JUDGE PUSHES FOR PRE-DELIBERATION DISCUSSIONS

“Jurors are rarely brilliant and rarely stupid, but they are treated as both at once.” Chief U.S. District Judge Warren Urbom, Toward Better Treatment of Jurors by Judges, 61 Nebraska Law Review 409 (1982).

In other words, “We expect jurors to remember and understand brilliantly the facts and the law of complex cases, but often we think them too stupid to be trusted to take notes, ask questions, and in other ways take an active part in the acquisition and management of the information necessary to render an informed verdict.” William W. Schwarzer, Reforming Jury Trials, 1990 U. Chi. Legal. F. 119, reprinted in 132 F.R.D. 575 (1991).

Recent research has prompted some judges to reject old notions about how to treat jurors.

In 2007, for example, when Rhoderick T. Flockhart was accused of distributing marijuana in Denver, Colorado, the trial judge told the attorneys that “the court allows the jury to discuss the case prior to the conclusion of the case, but will instruct them not to draw any conclusions about what the evidence shows.”

Defense counsel objected, but the judge instructed the jury:

“You will be able to discuss the case as you go along. However, even though you’ll hear in opening statements what the evidence is expected to show, you’ll not have heard all the evidence until the last witness is finished. So don’t draw any firm conclusions about what you’ve heard. Keep an open mind all the way through the trial and draw your conclusions only at the conclusion of the case.”

The Colorado Court of Appeals reversed Flockhart’s conviction, with Judge Steve Bernard vigorously dissenting from the majority’s analysis of pre-deliberation discussions.

“Within the last fifteen years,” Judge Bernard explained, “the model of treating jurors as passive spectators has been subject to significant criticism.”

“A large and significant body of social science research about how human beings process information and learn indicates that jurors are active decision makers, rather than the mythical blank slates who wait until the close of a trial to decide a verdict,” Judge Bernard recounted.

This accumulating body of compelling research prompted the Arizona Supreme Court to authorize pre-deliberation discussions in civil cases.

Rule 39(f) of the Arizona Rules of Civil Procedure says that jurors “shall be instructed that they will be permitted to discuss the evidence among themselves in the jury room during recesses from trial when all are present, as long as they reserve judgment about the outcome of the case until deliberations commence. Nothwithstanding the foregoing, the jurors’ discussion of the evidence among themselves during recesses may be limited or prohibited by the court for good cause.”

After Arizona adopted this rule, Judge Bernard noted, “three empirical follow-up studies all provided evidence that allowing jurors to engage in predeliberation discussions under this rule improved the trial process.”

“Allowing jurors to engage in predeliberation discussions provides palpable benefits,” Judge Bernard concluded. “Jurors understand the evidence better, they are less confused, and, in some circumstances, predeliberation discussions convince jurors to alter or reverse preliminary decisions about the case.” People v. Flockhart, 2009 WL 4981910 (Colo.App.) (December 24, 2009).

Here are highlights of Judge Bernard’s analysis (with omissions not noted in the text):

Jurors in the United States are passive spectators of a well-orchestrated jury trial presented by lawyers and judges. Jurors act as passive judges of what evidence the parties choose to present and which proof the law of evidence allows.

The earliest English juries were much different than present-day American juries. They played an active role in the trial process, often gathering evidence before trials began.

The present-day model of jurors as passive listeners who choose between the parties’ evidence is a product of a historical struggle, hundreds of years in duration, in which lawyers and judges sought to gain control over juries.

It is, therefore, not surprising that the fear of losing total control over the trial and fact-finding processes prompts too many lawyers and judges to reject even the most modest of proposals for jury reform.

However, within the last fifteen years, the model of treating jurors as passive spectators has been subject to significant criticism. Controversial acquittals, such as those in the O.J. Simpson and Rodney King cases, raised questions about the effect of bias on the criminal justice system, and spurred calls for jury reform.

It is not my intent to take any position on those well-known acquittals. Rather, my attention is drawn, for the purposes of this case, to certain observations that commentators made about the jury system in general in the wake of the calls for jury reform flowing from those verdicts. For example:

“Chief Judge Warren Urbom of the District of Nebraska has succinctly described the way we treat jurors: ‘Jurors are rarely brilliant and rarely stupid, but they are treated as both at once.’ We expect jurors to remember and understand brilliantly the facts and the law of complex cases, but often we think them too stupid to be trusted to take notes, ask questions, and in other ways take an active part in the acquisition and management of the information necessary to render an informed verdict.” William W. Schwarzer, Reforming Jury Trials, 1990 U. Chi. Legal. F. 119, reprinted in 132 F.R.D. 575, 590 (1991).

Social Science Research

The commentators urging jury reform considered substantial social science research that raised questions about whether the enforced passivity of American juries is productive.

For example, one observer commented that American juries are excessively passive, which “interferes with learning and reduces opportunities for jurors, individually and collectively, to perform to their potential as community representatives and decision makers in trials of criminal and civil cases.” B. Michael Dann, “Learning Lessons” and “Speaking Rights”: Creating Educated and Democratic Juries, 68 Ind. L.J. 1229, 1235 (Fall 1993).

Such interference with learning creates real problems. Obstacles to jury comprehension “produce trials which leave jurors floundering in a mass of disconnected and obscure evidence.” Schwarzer, 132 F.R.D. at 576.

Jurors confused by a lack of comprehension lose interest in the trial process. Dann, 68 Ind. L.J at 1241.

Concerns like these led reformers to a large and significant body of social science research about how human beings process information and learn. This research indicates that jurors are “active decision makers,” “rather than the mythical blank slates who wait until the close of a trial to decide a verdict.” Valerie P. Hans, Paula L. Hannaford & G. Thomas Munsterman, The Arizona Jury Reform Permitting Civil Jury Trial Discussions: The Views of Trial Participants, Judges, and Jurors, 32 U. Mich. J.L. Reform 349 (Winter 1999).

