Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca10-91-01423/USCOURTS-ca10-91-01423-0/pdf.json

Parties Involved:
Paccar, Inc.
Appellant
Donna M. Stearns
Appellee
Virgil A. Stearns
Appellee

Document Text:

UNITED STATES COURT OF APPEALS 

TENTH CIRCUIT 

FILL o 

Unltld 8tatll Court of'Appllla Tenth-Cireutt 

VIRGIL A. STEARNS; DONNA M. 

STEARNS, 

Plaintiffs-Appellees, 

vs. 

PACCAR, INC. , 

Defendant-Appellant . 

JAN 22 1993 

ROBERT L. HOECKER 

Clerk 

No. 91-1423 

(D.C. No. 89-K- 1648) 

(D. Colo.) 

ORDER AND JUDGMENT* 

Before LOGAN, ANDERSON, and BALDOCK, Circuit Judges. 

Defendant Paccar, Inc .. appeals the judgment following a jury 

verdict on this diversity case out of the United States District 

Court for the District of Colorado. Defendant alleges that there 

was insufficient evidence of Defendant's 100% liability, 

causation, and damages for impairment of future earning capacity. 

Defendant further alleges that the district court abused its 

discretion in admitting the deposition testimony of Defendant's 

employee Lois Davis and Plaintiff's testimony regarding the wages 

of other employee's of Plaintiff's employer. Plaintiffs seek Rule 

38 sanctions, claiming Defendant's appeal is "frivolous." Fed. R. 

App. P . 38 . We have jurisdiction under 28 U.S . C. § 1291, and we 

affirm the district court judgment but deny Plaintiffs' request 

* This order and judgment has no precedential value and shall 

not be cited, or used by any court w~thin the Tenth Circuit, 

except for purposes of establishing the doctrines of the law of 

the case , res judicata, or collateral estoppel . 10th Cir. R. 

36 . 3. 

-1-

Appellate Case: 91-1423 Document: 010110159207 Date Filed: 01/22/1993 Page: 1 
for sanctions. 

On January 22, 1988, Plaintiff Virgil Stearns, an employee of 

Barlow Truck Lines, was driving a Peterbilt tractor-truck headed 

west on I-70 near Watkins, Colorado. As he crossed an overpass, 

he lost control of his steering, and his truck veered into the 

guardrail, went off an embankment, and turned over on its side. 

Plaintiff Virgil Stearns sustained a back injury as a result of 

the accident. 

After the accident, inspection of the truck revealed that the 

pinch bolt which secured the pitman arm to the steering column was 

missing. Peterbilt Motor Company, a division of Paccar, 

manufactured the truck during the summer of 1987 in its Denton, 

Texas plant, and delivered· the truck to Barlow Truck Lines in· 

August of 1987. During the summer of 1987, Peterbilt experienced 

a shortage of the pinch bolts which it used to attach the pitman 

arm to the steering column in tractor-trucks such as Plaintiff's. 

Peterbilt's planner/buyer, Lois Davis, who was in charge of 

ensuring that Peterbilt had a sufficient supply of these pinch 

bolts, called one of Peterbilt's approved suppliers, Aircom 

Fasteners, to order more of the pinch bolts. An Aircom employee, 

who Ms. Davis dealt with on a regular basis, informed Ms. Davis 

that Aircom was out of the pinch bolts but that he would call 

around and attempt to locate the pinch bolts from another source. 

The Aircom employee located the pinch bolts at Porteous Fasteners 

and notified Ms. Davis that he would obtain a supply of the pinch 

bolts from Porteous and send them to Peterbilt. 

-2-

Appellate Case: 91-1423 Document: 010110159207 Date Filed: 01/22/1993 Page: 2 
Peterbilt had established quality control procedures to 

ensure that only high quality parts from approved suppliers were 

used in the manufacture of its trucks. To become an approved 

Peterbilt supplier, a company must pass Peterbilt's quality 

control inspection, during which Peterbilt's quality control 

department would inspect the· company's facilities and quality 

assurance procedures. However, Peterbilt's established quality 

control procedures failed in this instance when the approved 

supplier, Aircom, obtained the pinch bolts from a supplier that 

had not been approved, Porteous, and sent them to Peterbilt in 

Aircom packaging. In fact, the record reflected that if Peterbilt 

had received the pinch bolts directly from Porteous in Porteous 

packaging, the receiving department, following standard procedure, 

would have rejected them because Porteous was not an approved 

supplier. 

