RENDERED: June 26, 1998; 2:00 p.m. NOT TO BE PUBLISHED NO. 96-CA-2305-MR. RUTH BUTLER, Executrix of the ESTATE OF JOHN BUTLER, SR.
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1 RENDERED: June 26, 1998; 2:00 p.m. NOT TO BE PUBLISHED NO. 96-CA-2305-MR RUTH BUTLER, Executrix of the ESTATE OF JOHN BUTLER, SR. APPELLANT APPEAL FROM JEFFERSON CIRCUIT COURT V. HONORABLE WILLIAM E. MCANULTY, JR., JUDGE ACTION NO. 87-CI-1119 OWENS-ILLINOIS GLASS COMPANY, INC. APPELLEE OPINION VACATING AND REMANDING * * * * * * BEFORE: COMBS, GUIDUGLI, and JOHNSON, Judges. COMBS, JUDGE: The appellant, Ruth Butler, Executrix of the Estate of John Butler, Sr. (Butler), appeals from a jury verdict and judgment in favor of the appellee, Owens-Illinois, Inc. (Owens-Illinois). Butler argues that the court improperly instructed the jury on several issues and requests a new trial. This appeal arises from a products liability action based upon John Butler's exposure to asbestos products. John
2 Butler (Ruth Butler's husband), worked as a pipe fitter from 1950 through He worked for the United States Air Force from 1950 through 1968, installing various types of insulation that contained asbestos. After leaving the military in 1968, he joined a pipe fitters union and continued installing insulation containing asbestos. In 1986, Mr. Butler was tested by an expert in Pulmonary Medicine at the University of Louisville School of Medicine and was diagnosed as suffering from asbestosis, a condition involving the scarring of the lungs from exposure to asbestos. On February 11, 1987, the Butlers filed a products liability action to recover damages for injuries resulting from Mr. Butler's exposure to asbestos. Their complaint named twentysix (26) manufacturers of asbestos-containing products as defendants. In 1989, the complaint was amended to add another manufacturer as a defendant, bringing the total number of defendants to twenty-seven (27). However, at the time of trial, Owens-Illinois, Inc. was the only remaining defendant; the other named defendants had either settled or had been dismissed for various reasons. In February 1991, the case proceeded to trial, and a jury returned a verdict in favor of Owens-Illinois. In accordance with the jury's verdict, the Jefferson Circuit Court entered its final judgment. The Butlers appealed the jury's verdict to this Court, alleging that the jury instructions were improper and raising several issues as to evidentiary matters. -2-
3 On March 12, 1993, we rendered an unpublished opinion affirming in part, and reversing and remanding in part the judgment of the court. We held that the trial court had improperly instructed the jury as to contributory negligence and punitive damages. Following the trial, Mr. Butler developed lung cancer and died. The appellant, his wife, was appointed Executrix of his estate. Upon remand, Mrs. Butler was allowed to amend the original complaint to add a claim for wrongful death, alleging that Mr. Butler's development of lung cancer and his subsequent death were the direct and proximate result of his exposure to asbestos-containing products manufactured by Owens-Illinois. In March 1995, the case was re-tried in the Jefferson Circuit Court, and the jury returned a verdict in favor of Owens-Illinois. The court entered its final judgment in April Butler filed a motion for a new trial with the circuit court, contending that the court's instructions to the jury were improper based upon several grounds; the court denied her motion On July 29, This appeal followed. Butler first argues on appeal that the court improperly instructed the jury on a presumption created by KRS (2). In Instruction No. 1, subparagraph (g), the court instructed the jury to determine whether "Owens-Illinois, Inc.'s method of manufacturing its products did not conform to the generally recognized and prevailing standards of the state of the art in existence at the time of the manufacture." (Emphasis added). KRS (2) provides: -3-
4 In any product liability action, it shall be presumed until rebutted by a preponderance of the evidence to the contrary, that the product was not defective if the design, methods of manufacture, and testing conformed to the generally recognized and prevailing standards or the state of the art in existence at the time the design was prepared, and the product was manufactured. The statute thus creates a presumption of product fitness or, perhaps more accurately, a rebuttable presumption of nondefectiveness. We have interpreted this statute to mean that the presumption which it creates "may be rebutted by evidence that the product was defective and not that there must be evidence that the design did not conform to prevailing standards or was not state of the art at that time." (Emphasis added). Murphy By Murphy v. Montgomery Elevator Co., Ky. App., 957 S.W.2d 297 (1997). Thus, if the plaintiff fails to rebut the presumption "by a preponderance of the evidence to the contrary," a verdict will be directed that the product was not defective. However, if and when the plaintiff rebuts the presumption, the issue of whether the product was defective will be submitted to the jury on the evidence -- without additional comment or further elaboration either warranted or permitted in the jury instructions as to prevailing standards or state of the art. It appears from our analysis of the scanty case law on jury instructions vis à vis this statutory presumption that judicial silence is virtually mandated as to prevailing standards and/or state of the art once the plaintiff has presented evidence sufficient to rebut the presumption. A trial judge must operate -4-
