General Motors Corp. v. Moseley

Citations: 213 Ga. App. 875; 447 S.E.2d 302Docket: A94A0826, A94A0827

Court: Court of Appeals of Georgia; June 13, 1994; Georgia; State Appellate Court

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On October 21, 1989, Shannon Moseley was killed when his 1985 GMC pickup truck was struck on the driver's side by another vehicle, resulting in a ruptured side saddle gas fuel tank that ignited. The medical examiner determined that Moseley died from thermal burns and smoke inhalation. His estate, represented by his parents Thomas and Elaine Moseley, filed a wrongful death suit against General Motors Corporation (GM) and the other driver, David Ruprecht. The jury awarded the Moseleys $4,241,611.84 for wrongful death and $1.00 for pain and suffering, along with $101 million in punitive damages against GM. The State of Georgia sought 75% of the punitive damages under OCGA § 51-12-5.1(e.2), but the trial court deemed the statute unconstitutional. However, the Supreme Court later upheld the statute's constitutionality and reversed the trial court's decision. GM's motion for a new trial based on newly discovered evidence was denied, leading to this appeal. The Moseleys, unhappy with the nominal award for pain and suffering and the denial of prejudgment interest, also sought a new trial, which was denied. Their cross-appeal followed. Initially filed in the Supreme Court due to constitutional concerns regarding punitive damages, the case was transferred to the Court of Appeals as it involved settled constitutional principles. The appeal record is extensive, encompassing over 10,000 pages, including trial transcripts. Additionally, GM attempted to exclude evidence of other similar cases involving its pickup trucks, with the trial court requiring a demonstration of substantial similarity before such evidence could be presented to the jury.

GM argues that the jury's verdict was tainted by the plaintiffs' counsel's inappropriate and frequent references to unrelated lawsuits involving post-collision fuel-fed fires, which lacked any demonstration of substantial similarity to the case at hand, violating a pretrial ruling. In product liability cases, evidence of other incidents is admissible only if substantial similarity is shown (Mack Trucks v. Conkle). Without such a showing, the evidence is deemed irrelevant (Carlton Co. v. Poss). The plaintiffs' counsel made over 16 references to 120 other lawsuits and approximately 240 deaths during various stages of the trial without providing evidence of similarity. Although GM did not object in some instances and objected in others—where the trial court either allowed continued reference or overruled motions for mistrial—one objection was upheld. The plaintiffs contend that GM did not preserve this issue for appeal; however, violations of a motion in limine do not require further objections (Scott v. Chapman). The purpose of a motion in limine is to prevent prejudicial questioning and statements before the jury. The trial court had warned against mentioning other cases without substantiating similarity, and the plaintiffs' repeated disregard of this ruling was deemed deliberate. Given the inflammatory nature of the references, the court concluded that these violations likely influenced the jury's decision. The plaintiffs argue that GM's concerns are unfounded, claiming that a showing of substantial similarity is only necessary for proving defect existence, not notice. However, the plaintiffs failed to demonstrate either substantial or mere similarity, undermining their position. Their reliance on Skil Corp. v. Lugsdin is misplaced, as that case deals with evidence relevance, not the foundational requirements for admitting such evidence.

Skil Corp. acknowledged the similarity of various incidents in the case, yet the requirement for demonstrating substantial similarity remains necessary for admissibility of evidence. The Supreme Court's ruling in *Mack Trucks v. Conkle* reinforces this prerequisite. The plaintiffs failed to establish this similarity, violating the trial court's ruling on a motion in limine, which constitutes reversible error. GM's motion in limine aimed to exclude evidence regarding discovery disputes, to which plaintiffs' counsel assured the court such evidence would not be introduced. However, throughout the trial, plaintiffs referenced GM's alleged concealment of issues with full-size pickup trucks and elicited testimony from a former GM engineer, Ronald Elwell, about GM's responses to discovery requests. This reference to other lawsuits and discovery disputes should have been excluded.

Elwell, who left GM in 1989 after an employment dispute and subsequently sued GM, testified about the development of GM's side saddle fuel tank. GM sought to exclude his testimony based on attorney-client privilege, but the trial court denied a total exclusion while allowing objections on a case-by-case basis. GM contends the trial court erred by not fully excluding Elwell's testimony, which may fall under attorney-client privilege. The concept of disqualifying a witness due to attorney-client privilege has precedent in various cases, with some jurisdictions interpreting the privilege to prevent disclosure by former employees. However, in Georgia, communications between principal and agent are not privileged even if they inform the principal's legal defense. In this case, Elwell's testimony was based on his employment experience rather than expert witness status.

