KELLY K.E. MAHONEY, Magistrate Judge.
This case involves claims brought under Iowa law by Plaintiffs Jeffrey and Jennifer Klingenberg
On February 22, 2013, while working as a home inspector, Jeffrey fell as he attempted to move from the roof of a house onto a Vulcan-branded ladder, and he suffered serious injuries. He had purchased the ladder from a Menards store in September 2011.
The Klingenbergs initiated this lawsuit on January 26, 2015, by filing a complaint in state court against Vulcan. Doc. 1-2. They alleged, among other things, that Vulcan breached an express warranty based on the ladder's label that its working weight limit was 300 pounds and that Vulcan defectively designed the ladder. Id. Vulcan removed the case to federal court on February 26, 2015. Doc. 1. In a disclosure statement filed in accordance with the Local Rules on March 18, 2015, Vulcan stated that GP International, a Chinese corporation, was Vulcan's parent company. Doc. 5.
After conducting some discovery, the Klingenbergs moved on July 24, 2015—the deadline to add parties—for leave to file an amended complaint adding GP International and GP International Co., LLC (GP LLC) as defendants. Docs. 7, 9. The Klingenbergs asserted that they were still not sure of the relationship between the parties and what role the additional defendants had in designing, manufacturing, and distributing the ladder. Id. The court granted the motion on August 11, 2015, and that same day, the Klingenbergs filed an amended complaint setting forth the same claims but adding the two additional defendants. Docs. 10, 11. Vulcan and GP LLC quickly filed answers to the amended complaint (represented by the same attorneys), but the Klingenbergs were unable to serve GP International, and counsel for Vulcan declined to accept service on GP International's behalf. Docs. 14-17, 74 ¶ 12.
The case proceeded without GP International. Vulcan and GP LLC filed a Daubert motion to exclude the testimony of the Klingenbergs' expert witness, Stephen Fournier. Doc. 26. Vulcan and GP LLC also filed a motion for summary judgment, largely based on the assumption that the Klingenbergs' expert testimony would be excluded. Doc. 25. The court
On May 30, 2017, having exhausted the requirements for service under the Hague Convention to no avail, the Klingenbergs moved for default judgment against GP International. Doc. 56. Two weeks later, the motion became moot when the attorneys for Vulcan and GP LLC entered their appearance on GP International's behalf and filed GP International's answer. Docs. 57-59, 63. GP International's answer set forth the same boilerplate affirmative defenses that had been in Vulcan's and GP LLC's answers, including a statute-of-limitations defense, and added a defense based on lack of personal jurisdiction. See Docs. 4, 14, 17, 58. GP International also filed a disclosure statement as required by the Local Rules, stating that no entities were related to it as a parent, subsidiary, or otherwise and that no other entities had a direct or indirect pecuniary interest in the outcome of the case. Doc. 61. GP LLC filed the same disclosure statement, as did Vulcan, amending (without explanation) its earlier disclosure statement that had represented GP International was its parent company. Docs. 60, 62. The court allowed the Klingenbergs to conduct additional discovery in the form of depositions to try to discern the relationship between the three defendants. Docs. 74, 83. After the additional discovery, the parties agreed to the dismissal of GP LLC as a defendant and to stipulate that the ladder was designed and distributed by Vulcan and manufactured and sold by GP International. Docs. 99, 107, 113 at 18. They also agreed not to use the additional discovery at trial. Doc. 99.
The court held a final pretrial conference on September 11, 2017 (before the additional discovery had been conducted). Doc. 92. The parties discussed with the court the foreseeable issues for trial, and the court entered a final pretrial order. Defendants made no mention of a potential statute-of-limitations defense, and this defense was not included as a potential issue for trial in the final pretrial order (even though the final pretrial order does note "Defendants will argue at the close of Plaintiffs' case[-]in[-]chief that . . . [GP International] should be dismissed" based on a lack of evidence that it designed and distributed the ladder). Docs. 93, 102.
The parties submitted joint proposed jury instructions. Doc. 86. They requested the model Iowa instructions for design-defect claims and breach-of-express-warranty claims. Id. Defendants also proposed the following instruction related to the alternative-design element of the design-defect claim:
Doc. 86 at 12. The Klingenbergs objected that this instruction was based on a withdrawn model Iowa instruction that now stated under "Wright v. Brooke Group, Ltd., 652 N.W.2d 159 (Iowa 2002)[,] . . . `State of the Art' [is] an element of plaintiff's proof in product liability cases, but remains an affirmative defense under Iowa Code section 668.12." Doc. 86 at 12.
