UNPUBLISHED

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

LARRY S. DUDLEY,

Plaintiff-Appellee,

v.

BUNGEE INTERNATIONAL

MANUFACTURING CORPORATION,

No. 95-1204

Defendant-Appellant,

and

THE PRICE COMPANY, d/b/a Price

Club,

Defendant.

Appeal from the United States District Court

for the Western District of Virginia, at Charlottesville.

B. Waugh Crigler, Magistrate Judge.

(CA-93-21-C)

Argued: December 7, 1995

Decided: January 31, 1996

Before HALL and HAMILTON, Circuit Judges, and

THORNBURG, United States District Judge for the Western

District of North Carolina, sitting by designation.

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Affirmed in part and reversed in part by unpublished per curiam opinion.

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COUNSEL

ARGUED: Donald R. Morin, MORIN & BARKLEY, Charlottesville, Virginia, for Appellant. Bruce David Rasmussen, MICHIE,
HAMLETT, LOWRY, RASMUSSEN & TWEEL, P.C., Charlottesville, Virginia, for Appellee. ON BRIEF: Leon F. Szeptycki, Patricia

C. Karppi, MCGUIRE, WOODS, BATTLE & BOOTHE, L.L.P.,

Charlottesville, Virginia, for Appellant. Edmund R. Michie, MICHIE,

HAMLETT, LOWRY, RASMUSSEN & TWEEL, P.C., Charlottesville, Virginia, for Appellee.

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Unpublished opinions are not binding precedent in this circuit. See

Local Rule 36(c).

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OPINION

PER CURIAM:

Appellant, Bungee International Manufacturing Corporation

(Bungee), appeals the magistrate judge's entry of judgment in favor

of the appellee, Larry S. Dudley (Dudley), following a jury trial in a

products liability action. For the reasons discussed below, we affirm

in part and reverse in part.

I.

This action arises out of an injury Dudley sustained to his left eye

on September 17, 1992, while using one of Bungee's cords to secure

the flaps of a tarp covering a load of plywood on his trailer. To secure

the tarp, Dudley first placed the cradle of one hook (the curved part

of the hook) into one of the tarp's grommets. Dudley then stretched

the cord and fastened the hook on the other end of the cord to a metal

cup along the side of the trailer. After Dudley fastened the second

hook in the metal cup, the first hook that had been in the grommet of

the tarp bent and released from the grommet as Dudley was in the

process of letting go of the stretched portion of the cord. The cord

then snapped back towards Dudley, and the hook that had been in the

grommet of the tarp struck him in the left eye causing permanent eye

damage.

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Dudley, a Virginia citizen, commenced this diversity action against

Bungee and the retailer of the cords, Price Club. 1 Dudley's complaint

alleged claims against both defendants for negligence, breach of

express and implied warranties, violation of the Virginia Consumer

Protection Act, actual fraud, and constructive fraud. In particular,

Dudley's complaint alleged that Bungee was negligent in designing

the cord and negligent in failing to adequately warn Dudley of the

cord's potential danger. The parties consented to the jurisdiction of,

and all the proceedings were heard by, a magistrate judge. See 28

U.S.C.A. § 636(c) (West 1993).

The jury returned a verdict against Bungee on Dudley's claims for

breach of express warranty2 and negligence, but failed to distinguish

between Dudley's negligent design and negligent warning claims.3

The jury, however, returned a verdict for Bungee on Dudley's claim

for breach of implied warranty and his claim for Bungee's alleged

violation of the Virginia Consumer Protection Act. The jury also

returned a verdict for Price Club on all of Dudley's claims. The jury

awarded Dudley $350,000 in compensatory damages on his claims for

breach of express warranty and negligence and $350,000 in punitive

damages.

After the magistrate judge entered judgment on the verdict, Bungee

filed a motion for judgment as a matter of law and for a new trial. The

magistrate judge denied those motions, and Bungee timely filed its

notice of appeal.

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1 It is undisputed that Virginia law applies.

2 Dudley contends that Bungee created an express warranty with the

following three statements: (1) that the cords were"MADE IN USA"; (2)

that the cords were "PREMIUM QUALITY"; and (3) that "When properly used, BUNGEE cords are safe and dependable for industrial, trucking, marine, automotive, and recreational vehicle use where tough, hightensile strength is required." (J.A. 1325).