Elwell, a GM employee, collaborated with a defense team on various cases, but his experience did not grant him any privilege regarding his insights. The court correctly allowed his testimony, as merely involving an attorney does not confer privilege on non-privileged information. During litigation related to his employment, Elwell deposed Theodore Kashmerick, who disclosed that he had discarded old documents concerning GM truck designs at the request of GM's legal department. Although GM's counsel was present, they did not cross-examine Kashmerick. Following Kashmerick's death, his deposition was played for the jury, but GM argued it was inadmissible due to the lack of meaningful cross-examination, as the issues in Elwell's employment case were unrelated to the product liability case. The court agreed, citing the necessity for substantial similarity in parties and issues for prior testimony to be admissible.

Additionally, GM redesigned its full-size pickup trucks starting around 1983, with production commencing in 1988. GM sought to exclude references to this redesign as subsequent remedial measures, which are typically inadmissible to prove negligence. The court denied this motion, stating that public policy encourages improvements without fear of admissions of fault. Plaintiffs contended that because the redesign began prior to the 1989 injury, it should not be considered a subsequent remedial measure, arguing its relevance to the case.

Planning and implementing design changes in product liability cases can take years, which raises similar concerns as when remedial measures follow an injury. The sequence of design changes occurring before an injury does not exempt the case from the exclusionary rule regarding subsequent remedial measures. Plaintiffs argue this rule should apply only to negligence actions; however, they have asserted both negligence and strict liability theories, a matter not previously addressed in Georgia. Other jurisdictions are divided on admitting subsequent remedial measures in strict liability cases. Some argue that since strict liability focuses on product character rather than manufacturer conduct, the fear of liability should not deter manufacturers from making improvements. Conversely, some jurisdictions maintain that public policy reasons for exclusion apply equally to strict liability and negligence cases. In Georgia, while subsequent remedial measures are generally inadmissible in negligence actions, exceptions exist, such as when they prove facts relevant to the case or address feasibility. If admitted, juries must be instructed on the limited purpose of such evidence and not to interpret it as an indication of negligence.

Numerous exceptions exist to the general rule in negligence actions, leading to the acceptance of evidence of subsequent remedial measures in strict liability cases, aligning with trends observed in other states. When negligence and strict liability claims are jointly presented, juries must be instructed on the appropriate use and limitations of such evidence. It may be beneficial to bifurcate or trifurcate proceedings, first addressing the negligence claim without the admissibility of subsequent remedial measures, followed by the strict liability claim if the defendant succeeds in the negligence phase.

At trial, Mike Juras, former chief design engineer for GM's pickup truck division, asserted that trucks with side saddle fuel tanks were safe, citing crash tests that exceeded federal standards. During cross-examination, he acknowledged a pending investigation by the National Highway Traffic Safety Administration (NHTSA) regarding GM's compliance with the Federal Motor Vehicle Safety Standard (FMVSS) 301, which was not concluded at the time of trial. GM sought to exclude references to the NHTSA investigation as hearsay, a point the plaintiffs contested. The trial court deferred a ruling but prohibited mention of the investigation until further direction. It was determined that admitting evidence of the NHTSA investigation was erroneous, as it did not contribute relevant evidence to the compliance issue.

Additionally, the trial court allowed questioning of Robert Stempel, GM's former CEO, regarding various "standards" to evaluate GM's actions, including customer care and honesty as per GM's advertising, as well as standards from the Society of Automotive Engineers (SAE) and GM's internal testing. GM argued this questioning introduced inappropriate legal standards, but it was found that these inquiries pertained to GM's commercial practices and industry norms, relevant to the issue of ordinary care rather than legal conduct standards.

The trial court's decision to allow inquiry and deny GM's motion for a new trial based on newly discovered evidence was upheld. GM argued that testimony from two new eyewitnesses, who claimed to have seen Shannon Moseley unconscious at the scene, warranted a new trial. However, the court determined that this testimony would only serve to discredit previous eyewitness accounts rather than provide new, substantive evidence, which did not meet the criteria for a new trial as outlined in Timberlake v. State.

Additionally, GM challenged the punitive damages awarded against it. GM asserted that compliance with Federal Motor Vehicle Safety Standards (FMVSS 301) precluded punitive damages, referencing Stone Man v. Green, which states that adherence to safety regulations usually indicates a lack of malicious intent. Nonetheless, evidence showed GM was aware of risks associated with the placement of fuel tanks in its trucks and failed to make safety modifications for economic reasons. This knowledge of potential danger supported the punitive damages award. 

GM further contended that the jury's punitive damages verdict was invalid as it allegedly constituted an extraterritorial award, violating the Commerce Clause. However, the court reasoned that since the 5,000,000 GM pickup trucks in question could enter Georgia at any time, the jury's award was not extraterritorial in nature, and thus valid.

