Friday, February 25, 2011

Something is afoot at the Legislature...(Update on Branham v. Ford and Proposed Punitive Damages Cap)

I have been hearing for awhile that there is a chance that the South Carolina State Legislature may take action in response to the South Carolina Supreme Court's decision in Branham v. Ford, and these rumors (may have been) confirmed today.

Apparently Senator Brad Hutto has offered an amendment to repeal the holding in the case. I say "may have been" above because I have not obtained a copy of the amendment, but the South Carolina Chamber of Commerce Competitiveness Update talks about this particular issue, and proposed caps on punitive damages, in today's edition. A cut and paste of the article is below (click the hyperlink above for the actual article). I will try to obtain the amendment and determine the nature of the provision.

Trial Lawyers Take Tort Reform Hostage

Last week, a Senate Judiciary subcommittee passed a comprehensive tort reform bill supported by the business community. However, this week the full Senate Judiciary Committee watered down key pieces of tort reform, including a meaningful punitive damage cap. The subcommittee also set unreasonable monetary thresholds for the admissibility of the non-use of seat belts.

The amended bill could be debated on the Senate floor as early as next week, and the South Carolina Chamber of Commerce is asking senators to vote against the committee amendment. If the committee amendment is defeated, the bill will revert back to the House-passed version of tort reform, which is a much stronger, pro-business bill championed by Speaker Bobby Harrell (Charleston).

The South Carolina Chamber and the South Carolina Civil Justice Coalition are also asking senators to examine neighboring states’ punitive damage limits, specifically Virginia, North Carolina, Georgia and Florida, and pick a model. Currently, trial lawyers are picking and choosing words and phrases from the other states in an attempt to render any cap in South Carolina meaningless.

The Chamber is also very concerned with an amendment offered by Senator Brad Hutto (Orangeburg), which was adopted by the full committee and repeals the Branham v Ford decision. The decision places South Carolina in the minority compared with other states on product liability issues. It also weakens the state’s business climate. At a time when the South Carolina Department of Commerce is working to expand the automotive cluster, this amendment must be stripped out of the tort reform bill.

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Thursday, February 24, 2011

Case Brief: Salladin v. Tellis

Today's case brief is Salladin v. Tellis, 247 S.C. 267, 146 S.E.2d 875 (1966). This an older, short opinion that reviews the landmark case of MacPherson v. Buick Motor Co., 217 N.Y. 382, 111 N.E. 1050 (1916) and the concept of privity in tort law.

FACTUAL BACKGROUND: The decedent was electrocuted while working in the repair and renovation of a pharmacy in Charleston, South Carolina. 247 S.C. at 269, 146 S.E.2d at 876. As alleged in the Complaint, decedent "came into contact with a highly charged piece of metal." Id.

PROCEDURE: Plaintiff brought a wrongful death lawsuit on behalf of the decedent's estate against numerous defendants. 247 S.C. at 269, 146 S.E.2d at 876. Defendant Universal Manufacturing Corporation ("Defendant"), a manufacturer of electrical transformers and devices, demurred to the Complaint on grounds of lack of privity between Defendant and the decedent. Id. Defendant also argued that the decedent was not a vendee of Defendant's product and was not using the product at the time of his injury. Id. The circuit court overruled the demurrer. Id.

ISSUE(S): Defendant appealed the overruling of the demurrer by the circuit court.

DISPOSITION: The South Carolina Supreme Court affirmed the circuit court's decision.

RULES AND OPINION: The court reviewed the "celebrated decision" in MacPherson v. Buick Motor Co., 217 N.Y. 382, 111 N.E. 1050 (1916) which established that the manufacturer of a product which, when put to its intended use, is imminently dangerous if defective, is liable in tort for negligence in its manufacture. 247 S.C. at 269, 146 S.E.2d at 876. The court noted that the MacPherson case abolished the concept of privity in products liability cases and that a manufacturer's duty extends to anyone who may reasonably be expected to be in the vicinity of a products probable use and to be endangered if the product is defective. Id. at 269-70, 146 S.E.2d at 876-77. The court cited to the following rule as the applicable law for opposing the demurrer:
A manufacturer who fails to exercise reasonable care in the manufacture of a chattel which, unless carefully made, he should recognize as involving an unreasonable risk of causing physical harm to those who use it for a purpose for which the manufacturer should expect it to be used and to those whom he should expect to be endangered by its probable use, is subject to liability for physical harm caused to them by its lawful use in a manner and for a purpose for which it is supplied.
Id. at 271, 146 S.E.2d at 877. Therefore, in this case, it did not matter that the decedent lacked privity and/or was not a vendor of the product.

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Wednesday, February 23, 2011

South Carolina Bar "Distance Learning" CLE Presentation on Warnings Law

I have been asked by the South Carolina Bar to do a one hour "Distance Learning" presentation on South Carolina warnings law based on the article I recently had published in South Carolina Lawyer. I guess I did not realize that the Bar offers these types of videotaped programs for CLE credit, but I was very happy to be offered the opportunity to do it.