3 Although the verdict form submitted to the jury was a special verdict

as to the majority of Dudley's claims, it was a general verdict as to Dudley's negligence claim because it did not distinguish between Dudley's

design defect and failure to warn claims.

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II.

Bungee raises numerous assignments of error, only a few of which

merit discussion. We shall address each of these assignments of error

in turn.

A.

Bungee first contends that the magistrate judge erred in failing to

grant it judgment as a matter of law on Dudley's negligence claim.

Bungee does not attack the jury's finding that it was negligent in

either designing the cord or in failing to warn of the cord's dangers.4

Instead, as Bungee's argument goes, Dudley presented insufficient

evidence to allow a jury to find the cause of the accident, leaving the

jury to speculate whether Bungee's negligence was the proximate

cause of Dudley's injuries. See Edwards v. Hobson, 54 S.E.2d 857,

859 (Va. 1949) (plaintiff cannot recover under a negligence theory if

the evidence leaves the cause of the accident "wholly within the realm

of surmise and speculation"). We disagree.

Dudley produced sufficient evidence demonstrating the cause of

the accident. He presented evidence that the hook bent, released, and

struck him in the eye because the cord's hook was not strong enough

to withstand the force he applied to it as he stretched the cord. Even

though Dudley initially fastened the cradle of the cord's hook in the

tarp's grommet, Dudley's expert witness (Hendrickson) testified that

the hook could have become caught at its tip (tip loaded) on an object

adjacent to it. Hendrickson specifically noted that the cord's hook

could have shifted positions and become tip loaded as Dudley pulled

and stretched the cord while attaching the second hook to the metal

cup. Significantly, Hendrickson stated that the cord's hook would be

easier to bend when it was tip loaded because the steel in the cord's

hook was not strong enough to withstand the force Dudley applied to

it as he stretched the cord. Finally, Hendrickson testified that the

cord's hook could release from the tarp's grommet if the pressure on

the cord's hook was lessened. Hendrickson stated that the pressure on

the hook would be reduced as Dudley let go of the stretched portion

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4 Nor does Bungee attack the size of the jury's compensatory damage

award.

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of the cord, a matter on which Dudley testified. Clearly, this evidence

would allow the jury to conclude that the accident occurred as Hendrickson described.5 Accordingly, the magistrate judge did not err in

denying Bungee's motion for judgment as a matter of law. Therefore,

we affirm the award of compensatory damages.6

B.

We now turn to the issue of punitive damages. Bungee contends

that, even assuming it was liable to Dudley under his design defect

and failure to warn theories, the magistrate judge erred in refusing to

grant it judgment as a matter of law on the issue of punitive damages.

For Bungee to be entitled to a judgment as a matter of law on the

issue of punitive damages, Bungee must show that Dudley is not entitled to punitive damages under both negligence claims. See Richards

v. Michelin Tire Corp., 21 F.3d 1048, 1054-55 (11th Cir. 1994), cert.

denied, 115 S. Ct. 902 (1995).

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5 Bungee also argues that Dudley presented inconsistent testimony as

to whether the cord's hook was tip loaded before the accident. Specifically, Bungee contends that Dudley testified the accident happened as the

hook was attached to the tarp's grommet at its cradle (cradle loaded) and

that Hendrickson testified the accident occurred when the hook was tip

loaded. We believe Dudley's testimony was not inconsistent with Hendrickson's testimony. Although Dudley testified that the hook was initially cradle loaded, Dudley specifically stated that he did not know if the

cord's hook changed positions after he placed it in the tarp's grommet.

Further, Hendrickson testified that Dudley would not have noticed that

the cord's hook shifted positions and became tip loaded because the conditions allowing the hook to become tip loaded are usually hidden from

the user. Thus, Dudley's testimony did not contradict Hendrickson's testimony since it did not rule out the possibility that the cord's hook shifted

from a cradle loaded position to a tip loaded position prior to the accident.

6 Since we have affirmed Dudley's claim for compensatory damages on

the negligence count, we find it unnecessary to address the question of

whether the labelling on the cord's bag created any express warranties.

