Alm v. Aluminum Co. of America

KILGARLIN, Justice.

James Aim presents three issues for decision by this court: (1) whether Aluminum Company of America (Alcoa), the designer of a closure system for soft drink bottles, had a duty to warn consumers of the hazard of bottle cap blow off; (2) whether the trial court properly disregarded the jury’s findings of gross negligence; and, (3) whether the court of appeals applied the correct legal standards in reviewing the factual sufficiency of the evidence supporting the jury’s finding of ordinary negligence.

The trial court rendered judgment for Aim based on the jury’s favorable verdict. The court of appeals, with one justice dissenting, reversed that judgment, holding that the evidence pertaining to certain alleged acts of negligence was factually insufficient to support the jury finding against Alcoa. Additionally, the court of appeals held that Alcoa did not have a duty to warn consumers of the hazard of bottle cap blow off. 687 S.W.2d 374. We reverse the judgment of the court of appeals in part and affirm it in part.

During the 1960’s, Alcoa designed, patented, manufactured, and marketed a closure system for applying aluminum caps to carbonated soft drink bottles. ' In 1969, Alcoa sold such a capping machine to JFW Enterprises, Inc., the owner of the Houston 7-Up Bottling Company. The capping machine applied Alcoa-designed 28 millimeter pilfer-proof aluminum caps to soft drink bottles of various sizes. JFW purchased the aluminum capping material from W.H. Hutchinson & Son, Inc. W.H. Hutchinson manufactured the Alcoa-designed and patented resealable caps under licensing agreements with Alcoa.

On June 3, 1976, James Aim suffered a severe eye injury when an aluminum bottle cap exploded off a 32-ounce bottle of 7-Up. Aim had purchased the bottle of 7-Up at a Lewis and Coker supermarket. Lewis and Coker had purchased the bottle from JFW Enterprises.

Aim sued Lewis and Coker, JFW, and Alcoa under theories of strict liability and negligence but settled with Lewis and Coker and JFW before trial. Alcoa filed a cross-action against JFW and Lewis and Coker. The jury found against Alcoa on all the submitted liability issues. However, the trial court disregarded the jury’s answers to special issues 1 through 6, stating that strict product liability did not apply to Alcoa. The trial court also disregarded the jury’s answers to issues 11 and 12, finding the answers were “against the great weight and overwhelming preponderance of the evidence.” In issue 11, the jury found Alcoa was grossly negligent, and in issue 12, it awarded Aim one million dollars in exemplary damages. The trial court rendered judgment on the jury’s answers to the remaining issues, which found Alcoa 55% negligent and JFW 45% negligent. Aim was awarded $300,500 as his actual damages.

The question of Alcoa’s negligence was broadly submitted in one issue. The court of appeals set out and considered four alleged acts of negligence by Alcoa:

(1) Alcoa negligently designed the bottle and cap in that the threads on the bottle to be impressed into the cap were too shallow;

(2) Alcoa negligently designed the cap by including an optional pilfer-proof band on the cap;

(3) Alcoa was negligent in recommending to bottlers a visual inspection system based upon the batch and hold principle of quality control, as opposed to inventing or devising some fail safe system of inspection for use by bottlers;

(4)Alcoa was negligent in failing to adequately warn the bottler (JFW) and/or the plaintiff about the risk that an improperly applied cap could blow-off and cause personal injury.

687 S.W.2d at 378. The court of appeals concluded the evidence was factually insufficient to support a finding of negligence as to the first three alleged acts. As to whether Alcoa was negligent in failing to warn JFW and/or Aim, the court of appeals held that Alcoa had no duty to warn Aim. The court held Alcoa did have a duty to warn JFW, but concluded the jury had impliedly found that Alcoa’s warning to JFW was adequate.¹ 687 S.W.2d at 382.