Indeed, “studies consistently disclose that ‘the juror is not a passive and altogether accurate encoder of information who suspends judgment until the end of the case.’ Behavioral research reveals that a ‘juror’s natural tendency is to actively process information as it is received as well as afterward, thus forming tentative judgments about evidence’ before deliberation.

“In a survey of criminal jurors, approximately 57% of the jurors stated they made up their mind prior to deliberations. In another study examining 783 civil and criminal jurors, 71% admitted they began deciding the case before retiring for deliberations. In fact, only a quarter of the jurors polled (26%) stated they retained an open mind throughout the trial and only began to reach a decision about the outcome of the case after deliberating with their colleagues.” Natasha K. Lakamp, Deliberating Juror Predeliberation Discussions: Should California Follow the Arizona Model?, 45 UCLA L.Rev. 845 (1998) (quoting Dann, 68 Ind. L.J. at 1263, and William H. Carlile, Power to the Jurors, Christian Sci. Monitor, Feb. 22, 1996).

“Further, critics of the passive juror model argue that it “flies in the face of what studies about adult learning have proven. The educational model of learning, in contrast to the legal model, has demonstrated conclusively that active learners are better learners. The educational model recognizes the reality that jurors bring with them their own frames of reference. The existence of these frames of reference underscores the need to have continuous feedback and the need to provide a legal frame of reference as early in the trial as possible.” Jacqueline A. Connor, Jury Reform: Notes on the Arizona Seminar, 1 J. Legal Advoc. & Prac. 25 (1999).

Implementing Reform in Civil Cases

“This compelling body of research prompted reforms. Arizona was the first state to act, appointing a commission to study the problem. The commission’s report, issued in 1994, stated that, according to this research, “limitation of all discussions among trial jurors and the accompanying assumption that jurors can and do suspend all judgments about the case are unnatural, unrealistic, mistaken and unwise.” Arizona Supreme Court Committee on More Effective Use of Juries, Jurors: The Power of 12 at 97 (1994).

To address this problem, the Arizona Supreme Court issued Ariz. R. Civ. P. 39(f), which states that, in civil cases, jurors

“shall be instructed that they will be permitted to discuss the evidence among themselves in the jury room during recesses from trial when all are present, as long as they reserve judgment about the outcome of the case until deliberations commence. Nothwithstanding the foregoing, the jurors’ discussion of the evidence among themselves during recesses may be limited or prohibited by the court for good cause.”

At least three empirical follow-up studies have been conducted, which all provided evidence that allowing jurors to engage in predeliberation discussions under this rule improved the trial process.

The first study, in 1996, surveyed Arizona trial court judges. The results indicated that the benefits of predeliberation discussions outweighed the concerns. Jurors were more alert and happy; they understood the case better; they reached verdicts quicker; and allowing predeliberation discussions did not seem to benefit one party over the other. Lakamp, 45 UCLA L.Rev. 845 at 871-73.

The second study sent surveys to jurors, judges, attorneys, and litigants who had participated in about 160 civil trials in 1997 and 1998. A high percentage of jurors and judges thought that jurors’ comprehension of the evidence improved, and that predeliberation discussions contributed to that improvement.

Further, about seventy percent of the judges did not think that allowing jurors to discuss the case before the presentation of evidence had been concluded resulted in the jurors reaching premature decisions about a verdict. Hans, 32 U. Mich. J.L. Reform at 367, 371-72.

The third study videotaped all juror discussions and deliberations in about fifty civil trials conducted between 1998 and 2002.

This study showed that deliberations were shorter; jurors understood expert testimony better; jurors were better able to clarify evidence and understand it accurately; the judge would have reached the same result as the jury in ninety percent of the cases; and, perhaps most important for the discussion here, there was no evidence that predeliberation discussions favored the plaintiff. Shari Seidman Diamond et al., Juror Discussions During Civil Trials: Studying an Arizona Innovation, 45 Ariz. L.Rev. 1, 62, 63-64, 71 (Spring 2003).

Colorado quickly followed Arizona’s lead. In 1996, our supreme court established the Committee on the Effective and Efficient Use of Juries in Colorado, which was tasked with studying the jury system here and recommending ways in which communication with jurors could be improved.

This process produced a series of reforms that became effective in our state on January 1, 1999. These included allowing jurors to take notes; providing them with trial notebooks; allowing them to ask questions of witnesses under the court’s careful supervision; and, in a pilot project in civil cases, allowing jurors to engage in predeliberation discussions. Rebecca L. Kourlis & John Leopold, Colorado Jury Reform, 29 Colo. Law. 21 (Feb.2000).

Surveys of jurors participating in the 53 civil jury trials involved in the project reported that 93% of the jurors thought that predeliberation discussions assisted them in understanding the evidence and avoiding confusion; and, although about 14% of the jurors reported that they thought discussions held during the trials encouraged jurors to reach a final decision before the trials’ end, 62% of the jurors emphatically disagreed with this contention. Id . at 22.

As a direct result of these conclusions, jurors in Colorado are now instructed about discussions during a civil trial:

“You may discuss the evidence during the trial, but only among yourselves and only in the jury room when all of you are present.

“You must not, individually or as a group, form final opinions about any fact or about the outcome of this case until after you have heard and considered all of the evidence, the closing arguments, and the rest of the instructions [the judge] will give you on the law. Keep an open mind during the trial. Form your final opinions only after you have discussed this case as a group in the jury room at the end of the trial.” CJI-Civ. 1:4 n. 2 (2000).

Predeliberation discussions promote, rather than discourage, group decision making.

If proper instructions are given, such discussions can deter jurors from locking in their positions, because the jurors remind one another of the need to follow the court’s instructions, and to keep an open mind until their deliberations begin.

Predeliberation discussions do not encourage premature judgments. Rather, such discussions may encourage jurors to keep their minds open.

Allowing jurors to engage in predeliberation discussions provides palpable benefits. Jurors understand the evidence better, they are less confused, and, in some circumstances, predeliberation discussions convince jurors to alter or reverse preliminary decisions about the case.

