COA: Product Modification By A Non-Party Is Not A Defense In Products Liability Suits

Today the COA held that the defense of modification of a product is not available in a products liability suit where the person who modified the product was not a party to the suit at the time of trial. The case is Stark v. Ford Motor Co.

Mr. and Mrs. Starks and their daughter Cheyenne filed suit against Ford seeking damages for injuries to Cheyenne caused by an allegedly defective seatbelt. Ford asserted a defense of "Alteration or Modification of Product" pursuant to N.C. Gen. Stat. § 99B-3 and presented evidence at trial that the product had been modified because Cheyenne was wearing the seatbelt with the shoulder portion behind her back.

The COA first held that because Cheyenne was five years old at the time of the accident she was legally incapable of modifying or altering the product under N.C. Gen. Stat. § 99B-3. Ford also claimed the seatbelt modification was made by Mr. Stark, who was not a party to the action. The COA held that because Mr. and Mrs. Stark were not parties to the action at the time of trial, there was no "alteration or modification of the product by a party other than the manufacturer seller that occurred after the product left the control of such manufacturer," and Ford could not utilize the § 99B-3 defense.

Judge Wynn concurred, but wrote separately to explain that in negligence law it does not matter if a third intervening person is a party to the action- "what matters is that the person’s actions constitute intervening negligence insulating the defendant from liability." He also noted that other states do not make any distinctions regarding the identity of the modifier, and that it did not make sense that a manufacturer should be held liable for injuries resulting from a modified product just because the modifier has not been joined in the action. Judge Wynn concluded, however, that the language of N.C. Gen. Stat. § 99B-3 regarding product modifiers was clear here, and did not insulate Ford from liability.

COA Opinions

The COA filed opinions today, including 12 civil published ones. More on these soon.

COA Primary Results

You can see the numbers here. It'll be Calabria v. Gray and Elmore v. Walker.

COA: Chapter 75 Is Not a Penal Statute for Purposes of Determining Venue

Today the COA held that Chapter 75 does not constitute a penal statute for purposes of determining proper venue under N.C. Gen. Stat. § 1-77(1). The case is Caldwell, et al v. Smith, et al.

Plaintiffs filed suit against Defendants, alleging, among other things, unfair and deceptive trade practices and fraud. Plaintiffs alleged in their Complaint that they were citizens of Indiana but were formerly residents of Dare County. They also alleged that Defendant Sunshield Coatings ("Sunshield") was located in Rutherford County, and did not make any claims concerning the residency of individual defendants. Plaintiffs also alleged that the cause of action arose in Dare County. Defendants moved for change of venue on the grounds that none of the parties are residents of Dare County. Defendants included an affidavit from one of the individual defendants stating that the defendants did not live in Dare County and that Sunshield's principal place of business was Rutherford County.

The COA held that the motion for change of venue should be granted because Plaintiffs' Complaint did not fit into the statutory requirements for filing suit "where the cause of action arose," which would be the only option for proper venue in Dare County since none of the parties resided in that county. N.C. Gen. Stat. § 1-77(1) provides that venue is proper in the county where the cause of action arose where a party is seeking recovery of a penalty or forfeiture, and Plaintiffs claimed that their Complaint was properly filed in Dare County because the action arose there and Plaintiffs sought penalties for unfair and deceptive trade practices. The COA held that Chapter 75 is "not a penal statute" with the "sole purpose of punishment," and thus Plaintiffs' suit did not fit under N.C. Gen. Stat. § 1-77(1).

The COA further noted that aside from the statutory interpretation of "penalty," venue is determined at the time of the filing of the Complaint, and no party to the suit resided in Dare County at the time of filing. The COA remanded the case for removal to the proper county.

COA: Application for Appointment of Arbitrator Is An "Action" for Purposes of Determining Venue

Today the COA held that an Application for Appointment of Arbitrators is an "action" under the NC venue statute, and that consent to a certain venue for arbitration does not constitute consent to that same venue for all proceedings related to the arbitration. The case is Pay Tel Communications v. Caldwell Cty.

Paytel provided telecommunication/phone services to prisoners. It entered into an agreement with Caldwell County (the "County") to provide telecommunication/phone services to its prisoners. An original agreement and an extension of the agreement were each signed by a County Sheriff. The County cancelled the agreement extension, and Plaintiff claimed that the County was in breach. The County denied that the two sheriffs were its agents.

The agreement extension included an arbitration clause providing that disputes be resolved at the Private Adjudication Center, an organization affiliated with Duke Law School. It also provided that "Venue for such arbitration shall be Raleigh, North Carolina unless otherwise agreed by the parties." After the parties signed the agreement extension, the Adjudication Center ceased operating.

Paytel filed an Application for Appointment of Arbitrator (the "Application") in Wake County. The County claimed that Caldwell County was the appropriate venue, and Paytel claimed that Wake County was.

The COA first noted that the application filed by Paytel initiated an action under the NC Uniform Arbitration Act, similar to a civil complaint. Because the NCUAA does not contain a venue provision, the COA looked to N.C. Gen. Stat. § 1-77(2) to determine proper venue. That statute provides that an action against a public officer should be brought in the county in which the action arose. Paytel conceded that defendants were public officers and that the alleged breach of the extension occurred in Caldwell County, but claimed that the Application was not an "action" under the statute. The COA held that a civil action is “an ordinary proceeding in a court of justice, by which a party prosecutes another party for the enforcement or protection of a right, the redress or prevention of a wrong, or the punishment or prevention of a public offense," and that the Application fit this definition.

The COA further held that the provision of the extension stating that “Venue for such arbitration shall be Raleigh, North Carolina unless otherwise agreed by the parties" did not result in a waiver of venue by Defendants. The COA reasoned that consent to conduct arbitration in Wake County did not result in consent to venue for any judicial proceeding (such as an application for appointment of an arbitrator or a motion to compel arbitration), and Paytel provided no evidence that Defendants waived their right to venue. In fact, the COA noted, Defendants filed a motion to change venue contemporaneously with their answer to the Application, which preserved their right to contest venue.

Reminder: 2 COA Primaries On The Ballot Today

Don't forget that 2 NC COA primaries, for the Calabria and Elmore seats, are on the ballot today. You can read more here.

COA: Trial Judges Cannot Overrule Eachother, Even If On Different Motions

Today the COA confirmed that one superior court judge can't overrule another -- even if under the guise of a different motion with a different standard. The case is Adkins v. Stanly County Board of Education.

In Adkins, an assistant school superintendent brought a retaliation complaint claiming her employment contract was not renewed because of an earlier lawsuit. The defendants moved to dismiss plaintiffs' claims, and the trial court granted in part and denied in part that motion. A different superior court judge then granted summary judgment in the defendants' favor, and the plaintiff appealed.

The COA reversed the trial court's summary judgment. The COA recognized that motions to dismiss and motions for summary judgment are different animals with different standards. However, the same legal issue can -- and here, did -- some up at both. And to the extent that that happens, the later trial judge is bound by the ruling of the earlier one. In Adkins, the trial court ruled on the motion to dismiss that, as a matter of law, the plaintiff's earlier lawsuit touched on a matter of public concern. The trial court was bound by this legal determination at the summary judgment hearing and its ruling otherwise was error.

COA Opinions Today

Back from maternity leave and happy to be back on the blog. Today the COA filed opinions, including 6 civil published ones. We'll post on any important ones shortly.