Opinion ID: 888872
Heading Depth: 1
Heading Rank: 12

Heading: Improper Legal Maneuvering

Text: ¶ 82 Evenflo points to Hall v. Big Sky Lumber & Supply, Inc., 261 Mont. 328, 863 P.2d 389 (1993), to support its argument that the Malcolms' counsel committed improper legal maneuvering in his closing argument. Hall filed a tort suit against the driver of a logging truck after the logging truck struck his vehicle from behind when its brakes failed. Hall, 261 Mont. at 331, 863 P.2d at 391. A highway patrolman issued the driver a citation at the scene for inadequate or defective brakes. Hall, 261 Mont. at 336, 863 P.2d at 394. The district court granted the defendant's motion in limine to exclude evidence of the citation. Hall, 261 Mont. at 336, 863 P.2d at 394-95. The defendant's counsel stated during his closing argument that if there were any defects or problems with that braking system at all, you can be sure that [one of the patrolman witnesses] would have told you about that. Hall, 261 Mont. at 336-37, 863 P.2d at 395. ¶ 83 The jury found that the defendant was not negligent. Hall, 261 Mont. at 332, 863 P.2d at 392. This Court ordered a new trial. Hall, 261 Mont. at 337, 863 P.2d at 395. The Court concluded that the argument by defense counsel to the jury [was] improper legal maneuvering. Defense counsel cannot ask to have evidence excluded and then argue that if the evidence existed it would have been admitted. Hall, 261 Mont. at 337, 863 P.2d at 395. ¶ 84 Evenflo claims that the Malcolms engaged in just such improper legal maneuvering here. Evenflo argues that the District Court committed transparent reversible error when it allowed the Malcolms' counsel to state that `if there were any inaccuracy' in D'Aulerio's chart, Evenflo would have said so. Evenflo selectively parses the record. Evenflo stated in its closing argument: [H]e tells you, please, look at Exhibit 278-A, that's the list put together by Dr. D'Aulerio that he made from the test reports. Why not put the test reports in? I mean, that's where it came from, why not use your best evidence? I mean, think of all of this key evidence that you're really not seeing, the door, actual test reports. The Malcolms' counsel then stated in rebuttal: [Evenflo's counsel] held it up, and it's the exhibit prepared by Mr. D'Aulerio that has the tests, 278-A. And he said, well, where are the actual tests? Well, this is the summary. It would not have been admitted if it were not an accurate summary. And as Mr. D'Aulerio said, the words that are written, here, shell cracked on the left side starting at the belt hooks, are the words that were actually on the tests. That's what it said. And I can assure you that if there were any inaccuracy in these 157 tests included in this summary . The Court overruled Evenflo's objection. The Malcolms' counsel continued: I can assure you that if there were any inaccuracy about the cracks that are shown, here, that would have been pointed out. He would have been impeached on it. They would [have] said you inaccurately quoted this. ¶ 85 The defendant in Hall asked the court to exclude the evidence and then took advantage of the plaintiff's inability to mention the evidence by implying that the evidence did not exist. Hall, 261 Mont. at 336-37, 863 P.2d at 395. The Malcolms, on the other hand, responded to Evenflo's implication that the actual test reports differed from those presented on the summary. The District Court's order in limine prohibited the admission of the underlying test reports that Evenflo had mentioned in its closing argument. The Malcolms' counsel referred to the summary of quotes that the court had deemed to be admissible. The Malcolms' counsel did not commit improper legal maneuvering in his closing argument. ¶ 86 We agree that several of the District Court's evidentiary rulings heightened the task of Evenflo's defense. The District Court's rulings regarding Kiser's and D'Aulerio's testimony and D'Aulerio's test failures chart left Evenflo with a difficult task. The court's exclusion of Evenflo's FMVSS 213 compliance information made that task even more onerous. ¶ 87 The District Court operated within the realm of Montana's strict liability law, however, which places a heavy burden on the manufacturer of products. See, e.g., Sternhagen, 282 Mont. at 177-78, 935 P.2d at 1144-45. Montana's strict liability law emphasizes maximum protection for the consumer and places the risk of loss on the manufacturer. Sternhagen, 282 Mont. at 175-81, 935 P.2d at 1143-46. Montana's strict liability law rejects concepts fundamental to negligence law such as reasonableness and foreseeability. Sternhagen, 282 Mont. at 176, 935 P.2d at 1144. ¶ 88 We cannot say that the District Court's rulings were improper with regard to Evenflo's liability for compensatory damages when we view those rulings through the lens of Montana's strict liability law. We will overturn a district court's evidentiary rulings only if the court abused