Alm v. Aluminum Co. of America

GONZALEZ, Justice,

dissenting.

While I agree that Alcoa owed a duty under the facts of this cause, I disagree with the court’s other holdings. I dissent because the court:

(1) addresses an inadequate warning theory for negligence liability which Aim neither pleaded nor submitted to the jury;

(2) reverses the burden of proof on an issue regarding the adequacy of the warning;

(3) usurps the court of appeals’ jurisdiction for reviewing the factual sufficiency of the evidence; and

(4) addresses the court of appeals’ standard for reviewing the factual sufficiency of the evidence even though Aim did not assert such a complaint by point of error.

Aim pleaded that Alcoa was liable under both strict liability and negligence theories, the trial court, however, disregarded the jury findings on strict liability; Aim did not appeal this action. Thus, this is a negligence case.

Liability in a negligence action requires: (1) a legal duty owed one person by another; (2) a breach of that duty; (3) that the breach was a proximate cause of the injury; and (4) actual injury. Colvin v. Red Steel Co., 682 S.W.2d 243, 245 (Tex.1984); W. KEETON, Et AL, PROSSER AND KEETON ON TORTS § 30, at 164-65 (5th ed. 1984). The threshold question of whether a duty exists in a given situation is a question of law for the court. Jackson v. Associated Developers of Lubbock, 581 S.W.2d 208, 212 (Tex.Civ.App.—Amarillo 1979, writ ref’d n.r.e.). See Abalos v. Oil Development Co., 544 S.W.2d 627, 631 (Tex.1976). Our question is whether, under negligence principles, Alcoa, a manufacturer who sold a “capping machine” to a bottler, had a duty to warn consumers of a potential danger resulting from misapplied bottle caps.

DUTY

Dean Prosser notes that “duty is a question of whether the defendant is under any obligation for the benefit of the particular plaintiff.” PROSSER & KEETON, supra at 356. Alcoa did not manufacture, distribute, or sell the injury producing product, the bottle cap. Alcoa did, however, manufacture and sell another product, the capping machine. Alcoa knew that the capping machine could, without proper maintenance and operation, create a risk of misapplied caps. Alcoa owed a duty to consumers to act as a reasonable prudent manufacturer would act under the same or similar circumstances regarding any foreseeable risk. See Colvin v. Red Steel Co., 682 S.W.2d 243, 245 (Tex.1984).

Alcoa’s position, as a remote manufacturer, is relevant to the duty it owed consumers because it affects the extent of Alcoa’s duty to warn and its ability to effectively distribute a warning. Significantly, Alcoa is the manufacturer of one product, the capping machine, while J.F.W. is the assembler of the injury producing product, the 7-Up bottle. Alcoa sold the capping *596 machine to J.F.W. whose employees operated and maintained the machine. Aim was injured by a misapplied bottle cap which resulted from allowing the capping machine to get out of adjustment. J.F.W., an intermediate assembler, controlled the entire bottling process.

The mere presence of J.F.W. as an intermediary does not necessarily relieve Alcoa, the original manufacturer, of its duty to warn. When the original manufacturer gives a warning to an intermediate manufacturer or assembler, however, it can be relieved of its liability for the intermediary’s failure to disseminate the warning. See Borel v. Fiberboard Paper Products Corp., 493 F.2d 1076, 1091 (5th Cir.1973), cert. denied, 419 U.S. 869 , 95 S.Ct. 127 , 42 L.Ed.2d 107 (1974). See also Martinez v. Dixie Carriers, Inc., 529 F.2d 457 (5th Cir.1976); Hill v. Wilmington Chem. Corp., 279 Minn. 336 , 156 N.W.2d 898 (1968); Powell v. Standard Brands Paint Co., 166 Cal.App.3d 357 , 212 Cal.Rptr. 395 (1985). In other words, when a manufacturer notifies an intermediary of the danger and the intermediary “proceeds to sell the product anyway, the manufacturer is insulated from liability.” Helene Curtis Indus, v. Pruitt, 385 F.2d 841, 862 (5th Cir.1967), cert. denied, 391 U.S. 913 , 88 S.Ct. 1806 , 20 L.Ed.2d 652 (1968). Thus, the party’s position in the chain of distribution is a factor to be considered in making the determination as to the existence of a duty to directly warn.

