Opinion ID: 2046018
Heading Depth: 1
Heading Rank: 2

Heading: Did the district court err in admitting evidence of all consumer complaints?

Text: BRK contends that the district court committed reversible error by allowing the Mercers to introduce into evidence more than 300 consumer complaints to BRK regarding the alleged failure of the model 83R to alarm to smoke. BRK objected to admission of the consumer complaints on hearsay and relevancy grounds, arguing that plaintiffs failed to prove that the incidents reported in the consumer complaints were substantially similar to the circumstances of the Mercer fire.
The inquiry whether evidence is admissible under our Iowa rules of evidence 402 and 403 involves a two-step inquiry: (1) is the evidence relevant? and (2) if so, is its probative value substantially outweighed by the danger of prejudice or confusion? Evidence is relevant if it has a tendency to make a consequential fact more or less probable than it would be without the evidence. Iowa R. Evid. 401; McClure v. Walgreen Co., 613 N.W.2d 225, 235 (Iowa 2000). Even relevant evidence, however, is not admissible if its probative value is substantially outweighed by the danger of unfair prejudice. Iowa R. Evid. 403. Unfair prejudice arises when the evidence prompts the jury to make a decision on an improper basis.... Waits v. United Fire & Cas. Co., 572 N.W.2d 565, 569 (Iowa 1997). We review a district court's decision concerning the admission of relevant evidence for an abuse of discretion. See McClure, 613 N.W.2d at 235. An abuse of discretion occurs when the court exercised [its] discretion on grounds or for reasons clearly untenable or to an extent clearly unreasonable. Waits, 572 N.W.2d at 569 (quoting State v. Maghee, 573 N.W.2d 1, 5 (Iowa 1997)). A ground or reason is untenable when it is not supported by substantial evidence or when it is based on an erroneous application of the law. See id. Not every erroneous admission of irrelevant evidence requires reversal. McClure, 613 N.W.2d at 235. Reversal is only warranted when a substantial right of the party is affected. Id. (quoting Iowa R. Evid. 103(a)). Although a presumption of prejudice arises when the district court has received irrelevant evidence over a proper objection, the presumption is not sufficient to require reversal if the record shows a lack of prejudice. Id.
The rule is well established that evidence of prior accidents or incidents may be admissible to show the existence of a dangerous condition. Lovick v. Wil-Rich, 588 N.W.2d 688, 697 (Iowa 1999). A preliminary requirement to the admission of evidence of prior incidents, however, is a foundational showing that the prior accidents or incidents occurred under substantially the same circumstances as the incident in the present case. McClure, 613 N.W.2d at 234 (holding that evidence of thirty-four incident reports, involving claimed error in filling of prescriptions at defendant's pharmacy within a three-year period preceding the prescription error in plaintiff's case, were substantially similar to misfilling incident giving rise to plaintiff's claim and were properly admissible under similar incidents rule); see also Lovick, 588 N.W.2d at 697, and cases cited therein. In cases where the evidence of prior accidents or incidents is offered to show a dangerous condition, the probative value of previous accidents rests in the likelihood that the same dangerous conditions caused the accident that is the source of the present litigation. Cook v. State, 431 N.W.2d 800, 803 (Iowa 1988). We said in Cook that when the prior accidents evidence is offered to show that the alleged tortfeasor had notice of the allegedly defective condition, the proof of similarity may be more relaxed. Id. at 803 (citing E. Cleary, McCormick on Evidence § 200, at 589-90 (3d ed.1984)). Although accident reports or other documents consisting of complaint statements made by consumers to a manufacturer constitute hearsay, and thus would be inadmissible for any purpose that assumes the truth of the allegations made in the complaints, see Iowa R. Evid. 801(c), such evidence would be admissible as tending to show the manufacturer's notice or awareness of danger, provided the incidents alleged in the complaints are substantially similar to the one at issue. See Shields v. Sturm, Ruger & Co., 864 F.2d 379, 381 (5th Cir.1989) (holding that although accident reports from consumers to gun manufacturer were hearsay and inadmissible for any purpose that assumed the truth of the allegations made in the reports, district court properly admitted 70 of the 570 consumer reports for purposes of proving notice and awareness of danger caused by misfiring of gun; reports of customers made after the date of plaintiff's accident were not relevant and not admissible).
