Liberty Northwest Insurance initiated this product liability action against Spudnik Equipment Company, seeking to recover worker's compensation benefits it paid to an employee of its insured, Grant 4-D Farms, who was injured while working on a potato conveyor. The district court dismissed the case on summary judgment, finding that Liberty had failed to adequately identify the equipment involved in the accident. Liberty appealed to this Court and we affirm.
On October 9, 2008, Armando Olmos, an employee of Grant 4-D Farms (Grant), was injured when his hand was pulled into the junction or "nip point" between two potato conveyor tables (hereinafter, conveyors or tables). Olmos was a "clod picker," and his duties included standing next to the conveyor system to remove debris, rocks, or other unwanted materials from the conveyor tables. On the day of the accident, Grant was using five or six conveyors, attached end-to-end, to move potatoes into its potato cellar. The conveyors are supposed to run in the same direction but, because they are operated by three-phase electric motors, they can run equally well in both directions. The direction the conveyor runs depends on which power wire is hooked up to the terminal on the motor. Rearranging the conveyors or pulling one out of the line could result in a conveyor reversing direction. Olmos' hand was pulled in between two conveyors that were incorrectly running in opposite directions.
Since the 1980's, Grant has used conveyors manufactured by three separate companies: Spudnik, Double L, and STI. Grant owns at least two different models of Spudnik conveyors. Grant purchased its conveyors used and many have been modified by previous owners. Any conveyors that are not interchangeable with its system are modified by Grant so as to be interchangeable with the other components of its conveyor system. These modifications include changing bolt connection patterns between the two Spudnik models, altering the Double L conveyor ends to match up with the Spudnik conveyor ends, changing the electrical connections so that they are uniform, and adding phase reversers. Typically, it is Grant and not Spudnik, that performs the modification and maintenance work on the conveyors.
After Olmos' accident, Liberty's investigator, Tom Groat, identified only one of the conveyors by its serial number. It is unclear how the identified conveyor fit into the conveyor system. It may either have formed half of the nip point that caused the injury to Olmos' hand or it may have merely formed part of the line of conveyors.
Liberty ultimately paid out $214,221 in worker's compensation benefits and initiated the present subrogation action against Spudnik on February 1, 2010. Spudnik filed a motion to dismiss for Liberty's failure to preserve evidence of the conveyors involved in the injury, which the district court denied. Spudnik then filed a motion for summary judgment, which the district judge granted, based on Liberty's failure to identify the conveyors that caused Olmos' injuries. Liberty timely appealed to this Court.
"Appellate review of a district court's ruling on a motion for summary judgment
The district court granted summary judgment in favor of Spudnik as to all of Liberty's claims: (1) negligent design; (2) negligent manufacture; (3) negligent failure to warn; (4) strict liability in tort; and (5) breach of express and implied warranty. Liberty has failed to raise its strict liability and warranty claims on appeal and, therefore, we do not address them. In support of its negligence claims, Liberty argues that the district court erred in granting summary judgment to Spudnik "by presuming, without proof or evidence, that alterations or lack of maintenance could have caused the injury." Spudnik counters that summary judgment was proper because Liberty failed to establish a prima facie case with regard to each of its claims.
To establish a prima facie case in a products liability action, the plaintiff has the burden of proving that "1) he was injured by the product; 2) the injury was the result of a defective or unsafe product; and 3) the defect existed when the product left the control of the manufacturer." Farmer v. Int'l Harvester Co., 97 Idaho 742, 746-47, 553 P.2d 1306, 1310-11 (1976). Where, as here, the prima facie case is met with evidence that the product has been modified since leaving the control of the manufacturer, the plaintiff must show "the absence of evidence of reasonable secondary causes which would eliminate liability of the defendant." Id. at 747, 553 P.2d at 1311.
Liberty asserts that the specific design defect is the absence of guards or other protective devices around the nip point between two conveyors. For this contention, Liberty relies on the deposition testimony of its expert, Dr. Richard Gill. Dr. Gill opined that "[t]he primary cause [of the accident], if you go back to fault-free analysis far enough, is designing a piece of equipment with an in-running nip point that has no guard and no Safety by Design and virtually no Persuasion Control." Because the absence of guards is common to all conveyors manufactured by Spudnik, Liberty contends, the district court erred in granting summary judgment in Spudnik's favor. Spudnik responds that "[a]t best, [Liberty] can only describe a hypothetical `conveyor system'" and it is therefore impossible to say whether a particular defect caused the injury.