See Compton v. Wyle Lab., 674 F.2d 206, 208 n.1 (4th Cir. 1982), the

second claim on which the jury found Bungee liable.

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Virginia law permits the recovery of punitive damages when the

plaintiff proves the defendant's negligence was"so willful or wanton

as to evince a conscious disregard of the rights of others." Booth v.

Robertson, 374 S.E.2d 1, 3 (Va. 1988). "Willful and wanton negligence is acting consciously in disregard of another person's rights or

acting with reckless indifference to the consequences, with the defendant aware, from his knowledge of existing circumstances and conditions, that his conduct probably would cause injury to another."

Griffin v. Shively, 315 S.E.2d 210, 213 (Va. 1984). See also Clohessy

v. Weiler, 462 S.E.2d 94, 96 (Va. 1995) (quoting Griffin). Virginia

law, however, precludes a finding of willful and wanton negligence

when a defendant has shown some care for the safety of others. Philip

Morris, Inc. v. Emerson, 368 S.E.2d 268, 283 (Va. 1988). We further

note that Virginia law does not favor the awarding of punitive damages, reserving such awards only for the most egregious circumstances.7

Id.

1.

Bungee claims that, assuming it was liable to Dudley under his failure to warn theory, its actions did not rise to the level of willful and

wanton negligence because it exercised some care for the safety of

others by placing a warning on the cord's bag. We agree.

The warning that Bungee placed on the bag shows that it exercised

some care for the safety of others. Bungee's warning was as follows:

1. CORD IS STRETCHED TOO FAR. Do not use

BUNGEE when stretch will be greater than Seventy Five

(75%) Percent of its stretchable length. Stress on anchor

points is increased many times as the cord approaches its

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7 For examples of conduct creating a jury issue as to willful and wanton

negligence, see Owens-Corning Fiberglas Corp. v. Watson, 413 S.E.2d

630, 642 (Va. 1992) (where for several decades the defendant actively

concealed the danger that inhalation of dust from one of its products

could cause lung disease); Griffin, 315 S.E.2d at 213 (where the defendant fired a gun in close proximity to a number of people in a relatively

small room); Friedman v. Jordan, 184 S.E. 186, 187 (Va. 1936) (where

the defendant chased and ran over a bicyclist with his car).

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maximum stretch limit, possibly resulting in failure of either

fastener and dangerous rebound.

(J.A. 1325). This warning, at least in general terms, warned others of

the dangers of stretching the cord too far. It is undisputed that Dudley

had to stretch the cord over seventy-five percent of its stretchable

length before the cord's hook would bend. Thus, since Bungee

warned of the potential danger that injured Dudley, it exhibited some

care for his safety. Because Bungee exercised some care for the safety

of others, an award of punitive damages was not warranted under a

failure to warn theory.8 See Richards, 21 F.3d at 1059 (applying Alabama law) ("We have repeatedly held that the issue of punitive damages should not go to the jury when a manufacturer takes steps to

warn the plaintiff of the potential danger that injured him; such acts

bar a finding of wantonness."); Bhagvandoss v. Beiersdorf, Inc., 723

S.W.2d 392, 398 (Mo. 1987) (en banc) ("[I]nadequate communication

cannot be equated to conscious disregard.").

2.

Bungee also claims that, assuming it was liable to Dudley under his

negligent design theory, its actions did not rise to the level of willful

or wanton negligence because there was insufficient evidence presented at trial to demonstrate that it knew the cord's design would

cause injury to another. We agree.

The evidence presented shows that any negligence on the part of

Bungee in designing its cords does not rise to the level of willful and

wanton negligence because Bungee could not have been aware from

its "knowledge of existing circumstances and conditions, that [the

cord's design] probably would cause injury to another." Griffin, 315

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8 Dudley's reliance on our recent decision in Benedi v. McNeil-P.P.C.,

Inc., 66 F.3d 1378, 1383 (4th Cir. 1995), is misplaced. In Benedi, the

plaintiff's liver was injured by acetaminophen toxicity, which is caused

by combining acetaminophen with alcohol. Although the defendant had

placed a warning on its product (Tylenol), the warning failed to warn,

even in general terms, of the danger of combining alcohol and

acetaminophen. Thus, unlike this case, the defendant showed no concern

for the safety of those in the plaintiff's position.

