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Morden v. Continental AG
Citations: 2000 WI 51; 611 N.W.2d 659; 235 Wis. 2d 325; 2000 Wisc. LEXIS 392Docket: 98-0073
Court: Wisconsin Supreme Court; June 16, 2000; Wisconsin; State Supreme Court
Christine and Thomas Morden sought review from the Wisconsin Supreme Court regarding a court of appeals decision that reversed a nearly $7 million judgment awarded to them by the Milwaukee County Circuit Court. The case stemmed from an accident that left Christine Morden with spinal cord injuries and quadriplegia after their Volkswagen Vanagon rolled over, allegedly due to defective tires manufactured by Continental AG. The Mordens filed negligence and strict liability claims against Continental, as well as claims against VW, the servicing dealer, and the tire retailer. Prior to trial, they settled with VW for $500,000. During a four-week trial, the jury found Continental negligent and strictly liable for producing unreasonably dangerous tires. However, the circuit court deemed the strict liability verdict defective due to inconsistent juror responses. The jury attributed 50% of the accident's causation to Christine Morden's negligence in driving, while Thomas Morden's negligence in tire maintenance was not deemed a contributing factor. The jury awarded a total of approximately $11.7 million in damages, with 50% liability assigned to Continental and 50% to Christine. The circuit court upheld the negligence verdict, adjusted for Christine's liability, resulting in a final judgment ordering Continental to pay approximately $6.2 million to Christine and $636,000 to Thomas. Continental's appeal led to a reversal by the court of appeals, which determined that the evidence was insufficient to support the jury's finding of negligence against Continental. The court found that the Mordens did not prove that Continental had breached a duty of care, as they failed to show that the company was aware of any unsafe tire design or manufacture. The Mordens presented four issues for consideration: 1. Whether the trial evidence was adequate to uphold the jury's negligence finding against Continental. 2. An alternative question regarding the validity of the jury's verdict on the strict liability claim, contingent on the outcome of the negligence claim. 3. A proposal to revise appellate procedure rules to prevent unpublished decisions in complex cases reversing jury verdicts. 4. Continental's assertion that the circuit court erred by not informing the jury about a covenant not to sue between VW and the Mordens, arguing this exclusion compromised their fair trial rights. The court concluded that the trial evidence was indeed sufficient to support the jury's negligence finding, reversing the court of appeals' decision. Consequently, the court did not address the second and third issues due to their reliance on the first issue's outcome. Regarding the fourth issue, the court upheld the circuit court's discretion to exclude the covenant evidence and found no basis for a new trial, as Continental did not demonstrate that a miscarriage of justice occurred. The case's background highlights the Mordens' planned trip to Florida, detailing their departure and driving arrangements, stressing that the underlying facts were largely undisputed, although interpretations of those facts were contested. Thomas Morden prepared the Vanagon for a family vacation by packing four suitcases, a 10-pound microwave, a cooler with soda, board games, pillows, blankets, and securing a 14-foot sailboat, the Lazer, on the roof. Additionally, he towed a Hobie Cat sailboat, which is lightweight and designed for family trips, aligning with VW's mid-1980s promotional material that featured the Vanagon with a Hobie Cat. During their drive through several states, the Mordens encountered varying weather conditions and opted to keep snow tires on the Vanagon. After approximately 23 hours of travel, Christine took over driving about 360 miles from their Florida destination, during which they experienced no vehicle issues. While traveling on Interstate 75, Christine drove at an estimated speed of 55 to 65 miles per hour, consistent with the posted limit of 65 mph. Witness Scott Leonhard confirmed he was traveling at 72 mph and occasionally passed the Vanagon. As they crossed an overpass, the Mordens felt a "dip" in the road, followed by a "pop" suggesting a tire blowout. Witnessing the back of the Vanagon lift, they perceived instability, likening the experience to fishtailing on ice. Christine reduced speed to 35-40 mph and made minor steering adjustments before the Vanagon ultimately lost control, rolling to the right side, swerving left, and coming to rest in the grass median. Christine Morden was found lying on her left side behind the steering wheel after a vehicle accident, initially claiming she was okay but unable to move. She was wearing a three-point restraint seat belt, which allowed slack, resulting in her head striking the vehicle's roof during the crash. The roof of the Vanagon caved in above her head, and after paramedics extricated her, she was flown 75 miles to a Jacksonville hospital, where it was determined she suffered a spinal cord injury leading to quadriplegia. Florida State Trooper Harry