5 between the extremes: either that of directing a verdict in favor of the defendant where a plaintiff has failed to rebut the presumption or that of wholly refraining from alluding to state of the art in his jury instructions if evidence has been presented to rebut the presumption. This is the only interpretation we can glean from Murphy, supra, and from Sexton by and through Sexton v. Bell Helmets, Inc., 926 F.2d 331 (4th Cir. 1991). Sexton, a federal case in which an Ohio court has interpreted Kentucky law on this very narrow issue, essentially articulated the mandate on judicial silence in this area: [w]e can perceive no reason why the trial court would ever need to instruct the jury on this statutory presumption. Id. at 333. (Emphasis added.) Sexton correctly restates long-settled Kentucky case law upholding the impropriety or ill-advisedness of a court to undertake instruction of a jury to legal presumptions. Lowe v. McMurray, Ky., 412 S.W.2d 571 (1967). The rationale underlying judicial silence in this area would appear to be that "industry standards" or "state of the art" may not be cited conclusively as incantations of product trustworthiness; that they might in fact be untrustworthy criteria created by the very industry seeking to create the appearance of product safety by recitals of their own safety standards. Regardless of the public policy or rationale, we hold that in the case at bar, Instruction No. 1, subparagraph (g) -5-
6 directly contravenes the mandate as to silence on the statutory presumption and that, therefore, it constitutes reversible error. Butler next argues that the court failed to instruct the jury properly on the issue of strict liability in Instruction No. 1. Specifically, she contends: (1) that the court placed unnecessary and prejudicial emphasis on the injury aspect of her claim; (2) that the court improperly instructed the jury on the element of substantial factor; and (3) that the court erroneously separated the concept of "defective condition unreasonably dangerous." Instruction No. 1 provides in its entirety 1 : If you believe from the evidence: (a) That John Butler, Sr. was exposed to asbestos fibers released from asbestos containing products manufactured and sold by Owens-Illinois, Inc., and that such exposure was a substantial factor in causing injury to him; AND (b) That John Butler, Sr. sustained an asbestos-related injury; AND (c) That the asbestos-containing products manufactured by Owens-Illinois, Inc. to which John Butler, Sr., was exposed were defective; AND (d) That these products were defective at the time that they were manufactured by Owens- Illinois, Inc.; AND 1 We note that we have just examined and found the language contained in subparagraph (g) of Instruction No. 1 to be erroneous. Our analysis of this issue focuses on the correctness of the court's instructions set forth in remaining subparagraphs (a)-(f). -6-
7 (e) That the defective nature of these products rendered them unreasonably dangerous for use by John Butler, Sr.; AND (f) That such defect was a substantial factor in causing injury to John Butler, Sr.; AND (g) That Owens-Illinois, Inc.'s method of manufacturing its products did not conform to the generally recognized and prevailing standards or the state of the art in existence at the time of the manufacture; you will find for Plaintiff, Ruth Butler, Executrix of the Estate of John Butler, Sr.... Otherwise, you will find for Defendant, Owens-Illinois, Inc.... With the exception of subparagraph (g), we find that taken as a whole, the court's instructions were not improper. Contrary to appellant's contention, the court did not confuse or mislead the jury by overemphasizing the injury aspect of her claim. In order to prove her claim, Butler had to prove that her husband had indeed suffered an asbestos-related injury which had been caused by exposure to asbestos-containing products manufactured by Owens-Illinois, that these products were defective, and that they were a substantial factor in causing in his injury. Although they do not exactly mirror the proposed instructions set forth in the Restatement (Second) of Torts 402A, the court's instructions nonetheless state each of these requirements correctly in a "bare bones" manner. We disagree with Butler's allegation that the court improperly instructed the jury on the element of "substantial factor." The Butlers named a total of twenty-seven (27) manufacturers whose allegedly defective products caused injury to -7-