The court submitted proposed jury instructions on September 15, 2017, and included instructions only on the design-defect claim because both sides' model verdict forms contained only that claim. Docs. 88, 89, 94-1. Neither did the court include Defendants' proposed state-of-the-art instruction. Doc. 94-1. The court instructed the parties to file any objections to the jury instructions by 5:00 p.m. on September 20, 2017, or the objection would be deemed waived. Doc. 94. The Klingenbergs objected, requesting instructions on additional claims. Doc. 96. Defendants filed no response. The court filed revised proposed jury instructions on September 21, 2017, which included instructions on breach of express warranty, and ordered the parties to respond by 5:00 p.m. the next day. Docs. 98, 98-1. The court further stated that "[a] party may not object to any portion of these instructions that remains unchanged from the [previous] version" and that "[a]ny objection not included in a party's response will be deemed to be waived." Doc. 98. By email, counsel for Defendants requested additional time to object (Doc. 148 at 1), which the court allowed. When Defendants filed their response to the jury instructions, they had no objections to the instructions on breach of express warranty. Doc. 103. During the pretrial conference on the first day of trial, the court presented the parties with the final jury instructions and inquired into whether any changes needed to be made. Trial Tr. vol. 1, 4-6.
Docs. 98-1 at 16, 113 at 16; see also Doc. 11 at 6; Doc. 86; Iowa Model Civil Jury Instructions 1100.1-1100.4 (2017).
Neither party objected to the verdict form until the second day of trial, when the Klingenbergs objected that the jury should not consider whether Vulcan breached an express warranty separately from whether GP International breached an express warranty; the Klingenbergs argued the jury should consider the Defendants' liability together, so that either Vulcan and GP International were both liable, or both were not. Trial Tr. vol. 2, 334-337. Defendants resisted. Id. That night, the parties submitted briefing on the issue by email, and Defendants argued that "[i]t does not matter if a[n] []entity is the seller or the distributor; what matters is who . . . convey[ed] . . . the warranty." Doc. 148 at 2-7. Defendants suggested that the evidence on this issue was different between Vulcan and GP International and argued that the verdict form should therefore require the jury to evaluate their liability separately for the breach-of-express-warranty claim. The parties discussed the issue further at the pretrial conference the next day, where Defendants again argued any entity that communicated the warranty would be liable. Trial Tr. vol. 3, 342-346. Defendants argued that the sticker containing the warranty "[j]ust says Vulcan" and that the ladder contained no reference to GP International. Id. at 344. Ultimately, the court expressed no views on the merits of this issue, finding that the Klingenbergs should have raised their objection to the verdict form earlier and that it was waived. Trial Tr. vol. 4, 489-92.
During trial, the Klingenbergs presented testimony from Jeffrey and Fournier (the expert) regarding liability, as well as several witnesses who testified as to damages. They also presented the ladder itself, which had a Vulcan label, but did not offer any evidence distinguishing Vulcan from GP International, apart from the stipulation as to each Defendants' role in designing, manufacturing, and selling the ladder. After the Klingenbergs rested, Defendants moved for judgment as a matter of law under Federal Rule of Civil Procedure 50(a), and they renewed their motion at the close of all evidence. Trial Tr. vol. 3, 399-422, 471-72. In the motion, for the first time since GP International filed its answer, GP International argued that the statute of limitations barred any claims against it. Id. at 399, 404-18. GP International argued that because it did not have notice of the lawsuit within 90 days of the filing of the original complaint, the amended complaint did not relate back. Id. at 406-07. The Klingenbergs objected to this argument as forfeited, arguing that if they had known GP International intended to raise a statute-of-limitations defense, they would have presented evidence on the relationship between GP International and Vulcan to prove that GP International had notice of the lawsuit (including the additional discovery that the parties had agreed to exclude). Id. at 407-09.
Defendants did not specifically move for a directed verdict in favor of Vulcan on the breach-of-express-warranty claim based on a lack of evidence that Vulcan sold the ladder. Neither did they move for a directed verdict in favor of GP International on this issue. This, despite Defendants' representation at the final pretrial conference (memorialized in the final pretrial order) that "[b]ecause the only evidence adduced will be that Vulcan is the designer and distributor, Defendants will argue at the close of Plaintiffs' case[-]in[-]chief that GP International . . . should be dismissed."
After a four-day trial, the case was submitted to the jury. The jury found against both Vulcan and GP International on the breach-of-express-warranty claim and awarded the Klingenbergs more than $2.4 million in damages: $262,000 in past medical expenses, $500,000 in future medical expenses, $72,000 in loss of past earnings, $600,000 in loss of future earning capacity, $200,000 in past loss of full body function, $200,000 in future loss of full body function, $200,000 in past pain and suffering, $200,000 in future pain and suffering, $100,000 in past loss of consortium, and $100,000 in future loss of consortium. Doc. 115. The jury found in favor of Defendants and against the Klingenbergs on the design-defect claim, however. Id.