After installation of these pinch bolts in the trucks, 

Peterbilt discovered that a large number of the pinch bolts were 

defective. 1 One of these pinch bolts, received from Porteous 

through Aircom and later discovered to be manufactured by Kosaka 

Koygo, found its way into Plaintiff Virgil Stearns' truck. 

Although the pinch bolt that was missing from Plaintiff's steering 

column was never found, it was determined by using the serial 

number of Plaintiff' s truck that the truck was manufactured during 

the short time period when Peterbilt installed the defective bolts 

received from Porteous through Aircom. 

1 It is unclear from the xecord whether Peterbilt was aware 

that the pinch bolts were defective prior to Plaintiff's accident. 

-3-

Appellate Case: 91-1423 Document: 010110159207 Date Filed: 01/22/1993 Page: 3 
Plaintiffs proceeded to trial against Paccar on a theory of 

negligence, cl a i ming that Paccar breached its duty to 

independently inspect its pitman arm pinch bolts. Plaintiffs 

Virgil Stearns and his wife, Donna Stearns, sued Paccar for 

compensatory damages and loss of consortium suffered by Mrs. 

Stearns'. Paccar asserted an affirmative defense in accordance 

with Colorado's Proportionate Fault Statute, Colo. Rev. Stat. § 

13-21-111.5, designating Aircorn, Porteous, and Kosaka Koygo as 

non-parties whom Paccar felt should bear a portion of the 

responsibility for Plaintiffs' injuries due to their negligence. 

At trial, however, Paccar introduced little evidence that these 

three non-parties were negligent, relying only on Plaintiffs' 

evidence that the pinch boit was defective . Although Paccar 

proved that Kosaka Koygo had the duty to inspect a certain number 

of bolts for every lot of bolts produced according to the industry 

standard, Paccar failed to prove that Kosaka Koygo breached this 

duty through non-compliance with the standard. Furthermore, 

Paccar introduced no evidence of either duty or breach with regard 

to Aircorn and Porteous. Assuming without deciding that Paccar 

might have been able to prevail on a theory of strict liability by 

relying only on the fact that the pinch bolt was defective, Paccar 

did not argue its case on a strict liability theory nor did it 

propose a strict liability jury instruction. Therefore, the jury, 

when apportioning fault to Paccar and the three non-parties, found 

Paccar 100% at fault and the three non-parties to have no fault, 

burdening Paccar with Plaintiffs' entire $336,707.50 damage award. 

-4-

Appellate Case: 91-1423 Document: 010110159207 Date Filed: 01/22/1993 Page: 4 
our review of the jury's determination that Paccar was 100\ 

liable is a review for sufficiency of the evidence. Reazin v, 

Blue cross & Blue Shield of Kansas, Inc., 899 F.2d 951, 955 (10th 

Cir.), cert. denied. 497 U.S. ·1005 (1990) . We will only overturn 

a jury's verdict if we find that no reasonable jury could have 

reached such a verdict based on the evidence presented. Acrey v . 

American Sheep Industry Ass'n, 1992 WL 384930, at *5 (10th Cir. 

Dec. 29, 1992). We find that there was sufficient evidence from 

which the jury could have found Paccar 100% liable. 

Plaintiff presented evidence that Paccar's subsidiary, 

Peterbilt, had established certain procedures to ensure that it 

used high quality component parts. Plaintiffs' evidence 

established that these procedures were circumvented by Peterbilt's 

planner/buyer, Lois Davis, who obtained pinch bolts from Porteous, 

a supplier who had not been approved by Peterbilt, by ordering 

them through Aircom, an approved supplier. This evidence alone is 

sufficient for a reasonable jury to find Paccar 100% at fault. 

