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Colt Industries Operating Co. v. Murphy Manufacturer (12/13/91), 822 P 2d 925
<![CDATA[
Notice: This is subject to formal
correction before publication in the
Pacific Reporter. Readers are requested
to bring typographical or other formal
errors to the attention of the Clerk of
the Appellate Courts, 303 K Street,
Anchorage, Alaska 99501, in order that
corrections may be made prior to
permanent publication.
THE SUPREME COURT OF THE STATE OF ALASKA
COLT INDUSTRIES OPERATING )
CORPORATION, Quincy ) Supreme Court Nos. S-
3839/3942
Compressor Division, ) Superior Court No.
) 3AN-83-10762 Civil
Appellant/ )
Cross-Appellee, ) O P I N I O N
)
v. )
)
FRANK W. MURPHY MANUFACTURER, )
INC., a corporation, )
)
Appellee/ )
Cross-Appellant. ) [No. 3788 - December 13,
1991]
______________________________)
Appeal from the Superior Court of the
State of Alaska, Third Judicial
District, Anchorage, Rene J. Gonzalez,
Judge.
Appearances: Theodore M. Pease, Kristi
A. Nelson and Peter J. Maassen, Burr,
Pease & Kurtz, Anchorage, for
Appellant/Cross-Appellee. Kenneth M.
Rosenstein, Lynch, Crosby & Sisson,
Anchorage, for Appellee/Cross-Appellant.
Before: Rabinowitz, Chief Justice,
Burke, Matthews, Compton and Moore,
Justices.
MOORE, Justice.
COMPTON, Justice, dissenting in part.
This case stems from a wrongful death claim by the
estate of Ralph Howard against Colt Industries Operating
Corporation (Colt), a compressor manufacturer. Frank Murphy
Manufacturer, Inc. (Murphy), which made a component used in
Colt's compressor, was a third party defendant in the
underlying claim. Colt negotiated a settlement with the
Howard estate which released Murphy, Craig Taylor, Colt's
distributor, and itself from liability. Colt then sought
contribution from Murphy, arguing that Murphy was liable on
manufacturing and design defect theories. Colt was
unsuccessful in its attempt to establish Murphy's liability;
the superior court directed a verdict for Murphy on the
issue of design defect, and the jury returned a verdict in
favor of Murphy on the manufacturing defect claim. Colt
appealed and Murphy cross-appealed. These appeals present
four major issues: 1) whether the trial court erred in
directing a verdict on Colt's design defect claim; 2) what
number of pro rata shares should be counted for purposes of
a contribution action; 3) whether a limitation imposed by
the trial court upon Colt's expert's testimony constituted
an abuse of discretion; and 4) whether the trial court
abused its discretion by permitting Colt's expert to rely on
Murphy's business records. We reverse the decision of the
superior court as to the first three issues and affirm as to
the fourth.
I. Facts and Proceedings
On March 15, 1983, Ralph Howard was killed while
using a sandblaster. A compressor manufactured by Quincy
Compressor Division of Colt powered the machine. The
compressor also supplied breathing air to Howard, who wore a
protective mask and hood when using the sandblaster. While
Howard was sandblasting, a fire
started in the Colt compressor. Carbon monoxide produced by
the fire contaminated Howard's air supply. He died of
carbon monoxide poisoning.
Howard's estate initiated a wrongful death action
on December 27, 1983. The estate sought damages from
multiple parties, including Colt and Craig Taylor, Colt's
distributor. On July 11, 1985, Colt filed a third-party
complaint against Murphy, the manufacturer of a device known
as a model 20-T temperature switch gauge which Colt had
installed on the compressor during its manufacture. The
function of the switch gauge was to automatically shut down
the diesel engine that powered the compressor when the
compressed air discharge temperature exceeded a certain
level. Such devices are important components because
compressors generate substantial heat during normal use, and
can easily overheat if any abnormality occurs during
operation.1
The Murphy switch gauge consists of a bulb
attached by a copper capillary tube to a case assembly with
a gauge face. It is installed at the hottest area of the
compressor. The bulb acts as a sensor; the cavity within
it is filled with methylene chloride. As the bulb heats,
the methylene chloride boils and converts from liquid to
gas, thereby creating pressure. The pressure is
hydraulically transferred from the bulb through the
capillary to a copper diaphragm at the back of the case
assembly. The increasing pressure causes the diaphragm to
contract. This movement is conveyed through the case
assembly and reflected in a temperature reading on the gauge
face. When the temperature reaches the set level, the gauge
activates a magnetic switch, cutting off the flow of fuel to
the diesel engine and shutting down the machine.
Murphy manufactures the switch gauge by attaching
the case assembly to the copper capillary tube which is
inserted into one of two holes in the sensor bulb. The bulb
is soldered in place with 40/60 (tin-lead) solder. The
bulb, capillary tube, and diaphragm are then filled with
liquid methylene chloride through the remaining hole in the
bulb. When the device is filled to specifications, a brass
pin is inserted into the hole in the bulb and sealed in
place with 40/60 solder.
The switch gauge in the compressor used by Howard
was set to shut the compressor down if the temperature
within the compressor exceeded 225 F. It did not activate.
The parties agree that the Murphy switch gauge was
nonfunctional because the joints around the sensing bulb
failed to contain the methylene chloride, but disagree as to
whether the leak occurred before or during the compressor
fire. Colt theorized that methylene chloride slowly leaked
from small cracks in the soldered joints which were
undetectable at the time of manufacture.2 In the opinion of
Colt's experts, by the time of the accident, there was too
little methylene chloride remaining in the bulb for the
switch gauge to function. Thus, while Howard used the
sandblaster, temperature in the compressor rose gradually,
escalating unchecked due to the failure of the Murphy
device, until the fire started and the carbon monoxide which
Howard inhaled was produced.
Murphy contended that the switch gauge was
operational until a spark ignited the oil in the compressor.
According to its theory, the heat of the fire melted the
solder seals, allowing vaporized methylene chloride to
escape. Thus, Murphy concludes, there was not a causal link
between the failure of the switch gauge and Howard's death
because the fire started before the gauge failed.
The parties were unable to definitively resolve
this dispute because sometime after Howard's death, William
Kenton, who was then working on behalf of the Howard estate,
removed the Murphy switch gauge from the compressor and took
it to the Murphy manufacturing plant. There, with the
assistance of Murphy's production supervisor and quality
control officer, Kenton tested the device. In the course of
testing, the switch gauge was cut apart. Once the joints of
the switch gauge had been severed, it was no longer possible
to test the device to determine whether there had been a
small leak in the bulb joint prior to the fire.
