PUBLISHED

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

DAVID D. COLE,

Plaintiff-Appellant,

v. No. 94-2576

KELLER INDUSTRIES, INCORPORATED,

Defendant-Appellee.

Appeal from the United States District Court

for the Eastern District of Virginia, at Richmond.

James R. Spencer, District Judge.

(CA-94-375)

Argued: July 13, 1995

Decided: January 6, 1998

Before RUSSELL, WIDENER, and HALL, Circuit Judges.

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Vacated and remanded by published opinion. Judge Widener wrote

the opinion, in which Judge Russell and Judge Hall joined.

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COUNSEL

ARGUED: Thomas Bryan Byrne, Richmond, Virginia, for Appellant.

Terrence Mitchell Bagley, Sr., MCGUIRE, WOODS, BATTLE &

BOOTHE, L.L.P., Richmond, Virginia, for Appellee. ON BRIEF:

Stephanie L. Karfias, MCGUIRE, WOODS, BATTLE & BOOTHE,

L.L.P., Richmond, Virginia, for Appellee.

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OPINION

WIDENER, Circuit Judge:

Plaintiff-appellant David Cole appeals the grant of summary judgment against him in his suit alleging products liability and breach of

warranty against defendant-appellee Keller Industries, Inc. We vacate

and remand.

In June, 1991, David Cole, an apartment maintenance man, was

injured while using a ladder manufactured by Keller Industries. Cole

alleges that as he descended to the third step of the ladder, a rivet

broke, which had fastened the left rear of the step to the ladder's side

rail, causing him to fall.

The ladder was made of aluminum, and both the side rails of the

ladder and the steps were made of channels, with the open sides of

the channels facing in on the side rails, and the open side of the channels facing down on the steps. The ends of the steps fit just inside the

channels of the side rails, and the vertical sides of the step channels

were secured to the short sides of the side rail channels by rivets.

There were two rivets in the front, that is the side facing out, and one

rivet in the rear, that is the side facing in. The six rivets secured each

step, four in the front and two in the rear.

The plaintiff had two experts examine the ladder, and the defendant

had two experts examine the ladder. At this point, it is well to consider their reports and factual findings.

First, and of considerable significance, is the fact that all four of

the experts agreed that the rivet failed which held in place the left rear

of the step involved. None of the other five rivets in that step failed.

There is no doubt of the failure. The experts are not agreed as to when

the failure occurred, the effect of the failure, or the cause of the failure, but the fact of the failure is acknowledged by all.

Plaintiff's expert, Taber, concluded that the left front rivets were

loose in their holes, which caused an undue strain on the left rear

rivet, which caused the failure. Plaintiff's expert, Foster, was of opinion that the ladder was defectively manufactured in that the cracking

of the failed rivet started upon the setting of the rivet, and he concluded that the ladder was defectively designed because the holes in

the side rail and the step were too large for the rivet. He also con-

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cluded that the rivets were too hard, which was a design defect. Both

of plaintiff's experts were of opinion the failing of the rivet caused

or contributed to plaintiff's fall.

The defendant's experts came to different conclusions. The Ver

Halens were of opinion that the failed rivet had been broken before

the plaintiff's use complained of here. They concluded that, since the

plaintiff had used the ladder more than 20 times and the rivet had

been broken for a considerable period of time, the plaintiff's fall was

not due to a failure of the rivet on the day in question and that the ladder was not defective as designed and manufactured. They found the

failed rivet was the result of excessive forces beyond normal product

use.

Defendant's expert, Lytton also concluded that the rivet fracture

did not occur at the moment of loss of balance by the plaintiff but had

occurred some time during earlier use and that the ladder was subsequently used with the broken rivet without incident many times. He

concluded that the ladder had no design or manufacturing defects and

that the materials used were proper for their intended use.

Cole retained attorney T. Bryan Byrne who hired engineering consultant and expert witness Kenneth C. Taber to inspect the ladder. To

remove the step from the ladder, Taber ground off the heads of the

rivets at the left front of the step, forcibly broke the right rivets, and

hacksawed out a portion of the step surrounding the left rear rivet. On

June 27, 1992, Taber reported that the left front rivets were "loose in

their holes," and claimed this to be the manufacturing defect that

caused the rear rivet to fail. Byrne notified Keller of his client's claim

on October 12, 1992, and filed suit on June 14, 1993. In the interim,

Taber lost two of the right side rivets, one each from the front and

rear. On October 6, 1994, within the discovery period, Cole identified

a second expert, James Foster. Foster claimed "the rivet holes in the

siderails were too large, and the rivet material was too hard," an opinion that "[a]pparently . . . does not rely upon the destroyed or lost evidence." Cole v. Keller Indus., Inc., 872 F. Supp. 1470, 1472 (E.D. Va.

1994).