Fouraker, who investigated the accident, found no road hazards but observed that both rear tires of the Vanagon were blown out and punctured. Accident reconstruction expert Morrie Shaw testified that a bump or dip in the overpass likely caused the tire ruptures. Continental tire engineer Victor Bleumel supported this hypothesis, suggesting the tires hit something that led to the blowout. Trooper Fouraker suggested further investigation into the damaged tires but did not recommend examining the Hobie Cat trailer, Lazer sailboat, or the Vanagon itself. He noted the vehicle's loading was more akin to a "mini-move" than a family vacation, but recon expert Shaw calculated the load was 1,178 pounds below the rear tires' capacity. Tire consultant Donald Avila testified that loading did not contribute to the tire failures. The rear tires that blew out were Continental mud and snow tires, purchased by Thomas Morden in November 1989, about 1.5 years prior to the accident, as replacements for Michelin tires. Although Morden recognized the Continental tires were larger than recommended, he was assured they would be suitable. Morden believed the Continental tires were comparable in size to the Michelins and appropriate for the Vanagon, a view supported by Avila, who found the tires' dimensions and loading capacity adequate. However, Shaw and tire expert John Taylor contended that Morden selected the wrong tires. Notably, the invoice for the tires indicated they were from "old stock," manufactured in 1979 and stored for about ten years. While Taylor lacked information on the tires' storage conditions, he estimated they had only 12,000 to 20,000 miles of use. Avila, however, asserted that the age and storage conditions did not impact the tires' failure. Thomas Morden was unaware that the Continental tires on his vehicle had a maximum inflation pressure of 36 psi. Although the tires appeared visually fine from purchase until the accident, Morden never checked the tire pressure. An employee from Tech Lube, which serviced the Vanagon, noted that the tires were inflated to 45 psi—25% over the maximum—just three months prior to the incident. Tire expert Taylor observed that prolonged overinflation can significantly contribute to belt separation in radial tires, while consultant Avila stated that overinflation was not the cause of the tire rupture. Steel-belted radial tires consist of two belts that adhere to each other, with the space between them vulnerable to separation due to centrifugal forces during operation. Loss of adhesion is a common issue as tires age, and a nylon cap ply serves as an additional adhesive to prevent separation. Taylor indicated that cap plies are typically not used in standard passenger tires unless separation is a concern. The cap ply's weakest point is its splice, which can be designed as either a single wrap or double wrap. Double wrap designs are more effective in minimizing splice weaknesses. The ruptured Continental tires had a single-wrap cap splice, and it is unclear if Continental tested the strength of this design for mud and snow tires. Taylor noted that both tires failed at the cap splice, while Continental's quality control engineer, Victor Bleumel, identified internal "bubbles" along the tire's inner surface, corresponding to the belt separation. Taylor indicated that these bubbles suggested the separation had been developing over an extended period. The Mordens initiated a lawsuit for damages against Continental, VW, Mr. P's, and EvS. On August 1, 1997, just before trial, the Mordens reached a covenant not to sue with VW in exchange for $500,000, and the circuit court ruled that evidence of this settlement was inadmissible unless it demonstrated a change in party alignment or testimony. During a four-week trial, the court presented a Special Verdict with 15 questions to the jury regarding the negligence of the defendants and the Mordens. VW was excluded from the negligence assessment due to its dismissal without objection. On September 12, 1997, after five days of deliberation, the jury unanimously found Continental negligent in designing or manufacturing the tires, which contributed to the accident. For the strict liability claim, the jury found that the tires were defectively dangerous when they left Continental's possession, with 10 jurors supporting this conclusion and 2 dissenting. The jury determined that both Mr. P's and EvS were not negligent, while Christine Morden was found negligent in operating the Vanagon, contributing to the accident. Thomas Morden was deemed negligent in tire selection/maintenance but not in causing the accident. Negligence was apportioned 50% to Continental and 50% to Christine Morden, resulting in damages of $10,467,408 awarded to Christine and $1,237,830 to Thomas. After the verdict, Continental sought to overturn the jury's negligence finding and claimed the strict liability verdict was flawed. The court agreed the strict liability verdict was defective, as not all jurors unanimously agreed on the questions. However, it upheld the negligence verdict, adopting it as its own, citing foreseeability of risk from Continental's tire design. The court dismissed Continental's argument regarding the prejudicial impact of not admitting the VW