To properly address this issue, we believe it helpful to explain in detail the evidence of consumer complaints made to BRK. At trial, BRK customer service employee Beth Weber testified concerning BRK's method of responding to consumer complaints. Weber testified that a consumer would either telephone or write to BRK concerning complaints regarding alleged failure of a smoke detector to alarm in the presence of smoke. A BRK customer service representative would document the relevant information. When a consumer complained that a smoke detector had failed to alarm in the presence of smoke, the notation N/R/S or No Response to Smoke was made on the report. Weber explained to the jury that the term No Response to Smoke is the term assigned by BRK to complaints where the consumer thought that the smoke detector should have sounded in the presence of smoke but did not. Weber was responsible for processing complaints directly from consumers. The next step in processing a consumer complaint was that a BRK customer service representative would respond in writing to the consumer using a form-type letter, asking the consumer to complete an enclosed questionnaire. The letter also included instructions on how to return the detector to BRK for examination. BRK would send a replacement detector to the consumer prior to the consumer returning the detector that allegedly failed to alarm. From 1983 until about 1992 or 1993, BRK would send consumers a combination detector. BRK now sends the consumer the same model that is the source of the complaint. Some of the complaining consumers completed the questionnaires and others did not. Approximately half of the customers returned their model 83R detectors. If the consumer sent the smoke detector to BRK for testing, BRK would examine the detector, check the battery connection, and submit it to the UL 217 smoke box test to determine whether the detector was working properly. According to BRK's records, of the detectors that were returned by consumers and that were subjected to the UL 217 smoke box test, none failed. After testing the detector, BRK would then send a letter to the consumer explaining what the likely problem was when the alarm did not sound. During the course of discovery in this case, plaintiffs requested BRK to produce company documents relating to customer complaints involving the alleged failure of the BRK model 83R detector to alarm to smoke. BRK produced approximately 363 consumer complaints that had been categorized as N/R/S or No Response to Smoke. These complaints were received by BRK during the period from July 1989 to December 1997. Only 116 of those complaints were received by BRK prior to the Mercer fire, which occurred on January 18, 1993. Prior to trial, BRK filed a motion in limine seeking to exclude all 363 consumer complaints from evidence at trial. BRK argued that the consumer complaints were inadmissible hearsay and were not relevant in that the Mercers had failed to show that the incidents reported in the complaints were substantially similar to the facts and circumstances of the Mercer fire.
After hearing extensive argument on the issue, the court ruled that all of the consumer complaints would be admissible at trial and overruled BRK's motion in limine. The court's reasoning was as follows: THE COURT: ... the Court is going to allow into evidence the consumer complaints.... These consumer complaints... are relevant regarding punitive damages, these complaints, they are relevant to show knowledge.... The Court feels that the consumer complaints are relevant in that they are substantially similar under the Iowa law. The fact that they, perhaps, never went off or went off late, in this Court's opinion they are substantially similar.... If it doesn't go off timely, it doesn't do what it's intended to do.... Again, the Court is finding that an alarm that never goes off and one that does not go off in a timely fashion are substantially similar for the purposes of this type of product in this lawsuit. It comes in to show knowledge. As a result, all 363 written consumer complaints were admitted into evidence. The consumer complaints were presented to the jury in three cardboard filing boxes. The only limiting instruction given by the court with respect to the consumer complaints advised the jury that in considering the conduct of BRK with regard to the issue of punitive damages, the jury could only consider the consumer complaints as to those incidents which pre-dated the Mercer fire of January 18, 1993. In addition to admission of the written consumer complaints, three of the complaining consumers, including Barbara Ware, William Watters, and Marilyn Russell, testified during trial concerning the failure of their model 83R to alarm to smoke during a fire. Later, in overruling BRK's motion for judgment notwithstanding the verdict on the issue of the consumer complaints, the court stated, that by BRK's own conduct and admissions, the consumer complaints at issue were