Colt eventually arranged a settlement with the
Howard estate which extinguished its own liability as well
as that of Craig Taylor and Murphy. Colt paid the sum of
$1,620,018. The other defendants who settled independently
paid $250,000 in the aggregate.
Colt then sought contribution from Murphy pursuant
to former AS 09.16.010-.060. Colt and Murphy each filed
motions for summary judgment directed to the number of
tortfeasors to be counted for determining Murphy's pro rata
share of Colt's settlement. The trial court held that,
assuming Murphy was adjudicated a joint tortfeasor, there
would be three pro rata shares: Colt, Craig Taylor, and
Murphy.
In January 1990, a jury trial was held on the
issue of Murphy's liability as a joint tortfeasor. Colt
argued that Murphy was liable for Howard's death in strict
products liability under both manufacturing and design
defect theories. Murphy moved for directed verdict on
Colt's manufacturing and design defect theories. Its motion
was granted as to the design defect claim. Subsequently,
the jury concluded that the Murphy device did not have a
manufacturing defect. Judgment was entered in favor of
Murphy on February 7, 1990. This appeal followed.
II. Directed Verdict
A. Standard of Review
In City of Whittier v. Whittier Fuel & Marine
Corp., 577 P.2d 216 (Alaska 1978), we defined the standard
of review regarding a motion for directed verdict:
[T]he proper role of this
court, on review of motions
for directed verdict . . . is
not to weigh conflicting
evidence or judge the
credibility of the witnesses,
but is rather to determine
whether the evidence, when
viewed in the light most
favorable to the non-moving
party, is such that reasonable
men could not differ in their
judgment.
The test is objective; and, if there is
room for diversity of opinion among
reasonable people, the question is one
for the jury. Further, all favorable
inferences are to be accorded the non-
moving party.
Id. at 220 (quoting Holiday Inns of America, Inc. v. Peck,
520 P.2d 87, 92 (Alaska 1974)) (footnotes omitted).
B. Design Defect
Colt claims that the use of 40/60 solder seals on
Murphy's switch gauge was a design defect and therefore,
Murphy was strictly liable in tort for marketing the switch
gauge.
In Alaska, a "manufacturer is strictly liable in
tort when an article he places on the market, knowing that
it is to be used without inspection for defects, proves to
have a defect that causes injury to a human being." Clary
v. Fifth Avenue Chrysler Center, Inc., 454 P.2d 244, 247
(Alaska 1969) (citations omitted). In Caterpillar Tractor
Co. v. Beck, 593 P.2d 871 (Alaska 1979), we set forth two
methods by which plaintiffs can prove strict liability on
the ground that a product is defectively designed. Colt
attempted to satisfy the second test which applies to
situations in which "the product satisfies ordinary consumer
expectations as to its general use but is still defective
in that its design exposes the user or bystander to
excessive preventable danger. " Id. at 885 (citations
omitted). Specifically, the test states that a product is
defectively designed if:
[T]he plaintiff proves that the
product's design proximately caused
injury and the defendant fails to prove,
in light of the relevant factors, that
on balance the benefits of the
challenged design outweigh the risk of
danger inherent in such design.
Id. at 886.
In Dura Corp. v. Harned, 703 P.2d 396 (Alaska
1985), we interpreted the second Beck test for design defect
claims in light of the trial court's grant of a directed
verdict in favor of the plaintiff. We explicitly stated
that under Beck, "the plaintiff must establish a prima facie
case by introducing sufficient evidence to permit a jury to
find that the product's design features were a proximate
cause of plaintiff's injury." Dura, 703 P.2d at 406. We
further noted that proximate cause may be shown by
establishing that "the defective product was more likely
than not a substantial factor in bringing about the
plaintiff's injury." Id.; see also Campbell v. General
Motors Corp., 649 P.2d 224 (Cal. 1982). Finally, as to the
directed verdict, we stated "[t]he issue of proximate cause
is normally a question of fact for the jury to decide and
becomes a matter of law only where reasonable minds could
not differ." Dura, 703 P.2d at 406 (citation and footnote
omitted).
Colt argued that Murphy's design for sealing the
sensor bulb with 40/60 soldered joints was defective for
three reasons. Its primary theory was that the 40/60 solder
seals used by Murphy were unreliable. Colt's expert, John
Weiss, explained that Murphy's soldering was performed
manually. He stated that since hand-finishing makes it
difficult to achieve a uniform product, this process could
result in what is known as a "cold joint"(a joint which
does not totally bond when initially formed). Weiss
explained that cold joints are prone to leaks. Moreover,
these leaks cannot be detected at the time of manufacture.
Weiss also testified that his examination of the
distribution of solder on the joints of the device confirmed
his opinion that the joints had not bonded properly.
Secondly, Colt presented evidence that the
combination of three different metals in 40/60 solder was a
design defect. Weiss testified that each metal has
different expansion, corrosion and resistance
characteristics. Thus, as combination metals are heated and
cooled with use, joints weaken so that "it's just a question
of how many times [they] will last until [they] fracture[]."
This phenomenon is called "thermal cycling."
Finally, Colt argued that even assuming the device
was operational when the fire started and that the fire
melted the solder, Murphy's design was defective because
40/60 solder melts at a low temperature, allowing leakage of
methylene chloride at exactly the time it is most needed to
activate the switch gauge. Although this argument was
inconsistent with Colt's theory of the accident,3 Colt
raised it to illustrate that even under Murphy's theory, the
design of its switch gauge was defective.
In support of Colt's design defect theory, Weiss
testified that he had reviewed product return documents
received by Murphy during a one-year period and found
several other instances where methylene chloride had escaped
from Murphy's safety devices which did not have visible
defects. He interpreted these documents to substantiate his
belief that due to the 40/60 solder seal design, Murphy's
switch gauges are susceptible to undetectable leaks.
In addition, Colt presented evidence that
alternative manufacturing processes were available.4 Weiss
stated that both silver solder and welded seals would be
feasible and preferable. The manufacture of welded seals
can be programmed so identical amounts of current are
introduced into each joint. Thus, uniform joints are
produced, making leaks less likely than with soldered
joints. In addition, welded seals are not susceptible to
thermal cycling because they are constructed of homogeneous
material. Moreover, they can withstand extremely high
temperatures without melting. With respect to silver
soldering, Weiss testified "brazing alloys [such as silver]
tend to be less viscous than solders and will run into
smaller cavities and make, in fact, a better seal."