Research indicates that jurors often form opinions about the case and talk about it before final deliberations. Research further demonstrates that allowing predeliberation discussions can channel these normal human behavioral tendencies in a manner that improves the quality and fairness of deliberations.

As the Arizona committee that studied jury reform observed, research shows that the “limitation of all discussions among trial jurors and the accompanying assumption that jurors can and do suspend all judgments about the case are unnatural, unrealistic, mistaken and unwise.”

Deceased Patient’s Conduct Supported Inference That Doctor Failed to Provide Proper Warnings of Deadly Side Effects

Providing a classic illustration of the important distinction between permitted inference versus improper speculation, the Connecticut Appellate Court reversed a directed verdict for a primary care physician in an informed consent case where there was no direct evidence that the doctor failed to warn a deceased patient about the danger that an oral contraceptive could cause blood clots.

Forty-five year old Leeann Curran died from bilateral pulmonary emboli, caused by deep vein thrombosis, four-weeks after her primary care physician, Dr. Kroll, prescribed an oral contraceptive for menopausal symptoms.

Because Curran was dead, there was no direct evidence that the doctor failed to give Curran proper warnings about the danger of blood clots. Instead, the administrator of Curran’s estate relied on evidence that Curran began complaining of intense pain in her legs and groin; told her family that she did not know what could be causing the pain; and failed to seek medical help for the condition.

According to Dr. Kroll, though, she warned Curran about the danger that the oral contraceptive could cause an increased risk of deadly blood clots – and also told Curran that the symptoms to watch out for included pain in the legs. However, Curran’s medical chart did not say that Dr. Kroll provided these warnings.

Granting a defense request for a directed verdict, the trial judge concluded that “a failure to warn claim could not be based solely on an inference that might be drawn from the decedent’s failure to seek help.” Curran v. Kroll, 118 Conn.App. 401 (2009).

Here are highlights of the Appellate Court’s opinion (with omissions not noted in the quoted text):

Although it is the jury’s right to draw logical deductions and make reasonable inferences from the facts proven, it may not resort to mere conjecture and speculation.

In this case, in which the court directed a verdict after concluding that the plaintiff had failed to provide any evidence, either direct or circumstantial, from which the jury reasonably could have concluded that Dr. Kroll had breached the standard of care by failing to advise the decedent of the signs and symptoms associated with the risks of birth control pills, we need only determine whether the court properly concluded that such evidence was absent from the case.

We agree that there was no direct evidence that Dr. Kroll breached the standard of care; this was so because the person who could have provided such evidence was dead.

We disagree, however, that there was no circumstantial evidence that could have led to a reasonable inference if the jury had chosen to credit such evidence.

There is no distinction between direct and circumstantial evidence so far as probative force is concerned. In fact, circumstantial evidence may be more certain, satisfying and persuasive than direct evidence.

After thoroughly reviewing the record, we conclude that there was evidence to support a reasonable inference that Dr. Kroll had not advised the decedent in accordance with the proper standard of care.

Unlike Aristotelian and Thomistic logic, law does not demand metaphysical certainty in its proofs. In law, we recognize three principal proofs: beyond a reasonable doubt, which is the very high burden in a criminal case; clear and convincing evidence, required to prove fraud and certain other claims, which equates to a very high probability; and preponderance of the evidence, applied to civil claims generally, which means it is more probable than not. None of these varying proofs require absolute certainty.

To meet one’s burden of proof, evidence is necessary. This evidence comes in two forms, direct and circumstantial.

“The basic distinction between direct and circumstantial evidence is that in the former instance the witnesses testify directly of their own knowledge as to the main facts to be proved, while in the latter case proof is given of facts and circumstances from which the jury may infer other connected facts which reasonably follow, according to common experience.” 29 Am.Jur.2d 329, Evidence § 313 (1994).

Proof of a fact by the use of circumstantial evidence usually involves a two-step process. A fact is first established by direct evidence, which is ordinarily eyewitness or other direct testimony. That direct evidence can serve as a basis from which the jury infers another fact. Thus, the direct evidence may operate as circumstantial evidence from which a fact is inferred by the jury.

“When the necessity to resort to circumstantial evidence arises either from the nature of the inquiry or the failure of direct proof, considerable latitude is allowed in its reception.” 29 Am.Jur.2d 331, Evidence § 315 (2008).

“An inference is a factual conclusion that can rationally be drawn from other facts. If fact A rationally supports the conclusion that fact B is also true, then B may be inferred from A.

“The process of drawing inferences based on a rough assessment of probabilities is what makes indirect or circumstantial evidence relevant at trial. If the inference (fact B from fact A) is strong enough, then fact A is relevant to prove fact B.

“Inferences are by their nature permissive, not mandatory: although the fact proved rationally supports the conclusion the offering party hopes will be inferred, the factfinder is free to accept or reject the inference.” 1 C. Fishman, Jones on Evidence (1992) § 4:1.

Much has been written about the jury’s ability to draw inferences, but, as explained by Professor McCormick, “in few areas of the law have so many words been spoken by the courts with so little conviction.” 2 C. McCormick, Evidence (5th Ed.1999) § 338.

Just because a jury could, but is not required to, draw an inference does not mean that it is resorting to speculation.

“Inferences are based on common experience and probability. Reasonable inferences permit the jury to find the inferred fact without direct proof of that fact. Direct evidence of a fact or facts will often give rise to circumstance evidence of other fact or facts. Such inferences, if reasonable, permit the fact finder to find the inferred fact without direct proof of that fact.

“A trier is entitled to draw all reasonable and logical inferences based on the facts proved. Inferences should be based on probabilities, not possibilities, surmise, or conjecture. To state a truism, the only kind of inference the law recognizes is a reasonable one.

“Successive inferences are permissible if justified by the facts. Thus, one inference can be founded upon facts whose determination is the result of other inferences. The only question is whether the successive inferences are rationally justified by the facts.” C. Tait & E. Prescott, Connecticut Evidence (4th Ed.2008) § 4.3.1.

