Aftermath of Owens and Whitehead–products liability and comparative fault in Tennesssee–how deep does the relationship run?, The

aftermath of Owens and Whitehead–products liability and comparative fault in Tennesssee–how deep does the relationship run?, The

McWherter, James Brandon

I. INTRODUCTION AND STATEMENT OF PURPOSES

Upon the Tennessee Supreme Court’s adoption of its present comparative fault system in 1992,(1) the products liability bar undoubtedly felt an immediate impact. Notwithstanding the great pressure the bar has put on the courts for guidance, there have been but a few cases addressing the applicability of comparative fault to products liability actions.2 As such, this Note seeks to examine the extent of the doctrine’s applicability to products liability cases, as well as to explore the plethora of collateral issues that sprout up like seedlings as the area is thoroughly analyzed. In doing so, this Note will track the emergence of comparative fault in products liability cases by first addressing the status of products liability law before the adoption of comparative fault in McIntyre v. Balentine, and by then focusing on the few post-McIntyre cases that examine and discuss the interaction between comparative fault and products liability. Next, this Note will probe and assess the policy and conceptual issues at play in this area. Lastly, this Note will analyze the continued viability of joint and several liability in products liability actions, particularly in the gray area of breach of the implied warranty of merchantability, which, to date, has not been addressed by a Tennessee appellate court.

II. PRE-MCINTYRE PRODUCTS LIABILITY LAW IN TENNESSEE: EVOLUTON OF PRODUCTS LIABILITY LAW IN TENNESSEE

Tennessee Products Liability Act,3 followed by a cursory perusal of relevant historic case law.

A. The Tennessee Products Liability Act

Under Tennessee law, a manufacturer or seller of a product may only be held liable for an injury caused by its product if “the product is determined to be in a defective condition or unreasonably dangerous at the time it left the control of the manufacturer or seller.”4 As such, the first key questions any practitioner must answer are: (1) what is the definition of “unreasonably dangerous”; and (2) what is the definition of “defective condition”?

1. Under What Circumstances Is a Product Considered “Unreasonably Dangerous”?

In answer to this question, the Tennessee Code states that a product is “unreasonably dangerous” if:

assuming that the manufacturer or seller knew of its dangerous condition.5

As literally interpreted by case law, this definition creates two separate and distinct tests for ascertaining whether a product is “unreasonably dangerous.”6 First, the plaintiff may employ the consumer expectation test to prove a product is “unreasonably dangerous,”7 and second, the plaintiff may assert that the product fails the prudent manufacturer test, which requires a risk-utility balancing of factors.8

2. Under What Circumstances Is a Product Considered To Have a “Defective Condition”?

For clarity and avoidance of future controversy, the Tennessee legislature specifically defines a “defective condition” as “a condition of a product that renders it unsafe for normal or anticipatable handling and consumption.”19 In applying this definition, Tennessee courts have recognized that one factor to consider is “consumer knowledge about the risks inherent in the use of [the] product.”20 Further, the condition must truly be a defect. In other words, the design of the product does not have to be perfect, accident proof, or incapable of causing injury to be considered non-defective.21

B. Pre-Owens and Whitehead Products Liability Causes of Action and Corresponding Case Law

1. Basic Principles and Primary Elements of a Products Liability Action Based on Negligence

or seller may be liable for damages caused by his negligence when a reasonably foreseeable consumer is injured as a result of that negligence.27

As negligence is often a valid claim in a products liability action, many plaintiffs often take advantage of the theory. However, under pre-McIntyre law, contributory negligence was an absolute bar to a product liability action founded on negligence.28 Thus, many plaintiffs’ lawyers often opted to proceed on a theory of strict liability instead because contributory negligence was not a defense to strict liability.29

2. Basic Principles and Primary Elements of Strict Liability

a. Section 402A of the Restatement (Second) of Torts

strict liability action is brought must be engaged in the manufacture, processing, sale, or distribution of the product, and, in addition, the defendant must be engaged in that activity as a part of their business.31 Moreover, the defect must have existed at the time the product was distributed by and was under the control of the defendant.32 Even if all of the above elements are satisfied, however, a prima facie case of strict liability is still not established under section 402. In fact, liability will only attach if the product is defective as marketed, and the product is unreasonably dangerous.33

b. Tennessee’s Approach

Although Tennessee’s requirements for strict liability are based on section 402 of the Restatement (Second) of Torts, there is one key difference. As mentioned above, section 402A requires that the product be both defective and unreasonably dangerous at the time it left the hands of the manufacturer or seller.34 The Tennessee legislature, however, has addressed the issue, and only requires that the product be defective or unreasonably dangerous, rather than requiring the fulfillment of both elements.35

(1) McKinnie v. Lundell Manufacturing Co.