Furthermore, there was evidence that it would not be any
more difficult to solder with silver than with 40/60 solder.
Finally, Weiss stated that silver solder can withstand far
higher temperatures than 40/60 solder (1200-1400 F as
compared with 361-460 F).
Murphy maintains that the evidence Colt presented
failed to establish a prima facie case of design defect as
to any of Colt's theories as to the cause of the device's
failure. First, Murphy characterizes cold joints as
production errors. It argues that such "deviation[s] from
the condition intended by the manufacturer" should be
defined as manufacturing rather than design defects. Beck,
593 P.2d at 878 n.15. Additionally, Murphy contends "some
processes may be more subject to errors than others, but to
argue that a certain process constitutes a design defect
because it might be more prone to errors than some other
process serves only to blur the distinction between design
and manufacturing defects to the point of disappearance."
The delineation between design and manufacturing
defects is undoubtedly blurry. However, we have long
recognized that overlap between the two categories is
unavoidable. We have clearly stated that rigid delineation
of the two categories is neither necessary nor desirable.
In Beck we specified:
Manufacturing defects and design errors
are not mutually exclusive . . . . As
the California court noted in Cronin,
whether a defect results from
manufacture or design is not always
obvious. . . . The categories not only
overlap, but they may also operate
simultaneously or be alleged in the
alternative."5
593 P.2d at 878 n.15 (citation omitted).
Here, the two theories operate
simultaneously; we see no reason to
arbitrarily assign defects resulting
from processes which are prone to error
to one category or the other. Colt
introduced sufficient evidence to enable
reasonable jurors to conclude that 40/60
solder was prone to leaks and that
Murphy's design decision to use it was a
proximate cause of Howard's death.
Although this determination
alone is a sufficient basis to reverse
the trial court's directed verdict, to
guide the court's consideration of
Colt's design defect claim on remand, we
will also address Murphy's arguments
that Colt failed to make a prima facie
case as to its thermal cycling and low
melting point theories.
Murphy contends that because
there was not definitive proof that
thermal cycling occurred in this case,
there was no basis on which the jury
could conclude that thermal cycling was
the proximate cause of Howard's death.6
However, in light of the fact that it
was impossible to conclusively determine
how the methylene chloride escaped due
to the joints of the sensor bulb having
been severed, expert testimony with
respect to the particular switch gauge
at issue was unavoidably speculative.
Weiss described a known phenomenon,
which he viewed as "something to avoid
in design." On the basis of the
components of the solder used by Murphy,
he considered thermal cycling to be a
plausible explanation for the switch
gauge's failure. While Murphy's
objections may diminish the
persuasiveness of Weiss' testimony, in
reviewing a directed verdict the
evidence must be viewed in the light
most favorable to the non-moving party.
Given these conditions, we conclude that
Weiss' testimony was sufficient to
create a question of fact as to whether
thermal cycling was the cause of the
Murphy device's failure.
Lastly, Murphy contends that
because Colt argued that the device was
nonfunctional prior to the time the fire
started, the jury could not have found
that the low melting point of 40/60
solder had any causal connection to the
accident. Yet, Alaska Civil Rule
8(e)(2) permits parties to set forth
arguments in the alternative. Colt
presented evidence which showed that
even if Murphy's theory was correct
(i.e. that methylene chloride did not
escape until the heat of the fire melted
the seals), a reasonable jury could
nonetheless have concluded that the
selection of 40/60 solder over other
available seals was a design defect
because of its low melting temperature.
The jury should have been permitted to
consider this theory.7
Thus, Colt introduced evidence
which, even under Murphy's theory of the
cause of the fire, linked the design of
the Murphy switch gauge to Howard's
death.8 Viewing the evidence in a light
most favorable to Colt, there can be no
question that Colt made a prima facie
showing that the design of Murphy's high
temperature shut-off device with 40/60
solder seals on the sensor probe was a
legal cause of the methylene chloride
leak, the fire, and Howard's death. The
burden of disproving a design defect
should have been shifted to Murphy. See
Dura, 703 P.2d at 406. We reverse the
directed verdict against Colt and remand
for a new trial on the issue of design
defect.
III. Evidentiary Issues
A. Standard of Review
The standard for appellate
review of a trial court's decision on
admissibility of evidence is whether the
court abused its discretion. Dura, 703
P.2d at 409. We will find that the
trial court abused its discretion only
"when we are left with a definite and
firm conviction, after reviewing the
whole record, that the trial court erred
in its ruling." Id. (citation omitted).
B. Alaska Rule of Evidence
702
Herbert Brown testified for
Colt as an expert on air compressors.
Murphy did not challenge Brown's
expertise as to compressors; however, it
objected to his testimony about the
failure of the Murphy device. The trial
court sustained Murphy's objection on
the ground that the "device in question
here" was not in the area of Brown's
expertise.9 Colt argues that the trial
court abused its discretion by excluding
Brown's testimony.
Alaska Rule of Evidence 702
concerns testimony of expert witnesses.
It provides in relevant part:
(a) If scientific, technical, or other
specialized knowledge will assist the
trier of fact to understand the evidence
or to determine a fact in issue, a
witness qualified as an expert by
knowledge, skill, experience, training,
or education, may testify thereto in the
form of an opinion or otherwise.
We have construed Rule 702 to require "simply that the
witness' special knowledge must assist the trier of fact to
understand the evidence or determine a fact in issue."
Norris v. Gatts, 738 P.2d 344, 350 (Alaska 1987). Colt
argues that Brown had this expertise, and that he should
have been permitted to testify as to why he believed the
40/60 solder seals on the Murphy device were defective.
Murphy maintains its objection to Brown's
testimony chiefly on the ground that Brown's background
reflected general experience in the broad field of
engineering rather than specific experience in evaluating
the quality of solder seals. In support of this claim,
Murphy emphasizes that Brown's soldering experience is
limited to "cold soldering"of electrical parts, whereas the
parts in Murphy's switch gauge were preheated before
soldering.
We decline to hold that Rule 702 demands expertise
in precisely the area upon which the expert proposes to
comment. Furthermore, we conclude that in this case Brown's
background in mechanical engineering enabled him to assist
the jury in evaluating the design of the Murphy device.