Keller moved for summary judgment. The district court held that

plaintiff's destructive testing substantially prejudiced Keller and justified imposing a sanction. Cole, 872 F. Supp. at 1473. The court dis-

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missed plaintiff's suit on grounds that barring plaintiff from relying

on the lost or damaged evidence would preclude him from establishing a prima facie case. Cole, 872 F. Supp. at 1473. The court said

defendant was entitled to judgment on the breach of warranty claim

independently because the three and one-half month delay between

the expert's report and plaintiff's notice of claim was unreasonable as

matter of law under Virginia Code § 8.2-607(3)(a). Cole, 872 F. Supp.

at 1474-75.

Summary judgment is appropriate where there is no genuine issue

of material fact, and the moving party is entitled to judgment as a

matter of law. Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). We

review the district court's grant of summary judgment de novo. Myers

v. Finkle, 950 F.2d 165, 167 (4th Cir. 1991). The trial court has broad

discretion to permit a jury to draw adverse inferences from a party's

failure to present evidence, the loss of evidence, or the destruction of

evidence. Vodusek v. Bayliner Marine Corp., 71 F.3d 148, 155-57

(4th Cir. 1995). Application of the rules with respect to the spoilation

of evidence are rules of evidence administered at the discretion of the

trial court. Vodusek, 71 F.3d at 155-57.

We turn first to the question of spoilation of evidence and the question of the district court's exclusion of plaintiff's evidence and then

granting judgment. This circuit has addressed the spoilation of evidence rule in only one case and held that it is a rule of evidence.1

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1 Virginia has not decided whether a presumption results after spoilation of evidence. See 9 Wigmore, Evidence§ 2524 (Chadbourn rev.

1981); 29 Am. Jur. 2d Evidence § 244 (1994). We express no opinion on

that question and decline to decide whether there is such a presumption

under Virginia law. Nevertheless, when a State decides that a presumption arises as Kentucky had in Welsh v. United States, 844 F.2d 1239,

1245-47 (6th Cir. 1988), Federal Rule of Evidence 302 was applied to

apply state law. If Guaranty Trust Co. of New York v. York, 326 U.S. 99

(1945), as construed in Hanna v. Plumer, 380 U.S. 460 (1965), were

applied here, to avoid different results depending on whether state or federal law applied, and no federal rule intervened, precedent would seem

to indicate that Virginia law should apply, and bad faith would be

required before a case could be dismissed for spoilation. The Virginia

court so held in Gentry v. Toyota Motor Corp. , 471 S.E.2d 485 (Va.

1996). Thus, for the present appeal, the result, no matter how arrived at,

would be the same as we reach in this decision. We decide neither of

these other questions, however, and include mention of the same for the

sake of completeness.

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Vodusek, 71 F.3d at 155-57. In Vodusek, not basing our ruling on bad

faith, we approved the trial court's instruction to the jury that it could

draw an adverse inference from the plaintiff's destruction of evidence

under much the same circumstances as were present here. Vodusek,

71 F.3d at 155-57. We did not address any more severe action than

drawing an adverse inference, and stated that bad faith was not

required to permit the jury to draw an adverse inference. Nevertheless, the vast weight of authority, including the Virginia Supreme

Court, holds that absent bad-faith conduct applying a rule of law that

results in dismissal on the grounds of spoilation of evidence is not

authorized. See Berthold-Jennings Lumber Co. v. St. Louis, I. M. &

S. Ry. Co., 80 F.2d 32, 41-42 (8th Cir. 1935); Trupiano v. Cully, 84

N.W.2d 747 (Mich. 1957); Gentry v. Toyota Motor Corp., 471 S.E.2d

485 (Va. 1996).

We do not find bad faith, or any like action, in the case at bar and

therefore do not agree with the district court's drastic remedy. The

plaintiff's attorney gave the ladder to Taber to determine the cause of

the accident. In the course of his testing, he ground off the head of

two front rivets and removed the third step. Nevertheless, there is no

evidence that Taber's actions were undertaken in an effort to prevent

the defendant from inspecting and testing the ladder. In fact, the

defendant was able to inspect and test the ladder. It hired two experts,

both of whom were able to reach conclusions regarding the cause of

the accident despite Taber's mistake. They found that the rivet failed,

but concluded that the rivet was not the cause of the accident because

it failed during some earlier usage. (JA 71, para. 7; JA. 127, para. 5.)

Indeed, this record does not show that the defendant's experts ever

stated that the mistake by Taber had interfered with their investigation. Because the plaintiff, in fact, destroyed evidence, however innocently, a jury instruction, as in Vodusek, permitting an adverse

inference to be drawn might have been appropriate. But that question

is not before us, and because the plaintiff did not intentionally destroy

the evidence, and bad faith was not shown, excluding plaintiff's evidence and granting judgment was excessive and was an abuse of discretion. The remedy chosen by the district court was simply too

severe in the circumstances.