Moreover, in l i ght of Paccar' s failure to establish the negligence 

of the non-party defendants -- Aircom, Porteous, and Kosaka 

Koygo -- we have little trouble finding sufficient evidence to 

hold Paccar 100% liable . 

Our review of whether Plaintiffs adequately established 

causation is also one of sufficiency of the evidence . Reazin, 899 

F.2d at 954 . In order for Plaintiffs to recover from Defendants 

on a negligence theory, Plaintiffs were required to demonstrate 

that Defendant owed them a duty, that Defendants breache~ that 

duty, and that the breach of the duty caused Plaintiffs to suffer 

-5-

Appellate Case: 91-1423 Document: 010110159207 Date Filed: 01/22/1993 Page: 5 
damages . Schultz v. Linden-Alirnak, Inc . , 734 P.2d 146, 149 (Colo. 

App. 1986). Defendant Paccar asserts that Plaintiffs fa i led to 

establish the third negligence prong, i.e., that Defendant's 

breach caused the accident and resulting injuries. 

Paccar appears to argue that because Plaintiffs' expert did 

not examine the actual pinch bolt from Plaintiff's truck for 

defects, Plaintiffs failed to establish causation. However, it is 

obvious that Plaintiffs' expert could not examine the pi nch bolt 

which had been installed in Plaintiff's truck, because the pinch 

bolt, had come loose and fallen out, causing the accident, and 

could not be found at the time of the accident. What Paccar fails 

to acknowledge, however, is that Plaintiffs can submit evidence 

other than examination of ·the missing bolt to establish causation, 

which Plaintiffs unquestionably did. 

Plaintiffs submitted evidence that the accident was caused 

when the pitman ann became disconnected from the steering column , 

resulting in Plaintiff's total loss of steering. Plaintiffs also 

submitted evidence that a number of pinch bolts received from 

Porteous through Aircom, which were placed in trucks during the 

short time period when Plaintiff's truck was assembled, had preexisting cracks, making them defective. Plaintiffs introduced 

expert testimony that the pinch bolt had not been manually removed 

but had fallen out, relying on the fact that the paint surrounding 

the pinch bolt was not marred in any way . This same expert 

further testified that because the pinch bolt had fallen out less 

than a year after the truck's manufacture, it was likely that the 

pinch bolt was defective. This unrebutted evidence was sufficient 

-6-

Appellate Case: 91-1423 Document: 010110159207 Date Filed: 01/22/1993 Page: 6 
' 

for the jury to find that a defective pinch bolt had caused the 

accident. 

Defendant further objects to the jury's damage verdict, 

arguing that Plaintiffs presented insufficient evidence to support 

the portion of the jury's damage award designated as Plaintiff 

Virgil Stearns' impairment o"f future earning capacity. However, 

we find that there was sufficient evidence from which the jury 

could determine this portion of the damage award. 

Paccar primarily argues that because Plaintiff only offered 

evidence of the amount of money he ma.de prior to t he accident and 

offered no evidence of the amount he ma.de after the accident, the 

jury's damage award with regard to impairment of future earning 

capacity was based on speculation. Contrary to this assertion, 

however, the amount of money that Plaintiff ma.de prior to the 

accident is more relevant than the amount he has ma.de after the 

accident because the record reflected that the accident affected 

the amount of trips he can make, thus affecting his total 

earnings. Furthermore, under Colorado law, evidence of permanent 

disability alone warrants an instruction regarding impairment of 

future earning capacity,~ Zertuche v, Montqome:c:y ward & co . , 

I nc., 706 P. 2d 424, 428 (Colo . App. 1985); Phillips v , Monarch 

Recreation Co;:p., 668 P . 2d 982, 987 (Colo . App. 1983), and the 

record reflects that Pl aintiffs presented evidence of permanent 

disability. Two medical doctors and a chiropractor testified that 

Plaintiff' s injury was likely to have a negative impact on 

Plaintiff's future work life . One of the medical doctors, who was 

Plaintiff's physician, testified that Plaintiff has sustained a 

-7-

Appellate Case: 91-1423 Document: 010110159207 Date Filed: 01/22/1993 Page: 7 
fifteen percent partial impairment, and the chiropractor testified 

that Plaintiff would probably require additional medical treatment 

in the future. 