In this case, the court directed a verdict on the ground that a failure to warn claim could not be based solely on an inference drawn from the decedent’s failure to seek help.

Although we agree with such a statement, we conclude that there was other evidence from which such an inference reasonably could have been drawn.

The line between permissible inference and impermissible speculation is not always easy to discern. When we infer, we derive a conclusion from proven facts because such considerations as experience, or history, or science have demonstrated that there is a likely correlation between those facts and the conclusion.

If that correlation is sufficiently compelling, the inference is reasonable. But if the correlation between the facts and the conclusion is slight, or if a different conclusion is more closely correlated with the facts than the chosen conclusion, the inference is less reasonable.

At some point, the link between the facts and the conclusion becomes so tenuous that we call it speculation. When that point is reached is, frankly, a matter of judgment.

Viewing the evidence in the light most favorable to the plaintiff, we conclude the jury reasonably could have found that the decedent did not seek help from the medical community because she had no idea what was the cause of her severe leg pain; such an inference would have been reasonable in this case because the decedent had told her husband that she could not figure out why she was experiencing pain in her groin, and she had expressed to her mother that she had no idea what was the cause of her pain, and further, this puzzlement occurred one month after her office visit with Dr. Kroll.

The jury could have inferred that the reason the decedent had no idea what was the cause of her leg pain was because Dr. Kroll had not informed her adequately of the risks associated with birth control pills and had not explained fully the signs and symptoms associated with such risks, especially that the use of the pill increased the possibility of blood clots, that blood clots could be life threatening and that severe leg pain was a symptom associated with blood clots, which must be dealt with immediately.

In the present case, the evidence, viewed in the light most favorable to the plaintiff, reasonably could have led the jury to find that Dr. Kroll prescribed the birth control pill to the decedent slightly more than four weeks before the decedent’s death, and that Dr. Kroll made no notation that she had given the decedent a proper warning of the risks and the signs and symptoms associated with such risks.

When the decedent experienced severe leg pain over the course of a couple of days, she had no idea what was the cause of that pain.

Additionally, the jury could have found that persons generally seek to follow instructions of a medical nature concerning the serious symptoms associated with the side effects of medication.

These findings could have led the jury to the reasonable inference that Dr. Kroll, four weeks before the decedent’s death, had not discussed the signs and symptoms associated with the risks of birth control pills adequately with the decedent, because, if she had discussed them adequately, the decedent would have known that this might be the cause of her pain.

The decedent’s complete lack of knowledge and puzzlement as to the cause of her pain, combined with other evidence, reasonably could have led the jury to the inference that the decedent had not been informed adequately by Dr. Kroll.

Accordingly, we conclude that the court should not have directed a verdict in favor of the defendants but should have given the jury the opportunity to weigh this evidence and decide the issue.

EVEN WHEN USED CAR IS SOLD “AS IS,” DEALER HAS LIMITED DUTY TO INSPECT FOR DANGEROUS DEFECTS

When a used-car dealer sells a vehicle “as is,” thereby disclaiming contract warranties, do general principles of negligence law nevertheless call for imposing a duty of reasonable care on the dealer to inspect the vehicle for unreasonably dangerous defects?

“Most courts which have considered the issue have recognized a limited duty on the part of the dealer to inspect for patent safety defects existing at the time of sale,” the Nebraska Supreme Court recently noted in Wilke v. Woodhouse Ford, Inc., 278 Neb. 800 (2009).

As the Montana Supreme Court explained in 1980:

“When the ordinary person purchases a car ‘as is,’ he expects to have to perform certain repairs to keep the car in good condition. He does not expect to purchase a death trap. Public policy requires a used car dealer to inspect the cars he sells and to make sure they are in safe, working condition. This duty cannot be waived by the use of a magic talisman in the form of an ‘as is’ provision.” Kopischke v. First Continental Corp., 187 Mont. 471.

Applying general principles of negligence law in determining whether a used-car dealer owed a duty to inspect a vehicle before it was sold “as is,” the Nebraska Supreme Court in Wilke v. Woodhouse reasoned:

“There is a relatively great magnitude of risk of injury in the circumstance where an unknowing buyer drives off the dealer’s lot in a used vehicle which has a patent safety defect, such as defective brakes or steering.

“The dealer is better equipped than the purchaser to perceive such a defect before it causes harm. The nature of the risk is such that personal injury or death could result not only with respect to the purchaser of the defective vehicle, but to other members of the motoring public.

“The dealer has the earliest opportunity to discover and repair a patent safety defect in a used vehicle. An unknown safety defect existing at the time of sale poses foreseeable harm to the purchaser and the general public, and there exists a policy interest in requiring reasonable conduct on the part of the dealer to prevent such harm.

“We, therefore, hold that a commercial dealer of used vehicles intended for use on public streets and highways has a duty to conduct a reasonable inspection of the vehicle prior to sale in order to determine whether there are any patent defects existing at the time of sale which would make the vehicle unsafe for ordinary operation and, upon discovery of such a defect, to either repair it or warn a prospective purchaser of its existence.” Wilke v. Woodhouse Ford, Inc., 278 Neb. 800 (2009).

Here are highlights of the Nebraska Supreme Court’s opinion (with omissions not noted in the quoted text):

We have never before addressed whether a used-car dealer has a duty to its customers to inspect vehicles for safety defects before they are sold.

Most courts which have considered the issue have recognized a limited duty on the part of the dealer to inspect for patent safety defects existing at the time of sale.

For example, Minnesota courts have held that the seller of a used vehicle intended for use upon the public highways has a duty to the public using such highways to exercise reasonable care in supplying the purchaser with a vehicle which will not constitute a menace or source of danger, so that liability attaches to the seller for injuries which are the result of patent defects in the vehicle, or defects which could have been discovered in the exercise of reasonable care. Crothers by Crothers v. Cohen, 384 N.W.2d 562 (Minn.App.1986); Kothe v. Tysdale, 233 Minn. 163, 46 N.W.2d 233 (1951).

