Sylvia Averbach v. Rival Manufacturing Company

879 F.2d 1196, 1989 WL 78703
CourtCourt of Appeals for the Third Circuit
DecidedAugust 17, 1989
Docket88-1957
StatusPublished
Cited by60 cases

This text of 879 F.2d 1196 (Sylvia Averbach v. Rival Manufacturing Company) is published on Counsel Stack Legal Research, covering Court of Appeals for the Third Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Sylvia Averbach v. Rival Manufacturing Company, 879 F.2d 1196, 1989 WL 78703 (3d Cir. 1989).

Opinion

OPINION OF THE COURT

SLOVITER, Circuit Judge.

Appellant, Sylvia Averbach, brought this suit alleging that appellee, Rival Manufacturing Company, had committed common law fraud in filing false answers to interrogatories in a prior product liability action between the parties which Averbach lost. The district court in this case entered a judgment notwithstanding the verdict for Rival following the jury’s responses to special interrogatories in a bifurcated trial. The principal issue before us is whether the jury could properly have found that Aver-bach relied on Rival’s answers to interrogatories in the prior action.

I.

Facts and Procedural History

In 1977, Averbach suffered a fire in her home which she claimed was caused by an electric can opener with a design defect that allegedly caused continuous running, overheating, and ignition of the appliance. The can opener was manufactured by Rival. Averbach, filed a product liability suit against Rival in the District Court for the Eastern District of Pennsylvania, alleging more than $200,000 in damages and invoking that court’s diversity jurisdiction. One of the interrogatories propounded by Aver-bach to Rival read:

40. If the defendant has within the past five years received any complaints of an occurrence similar to those allegedly experienced by the plaintiff, please state for each such complaint:
(a) Its date;
(b) Its substance, including a description of the factual circumstances;
(c) The name and address of the person making the complaint.

App. at 65.

Rival’s response was:
40. a. December 7, 1976.
b. The claim was for property damage to a house. It was alleged that a Rival Model 731/1 Can Opener/Knife Sharpener caused a fire. The evidence did not support the claimant’s allegations, the claim was denied by the Company and dropped by the Claimant.

App. at 75.

The case was tried before a jury, which returned a verdict in favor of Rival in June 1981, from which Averbach did. not appeal.

*1198 In September 1984, Averbach filed a motion for a new trial under Fed.R.Civ.P. 60(b) on the ground that she had recently received information showing that Rival falsely answered her Interrogatory Question No. 40, referring to records of the Consumer Product Safety Commission (CPSC) with respect to numerous complaints about fires caused by Rival’s can openers during the period specified in the interrogatory. The district court denied the motion because it was not filed within one year after judgment as required for motions for new trial under Fed.R.Civ.P. 60(b)(3) based on fraud or misrepresentation, and this court affirmed by judgment order.

In May 1985, Averbach filed a two-count complaint against Rival in the Eastern District of Pennsylvania, this suit based on the allegedly false answer to the interrogatory in the product liability lawsuit. Count One was based on the Racketeer Influenced and Corrupt Organizations Act (RICO), 18 U.S. C. § 1961 et seq., and Count Two on common law fraud. The district court dismissed the complaint for failure to state claims upon which relief could be granted. On appeal, this court affirmed the dismissal of the RICO claim, holding that Aver-bach could not claim that the court system was an enterprise for purposes of RICO because the court personnel and litigants lacked a common purpose. However, we reversed the dismissal of the common law fraud claim, concluding that Averbach’s complaint sufficiently stated a cause of action. Averbach v. Rival Mfg. Co., 809 F.2d 1016, 1018-20 (3d Cir.), cert. denied, 482 U.S. 915, 107 S.Ct. 3187, 96 L.Ed.2d 675 (1987) and 484 U.S. 822, 108 S.Ct. 83, 98 L.Ed.2d 45 (1987). As we noted, “[i]f the information from the files of the [CPSC] about fires begun by Rival electric can openers is true, the answers to interrogatories served in the underlying action are grossly false.” Id. at 1018.

With respect to the district court’s conclusion that the complaint failed to allege justifiable reliance as required under Pennsylvania law, we found “unpersuasive the proposition that the complaint was deficient in failing to allege the self-evident 'purpose of asking for information under penalty of false swearing in the course of discovery, or the self-evident purpose of responding to a request for such information.” Id. at 1020 (emphasis added). We remanded the case to the district court with instructions to proceed on the common law fraud count, which had an independent jurisdictional basis in diversity of citizenship.

Over Averbach’s objection, the district court agreed to Rival’s proposal to try the case by means of a bifurcated trial, with the first phase directed only to the question of whether the interrogatory responses were fraudulent, and the second phase to the issues of causation and damages. We note that this division is not along the common line of bifurcation between liability and damages. Nonetheless, Fed.R.Civ. P. 42(b) expressly authorizes a separate trial of any separate issue under certain circumstances, subject to Seventh Amendment considerations.

The court advised the jury that the trial would be divided into two phases, saying: “During the first phase we will consider only whether there was a misrepresentation of fact fraudulently uttered by defendant with the intent to cause reliance by plaintiff and ... whether such misrepresentation did, in fact, cause reliance by plaintiff. And I told you that the questions of causation and damages will be reserved for the second phase of this trial.” App. at 749. 1

At trial, Averbach presented evidence by way of a stipulation of uncontested facts of the occurrence of the fire, Averbach’s earlier suit against Rival, Averbach’s propounding of the relevant interrogatories to Rival and Rival’s answer identifying only one complaint. The stipulation also stated that, *1199 “[b]etween January 1, 1973 and July 1, 1979 (when the plaintiffs First Set of Interrogatories was answered), 81 claims that fires allegedly caused by different models of electric can openers were reported to Rival. There was one additional claim that a Rival electric can opener allegedly caused a fire between July 1, 1979 and September 14, 1979. From January, 1973 to June, 1981, Rival received over 100 alleged claims that its can opener products caused fires.” App. at 616.

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Bluebook (online)
879 F.2d 1196, 1989 WL 78703, Counsel Stack Legal Research, https://law.counselstack.com/opinion/sylvia-averbach-v-rival-manufacturing-company-ca3-1989.