The Texas courts have applied a similar analysis in other duty to warn cases. For instance, an adequate warning to the physician relieves a drug manufacturer of its duty to warn the consumer-patient of hazards associated with its product. Gravis v. Parke-Davis & Co., 502 S.W.2d 863, 870 (Tex.Civ.App.—Corpus Christi 1973, writ ref’d n.r.e.). See also Bristol-Meyers Co. v. Gonzales, 561 S.W.2d 801 (Tex.1978); Crocker v. Winthrop Lab’s, Div. of Sterling Drug, 514 S.W.2d 429 (Tex.1974); Cooper v. Bowser, 610 S.W.2d 825, 830-31 (Tex.Civ.App.—Tyler 1980, no writ). Because a warning on the drug package may not be understood, the duty to warn lies with the party who is in a position to give an effective warning, the doctor. Similarly, because as Aim’s expert testified, the bottle was the optimum place for a warning, Alcoa’s position as a remote manufacturer made it difficult for Alcoa to give an effective warning.

Another important consideration in determining the extent of Alcoa’s duty to consumers is that Alcoa never had physical control over the package or product which reached Aim. In this regard, this cause is analogous to cases involving a bulk supplier who sells a product to another manufacturer or distributor who in turn packages and sells a finished product to the public. In Jones v. Hittle Service, Inc., 219 Kan. 627 , 549 P.2d 1383, 1394 (1976) the court held that the propane gas manufacturer did not have a duty to warn the ultimate consumer where he sells to a distributor who is familiar with the final product’s dangerous propensities. The court notes that the manufacturer was unable to communicate an effective warning, by stating:

The wholesaler is seriously hampered in any attempt to communicate directly with the ultimate consumer. As pointed out in Parkinson v. California Co., [ 255 F.2d 265 (10th Cir.1958) ], the bulk wholesaler has no way of telling who the ultimate purchaser might be, and has no package on which to endorse any warning. The best the wholesaler could do would be to furnish literature to his retailer and hope it was passed on — a chancy operation at best. We fail to see how this procedure improves upon a situation where the wholesaler deals with a knowledgeable retailer. In either event the whplesaler must depend on his vendee to pass on his message, and cannot do so himself.

Id. at 1394. See also Weekes v. Michigan Chrome & Chem. Co., 352 F.2d 603 (6th Cir.1965). Thus, the court held that the wholesaler’s duty to warn consumers only extended to warning the distributor who packages the product for consumption by the public.

*597 In acting as a reasonably prudent manufacturer would act under the same or similar circumstances regarding the foreseeable risk, Alcoa owed a duty to Aim which required warning J.F.W. of the risk to consumers by misapplied caps. Alcoa breached its duty to Aim if it did not warn, or did not adequately warn, J.F.W.

PRESERVATION OF INADEQUATE WARNING THEORY

Alcoa provided J.F.W. with a 1970 owner’s manual containing the following warning:

Leakage or closure blow-off at lower pressures can occur when the closure application is improper ...

Alcoa, then, did warn J.F.W. that caps could blow-off if the capping machine was not properly adjusted to prevent misapplication.

Alcoa still could have breached its duty to Aim if it inadequately warned J.F.W. Aim, however, failed to plead either that Alcoa was negligent for failing to warn J.F.W. or that Alcoa was negligent for failing to adequately warn J.F. W.' Further, Aim did not request an issue or instruction regarding the adequacy of the warning. The adequacy of the warning to J.F.W. is a question of fact. Bituminous Casualty Corp. v. Black & Decker Mfg. Co., 518 S.W.2d 868, 873-74 (Tex.Civ.App.Dallas 1976, writ ref’d n.r.e.). Aim, the party with the burden of establishing duty and breach of duty on a failure to warn theory, had the burden to plead and secure a jury finding that the warning to the intermediate assembler was inadequate. Tex.R.Civ.P. 279. Aim failed to do either.