Brown has a bachelor of science degree in marine
engineering, which is nautically-applied mechanical
engineering. He also has extensive experience in mechanical
engineering; he was employed in various engineering
positions for approximately twenty years. He worked for
Colt in its compressor division for approximately six years
during which time he was promoted to vice president of
product engineering and quality assurance.
Murphy alternatively contends that the court did
not abuse its discretion by excluding the testimony because
Brown shared Weiss' opinion that the bulb was improperly
soldered. Therefore, it argues, the testimony of experts
Brown and Weiss would have been cumulative and exclusion of
Brown's opinion was harmless error.
We reject this argument as well. Brown's
testimony went to a material issue of Colt's case. Although
he reached the same conclusion as did Colt's other expert,
the mere fact that another witness has already testified as
to a certain issue does not foreclose a litigant's right to
introduce substantiating testimony. Juries may find one
witness more compelling than another, or they may attribute
greater weight to a finding if more than one expert reaches
the same conclusion.
In light of the importance of the issue to Colt's
case, we conclude that the exclusion of Brown's testimony as
to the reason for the Murphy device's failure prejudiced
Colt's right to a fair trial.10 Accordingly, its ruling is
reversed. During retrial of Colt's design defect claim,
Colt must be permitted to question Brown concerning the
Murphy device.
C. Business Records
Colt's expert, John Weiss, testified concerning
Murphy's product return documents. Weiss relied on these
records to substantiate his opinion that the 40/60 solder
seal design makes Murphy's devices susceptible to
undetectable leaks.11
During trial, Murphy objected to Weiss' reliance
on the records on the ground that they were inadmissible
hearsay12 and that they did not contain enough information to
justify Weiss' reliance. Murphy now asserts that the trial
court abused its discretion by admitting Weiss' testimony
pertaining to the records. However, Alaska Rule of Evidence
70313 allows an expert witness to rely on inadmissible
evidence to undergird his or her opinion if the facts and
data underlying the expert's opinion are those reasonably
relied upon by experts in the field. The reasonableness of
Weiss' reliance on the return reports is judged by reference
to the six factors set forth in Zenith Radio Corp. v.
Matsushita Elec. Indus. Co., 505 F. Supp. 1313, 1330 (E.D.
Pa. 1980), which we followed in Norris v. Gatts, 738 P.2d
344, 351 (Alaska 1987).14
Applying the Zenith factors to Weiss' testimony,
we find that his reliance upon Murphy's return reports was
reasonable. Clearly, Weiss' overall testimony was not
dominated by reliance on inadmissible or untrustworthy
materials, nor were his assumptions shown to be unsupported
or speculative.15 It is also reasonable for an expert who is
seeking to determine the explanation for the failure of a
device, such as the switch gauge, to examine the
manufacturer's records of repairs to identical devices.16
The reports were not prepared for litigation purposes, but
were "part of Murphy's operating procedure and its
function." Weiss reviewed multiple return reports,
selecting only those in which an unexplained leak was the
reason for the return. Finally, there is no reason why
reliance on the reports was unreasonable in this particular
case. On the contrary, in light of the fact that tests to
determine the existence of leaks in the solder seals could
not be performed on the Murphy device in question, reliance
on extrinsic evidence of such defects appears both
reasonable and unavoidable.
Furthermore, the alleged absence of information in
the return reports pertaining to the manner in which the
returned devices had been used and other reasons for their
failure or return could have been tested on cross-
examination. If, as Murphy claims, there was "not the
slightest bit of evidence indicating a similarity in the
failures of the switch gauge installed on Colt's compressor
and those referred to in the documents Mr. Weiss testified
about," cross-examination could have raised serious
questions about the reasonableness of Weiss' reliance on the
reports and potentially diminished his overall credibility.
The trial court did not abuse its discretion by permitting
Weiss to rely upon Murphy's return reports. Its ruling is
therefore affirmed.
IV. Contribution Issues
There were four defendants and three third-party
defendants to the underlying wrongful death action brought
by Howard's estate. The complaint against one third-party
defendant, AMOT, was dismissed. Colt negotiated a
settlement of the wrongful death suit with the Howard estate
which extinguished its own liability as well as that of
Murphy and Colt's distributor, Craig Taylor. Three other
defendants to the underlying action, Jackovich, Totem, and
Empire, entered into separate settlement agreements with the
Howard estate.
Following resolution of the Howard estate's
claims, Colt sought contribution from Murphy. Colt and
Murphy each filed motions for summary judgment on the issue
of how many tortfeasors should be counted in determining
Murphy's pro rata share of Colt's settlement, assuming
Murphy was adjudicated a joint tortfeasor.17 Murphy argued
that there were six shares: Colt, Craig Taylor, Jackovich,
Totem, Empire, and Murphy. Colt's position was that there
were only two shares, Colt and Murphy. The trial court
rejected both positions, and concluded that there were three
shares: Colt, Craig Taylor, and Murphy. Both Murphy and
Colt appeal the trial court's determination.
The contribution obligations of these parties are
governed by former AS 09.16.010-.060.18 Former AS 09.16.010
provides in relevant part:
(a) . . . where two or more persons
become jointly or severally liable in
tort for the same injury to person or
property or for the same wrongful death,
there is a right of contribution among
them. . . .
(b) The right of contribution exists
only in favor of a tortfeasor who has
paid more than that tortfeasor's pro
rata share of the common liability, and
the total recovery of that tortfeasor is
limited to the amount paid in excess of
the pro rata share. No tortfeasor is
compelled to make contribution beyond
the tortfeasor's pro rata share of the
entire liability.
A. Common Liability
Murphy argues tortfeasors should not be omitted
from share determination merely because they have settled
and are shielded from contribution by operation of former AS
09.16.040.19 Murphy asserts that the terms "common" and
"entire" liability used in former AS 09.16.010(b) "must be
established at the moment the tort occurs"and "include all
parties incurring legal responsibility for a tortious
injury."20 Although AS 09.16.040(2) prevents tortfeasors who
have settled from being required to contribute, Murphy
asserts that even tortfeasors who have settled are part of
the "common liability"for the purpose of determining the
number of pro rata shares in a contribution action. Thus,
since Jackovich, Totem, and Empire were named in the
underlying action, Murphy reasons that there were six pro
rata shares. It asserts that requiring contribution in
excess of one sixth of the total amount of all settlements
would constitute "comp[ulsion] to make contribution beyond
[its] pro rata share of the entire liability"in violation
of former AS 09.16.010(b).