We have tentatively scheduled the videotaping for April 19, 2011, but my hope is that we can do it sooner (depending on how some scheduling works out). I intend to cover much of the material written about in South Carolina Lawyer article. However, because of space constraints for that particular article, I had to cut out much of the text relating to limitations on the duty to warn in South Carolina (I hope to have the material that was cut published as a separate article in the near future). Therefore, this presentation will afford me the opportunity to cover that material, as well.

If there are any lawyers licensed in South Carolina who practice out of state, or any in-state lawyers who just need the convenience of a video CLE, I invite you to be on the lookout for this new addition. I assume you will be able to find it listed here, but will update this post once the presentation goes online.

Monday, February 21, 2011

Case Brief: Benford v. Berkeley Heating Co.

Today's case "brief" (I should call these "surveys" since they admittedly are never very "brief") is Benford v. Berkeley Heating Co., 258 S.C. 357, 188 S.E.2d 841 (Ct. App. 1972). The case involves a furnace and component blower switch that -- although found not to be defective in design -- combines with improper installation to cause a fire. There is some artful pleading and and election of remedies that influence the outcome of this case. It is not a case of "bad facts make bad law," as I do not disagree with the court's findings based on the theory of recovery. However, I am not sure that the outcome would be the same if this case was heard today or if the case asserted negligence or strict liability as a theory of recovery.

FACTUAL BACKGROUND: Berkeley Heating Company ("Berkeley") installed a furnace manufactured by The Trane Company ("Trane") in the crawlspace of a new home in August of 1977. 258 S.C. at 361, 188 S.E.3d at 842. The home burned on November 30, 1967. Id. As installed, the furnace's vent was only two and three-quarter inches from the pine joist where the fire originated. Id. Trane's manual required clearance of at least six inches between the heater's draft hood and the joist. Id. The manual also required that the flue pipe to be pitched upwards to facilitate escape of exhaust through a "short and direct route." Id. However, as installed by Berkeley, the flue pipe was ten feet long and made three ninety degree turns. Id. Two experts investigated the fire for Plaintiff Marvin Benford ("Plaintiff"). Id. The first expert did not find anything wrong with the furnace itself, but cited to three errors in the furnace's installation: (1) inadequate clearance between the draft hood and joist, (2) three ninety degree elbows in the vent connector, and (3) the down pitch of the vent connector to the chimney. Id. at 361-362, 188 S.E.2d at 842. Another expert investigated the case for Plaintiff in February of 1969. Id. at 362, 188 S.E.2d at 842. He concluded that the blower had not operated during the fire. Id.

PROCEDURE: After receiving the first expert's report, Plaintiff sued Berkeley alone in Charleston County. 258 S.C. at 362, 188 S.E.2d at 842. After the second expert's report, Plaintiff discontinued his Charleston County suit against Berkeley alone and commenced a lawsuit against Berkeley and Trane in Dorchester County. Id. Plaintiff sought recovery on several theories, including negligence and implied warranty. Id. Plaintiff alleged that the failure of the blower to operate caused the temperature to become higher than normal. Id. The higher temperature and faulty installation by Berkeley combined to cause the fire. Id. The trial court required Plaintiff to elect a remedy for recovery at the end of his testimony, and Plaintiff chose breach of implied warranty. Id. The jury found in favor Berkeley, but returned a verdict against Trane. Id. at 361, 188 S.E. 2d at 842. Trane appealed.

ISSUES: Whether the trial court erred in not granting Trane's motion for judgment notwithstanding the verdict or for a new trial. 258 S.C. at 361, 188 S.E.2d at 842.

DISPOSITION: Reversed. "For the reasons stated, the only reasonable inference from the evidence is that the intervening independent negligence of Berkeley was not reasonably foreseeable by Trane and that the destruction of plaintiff's house was not a natural and probable result of the failure of the blower switch. Trane's motion for judgment Non obstante verdicto should have been granted." 258 S.C. 368, 188 S.E.2d at 846.

RULES AND OPINION: The court set forth the applicable law for breach of implied warranty as follows:
The vendor is answerable for breach of implied warranty incident to a sale, as for any breach of contract, "for whatever damages follow as a natural consequence and proximate result of his conduct, or which may be reasonably be supposed to have been within the contemplation of the parties at the time the contract was made as a probable result of a breach of it."

258 S.C. at 362, 188 S.E.2d at 843 (quoting Nat'l Tire & Rubb Co. v. Hoover, 128 S.C. 344, 347-48, 122 S.E. 858, 859 (1924)). Applying this law, liability only extends to consequences that would follow the breach in the usual course of events, i.e., events that are foreseeable. Id. The court found that there was sufficient evidence to support the verdict that the switch was defective when it left Trane's hands. Id. at 363, 188 S.E.2d at 843. The court therefore reviewed whether there was evidence to support that the fire was a natural and foreseeable consequence of Trane's breach of implied warranty. Id. In other words, the court reviewed whether Trane could have foreseen the fire as a probable and natural result of the failure of the blower switch. Id.

