McGarvey v. G.I. Joe Septic Service, Inc.

Citations: 293 N.J. Super. 129; 679 A.2d 733; 1996 N.J. Super. LEXIS 334

Court: New Jersey Superior Court Appellate Division; August 6, 1996; New Jersey; State Appellate Court

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The court, represented by Judge Arnold M. Stein, has consolidated multiple appeals and reversed the verdict of no cause for action against defendants Ford and Rice, Holman, remanding the case for retrial on all strict liability and negligence claims except those related to Rice, Holman. The court determined that the Ford LTL-9000 chassis-cab, delivered by Rice, Holman to DePalma and G.I. Joe, was legally defective. 

On November 24, 1986, a collision occurred when Dennis McGarvey’s car struck the rear frame of a 1987 Ford LTL-9000 chassis-cab, which was being driven by Stephen DePalma. G.I. Joe Septic Service, owned by Joseph Lombardo, had purchased the chassis that evening from Rice, Holman Ford, an authorized dealer. The incomplete vehicle, which was intended for customization, was to be used by Lombardo as a platform for a septic tank. 

DePalma picked up the chassis after hours as a favor and turned left into the median strip to make a U-turn, causing the chassis rails to extend into the southbound lane. While waiting for traffic, McGarvey’s car, traveling in the same lane, collided with the protruding rails. The chassis lacked adequate rear side lights and reflectors, which could have alerted McGarvey to the obstruction. 

McGarvey subsequently sued G.I. Joe, Lombardo, DePalma for negligence, and Ford Motor Co. and Rice, Holman for product defect. Lombardo had been informed by salesman A1 Branch that the chassis could be shipped directly to a second-stage manufacturer if he specified a destination; however, he failed to do so in time, resulting in the chassis being sent back to Rice, Holman. Although Branch suggested hiring a professional carrier to transport the truck, he did not mention any inadequate lighting or safety concerns. Lombardo assumed the vehicle would include all necessary lighting and decided to pick up the chassis himself. Lombardo's son and DePalma arrived at Rice, Holman around 5:00 PM to complete the transaction, but Branch could not recall specific details about their departure.

During cross-examination, a witness acknowledged assuming that Mr. Lombardo's team would drive the truck off the premises, confirming they did not see any motor carriers used for transport. The witness also stated that he prepared a temporary registration under that assumption. DePalma inspected the truck's lights but was unaware it lacked side marker lights and reflectors for safe night operation. Both Branch and John M. Repholz, the general manager, were similarly uninformed about the vehicle's lighting deficiencies and stated the truck was delivered in "drive-away condition." There were no warnings in the cab regarding the need for additional lighting, and despite an incomplete vehicle manual indicating non-compliance with certain Federal Motor Vehicle Safety Standards, Branch did not advise reading it. Repholz noted that telling customers to read the lengthy manual would likely be ignored. Neither Ford Motor Co. nor Rice, Holman required additional lighting for the chassis before delivery. Furthermore, Branch was unaware if temporary lighting kits were available, though Repholz indicated that Rice, Holman could add lights upon request. McGarvey argued the chassis was defectively designed due to inadequate lighting and a failure to warn, making it unsafe for night use, which was a foreseeable purpose. In contrast, Ford and Rice, Holman claimed the vehicle's intended use was for transport via motor carrier, asserting that DePalma's nighttime driving without proper lighting was not foreseeable. They maintained that it was DePalma's responsibility as a motor carrier to ensure the installation of temporary lights for nighttime operation. The jury ultimately found Lombardo, DePalma, and McGarvey each negligent in the accident, while concluding that the truck chassis was not being used for its intended purpose at the time of the incident.

Two appeals were filed concerning third-party claims against Ford and Rice, Holman by defendants G.I. Joe, Lombardo, and DePalma. The defendants assert several errors in the trial court's decisions: 

1. The trial court failed to instruct the jury, per Bexiga v. Havir Manufacturing Corp., that Ford and Rice, Holman were not exempt from liability based on their expectation that G.I. Joe would add lights and reflectors.
2. The trial court did not address the applicability of federal regulations before trial and erroneously reversed its prior decision, allowing conflicting expert opinions to be presented to the jury.
3. The trial court incorrectly ruled that Ford and Rice, Holman were not required to comply with Section 108 lighting requirements.
4. The trial court vacated a partial summary judgment order against Rice, Holman.

Additionally, McGarvey's appeal raised the issue of reversible error for not granting a directed verdict on product defect. Prior to trial, a Law Division judge found the chassis defective as a matter of law, leaving only responsibility for that defect as the remaining issue. This was reversed on the basis that the judge equated ‘defective’ with ‘unsafe’ without considering the truck's intended uses.

