis received extensive treatment for multiple fractures of his left hip.

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Plaintiffs' proofs in the 1978 and 1980 cases were identical and included the testimony of both Mr. Prentis and his wife, a treating physician, and two expert witnesses. In the 1980 trial, plaintiffs' counsel read into evidence the complete testimony of the two experts transcribed in the 1978 trial. The focus of plaintiffs' proofs at both trials was an alleged defect in the design of the forklift, and the substance of the expert witness' testimony was that the design of the forklift failed to properly incorporate the operator as a "human factor" into the machine's function, specifically because it did not provide a seat or platform for the operator. However, in the period between the Court of Appeals reversal and the second trial, Michigan had enacted the "products liability statute," . . . which became effective on December 11, 1978, resulting in some confusion as to the proper legal principles to be applied in this case.

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The development of the law of tort liability for physical injury caused by products is perhaps the most striking and dramatic of all the numerous stories in the portfolio of modern tort scenarios. When the societal goal of holding manufacturers accountable for the safety of their products has been threatened by the interposition of technical rules of law, it has been the rules that have gradually given way.

However, this has never meant that courts have been willing to impose absolute liability in this context and from their earliest application, theories of products liability have been viewed as tort doctrines which should not be confused with the imposition of absolute liability. As this Court noted in Piercefield v Remington Arms Co, Inc, . . .:

"Some quibbler may allege that this is liability without fault. It is not. . . . [A] plaintiff relying upon the rule must prove a defect attributable to the manufacturer and causal connection between that defect and the injury or damage of which he complains. When able to do that, then and only then may he recover against the manufacturer of the defective product."

Thus while courts have accepted the social policy rationale that those injured by defective products should be compensated for their injuries without being subject to the contractual intricacies of the law of sales, and have agreed that manufacturers can most effectively distribute the costs of injuries, they have never gone so far as to make sellers insurers of their products and thus absolutely liable for any and all injuries sustained from the use of those products.

Like the courts in every other state, whether a suit is based upon negligence or implied warranty, we require the plaintiff to prove that the product itself is actionable -- that something is wrong with it that makes it dangerous. This idea of "something wrong" is usually expressed by the adjective "defective" and the plaintiff must, in every case, in every jurisdiction, show that the product was defective. . . .

As a term of art, "defective" gives little difficulty when something goes wrong in the manufacturing process and the product is not in its intended condition. In the case of a "manufacturing defect," the product may be evaluated against the manufacturer's own production standards, as manifested by that manufacturer's other like products.

However, injuries caused by the condition of a product may also be actionable if the product's design, which is the result of intentional design decisions of the manufacturer, is not sufficiently safe. Conscious design defect cases provide no such simple test. The very question whether a defect in fact exists is central to a court's inquiry. It is only in design defect cases that a court is called upon to supply the standard for defectiveness. Thus, the term "defect" in design cases is "an epithet -- an expression for the legal conclusion rather than a test for reaching that conclusion." . . .

At present, questions related to "design defects" and the determination of when a product is defective, because of the nature of its design, appear to be the most agitated and controversial issues before the courts in the field of products liability. A number of appellate courts, aware that they are engaged in the conscious task of molding the law of products liability, have become concerned that they are not differentiating with sufficient clarity between various theories of recovery in design defect cases. In response, they have sought to devise significant and well-articulated distinctions. At the same time, other courts have become concerned that the differentiation is too great, and have attempted to devise means of keeping the broad scope of liability in check. The result has been several cases in which the standard for liability in the design area has been very carefully examined by courts and often vigorously debated by the judges themselves. A survey of the important recent cases in neighboring jurisdictions suggests something of the creative ferment underlying what has been described as the "rich tapestry" of the developing common law of products liability.

The approaches for determination of the meaning of "defect" in design cases fall into four general categories. The first, usually associated with Dean Wade, employs a negligence risk-utility analysis, but focuses upon whether the manufacturer would be judged negligent if it had known of the product's dangerous condition at the time it was marketed. The second, associated with Dean Keeton, compares the risk and utility of the product at the time of trial. The third focuses on consumer expectations about the product. The fourth combines the risk-utility and consumer-expectation tests. While courts have included many other individual variations in their formulations, the overwhelming consensus among courts deciding defective design cases is in the use of some form of risk-utility analysis, either as an exclusive or alternative ground of liability. Risk-utility analysis in this context always involves assessment of the decisions made by manufacturers with respect to the design of their products.