The clerk entered judgment on the jury verdict on September 29, 2017. Doc. 119. The Klingenbergs filed a bill of costs, and Defendants moved for a stay of execution of judgment. Docs. 122, 124. The court granted the motion to stay in part, imposing a temporary stay that would be lifted on November 6, 2017, unless Defendants had filed a supersedeas bond. Doc. 127. The court ordered that "[u]pon the filing by Defendants . . . of a supersedeas bond in the amount of $2,434,000, execution of the judgment shall be stayed until this court has resolved Defendants . . . post-trial motions." Id. No bond was ever filed.
Defendants now move for judgment as a matter of law or alternatively, for a new trial. Doc. 128. They argue that testimony from Fournier, the Klingenberg's expert, should not have been admitted; that the statute of limitations bars the express-warranty claim against GP International; that the express-warranty claim fails because no evidence establishes that ANSI standards were violated; that only sellers can be liable for breach of express warranty under Iowa law, and no evidence establishes Vulcan sold the ladder; that the Klingenbergs' damages are limited because they did not purchase the ladder directly from Defendants; and that the jury's finding for Defendants on the design-defect claim precludes a finding against them on the express-warranty claim.
During trial, after the plaintiffs rest, the defendants may move for judgment as a matter of law under Federal Rule of Civil Procedure 50(a). After trial, "the movant may file a renewed motion for judgment as a matter of law" under Rule 50(b). A court may grant judgment as a matter of law on a claim when "a reasonable jury would not have a legally sufficient evidentiary basis to find for" the plaintiff. Fed. R. Civ. P. 50(a)(1), (b). In evaluating whether a sufficient evidentiary basis exists to support the jury's verdict, the court considers "the evidence in the light most favorable to the verdict, giving the non-moving party the benefit of all reasonable inferences." Emmenegger v. Bull Moose Tube Co., 324 F.3d 616, 619 (8th Cir. 2003). The court "do[es] not judge the credibility of witnesses or weigh the evidence." Id. Judgment as a matter of law is proper when only "[a] mere scintilla of evidence" or "no proof beyond speculation. . . support[s] the verdict." Larson ex rel. Larson v. Miller, 76 F.3d 1446, 1452 (8th Cir. 1996) (en banc) (quoting City of Omaha Emps. Betterment Ass'n v. City of Omaha, 883 F.2d 650, 651-52 (8th Cir. 1989)).
As they have throughout this case, Defendants focus their argument on Plaintiffs' expert testimony from Fournier. Defendants argue that Fournier should not have been allowed to testify as an expert under Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579 (1993), and that without this expert testimony, insufficient evidence exists to support the jury's verdict. Defendants offer no new arguments based on the trial testimony
Neither did the court err in finding Fournier's opinion reliable. Fournier based his opinion on general engineering principles; his experience; information from Jeffrey about the accident; and examinations of the accident ladder, design specifications for the accident ladder,
The cases relied on by Defendants are distinguishable. In Peitzmeier v. Hennessy Industries, Inc., 97 F.3d 293, 297-98 (8th Cir. 1996), the Eighth Circuit held the district court did not abuse its discretion by excluding expert testimony of a design defect and alternative design when the expert had "[n]o factual basis . . . that his design changes [we]re feasible," as he had conducted no testing and relied only on rough sketches that had not been made into prototypes. Here, however, the design changes proposed by Fournier are clearly feasible as they have been implemented in competitors' ladders. See Young v. Pollock Eng'g Grp., Inc., 428 F.3d 786, 790 (8th Cir. 2005) (holding that "the experts did not need to conduct a detailed feasibility study" when the defendant had installed the experts' proposed alternative design and used it successfully). Defendants also rely on Alevromagiros v. Hechinger Co., 993 F.2d 417, 421-22 (4th Cir. 1993), which does not address the admissibility of expert testimony (and analyzes the evidence needed to prove a design-defect claim under Virginia law, not Iowa law). Defendants cite no authority demonstrating that the admission of Fournier's testimony was an abuse of discretion. The court finds no error in allowing the jury to weigh the qualifications and reliability of Fournier and his methodology.
Because the Klingenbergs amended their complaint to add GP International as a defendant after the statute of limitations had expired, GP International argues that the claims against it are time-barred. The Klingenbergs argue that GP International waived its statute-of-limitations defense by failing to raise it at the final pretrial conference for inclusion in the final pretrial order and that, in any event, the claims against GP International relate back to the filing of the original (timely) complaint.