On remand, a different judge found the vehicle defective when it left Rice, Holman’s control, but the motion for leave to appeal was denied, emphasizing that previous rulings should be approached with caution. The trial judge later vacated the second partial summary judgment order prior to testimony.

The appellants argued for a new trial based on the trial judge's failure to rule on the applicability of Federal Motor Vehicle Safety Standards before trial, a mistaken determination that Standard 108 did not apply to Ford, and the timing of the decision impacting the credibility of experts. The court disagreed, clarifying that while the Ford LTL-9000 fits the definition of a truck, it should be classified as an incomplete vehicle requiring further manufacturing to become complete, thus exempting it from certain standards.

An incomplete vehicle, like the Ford LTL-9000 chassis-cab, is not required to meet all motor vehicle safety standards, as outlined in Part 568 of the safety regulations. This part mandates that manufacturers provide documentation detailing which safety standards the vehicle meets and what is needed for compliance with other standards at the time of delivery. The trial judge correctly determined that Ford was not obligated to produce a cab-chassis conforming to Standard 108, as the Federal Motor Vehicle Safety Standards did not apply. However, the judge erred by not addressing this issue before trial and instead allowing the jury to hear extensive expert testimony that may have misled them regarding the applicability of the regulations.

The judge later indicated he would decide on the regulations' meaning but had already permitted jury deliberation based on conflicting expert opinions, which could confuse the jury's focus on the core issues of liability under common law for defective design and failure to warn. The case's strict liability issues were not contingent on compliance with the certification requirements of Part 568, which only outlines shared responsibilities among manufacturers. The absence of side lights on the chassis was acknowledged as making it unsafe for night driving, and while Standard 108 could indicate the product's dangerousness, it did not directly pertain to the design defect claims.

In design-defect cases, a plaintiff must establish that the product was defective, the defect existed when it left the defendant's hands, and the defect caused injury to a foreseeable user. The key consideration is the reasonableness of the manufacturer's design choice.

In inadequate warning cases, the defect arises from a failure to alert users about potential injury risks associated with a product. The criteria for establishing a product defect are similar for both design defects and failure-to-warn claims. A product's defectiveness is assessed based on its fitness, suitability, and safety for intended or foreseeable uses, guided by a seven-factor risk-utility analysis. This analysis includes the product's usefulness, the likelihood and severity of injury, availability of substitutes, the manufacturer’s ability to mitigate dangers without sacrificing utility, the user’s capacity to avoid danger through due care, the user’s anticipated awareness of dangers, and the feasibility of the manufacturer spreading loss costs.

Component part manufacturers can be held strictly liable for injuries caused by defective parts if those parts were not significantly altered post-manufacture. When evaluating a manufacturer’s liability, the focus should be on the product's condition rather than the consumer's care in use. The analysis should consider how an average user, rather than the plaintiff, might avoid injury. Product safety assessments must exclude the specific behaviors or knowledge of individuals involved, as they should reflect an average consumer's perspective.

In the case involving Ford, Rice, Holman, and DePalma, the obligation to comply with Federal Motor Carrier Safety Regulations was raised, suggesting DePalma should have ensured the chassis met lighting standards. However, this shifted the trial's focus from the chassis's condition to DePalma's operation of it, which was deemed irrelevant for the risk/utility analysis. The jury was not properly instructed regarding the relevance of DePalma's due care, potentially leading them to mistakenly consider his conduct when assessing strict liability against Ford and Rice, Holman. The judge initially stated that the defendants denied any defect in the chassis and claimed it was safe for its intended use, which pertained to its transport for further modification.

Defendants argue against any duty to warn, asserting that their alleged failure was inconsequential, as defendant DePalma was aware of the absence of side lighting and the risks of nighttime driving without it. During the negligence charge, it was indicated that defendants Ford and Rice, Holman claimed that DePalma, Lombardo, and G.I. Joe violated federal safety regulations applicable to the transportation of the Ford vehicle after it left Rice, Holman's lot. Federal regulations at Section 393.12 establish requirements for lighting devices and reflectors on vehicles, mirroring those in Section 108, which pertains exclusively to manufacturers and sellers. These standards set a conduct benchmark for street and highway users. If DePalma or Lombardo violated these standards, it could be considered evidence of negligence. The court instructed that DePalma had a duty to comply with Standard 108 in assessing negligence. 