8 John Butler over the course of his career as a pipe fitter. Therefore, not only did Butler have to show that her husband suffered an asbestos-related injury but also that his injury was caused by exposure to defective products manufactured specifically by Owens-Illinois. We believe that the instructions adequately stated the issue regarding causation and that the jury was not misled or confused. Furthermore, the instructions did not mislead the jury as to the issue of whether the product was "in a defective condition unreasonably dangerous to the user." Butler alleges that the instructions required the jury first to find that Owens- Illinois's products were defective and then to determine whether the defective nature of the product rendered them unreasonably dangerous to the user. We find no error in this portion of the instructions. Butler challenges the court's instructions as to punitive damages and to apportionment of liability. Because of their finding in favor of Owens-Illinois, the jury did not consider this portion of the instructions. Although any error resulting from these instructions would, therefore, be moot in light of the jury's verdict, we will nevertheless address the issue of these instructions since appellant did lodge objections and preserved the error for our review. Any alleged errors would have implications upon remand for a new trial as they are likely to arise again. -8-
9 Butler contends that the trial court erroneously instructed the jury on the issue of punitive damages. Instruction No. 5 provides: If you find from the evidence that during the period in which the Defendant manufactured the asbestos-containing product that it had actual knowledge of the defect and consciously or deliberately disregarded the safety of others resulting from the defect, you may in your discretion award punitive damages in addition to compensatory damages.... (Emphasis added). She argues that the proper standard for awarding punitive damages requires language reciting that the defendant's conduct indicated malice, willfulness, or a reckless and wanton disregard for the rights of others. Here, the trial court required the jury to find that Owens-Illinois had actual knowledge of the defect and consciously or deliberately disregarded the safety of others. In Kentucky, an award of punitive damages is now governed by KRS and neither of which contains language indicating retroactive applicability. These statutes became effective in July 1988 and were erroneously applied to this case (which was originally filed in 1987) as we held in our Opinion of March 12, 1993, in the first appeal of this case. Prior to the enactment of KRS and KRS , punitive damages were authorized when the circumstances surrounding a tortious act indicated malice, willfulness, or a reckless or wanton disregard for the rights of others. Island Creek Coal Co. v. Rodgers, Ky. App., 644 S.W.2d 339 (1982). In the case before us, we hold that the court erred in its instruction as to the -9-
10 punitive damages by leading the jury to believe that punitive damages were appropriate only if Owens-Illinois acted intentionally with knowledge of its product's defective nature -- improperly disregarding the higher standard enunciated in Island Creek Coal Co. v. Rodgers, supra. Upon remand, the court should properly instruct the jury regarding punitive damages to comport with the language set out in Rodgers, supra. Butler also challenges as erroneous the court's instructions regarding apportionment of liability. She argues that prior to 1988, Kentucky law did not permit apportionment of liability in a products liability case. The court had instructed the jury that if it found in favor of Butler, it should determine the percentage of the total fault attributable to each of the entities listed in the instruction; the court listed twenty-one (21) manufacturers whose asbestos-containing products had been involved with John Butler over the course of his career. Arguing that the case must be governed by the law as it existed when the case was filed in 1987, appellant contends that KRS governed and forced a jury to choose between joint or several liability among multiple defendants in a negligence action; this statute pre-dated the effective date of July 15, 1988, of KRS , which specifically mandated allocation of fault according to principles of comparative fault. Also on the books prior to KRS was KRS (3), dictating that in products liability cases, the contributory negligence of an -10-