Punitive damages must be reasonable and rationally related to their purpose of punishment and deterrence, as established in Pacific Mut. Life Ins. Co. v. Haslip. GM argues that the punitive damages ratio of 101,000,000 to 1 compared to compensatory damages indicates excessiveness. However, the Supreme Court of Georgia in Hosp. Auth. of Gwinnett County v. Jones ruled that proportionality does not limit punitive damages awards intended for deterrence. Under OCGA § 51-12-5.1(e.1), there is no cap on punitive damages, but only one award can be recovered from a defendant for any act of product liability, regardless of the number of causes of action. Given the public harm and GM’s corporate status, the punitive damages assessed were deemed reasonable and served their intended purpose.

GM also contends the trial court erred by not defining the "clear and convincing evidence" standard required for punitive damages in its jury instructions. GM requested a specific instruction emphasizing that plaintiffs must prove entitlement to punitive damages with clear and convincing evidence, which is a higher burden than a preponderance of the evidence. The trial court refused this request, causing confusion when the jury sought clarification. In Clarke v. Cotton, the court determined that where different standards of proof apply, both must be defined to avoid misleading the jury. The Supreme Court noted that while GM's full request was partially incorrect, the request to define clear and convincing evidence was legally sound. Therefore, the trial court erred by not providing this definition, particularly in light of GM's requests and the jury's confusion.

Evidence for punitive damages was deemed sufficient but not overwhelming, meaning any omission could not be considered harmless error. Under OCGA § 51-12-5.1 (d)(1) and (2), the fact-finder must first determine if punitive damages are warranted, followed by a separate trial phase to establish the amount if appropriate. This statute mandates a bifurcated trial for punitive damages, which was previously at the trial court's discretion. The trial court followed this bifurcation, but this method may not always prevent jury confusion between compensatory and punitive damages. Evidence relevant to punitive damages could improperly influence the jury's decision on liability for compensatory damages, particularly if there are reversible errors regarding the admission of such evidence. A trifurcated procedure—separating the trial into phases for compensatory damages, the propriety of punitive damages, and the amount of punitive damages—could mitigate this risk. In the current case, during the punitive damages phase, no new evidence was presented, as all relevant evidence had been introduced in the earlier phase for compensatory damages. This overlap likely affected the jury's judgment regarding GM's liability for compensatory damages, especially due to the admission of prejudicial evidence, like references to other lawsuits. Consequently, the judgment for compensatory damages is linked to the punitive damages judgment, necessitating a retrial. The trial court had prior discretion to bifurcate or trifurcate trials to enhance issue resolution. The plaintiffs' cross-appeal regarding the denial of a new trial for pain and suffering and the striking of prejudgment interest is rendered moot by the requirement for a retrial of the entire case.

Prejudgment interest was initially assessed at $1,568,223.86 by the trial court based on the jury's verdict, but later struck on the grounds that punitive damages should not be included when determining if the judgment exceeded the plaintiffs' unliquidated damages demand of $5,000,000. According to OCGA § 51-12-14(a), if a claimant provides written notice of unliquidated damages and the opposing party fails to pay within 30 days, the claimant is entitled to prejudgment interest if the trial judgment meets or exceeds the demanded amount. This statute aims to encourage timely settlement and compensate for delayed damages. However, punitive damages, meant to punish or deter, do not align with this purpose, as established in prior case law that disallows interest on exemplary damages awarded by a jury. Therefore, the trial court correctly focused solely on compensatory damages when assessing prejudgment interest. The judgment was reversed in one case and dismissed as moot in part while affirmed in another. Judge Banke expressed concern regarding the punitive damages awarded, suggesting that the amount was influenced by an emotionally charged jury, and noted the deficiencies in Georgia's current punitive damages determination process.

Punitive damages must be reasonable and serve a rational purpose, as affirmed by the United States Supreme Court, which supports a comparative review of punitive and compensatory awards (Pacific Mut. Life Ins. Co. v. Haslip). However, Georgia's Supreme Court has dismissed the need for proportionality in punitive damages intended for deterrence (Hosp. Auth. of Gwinnett County v. Jones), leading to a lack of objective criteria for evaluating such awards in Georgia law. The reliance on a jury's or judge's subjective judgment creates ongoing issues regarding the appropriateness of punitive damage awards.

In the current case, the trial was influenced by a charged atmosphere, with inappropriate references to unrelated incidents of fuel-fed fires, violating procedural orders. The motion for reconsideration implies that the court's reasoning may lack rationality. Given the circumstances, including the reversal of the punitive damages judgment on evidentiary grounds, the evaluation of punitive damages is considered non-binding or advisory. Ultimately, the punitive damages awarded should not be upheld, as they resulted from an emotionally driven jury rather than a reasoned deliberation.