Paccar's assertion that the district court erred in allowing 

Lois Davis' deposition testimony to be read at trial is reviewed 

for an abuse of discretion. ·· Graham v . Wyeth Laboratories, 906 

F.2d 1399, 1401 (10th Cir.), cert . denied, 111 S . Ct. 511 (1990). 

A party seeking reversal of a district court judgment on account 

of an evidentiary ruling must make a clear showing that he or she 

was prejudiced by the ruling in that the ruling was "inconsistent 

with substantial justice" or affected the substantial rights of 

the party. 28 U.S.C. § 2111; Fed. R. Civ. P. 61; Fed. R. Evid. 

103(a); Neu v. Grant, 548 F.2d 281, 286 (10th Cir. 1977). 

"The deposition of a party or of anyone who at the time of 

taking the deposition was an officer, director or managing 

agent .. . may be used by an adverse party for any purpose." 

Fed. R. Civ. P. 32(a} (2}. Although Ms. Davis was neither an 

officer nor a director, the district court designated her a 

"managing agent" and admitted her deposition under Rule 32(a} (2} .

2 

Factors considered by the federal courts in determining whether an 

individual is a "managing agent" under Rule 32(a} (2) are whether 

the agent's interests are identified with those of the principal, 

the nature and extent of the agent's functions, responsibilities 

and duties, the extent of the agent's power to exercise judgment 

2 Deposition testimony admitted under Rule 32(a} (2) is not 

hearsay because it is considered an admission by party-opponent . 

Fed. R. Evid. 80l(d} (2}. 

-8-

Appellate Case: 91-1423 Document: 010110159207 Date Filed: 01/22/1993 Page: 8 
and discretion, and whether any person or persons higher in 

authority than deponent were in charge of the particular matter or 

possessed all of the necessary information sought in the 

deposition. ~ Crimm v. Missouri P.R. Co., 750 F . 2d 703, 708-09 

(8th Cir. 1984}; Terry v. Modern Woodmen of America. 57 F.R.D. 

141, 143 (D. Mo. 1972}; Tomingas v. Douglas Aircraft co., 45 

F.R.D. 94, 96 (S.D.N.Y. 1968}. At the time of her deposition, Ms. 

Davis was accompanied by Paccar counsel, who made deposition 

objections with only Paccar's interests in mind. The record 

reflects that Ms. Davis' had a managerial role in fastener 

acquisition, in that she had absolute discretionary control over 

which approved supplier she would contact to order a specific 

fastener. She was not required to report to her supervisors the 

specifics of her fastener acquisitions, but only that she had 

located the fasteners. Ms. Davis unquestionably exercised her 

judgment and discretion in this case, resulting in the 

circumvention of established quality control procedures. Finally, 

it is clear from the record that Ms. Davis was the only person at 

Peterbilt who possessed all of the critical information which was 

sought in the deposition. Thus, it was not an abuse of discretion 

for the district court to admit Ms. Davis' deposition as the 

deposition of a "managing agent." Even if the district court's 

admission of the Davis deposition was erroneous, Paccar would be 

unable to show that it was prejudiced by the ruling, especially 

considering that Paccar called Ms. Davis as a defense witness and 

had every opportunity to contradict or explain Ms. Davis' 

deposition testimony. 

-9-

Appellate Case: 91-1423 Document: 010110159207 Date Filed: 01/22/1993 Page: 9 
Defendant Paccar is correct in its assertion that Plaintiff's 

testimony regarding what he had seen on the W-2 fonns of other 

Barlow Truck Line employees was inadmissible hearsay. Federal 

Rule of Evidence 801(c) defines hearsay as "a statement, other 

than one made by the declarant while testifying at the trial or 

hearing, offered in evidence to prove the truth of the matter 

asserted." Plaintiff offered the written statement, i.e., the W-2 

forms, to prove the truth of the matter asserted, i.e., that other 

employees at Barlow made between $28,000 and $32,000 per year. 