Alcoa, on the other hand, properly objected to the submission of the broad negligence issue 1 which did not limit the jury’s consideration to acts pleaded and proved. 2 In Scott v. Atchinson, Topeka & Santa Fe Ry., we observed that:

*598 Under Rule 277, the trial court has the discretion to submit an issue broadly, including the combination in one issue of several acts or omissions which may be alleged to constitute negligence. However, when one or more pleaded acts or omissions are unsupported by evidence and the record contains evidence of other possible negligent acts or omissions which were not pleaded, failure to limit the broad ultimate fact issue to acts or omissions which were raised by both pleadings and proof violates Rule 277 and is error. In view of the wide variance between the pleadings and unpled facts and circumstances from which the jury could have inferred that the railroad was negligent, such error was reasonably calculated to and properly did cause the rendition of improper judgment.

572 S.W.2d at 273, 277 (Tex.1978).

Alcoa has shown a substantial variance. Aim pleaded allegations of negligence in the “design, testing, formulation, manufacture, preparation, inspection, instructions for the use of, warnings for the use of, servicing, sale, and distribution of the thirty-two (32) fluid ounce bottle, cap and contents of the ‘7-Up’ soft drink in question.” All these allegations are directed at the soft drink bottle. There is a total lack of any evidence in regard to most of these categories of negligence. While it can be argued that Aim’s pleadings were based on a failure to warn consumers theory, it is not at all accurate to assert that Aim pleaded that Alcoa failed to warn, or failed to adequately warn, J.F.W.

On the other hand, Aim raised matters before the jury which were not supported by his pleadings and which could be construed by the jury as evidence of fault. For instance, Aim’s expert testified about the potential for intermittent misapplication of the capping machine, even though the cap that injured Aim was misapplied because the machine was out of adjustment. Aim offered testimony by an “expert” on patent law that Alcoa could, through its licensing agreements, require others to include a warning on soft drink bottles. No support whatsoever in Aim’s pleadings for any supposed negligent failure to enforce such agreements. Another area of variance dealt with Alcoa’s “closure system.” Aim’s expert was allowed, over objection, to testify about alleged defects in the “Alcoa process enclosure.” Aim attempted to hold Alcoa liable for negligence in its “closure system.” Such allegation of negligence was clearly outside of its pleadings pertaining to the 7-Up bottle and cap. Finally, and most importantly, Aim, without pleadings, argued in trial that Alcoa failed to provide J.F.W. with an adequate warning. Yet, Aim failed to offer any evidence with respect to a proximate causal relationship; thereby implying negligence without any requisite proof on proximate cause.

Alcoa, then, complained of the lack of pleadings and proof in regard to whether Alcoa adequately warned J.F.W. The trial court overruled Alcoa’s objection. Alcoa preserved error on this point in its motion for judgment non obstante verdicto and in its points of error presented to the court of appeals.

The court of appeals did not address this point because it held that the warning was adequate. The court of appeals’ rationale was that because the jury affirmatively found that J.F.W. was negligent, the jury must have found that J.F.W. knew or should have known that its negligent act of misapplying the cap, or its own failure to warn, could foreseeably result in Aim’s personal injuries. The rationale continues that because it is well established that one does not have a duty to warn a party already aware of a danger, the jury must have found that Alcoa adequately warned J.F.W., or did not need to warn, since J.F.W. was already aware of the danger. Thus, the court of appeals overlooked Alcoa’s argument on the improper submission of the broad issue and arrived at a favorable result for Alcoa under its own analysis. The courts use of implied findings under Rule 279 was improper.