Considering the question of notice, the district court held that this

non-purchaser who sued on warranty for personal injuries, was

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required under Va. Code § 8.2-607 to provide notice to the manufacturer pursuant to § 8.2-607(3).2 Excluding the district court's opinion

in the present case, every reported case which has come to our attention, save one, has taken the position that a non-purchaser in a suit on

warranty, need not comply with the notice requirement of the Uniform Commercial Code in order to recover for personal injuries rather

than for economic loss. See McKnelly v. Sperry Corp., 642 F.2d 1101,

1107 (8th Cir. 1981) (applying Iowa statute); Chapman v. Brown, 198

F. Supp. 78, 85 (D. Hawaii), aff'd, 304 F.2d 149 (9th Cir. 1962)

(table); Simmons v. Clemco Indus., 368 So.2d 509, 514-15 (Ala.

1979); Tomczuk v. Town of Cheshire, 217 A.2d 71 (Super. Ct., Tolland County, Conn. 1965); Chaffin v. Atlanta Coca Cola Bottling Co.,

194 S.E.2d 513, 515 (Ga. Ct. App. 1972); Mattos Inc. v. Hash, 368

A.2d 993, 996-97 (Md. 1977); Frericks v. General Motors Corp., 363

A.2d 460, 463 (Md. 1976); Hill v. Joseph T. Ryerson & Son, Inc., 268

S.E.2d 296, 305 (W.Va. 1980). But see Ratkovich v. SmithKline, 711

F. Supp. 436 (N.D. Ill. 1989).3 Ronald A. Anderson, Anderson on the

Uniform Commercial Code, § 2-607:130 (1997 Revision) observes:

"When a non-purchaser is entitled to sue a seller for the third person's

harm resulting from a condition or defect which in itself was a breach

of warranty, the requirement of notice to the seller is not applicable."

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2 Code of Virginia § 8.2-607(3)(a) follows: "the buyer must within a

reasonable time after he discovers or should have discovered any breach

notify the seller of breach or be barred from any remedy." The term

"buyer" is defined as "a person who buys or contracts to buy goods,"

§ 8.2-103(a), and "seller" is defined as"a person who sells or contracts

to sell goods." § 8.2-103(d).

3 The district court relied on Ratkovich v. SmithKline, 711 F. Supp. 436

(N.D. Ill. 1989). Ratkovich held that the notice provisions of the Illinois

Uniform Commercial Code applied to a non-buyer suing a manufacturer

on a warranty for personal injuries sustained in utero as a result of her

mother's ingestion, during pregnancy, of Dexadrine, a drug manufactured by the defendant. In reaching that conclusion, the court relied on

Berry v. G.D. Searle Co., 309 N.E.2d 550 (Ill. 1979), a case involving

a buyer, who suffered personal injury from using birth control pills,

suing the seller of the pills, Planned Parenthood Association of Chicago.

Since Berry concerns a buyer and a seller and is within the literal terms

of the statute on notice, we think the reliance of Ratkovich on that case

and the comment to the Uniform Commercial Code was misplaced, as

was the reliance of the district court on Ratkovich.

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But see James J. White & Robert S. Summers, Uniform Commercial

Code, § 11-10, at 425 (2d ed. 1980) (noting that notice may be

required, but not concluding that notice is required).

We are of opinion that the proper reading of the statute is that a

non-purchaser is not required to give notice, under Va. Code § 8.2-

607 to the manufacturer, as a condition precedent to suing on a warranty under the Virginia law for personal injuries. We recognize that,

even though the text of the statute does not, the language of Official

Comment 5 accompanying § 8.2-607 could be interpreted as requiring

a claimant seeking relief to assume the position of the buyer and thus

to comply with the notice requirement. But, if the Official Comment

were meant to apply to facts such as those presently before us, that

holding would reintroduce into Virginia law a requirement of privity

that Virginia previously has abandoned. See Va. Code§ 8.2-318

(1991); Blake Construction Co. v. Alley, 353 S.E.2d 724, 725-26 (Va.

1987); Brockett v. Harrell Bros. Inc., 141 S.E.2d 897, 901 (Va. 1965).

Consequently, we hold that Official Comment 5 and§ 8.2-607(3)(a)

are inapplicable to require notice from the non-purchaser user to the

manufacturer in a suit on a warranty for personal injuries.

The judgment of the district court is vacated and the case remanded

for further proceedings not inconsistent with this opinion.

VACATED AND REMANDED.4

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4 This case was held in abeyance for some time because Keller Industries was in Chapter 11 bankruptcy. The bankruptcy court, by order

entered May 2, 1997, modified the automatic stay so as to permit this

case to proceed. Accordingly, the case is no longer held in abeyance.

Each of the parties following argument in this case has made objection

to the other party bringing authority to the attention of the court. All of

the objections of the parties subsequent to the argument of the case to the

manner or form of briefing, or with respect to authorities, are overruled.

We also have a motion to add a party to this case pursuant to a reorganization of Keller Industries in the suit in bankruptcy. We think that

motion is more appropriately made in the district court on remand, and

we are confident the district court will approve an agreed order to effect

the changes.

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