settlement evidence and denied a new trial request. On November 24, 1997, the circuit court ordered Continental to pay a judgment of $6,206,699.91 to Christine Morden and $636,328.04 to Thomas Morden, which reflected a 50% reduction from the jury's total verdict, along with taxable costs and accrued interest. Continental appealed the decision, leading the court of appeals to reverse the circuit court's judgment. The appellate court found insufficient evidence to support the jury's negligence finding against Continental, asserting the Mordens failed to demonstrate that Continental knew or should have known the tires were unsafe. It clarified that merely having safer manufacturing alternatives does not constitute negligence; the plaintiffs must show actual knowledge of defects. Although the Mordens' expert indicated a defect in the tires, the court noted it was unclear whether this defect occurred during manufacturing or vehicle operation. Following the appellate decision, the Mordens sought reconsideration for a retrial on the strict liability claim, which was denied. The court ruled that the Mordens waived their right to a retrial by not requesting further jury instructions or raising the defective verdict during post-verdict motions. The document also outlines the standard of review for jury verdicts in Wisconsin, stating that a verdict will be upheld if there is any credible evidence supporting it. The court applies a narrow standard of review, considering evidence in favor of the jury's verdict. It emphasizes that the jury is responsible for assessing witness credibility and testimony weight, while appellate courts seek credible evidence to uphold the verdict rather than to support an alternative outcome. A jury's decision will be affirmed if there is any credible evidence present, even if contradicted by stronger evidence. Special deference is given when the trial court approves the jury's finding, allowing for overturning the verdict only in cases of complete failure of proof. The analysis then shifts to the negligence issue, examining credible evidence supporting the jury's decision. Wisconsin law permits recovery from manufacturers for product defects under both strict liability and negligence theories, despite existing confusion due to their overlapping nature. The elements required for strict liability differ from those for negligence, focusing on the product's dangerously defective condition, as established in precedent cases. Specifically, strict liability claims necessitate proof that the product was unreasonably dangerous or posed extraordinary danger. In a negligence action, plaintiffs do not need to demonstrate that a product is unreasonably dangerous, making the burden of proof seemingly lighter compared to other theories. However, it is insufficient for a plaintiff to prove merely that a product is defective; they must also establish the defendant's fault. The elements required to prove negligence include: 1) a duty of care by the defendant, 2) a breach of that duty, 3) a causal connection between the breach and the injury, and 4) actual loss or damage resulting from the injury. Wisconsin law recognizes that every individual has a duty of care to avoid actions that could foreseeably harm others. This duty is established if it can be shown that the defendant's actions could reasonably lead to harm. Courts require that it be demonstrated that some injury could have been foreseen, rather than a specific injury. Manufacturers must anticipate typical and atypical uses of their products and the associated risks. To determine if Continental owed a duty of care to the Mordens, it must be assessed whether there is credible evidence that Continental knew or should have known about the risks posed by their tires, including potential misuse by consumers. The court of appeals concluded that the Mordens did not provide sufficient evidence to establish that Continental was aware or should have been aware of any safety issues with the tires. However, there is credible evidence suggesting that the Continental tires exhibited a belt separation issue, indicating the potential for rupture, supported by expert testimony that manufacturers do not use cap plies unless there is a likelihood of belt separation occurring. The cap ply in the tire design served to address issues of belt separation, indicating that Continental had actual knowledge of these problems and could foresee potential tire ruptures. The jury could reasonably conclude that the tire's rupture was not an unusual event and that high-speed travel increased the likelihood of injury from such ruptures. Additionally, the jury could infer that Continental anticipated misuse of the tires, as evidenced by their 1988 Tire Guide, which provided guidance on proper tire size, inflation pressure, and load capacity, suggesting a recognition of consumer errors. With this foundation, the jury was justified in determining that Continental owed a duty of care to the Mordens. In assessing whether this duty was breached, the standard applied was that of ordinary care, which reflects the level of caution a reasonable person would exercise under similar circumstances. Manufacturers are held to this standard, and liability hinges on whether a reasonably