We find Murphy's argument strikingly inconsistent
with former AS 09.16.040 which was adopted for the specific
purpose of encouraging settlement.21 Therefore, in order to
serve that purpose, unless a settlement is shown to be
unreasonable and thereafter set aside, a settling tortfeasor
must not be considered in determining the number of pro rata
shares available for each remaining tortfeasor's individual
liability. Under these circumstances the provisions set
forth in former AS 09.16.010(a)&(b) concerning the concepts
of "common liability"and "pro rata share of the entire
liability" become inoperable and inapplicable to the
settling tortfeasor. This is so because the provisions of
former AS 09.16.040(2) control and completely discharge the
settling tortfeasor for any purpose whatsoever. Conversely,
the remaining viable tortfeasors, who have not negotiated a
settlement under former AS 09.16.040(1)&(2) and who still
remain in the lawsuit,22 will now comprise the total number
of viable tortfeasors that can be considered and included in
determining common liability for each of these tortfeasors'
pro rata share of the entire liability remaining under
former AS 09.16.010(a)&(b).
We conclude that the trial court properly
determined that Jackovich, Empire, and Totem could not be
considered or counted as tortfeasors in determining the pro
rata shares of common liability for purposes of deciding
Colt's contribution action against Murphy.
B. Contribution by Non-Negligent Retailer
Colt argues that the collective liability of Colt,
as manufacturer of the compressor, and Craig Taylor, as
distributor of Colt's compressor, should be treated as a
single share for purposes of contribution. Colt argues that
Craig Taylor's liability to the Howard estate was imputed
based exclusively on its position in the chain of
distribution of the compressor. We agree.
Craig Taylor's contribution share drops out
because, under a strict liability theory, Craig Taylor is
entitled to indemnification from Colt. Here, the complaint
included a general allegation of negligence, which Murphy
now wants to impute to Craig Taylor. In the absence of any
evidentiary basis to hold Craig Taylor liable based upon its
own independent negligent conduct, a mere allegation of
negligence in a complaint against Craig Taylor is legally
insufficient to establish liability, and thus is irrelevant.
It is clear that Craig Taylor cannot be considered as a
viable tortfeasor for the purpose of being counted as one of
the pro rata share contributors under former AS
09.16.010(a)&(b). Craig Taylor's liability here can only be
established through the chain of distribution as the local
retailer of the manufacturer's product, and not by any
negligent conduct on its part which legally caused the
plaintiff's injuries. Here, Craig Taylor's tortfeasor
status for purposes of computing pro rata shares disappears
and in effect merges completely into one share, namely that
of the manufacturer, Colt.
The superior court concluded that Craig Taylor was
not negligent. Therefore, we reverse the superior court's
ruling that there were three shares to prorate. If, after a
retrial, Murphy is found to be a joint tortfeasor, then
there will be two pro rata shares, namely Colt and Murphy,
for division purposes.
The decision of the superior court is AFFIRMED in
part, REVERSED in part, and REMANDED.
COMPTON, Justice, dissenting in part.
I find the court's analysis of common liability
(Part IV A.) unpersuasive and therefore dissent from it. In
all other respects I agree with the court's opinion.
The court concludes that there are two pro rata
shares to be included in the equation in dividing liability
between Colt/Craig Taylor and Murphy, based on its
perception that Murphy's argument under former AS 09.16.010
is somehow inconsistent with former AS 09.16.040. The only
inconsistency is of the court's own making. It creates two
categories of tortfeasors, one of whom is designated a
"viable"tortfeasor "that can be considered and included in
determining common liability for each of these tortfeasor's
pro rata share of the entire liability remaining under
former AS 09.16.010(a)&(b)." The other is designated the
"settling" tortfeasor to whom the provisions of former AS
09.16.010(a)&(b) become "inoperable and inapplicable," and
for whom former AS 09.16.040(2) "control[s] and completely
discharge[s] . . . for any purpose whatsoever." No
authority is cited to support the court's designation of
"viable"and "settling"tortfeasors. Furthermore, I do not
understand what is meant by the "common liability for each .
. . tortfeasor's pro rata share of the entire liability . .
. ."
First, there is no language in former AS
09.16.040(2) which precludes or even suggests that a
settling tortfeasor cannot be included in the equation to
determine the number of shares in the entire liability.
Subsection (2) discharges the tortfeasor from all liability
for contribution. Including that tortfeasor in the equation
does not impose upon that tortfeasor any liability
whatsoever for contribution.
Second, I believe that the court and Colt take a
wrong turn in their treatment of pro rata shares of "common
liability" and "entire liability." Each term appears once
in separate sentences in former AS 09.16.010(b), and "entire
liability"again in former AS 09.16.020.23 Neither term is
defined in the statute.24 Nothing compels the conclusion
that "pro rata share of the common liability" necessarily
means the same as "pro rata share of the entire liability."
It may or it may not.25
The official commentary to the uniform act does
not provide an answer. The problem is compounded: (1) the
1939 version of the uniform act was amended substantially in
1955; (2) state statutes are far from uniform; (3) case law
is not extensive. However, case law does suggest that the
court's construction is incorrect.
Maryland's comparable statute is entitled the
Uniform Contribution Among Tort-Feasors Act. Sections 19
and 20 of the act resemble, but are not identical to
comparable sections of our statute.26 In Lahocki v. Contee
Sand & Gravel Co., 398 A.2d 490, 513-14 (Md. App. 1979),
rev'd on other grounds, 410 A.2d 1039 (Md.
1980), Section 20's provision for "a reduction, to the
extent of the pro rata share of the released tort-feasor,"
was held to mean "in numerical shares or proportions based
on the number of tortfeasors." Id. at 514. Murphy advances
this same argument here.
The Maryland court does not trace this definition
of pro rata to any conscious effort in earlier decisions to
glean legislative intent. Oddly, its genesis seems to have
been a lecture given to the Barristers Club of Baltimore by
a Baltimore Bar member, who commented that "[w]e all agree"
that pro rata means shares based on the number of
tortfeasors. The lecturer's comment became the customary
practice. See Id. at 511-13. In Lahocki it was argued that
by defining pro rata to mean numerical shares based on the
number of tortfeasors, the act's objective of encouraging
settlements was subverted. However, the court found no
evidence that the objective was subverted in any manner by
this definition and customary practice. The court commented
that "there is no way to determine whether it has, in
effect, deterred rather than encouraged settlements. . . ."