In our review of the judgment of the court of appeals, it is well settled that the *599 party who prevailed in the court of appeals is entitled to have his assignments, which were properly presented in that court, considered by this court insofar as may be necessary to determine what judgment should have been rendered by the court of appeals. McKelvy v. Barber, 381 S.W.2d 59, 64 (Tex.1964); Holland v. Nimitz, 111 Tex. 419 , 232 S.W. 298 (1921). Moreover, we are required to examine the brief of the prevailing party in the court of appeals to determine if there is another ground on which its judgment should be affirmed. Knutson v. Morton Foods, Inc., 603 S.W.2d 805, 809 (Tex.1980); Goodyear Tire & Rubber Co. v. Jefferson Constr. Co., 565 S.W.2d 916, 920 (Tex.1978); McKelvy, 381 S.W.2d at 64 . Alcoa properly raised points of error in regard to the submission of a broad negligence issue that allowed the jury to find negligence on theories which were not pleaded such as Alcoa’s alleged failure to adequately warn J.F.W.

Even though Aim did not plead that Alcoa failed to warn J.F.W. or that the warning was inadequate, and even though there was no assertion by Aim in the briefs or during oral argument that these issues were tried by consent, the court remands this cause to the court of appeals because “there is some evidence of an inadequate warning.” The court of appeals is then to determine whether the evidence is factually sufficient to support the jury’s “subsumed finding” that Alcoa provided an inadequate warning to J.F.W. Because the jury found Alcoa negligent, the court holds that it “must” have found that Alcoa inadequately warned J.F.W. Yet, the jury did not have to find that Alcoa inadequately warned J.F.W., as it may have found Alcoa negligent for one of the other three alleged acts upon which the court of appeals remanded to the trial court for a new trial. Defendants now have burden to negate all pleaded and proved acts of negligence and even all unpleaded and objected to acts of negligence.

The court does not give defendants any opportunity to complain of the submission broad issues. In doing so, the court ignores this court’s prior analysis in the Scott case. Basically, defendants are “thrown to the wolves” with regard to un-pleaded or unsubmitted grounds of recovery that are “included” in broadly submitted issues.

BURDEN OF PROOF

The court states: “Alcoa should be able to satisfy its duty to warn consumers by proving that its intermediary was adequately trained and warned, familiar with the propensities of the product, and capable of passing on a warning.” 717 S.W.2d at 592. This is an unprecedented reversal of the burden of proof. Aim brought the cause of action; Aim had the burden to show Alcoa’s warning to J.F.W. was inadequate. In an analogous products liability warning case, Technical Chem. Co. v. Jacobs, 480 S.W.2d 602 (Tex.1972), this court observed that:

In the words of Dean Keeton, when a product is defective due to inadequate labeling, “the aspect of the defendant’s conduct that made the sale of the product unreasonably dangerous [i.e., the label] must be found to have contributed to the plaintiff’s injury.” 48 Texas L.Rev. at 413. This means that it is incumbent upon the plaintiff to secure a jury finding that the faulty labeling was a cause of the injury. It is this finding [plaintiff] failed to secure.

Id. at 605 (emphasis added). As Aim failed to meet his burden; this cause should not be remanded to the court of appeals on a failure to adequately warn theory.

EVIDENCE REVIEW

The majority now overtly misapplies our decision in Pool v. Ford Motor Co., 715 S.W.2d 629 (Tex.1986) for reviewing the court of appeals holdings on the factual sufficiency of the evidence. As foreseen, in reviewing factual sufficiency points, the Pool opinion can now be used to substitute this court’s judgment for that of the court of appeals. Pool, 715 S.W.2d at 638 (Gonzalez, J., concurring).