Due to the Klingenbergs' inability to effect service on it, GP International did not file its answer and enter the case as a defendant until June 13, 2017, after the deadline for filing dispositive motions had already passed. Docs. 7, 45, 57-59. In its answer, GP International raised nine affirmative defenses, all of which had also been raised by Vulcan and GP LLC, including a statute-of-limitations defense. Doc. 58. At the final pretrial conference, the parties discussed the potential legal issues to be decided at trial and made no mention of a statute-of-limitations defense. The final pretrial order
This type of gamesmanship is not permitted by the Federal Rules of Civil Procedure. The purpose of the final pretrial conference is to "promot[e] efficiency and conserve[e] judicial resources by identifying the real issues prior to trial, thereby saving time and expense for everyone." Friedman & Friedman, Ltd. v. Tim McCandless, Inc., 606 F.3d 494, 498 (8th Cir. 2010) (quoting Fed. R. Civ. P. 16 advisory committee's note to 1983 amendment). As such, "[a]ttorneys at a pre-trial conference must make a full and fair disclosure of their views as to what the real issues of the trial will be." Gorlikowski v. Tolbert, 52 F.3d 1439, 1444 (7th Cir. 1995) (alteration in original) (quoting Erff v. Marktton Indus., Inc., 781 F.2d 613, 617 (7th Cir. 1986)). And because "the final pretrial order supersedes the pleadings," Friedman & Friedman, 606 F.3d at 498, as a general rule, an affirmative defense omitted from the final pretrial order is forfeited (just as it would be if the defendant failed to plead the affirmative defense in its answer), see Youren v. Tintic Sch. Dist., 343 F.3d 1296, 1304-05 (10th Cir. 2003); see also Am. Simmental Ass'n v. Coregis Ins. Co., 282 F.3d 582, 588-89 (8th Cir. 2002) (recognizing that the "district court [may] refuse[] to allow a party to advance new theories following the entry of a [final] pretrial order" (citing Anderson v. Genuine Parts Co., 128 F.3d 1267, 1271 (8th Cir. 1997))). Thus, GP International forfeited its statute-of-limitations defense by failing to raise it for inclusion in the final pretrial order. See Youren, 343 F.3d at 1304-05 (defendants waived statute-of-limitations defense by failing to "identify the statute of limitations issue in the pretrial order" as a contested issue of law, despite raising the defense in their answer); Sidak v. Pinnacle Telemarketing Ltd., 182 F.Supp.2d 873, 880 n.9 (D. Neb. 2002) ("Although [the defendant] generally pleaded a statute of limitations defense in its answer, the defense was not preserved in the final pretrial conference order. I therefore treat it as waived."), disapproved of on other grounds by Hassler v. Alegent Health, 198 F.Supp.2d 1108 (D. Neb. 2002).
Defendants argue that because no evidence establishes that ANSI standards were violated, the evidence is insufficient to support a breach-of-express-warranty claim. Specifically, they argue the ladder's label warranted only "that the ladder met ANSI A14.2" standards, and as all the evidence establishes the ladder met those standards, no breach occurred. Doc. 136 at 6-7. The Klingenbergs do not dispute that the ladder met ANSI standards. See Doc. 141 at 3-5. Rather, the Klingenbergs argue that the Defendants warranted that the ladder would hold 300 pounds irrespective of whether it met ANSI standards and that this warranty was breached when the ladder "collapsed with less than 300 pounds on it." Doc. 141 at 4-5.
Iowa has adopted the Uniform Commercial Code (U.C.C.), which defines an express warranty as an "affirmation of fact or promise . . . which relates to the goods" or "[a]ny description of the goods"; "formal words such as `warrant' or `guarantee' are not necessary." Iowa Code § 554.2313. The jury found that the Defendants "expressly warranted that the working weight load of the ladder was 300 pounds and that it could be used in different positions under the 300-pound working weight." Doc. 113 at 16. This warranty was based on the accident ladder's label, which read:
Doc. 117-32 at 100. Lower on the label (after the model number, address of Vulcan, and date and place of manufacture), the label stated:
Doc. 117-32 at 101-102. Under ANSI A14.2, an articulated ladder rated "Extra Heavy Duty — Type IA" must satisfy certain tests demonstrating a working load of 300 pounds. Doc. 117-32 at 40. Thus, Defendants suggest that the warranty created by the words, "Working Load: 300 pounds," must be read in context: immediately preceding the working-load language, the label refers to the ladder's ANSI rating ("Type IA"), which requires the ladder meet tests prescribed by ANSI showing a working load of 300 pounds, and further below, the label explicitly cites the ANSI standard imposing the 300-pound working load for Type IA ladders.