Aim contends that Alcoa owed a duty to warn consumers such as himself of the hazard of bottle cap blow off. It is a long standing principle in this state that a duty of care arises when conditions are such that a “prudent person would have anticipated and guarded against the occurrence which caused” another’s injury. St. Louis Southwestern Ry. Co. of Texas v. Pope, 98 Tex. 535, 865 S.W. 57 (1905). As this court recently stated, a person has a duty to act as a “reasonable prudent person would act under the same or similar circumstances regarding any reasonably forseeable risk.” Colvin v. Red Steel Co., 682 S.W.2d 243 (Tex.1984).

Alcoa argues that it owed no duty to warn Aim as it was not the manufacturer or seller of any component part or the final product which injured Aim. Alcoa was, however, the designer and marketer of the closure process, the designer of the cap, and the designer, manufacturer, and seller of the capping machine.

ALCOA AS DESIGNER

Whether a designer who is not a manufacturer has a duty to warn of hazards associated with the use of its designed product has not before been addressed by this court. A manufacturer has long been held to have a duty to exercise ordinary care in the design of a product. Gonzales v. Caterpillar Tractor Co., 571 S.W.2d 867 (Tex.1978). A designer who is not also the manufacturer should share the same duty to develop a safe design. Alcoa has a duty to exercise ordinary care in the design of its closure system. In fact, Alcoa does not dispute that it owes Aim a duty to design its closure system in a non-negligent way.

A manufacturer, as well as all suppliers of a product, also has a duty to inform users of hazards associated with the use of its products. Restatement (Second) of Torts § 388 (1965); Olivarez v. Broadway Hardware, Inc., 564 S.W.2d 195 (Tex.Civ. App.—Corpus Christi 1978, writ ref’d n.r. e.). There is no reason to distinguish a designer, who has intimate knowledge of a designed product, from a retailer, wholesaler or manufacturer. Alcoa designed the closure system. It is the failure of that system which caused Aim’s injury. There can be no justification for requiring a user of Alcoa’s closure technology to warn of its hazards while not holding Alcoa to the same duty. The issue in a negligent failure to warn case is simply whether a reasonably prudent person in the position of the designer would warn of hazards associated with the designed product. Alcoa had a duty to warn of the hazards associated with its closure technology if a reasonably prudent person in the same position would have warned of the hazards.

ALCOA AS MANUFACTURER

While no Texas court has ever held a manufacturer precisely in the position of Alcoa liable, at least one court of another jurisdiction has. In Fabbrini Foods, Inc. v. United Canning Corp., 90 Mich.App. 80, 280 N.W.2d 877 (1979), the plaintiff recovered against three defendants, including the designer/manufacturer of a filling machine used by a mushroom canner. The plaintiff had received contaminated mushroom cans produced by the canning machine. Alcoa’s position as a remote manufacturer of the capping machine should not insulate it from liability when its negligence proximately causes damages.

Alcoa supplied a capping machine to JFW. Alcoa knew that through use its capping machine would go out of adjustment, thereby causing misapplied caps. And Alcoa knew of the risk of personal injury from bottle cap blow off at least as early as 1970. Alcoa had a duty to warn users of the hazard of improperly applied caps.

Alcoa argues and the court of appeals held that Alcoa satisfied its duty to warn of the hazard of bottle cap blow off by adequately warning JFW. We agree that a manufacturer or supplier may, in certain situations, depend on an intermediary to communicate a warning to the ultimate user of a product. However, the mere presence of an intermediary does not excuse the manufacturer from warning those whom it should reasonably expect to be endangered by the use of its product. The issue in every case is whether the original manufacturer has a reasonable assurance that its warning will reach those endangered by the use of its product. Hopkins v. Chip-In-Saw, Inc., 630 F.2d 616 (8th Cir.1980); Gordon v. Niagara Machine and Tool Works, 574 F.2d 1182 (5th Cir. 1978); Borel v. Fiberboard Paper Products Corp., 493 F.2d 1076 (5th Cir.1973); Doss v. Apache Powder Co., 430 F.2d 1317 (5th Cir.1970); Weekes v. Michigan Chrome and Chemical Co., 352 F.2d 603, 607 (6th Cir.1965).