its broad discretion. Sunburst, ¶ 74. The record does not indicate that the court acted arbitrarily without conscientious judgment or so exceeded the bounds of reason as to work a substantial injustice. Giddings, ¶ 42. We cannot say based on this record that the court abused that discretion by applying unfairly its FMVSS 213 ruling. Giddings, ¶ 42. ¶ 89 Did the District Court abuse its discretion when it excluded Evenflo's FMVSS 213 compliance evidence with respect to punitive damages? ¶ 90 A jury may award punitive damages when a defendant has acted with actual fraud or actual malice. Section 27-1-221, MCA. The defendant's state of mind represents a key element in determining whether a defendant acted with actual fraud or actual malice. Sunburst, ¶ 81. Evenflo argues that the District Court's decision to exclude evidence of the OMW model 207's compliance with FMVSS 213 prevented it from introducing evidence bearing on its state of mind. Evenflo contends that this Court's decision in Sunburst, which we decided after the Malcolm trial, requires reversal of the jury's punitive damages award. ¶ 91 In Sunburst, Texaco operated a gasoline refinery just outside the town of Sunburst, Montana, from 1924 to 1961. Gasoline leaked from pipes at the refinery for many years and contaminated the surrounding soil. Texaco conducted a partial cleanup of the contamination in the soil and the groundwater in the late 1950s, but left a significant amount of pollution. Sunburst, ¶ 10. Montana's Department of Environmental Quality (DEQ) eventually assumed jurisdiction over the refinery site. Sunburst, ¶ 11. ¶ 92 Sunburst filed suit against Texaco on February 22, 2001. Sunburst alleged numerous causes of action, including strict liability for abnormally dangerous activity. Sunburst, ¶ 19. The district court denied Texaco's attempt to introduce evidence that it had cooperated with DEQ and that it had complied with DEQ regulations during its remediation efforts in the decade before Sunburst had filed suit. Sunburst, ¶ 81. The district court determined that evidence of Texaco's negotiations with DEQ likely would confuse the jury and divert its attention from evaluation of Sunburst's common law claims. Sunburst, ¶ 83. The jury awarded Sunburst compensatory damages of approximately $16 million. Sunburst, ¶ 24. The jury also found that Texaco had acted with actual fraud or actual malice and awarded Sunburst $25 million in punitive damages. Sunburst, ¶ 26. ¶ 93 We concluded that the district court had abused its discretion by prohibiting Texaco from introducing evidence at trial of DEQ's involvement in the site remediation and Texaco's attempted compliance with government regulations. Sunburst, ¶ 85. We stated that a good faith effort to comply with all government regulations would be evidence of conduct inconsistent with the mental state requisite for punitive damages. Sunburst, ¶ 81. ¶ 94 The District Court concluded that the OMW model 207's compliance with FMVSS 213 had absolutely no bearing at all upon the reprehensibility of the conduct of Evenflo. The court emphasized that Evenflo could not even begin selling the OMW without complying with FMVSS 213 and thus [e]ach and every act of Evenflo relating to it[s] adherence to FMVSS 213 was intended solely to free the company up to sell, and profit from, the On My Way. ¶ 95 We faced similar findings regarding the defendant's misconduct in Sunburst. The district court noted that Texaco had been communicating with the public regarding the contamination since the late 1980's. Sunburst, ¶ 82. The court found that Texaco's communication with the public consistently [had] minimized the problem and failed to accurately report their findings. Sunburst, ¶ 82. The court attributed this effort at minimization to the fact that Texaco had been motivated by its own financial interests. Sunburst, ¶ 82. The court highlighted a 1989 document that outlined Texaco's hidden agenda to save money at the expense of a meaningful cleanup in Sunburst. The court further attributed to Texaco numerous affirmative misrepresentations concerning the pollution in Sunburst. Sunburst, ¶ 82. ¶ 96 We determined that the district court's partial reliance on these findings of misconduct by Texaco to justify an award of punitive damages could not be sustained in light of the court's decision to exclude evidence tending to show why the defendant acted as it did, or failed to act, whatever the case may be, when a jury considers whether to award punitive damages. Sunburst, ¶ 84. The evidence could bear on whether Texaco had acted with deliberate indifference, whether Texaco knowingly had concealed any material facts, and the size of any appropriate punitive award. Sunburst, ¶ 84. Sunburst retained a strong argument that Texaco's inaction and selection of the cheap remediation alternative indeed had demonstrated deliberate indifference, but the debate should not be preempted by disabling Texaco from explaining itself. Sunburst, ¶ 