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The risk-utility balancing test is merely a detailed version of Judge Learned Hand's negligence calculus. . . . As Dean Prosser has pointed out, the liability of the manufacturer rests "upon a departure from proper standards of care, so that the tort is essentially a matter of negligence."

Although many courts have insisted that the risk-utility tests they are applying are not negligence tests because their focus is on the product rather than the manufacturer's conduct, . . . the distinction on closer examination appears to be nothing more than semantic. As a common-sense matter, the jury weighs competing factors presented in evidence and reaches a conclusion about the judgment or decision (i.e., conduct) of the manufacturer. The underlying negligence calculus is inescapable. As noted by Professor Birnbaum:

"When a jury decides that the risk of harm outweighs the utility of a particular design (that the product is not as safe as it should be) it is saying that in choosing the particular design and cost trade-offs, the manufacturer exposed the consumer to greater risk of danger than he should have. Conceptually and analytically, this approach bespeaks negligence." . . .

The competing factors to be weighed under a risk-utility balancing test invite the trier of fact to consider the alternatives and risks faced by the manufacturer and to determine whether in light of these the manufacturer exercised reasonable care in making the design choices it made. Instructing a jury that weighing factors concerning conduct and judgment must yield a conclusion that does not describe conduct is confusing at best.

The Model Uniform Product Liability Act was published in 1979 by the Department of Commerce for voluntary use by the states. The act adopts a negligence or fault system with respect to design defects. It is important to examine the rationale underlying the UPLA's adoption of negligence as the criteria for liability in design defect cases. The drafters rejected, as a reason for application of strict liability to design defect cases, the theory of risk distribution wherein the product seller distributes the costs of all product-related risks through liability insurance. They believe that a "firmer liability foundation" than strict liability is needed in a design defect case because the whole product line is at risk. Furthermore, the drafters believed that a fault system would provide greater incentives for loss prevention.

The approach of the UPLA has been approved by several commentators, whose analysis is also instructive. First, unlike manufacturing defects, design defects result from deliberate and documentable decisions on the part of manufacturers, and plaintiffs should be able to learn the facts surrounding these decisions through liberalized modern discovery rules. Access to expert witnesses and technical data are available to aid plaintiffs in proving the manufacturer's design decision was ill considered.

Second, to the extent that a primary purpose of products liability law is to encourage the design of safer products and thereby reduce the incidence of injuries, a negligence standard that would reward the careful manufacturer and penalize the careless is more likely to achieve that purpose. A greater incentive to design safer products will result from a fault system where resources devoted to careful and safe design will pay dividends in the form of fewer claims and lower insurance premiums for the manufacturer with a good design safety record. The incentive will result from the knowledge that a distinction is made between those who are careful and those who are not.

Third, a verdict for the plaintiff in a design defect case is the equivalent of a determination that an entire product line is defective. It usually will involve a significant portion of the manufacturer's assets and the public may be deprived of a product. Thus, the plaintiff should be required to pass the higher threshold of a fault test in order to threaten an entire product line. The traditional tort law of negligence better serves this purpose.

Fourth, a fault system incorporates greater intrinsic fairness in that the careful safety-oriented manufacturer will not bear the burden of paying for losses caused by the negligent product seller. It will also follow that the customers of the careful manufacturer will not through its prices pay for the negligence of the careless. As a final bonus, the careful manufacturer with fewer claims and lower insurance premiums may, through lower prices as well as safer products, attract the customers of less careful competitors.

We find the formula adopted by the UPLA on the question of defective design to have the merit of being clear and understandable. We recognize that in products liability cases against manufacturers based upon alleged defects in the design of a product, the courts of this state have attempted to avoid both the notion of fault implicit in negligence and the harshness of no-fault implicit in absolute liability. Thus, on the basis of the heritage of contract and sales law underlying concepts of implied warranty, we have in the past approved instructions that attempted to focus a jury's attention on the condition of a product rather than on the reasonableness of the manufacturer's conduct or decision. We are persuaded that in so doing in the context of cases against the manufacturers of products based upon allegations of defective design, we have engaged in a process that may have served to confuse, rather than enlighten, jurors, who must ultimately apply understandable guidelines if they are to justly adjudicate the rights and duties of all parties. Imposing a negligence standard for design defect litigation is only to define in a coherent fashion what our litigants in this case are in fact arguing and what our jurors are in essence analyzing. Thus we adopt, forthrightly, a pure negligence, risk-utility test in products liability actions against manufacturers of products, where liability is predicated upon defective design.