prudent manufacturer would have acted differently. Importantly, the existence of better manufacturing methods does not automatically imply a lack of ordinary care in the product's design or manufacture. Negligence is established when a plaintiff demonstrates that a defendant knowingly selected a more dangerous manufacturing route. Manufacturers are measured against a "reasonable person" standard based on customary industry practices, which, while not definitive proof of negligence, informs the jury on whether the defendant could have reasonably prevented harm. Evidence of industry practices and technological capabilities at the time of design and manufacture is pertinent to the jury's negligence assessment. In this case, the jury could determine that Continental's failure to utilize a double-wrap cap splice reflected a lack of ordinary care, despite the absence of testing on the single-wrap cap splice. Testimony and patents indicate that single-wrap splices were inadequate for preventing tire separation, a known issue addressed by double-wrap technology since the 1960s and 1970s. The combination of industry knowledge and expert testimony provides credible evidence for the jury to conclude that Continental breached its duty of care by not opting for a safer design. An appellate court must uphold the jury's inferences from the evidence. Additionally, the determination of causation hinges on whether the defendant's negligence was a substantial factor in causing the injuries sustained by Christine Morden. The inquiry into causation examines the relationship between the tire design or manufacture and Christine Morden's injuries. Establishing a "cause-in-fact" requires determining if the defendant's actions directly caused the injuries. If so, the analysis would typically progress to "proximate cause," which includes public policy considerations that may limit liability. However, in this case, proximate cause is not under consideration, and focus remains on cause-in-fact. The jury found that the tire design or manufacture was a cause-in-fact of the accident, with 10 members agreeing the tires were defectively designed and unreasonably dangerous. Testimony from Trooper Fouraker emphasized the defective rear tires as a critical finding in the investigation. Accident reconstruction expert Shaw noted that the tire failures resulted from belt separation. Tire expert Taylor indicated that this separation stemmed from inadequate adhesion between the radial belts, potentially arising from manufacturing deficiencies or post-manufacturing issues such as heat or overinflation. Multiple factors could have contributed to these adhesion problems, which were foreseeable. Both failed tires were manufactured simultaneously and identically, failing in the same manner. Taylor suggested the belt separations were longstanding, implying they predated the accident, which was exacerbated by the vehicle's speed and conditions. Ultimately, Taylor attributed the tires' blowouts to Continental's use of an insufficient single-wrap cap splice, leading to a catastrophic failure. Taylor concluded that the failure of the tires could have been prevented had Continental implemented a double-wrap cap splice instead of a single-wrap cap splice, which led to belt separations. Continental's quality control engineer, Victor Bleumel, noted that both tires split at the cap ply splice's weak point, and his examinations revealed bubbles in the tires consistent with the belt separations, affirming that these separations contributed to the tire failures. The simultaneous rupture of both rear tires at the same points supported Taylor's assertion of a design or manufacturing defect. Accident reconstruction expert Morrie Shaw testified that the simultaneous failure caused the vehicle's loss of control. Dr. Rainer Stark, Continental's quality assurance director, also indicated that simultaneous tire failures significantly increased danger. Contrarily, tire consultant Donald Avila claimed that the tires did not contribute to the accident, attributing it instead to driver error. Continental argued that a negligent manufacture or design claim could not succeed solely based on tire failure, pointing to other potential causes such as tire age, misuse, and loading issues. They suggested that the method of loading, tire overinflation, and driving conditions led to the simultaneous tire failure. The court disagreed with Continental's position, stating that the jury's inferences were valid and supported by evidence, including testimony about the misuse of the Vanagon and tire overinflation. Expert witnesses confirmed that the wrong tires were purchased and noted the potential impact of overinflation on tire adhesion. The jury's findings indicated that while they acknowledged factors like tire selection and maintenance issues, they did not attribute these to the accident's cause, suggesting a thorough consideration of all evidence rather than exclusion of potential causes. Product misuse in vehicle maintenance or operation relates to the affirmative defense of contributory negligence. A negligence claim does not hinge on a plaintiff’s ability to rule out other potential causes of an accident, nor does a finding of negligence address whether it was the sole