Holm v. Sponco Mfg., Inc.

324 N.W.2d 207, 35 A.L.R. 4th 848, 1982 Minn. LEXIS 1766

• Court: Supreme Court of Minnesota
• Decided: August 31, 1982
• Docket: 81-1133
• Status: Published

Opinions

YETKA, Justice.

Appellant Holm was severely injured on September 10, 1973, when he came in contact with a high voltage power line while operating an aerial ladder manufactured by the respondent, Sponco Mfg., Inc. Holm commenced a lawsuit against Sponco alleging negligence and strict products liability: Appellant stipulated that the danger of electrocution from contact with a high voltage wire was obvious, that he knew of the danger, and that he was familiar with warning decals on the machine which warned against the specific hazard which caused his injury. The Hennepin County District Court granted Sponco’s motion for summary judgment, concluding that the rule of law in Halvorson v. American Hoist and Derrick Co., 307 Minn. 48, 240 N.W.2d 303 (1976), was controlling. Appellant appeals from that order and the entry of judgment thereon.. We reverse and remand for trial.

At the time of the accident, Arnold Holm was a 58-year-old employee of Naegele Advertising, Inc.¹ Approximately 80% of his time was spent working as an electrician’s assistant where his primary duty was to install light fixtures on Naegele’s billboards so they could be illuminated at night. On September 10,1973, Laval Hylback, an electrician, and appellant Holm were assigned to prepare an advertising billboard for illumination by mounting light fixtures on the billboard. The advertising billboard was located on Highway 12 between Tamarach Avenue and Brimhall Avenue on the west end of Long Lake, Minnesota. The billboard was approximately 25 feet high; within 16 feet of the billboard was a high voltage electrical line approximately 31 feet off the ground. In order to attach the fixtures, Holm and Hylback were required to use an aerial ladder purchased by their employer from Sponco.

The aerial ladder had an automatic worker’s platform at the top section of the ladder with a remote control device which permitted operation of the ladder from the platform. The remote control device consisted of a series of four (4) toggle switches which, when pressed, caused the ladder to move up, down, left, or right.

Holm was familiar with the aerial ladder. He had received instructions on the use of it from Naegele employees. He had used this or a similar aerial ladder for 3 years, during which time he had operated it more than 2,000 times. Moreover, Holm maintained that he was familiar enough with the controls that he could operate the ladder without looking at the control panel direction labels. Prior to September 10,1973, Holm had had difficulty positioning the aerial ladder. Specifically, when moving the ladder to a designated spot, the ladder “carried over” or drifted after the power was discontinued. However, Holm had learned to work with the ladder so that the drifting was not a problem.

Holm had worked with the aerial ladder on billboards near electrical lines on prior occasions. He knew that the aerial ladder was not insulated. Holm was aware that he could be electrocuted if he or the ladder came in contact with an electrical line. Holm acknowledged that it was his practice to avoid the electrical lines by at least 15 feet. Holm was also aware of the various warning labels on the aerial ladder and truck and, in particular, of the 10 and 15 feet clearance recommendations.

At approximately 10:00 a.m., Hylback and Holm extended the aerial ladder such that they could climb up the ladder to the top of the billboard. Using the aerial ladder, the two men maneuvered one 18-foot long fixture up to the top of the billboard and began to bolt the fixture in place. Holm’s intentions were to ride the ladder to the ground, controlling it by using the remote control device on the platform, to pick up the second 18-foot fixture that would be required to complete the job, and to return to the top of the billboard. In returning to the ground, Holm maneuvered the aerial ladder and the automatic worker’s platform on which he was standing in a clockwise, northeasterly direction. While doing so, he struck the electrical powerline with his right arm below the shoulder.

In opposition to Sponco’s motion for summary judgment, Holm filed an affidavit of an expert witness, testifying that the aerial ladder was defective and unreasonably dangerous because it lacked safety devices such as insulation, sensors, and other limiting or proximity warning devices which would have either warned appellant of the proximity of the electrical wires or would have prevented the electrical current from passing through appellant to ground. Sponco’s expert also indicated that it was not a reasonable engineering practice to fail to include such safety devices where it was foreseeable that the aerial ladder would be used near electrical wires.