Ohio courts have held that even when a dealer sells a used vehicle “as is,” the dealer has a duty to exercise reasonable care in examining the vehicle to discover defects which would make the vehicle dangerous to users or those who might come in contact with them, and upon discovery, to correct those defects or at least give warning to the purchaser. Stamper v. Parr-Ruckman Home Town Motor Sales, 25 Ohio St.2d 1, 265 N.E.2d 785 (1971); Thrash v. U-Drive-It Co., 158 Ohio St. 465, 110 N.E.2d 419 (1953).

The Kentucky Court of Appeals has noted that used cars are more likely to be subject to mechanical defects than new vehicles and that the dealer is in a better position than the average consumer to “discover what defects might exist in any particular car to make it a menace to the public,” holding that “we are of the opinion it is not too harsh a rule to require these dealers to use reasonable care in inspecting used cars before resale to discover these defects, which the customer often cannot discover until too late.” Gaidry Motors v. Brannon, 268 S.W.2d 627, 629 (Ky.App.1954).

In Kopischke v. First Continental Corp., 187 Mont. 471 (1980), the Montana Supreme Court held that a used-car dealer had a duty to inspect a vehicle for safety defects prior to sale, notwithstanding the fact that the vehicle was sold “as is.” The court reasoned:

“When the ordinary person purchases a car ‘as is,’ he expects to have to perform certain repairs to keep the car in good condition. He does not expect to purchase a death trap. Public policy requires a used car dealer to inspect the cars he sells and to make sure they are in safe, working condition. This duty cannot be waived by the use of a magic talisman in the form of an ‘as is’ provision.

But courts which have recognized a duty on the part of used-car dealers to inspect for safety defects prior to sale have also emphasized that the duty is limited.

Courts have stated that used-car dealers are not insurers and therefore are not liable for latent defects in the vehicle.

Courts have limited the duty to inspect for patent defects affecting the minimum essentials for safe operation of the vehicle.

Dealers are not required to disassemble the vehicle to inspect for latent defects, and they are not responsible for the continuing safety of the vehicles they sell.

Applying our risk-utility test for the existence of a legal duty to use reasonable care, we conclude that there is a relatively great magnitude of risk of injury in the circumstance where an unknowing buyer drives off the dealer’s lot in a used vehicle which has a patent safety defect, such as defective brakes or steering.

The dealer is better equipped than the purchaser to perceive such a defect before it causes harm. The nature of the risk is such that personal injury or death could result not only with respect to the purchaser of the defective vehicle, but to other members of the motoring public.

The dealer has the earliest opportunity to discover and repair a patent safety defect in a used vehicle. An unknown safety defect existing at the time of sale poses foreseeable harm to the purchaser and the general public, and there exists a policy interest in requiring reasonable conduct on the part of the dealer to prevent such harm.

We, therefore, hold that a commercial dealer of used vehicles intended for use on public streets and highways has a duty to conduct a reasonable inspection of the vehicle prior to sale in order to determine whether there are any patent defects existing at the time of sale which would make the vehicle unsafe for ordinary operation and, upon discovery of such a defect, to either repair it or warn a prospective purchaser of its existence.

The dealer has no duty to disassemble the vehicle to discover latent defects or to anticipate the future development of safety defects which do not exist at the time of sale.

The tort duty we recognize today is not affected by a valid disclaimer or exclusion of U.C.C. warranties, because such contractual provisions do not absolve a seller from exercising reasonable care to prevent foreseeable harm.

Tort liability is not based upon representations or warranties. Rather, it is based upon a duty imposed by the law upon one who may foresee that his or her actions or failure to act may result in injury to others.

Abraham Lincoln’s Handwritten Complaint in Jasper Harris v. The Great Western Railroad (1854)

In the Circuit Court of Sangamon County
March term A.D. 1854

State of Illinois SS.
Sangamon County

Jasper Harris, plaintiff, complains of The Great Western Railroad Company, defendant, being in custody etc. of a plea of trespass on the case – For that whereas heretofore towit, on the ___ day of November, in the year of our Lord one thousand eight hundred and fifty three at the county of Scott, towit, at the county aforesaid, the said Railroad Company were possessed of a certain Railroad and were then and there possessed of and using thereon certain Locomotive-steam-engines, tanks, cars etc. and then and there had in their employment, as servant and engineer, managing and running one of their Locomotive steam engines with a tank and with and without cars attached, on their said Railroad, one ­ Edgar; and also said Railroad Company, then and there, had in their employment, as servant and conductor, in charge of the same Locomotive-steam-engine, thank and cars managed and run by said Edgar as engineer as aforesaid, one George Armstrong; and also said Railroad Company, then and there, had in their employment, as servant and brakeman, on and about the Locomotive-steam-engine, tank and cars, last aforesaid, the aforesaid plaintiff – And the plaintiff avers that it was, then and there, the duty of both said engineer and brakeman, severally, to obey the proper orders of said conductor, and then and there, was the duty of said Railroad Company by their engineer, whenever said Locomotive-steam-engine and whatever might be thereto attached, should be at rest, to not put the same in motion without the order of said conductor, not without giving a known signal of the intention to do so – Yet the said Railroad Company, on the day and year aforesaid and at the county aforesaid by their said engineer being then and there in their employment as aforesaid and in the prosecution of their lawful business aforesaid; and the said Locomotive-steam-engine, then and there being at rest, with said tank thereto attached, (and said plaintiff then and there being in the attempt to go aboard of said tank in obedience to the proper order of said conductor and without any fault on his
part) they, the said Railroad Company, by their said engineer, and without the order of said conductor, and without the giving of the signal aforesaid, put said engine and tank in motion, whereby said plaintiff was thrown down and his right foot, ankle, leg and thigh greatly torn, crushed and broken; so that thereby said plaintiff became and was sick, lame and disordered, and has so remained for a long space of time, towit for the period of four months; and also by means of which said wrong of said Railroad Company, amputation of his said right limb above the knee became and was necessary, and has actually been performed, and said limb has been wholly lost to said plaintiff; and other wrongs the said Railroad Company then and there did to the said plaintiff, and to his damage of ten thousand dollars and therefore he brings his suit etc.