*600 The court remands this cause to the court of appeals for its “reconsideration” of “all” the evidence in determining whether there was factually sufficient evidence to support the jury’s findings on two of Aim’s ordinary negligence theories. In regard to the first theory, the court remands for reconsideration of Alcoa’s alleged negligence in designing a cap with a pilfer-proof band. Because the lower court did not mention the testimony of Jaye Gibbs, this court implicitly holds that the court of appeals did not consider such testimony. Gibbs stated that Alcoa tested closures where the pilfer-proof ring was essentially the only thing holding a cap with weak threads on a bottle. Gibbs further stated that from Alcoa’s tests on pilfer-proof caps and caps without the pjlfer-proof ring revealed that a similar result was reached with each. The court of appeals’ failure to expressly mention this testimony should not be grounds for remanding to the court of appeals for their reconsideration of the factual sufficiency of the evidence.

The court next attacks the court of appeals’ alleged failure to consider evidence in its factual sufficiency review on Aim’s theory that Alcoa was negligent in failing to include a mechanical inspection system. The court of appeals failed to explicitly mention the testimony of Aim’s expert, George Green, that a mechanical inspection system was feasible and that he had in the past offered to design a system for Alcoa. Green states that there are several methods for assuming there is a good thread on cap, “[o]ne of them is a method of ultrasonic transducer.” Another method involves a “shadowgraph.” Green made these simple statements without reference to costs, efficiency, or utility. Green did not state that these methods would have prevented cap misapplication or the injury to Aim. I can hardly criticize the court of appeals for failing to set out these points in its opinion.

Other evidence exists in the record which supports the court of appeals’ judgment. The court’s remand to the court of appeals for its reconsideration on the sufficiency of the evidence was inappropriate for the two alleged acts of ordinary negligence. Henceforth, it appears that the courts of appeals must summarize and transcribe the entire statement of facts. If it does not, this court can second guess the court of appeals whenever we do not agree with its assessment, utilizing any evidence the court of appeals does not mention in order to remand the cause to the court of appeals for its further review.

PRESERVATION OF FACTUAL SUFFICIENCY POINT

Aim only brought two points of error in his writ application:

FIRST POINT OF ERROR

(GERMANE TO FIRST THROUGH FIFTH ASSIGNMENTS OF ERROR IN MOTION FOR REHEARING.)

THE COURT OF APPEALS ERRED IN HOLDING THAT ALCOA’S DUTY TO GIVEN AN ADEQUATE WARNING OF THE HAZARDS OF ITS CLOSURE SYSTEM DID NOT EXTEND TO CONSUMERS SUCH AS PLAINTIFF.

SECOND POINT OF ERROR

(GERMANE TO EIGHT THROUGH TENTH ASSIGNMENTS OF ERROR IN MOTION FOR REHEARING.)

THE COURT OF APPEALS ERRED IN FAILING TO HOLD THAT ALGOA’S BREACH OF ITS DUTY TO WARN CONSUMERS SUCH AS PLAINTIFF AND BOTTLERS SUCH AS J.F.W. WAS GROSS NEGLIGENCE AND IN NOT REINSTATING THE JURY’S FINDING . OF PUNITIVE DAMAGES OF $1,000,-000 AGAINST ALCOA.

Clearly, neither of these points of error asserts that the court of appeals erred in its standard for reviewing the factual sufficiency of the evidence. The court, sua sponte, addresses its own point of error regarding the sufficiency of the evidence.

The court clearly violates the mandates of Tex.R.Civ.P. 476, which provides:

*601 The consideration of the Supreme Court shall be limited to questions of law raised by points in the application for writ of error and to questions of law certified by a Court of Appeals.

Tex.R.Civ.P. 476 (Vernon 1986) (emphasis added). Caselaw further establishes that “[t]his court may consider only those questions of law raised by assignments of error in the application for writ of error ... [and that] petitioner waives the right to complain of any holding to which no error is assigned.” State Farm Mut. Auto Ins. Co. v. Cowley, 468 S.W.2d 353, 354 (1971). This court is not authorized to reverse a lower court’s judgment in the absence of properly assigned error. See State Bd. of Ins. of State of Texas v. Westland Film Indus., 705 S.W.2d 695 (Tex.1986); Gulf Consolidated Int'l Inc. v. Murphy, 658 S.W.2d 565 (Tex.1983). The above rationale was applied in Nat. Life & Accident Ins. Co. v. Blagg, 438 S.W.2d 905, 909 (Tex.1969) where the court of appeals made a “no evidence” holding. We observed that “[sjince this holding was not assigned as error in a motion for rehearing before the Court of Civil Appeals or in an application for writ of error before this court, it is final in Court of Civil Appeals, and we have no jurisdiction to review it.” Id. at 566.