11 injured plaintiff would wholly negate any liability of a defendant. While statutory law has changed subsequent to the filing date of this case without containing language indicating retroactive application, case law has continued to evolve and has consistently upheld the necessity of apportionment -- applying KRS retroactively by judicial interpretation. In Floyd v. Carlisle Construction Company, Ky., 758 S.W.2d 430 (1988), the Supreme Court held that apportionment was required even as to one who had settled the claim and who was no longer a party to the lawsuit -- either as a defendant or a third-party defendant. In Stratton v. Parker, Ky., 793 S.W.2d 817 (1990), the Supreme Court further explained: The law has now developed to the point that in tort actions involving the fault of more than one party, including third-party defendants and persons who have settled the claim against them, an apportionment instruction, if requested, must be given whereby the jury will determine the amount of the plaintiff's damage and the degree of fault to be allocated to each claimant, defendant, third-party defendant, and person who has been released from liability. (emphasis added). In Dix & Associates Pipeline Contractors, Inc. v. Key, Ky., 799 S.W.2d 24 (1990), the court extended the reasoning of Floyd, supra, to abolish any distinction as to liability between an original defendant and a defendant present in the litigation as a third-party defendant. Key specifically expanded apportionment to include both classes of defendants, overruling -11-
12 Nix v. Jordan, Ky., 532 S.W.2d 762 (1975), for its holding restricting apportionment. In Caterpillar, Inc. v. Brock, Ky., 915 S.W.2d 751 (1996), the Supreme Court of Kentucky articulated unambiguously that the contributory negligence feature of the Kentucky products liability statute (KRS (1)) had been superseded by the comparative fault feature of KRS , mandating apportionment in products liability actions: Id. at 753. The language of the comparative fault statute, KRS , is straightforward and admits, with ease, to only one construction: that in all tort actions, including products liability actions, fault is to be apportioned among all parties to each claim. The chosen language of the legislature is plain and direct rather than circumferential. The date of enactment and the legislative history intone negation of KRS (1). Finally, we note that Johns-Manville was included on the list of defendants with regard to whom the jury received an apportionment instruction. We find no basis for the inclusion of Johns-Manville -- either as an original defendant, third-party defendant, or party with whom settlement was made -- under the authorities we have cited. Consequently, Johns-Manville should be stricken from the list. With regard to A-Best, we hold that A-Best should remain as part of the jury instruction on apportionment since it had originally been named as a party (although dismissed via summary judgment). We hold that the inclusion of A-Best for instruction purposes only reinforces the decision of Parker, supra, in which the Supreme Court determined -12-
13 that the liability of a defendant was entitled to be evaluated by considering and comparing the potential liability of all other defendants arguably involved in the commission of the injury -- even though they no longer might bear legal liability to the plaintiff in damages. Notwithstanding the fact that the jury did not reach these instructions, we find that the court properly gave the jury instructions regarding apportionment of fault. In summary, we find that Instruction No. 1, subparagraph (g) constituted reversible error. Additionally, the court improperly instructed the jury with regard to punitive damages. Therefore, we vacate and remand for a new trial. GUIDUGLI, JUDGE, CONCURS. JOHNSON, JUDGE, CONCURS IN PART, DISSENTS IN PART, AND WRITES A SEPARATE OPINION. JOHNSON, JUDGE, CONCURRING IN PART AND DISSENTING IN PART: I concur with the Majority Opinion in reversing the trial court on Instruction No. 1 subparagraph (g) and the punitive damages instruction. I respectfully dissent and would also reverse the trial court on Instruction No. 1 concerning the doctrine of strict liability. I believe the trial court improperly instructed the jury on the injury aspect of the claim, the element of substantial factor, and the concept of "defective condition unreasonably dangerous." In my opinion the appellant's proposed instructions were correct and were in compliance with the Restatement (Second) of Torts 402 A and Dealers Transport Company v. Battery Distribution Company, Ky., 402 S.W.2d 441, -13-
14 (1965). See Ford Motor Company v. Fulkerson, Ky., 812 S.W.2d 119 (1991); Ingersoll-Rand Company v. Rice, Ky.App., 775 S.W.2d 924, 931 (1988); and Nichols v. Union Underwear Company, Inc., Ky., 602 S.W.2d 429, 431 (1980). I also dissent as to the issue of which parties are to be included in the apportionment instruction. While I believe an apportionment instruction is appropriate, I would make it clear to the trial court that a party can be listed in the apportionment instruction only if there is adequate proof as to all the elements of liability. Floyd v. Carlisle Construction Company, Inc., Ky., 758 S.W.2d 430, 432 (1988). -14-
15 BRIEFS FOR APPELLANT: Kenneth L. Sales William R. Kenealy Melissa S. Norman Louisville, KY BRIEF FOR APPELLEE: Louis C. Woolf M. Denise Moretz Michael J. King Knoxville, TN William P. Swain John B. Moore Louisville, KY -15-
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