cause. Accidents can have multiple causes, and plaintiffs are not required to demonstrate freedom from their own negligence. Instead, if a plaintiff is found negligent, it is the defendant's responsibility to assert and prove contributory negligence. In this case, the jury determined that Christine Morden shared responsibility for her injuries due to her negligent vehicle operation, with factors such as her excessive speed and abrupt lane changes considered in their verdict. The jury assigned 50 percent of the negligence to both Christine Morden and Continental, which allows Morden to recover damages under Wisconsin law, as a plaintiff can recover if their negligence is less than 51 percent. The jury unanimously found Continental's negligence contributed to the accident, with evidence suggesting that Continental’s failure to implement a safer tire design was a substantial factor in the incident. The Mordens presented compelling evidence of significant actual losses, with Christine Morden sustaining severe injuries, ultimately categorized as catastrophic. The jury's findings were supported by credible evidence, confirming that the Mordens proved all elements of their negligence claim. The judgment of the circuit court, which upheld the jury's verdict, was affirmed, and the court of appeals decision was reversed. The court did not address the Mordens' secondary issue regarding strict liability, as the primary issue was resolved. The court does not address the Mordens' question regarding the court of appeals' ability to file unpublished, per curiam opinions. It evaluates Continental's request for a new trial based on claims that excluding evidence of a covenant not to sue prejudiced the jury. The analysis is divided into two parts: the trial court's discretion in evidentiary rulings and the conditions under which a new trial may be granted. The standard for reviewing a circuit court's evidentiary ruling involves assessing whether the court exercised its discretion appropriately, as established in Grube v. Daun. The court must apply the proper law to relevant facts and provide a reasonable basis for its rulings. It concludes that the circuit court appropriately excluded evidence of the covenant. Wisconsin Stat. 904.08 specifies that evidence of settlement or agreements cannot be used to prove liability or the validity of a disputed claim, though it can be admitted for other purposes, such as showing a witness's bias or prejudice. In this instance, Continental contended that the accident reconstruction expert's testimony was altered due to the settlement, as the expert did not address the crashworthiness of the VW Vanagon. The circuit court determined that there was no evidence of witness bias due to changes in testimony; rather, it noted that testimony had simply been omitted. Shaw's testimony on crashworthiness was deemed inappropriate as no related questions were posed. The court permitted mention of the covenant solely to illustrate potential bias linked to witness testimony changes, demonstrating appropriate discretion in applying relevant law and justifying its conclusions. Continental contended that the circuit court narrowly interpreted Wis. Stat. 904.08, which modifies Federal Rule of Evidence 408, asserting that it should allow for broader admission of settlement evidence. They pointed out that 904.08 includes additional purposes for settlement evidence, emphasizing the need for caution in its admissibility. Continental also referenced *Johnson v. Heintz*, where the court noted that while identifying insurance alignments and settlement facts should be permitted, introducing settlement details could undermine 904.08's purpose. Ultimately, while the circuit court has the authority to admit settlement evidence, it is not mandated to do so, and exclusion of such evidence does not necessarily prejudice the parties involved. When considering requests for a new trial, the court approaches with caution, recognizing that the circuit court is better positioned to assess whether the trial outcome's correctness has been compromised. The circuit court's denial of a new trial motion reflects this principle, as such requests are granted only in exceptional circumstances. The court possesses inherent authority to independently review requests for a new trial, not strictly limited by an erroneous exercise of discretion standard. Under Wis. Stat. 751.06, the court can either direct the proper judgment or remand for a new trial if it finds that the real controversy was not fully tried or that justice has miscarried. The first prong of this statute allows for a new trial if the jury was not given the opportunity to hear crucial testimony or if improperly admitted evidence clouded a significant issue. In this case, Continental challenges the exclusion of evidence regarding a covenant not to sue. The court finds that this exclusion did not impair the jury's ability to hear relevant testimony and distinguishes this case from others where exclusion of evidence warranted a new trial. For instance, in State v. Hicks, the court granted a new trial because critical DNA evidence affecting the defendant's identity was not presented, which was vital to the case's outcome. Similarly, in Garcia v. State, a witness's