It is undisputed that Liberty identified by serial number only one conveyor in use on the day of the accident. The district court accurately noted why this was problematic for Liberty, stating:
Nevertheless, Liberty argues that "identification of the specific [conveyors] by serial
However, Mr. Grant also testified:
Notably, Mr. Grant testified that "[t]he only way it would be possible" to identify all of the equipment that was present on the day of the accident would be if Liberty's investigator recorded the serial numbers off of each piece. Kalvin Miller, another owner of Grant, agreed, saying "[i]t would be difficult to pinpoint exact conveyors."
Even when liberally construing the evidence in Liberty's favor and assuming that the conveyor system in use on the date in question was manufactured exclusively by Spudnik, Liberty still fails to present a prima facie case because it cannot get around the fact that Grant purchases used conveyors. Mr. Grant testified that "in terms of new equipment, literally, I think the only thing that we have purchased brand-new from Spudnik is that one planter. I believe that's the only thing that we've bought brand-new from them." Therefore, as Spudnik points out, "the equipment involved in the accident admittedly had prior owners who... modified, changed, rewired and reconfigured their equipment to fit their particular farming needs."
Because Grant bought used conveyors and many were modified by previous owners or by Grant, it is impossible to determine whether a defect existed at the time the conveyors left Spudnik's control. Liberty is thus also unable to present direct or circumstantial evidence that shows the absence of reasonable secondary causes. Too many unknown quantities remain — the record indicates that Grant owns at least two models of Spudnik conveyors; buys its conveyors used, many of which have been modified by the previous owner; and modifies its own equipment once purchased. Put simply, without knowing which conveyors were in use on the day of the accident, Liberty cannot present a prima facie case; nor should Spudnik be expected to defend a theoretical system, where the variables are many and the confirmed features of the conveyors few.
Under the theory of negligent failure to warn, a "product is defective if the defendant has reason to anticipate that danger may result from a particular use of his product and fails to give adequate warnings of such danger." Puckett v. Oakfabco, Inc., 132 Idaho 816, 823, 979 P.2d 1174, 1181 (1999) (internal citations omitted). Additionally, comparative negligence is not a bar to recovery; rather, the plaintiff may still recover as long as his responsibility for the injury is less than that of the manufacturer. Id.
Liberty argues that the Spudnik equipment was defective because, according to Dr. Gill, it "lacked any warning labels `of an in-running nip point at the location where the hazard existed.'" In turn, Spudnik responds that "because the insurance company has identified only one component of the `conveyor system' and cannot even identify where that component part fit in the conveyor line, it is equally impossible to determine whether the `conveyor system' failed to give adequate warning of the alleged danger."
Thus, Dr. Gill's conclusion that there were no labels or warnings on the equipment is based on his review of video and photographs that may — or may not — be images of the equipment involved in the accident. The district court noted that "Liberty concedes that the conveyors continued to be used immediately after the accident." In addition, Tom Groat, Liberty's investigator, testified that he took the photographs on October 15th, six days after the accident, and that on that day, the conveyors were not set up because of recent, heavy snowfall. What's more, Groat did not record the video until October 20, 2008. Thus, within the period of time between the accident and the days in which the photos and video were taken, it is conceivable — and even probable — that the conveyor tables were moved around, or swapped with others, as was common practice at Grant.
Equally problematic is that based on the lack of evidence presented, Spudnik has no chance of proving that others were responsible for the injury, thereby reducing its potential liability under the doctrine of comparative negligence. The district court clearly recognized this:
Because of Liberty's failure to identify the conveyor system in use at the time of the accident, Spudnik is now unable to offer a meaningful defense to any claim asserted by Liberty. General notions of fairness preclude Liberty from profiting from its own laxity and inattention to detail. Thus, we affirm the district court's grant of summary judgment in favor of Spudnik as to Liberty's negligent failure to warn claim.
On cross appeal, Spudnik asks this Court to modify existing Idaho case law and conclude that Liberty's failure to preserve evidence warrants dismissal or another appropriate sanction, but only "in the event that summary judgment is not affirmed." Because we affirm the district court's grant of summary judgment in favor of Spudnik, we
We affirm the judgment of the district court and award costs on appeal to Spudnik.
Chief Justice BURDICK, and Justices EISMANN, HORTON, and Justice Pro Tem SCHROEDER concur.