Allegedly Ambiguous Warning Fails to Insulate Manufacturer from Design Defect Claims

In a recent indemnity action brought by a residential care facility for the severely developmentally disabled against a plumbing company and a mixing valve manufacturer, the U.S. District Court for the Northern District of California granted in part and denied in part a manufacturer’s motion for summary judgment on the plaintiff’s manufacturing and design defect claims. Res-Care, Inc. v. Roto-Rooter Servs. Co., — F. Supp.2d —, No. C-09-03856, 2010 WL 4367219 (N.D. Cal. Oct. 28, 2010). The plaintiff commenced the action after settling a lawsuit for $8.5 million with the conservator of one of its residents who was badly scalded during a shower at the plaintiff’s facility.

Defendant, Leonard Valve Company (“Leonard”), manufactured a Leonard Valve Model 110 tempering valve (“the valve”) that was attached to the water heater at the plaintiff’s facility. A warning label placed in the product catalog and affixed to the valve itself indicated that the valve was not to be used for “direct showering and bathing applications,” should not be considered an “anti-scald device,” and should be inspected every six to twelve months. Leonard designed the valve in the 1950′s, and it had never been certified to meet any industry standards. The plaintiff was unsure of the age of the valve, but estimated that it had been installed in 1995. At any rate, the valve was visibly present and attached to the showering line when a plumber replaced the hot water heater at the plaintiff’s facility in 2004, approximately one week prior to the scalding. Following the accident, the valve was found to be corroded and likely inoperable for at least two months.

While the Court began its opinion by ruling in favor of Leonard on the plaintiff’s manufacturing defect claim citing a lack of evidence that the valve was not installed as an anti-scald device, Leonard’s fortunes quickly deteriorated. Despite Leonard’s argument that its warnings reduced the likelihood of injury and the fact that the valve had not been inspected for nearly ten years (contrary to the valve’s specific instructions to do so every six to twelve months), the Court held there to be a triable issue of fact as to the plaintiff’s design defect claim finding little evidence to show that the benefits of the Model 110 valve design outweighed the risk of danger.

Further, the Court held that there was at least a triable issue of fact as to whether the warning attached to the valve was ambiguous. The plaintiff argued that the phrase “direct showering or bathing application” was ambiguous by presenting evidence that the experienced plumber was unable to decipher the meaning of the phrase. While it could be argued that the definition of “bath” could encompass anything from a simple handwashing to a complex soak in the tub, it is interesting that the Court and the experienced plumber could assign an ambiguous meaning to the phrase “direct showering.” Apparently, the Court was aware of a line of cases assigning ambiguous meanings to unambiguous terms which the counsel for Leonard was not privy.

Had Leonard been aware of the Court’s opinion on the adequacy of its warning label, perhaps it would not have insisted on further relying upon it in defense of its argument for summary judgment on the plaintiff’s negligent design claim. Unfortunately for Leonard, the Court, in denying Leonard’s motion, held that warnings are not relevant in determining whether a manufacturer breached a duty to design a safe product and relied instead on the evidence that Leonard never considered an alternative design and failed to test to industry standards.

Lost in this discussion is the fact that the plaintiff not only failed to maintain the valve, contrary to Leonard’s instructions, but also knew at least five days prior to the incident that the water temperature was wildly fluctuating and still elected to place a severely developmentally disabled resident into the shower. This case demonstrates that despite instructions on the proper use of a product that may appear clear and unambiguous (at least to the average products liability legal blog contributor), a manufacturer can never be entirely certain that its product is not going to be misused by even the most “sophisticated” consumer.

What In The Name Of Subrogation, Equitable Indemnification and Contribution Is Going On Here?

Often, when talking to clients, a practitioner will interchangeably use words like “subrogation,” “contribution,” or “indemnification” to console a client about a loss that they are facing with a pending lawsuit or claim. However, these words are not as synonymous as some think they are. Although each term stands for the proposition of “don’t worry, we’ll get somebody else to help pay for this,” courts will carefully scrutinize whether each claim is viable in a particular situation.

Consider the recent decision in White Elec. Servs., Inc. v. Franke Food Servs., No. 09-CV-0504-CVE-PJC, 2010 WL 1542575 (N.D. Okla. Apr. 15, 2010). The case arose from an underlying lawsuit brought by Sarah Austin against an electrical contractor, White Electrical Services, Inc. Austin alleged that she received an electrical shock when she attempted to plug in a food preparation table while working at McDonald’s. Id. at *1. White settled with Ms. Austin and then brought suit against Franke, the alleged manufacturer of the food preparation table. Id.

Franke was not a party to the underlying lawsuit filed by Ms. Austin. Id. White alleged that the table was defective and that the table caused Ms. Austin’s injuries. As such, White sought to recover all funds paid to Ms. Austin from Franke. White asserted multiple claims against Franke including products liability, contractual indemnity, subrogation, equitable indemnity and contribution. Id. at *2. White apparently waived its claims of product and contractual claims. The court found that since White had not used the term “subrogation” in its complaint, it did not assert a subrogation claim. Id. When dealing with the claim of equitable indemnity, the court’s analysis was quite sound. That is, the court found that the right to indemnity is based upon a legal relationship between the parties. White asserted that since Franke was strictly liable to Austin, it was entitled to indemnity. The court disagreed and stated that in a products situation, a distributor may bring a claim for indemnification against the manufacturer of a defective product based upon the manufacturer’s duty to the distributor. Id. In this case, White was not a seller of the allegedly defective table. White was not in the chain of distribution whatsoever. The court held that a products liability theory does not supply the required legal relationship between White and Franke. Id. As such, White’s claim for equitable indemnification failed as a matter of law.

Finally, the court analyzed White’s claim for contribution and found that contribution “represents a sharing of joint and several liability by providing for proportional reimbursement from other parties who are liable to the plaintiff.” Id. at *3. Since there was at least a possibility that both White and Franke could have been jointly and severally liable to Ms. Austin, the court allowed for White’s contribution claim to go forward. The moral of this case is that practitioners must exercise caution when using seemingly synonymous terms in any document filed with the court.