Wednesday, June 20, 2018

Case Brief: Riley v. Ford Motor Co.

I am trying to get back into blogging and catching up on some cases that have been decided in South Carolina over the last few years.  Today’s case is Riley v. Ford Motor Co., 414 S.C 185, 777 S.E.2d 824 (2015).  It is a defective door latch case where the decedent was thrown from a Ford F-150.  The substance of the case relates to (i) whether the trial judge should have granted a $600,000 additur to the verdict, and (ii) how to apply South Carolina’s setoff law.  There is no real analysis of products issues per se, but it is worth a read from a procedural standpoint.

FACTUAL BACKGROUND: Benjamin Riley was involved in an automobile accident in a Ford F-150 when another driver pulled out in front of him.  He swerved, collided anyway, and the impact caused the driver’s door of Riley’s pick-up to open.  Riley was ejected and died from his injuries.  414 S.C. at 189, 777 S.E.2d at 826.

PROCEDURE: Riley’s widow, as his Personal Representative (“Plaintiff’), filed survival and wrongful death claims against the opposing driver and Ford.  414 S.C. at 189, 777 S.E.2d at 827.  The case against Ford alleged a negligently designed door latch system that resulted in Riley’s ejection.  Plaintiff settled with the opposing driver for $25,000 and allocated $20,000 to the survival claim and $5,000 to the wrongful death claim.  The trial judge approved the settlement.  Id.

At trial, Plaintiff only submitted the wrongful death claim against Ford to the jury, and it returned a verdict for $300,000 in actual damages.  The jury found evidence of conduct to support punitive damages but declined to award them.  Id.

Plaintiff sought a new trial nisi additur (to add damages), which the trial court granted in the amount of $600,000.  This brought the total recovery to $900,000.  Id.  Ford filed post-trial motions for judgment notwithstanding the verdict and to offset the opposing driver’s settlement.  The trial judge denied these motions.  Id. at 190, 777 S.E.2d at 827.

Ford appealed and the South Carolina Court of Appeals reversed in Riley v. Ford Motor Co., 408 S.C. 1, 757 S.E.2d 422 (Ct. App. 2014).  It held the trial court erred in denying Ford’s motion for setoff and in granting Plaintiff’s motion for a new trial nisi additur.  It reinstated the jury’s $300,000 verdict.  It also held Ford was entitled to offset $20,000 against the jury’s verdict in the wrongful death action, as opposed to the $5,000 that the settling defendant agreed to allocate to that claim.  Id. at 190-91, 777 S.E.2d at 828. 

Plaintiff appealed to the South Carolina Supreme Court on both issues.

ISSUES: (1) Did the court of appeals err in reversing the trial court’s order granting a new trial nisi additur, i.e., because the trial court’s decision was an appropriate exercise of discretion and was supported? (2) Did the court of appeals err in reallocation of the underlying settlement and setoff of settlement proceeds?  414 S.C. at 192, 777 S.E.2d at 827-28. 

DISPOSITION: Reversed on both issues.  414 S.C. at 192, 777 S.E.2d at 827-28. 

RULES AND OPINION: The Court first addressed a motion by a party for a new trial based on a challenge that the verdict is either excessive or inadequate.  The rule with regard to this issue is that “’the trial judge must distinguish between awards that are merely unduly liberal or conservative and awards that are actuated by passion, caprice, or prejudice.’”  414 S.C. at 192, 777 S.E.2d at 828 (quoting Allstate Ins. Co. v. Durham, 314 S.C. 529, 530-31, 431 S.E.2d 557, 558 (1993)).  If it is the former, then the trial judge alone has the power to alter the verdict by granting of a new trial nisi.  If it is the latter, it is the duty of the trial court and the appellate court to set aside the verdict absolutely.  Id.  Although the trial judge has discretion, “compelling reasons” must be given to justify the trial court invading the jury’s province in this manner. Id. at 193, 777 S.E.2d at 829 (citing Bailey v. Peacock, 818 S.C. 13, 14, 455 S.E.2d 690, 691 (1995)). 

At trial, Plaintiff presented expert testimony to support economic damages of more than $228,000.  There were also so many witnesses to testify about non-economic damages that the trial judge ruled it became cumulative.  In short, substantial evidence supported the decedent was a wonderful human being.  Id.  The Court held the court of appeals ignored the abuse-of-discretion standard of review and focused on a de novo evaluation of whether there was sufficient justification for “invading the jury’s province.”  Id. at 194, 777 S.E.2d at 829.  The Court held this was error.  The trial court did not abuse its discretion in granting an additur of $600,000 based on the trial judge’s thorough recitation of the basis for his actions.  Id.  The Court also clarified that just because the jury awarded some amount of non-economic damages (over and above the $228,000 in actual damages) did not mean that nisi additur was not available.  “While the presence of some amount of noneconomic damages may be a factor mitigating against the granting of a new trial nisi additur, there is no categorical rule prohibiting a nisi additur where a jury verdict includes some measure of noneconomic damages.”  Id. at 194, 777 S.E.2d at 830. 

On the issue of setoff, “’[a] non-settling defendant is entitled to credit for the amount paid by another defendant who settles for the same cause of action.’”  Id. (quoting Rutland v. S.C. Dep’t of Transp., 400 S.C. 209, 216, 734 S.E.2d 142, 145 (2012)).  Allowing setoff prevents a double recovery.  The Court recounted the principle of setoff was codified as part of the South Carolina Contribution Among Tortfeasors Act at section 15-38-50(1).  Id.  However, “any ‘reduction in the judgment must be from a settlement for the same cause of action.’”  Id. at 196, 777 S.E.2d at 830 (quoting Hawkins v. Pathology Assocs. Of Greenville, P.A., 330 S.C. 92, 113, 498 S.E.2d 395, 407 (Ct. App. 1998)).  If there is more than one claim, this affects how much a non-settling defendant may be allowed to offset.  Id. 

The issue was whether the court of appeals erred in reapportioning the $25,000 settlement between the survival and wrongful death claims so as to increase the amount Ford could offset against the wrongful death verdict.  The Court found the court of appeals erred in reapportioning the settlement proceeds.  Id. at 196-97, 777 S.E.2d at 831.  It agreed with the approach of the Illinois Court of Appeals, which stated as follows:

A plaintiff who enters into a settlement with a defendant gains a position of control and acquires leverage in relation to a non-settling defendant. This posture is reflected in the plaintiff's ability to apportion the settlement proceeds in the manner most advantageous to it. Settlements are not designed to benefit non-settling third parties. They are instead created by the settling parties in the interests of these parties. If the position of a non-settling defendant is worsened by the terms of a settlement, this is the consequence of a refusal to settle. A defendant who fails to bargain is not rewarded with the privilege of fashioning and ultimately extracting a benefit from the decisions of those who do.
Id. at 197, 777 S.E.2d at 831 (quoting Lard v. AMI FM Ohio, Inc., 327 Ill. Dec. 273, 901 NE.2d at 1019 (2009).
The Court held the trial court-approved allocation was reasonable and should not have been disturbed.  Therefore, Ford was entitled to set off only the $5,000 the settlement agreement apportioned to the wrongful death claim, and not the $20,000 reapportioned by the court of appeals.  Id. at 198, 777 S.E.2d at 831. 

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