(2) Roberts v. Sears, Roebuck & Co.

Notwithstanding the McKinnie decision, another federal district court reached the opposite result in Roberts v. Sears, Roebuck & Co.42 In Roberts, the court, focusing on the fact that there was a “long line of Tennessee cases that hold that contributory negligence is not a defense to strict liability in tort,”43 declined to apply comparative fault to strict liability actions.44 Although the decision was relatively short, the court essentially based its decision on the fact that it was inappropriate to modify such a large body of common law without statutory language directing otherwise.45 As such, the question of whether comparative fault applied to such actions remained unanswered.

3. Basic Principles and Primary Elements of Actions for Breach of Implied Warranties

A cause of action for breach of express or implied warranty has long been recognized as available to plaintiffs in the products liability setting.46 In fact, breach of warranty cases are often a favorite vehicle for recovery in products liability actions with appropriate factual scenarios.47

a. Uniform Commercial Code Implied Warranties

products liability actions: (1) implied warranty of fitness for a particular purpose; and (2) implied warranty of merchantability.48

The implied warranty of merchantability, the more common of the two warranties, is codified at section 2-314 of the U.C.C., and specifically mandates that such warranty is implied in a contract for the sale of goods if the seller is a merchant with respect to goods of that kind.49 The implied warranty of fitness for a particular purpose, on the other hand, codified at section 2-315 of the U.C.C., mandates a consumer can recover if “the seller has reason to know of a buyer’s particular purpose and of the buyer’s reliance in fact by the buyer.”50 Although not as common as the implied warranty of merchantability, this warranty does occasionally arise in the products liability setting, although it is more often at issue in actions between businesses rather than in products liability litigation by injured consumers.51

b. Tennessee’s Approach

concept of contributory negligence is not applicable as a defense.54 Consequently, the question of whether comparative fault was applicable in breach of warranty cases was an immediate concern after the McIntyre decision.

III. PRODUCTS LIABILITY LAW IN TENNESSEE AFTER THE ADOPTION OF COMPARATIVE FAULT

A. Generally

when considering the collateral issues that arise when the topic is closely analyzed. As such, this section of this Note will attempt to shed some light on this gray area of Tennessee law, some of which is uncharted territory in that no appellate court has explored the more remote regions of the topic.58

B. Joint and Several Liability or Several Only

Although difficult to define, joint and several liability is a relatively simple concept in that it means that a plaintiff can seek 100% of its damages from any single defendant anytime there are two or more joint tortfeasors. Conversely, several liability, as defined by Black’s Law Dictionary, is “liability separate and distinct from liability of another to the extent that an independent action may be brought without joinder of others.”64 In other words, the phrase “severally liable” implies that each one is liable alone. Despite the relatively simple distinction between the two theories, it is a difficult and confusing task to determine when it is appropriate to apply joint and several liability, especially in light of the fact that the Tennessee Supreme Court has twice stated, first in McIntyre v. Balentine65 and then in Volz v. Ledes,66 that joint and several liability no longer exists in Tennessee. Despite this language, later cases, such as Owens v. Truckstops of America, have made clear that the concept of joint and several liability has not been truly abolished in all areas, namely in the area of strict liability when there are joint tortfeasors.67

C. Landmark Cases

Although the decisions display significant gaps, they are two of the most important opinions issued by the Tennessee Supreme Court in the comparative fault arena since McIntyre v. Balentine.