substantially similar to the fire at the Mercer residence. The court specifically noted that BRK had categorized the consumer complaints under the single heading No Response to Smoke and that BRK sent out the exact same form letter regarding the identical model 83R ionization smoke detector to those consumers who complained. On appeal, BRK argues that the district court committed reversible error in admitting into evidence all 363 complaints. Specifically, BRK argues that not all of the incidents in the 363 consumer complaints were substantially similar to the Mercer fire because BRK's records of the consumer complaints showed that the smoke detectors failed to alarm for a variety of reasons, including: (1) improper placement of the detector on wall or ceiling; (2) improper location of detector within the home; (3) cold smoke or insufficient amount of smoke to reach detector; and (4) no battery or improper battery connection in the model 83R. In other cases, the smoke detector itself had been started on fire in an attempt to test it. BRK also points out, that in some cases, the detector had not been returned so BRK could not properly test the detector for a potential defect or the consumer had not completed the questionnaire regarding the incident. BRK also points out that the Mercer smoke detector was not available for testing and BRK could therefore not examine it to determine whether it had failed to function properly. The Mercers argue that the consumer complaints were properly admissible because they were substantially similar to the Mercer fire in that the complaints involved the exact same product and the same alleged product defectthat BRK ionization detectors have a delayed response time in responding to certain types of fires. Additionally, the Mercers argued that the consumer complaints were especially relevant to the issue of punitive damages as they showed BRK's knowledge that the 83R ionization smoke detector was not timely responding to slow smoldering fires, and BRK's knowledge that its method of testing the model 83R was not an adequate predictor of the performance of the 83R ionization detector in real world fire scenarios.
1. We first conclude that only those consumer complaints received by BRK prior to the date of the Mercer fire, January 18, 1993, (which the record shows to be 116) are relevant to plaintiffs' theories of recovery in this case. Therefore, only those complaints received by BRK prior to January 18, 1993, were properly subject to consideration for admission into evidence. Our recent cases also suggest that the rule allowing evidence of similar incidents is generally limited to incidents occurring prior to the one in question. See Lovick, 588 N.W.2d at 697 (making reference to prior incidents); Fell v. Kewanee Farm Equip. Co., 457 N.W.2d 911, 920 (Iowa 1990) (same); Cook, 431 N.W.2d at 803 (same); Oberreuter v. Orion Indus., Inc., 398 N.W.2d 206, 211-12 (Iowa App. 1986) (same); cf. Shields, 864 F.2d at 381 (holding that district court properly excluded reports from consumers made after the date of plaintiff's accident on relevancy grounds). But see Rattenborg by Rattenborg v. Montgomery Elevator Co., 438 N.W.2d 602, 606 (Iowa App.1989) (holding evidence of two subsequent accidents was admissible); Caterpillar Tractor Co. v. Beck, 624 P.2d 790, 794 (Alaska 1981) (holding that evidence of post-injury accidents is admissible in strict liability cases); Bass v. Cincinnati, Inc., 180 Ill.App.3d 1076, 129 Ill.Dec. 781, 536 N.E.2d 831, 833-34 (1989) (stating that rationale of why evidence of prior accidents is admissibleto show a product is dangerous or defectiveapplies to evidence of accidents which occur after the accident involving a particular plaintiff; but holding that evidence of similar post-accident occurrences is not admissible on issue of punitive damages). 2. We next consider which of the 116 consumer complaints received by BRK before the Mercer fire meet the substantially similar requirement. Plaintiffs' theory at trial was that their model 83R detector was fully operable and properly installed, that smoke reached the detector, but the detector did not sound an alarm due to its defective condition in that ionization detectors do not timely alarm to certain types of fires. The 116 consumer complaints received prior to the Mercer fire all involved the same productthe BRK model 83R ionization detectorand also involved the same general allegationthat the model 83R failed to alarm to smoke. At first glance, it may seem that the 116 consumer complaints were properly admitted. However, the consumer complaints show that there are a number of variables that affect the performance of a smoke detector. Thus, the specific reason why the model 83R failed to alarm to the presence of smoke in the Mercer fire therefore became an issue in the case. Plaintiffs had the burden of showing that the facts and circumstances of each consumer complaint were substantially similar to the Mercer fire to be