Although the issue is close, the jury could find that the label warranted "that the working weight load of the ladder was 300 pounds," regardless of whether the ladder satisfied the ANSI working-load tests. The label explicitly stated, "Working Load: 300 pounds." If Defendants wished to convey only that the ladder satisfied the ANSI working-load standards, they could have omitted the "300 pounds" language and stated only that the ladder was rated "Type IA Extra heavy-duty" and manufactured to ANSI A14.2 specifications. Cf. Thomas v. Genie Indus., Inc., No. 07-1447, 2008 WL 4366067, at *5 (W.D. La. Sept. 22, 2008) (suggesting that if evidence established "which ANSI requirements were not met and how this caused [plaintiff's] damages," defendant would have breached "its warranty . . . that all ANSI requirements were met").
There is sufficient evidence to establish that this warranty was breached. Jeffrey testified that he weighed "close to 250" pounds when he purchased the ladder, which is why he chose a ladder with packaging saying it could hold 300 pounds. Trial Tr. vol. 1, 179. He testified that as he was moving from the roof of a house to the ladder (with one foot on the ladder and one foot off), the ladder "jar[red]," causing him to fall. Trial Tr. vol. 1, 148, 193. Fournier testified that the outer rail of the ladder became deformed (which would have been prevented by a retaining strap) such that it could no longer sustain its normal load, causing the outer rail to move and in turn causing Jeffrey's fall. Trial Tr. vol. 2, 235-36. Although Fournier acknowledged on cross-examination that the ladder satisfied ANSI standards,
Defendants rely on Kolarik v. Cory International Corp., 721 N.W.2d 159, 161, 164 (Iowa 2006), in which the Iowa Supreme Court
Although a close call, I find Kolarik distinguishable. The court in Kolarik emphasized that the product met standards of merchantability,
Defendants' remaining arguments regarding the sufficiency of the evidence for breach of express warranty are likewise unsuccessful. Defendants argue that Vulcan, the designer and distributor of the ladder, cannot be held liable for breach of express warranty under Iowa law, as no evidence establishes that Vulcan sold the ladder. They also argue that because Jeffrey purchased the ladder from Menards, and not directly from Defendants, he is not in privity with Defendants and therefore cannot recover consequential damages. The Klingenbergs respond that Defendants waived these arguments by failing to raise them in their pre-verdict Rule 50(a) motion. Additionally, the Klingenbergs argue Defendants waived the consequential-damages argument by failing to object to the jury instructions on damages.
A post-trial Rule 50(b) motion "may not advance additional grounds that were not raised in the pre-verdict motion." Walsh v. Nat'l Computer Sys., Inc., 332 F.3d 1150, 1158 (8th Cir. 2003) (quoting Rockport Pharm., Inc. v. Digital Simplistics, Inc., 53 F.3d 195, 197 (8th Cir. 1995)). For a ground to be considered raised by a pre-verdict Rule 50(a) motion, the motion must "specify the judgment sought and the law and facts that entitle the movant to the judgment." Fed. R. Civ. P. 50(a)(2). "[T]echnical precision is not necessary in stating grounds for the motion so long as the . . . court is aware of the movant's position." Walsh, 332 F.3d at 1158 (alteration in original) (quoting Rockport Pharm., 53 F.3d at 197-98). "[T]he purpose of requiring the moving party to articulate the ground on which [judgment as a matter of law] is sought `is to give the other party an opportunity to cure the defects in proof that might otherwise preclude him from taking the case to the jury.'" Id. (first alteration in original) (quoting Galdieri-Ambrosini v. Nat'l Realty & Dev. Corp., 136 F.3d 276, 286 (2d Cir. 1998)). "If colloquy between counsel and the trial court fleshes out the motion, it may provide the opposing party with the requisite notice." Id.
Here, prior to the close of Plaintiffs' case, in connection with an issue related to the verdict form, Defendants argued that only the party that communicated or conveyed the warranty was liable, and they represented that they intended to move for a directed verdict on this point (although they never did). They elaborated that the sticker containing the warranty "just says Vulcan" and that the ladder contained no reference to GP International, suggesting that GP International could not be liable for breach of express warranty, because no evidence established it conveyed or communicated the warranty. Now, however, Defendants argue that only sellers may be liable for breach of express warranty (a position they explicitly disclaimed in their briefing on the verdict-form issue) and that Vulcan (as opposed to GP International) cannot be liable for breach of express warranty because no evidence established Vulcan sold the ladder.