Therefore, the testimony constituted hearsay. See Stanolind Oil & 

Gas Co. v. Sellers, 174 F.2d 948, 956-57 {10th Cir.),~-

denied, 338 U.S. 867 (1949) (because witness had no personal 

knowledge of the oil field at issue but relied only on scientific 

articles written about the oil field, his testimony as to the 

contents of the scientific articles was inadmissible hearsay} . 

Plaintiff's hearsay testimony does not fall under any 

exception to the hearsay rule. The closest possibility is the 

business records exception, Fed. R. Evid. 803(6}, but that 

exception requires presentation of the document with testimony by 

the document's custodian that the document was kept in the 

ordinary course of business. Therefore, in order to admit 

evidence regarding the W-2 forms of other Barlow employees, 

Plaintiffs were required to submit the W-2 forms to the district 

court through Barlow's records custodian. 

Although Plaintiff's testimony regarding the W-2 forms was 

inadmissible hearsay, it is not prejudicial error to admit 

evidence which is merely cumulative or corroborative of other 

-10-

Appellate Case: 91-1423 Document: 010110159207 Date Filed: 01/22/1993 Page: 10 
evidence. Hirschfeld v. New Mexico Corrections Dept., 916 F.2d 

572, 581 n.10 (10th Cir. 1990). To show the income lost by 

Plaintiff Virgil Stearns during the thirteen months that he was 

out of work because of his back injury, Plaintiffs submitted two 

types of evidence. First, Plaintiffs submitted evidence, which we 

have ruled inadmissible, that Plaintiff Virgil Stearns had seen 

the W-2 forms of other Barlow employees and that these forms 

reflected that his one-year earning potential was between $28,000 

and $32,000 a year. Second, Plaintiff Virgil Stearns testified 

that prior to the accident he made $800 to $900 a week working on 

a regular basis, which is approximately $40,000 a year. 

Therefore, Plaintiff's inadmissible hearsay testimony is 

cumulative of his admissibie weekly earnings testimony, and the 

district court's erroneous admission of the testimony regarding 

the W-2 forms was harmless. 

Plaintiffs' request for Rule 38 sanctions for delay caused by 

a frivolous appeal is denied. An appeal is frivolous if the 

result is obvious, or the arguments of error are wholly without 

merit. Autorama Corp. v. Stewart, 002 F.2d 1284, 1200 {10th Cir. 

1986). We hold that Defendant's appeal does not rise to this 

-11-

Appellate Case: 91-1423 Document: 010110159207 Date Filed: 01/22/1993 Page: 11 
level. 3 

The district court's judgment is AFFIRMED, and Plaintiffs' 

motion for Rule 38 sanctions against Def endant i s DENI ED. 

Entered for the Court 

Bobby R. Baldock 

Circuit Judge 

3 Although the appeal is not frivolous, we wish to admonish 

Defendant Paccar for its submission of an incomplete and cursory 

appendix. Pursuant to Tenth Circuit Rule 30.1, an appellant is 

permitted to file an appendix, containing excerpts of the record, 

instead of filing the entire record. •rt is the responsibility of 

appellant's counsel to file an appendix sufficient for the 

consideration and determination of the issues on appeal.• 10th 

Cir. R. 30.1.1. "It is the appellant's responsibility to order 

and provide all portions of the transcript necessary to give the 

court of appeals a complete and accurate record of the proceedings 

insofar as such proceedings relate to the issues raised on appeal, 

and when sufficiency of the evidence is raised. the entire trial 

transcript ordinarily should be provided. • 10th Cir. R. 10 .1.1. 

Appellant made three sufficiency of the evidence challenges, but 

provided only a very abbreviated version of the transcript. We 

were only able to decide this case because Plaintiffs-Appellees 

filed a supplemental appendix . 

-12-

Appellate Case: 91-1423 Document: 010110159207 Date Filed: 01/22/1993 Page: 12