Id. at 514. The court let the definition stand. The court
reaffirmed the definition in Chilcote v. Von Der Ahe Van
Lines, 462 A.2d 536 (Md. App. 1983).
In Theobald v. Angelos, 208 A.2d 129 (N.J. 1965),
the New Jersey Supreme Court interpreted New Jersey's Joint
Tortfeasors Contribution Law. Like Maryland's act, it
resembles, but is not identical to, the Alaska statute. See
N.J. Stat. Ann. 2A:53A-3 (West 1987). In Theobald the
plaintiff settled with one of three defendants prior to
trial. However, a cross-claim had been filed against that
defendant, so when the case went to trial, the jury was
asked whether that defendant was a tortfeasor. That
defendant was found not liable. A retrial against another
defendant was held on the issue of damages. The retried
defendant sought pro rata reduction of the second verdict,
and included all three defendants in the equation. The
court held that the defendant found not liable in the
original trial was not a tortfeasor for purposes of New
Jersey contribution law. Id. at 131. However, both the
opinion of the court and the dissent of Justice Francis
assume that but for the finding of no liability on the part
of the one defendant, that defendant would have been
included in the equation and pro rata reduction ordered,
irrespective of the settlement amount paid by that
tortfeasor. See Id. at 134, 137. No tortfeasor would have
been required to pay more than one third of the damages
found by the jury.
Colt agrees with Murphy that "a common or
entire liability is created at the instant a plaintiff
suffers injury." Colt then demonstrates how the common
liability created in that instant is extinguished by a good
faith settlement by a tortfeasor and correctly concludes
that the settling tortfeasor cannot be required to
contribute "to any other tortfeasor"more than already paid.
However, Colt's argument avoids attempting to explain what
is meant by "entire liability."
Colt criticizes Murphy's argument by asserting in
Section III A. 2. of its Brief of Cross-Appellee that
"Murphy's Analysis Leads to Absurd Results And Discourages
Settlement." Colt correctly states that a purpose of the
1955 amendments to the uniform act was to eliminate
provisions of the 1939 act which were seen as deterring
settlement. This court then reinterprets Colt's statement
and says that "AS 09.16.040 . . . was adopted for the
specific purpose of encouraging settlement." Colt's
statement of a purpose of the act does not compel its
interpretation of the entire act. This court's
reinterpretation is not correct. As this court noted in
Criterion Insurance Co. v. Laitala, 658 P.2d 112 (Alaska
1983), "we find it useful to underscore that the purpose of
the [Uniform Contribution Among Tortfeasors] Act is to
ensure that all joint tortfeasors pay their fair share of
the damages rather than to have only one joint tortfeasor
pay all the damages." Id. at 115. That remains its purpose
today.
Colt's parade of self-serving hypotheticals
presumably shows the absurd results certain to follow if
Murphy's interpretation is adopted.27 A hypothetical is only
as good as the information upon which it is based; in this
case, the hypotheticals assume or omit too much. Colt's
first hypothetical is an example:
Assume, for example, that P sues A, B, C, and D.
A settles on behalf of both himself and B and sues
B for contribution. Under Murphy's analysis, even
if B stipulates that the settlement represents the
amount of damages for which A and B were
potentially liable, A cannot know how much B owes
until the initial "common liability"-- the sum of
all the judgments and settlements involving C and
D -- is resolved as well, perhaps years in the
future.
I assume, perhaps erroneously, that B has not admitted to
being a tortfeasor, because Colt omitted that information
from the hypothetical. A is going to have to wait for a
judicial determination that B is a tortfeasor before A can
collect one thin dime from B, and that determination
probably will not occur until P's trial against C and D, or
C or D if one of them settles with P, or, if C and D both
settle with P, at A's trial against B. As a practical
matter, that is what occurred in this case, as Colt had to
go to trial against Murphy to establish that Murphy was a
tortfeasor, even though Jackovitch Tractor & Equipment Co.,
Empire Abrasive Equipment Corp., and Totem Equipment &
Supply, Inc. had settled separately with P.
Once we base our decision on whether either
interpretation encourages or discourages settlement, we have
entered the realm of speculation. A party settles
litigation for reasons that are specific to that party at
that time.
_______________________________
1The mere operation of a compressor can generate auto-
ignition temperatures. Colt's expert testified that
compressor fires are "expectable and predictable." Thus,
the reason for using a high temperature shut-off device is
to shut the machine down when it begins to overheat before
there is damage to the equipment or injury to its operator.
2Colt's expert explained that at normal temperatures, the
cracks in the joint were so small that methylene chloride
could not escape. However, while in operation, the heat of
the compressor
caused the internal pressure of the bulb to increase until
it exceeded atmospheric pressure. The expert concluded that
the high pressure within the bulb would expel a small amount
of methylene chloride through cracks in faultily bonded
joints each time the compressor was operated. The switch
gauge in question had been operated for 400-500 hours prior
to Howard's accident. Colt claimed that enough methylene
chloride could have leaked during those 400-500 hours to
make the device nonfunctional.
3If methylene chloride did leak prior to the fire, the
melting temperature of 40/60 solder would be irrelevant
since there would be no causal connection between the solder
melting and Howard's death.
4Although this evidence was not a necessary element of
Colt's case because the Beck test places the burden on the
defendant to prove that "on balance the benefits of the
challenged design outweigh the risk of danger inherent in
such design,"it bolstered Colt's claim by providing a basis
for comparing the design used by Murphy with other available
designs. Beck, 593 P.2d at 886.
5In Cronin v. J.B.E. Olson Corp., 501 P.2d 1153 (Cal. 1972),
the California Supreme Court stated:
[A] distinction between manufacture and
design defects is not tenable. . . . The
most obvious problem we perceive in
creating any such distinction is that
thereafter it would be advantageous to
characterize a defect in one rather than
the other category. It is difficult to
prove that a product ultimately caused
injury because a widget was poorly
welded - a defect in manufacture -
rather than because it was made of
inexpensive metal difficult to weld
. . . - a defect in design. . . . We
wish to avoid providing such a
battleground for clever counsel.
Id. at 1163.