1. Whitehead v. Toyota Motor Corp.

In Whitehead v. Toyota Motor Corp., which was the Tennessee Supreme Court’s first opinion regarding the proper application of comparative fault to products liability actions, the court held that principles of Tennessee’s modified comparative fault system “apply in products liability actions based on strict liability in tort.”70 In Whitehead, the plaintiffs brought a products liability action against a truck manufacturer and a truck retailer after a car accident in which the plaintiffs suffered personal injuries.71 As the basis for their claim, the plaintiffs averred that, under Tennessee’s Product Liability Act,72 the seatbelt system of the Toyota pickup was defective.73 The defendants, however, countered with the affirmative defense of comparative fault.74 The issue of whether comparative fault applies to products liability actions based on strict liability in tort was thus before the Tennessee Supreme Court for the first time.75

focused on post-McIntyre federal cases applying Tennessee law to strict liability actions.77 Next, the court considered past strict liability law in Tennessee.78 Considering this history, the court then noted other states’ laws as to whether comparative fault should apply to strict liability actions.79 The court ultimately concluded that comparative fault does apply to products liability actions based on strict liability in tort, reasoning that “a plaintiffs ability to recover in a strict products liability case should not be unaffected by the extent to which his injuries result from his own fault.”80 The Whitehead decision was undoubtedly a landmark decision in this area, but the issue related only to the apportionment of damages between the plaintiff and defendants.81 As such, the issue of damage apportionment among joint tortfeasors in a products liability action remained unanswered. Less than eight months later, however, the Tennessee Supreme Court, in an effort to answer this uncharted question, issued the Owens v. Truckstops of America decision.82

2. Owens v. Truckstops of America

unless he was allowed to recover all damages from Truckstops. Obviously, such an outcome would work an injustice to Truckstops unless it could follow such liability with indemnity and contribution claims against Vitro and Michael.90 Truckstops contended that, pursuant to McIntyre v. Balentine, it had the right “to show … that Vitro and Michael caused or contributed to the plaintiffs injuries and resulting damages, thereby reducing or eliminating liability on its part.”91 On the other hand, Vitro and Michael vigorously argued that McIntyre “abolished joint and several liability and the incidental rights of contribution and indemnity.”92 The court was faced with the inevitable controversy that was hinted at in the McIntyre decision, that is, whether the doctrine of joint and several liability in an action for negligence is truly obsolete in Tennessee.93

[W]here the separate, independent negligent acts of more than one tortfeasor combine to cause a single, indivisible injury, each tortfeasor will be liable only for that proportion of the damages attributable to its fault. As to those tortfeasors, liability is not joint and several but several only, even though two or more tortfeasors are joined in the same action.96

However, because the case was commenced prior to the McIntyre decision, the court determined that fairness required contribution in this transition case, accomplishing the same equitable results that would have been accomplished if the case had arisen after McIntyre.97

for the purpose of determining and allocating fault.”100 In applying this newly formulated rule to the facts, the Owens court found that the liability of Vitro and Michael “shall constitute a single share.”101 The court further held that “third-party defendants will be held jointly and severally liable as to the third-party plaintiff, with principles of contribution and indemnity applying to determine the ultimate division of liability among the strictly liable defendants.”102 When measuring the fault of these defendants as a single unit, the Owens court instructed that this determination be made by analyzing “the injury caused by the defective or unreasonably dangerous product.”103

negligence.”107 Last, “if [the] defendants who can be held jointly and severally liable on a claim of strict liability are also charged with negligence, as [in Owens], their liability on the negligence charge will be as separate, independent tortfeasors, and their liability on the negligence charge will be several only.””8 The Owens court, after application of these principles to the facts, summarized its holding as follows:

[O]n the charge of strict liability in tort, the liability of Vitro and Michael to Truckstops is joint and several, but only to that portion of the total liability that is attributable to them as a single unit or share, under comparative fault principles. On the charge of negligence, the liability of each is several and in proportion to the damage attributable to its negligence.109

damages in an action for breach of warranty “will be determined according to the principles of comparative fault hereinabove discussed.”113 This statement, as it turns out, is incredibly vague, because it does not make clear which portion of the opinion it refers to and does not offer a decision as to whether liability is joint and several or several only in actions for breach of warranty. For interpretation and analysis of this statement see infra Part V.