84. ¶ 97 The District Court's order upholding the jury's award of punitive damages to the Malcolms likewise included a number of findings of fact regarding misconduct by Evenflo. The District Court found that Evenflo had known from the outset that it could have used the safer alternative tunnel design for the OMW. The court found that the tunnel design would have provided a substantial margin of safety versus the open belt hook design and would have virtually eliminate[d] the deadly risk of a loss of restraint during an accident. The court found that Evenflo had deemed acceptable manufacturing the OMW with an unpadded, hard plastic surface, despite its knowledge that adding EPS foam padding would reduce the potentially deadly hazard of skull fractures. ¶ 98 The District Court further found that Evenflo had concealed from NHTSA the true hazard [of] potentially deadly ejection associated with the OMW during its June 1995 consumer corrective action. The court stated that Evenflo had failed to remedy sufficiently the hazard before re-starting production, and had continued to withhold its knowledge that the OMW continued to crack, tear, or peel back in the area of the automobile seat belt path at a rate that was dangerously high. The court noted that despite Evenflo's knowledge of the hazards associated with the OMW, it had assured Jessica Malcolm that the seat was safe to use with her soon to be born child. ¶ 99 We cannot sustain the District Court's partial reliance on these findings of misconduct by Evenflo in light of the court's decision to exclude evidence that might show why Evenflo acted as it did, or failed to act, whatever the case may be, when the jury consider[ed] whether to award punitive damages. Sunburst, ¶ 84. Evidence of Evenflo's good faith effort to comply with all government regulations, including FMVSS 213, would be evidence of conduct inconsistent with the mental state requisite for punitive damages. Sunburst, ¶ 81. ¶ 100 The District Court attempted to distinguish Sunburst on the grounds that compliance with the minimal frontal impact standard established by FMVSS 213 was irrelevant and inadmissible. We agree that evidence of the OMW model 207's compliance with FMVSS 213 was not relevant to the issue of compensatory damages. See ¶ 44. We cannot agree with the District Court that the FMVSS 213 compliance evidence would not be relevant to the issue of punitive damages. Evenflo may have been able to persuade the jury that its compliance with FMVSS 213 showed that it had not evinced deliberate indifference to the welfare of the occupants of the OMW. Sunburst, ¶ 84. The jury also might have decided that evidence of Evenflo's misconduct demonstrated deliberate indifference, but the District Court should not have preempted that debate by disabling [Evenflo] from explaining itself. Sunburst, ¶ 84. ¶ 101 The District Court abused its discretion by prohibiting Evenflo from introducing evidence of the OMW model 207's compliance with FMVSS 213 for the purposes of considering the appropriateness of punitive damages. Sunburst, ¶ 74. We vacate the jury's award of $3.7 million in punitive damages. The question of punitive damages must be put again to a jury with Evenflo being allowed to present evidence of the OMW model 207's compliance with FMVSS 213. ¶ 102 As we recognized in Sunburst, ¶ 86, this decision raises the problem of how the District Court could have ensured that the jury considered the OMW model 207's compliance with FMVSS 213 for purposes of punitive damages, but disregarded the same evidence for the purposes of compensatory damages. The District Court noted that the dilemma is a thorny one and opined that dilemmas such as this are unwelcome in jury trials. ¶ 103 We recognize the difficulties highlighted by the District Court in conducting a jury trial. We also recognize, however, that our system provides for the presentation of evidence regarding liability for compensatory damages and punitive damages to the jury in a single proceeding. See Finstad v. W.R. Grace & Co., 2000 MT 228, ¶ 20, 301 Mont. 240, 8 P.3d 778; First Sec. Bank of Glendive v. Gary, 245 Mont. 394, 401, 798 P.2d 523, 527 (1990); § 27-1-221(6)-(7). We must trust that the jury will heed the court's instructions as to how to evaluate the evidence presented. See e.g. Murray v. Talmage, 2006 MT 340, ¶ 17, 335 Mont. 155, 151 P.3d 49. We need not put our reliance to the test here. The District Court excluded evidence of the OMW model 207's compliance with FMVSS 213 for both purposes. We affirmed the District Court's decision for the purposes of compensatory damages. See ¶ 44. A new jury may consider evidence of the OMW model 207's compliance with FMVSS 213 for the purposes of determining whether Evenflo acted with actual fraud or actual malice. Section 27-1-221, MCA. ¶ 104 We affirm in part, reverse in part, and remand for further proceedings. We Concur: MIKE McGRATH, C.J., W. WILLIAM LEAPHART and JOHN WARNER, JJ.