In some situations, courts have recognized that a warning to an intermediary fulfills a supplier’s duty to warn ultimate consumers. For example, when a drug manufacturer properly warns a prescribing physician of the dangerous propensities of its product, the manufacturer is excused from warning each patient who receives the drug. Cooper v. Bowser, 610 S.W.2d 825, 830-31 (Tex.Civ.App.—Tyler 1980, no writ); Gravis v. Parke-Davis and Co., 502 S.W.2d 863, 870 (Tex.Civ.App.—Corpus Christi 1973, writ ref’d n.r.e.). The doctor stands as a learned intermediary between the manufacturer and the ultimate consumer. Generally, only the doctor could understand the propensities and dangers involved in the use of a given drug. Gravis, 502 S.W.2d at 870. In this situation, it is reasonable for the manufacturer to rely on the intermediary to pass on its warnings. However, even in these circumstances, when the warning to the intermediary is inadequate or misleading, the manufacturer remains liable for injuries sustained by the ultimate user. Bristol-Myers Co. v. Gonzales, 561 S.W.2d 801 (Tex.1978); Crocker v. Winthrop Laboratories, Division of Sterling Drug, Inc., 514 S.W.2d 429 (Tex.1974).

Some courts have also held that a bulk supplier, one who sells a product to another manufacturer or distributor who in turn packages and sells the product to the public, need only warn its intermediate distributor and not each individual consumer. See Jones v. Hittle Service, Inc., 219 Kan. 627, 549 P.2d 1383 (1976). But see Shell Oil Co. v. Gutierrez, 119 Ariz. 426, 581 P.2d 271 (Ariz.App.1978). But again, the issue is whether the supplier’s reliance on the intermediary is reasonable. In determining whether a bulk supplier’s duty to warn extends to ultimate users of a product, courts may consider whether the distributor is adequately trained, whether the distributor is familiar with the properties of the product and its safe use, and whether the distributor is capable of passing on its knowledge to consumers. See Khan v. Velsicol Chemical Corp., 711 S.W.2d 310 (Tex.App.—Dallas 1985, writ ref’d n.r.e.); Jones v. Hittle Service, Inc.; Shell Oil Co. v. Gutierrez.

Alcoa’s position in the chain of design, manufacture, and distribution undoubtedly makes it difficult for Alcoa to directly warn consumers of the hazard of bottle cap blow off. Alcoa’s position is somewhat analogous to that of a bulk supplier in that Alcoa has no package of its own on which to place a warning and no control, except by contractual requirements, over the final package labeling which reaches consumers. Therefore, Alcoa should be able to satisfy its duty to warn consumers by proving that its intermediary was adequately trained and warned, familiar with the propensities of the product, and capable of passing on a warning. But, if Alcoa failed to adequately warn and train JFW or if JFW was incapable of passing on the received warning, Alcoa would not have discharged its duty to the ultimate consumer.

The adequacy of a warning is a question of fact to be determined by the jury. Bituminous Casualty Corp. v. Black and Decker Manufacturing Co., 518 S.W.2d 868, 873 (Tex.Civ.App.—Dallas 1974, writ ref’d n.r.e.). Because the issue of negligence was broadly submitted in this case, there is no explicit finding by the jury as to the adequacy of Alcoa’s warning to JFW. Special issue 7 asked:

Do you find that the negligence, if any, of any or all of the following parties proximately caused the occurrence made the basis of this suit:

Answer “Yes” or “No” beside the name of each party listed:

Alcoa_

JFW_

James E. Aim_

The jury answered yes as to Alcoa and JFW but no as to Aim.

In spite of the disregarded jury finding to the contrary, the court of appeals concluded there was an implied jury finding that Alcoa’s warning to JFW was adequate. That court reasoned that in finding JFW’s negligence was a proximate cause of Aim’s injuries, “[t]he jury impliedly found that J.F.W. knew or should have known, because of the warning given by Alcoa, that a misapplied cap would result in personal injury.” This analysis is seriously flawed. Certainly the jury could have determined that JFW was negligent without believing that Alcoa adequately warned JFW of the hazards associated with bottle cap blow off. There were, after all, other allegations of negligence against JFW. The court of appeals cannot infer a jury finding from issues inquiring as to JFW’s negligence and then use that inferred finding to invalidate an express jury finding that Alcoa’s negligence proximately caused Aim’s injuries. The court of appeals should have considered the evidence supporting the jury’s finding that Alcoa was negligent without reference to the jury’s finding that JFW was negligent.