Lincoln & Herndon, p.q.

If you want a digital, color copy of the complaint that Lincoln wrote for Jasper Harris, contact Cindy Stahler at stahler@hoeyfarina.com.

LINCOLN RIDES TO THE RESCUE OF INJURED RAILROADER

Abraham Lincoln’s work as a lawyer for railroads is well known. But back in 1854, Lincoln sued Great Western Railroad Company for a severely injured brakeman named Jasper Harris.

According a three-page complaint that is in Lincoln’s handwriting, Harris’ right leg was amputated above the knee because of an accident that was caused by the negligence of a fellow employee named George Armstrong.

Closing the complaint, Lincoln asked the court to give Harris $10,000 in compensation. That would be nearly two million dollars today.

Although the pleading was signed on behalf of Lincoln & Herndon, historians have verified that the handwriting belongs to Lincoln.

This was a tough case for any lawyer, even a legendary trial and appellate advocate like Lincoln.

The first problem was that the Federal Employers’ Liability Act did not exist in 1854, and Illinois still followed the harsh contributory negligence rule.

Making a bad situation worse, the Illinois Supreme Court adopted the notorious fellow-servant rule – barring employees from suing for injuries caused by co-workers – a few months after Lincoln sued Great Western. Honner v. Illinois Central Railroad, 15 Ill. 550 (1854).

We are not sure exactly happened in Harris vs. Great Western. The old records say the case was dismissed – at Harris’ request – before the Illinois Supreme Court adopted the fellow-servant rule.

Did Great Western settle to avoid having to face the formidable Lincoln in court? And did Lincoln shrewdly forecast that the Illinois Supreme Court was going to adopt the fellow-servant rule?

At least we now have a high-quality color copy of Lincoln’s pleading for Jasper Harris.

Although a black-and-white microfilmed copy of the Harris complaint is available through the Lincoln legal papers project, we tracked the original complaint to the Lincoln Collection in the Library of Congress, and received permission to obtain a high-quality, digitized color-copy of pleading.

If you want a copy of the complaint that Lincoln wrote for Jasper Harris, contact Cindy Stahler at stahler@hoeyfarina.com.

IOWA SUPREME COURT ADOPTS THE DUTY ANALYSIS ADVOCATED BY THE RESTATEMENT (THIRD) OF TORTS

Swerving to avoid an unanchored trampoline that sailed onto a gravel road during a thunderstorm, Charles Thompson’s car ran into a ditch and rolled several times. But when Thompson sued the nearby homeowners, James Kaczinski and Michelle Lockwood, for negligence in not properly securing the recreational equipment, the trial judge – using traditional foreseeability analysis – ruled that the defendants owed no duty to Thompson.

Adopting § 7 of the Restatement (Third) of Torts, the Iowa Supreme Court reversed.

The new Restatement expressly rejects using foreseeability as a factor in reaching a no-duty determination negligence cases. Instead, § 7(a) of the new Restatement says:

“An actor ordinarily has a duty to exercise reasonable care when the actor’s conduct creates a risk of physical harm.”

With § 7(a), the Iowa Supreme Court explained, “in most cases involving physical harm, courts need not concern themselves with the existence or content of this ordinary duty, but instead may proceed directly to the elements of liability set forth in section 6.”

According to § 6, “An actor whose negligence is a factual cause of physical harm is subject to liability for any such harm within the scope of liability, unless the court determines that the ordinary duty of reasonable care is inapplicable.”

This, the Iowa Supreme Court recounted, means that:

“The general duty of reasonable care will apply in most cases, and thus courts can rely directly on § 6 and need not refer to duty on a case-by-case basis.

“However, in exceptional cases, the general duty to exercise reasonable care can be displaced or modified. An exceptional case is one in which an articulated countervailing principle or policy warrants denying or limiting liability in a particular class of cases.

“In such an exceptional case, when the court rules as a matter of law that no duty is owed by actors in a category of cases, the ruling should be explained and justified based on articulated policies or principles that justify exempting such actors from liability or modifying the ordinary duty of reasonable care.”

Turning to the question of foreseeability, the Iowa Supreme Court continued:

“The drafters acknowledge that courts have frequently used foreseeability in no-duty determinations, but have now explicitly disapproved the practice in the Restatement (Third) and limited no-duty rulings to ‘articulated policy or principle in order to facilitate more transparent explanations of the reasons for a no-duty ruling and to protect the traditional function of the jury as factfinder.’” Thompson v. Kaczinski, 2009 WL 3786631 (Iowa) (November 13, 2009).

Here are highlights of the Iowa Supreme Court’s opinion on the modern approach to no-duty analysis (with omissions not noted in the quoted text):

Our cases have suggested three factors should be considered in determining whether a duty to exercise reasonable care exists: (1) the relationship between the parties, (2) reasonable foreseeability of harm to the person who is injured, and (3) public policy considerations.

Our previous decisions have characterized the proposition that the relationship giving rise to a duty of care must be premised on the foreseeability of harm to the injured person as a fundamental rule of negligence law.

The factors have not been viewed as three distinct and necessary elements, but rather as considerations employed in a balancing process.

In the end, whether a duty exists is a policy decision based upon all relevant considerations that guide us to conclude a particular person is entitled to be protected from a particular type of harm.

The role of foreseeability of risk in the assessment of duty in negligence actions has recently been revisited by drafters of the Restatement (Third) of Torts.

“An actor ordinarily has a duty to exercise reasonable care when the actor’s conduct creates a risk of physical harm.” Restatement (Third) of Torts: Liab. for Physical Harm § 7(a) (2005).