admissible into evidence. Accordingly, this means that plaintiffs had to do more than just show that each consumer complaint involved a model 83R that did not alarm to smoke. Rather, plaintiffs had to show that there was a sufficient similarity between the reason why the particular consumer's detector failed to alarm and why the Mercers' detector failed to alarm; it was not BRK's burden to disprove any common factors between the Mercer fire and the incidents reported in the consumer complaints. Thus, the fact that BRK categorized the complaints as NRS or that BRK sent out the same form letter to the consumer does not prove that the reason the particular consumer's detector allegedly failed to alarm is sufficiently similar to the reason the Mercers' detector allegedly did not alarm. Upon our review of the evidence related to the consumer complaints, we conclude that plaintiffs failed in their burden of proving that all the consumer complaints received by BRK prior to January 18, 1993, are substantially similar to the facts and circumstances of the Mercer fire. The customer complaints reveal that some of the smoke detectors referenced in the complaints failed to alarm for reasons unrelated to those advanced by plaintiffs in this case. For example, in some of the consumer complaints, there was no battery in the detector or the battery or the smoke detector itself was started on fire in an attempt to test it. The failure of a smoke detector to alarm for these reasons is not relevant because it was unlikely to make a finding that the Mercers' detector was defective more or less probable. We also believe that any probative value of the complaints was outweighed by the danger of unfair prejudice when the jury observed the three boxes of 363 consumer complaints being admitted into evidence with the implication that each consumer complaint involved an incident similar to the Mercer fire where the model 83R allegedly failed to alarm to smoke because it was defective. See Iowa R. Evid. 403 (relevant evidence may be excluded if its probative value is substantially outweighed by the danger of unfair prejudice). We realize that the record in this case was voluminous. However, with respect to the 116 consumer complaints received by BRK prior to the fire, it would be necessary for the court to examine each prior incident to determine if it truly is substantially similar to the incident in the subject case. The court simply could not rely on BRK's classification system of processing consumer complaints for its conclusion that the complaints were substantially similar to the Mercer fire. Rather, it was plaintiffs' burden to establish a threshold foundation that in each consumer complaint the smoke detector was fully operable, that the detector was installed properly as to location in the home and on the wall/ceiling, and that a sufficient amount of smoke reached the detector to trigger the alarm. Those incidents where the consumer reported that the detector was otherwise operable, properly installed, and smoke reached the detector, but was informed by BRK that the detector did not alarm due to cold smoke or improper location of detector or some other subjective reason, would seem to relate more to weight of the evidence rather than its admissibility. We also point out that the district court would have discretion under Iowa rule of evidence 403 to exclude evidence of consumer complaints due to considerations of undue trial delay in analyzing whether each particular consumer complaint was sufficiently similar to the facts and circumstances of the Mercer fire. See Wilson v. Bicycle South, Inc., 915 F.2d 1503, 1510 n. 10 (11th Cir.1990) (upholding trial court's exclusion of evidence on grounds that evidence was not probative because of the necessity for considerable amount of extrinsic evidence to determine whether incidents were sufficiently similar to meet the standards of Fed.R.Evid. 403; even if trial court had reached the issue of whether the two incidents were substantially similar, admissibility of evidence would have required a trial within a trial); Brooks v. Chrysler Corp., 786 F.2d 1191, 1198-99 (D.C.Cir.1986) (holding that district court did not abuse its discretion in excluding evidence of 330 consumer complaints and other exhibits under Fed.R.Evid. 403 where minimal probative value of exhibits was substantially outweighed by risk of unfair prejudice, trial delay, and jury confusion; noting that trial would have been delayed by defendant attempting to rebut substance of each of the 330 complaints or to distinguish nature of complaints from alleged defect in plaintiff's case). The court might also consider giving a cautionary instruction advising the jury that the evidence of the consumer complaints may only be considered on the issue of whether BRK has notice or knowledge of the defective condition of the model 83R. We therefore conclude that the court's admission of all 300 plus consumer complaints constitutes reversible error.