The court of appeals determined that Aim pleaded and attempted to prove four alleged acts of negligence by Alcoa. In order to find that Alcoa’s negligence proximately caused Aim’s injuries, the jury must have found that at least one of those four allegations as to Alcoa’s conduct was true. One allegation was that Alcoa’s warning to JFW was inadequate. We must consider whether there was some evidence to support a finding as to that aspect. In deciding a no evidence point, an appellate court must consider only the evidence and inferences tending to support the finding and disregard all evidence and inferences to the contrary. Garza v. Alviar, 395 S.W.2d 821, 823 (Tex.1965).

The record shows that the only “warning” given JFW of the hazards associated with bottle cap blow off came in an Alcoa owner’s manual distributed with its capping machine. The statement in that manual read: “Leakage or closure blow off at lower pressures can occur when the closure application is improper or the glassware is not within specification.” The statement did not warn that serious personal injuries could result from cap blow off. The language was not designated as a warning, and it was not set off in type different from that used throughout the manual.

In the same year Alcoa issued its manual, 1970, an Alcoa employee, Jaye Gibbs, prepared a report which stated, “[pjrobably the most critical area of closure performance for this market is the closure’s ability to retain the package's internal pressure inherent to carbonated products. Faulty performance can cause serious injury to a would-be consumer if the closure blows off.” Alcoa’s representative, George Over-turf, testified that this report was not made available to bottlers using the Alcoa capping machine. No summary of this information or further warning was given JFW. Further, although Alcoa’s representative testified that the incidence of cap blow off did not increase, Alcoa issued a manual in 1977 which specifically warned that “on occasion, an improperly applied closure can be violently ejected by pressure in a package. This can cause serious injury to handlers or consumers.” From this evidence the jury could reasonably have concluded Alcoa’s Warning in 1970, not subsequently supplemented, was inadequate.

In discussing what measures Alcoa took to inform bottlers of the hazard associated with misapplied caps and cap blow off, Overturf testified that in 1972 Alcoa developed a slide presentation for bottlers. The slide presentation included a depiction of a bottle cap blowing off and breaking a window. The accompanying text read:

A capped bottle containing carbonated beverage is, very simply, a container under pressure, pressure that is harmless when released gradually, but having substantial propellant force when released suddenly. When the consumer starts to remove an improperly applied closure, the pressure inside the bottle may spontaneously remove the closure, to the surprise of the consumer and to the detriment of anything that the closure strikes. It would be a mistake not to recognize that an improperly applied closure could be a potential hazard to the consumer.

Overturf also testified that Alcoa distributed wall charts to bottlers beginning in 1973, showing proper and improper cap application. And, finally, Overturf testified that Alcoa’s technical service people informed bottlers about bottle cap blow off.

Overturf testified that he personally did not know which of this information, slide presentation, wall charts, or technical service instruction, was provided JFW. Stephen Matisko, superintendent of capping machine technology service for Alcoa, testified that it was common practice for Alcoa to receive a written report when a bottler was shown the Alcoa slide presentation or when a bottler was furnished an Alcoa wall chart. Matisko admitted that there was no document which showed that JFW ever saw the slide presentation or received a wall chart.

Charles Ferro, the plant superintendent for JFW, testified that he had never seen Alcoa’s slide presentation. Ferro also testified that he had not received a wall chart from Alcoa until two weeks before trial. Additionally, Ferro testified that he was not familiar with the hazards associated with misapplied caps and that Alcoa had never told him of any hazard associated with bottle caps blowing off.

Finally, Richard Condra, a technical service representative for Alcoa, was asked whether he informed JFW that people were getting injured across the country from cap blow offs. Condra responded that he did not know people were being injured, that Alcoa had never told him that people were being injured, and thus, he had no reason to inform JFW.