I am inclined to agree with the Klingenbergs that Defendants have waived this argument by failing to raise it in their Rule 50(a) motion, especially because the argument that they did make on this point during trial (before Plaintiffs rested) is directly at odds with their current argument. They did, however, at least mention this issue during trial: I addressed the issue briefly, and the Klingenbergs were on notice of the need to present evidence on the first element of the breach-of-express-warranty claim. The same cannot be said for Defendants' argument that the Klingenbergs' damages are limited because they were not in privity with Defendants. To my knowledge, this argument was not raised at any point in the proceedings. Moreover, Defendants did not object to the jury instructions on damages, which instructed the jury to award consequential damages. Doc. 113. I find that Defendants have forfeited the argument that the Klingenbergs' damages are limited to direct, economic damages. See, e.g, Republic Tobacco Co. v. N. Atl. Trading Co., 381 F.3d 717, 733 (7th Cir. 2004) (holding defendant waived argument that plaintiff could not recover presumed or punitive damages based on plaintiff's failure to prove actual malice, because defendant "fail[ed] to propose a jury instruction requiring a predicate finding of actual malice for general damages or to object to the court's instruction on that ground").
Nevertheless, because I believe the outcome is the same whether or not I address the merits of Defendants' arguments, I will briefly do so. First, Defendants argue that Vulcan—the designer and distributor of the Vulcan-branded ladder—cannot be liable for breach of express warranty because no evidence establishes Vulcan sold the ladder. Defendants do not cite any caselaw in support of their position that only sellers can be liable for breach of express warranty under Iowa law, relying instead on a provision of Iowa's adoption of the U.C.C., which defines how "[e]xpress warranties by the seller are created." Iowa Code § 554.2313. The comments to that section of the U.C.C. provide that "[a]lthough this section is limited in its scope and direct purpose to warranties made by the seller to the buyer . . ., the warranty sections of this Article are not designed in any way to disturb those lines of case law growth which have recognized that warranties need not be confined either to sales contracts or to the direct parties to such a contract." U.C.C. § 2-313 cmt. 2. The provision relied upon by Vulcan does not stand for the proposition that only sellers can be liable for breach of express warranty—indeed, Iowa case law recognizes that non-sellers may be liable for breach of express warranty in certain instances. See, e.g., Midland Forge, Inc. v. Letts Indus., Inc., 395 F.Supp. 506, 511 (N.D. Iowa 1975) ("Express warranties can be made by distributing advertising literature which contains factual representations relied upon by the ultimate purchaser, even though the latter is not in privity with the manufacturer who made the statements."); Dailey v. Holiday Distrib. Corp., 151 N.W.2d 477, 483 (Iowa 1967) (suggesting that a manufacturer could be liable for breach of express warranty when "evidence disclos[ed] an[] express warranty was . . . advanced, made or given to plaintiffs by defendant manufacturer"; or when the seller made an express warranty and "acted as agent for" the manufacturer). Here, Vulcan designed the ladder; Vulcan distributed the ladder; and the ladder, which contained a warranty on a label bearing Vulcan's name, ended up at a retail store, where it was purchased by Jeffrey. Defendants cite no authority, and I have found none, holding that a defendant such as Vulcan cannot be liable for breach of express warranty causing personal injury under Iowa law.
Defendants also argue that because the ladder was purchased from a Menards store, rather than directly from them, no privity exists between the parties, and the Klingenbergs are barred from recovering consequential damages—specifically, those damages related to medical expenses, lost earnings, loss of body function, pain and suffering, and loss of consortium. Under the U.C.C. as adopted by Iowa, "[a] seller's warranty whether express or implied extends to any person who may reasonably be expected to use, consume or be affected by the goods and who is injured by breach of the warranty." Iowa Code § 554.2318. This is one of three alternatives contained in the U.C.C., all of which are designed to "give certain beneficiaries the benefit of the same warranty which the buyer received in the contract of sale, thereby freeing any such beneficiaries from any technical rules as to `privity.'" U.C.C. § 2-318 & cmt. 2. The first alternative in the U.C.C. seeks to "include[] as beneficiaries within its provisions the family, household and guests of the purchaser"; under the second alternative (which is the version adopted by Iowa), "the seller's warranties, given to his buyer who resells, extend to other persons in the distributive chain"; and the third version "goes further,. . . extending the rule beyond injuries to the person." U.C.C. § 2-3138 cmt. 3. Thus, Iowa Code section 554.2318 abolishes privity as a defense when a defective product causes "personal injury or property damage"—as opposed to merely causing "economic loss," in which case Iowa courts "only allow the buyer to bring a claim under an express warranty for direct economic losses against a remote seller and warranty claims for consequential economic losses against the seller in privity with them." Des Moines Flying Serv., Inc. v. Aerial Servs. Inc., 880 N.W.2d 212, 222 (Iowa 2016); see also Nationwide Agribusiness Ins. Co. v. SMA Elevator Constr. Inc., 816 F.Supp.2d 631, 683 (N.D. Iowa 2011) ("Section 554.2318 does not extend its