While we recognize that in certain circumstances
it may be useful to describe products liability claims in
terms of design and manufacturing defects, we share the
Cronin court's belief that a plaintiff who successfully
establishes that a product is defective should not be
subjected to the additional burden of proving whether the
precise cause of a defect was in the product's design or its
manufacture.
6Weiss acknowledged that fatigue induced by thermal cycling
occurs over an indeterminate period of time, and that he did
not know whether it had actually occurred in this case.
7 Murphy also suggests that the melting point argument
must fail because silver soldered seals were available to
Colt from Murphy, and as a component manufacturer, it is not
responsible for inappropriate design decisions made by
manufacturers of devices into which the component is
incorporated. See, e.g., Taylor v. Paul O. Abbe, Inc., 516
F.2d 145 (3d Cir. 1975).
There is no factual basis in the record to decide
this issue, and we express no opinion as to the merit of
Murphy's claim. However, to avoid confusion in the event
that this issue arises upon retrial, we note that Murphy's
argument is properly framed as an assertion of superseding
cause. While this court has not directly addressed the
question of when component manufacturers are liable for
improper use of their products, we have held that the
defense of superseding cause is applicable to products
liability cases. Dura, 703 P.2d at 402. In Dura we further
ruled that the standard to be applied is whether, in
retrospect, it appears "highly extraordinary" that the
negligent conduct would have brought about the harm. Id.
(citing Yukon Equipment, Inc. v. Gordon, 660 P.2d 428
(Alaska 1983)).
8These facts are analogous to the facts in Dura in which the
thinness of a portable air tank caused the tank to fail
under both the plaintiff's and the manufacturer's theories
of the accident.
9There appears to be some confusion about the scope of the
trial court's ruling. Colt claims it was prevented from
questioning Brown regarding the operation of switch gauges,
while Murphy insists that the exclusion applied exclusively
to Brown's testimony concerning the particular device.
The transcript supports Murphy's position. Brown
was permitted to testify as to the function of the Murphy
device. Additionally, during cross-examination he was
allowed to describe his evaluation of high temperature
shutdown switches. Accordingly, we interpret the court's
instruction as restricting Colt only insofar as it was not
permitted to question Brown about the Murphy device in the
compressor used by Howard.
10See Dickey v. Corr-A-Glass, 601 P.2d 691, 694 (Kan. 1979)
("The exclusion of the testimony of plaintiffs' expert
witness went to the heart of their case and substantially
prejudiced their right to a fair trial.").
11Of the seven documents upon which Weiss' opinion was based
in part, three report "[n]o movement." Three additional
records do not indicate the problem with the switch gauges
other than that they required repair and were given new
sensing bulbs, calibrated, and returned to the customer.
The final document states that the switch gauge would not
register temperature. In the area designated for "remarks"
it states: "Calibration checks -Contact checks."
12Although the reports were business records, their
admissibility under Alaska Rule of Evidence 803(6), which
exempts business records from the hearsay rule, is
questionable. Because the reports appear to contain hearsay
in the form of customers' descriptions of the problem with
the returned devices, they may involve hearsay included
within hearsay, and would therefore be inadmissible absent
an independent hearsay exception. See Alaska R. Evid. 805;
see also Wolf v. Proctor & Gamble Co., 555 F. Supp. 613
(D.N.J. 1982).
13Rule 703 provides:
Basis of Opinion Testimony by Experts.
The facts or data in the particular case
upon which an expert bases an opinion or
inference may be those perceived by or
made known to him at or before the
hearing. Facts or data need not be
admissible in evidence, but must be of a
type reasonably relied upon by experts
in the particular field in forming
opinions or inferences upon the subject.
14The Zenith factors are:
1. The extent to which the opinion
is pervaded or dominated by reliance on
materials judicially determined to be
inadmissible, on grounds of either
relevance or trustworthiness;
2. The extent to which the opinion
is dominated or pervaded by reliance
upon other untrustworthy materials;
3. The extent to which the
expert's assumptions have been shown to
be unsupported, speculative, or
demonstrably incorrect;
4. The extent to which the
materials on which the expert relied are
within his immediate sphere of
expertise, are of a kind customarily
relied upon by experts in his field in
forming opinions or inferences on that
subject, and are not used only for
litigation purposes;
5. The extent to which the expert
acknowledges the questionable
reliability of the underlying
information, thus indicating that he has
taken that factor into consideration in
forming his opinion;
6. The extent to which reliance on
certain materials, even if otherwise
reasonable, may be unreasonable in the
peculiar circumstances of the case.
Norris, 738 P.2d at 350-51 (quoting Zenith, 505 F. Supp. at
1330).
15Murphy argues that Weiss' assumptions were speculative. It
compares Weiss' use of the documents to a report which was
at issue in Zenith, 505 F. Supp. at 1337-38. In Zenith the
report concluded, solely on the basis of a statement made by
one executive, that "the companies sought to avoid
competition with one another when adding to production
capacity." Id. at 1338. The court held that this statement
alone was not a reasonable basis for "such a sweeping
conclusion . . . nor is it helpful to the jury, in that
there has been no application of expertise." Id. In
contrast, Weiss relied on multiple written reports.
Furthermore, these reports were not the sole basis for his
conclusion, but merely substantiated the opinion he reached
based upon the application of his expertise and other
clearly admissible evidence.
16Murphy strongly urges us to conclude that Weiss' reliance
was improper because none of the records explicitly state
that there were leaks in the switch gauges which were
returned. However, the presence of leaks can be deduced
from the information contained in the reports. Weiss
considered only reports which indicated that there was no
observable damage, yet the device had "lost [its] fill."
When other explanations for the malfunction, such as
consumer abuse, were present, they appear to have been
specifically noted. Weiss excluded such reports.
17In Ogle v. Craig Taylor Equip. Co., 761 P.2d 722, 725-26
(Alaska 1988), this court set forth six elements which must
be established for a successful contribution claim. Murphy
admits that the only one of these elements which remains to
be resolved is whether Murphy was a tortfeasor, jointly and
severally liable for Howard's death.
18Former AS 09.16.010-.060 governs the contribution issues
presented in this case. Although that statute was repealed
by 1987 Initiative Proposal No. 2, 2, the repeal applies
only to actions accruing after March 5, 1989. 1987
Initiative Proposal No. 2, 4; Ogle v. Craig Taylor Equip.
Co., 761 P.2d 722 (Alaska 1988).