The issue raised on this appeal is whether the manufacturer of an aerial ladder in a defective condition unreasonably dangerous to the user is liable to the user if that defective condition is obvious.

In Halvorson v. American Hoist and Derrick Co., 307 Minn. 48, 240 N.W.2d 303 (1976), this court appeared to have adopted the latent-patent danger rule which relieves a manufacturer from liability if the dangers of his product are obvious to the user. Comment, Obviousness of Product Dangers as a Bar to Recovery: Minnesota Apparently Adopts the Latent-Patent Doctrine, 3 Wm. Mitchell L.Rev. 241 (1977). In Halvor-son, the court held that a manufacturer does not owe an injured plaintiff “any duty to install safety devices on its crane to guard against the risk of electrocution when the record demonstrated that [the] risk was: (1) obvious; (2) known by all employees involved; and (3) specifically warned against * * 307 Minn, at 57, 240 N.W.2d 308.

Appellant requests that Halvorson be directly overruled, contending (1) that it already has been implicitly overruled, (2) that the latent-patent rule is inconsistent with the current trend in products liability law, (3) that the policy considerations underpinning strict product liability are not served by adherence to Halvorson, and (4) that the latent-patent rule alters the basic allocation of liability under Minnesota’s comparative fault statute. Respondent argues that the rule of law laid down in Halvorson is logical and fair by requiring “that the user of the product should, in the final analysis, be held accountable for his own conduct in the use of the product in the face of obvious and known risks.” The district court found that the stipulated facts compelled the grant of respondent’s motion for summary judgment based on Halvorson. The court expressed doubt as to Halvorson’s continued validity, however, and appeared to invite reversal by this court. We agree with the district court’s excellent analysis of the law contained in its memorandum accompanying its order.

A succinct statement of the latent-patent rule is found in Campo v. Scofield,2 301 N.Y. 468, 95 N.E.2d 802 (1950):

[T]he manufacturer of a machine or any other article, dangerous because of the way in which it functions, and patently so, owes to those who use it a duty merely to make it free from latent defects and concealed dangers. * * *

If a manufacturer does everything necessary to make the machine function properly for the purpose for which it is designed, if the machine is without any latent defect, and if its functioning creates no danger or peril that is not known to the user, then the manufacturer has satisfied the law’s demands.

Id. at 471-72, 95 N.E.2d at 803-04. Citing Campo, the Halvorson court concluded that the plaintiff, as a matter of law, could not recover for defective product design under either a strict liability or negligence theory because the danger was obvious. Halvorson, 307 Minn. 48, 57, 240 N.W.2d 303, 308 (1976).

Since Halvorson, the position of this court on the obviousness question has been uncertain. In Ferguson v. Northern States Power Co., 307 Minn. 26, 239 N.W.2d 190 (1976) (decided a week before Halvorson), plaintiff was a teen-age boy who was severely injured when he accidentally contacted an 8,000 volt uninsulated electrical transmission line while trimming a tree in his father’s backyard. The court refused to bar recovery, noting instead that although the ordinary city dweller (including plaintiff) would know that the overhead utility lines in the backyard transmitted electricity, “he should [not] be expected to anticipate the presence of a such a lethal charge * * Id. at 33, 239 N.W.2d at 194. Thus, while the danger was obvious, the extent of the danger was not.

In Goblirsch v. Western Land Roller Co., 310 Minn. 471, 246 N.W.2d 687 (1976), the plaintiff lost his right hand while attempting to push wet corn down the intact chute of a corn-grinding machine, a task he had performed many times. Without reference to Campo or Halvorson, and without discussion of the apparently obvious danger, a jury verdict for the defendant was upheld based on plaintiff’s assumption of the risk.