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S.E.2d at 213. In attempting to prove Bungee was aware that the

design of its cords probably would cause injury to another, Dudley

introduced evidence of two lawsuits filed against Bungee before Dudley's injury which contained allegations similar to the allegations in

Dudley's complaint. Although prior lawsuits are relevant to prove

wantonness, see Skil Corp. v. Lugsdin, 309 S.E.2d 921, 922-23 (Ga.

Ct. App. 1983); 2A LOUIS R. FRUMER & MELVIN I. FRIEDMAN,

PRODUCTS LIABILITY § 18.02[1], 18-29 (1995), one's "notice of prior

injuries does not automatically create a jury question on wantonness."

Richards, 21 F.3d at 1058.

In Richards, Michelin knew of four incidents involving an injury

from the alleged defect (mismatches) in its tires out of some thirteen

to fifteen million tires it sold. Since the evidence showed the incidence of mismatches was one in millions, the court found that a jury

could not conclude that Michelin knew the mismatches were likely.

Thus, it granted Michelin's motion for judgment as a matter of law

on the plaintiff's punitive damages claim. Id. The court, however,

noted that it may have reached a different result if Michelin had

known of more mismatches. Id.

Bungee is in a position analogous to Michelin. Bungee offered evidence to show that it sold seven million cords9 through Price Club for

purposes of establishing that two lawsuits would not make it aware

that any defect in its cords probably would cause injury to another.

The magistrate judge, however, excluded this evidence as being irrelevant and, even if relevant, as being unduly prejudicial. This ruling

was error because the evidence of the number of cords sold was relevant and probative as to whether Bungee should have known that its

cords probably would cause injury to another. See 1 JOHN W. STRONG

ET AL., MCCORMICK ON EVIDENCE § 200, 850-51 (4thed. 1992) ("A

large number of cases recognize that lack of other accidents may be

admissible to show . . . (3) the nonexistence of an unduly dangerous

situation, or (4) want of knowledge (or of grounds to realize) the danger.") (footnotes omitted).

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9 Although Bungee had actually sold over thirty million of these cords,

it only proffered the fact it had sold seven million cords through Price

Club.

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We further note that Dudley did not introduce any other evidence

showing that Bungee knew that the design of its cords probably

would cause injury to another.10 Since the evidence in this case shows

the incidence of hook failure was literally one in millions, we find

that Bungee could not have known from claims in two lawsuits that

the design of its cords probably would cause injury to another.

Because, under the circumstances, Bungee could not have known that

its cord design probably would cause injury to another, an award of

punitive damages was not warranted under a negligent design theory.

3.

Bungee has demonstrated that Dudley was not entitled to punitive

damages under either a negligent design or negligent failure to warn

theory.11 Therefore, we must reverse the magistrate judge's denial of

Bungee's motion for judgment as a matter of law on the issue of punitive damages.

III.

Bungee also challenges several of the magistrate judge's evidentiary rulings. We have reviewed these contentions and find none of the

evidentiary rulings affected Bungee's substantial rights. See FED. R.

CIV. P. 61. Accordingly, for all the foregoing reasons, the judgment

entered by the magistrate judge is affirmed as to Dudley's claim for

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10 Although Dudley introduced other evidence allegedly showing

Bungee acted with willful and wanton negligence, none of the evidence

was relevant to show that Bungee knew the design of its cords probably

would cause injury to another.

11 For Dudley to sustain an award of punitive damages on his breach

of express warranty claim, he must show Bungee's alleged breach of the

express warranty amounts to an independent, willful tort. See Kamlar

Corp. v. Haley, 299 S.E.2d 514, 518 (Va. 1983). Although Dudley has

argued that Bungee's statements, see supra note 2, created an express

warranty, he has not argued that these statements constituted an independent, willful tort. Thus, an award of punitive damages is not warranted

under a breach of express warranty theory.

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compensatory damages and reversed as to Dudley's claim for punitive

damages.

AFFIRMED IN PART AND REVERSED IN PART

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