Thus, in most cases involving physical harm, courts “need not concern themselves with the existence or content of this ordinary duty,” but instead may proceed directly to the elements of liability set forth in section 6. § 6 cmt. f.

The general duty of reasonable care will apply in most cases, and thus courts “can rely directly on § 6 and need not refer to duty on a case-by-case basis.” § 7 cmt. a.

However, in exceptional cases, the general duty to exercise reasonable care can be displaced or modified. Id. § 6 cmt. f, at 81-82. An exceptional case is one in which “an articulated countervailing principle or policy warrants denying or limiting liability in a particular class of cases.” Id. § 7(b), at 90.

In such an exceptional case, when the court rules as a matter of law that no duty is owed by actors in a category of cases, the ruling “should be explained and justified based on articulated policies or principles that justify exempting [such] actors from liability or modifying the ordinary duty of reasonable care.” § 7 cmt. j.

Reasons of policy and principle justifying a departure from the general duty to exercise reasonable care do not depend on the foreseeability of harm based on the specific facts of a case. Id.

“A lack of foreseeable risk in a specific case may be a basis for a no-breach determination, but such a ruling is not a no-duty determination.” Id.

The assessment of the foreseeability of a risk is allocated by the Restatement (Third) to the fact finder, to be considered when the jury decides if the defendant failed to exercise reasonable care.

“Foreseeable risk is an element in the determination of negligence. In order to determine whether appropriate care was exercised, the factfinder must assess the foreseeable risk at the time of the defendant’s alleged negligence.

“The extent of foreseeable risk depends on the specific facts of the case and cannot be usefully assessed for a category of cases; small changes in the facts may make a dramatic change in how much risk is foreseeable. Courts should leave such determinations to juries unless no reasonable person could differ on the matter.” Id. at 97-98.

The drafters acknowledge that courts have frequently used foreseeability in no-duty determinations, but have now explicitly disapproved the practice in the Restatement (Third) and limited no-duty rulings to “articulated policy or principle in order to facilitate more transparent explanations of the reasons for a no-duty ruling and to protect the traditional function of the jury as factfinder.” Id. at 98-99.

We find the drafters’ clarification of the duty analysis in the Restatement (Third) compelling, and we now, therefore, adopt it.

The district court clearly considered foreseeability in concluding the defendants owed no duty in this case. When the consideration of foreseeability is removed from the determination of duty, as we now hold it should be, there remains the question of whether a principle or strong policy consideration justifies the exemption of Kaczinski and Lockwood – as part of a class of defendants – from the duty to exercise reasonable care.

We conclude no such principle or policy consideration exempts property owners from a duty to exercise reasonable care to avoid the placement of obstructions on a roadway. In fact, we have previously noted the public’s interest in ensuring roadways are safe and clear of dangerous obstructions for travelers:

“While an abutting landowner is not liable with respect to highway hazards over which he has no control, he is under an obligation to use reasonable care to keep his premises in such condition as not to create hazards in the adjoining highway. He must conduct operations on his land in such a manner as not to injure the highway traveler.” Weber v. Madison, 251 N.W.2d 523 (Iowa 1977).

Accordingly, we conclude the district court erred in determining Kaczinski and Lockwood owed no common law duty under the circumstances presented here.

COURT ADOPTS “RESTATEMENT OF PROPERTY” AS EXCEPTION TO “ECONOMIC LOSS RULE” AGAINST CONDO DEVELOPER

Section 6.20 of the Restatement (Third) of Property: Servitudes (2000), lists a series of duties that a condominium developer owes to a condo association and its members.

According to Section 6.20:

“Until the developer relinquishes control of the association to the members, the developer owes the following duties to the association and its members:

“(1) to use reasonable care and prudence in managing and maintaining the common property;

“(2) to establish a sound fiscal basis for the association by imposing and collecting assessments and establishing reserves for the maintenance and replacement of common property;

“(3) to disclose the amount by which the developer is providing or subsidizing services that the association is or will be obligated to provide;

“(4) to maintain records and to account for the financial affairs of the association from its inception;

“(5) to comply with and enforce the terms of the governing documents, including design controls, land-use restrictions, and the payment of assessments;

“(6) to disclose all material facts and circumstances affecting the condition of the property that the association is responsible for maintaining; and

“(7) to disclose all material facts and circumstances affecting the financial condition of the association, including the interest of the developer and the developer's affiliates in any contract, lease, or other agreement entered into by the association.”

In a case where a condo association pursued tort claims against a developer for water seepage and building subsidence – and the developer argued the claims were barred by the economic loss doctrine – the Utah Supreme Court adopted Section 6.20’s “limited fiduciary duty” as the source of an independent duty that was “outside the scope of the economic loss rule.” Davencourt at Pilgrims Landing Homeowners Ass’n v. Davencourt at Pilgrims Landing, LC, 2009 WL 3151197 (Utah) (October 2, 2009).

Davencourt at Pilgrims Landing, LC – the developer of a planned unit development in Utah – was managed by its member, LeGrand Woolstenhulme.

The developer, acting through Woolstenhulme, initially controlled the Davencourt at Pilgrim’s Landing Townhome Owners’ Association.

Several years after the association was turned over to the purchasers, water began seeping into the buildings.

According to the association, the developer had been warned, before construction, that the project was on collapsible subsurface soils that would subside if not properly prepared.

Post-construction subsidence allegedly caused sever damage to the structures, and the association sued the developer and Woolstenhulme, among others.

The claims against the developer and Woolstenhulme included negligence, negligent misrepresentation, misrepresentation and nondisclosure, and breach of fiduciary duties.

Invoking the economic loss rule, the trial judge dismissed these claims – but the Utah Supreme Court reversed. Here are highlights of the Supreme Court’s analysis (with omissions not noted in the text):

The economic loss rule is a judicially created doctrine that marks the fundamental boundary between contract law, which protects expectancy interests created through agreement between the parties, and tort law, which protects individuals and their property from physical harm by imposing a duty of reasonable care.