In Bigham v. J.C. Penney Co., 268 N.W.2d 892, 896 (Minn. 1978), we approved the Eighth Circuit’s analysis of Halvorson found in Bjerk v. Universal Engineering Corp., 552 F.2d 1314 (8th Cir.1977). In Bjerk, the plaintiff was injured after crawling under a metal guard in order to grease a rock-crushing machine while it was operating. The instruction manual specifically warned against greasing the crusher while in motion. Although the manufacturer argued that Halvorson was controlling, the court distinguished Halvorson and determined that the danger was not obvious as a matter of law. Consequently, the issue of defendant’s negligence in failing to design and install safety devices adequately or to provide an adequate warning was a fact question for the jury.

The continued validity of Halvorson is further clouded by Parks v. Allis-Chalmers Corp., 289 N.W.2d 456 (Minn.1979). In Parks, plaintiff was injured when his arm was pulled into a forage harvester. At the time of the injury, plaintiff was attempting to unclog the harvester mechanism through an open stalk-chute door. The power takeoff was still on. A sign on the stalk-chute door told the operator to “keep away from rolls unless power is off.” A second sign on the harvester warned the operator to “keep hands, feet and clothing away from power-driven parts.”

Defendant requested a jury instruction, apparently based on Halvorson, that “there is no duty to install additional safety devices if the risk is (1) obvious, (2) known by the usér, and (3) specifically warned against.” The refusal to give the requested instruction was affirmed because the instruction “assumed, contrary to- the evidence, that some safety device or devices, material to the particular risk involved, had been installed, and that there had been a specific warning about the particular danger that caused the injury.” Id. at 461. The court also indicated that there was credible testimony indicating that plaintiff did not know of the particular danger which caused his injury. Id. at 460.

Finally, in Allied Aviation Fueling Co. v. Dover Corp., 287 N.W.2d 657 (Minn.1980), the court cited Halvorson for the proposition that the failure of a manufacturer to design against a foreseeable misuse was not the proximate cause of plaintiff’s loss because plaintiff had prior knowledge of the result of such misuse. The plaintiff’s knowledge of the potential danger, rather than the obviousness of the defect, was the basis for denying recovery.

The result of all these cases might well appear to be a confusing set of decisions from which the bar could find that the court appears to be looking for a way to avoid the harsh result of Campo while retaining the three-part test of Halvorson.

The current trend in products liability law has been accurately summarized by the Florida Supreme Court:

The modern trend in the nation is to abandon the strict patent danger doctrine as an exception to liability and to find that the obviousness of the defect is only a factor to be considered as a mitigating defense in determining whether a defect is unreasonably dangerous and whether plaintiff used that degree of reasonable care required by the circumstances.

Auburn Machine Works Co. v. Jones, 366 So.2d 1167, 1169 (Fla.1979). The latent-patent danger doctrine has been abandoned in a number of jurisdictions. See, e.g., Davis v. Fox River Tractor Co., 518 F.2d 481 (10th Cir.1975) (applying Oklahoma law); Beloit Corp. v. Harrell, 339 So.2d 992 (Ala.1976); Byrns v. Riddell, Inc., 113 Ariz. 264, 550 P.2d 1065 (1976); Pike v. Frank G. Hough Co., 2 Cal.3d 465, 467 P.2d 229, 85 Cal.Rptr. 629 (1970); Auburn Machine Works Co. v. Jones, 366 So.2d 1167 (Fla.1979); Brown v. Clark Equipment Co., 62 Haw. 530, 618 P.2d 267 (1980); Derrick v. Yoder Co., 88 Ill. App.3d 864, 43 Ill.Dec. 897, 410 N.E.2d 1030 (1980); Uloth v. City Tank Corp., 376 Mass. 874, 384 N.E.2d 1188 (1978); Casey v. Gifford Wood Co., 61 Mich.App. 208, 232 N.W.2d 360 (1975); Thibault v. Sears, Roebuck & Co., 118 N.H. 802, 395 A.2d 843 (1978); Ferrigno v. Eli Lilly and Co., 175 N.J.Super. 551, 420 A.2d 1305 (1980); Micallef v. Miehle Co., 39 N.Y.2d 376, 348 N.E.2d 571, 384 N.Y.S.2d 115 (1976); Olson v. A.W. Chesterton Co., 256 N.W.2d 530 (N.D. 1977); Palmer v. Massey-Ferguson, Inc., 3 Wash.App. 508, 476 P.2d 713 (1970).