Aim asserted nineteen points of error in his motion for rehearing in the court of appeals. Points sixteen and seventeen complained of the court of appeals’ standard for review of the factual sufficiency of the evidence. An examination of Aim’s two points of error show that they are “germane” only to points one through five and points eight through ten in his motion for rehearing before the court of appeals. Rather than assert all of the points raised in his motion for rehearing, Aim chose to assert what he probably believed to be his two strongest arguments. Neither point of error complained of the standard applied by the court of appeals in its review of the factual sufficiency of the evidence. The court argues a section of Aim’s writ application, which appears after the “Conclusion” of Aim’s second point of error, sufficiently presents a point of error in which it can bootstrap a sufficiency point. The section used by the court is entitled: “Plaintiff’s Comments on the Court of Appeals Review of the Record.” This section complains of such items as the court of appeals addressing Aim’s expert witness as “Green,” while addressing Alcoa’s witness as “Dr.” Block. The alleged arguments in this section, however, were clearly not listed under a point of error and cannot be considered by this court.

The court adopts a new approach in appellate review — addressing arguments that have not been raised by points of error. Alcoa certainly did not have an opportunity to respond to the “incorrect standard” for factual sufficiency review arguments that were supposedly raised in this cause. This court is authorized to review errors in the judgment of the court of appeals, it is not authorized to create arguments on behalf of the parties.

For all of the above reasons, I dissent.

McGEE, J., joins this dissent.

. The submitted issue read:

[Issue # 7] Do you find that the negligence, if any, of any or all of the following parties proximately caused the occurrence made the basis of this suit:

Answer ‘Yes” or “No” beside the name of each party listed:

Alcoa: Yes

J.F.W.: Yes

James E. Aim: No

[Issue # 8] What percentage of the negligence that cause the injuries to James E. Aim do you find from a preponderance of the evidence to be attributal to each of the parties found by you to have been negligent?

Answer by stating the percentage, if any, opposite each name:

Alcoa: 55_%

J.F.W.: 45 %

James E. Aim: 0_%

100%

. Alcoa objected to the submission of these issues because:

1. There are no pleadings to support the submission of these issues.

2. There is no evidence, or in the alternative, the evidence is legally insufficient, or in the alternative, it is against the great weight and preponderance of the evidence to submit these issues.

3. These questions inquire as to the conduct of the parties without limitation to the pleadings and inquiries as to conduct for which Alcoa has not been shown to have duty or responsibility. It further allows the jury to consider elements of negligence outside the pleadings and allows the jury to decide negligence and with proximate cause less then ten members agreeing on the same issue of negligence or proximate cause.

4.These questions are defective under the guidelines set out in Scott v. Atchison, Topeka & Santa Fe Railway, in that it fails to limit the question to the facts which have been plead and proved, and permits the jury to consider evidence outside the pleadings, such as, for example, facts relating to the capping machine and a failure to require a warning in the licensing agreement. Furthermore, Scott clearly describes the incorrectness of this issue because the jury is permitted to consider, with this question, allegations of negligence in the pleadings for which there is no proof and no evidence in the case, such as sale of the bottle, cap and contents in question and inspection of the bottle, cap and contents in question. Objection is specifically made to the absence of an instruction limiting the jury’s consideration to negligent acts or omissions and proximate causal relationships supported by both pleadings and proof. For example, and without limitation, alleged negligence of Alcoa in failing to adequately warn [J.F.W.] was heavily focused as in the evidence, and yet no evidence was offered on proximate cause in this area.

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