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We hold that in this products liability action against a manufacturer for an alleged defect in the design of its product, where the jury was properly instructed on the theory of negligent design, the trial judge's refusal to instruct on breach of warranty was not reversible error. Such instructions could have created juror confusion and prejudicial error. Indeed, such an instruction would have been repetitive and unnecessary and could have misled the jury into believing that plaintiff could recover on the warranty count even if it found there was no "defect" in the design of the product. . . .

This opinion is limited solely to its facts. We do not suggest that implied warranty and negligence are not separate and distinct theories of recovery; . . . or that the Michigan products liability statute, . . . has merged all former products liability theories or causes of action into a single unified "products liability theory." We do not dispute the generally recognized distinction between the elements of negligence and breach of warranty. We recognize that the negligence theory generally focuses on the defendant's conduct, requiring a showing that it was unreasonable, while warranty generally focuses upon the fitness of the product, irrespective of the defendant's conduct. . . .

Thus, as defense counsel has conceded, . . . the only time the distinction between implied warranty and negligence may have any significance in design defect cases, is in determining the liability of a seller who is not also the manufacturer of a product. . . . We also are not required to determine whether the two theories are separate in cases alleging defects in manufacturing.

This holding is based upon the recognition that under the common law of products liability, in an action against the manufacturer of a product based upon an alleged defect in its design, "breach of implied warranty and negligence involve identical evidence and require proof of exactly the same elements." . . . A manufacturer has a duty to design its product so as to eliminate any unreasonable risk of foreseeable injury. . . . For the lack of reasonable care in the face of such duty, the manufacturer may be answerable in a negligence action. . . . When proceeding under a theory of implied warranty, a design defect is established by proof that the product is not reasonably safe for the uses intended, anticipated, or reasonably foreseeable. . . . For the sale of a product defective in such respect, the seller may be answerable for breach of an implied warranty. . . . Thus, when the issue is liability of a manufacturer who was also the seller, it is inconceivable that a jury could determine that the manufacturer had not breached its duty of reasonable care and at the same time find that the product was not reasonably safe for its reasonably foreseeable uses. The question in either case turns on reasonable care and reasonable safety, and as pointed out by Dean Prosser, the liability of the manufacturer rests "upon a departure from proper standards of care so that the tort is essentially a matter of negligence."

Applying these principles to the facts of this case, although plaintiffs alleged that their injuries were proximately caused by defendant's negligence and breach of an implied warranty, their evidence and proofs at trial focused on the single claim that the defendant defectively designed the "walkie hi-lo" forklift, because it failed to provide a seat or platform for the operator. Thus, recovery under either theory required the jury to determine that the forklift was defectively designed by defendant. . . . The factual inquiry was: whether the design of defendant's forklift was "unreasonably dangerous" because it did not contain a seat or platform for the operator. . . .

The test for determining whether the design was "unreasonably dangerous" was: whether the alleged defect in the design of the product created an unreasonable risk of foreseeable injury. . . . Stated another way, whether the manufacturer was under a duty to use reasonable care to design a product that was reasonably safe for its intended, anticipated, or reasonably foreseeable uses. . . .

The trial court properly recognized that the standards of liability under the theories of implied warranty and negligence were indistinguishable and that instructions on both would only confuse the jury. Accordingly, the trial judge's instructions regarding the standard of care and theories of liability properly informed the jury of defendant's legal duties as the manufacturer of the forklift. The court set forth the necessary elements for determining whether defendant defectively designed the forklift when it stated:

"A manufacturer of a product made under a plan or design which makes it dangerous for uses for which it is manufactured is [, however,] subject to liability to others whom he should expect to use the product or to be endangered by its probable use from physical harm caused by his failure to exercise reasonable care in the adoption of a safe plan or design.

"A manufacturer has a duty to use reasonable care in designing his product and guard it against a foreseeable and unreasonable risk of injury and this may even include misuse which might reasonably be anticipated."

In essence, the jury was instructed to consider whether the manufacturer took reasonable care in light of any reasonably foreseeable use of the product which might cause harm or injury. . . .

Therefore we hold that in a products liability action against a manufacturer, based upon defective design, the jury need only be instructed on a single unified theory of negligent design.

The judgment of the Court of Appeals is reversed, and the judgment of the trial court is reinstated.

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