As pointed out by the New York Court of Appeals in overruling Campo:

Campo suffers from its rigidity in precluding recovery whenever it is demonstrated that the defect was patent. Its unwavering view produces harsh results in view of the difficulties in our mechanized way of life to fully perceive the scope of danger, which may ultimately be found by a court to be apparent in manufactured goods as a matter of law. * * * Apace with advanced technology, a relaxation of the Campo stringency is advisable. A casting of increased responsibility upon the manufacturer, who stands in a superior position to recognize and cure defects, for improper conduct in the placement of finished products into the channels of commerce furthers the public interest. To this end, we hold that a manufacturer is obligated to exercise that degree of care in his plan or design so as to avoid any unreasonable risk of harm to anyone who is likely to be exposed to the danger when the product is used in the manner for which the product was intended, as well as an unintended yet reasonably foreseeable use.

What constitutes “reasonable care” will, of course, vary with the surrounding circumstances and will involve “a balancing of the likelihood of harm, and the gravity of harm if it happens, against the burden of the precaution which would be effective to avoid the harm.”

Micallef v. Miehle Co., 39 N.Y.2d 376, 385-86, 348 N.E.2d 571, 577-78, 384 N.Y.S.2d 115, 120-21 (1976) (citations omitted). Obviousness has not been eliminated as a factor in assessing liability, however. “Rather, the openness and obviousness of the danger should be available to the defendant on the issue of whether plaintiff exercised that degree of reasonable care as was required under the circumstances.” Id. at 387, 348 N.E.2d at 578, 384 N.Y.S.2d at 122.

Some states have gone further in defining what goes into the balance and adopted Professor Wade’s list of factors. See, e.g., Dorsey v. Yoder Co., 331 F.Supp. 753, 760 (E.D. Pa. 1971), aff'd, 474 F.2d 1339 (3d Cir.1973); Auburn Machine Works Co. v. Jones, 366 So.2d 1167, 1170 (Fla.1979). The specific factors which enter into the final balance are:.

(1) the usefulness and desirability of the product, (2) the availability of other and safer products to meet the same need, (3) the likelihood of injury and its probable seriousness, (4) the obviousness of the danger, (5) common knowledge and normal public expectation of the danger (particularly for established products), (6) the avoidability of injury by care in use of the product (including the effect of instructions or warnings), and (7) the ability to eliminate the danger without seriously impairing the usefulness of the product or making it unduly expensive.

Wade, Strict Tort Liability of Manufacturers, 19 Sw. L.J. 5, 17 (1965).³

In approving the doctrine of strict products liability in McCormack v. Hankscraft Co., 278 Minn. 322, 154 N.W.2d 488 (1967), this court recognized that not only is the manufacturer in a better position than a consumer to bear economic loss and to redistribute it via the cost of his product, but he is also better able to appreciate and minimize the risk of injury through the production of safer goods. See also Lee v. Crookston Coca-Cola Bottling Co., 290 Minn. 321, 188 N.W.2d 426 (1971); Restatement (Second) of Torts § 402A comment c (1965).

The latent-patent rule of Halvorson protects manufacturers who sell products with dangerous, but obvious, design defects. It “encourages manufacturers to be outrageous in their design, to eliminate safety devices, and to make hazards obvious.” Auburn Machine Works Co. v. Jones, 366 So.2d 1167, 1170 (Fla.1979). Moreover, the rule shifts the entire economic loss to the injured party, notwithstanding the fact that the manufacturer was, to some degree, at fault.