D. Available Causes of Action Under Tennessee Products Liability Law and Its Relationship with the Doctrine of Comparative Fault After Owens and Whitehead

1. Negligence

As mentioned previously, a plaintiff may proceed in a products liability case on a negligence theory.114 After McIntyre, however, “any products liability plaintiff who proceeds on a negligence theory in a products case will no longer be barred from recovery unless the plaintiffs fault is fifty percent or more.”115 Further, the Owens court held that liability is several only for the percentage of damages caused by its negligence.116

2. Breach of Implied Warranty of Merchantability

Owens, in which the court held that the defense of comparative fault could be used as a defense to a breach of warranty claim,117 but neglected to mention whether such liability was joint and several or several only.118 Another question the Owens court left unanswered in the breach of warranty realm is whether comparative fault may be used as a defense in an action for breach of express warranty or breach of warranty of fitness for a particular purpose. At least one commentator, however, has speculated that “it is likely that comparative fault will apply in those cases as well[,]” citing to the language of the Fiske opinion which made clear that liability should not hinge on semantical distinctions, but rather on the defendant’s culpability.119

3. Strict Liability

severally liable in cases arising under comparative fault.”124

IV. POLICY AND CONCEPTUAL ISSUES

A. Advantages and Disadvantages of the Application of Comparative Fault to Products Liability Actions

The advantages of applying comparative fault principles to products liability actions are numerous, but it is unclear which side benefits the most. On one side of the coin, it seems as if the defense bar was greatly benefited because any fault of the plaintiff reduces the plaintiffs recovery.125 On the other hand, however, plaintiffs also benefit in situations in which the plaintiffs actions could be deemed an assumption of the risk, thus completely barring recovery.126 Even so, plaintiffs also will suffer from the application of comparative fault to products actions when “the plaintiff has not assumed the risk but has failed to meet a standard of reasonable care in some sense.”127

B. Policy Considerations

1. Fairness

liability actions would also preserve strict liability’s goal of shifting the risk of defective products to manufacturers without holding manufacturers liable for injuries resulting from plaintiffs’ conduct.”130 In short, the application of the doctrine is fair because plaintiffs are forced to accept reduced damages as a result of their own fault, but, at the same time, a plaintiff who has a relatively low percentage of fault is not barred completely from recovery.131 One can hardly argue that this is not an equitable result.

2. Consistency

The application of comparative fault to all products liability theories will undoubtedly simplify the already complex products liability litigation process in that the consistent application of the doctrine will help avoid semantical pleading and avoidance of certain theories.

V. ARGUMENT FOR THE APPLICATON OF COMPARATIVE FAULT TO ACTIONS FOR BREACH OF THE IMPLIED WARRANTY OF MERCHANTABILITY

which portion of the opinion the Owens court is referring. In fact, the Owens court found that liability among defendants for negligence is several only,134 but, on the other hand, is joint and several in the area of strict liability in tort.135 This Note proposes that the proper outcome of this unsettled area of Tennessee law is that the apportionment of liability among tortfeasors in a breach of implied warranty of merchantability case is several only, and hinges directly on fault.

In consideration of the basic policy principles of fairness and consistency, the Tennessee Supreme Court, in the next appropriate case, should find that liability for breach of the implied warranty of merchantability is several only. Such an outcome follows the doctrine of comparative fault’s true purpose of fairness through the close linking of liability and fault. An opposite holding would result in an outcome contrary to the purpose of the doctrine of comparative fault. In sum, a ruling holding the defendants jointly and severally liable could result in the liability of a no-fault defendant for injuries incurred by the plaintiff as a result of defects or dangers over which the no-fault defendant had no control.

JAMES BRANDON McWHERTER*

* Notes Editor, The University of Memphis Law Review 2000-01; J.D., 2001, cum laude, The University of Memphis, Cecil C. Humphreys School of Law; B.S.B.A., cum laude, Union University, 1998. Mr. McWherter is presently practicing in Jackson, Tennessee with the Law Firm of Spragins, Barnett, Cobb & Butler, PLC.

Special thanks to University of Memphis Law Professor Daniel Wanat and Attorney Todd Fulks, whose advice and thoughtful suggestions helped mold this Note into its present state, and also to Attorney Charles M. Purcell, whose comments played an integral role in the formulation of the author’s opinion set forth in the Argument section of this piece.

Copyright University of Memphis Winter 2002

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