warranty protection to third party beneficiaries who have suffered only economic loss, because the term `injured' has been interpreted by [the Iowa Supreme Court] to include only `physical harm to the plaintiff or his property." (quoting Nebraska Innkeepers, Inc. v. Pittsburgh-Des Moines Corp., 345 N.W.2d 124, 129 (Iowa 1984))). Defendants conflate consequential damages with consequential economic damages, relying on cases involving only economic loss, not damages resulting from personal injury. See Nationwide Agribusiness Ins., 816 F. Supp. 2d at 637-38, 685 (defendants sought to recover "`consequential economic loss damages,'" not personal injury damages); Tomka v. Hoechst Celanese Corp., 528 N.W.2d 103, 105, 107-08 (Iowa 1995) (defendant sought to recover lost profits and loss of good will for damages to cattle he did not own, which are "consequential economic loss damages"); Beyond the Garden Gate, Inc. v. Northstar Freeze-Dry Mfg., Inc., 526 N.W.2d 305, 310 (Iowa 1995) (plaintiff could recover the difference between what it paid for the machine and what it sold it for under its breach-of-express-warranty theory against a nonprivity seller, but it could not recover "consequential economic loss damages," including "repair bills, . . . lost training profits, and lost business profits"); see also Kolarik, 721 N.W.2d at 163 (a plaintiff who bit into an olive and chipped his tooth "falls within th[e] extended class of beneficiaries" protected by Iowa Code section 554.2318). Because this is a personal-injury case, and the evidence establishes that the Klingenbergs suffered damages beyond economic loss, lack of privity between the Klingenbergs and Defendants does not preclude a breach-of-express-warranty claim nor limit the Klingenbergs' damages.
Defendants argue that "[t]he jury's verdict of `no design defect' precludes a verdict of breach of express warranty under Iowa law." Defendants rely on Wright v. Brooke Group Ltd., 652 N.W.2d 159, 181-82 (Iowa 2002), which held that "personal injury plaintiffs are permitted to seek recovery under tort and warranty theories that in essence allege the same wrongful acts," but a claim for breach of the implied warranty of merchantability requires the same "proof of a product defect" as a tort claim. Defendants argue that just as with implied-warranty-of-merchantability claims, breach-of-express-warranty claims require proof of product defect in tort.
The jury instructions on the breach-of-express-warranty claim required the jury to find that Defendants warranted that "the working weight load of the ladder was 300 pounds" and that "the Vulcan ladder did not conform to" that warranty because of "substantial and sufficiently serious" defects. Doc. 113 at 16. The instructions on breach of express warranty did not specifically include a requirement that the jury find a reasonable alternative design existed at the time of the sale of the ladder, as the design-defect instructions did. Doc. 113 at 14. The jury was troubled by the alternative-design element, as evidenced by the jury question asking whether the exemplar ladders from different brands using an alternative design were "new models" or whether they existed in 2011. Doc. 114.
The parties requested the Iowa model instructions on breach of express warranty and on design defect. Defendants made no objections to the jury instructions before or during trial, despite multiple opportunities. They did not raise the possibility of an inconsistent verdict. Nor did Defendants argue that the jury's verdict was inconsistent at any point before the jury's discharge—indeed, this issue is raised for the first time in the current briefing.
First, courts "evaluate whether verdicts are consistent in light of how the jury was instructed, not retrospective arguments about what the law is (which are really just late arguments about how the jury should have been instructed)." S.E.C. v. Quan, 817 F.3d 583, 589-90 (8th Cir. 2016). Here, it seems likely that the jury credited the testimony of Fournier and Jeffrey and found the ladder defective but did not find that the Klingenbergs had proved the existence of a reasonable alternative design at the time of the ladder's manufacture. Thus, the jury's finding for Defendants on the design-defect claim and against them on the express-warranty claim can be reconciled based on the required elements for each as listed in the instructions.
Even if the jury verdict was inconsistent, however, "[i]t is well established, at least in [the Eighth Circuit], that a party waives any objection to an inconsistent verdict if she fails to object to the inconsistency before the jury is discharged." Williams v. KETV Television, Inc., 26 F.3d 1439, 1443 (8th Cir. 1994). The purpose of this rule is "`to allow the original jury to eliminate any inconsistencies without the need to present the evidence to a new jury' and to `prevent[] a dissatisfied party from misusing procedural rules and obtaining a new trial for an asserted inconsistent verdict.'" Yazdianpour v. Safeblood Techs., Inc., 779 F.3d 530, 538-39 (8th Cir. 2015) (alteration in original) (quoting Lockard v. Mo. Pac. R.R. Co., 894 F.2d 299, 304 (8th Cir. 1990)). The Eighth Circuit has declined to excuse the failure to object to an inconsistent verdict before the jury's discharge when defendants "waited more than a month to raise their objection" and did not raise the issue of an inconsistent verdict at any point during the trial. See id. at 538 & n.4; cf. Quan, 817 F.3d at 588 (suggesting that the forfeiture rule may not apply when a defendant "pointed out an alleged inconsistency, but did not formally request relief"). Defendants have forfeited their argument that the jury's finding for them on the design-defect claim is inconsistent with its finding against them on the express-warranty claim.