This evidence clearly constitutes some evidence, certainly more than a scintilla, that Alcoa inadequately warned JFW. Therefore, the court of appeals erred in holding that the jury impliedly found Alcoa’s warning to the bottler to be adequate.

Aim next complains of the trial court’s disregarding the jury’s finding of gross negligence. In its judgment, the trial court stated that it "disregarded and set aside the Jury’s answers to Questions Numbers 11 and 12 because the court finds that, while there is some evidence to support such answers of the Jury, such answers to Questions Numbers 11 and 12 are against the great weight and overwhelming preponderance of the evidence.”

Rule 301, Texas Rules of Civil Procedure, expressly provides that a trial court may “disregard any Special Issue Jury Finding that has no support in the evidence.” A trial court may not disregard a jury’s answer because it is against the great weight and preponderance of the evidence. Campbell v. Northwestern National Life Insurance Co., 573 S.W.2d 496, 497 (Tex.1978); Garza v. Alviar, 395 S.W.2d at 824. In such a situation, the trial court may only grant a new trial. Gulf, Colorado and Santa Fe Railway Co. v. Deen, 158 Tex. 466, 470-71, 312 S.W.2d 933, 937, cert. denied, 358 U.S. 874, 79 S.Ct.111, 3 L.Ed.2d 105 (1958).

The trial court erred.in disregarding the jury’s answers to issues 11 and 12. We reinstate those answers. However, as Alcoa had no opportunity to complain of the sufficiency of the evidence to support the answers to issues 11 and 12, we remand to the court of appeals. In that court, Alcoa may raise sufficiency arguments as it chooses as to gross negligence and exemplary damages.

Aim lastly complains that the court of appeals incorrectly reviewed the factual sufficiency of the evidence supporting the jury’s finding of ordinary negligence. Notwithstanding the finality of judgments of the courts of appeals on fact questions, this court has jurisdiction to determine if a correct standard has been applied by the intermediate court. Pool v. Ford Motor Co., 715 S.W.2d 629 (Tex.1986); Garza v. Alviar, 395 S.W.2d 821 (Tex.1965); In re King’s Estate, 150 Tex. 662, 244 S.W.2d 660 (1961).

The court of appeals discussed the factual sufficiency of the evidence supporting Aim’s allegations that Alcoa negligently designed the bottle thread depth, negligently failed to include a mechanical inspection system, and negligently designed the bottle cap with a pilfer-proof band. We agree with the court of appeals that Aim failed to offer any probative evidence that the thread depth of the bottle was a proximate cause of his injury. From our reading of both the statement of facts and the court of appeals’ decision, however, it appears that court did not consider all of the evidence in determining the factual sufficiency of the evidence supporting Aim’s remaining two theories.

When reversing a trial court judgment on insufficiency grounds, a court of appeals must detail the evidence relevant to the issue in consideration and clearly state why the jury’s finding is factually insufficient. Further, the court of appeals must state in what regard the contrary evidence greatly outweighs the evidence in support of the verdict. Pool, 715 S.W.2d at 635. The court of appeals failed to do those things in this case.

Having concluded that Alcoa had a duty to adequately warn the consumer either directly or by warning the intermediary, we affirm in part and reverse in part the judgment of the court of appeals. We remand to that court for it to consider Alcoa’s factual insufficiency points regarding the adequacy of its warning of the hazard of cap blow off to JFW, and for the court to reconsider Alcoa’s factual insufficiency points regarding its failing to include a mechanical inspection system and its designing the cap with a pilfer-proof band. Additionally, we remand to the court of appeals so that it may consider points Alcoa may choose to raise in respect to the jury’s finding of gross negligence and exemplary damages.

GONZALEZ, J., files a dissenting opinion in which McGEE, J., joins.

1 . This is ironic. The jury had found that Alcoa failed to warn JFW of the potential of hazardous bottle cap blow off, but this was one of the issues disregarded by the trial court. Aim assigned no point of error as to this, however.