This result is inconsistent with the underlying policy rationale supporting the strict products liability doctrine espoused in McCormack v. Hankscraft Co., 278 Minn. 322, 154 N.W.2d 488 (1967), and in Lee v. Crookston Coca-Cola Bottling Co., 290 Minn. 321, 188 N.W.2d 426 (1971). As the Washington Supreme Court correctly noted: “The manufacturer of the obviously defective product ought not to escape because the product was obviously a bad one. The law, we think, ought to discourage misdesign rather than encouraging it in its obvious form.” Palmer v. Massey-Ferguson, Inc., 3 Wash.App. 508, 519, 476 P.2d 713, 719 (1970). There is little evidence to support respondent’s contention that the competition of the marketplace will motivate manufacturers to make their products better and safer.

Moreover, the Halvorson case is in conflict with current comparative fault law as amended by our legislature. In 1970, Minnesota adopted a comparative negligence statute. Minn. Stat. § 604.01 (1970). In Springrose v. Willmore, 292 Minn. 23, 192 N.W.2d 826 (1971), the scope of that statute was judicially expanded to include the assumption of the risk defense. The statute underwent a second redefinition in Busch v. Busch Construction, Inc., 262 N.W.2d 377 (Minn.1977), when it was applied to strict liability claims as well. As a result, contributory negligence (other than the failure to inspect a product or to guard against defects), misuse, and assumption of the risk were specifically recognized as valid defenses. Finally, in 1978, the comparative negligence statute became a comparative fault statute. Minn. Stat. § 604.01, subds. 1-la (1980). Contributory fault, including “unreasonable assumption of risk” and “unreasonable failure to avoid an injury,” bars recovery only when it is greater than the fault of the party from whom recovery is being sought. Id.

The latent-patent defect rule makes obviousness a complete bar to recovery. It circumvents Minn. Stat. § 604.01 (1980) and swallows up the assumption of the risk defense. This result is contrary to the public policy of apportioning loss between blameworthy plaintiffs and defendants. See Comment, Obviousness of Product Dangers as a Bar to Recovery: Minnesota Apparently Adopts the Latent-Patent Doctrine, 3 Wm. Mitchell L.Rev. 241, 265 (1977).

Therefore, the latent-patent danger rule, as set out in Halvorson, is rejected and a “reasonable care” balancing test substituted therefor in the same manner that the courts of New York and Florida have done. Accordingly, this case is reversed and remanded for a trial consistent with this opinion.

1 . The following summary of facts is condensed from the stipulation agreed to by the parties for purposes of Sponco’s summary judgment mo-' tion.

2 . The plaintiff, whose hands became caught in the steel rollers of an onion-topping machine, brought suit against the machine’s manufacturer, alleging that available safety devices would have reduced or prevented his injuries. The New York Court of Appeals upheld the dismissal of plaintiff’s complaint because the existence of a latent defect was not alleged. Campo was overruled by that same court within a matter of weeks after the Halvorson case was filed. See Micallef v. Miehle Co., 39 N.Y.2d 376, 348 N.E.2d 571, 384 N.Y.S.2d 115 (1976).

3 . It is interesting to note that this article was also cited in Halvorson in support of a balancing test very similar to that approved in Dorsey, Micallef, and Auburn Machine Works.

In this vein, one commentator has observed: “It has been argued that a rule of ‘strict liability’ which permits recovery for injuries arising out of defects in products only when those defects give rise to unreasonable dangers is borrowed from negligence theory [citing Wade, Strict Tort Liability of Manufacturers, 19 Sw.L.J. 5]. That is an apt observation, since both traditional negligence analysis and the ‘unreasonable danger’ analysis make liability depend upon whether the utility of the product or conduct in question outweighs, in light of all of the circumstances, the risk of injury and the burden of taking precautions to prevent it.” Comment, 1 Wm. Mitchell L.Rev. 207, 217.

Halvorson v. American Hoist and Derrick Co., 307 Minn. 48, 56, 240 N.W.2d 303, 307 (1976). Although indicating approval of the test, the Halvorson court declined to apply it.