19Former AS 09.16.040 provided:
When a release or covenant not to
sue or not to enforce judgment is given
in good faith to one of two or more
persons liable in tort for the same
injury or the same wrongful death
(1) it does not discharge any of
the other tortfeasors from liability for
the injury or wrongful death unless its
terms so provide; but it reduces the
claim against the others to the extent
of any amount stipulated by the release
or the covenant, or in the amount of the
consideration paid for it, whichever is
the greater; and
(2) it discharges the tortfeasor to
whom it is given from all liability for
contribution to any other tortfeasor.
20Murphy also argues that the terms "common liability" and
"entire liability"mean the same thing in AS 09.16.010(b).
This seems distinctly unlikely as the term "common
liability" defines a contributing defendant's share of
liability, whereas the term "entire liability" caps the
contributing defendant's share of liability. If the terms
were meant to be identical, the limiting function which is
performed by the last sentence of AS 09.16.010(b) would not
be necessary. However, neither party places any
significance on the possibility that these terms may have
different meanings, and we assume therefore that any
difference in meaning which they may have is not significant
in this case.
21The lack of merit of Murphy's argument is well illustrated
by examples set forth by Colt:
In this case, potential tortfeasors
Jackovich, Empire, and Totem settled for
$250,000; Colt settled for $1,620,018.
The entire liability was therefore
$1,870,018, one-sixth of which was
$311,670. If Murphy pays no more than
that, Colt pays the
remaining $1,308,348 of the settlement.
If Colt had settled for $1,000,000,
the entire liability would have been
$1,350,000, one-sixth of which is
$208,333. If Murphy pays no more than
that, Colt pays the remaining $791,667.
If Colt had settled for $250,000,
the entire liability would have been
$500,000, one-sixth of which is $83,333.
If Murphy pays no more than that, Colt
pays the remaining $166,667.
If Colt had settled for $125,000,
the entire liability would have been
$375,000, one-sixth of which is $62,500.
If Murphy pays that amount, Colt and
Murphy share equally in the cost of
settlement.
. . . .
Thus, under Murphy's analysis, it
is only if Colt had settled for exactly
$125,000 that Murphy and Colt would have
shared the cost equally. But Colt and
Murphy have agreed that a much greater
amount -- $1,620,018 -- reason-ably
represents the damages outstanding after
the Jackovich, Empire and Totem
settlements. The only amount of
settlement in which the parties would
have shared equally -- $125,000 -- not
only would have been rejected by the
plaintiff, unquestionably, but it also
is nearly $1.5 million less than what
both Colt and Murphy agree is
reasonable. Under Murphy's analysis
Colt cannot settle for a reasonable
amount unless it resigns itself to
paying over four times as much as
Murphy. This result is absurd, and it
must be avoided.
22Cf. Continental Ins. Co. v. Bayless & Roberts, Inc., 608
P.2d 281 (Alaska 1980). In Continental, two parties agreed
to a settlement which was reduced to a consent decree but
was treated as a settlement. The insurer of one party
sought to reduce its obligation pursuant to former AS
09.16.040(1) by the amount of previous settlements with two
other parties. We refused, noting that prior settlements
had already been taken into consideration in reaching the
reasonable amount for the consent decree.
23Former AS 09.16.020 provides:
In determining the pro rata shares
of tortfeasors in the entire liability
(1) their relative degrees of fault
shall not be considered;
(2) if equity requires, the
collective liability of some as a group
constitutes a single share; and
(3) principles of equity applicable
to contribution generally shall apply.
24The court notes Murphy's claim that "common liability"and
"entire liability"are synonymous, and Colt's apparent lack
of disagreement with that position. Thus the court assumes
that any difference between the terms "is not significant in
this case."Slip Op. at p. 25, note 20. I do not agree that
the terms are synonymous, or that we should accept the
parties' apparent agreement that they are. Since we are
interpreting a statute, we must apply our independent
judgment. We should not base our interpretation on an
underlying interpretation which the parties assume to be
correct, but which we do not independently examine
ourselves. I am gratified to note that the court itself
does not believe the terms are synonymous, though perplexed
that it nonetheless proceeds on the assumption that they
are.
25I suggest that the following are examples of "common
liability"and "entire liability."
(1) P sues A, B, C, D, and E. All
defendants are solvent. None settle. A
jury finds all defendants jointly and
severally liable to P. Their liability
is "common"to each other. Their common
liability is also the "entire liability"
to P.
(2) The same parties as in (1),
but A, B and C settle separately with P.
A jury finds D and E jointly and several
ly liable to P. The amounts paid by A,
B and C are deducted from the amount for
which D and E are found liable to P by
the jury. D and E's liability is common
to each other. However, the entire
liability to P is the total of the
amounts paid P by A, B, and C, plus the
amount of the judgment owed P by D and
E.
(3) The same parties as in (1),
but A, B and C settle separately with
P. D settles with P for D and E. In a
trial between D and E, a jury finds that
D and E are jointly and severally liable
to P, and hence D entitled to
contribution from E. D and E's
liability is common to each other.
However, the entire liability to P is
the total of the amounts paid P by A, B,
C, and D.
26Section 19 provides:
A release by the injured person of
one joint tort-feasor, whether before or
after judgment, does not discharge the
other tort-feasors unless the release so
provides; but reduces the claim against
the other tort-feasors in the amount of
the consideration paid for the release,
or in any amount or proportion by which
the release provides that the total
claim shall be reduced, if greater than
the consideration paid.
Md. Ann. Code art. 50, 19 (1991).
Section 20 provides:
A release by the injured person of
one joint tort-feasor does not relieve
him from liability to make contribution
to another joint tort-feasor unless the
release is given before the right of the
other tort-feasor to secure a money
judgment for contribution has accrued,
and provides for a reduction, to the
extent of the pro rata share of the
released tort-feasor, of the injured
person's damages recoverable against all
other tort-feasors.
Md. Ann. Code art. 50, 20 (1991).
27The court presents one of Colt's examples to illustrate the
"absurdity"of the result of Murphy's interpretation of the
act. Slip Op. at p. 25-26, note 21. First, the court
cannot know that the result is absurd without having full
knowledge of all considerations that went into Colt's
decision to settle for the amount it did. Second, the court
continues to ignore the fact that nobody has forced Colt to
settle. Colt settled voluntarily for its own reasons. It
is Murphy that is being compelled to contribute.
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