Furthermore, Section 108 applies specifically to trucks over 80 inches wide and mandates certain lighting and reflector requirements. The court clarified that regardless of Section 108’s applicability, federal regulations do not permit incomplete vehicles to operate on public roads at night in their existing condition. While Section 108 generally governs manufacturers, Section 568 outlines how incomplete vehicles should be produced and delivered, requiring the first-stage manufacturer to provide information about outstanding equipment. Consequently, the court ruled to strike expert testimony suggesting that Section 108's full lighting requirements apply universally to manufacturers of incomplete vehicles, instructing that Section 108's requirements are modified by Section 568 for the Ford Motor Company.

The instruction provided to the jury on products liability was both confusing and misleading, particularly by indicating that Standard 108 did not apply to Ford while simultaneously suggesting that DePalma's actions were relevant in assessing whether the chassis was defective. This constituted a reversible error. In the case of Ladner v. Mercedes-Benz, the trial judge's reference to a statute regarding the control of motor vehicles implied a comparison between the plaintiff's conduct and the statutory standard, which the appellate court found inappropriate. The court ruled that the plaintiff's behavior should not influence the determination of design defect in a strict liability context. Similarly, in this case, DePalma's actions regarding the absence of lights were deemed irrelevant to the assessment of the chassis's defectiveness. A limiting instruction was necessary to prevent the jury from considering DePalma's conduct in the risk-utility analysis. The potential for the jury to focus improperly on the plaintiff's behavior was significant. McGarvey maintained that DePalma's use of the chassis was foreseeable and that its unsafe condition for nighttime driving eliminated any factual dispute. Ford and Rice, Holman countered that DePalma's failure to add lights was unforeseeable, arguing that they had the right to expect users to be licensed drivers capable of recognizing such needs. This is aligned with the "sophisticated user" defense, which posits that manufacturers owe a duty only to those users with specialized training. Ford and Rice, Holman asserted that the chassis was designed for experienced motor carriers, with expert testimony supporting the industry standard of transferring chassis to carriers for proper lighting installation.

Ford had a reasonable expectation that a competent truck driver would recognize the absence of side lights and reflectors on a truck and would use a temporary light kit before driving at night. This raised a factual issue regarding Ford's reliance on the truck driver's ability to notice the missing safety features. If it was foreseeable that an average consumer would drive the chassis at night without lights, the jury could determine that Ford's failure to provide a conspicuous warning inside the cab rendered the product defective.

Expert testimony indicated that it would have been feasible for Ford to add necessary lights and reflectors, with minimal cost, to enhance safety. Consequently, if Ford could foresee the nighttime operation of the chassis without adequate lighting, the jury could find it defective for not installing these safety features.

In contrast, Rice, Holman, the dealer, could not reasonably rely on the expectation that the individual picking up the chassis would have the expertise to identify missing safety features. Testimonies revealed that the individuals picking up the chassis were not professional motor carriers and that it was known they intended to use the chassis immediately. Rice, Holman had actual notice that the individual, DePalma, would not use a motor carrier and breached its duty by allowing him to drive the unlit chassis at night. 

The court concluded that Rice, Holman delivered a defective product as a matter of law, and thus, the jury's finding of no cause for action was reversed. A risk/utility analysis was deemed unnecessary in this case.

The court disagrees with the appellants’ assertion that the judge should have instructed the jury based on Bexiga v. Havir Manufacturing Corp., which states a manufacturer cannot depend on a third party for the installation of safety devices if such devices are necessary to mitigate unreasonable risks. The case emphasizes that manufacturers should foresee the need for safety devices and cannot avoid liability simply because they expect others to install them. The sophisticated user defense applies here, raising the question of whether Ford could reasonably rely on average truck drivers to install safety devices before using the product. 

The court clarifies that no individual liability should be assigned to Lombardo since he was not an active tortfeasor, adhering to the principle that a corporation is distinct from its shareholders unless fraud or injustice is proven. Liability for G.I. Joe arises under the doctrine of respondeat superior, meaning any negligence by DePalma in operating the vehicle should result in a single negligence assessment against both DePalma and G.I. Joe.

There is a jury question regarding whether Ford delivered a defective product to the market, and Rice, Holman is determined to have sent a defective product onto public roads post-delivery. The determinations regarding negligence for McGarvey, DePalma, and G.I. Joe are to be retried to allow for a comparative fault assessment among all parties. 

The ruling cites three factors from Verge v. Ford Motor Co. regarding the absence of safety devices: trade custom, relative expertise, and practicality. New Jersey law restricts the inquiry into the feasibility of safety device installation by the component manufacturer, especially when multiple manufacturers are involved. In this case, as only Ford worked on the chassis before the accident, Ford's liability will be evaluated through a traditional risk/utility analysis. The decision is reversed and remanded for a new trial consistent with these findings.