testimony that could have exonerated the defendant was deemed crucial, leading to a new trial. In contrast, the current case does not present such circumstances that would necessitate a new trial based on the jury's ability to hear essential evidence. The defendant in Cuyler testified, but the circuit court excluded police officers' testimony regarding his character, affecting the trial's outcome. The court noted that evidence exclusion must significantly cloud a crucial issue to warrant a new trial, which was not the case here as the VW agreement did not address the central issue of the case. Under the second statutory prong for a new trial, a retrial must show a substantial probability of a different outcome. The court found no evidence that the VW agreement would have changed the trial result, as established Wisconsin law states that such agreements do not impact nonsettling joint tortfeasors. Continental's argument that the exclusion hindered its ability to impeach witnesses was countered by the availability of relevant information before the trial. Ultimately, the court concluded that the VW agreement's admission would not likely have produced a different trial outcome and might have prejudiced the jury against the Mordens. Thus, Continental did not meet the requirements for either statutory prong for a new trial. The court emphasized that it exercises discretion to grant a new trial only in exceptional circumstances, and concluded that the case did not present such circumstances to warrant a new trial. The record provided sufficient credible evidence supporting the jury's finding of negligence by Continental in the design or manufacture of the tires. The court ruled that Continental was not entitled to a new trial based on the exclusion of evidence regarding a covenant not to sue. The court of appeals' decision was reversed. Notably, the jury's Special Verdict found Continental negligent, confirming that their negligence and the defective condition of the tires were causes of the accident. Conversely, Mr. P's Ideal Tires and Ernie Von Schledorn were found not negligent regarding the tire selection and maintenance, respectively. Christine Morden was found negligent in the operation of the Vanagon prior to the accident, which was determined to be a contributing cause of the accident. In contrast, Thomas Morden was also found negligent regarding the selection and maintenance of the Vanagon's tires, but this negligence did not contribute to the accident. The negligence attributed to various parties totaled 100%, with 50% each assigned to Christine Morden and Continental Tire, and 0% to Mr. P's Ideal Tires, Ernie Von Schledorn, and Thomas Morden. For damages resulting from the accident on March 22, 1991, the court awarded Christine Morden the following amounts: $416,843 for past medical expenses, $2,850,000 for future medical expenses, $75,000 for past loss of earnings, $125,565 for future loss of earning capacity, and $7,000,000 for past and future pain, suffering, and disability. Additionally, Thomas Morden was awarded $487,830 for nursing care and attendant services provided to Christine and $750,000 for loss of consortium. Wisconsin Statute 805.14(1) outlines the criteria for evaluating the sufficiency of evidence supporting a verdict, emphasizing that a motion challenging this sufficiency will only be granted if no credible evidence exists to support a favorable finding. Furthermore, the case Dippel v. Sciano establishes five elements necessary to prove a strict liability claim regarding defective products, including proof of defectiveness, unreasonable danger, causation, engagement in the business of selling the product, and expectation of safe use by consumers. Taylor's testimony emphasized the critical factors in tire manufacturing that could lead to failures, particularly the importance of controlling material processing temperatures and the aging of components. He explained that excessive heat can cause premature curing of rubber, resulting in improper bonding during tire assembly, which may lead to belt separations. Similarly, if tire materials sit too long, they may cure and fail to bond correctly, also causing separation. Contamination from dust or other particles can exacerbate these issues, compromising the integrity of the tire. Taylor stressed the need for antioxidants to protect rubber from oxygen degradation. Counsel for Continental acknowledged that Taylor's testimony supported the assertion that belt separations were responsible for tire failures. The document also references a case, Anderson v. Alfa-Laval Agri, Inc., where the jury was informed of plaintiffs' settlements with other defendants, leading to an appeal regarding the potential influence of that information on the jury's verdict. The appellate court found sufficient evidence for the jury's conclusion of non-negligence despite the error. The text notes that courts have discretionary power to reverse decisions under certain statutes. It highlights the evidentiary principle allowing cross-examination of opposing witnesses and cautions that introducing evidence of settlements can mislead juries into thinking plaintiffs have already been compensated adequately, thus affecting their decisions on liability and damages.