Absent physical property damage (i.e., damage to other property) or bodily injury, this doctrine prohibits recovery of economic losses. Economic losses are defined as:

Damages for inadequate value, costs of repair and replacement of the defective product, or consequent loss of profits – without any claim of personal injury or damage to other property – as well as the diminution in the value of the product because it is inferior in quality and does not work for the general purposes for which it was manufactured and sold.

Where the economic loss rule is at issue, the initial inquiry becomes whether a duty exists independent of any contractual obligations between the parties.

If we find that an independent duty exists under the law, the economic loss rule does not bar a tort claim because the claim is based on a recognized independent duty of care and thus does not fall within the scope of the rule.

The question of whether a duty exists is a question of law and involves the examination of the legal relationships between the parties, an analysis of the duties created by these relationships, and policy judgments applied to relationships.

The Limited Fiduciary Duty Owed by a Developer in Control of a Homeowner’s Association Falls Outside the Scope of the Economic Loss Rule

The Association argues that the district court erred where it ruled that the Developer and Woolstenhulme owed no duty or that “any duty the developer had to the homeowners association would essentially be to itself.”

The Association emphasizes that because the Developer and Woolstenhulme established and initially operated the Association, they owed the Association a fiduciary duty that lies outside the economic loss rule.

We agree to an extent with the Association.

We have yet to consider what, if any, duty a developer owes where it establishes and initially controls a homeowners association.

The Association urges us to impose a broad fiduciary duty under the Utah Revised Nonprofit Corporation Act. The Act requires directors and officers of a nonprofit corporation to discharge their duties in good faith, with the care of an ordinarily prudent person in a like position under similar circumstances and according to the best interests of the corporation.

While the Act may serve as a basis for imposing a broad fiduciary duty in a nonprofit setting, the inherent conflict that a developer faces in promoting and marketing property for a profit, while simultaneously ensuring the interests of a homeowners association and its members, causes us to look elsewhere.

The Restatement (Third) of Property offers guidance. It recognizes that a developer owes certain limited duties to an association and its members. Section 6.20 of the Restatement provides:

“Until the developer relinquishes control of the association to the members, the developer owes the following duties to the association and its members:

“(1) to use reasonable care and prudence in managing and maintaining the common property;

“(2) to establish a sound fiscal basis for the association by imposing and collecting assessments and establishing reserves for the maintenance and replacement of common property;

“(3) to disclose the amount by which the developer is providing or subsidizing services that the association is or will be obligated to provide;

“(4) to maintain records and to account for the financial affairs of the association from its inception;

“(5) to comply with and enforce the terms of the governing documents, including design controls, land-use restrictions, and the payment of assessments;

“(6) to disclose all material facts and circumstances affecting the condition of the property that the association is responsible for maintaining; and

“(7) to disclose all material facts and circumstances affecting the financial condition of the association, including the interest of the developer and the developer’s affiliates in any contract, lease, or other agreement entered into by the association.” Restatement (Third) of Property: Servitudes § 6.20 (2000).

We agree with this articulation of the duties owed in such a relationship and adopt this section of the Restatement.

We also embrace the Restatement’s concept of the fine line drawn between a typical fiduciary duty and this limited fiduciary duty.

This concept arises from the nature of the developer’s relationship with the association and its members. The Restatement expounds that “treating the developer and its appointees to the board as trustees overstates the fiduciary component of the relationship.” Id. cmt. a.

Given the developer’s self-interest, “the developer cannot be expected to act solely in the interests for the association and the homeowners. Conflicts of interest are inherent in the developer’s role while it retains control of the association.” Id.

While the developer thus should not be a fiduciary in the broadest sense, we are nonetheless convinced that the developer’s control in this nonprofit association requires certain interests of the members and the association be protected. This is achieved by the limited fiduciary duty.

In adopting this limited fiduciary duty, we recognize that it constitutes a newly-recognized independent duty of care in Utah. This recognition comports with our past treatment of independent duties. For example, we have imposed an independent duty on real estate agents, who, though not occupying a fiduciary relationship, are expected to be honest, ethical, and competent and have a direct relationship with purchasers.

The limited fiduciary duty between a developer and an association or its members also constitutes a type of special relationship that gives rise to an independent duty. See, e.g., Grynberg v. Agri Tech, Inc., 10 P.3d 1267, 1271 (Colo.2000) (citing to cases wherein fiduciary relationships, such as attorney-client relationship, physician-patient relationship, or insurer-insured relationship, “automatically triggered independent duties of care”).

And despite the recovery of what would otherwise be considered economic loss damages, claims arising under a fiduciary duty, similar to fraud claims, lie outside the scope of the economic loss rule.

Therefore, because a limited fiduciary duty constitutes an independent duty of care, tort claims brought under this duty fall outside the scope of the economic loss rule.

This limited fiduciary duty does not permit any and all tort claims to be brought. Instead, only those tort claims that stem from this independent, limited fiduciary duty are permitted.

Recovery by the Association is therefore restricted to the common areas.

The Association may only bring its claims for negligence and negligent misrepresentation in relation to the Developer’s and Woolstenhulme’s failures to use reasonable care and prudence in managing and maintaining the common property, to establish a sound fiscal basis for the Association by imposing and collecting assessments and establishing reserves for the maintenance and replacement of common property, and to disclose all material facts and circumstances affecting the condition of the property that the Association is responsible for maintaining.

Consequently, the claims of negligence per se and nuisance, which the Association predicated respectively on noncompliance with the building code and the intrusion of water, do not arise from the fiduciary duty and are thus precluded by the economic loss rule.

Accordingly, we hold that the Developer and Woolstenhulme owed an independent duty to the Association, and we reverse the district court on this point.

The Association may bring its claims for negligence and negligent misrepresentation against the Developer and Woolstenhulme insofar as the claims stem from the limited fiduciary duty owed.

On remand, certain factual questions regarding the scope of the fiduciary duty should be resolved, including when the Developer and Woolstenhulme relinquished control of the Association, an act that would mark the termination of the duty owed.