Court Opinion

ID: 9462776
Source: CourtListenerOpinion
Date Created: 2023-08-04 22:50:13.062594+00
Date Added: 2024-06-11T17:37:47.033116
License: Public Domain

PELL, Circuit Judge,
concurring in part and dissenting in part.
Although approving of and concurring in the greater part of the majority opinion, I regard the extent of the reversal as to the Howarth claim as being too narrow and therefore respectfully dissent as to that portion of the opinion only.
The district court dismissed this part of the suit in part because of lack of causal relationship between injury and the alleged *738negligence and bad faith. I read the majority opinion as substantially agreeing with this premise although reversing because of the possibility of collateral estoppel becoming involved in the Howarth litigation. I will readily concede that Outboard’s efforts to demonstrate causation in the litigation here under review between the Sabich case and the Howarth litigation may be sisyphean. Nevertheless, following firmly established authority that a complaint is not subject to dismissal with prejudice unless it appears to a certainty that no relief can be granted under any set of facts that can be proved in support of its allegations, 5 Wright & Miller, Federal Practice and Procedure: Civil § 1215 at 113 (1969), I am not persuaded that it is proper at this point to deny access permanently by the plaintiff to the base of the hill and to the chance, difficult though the course may be, to engage in the effort of reaching the top.
Construing the pleadings liberally as we must, the following are the factual premises upon which the plaintiff relies in seeking relief under the Howarth counts. But for the negligence and bad faith of Stumbos and Liberty Mutual: the multi-million dollar class action Howarth suit would not have been filed; the attorney who had represented Sabich and who had acquired knowledge and expertise in the matter of product liability exposure of OMC would not have been acting as the lawyer for Howarth; the product would not have been found to have been defectively designed since it was not in fact defectively designed; and the trial record created in the Sabich case will seriously impair OMC’s ability to assert successfully the absence of design defects.
In my opinion, the most crucial of these matters is the last one. No matter how often we may express the aphorism that a law suit is a quest for the truth, the fact realistically remains that the trier of fact determines what it believes to be the truth on the basis of the case as it is presented in court which may or may not, dependent upon a number of variables, be the same as the ultimate truth. Admissions of parties which should not have been made because they did not represent the truth but were nevertheless made through inadvertence or misunderstanding will be admitted into evidence and can have a devastating effect. Any experienced trial attorney is aware of the impact created upon a trier of fact when he has to engage in attempting to explain away something detrimental to his client no matter how correct the explanation may be. A key witness not properly acquainted with all of the intricacies of a case because of lack of proper preparation on the subject on which he is to testify may be unuseable as a witness because of the threat of impeachment by inconsistent statements. Unprepared or incompetent counsel may be responsible for stipulations that should not have been entered or positions that should not have been taken. Any lawyer who has retried a case has been painfully aware that factors which were developed in the previous trial, even though they should not have been, cast their shadow on the second case.
The California judicial system will have to take the case as it is presented which will include any matters that may properly be brought from the record of the Sabich trial. This in no way is to cast doubt on the adequacy of that state’s judicial system. I cannot agree with the majority that we must presume that the judgment in the Howarth case will be correct if we mean that such a judgment is based upon the ultimate truth of there being a defective product. That might be the case; but it might equally be that the judgment resulted from the influence of that which occurred, but would not have except for the bad faith and negligence of the defendants, in the Sabich trial. I also for the reasons indicated cannot agree with the district court that there could not be a causal relationship between the negligence and the bad faith on the one hand and the Howarth litigation and its impact upon OMC on the other hand.
I agree with the majority that OMC has no legally protected interest in freedom from legal responsibility for wrongdoing. *739The complaint which was dismissed, however, alleges that there was no wrongdoing. In today’s climate of product liability I do not entertain any idea that very many who have purchased the product in question if it turns out to have been defective will refrain from calling OMC to account. This is a far different situation from being subjected to an action seeking many millions of dollars of compensatory and punitive damages on behalf of every purchaser of the product, a suit which would not have been brought except for the charged misconduct of Liberty Mutual and its attorney.
I have no way of knowing whether the product was or was not defective and express no opinion on that subject. I merely take the position that just as an injured purchaser of the OMC product should be afforded an opportunity of attempting to prove damage from the conduct creating the product, OMC itself, claiming to be an injured purchaser of insurance services, should be afforded an opportunity of attempting to prove damage from the conduct of Liberty Mutual and Stumbos. Faced with a dismissal with prejudice it would appear that the opportunity of doing so will be denied to it as to this substantial part of its claim.