"A motion for new trial based on sufficiency of the evidence should be granted only if the verdict is against the weight of the evidence." S.M. v. Lincoln County, 874 F.3d 581, 589 (8th Cir. 2017); see also Fed. R. Civ. P. 59(a)(1)(A). "[T]he district court `can rely on its own reading of the evidence—it can "weigh the evidence, disbelieve witnesses, and grant a new trial even where there is substantial evidence to sustain the verdict."'" Lincoln Composites, Inc. v. Firetrace USA, LLC, 825 F.3d 453, 459 (8th Cir. 2016) (quoting White v. Pence, 961 F.2d 776, 780 (8th Cir. 1992)). This test has sometimes been phrased as against the "clear weight" of the evidence, or "great weight," or "overwhelming weight," but "`[r]egardless of the rhetoric used[,] the true standard for granting a new trial . . . is simply . . . whether a miscarriage of justice has occurred.'" White, 961 F.2d at 780 (quoting Fireman's Fund Ins. Co. v. Aalco Wrecking Co., 466 F.2d 179, 187 (8th Cir. 1972)).
As discussed above, Jeffrey testified that he fell when the ladder moved, and Fournier testified that the ladder's outer rail bent due to a lack of a retaining strap, and the ladder could no longer bear loads normally. The jury could credit Fournier's testimony over Defendants' expert and find the deformed outer rail caused the ladder to be unable to hold loads of 300 pounds, as warranted. The weight of the evidence does not support a finding otherwise—this case came down to which expert the jury believed, and merely because the jury credited Fournier's testimony over Defendants' expert does not mean that a miscarriage of justice has resulted. See Keeper v. King, 130 F.3d 1309, 1315 (8th Cir. 1997).
The Klingenbergs orally moved at the hearing for judgment to be amended to include interest and costs. They are entitled to costs as requested (Doc. 124) under Federal Rule of Civil Procedure 54(d)(1). They are also entitled to postjudgment interest on the entire award (including the amount awarded by the jury, costs, and any prejudgment interest) under 28 U.S.C. § 1961. See also Sociedad Espanola de Electromedicina y Calidad, S.A. v. Blue Ridge X-Ray Co., 226 F.Supp.3d 520, 537 (W.D.N.C. 2016).
"The award of prejudgment interest in a diversity action is determined by the law of the state in which the action arose." California & Hawaiian Sugar Co. v. Kan. City Terminal Warehouse Co., 788 F.2d 1331, 1333 (8th Cir. 1986). Although the Klingenbergs did not specifically request prejudgment interest, "[t]he Iowa Supreme Court has stated that `[t]he award of [prejudgment] interest is mandatory and should be awarded even when interest has not been requested.'" Purina Mills, L.L.C. v. Less, 295 F.Supp.2d 1017, 1048 (N.D. Iowa 2003) (quoting Hughes v. Burlington N. R.R. Co., 545 N.W.2d 318, 321 (Iowa 1996)). Generally, prejudgment interest on tort judgments involving personal injury is governed by Iowa Code section 668.13, which authorizes prejudgment interest for past damages (but not future damages) that "accrue[s] from the date of the commencement of the action." Iowa Code § 668.13(1), (4); see also Waterloo Sav. Bank v. Austin ex rel. Austin, 494 N.W.2d 715, 717 (Iowa 1993). In other words, "section 668.13 . . . provides for interest on damages sustained prior to trial from the date of the commencement of the action." Gosch v. Juelfs, 701 N.W.2d 90, 92 (Iowa 2005).
The jury had a legally sufficient evidentiary basis to find for the Klingenbergs on their express-warranty claim, and the verdict is not against the great weight of the evidence. I therefore
The Clerk of Court is directed to enter an amended final judgment in the amount totaling $2,434,000 (as set forth in the original judgment filed at Docket No. 119), plus costs; prejudgment interest on $834,000 from January 26, 2016, to the date of entry of final judgment at the rate provided in Iowa Code section 668.13(3); and postjudgment interest on the entire award (including prejudgment interest and costs) at the rate provided in 28 U.S.C. § 1961(a).
Trial Tr. vol 2., 228.