The court reviewed the normal function of the heater and determined that if the blower switch does not operate, the air inside the heat exchanger to the unit continues to to grow hotter instead of being expelled into the dust system. Id. at 364, 188 S.E.3d at 843. The unit can complete a cycle in this manner, but it is said to be "cycling on the limit switch" and the result is that the draft hood reaches a much higher peak temperature than it otherwise would during normal cycling. Id. at 364, 188 S.E.2d at 843-44. The limit switch's function is to prevent dangerous overheating. Id. at 364, 188 S.E.2d at 844. Be that as it may, the furnace is designed to run in this manner so that there is sufficient heat to prevent pipes from freezing if the blower fails while a family is away. Id.

Significantly, Plaintiff did not claim defective manufacture and design of the heater by Trane, or that the installation manual was inadequate. Id. at 365, 188 S.E.2d at 844. Plaintiff's sole claim against Trane was with regard to the defective blower switch. Id. His installation claim was directed solely at Berkeley. Id. The court found that in the absence of proof to the contrary, Plaintiff's evidence supported that Berkeley's improper installation "interrupted the normally foreseeable train of events linking manufacture with use." Id. Berkeley's installation did not "usually and naturally" precede the use of a furnace. Id. Therefore, "[u]nless there was evidence reasonably pointing to the conclusion that the defective blower switch alone would have caused the loss in natural course, the judgment must fall." Id. The court reviewed the testimony of Plaintiff's experts, and it could not find any such evidence. Id. at 365-68, 188 S.E.2d at 844-46. Plaintiff's first expert said that the defective blower switch would not have caused the fire without the faulty installation. Id. at 365-66, 188 S.E.2d at 844. Plaintiff's second expert admitted during his testimony that the faulty installation made the difference in the fire's ignition. Id. at 366-68, 188 S.E.2d at 844-46.

The court recognized that Trane anticipated that its blower may not work all the time for a variety of different reasons (e.g., clogging, etc.), so it was designed to cycle safely on the limit switch when properly installed. Id. at 368, 188 S.E.2d at 846. "Any evidence that the furnace cycling on the limit switch would have caused the fire, even if it had been installed in the manner directed by the manual, would have pointed to a defect in design as the cause of the fire, which is not charged as a ground of recovery." Id. Based on Plaintiff's theory of recovery, the court reversed the verdict.

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Friday, February 4, 2011

SC Lawyer Article on Warnings Published

My apologies for the length of time since my last post. January was rough for the South Carolina Products Liability Law Blog, as your beloved author got sidetracked by one kid getting sick...for a week...then a second kid getting sick...for the entire next week....and then yours truly getting the flu this past week (most likely thanks to aforementioned kids). So basically, when I haven't been working, I've been helping tend to sick kids or trying to get myself healthy again. Fun stuff, people, fun stuff. But better days are ahead, as Punxsutawney Phil did NOT see his shadow this week, meaning spring is on the way!

But enough about all that. Let's talk about something that really gets the juices South Carolina's law on warnings. South Carolina Lawyer was kind enough to publish my article entitled Products Liability Claims in South Carolina: What is South Carolina's Law on Warnings? in its January 2011 edition, and you can find a copy of it here (give it a couple seconds to load). This article started out as a very exhaustive look at South Carolina warnings law (with the exception of the doctrine of preemption...which is a big enough topic to be its own article). However, because of space constraints, I had to cut it down a fair amount for publication. The section on exceptions to the duty to warn was originally much longer and had a great deal of additional case law and information. Because much of this information had to be cut out, I plan to use it as the basis for a new article that focuses specifically on this area of South Carolina warnings law, and I hope to submit it for publication in the near future.

Hopefully you will find it to be of interest, and I welcome any comments or feedback.

A couple of other blog-worthy developments from the last month. The South Carolina Defense Trial Attorneys Association asked if I would co-chair the Products Liability Substantive Law Committee, which I was very happy to accept for this year. My co-chair is Nick Gladd, and we will be responsible for providing updates to the organization on developments in products liability law in South Carolina, as well as helping plan for certain breakout sessions at the SCDTAA's meetings this year. If any followers of the blog are members of the SCDTAA and have suggestions for breakout topics, then please let me know.

Finally, my firm has asked me to chair our Products Liability Practice Group. The outgoing chairperson is Gray Culbreath, who also happens to be the Managing Partner of Collins & Lacy, P.C. and serves as the current President of the SCDTAA. Needless to say, Gray is wearing many different hats these days, so I appreciated my firm asking me to take over this duty so as to free him up a bit. I look forward to serving in this role.

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