Appeal from the Iowa District Court for Polk County, Carla T. Schemmel, Judge.
The opinion of the court was delivered by: Potterfield, J.
Cooper Tire and Rubber Co. appeals from the jury verdict entered for the plaintiffs injured in a rollover accident and their families. AFFIRMED.
Heard by Eisenhauer, C.J., and Potterfield and Tabor, JJ.
The case arises from a rollover accident involving a multi-passenger van. The driver of the van, third-party defendant Alfred Lang, lost control when the tread separated on one of the van's tires, manufactured by Cooper Tire and Rubber Company ("Cooper"). Cooper appeals from a jury's $32.8 million award to six plaintiffs and their family members based upon the jury's finding that Cooper was completely at fault. For the reasons that follow, we affirm.
I. Background Facts and Proceedings.
On September 17, 2007, Ivon Toe, Achol Mawien, Sekou Jai, Jalah Nayou, Josephine Cole, and Assata Karlar were passengers in a 1997 Plymouth Voyager van driven by Alfred Lang and traveling northeast on Highway 65 to the Swift packing plant in Marshalltown where they all worked. The van was owned by Mawien, who had purchased it less than three weeks before the accident. The van had multiple prior owners; over 145,000 miles on the odometer; and except for its initial use as a rental vehicle in Colorado, an unknown service and use history. The van's tires were all replacement tires. The left rear and right front tires were manufactured by Cooper.
Just before the accident, Lang was in the left lane, closest to the median. The tread of the left rear Cooper tire separated, which resulted in the vehicle pulling to the left. Lang steered sharply to the right and the van crossed the right lane and veered onto the right shoulder. The van rolled several times after leaving the pavement. Lang was uninjured, Karlar was killed, Toe was paralyzed from the neck down, and the others passengers sustained varying degrees of personal injuries.
The occupants of the vehicle and various family members sued Cooper on numerous theories, including that the Cooper tire was defectively designed, was sold in a defective condition, was manufactured defectively, Cooper failed to give adequate warnings of the tire's dangers, Cooper was negligent in various ways, and numerous express and implied warranties had been breached. On appeal, Cooper's major complaint is that the district court erred in allowing evidence of tread separations in Cooper tires other than a GTS 2846, which was the specific tire model involved here, to show knowledge of defective skim stock rubber.
Cooper presented evidence that a steel belted radial tire is composed of numerous components arranged in a number of different layers falling into six general groups: inner liner, body plies, steel belts, tread, beads, and sidewalls. As summarized by Cooper in its appellate brief:
Beads are the foundation of a tire and provide an anchor for other components and make the tire's fit against the rim tight. The first layer, the inner liner, is a thin layer of specialized rubber designed to retain air pressure between the tire and the wheel. The next layers are "body plies." Body plies are made of polyester encased in rubber and are provide structure to the tire and assist in air retention. The third layer is another type of rubber product called the sidewall. Sidewall rubbers are different from those found in the inner liner. Sidewalls are flexible and are designed for certain ride and handling characteristics.
Above the sidewall are the steel belts. In passenger tires, there are two rubber-encased steel belts containing parallel steel wires, one belt above the other at opposing angles. The crisscrossing steel belts provide rigidity and support for the tire's tread. The steel belts are coated with a unique type of rubber known as "skim stock."
The top layer of the laminate structure of a radial tire is the tread. The tread is a combination of specialized type of rubbers, formulated specially for abrasion resistance and traction capabilities.
The tire involved in this case carries the brand name Cooper Lifeliner Classic II,*fn1 size P215/65R15, which is a medium duty radial passenger car tire manufactured at Cooper's Texarkana, Arkansas, plant during the week of March 26, 2000. It is also a Generation VII tire with a Green Tire Specification (GTS) 2846.*fn2 The GTS 2846 tire was certified for production in 1996 according to standards promulgated by the National Highway Transportation Safety Administration ("NHTSA"), the federal agency responsible for automotive and tire safety. Between 1996 and 2001, more than 660,000 GTS 2846 tires were sold.
The subject tire was described by Toe's expert as "fairly worn," and had been used for approximately 35,000 miles. The tire had a nail in it that had penetrated through the entire structure of the tire. Grooves on the sidewall of the tire were evidence that the tire had been run for an extended period of time underinflated, overloaded, or both.
It was Toe's theory that, by 1996, Cooper had become aware that tread separations in its tires were increasing dramatically. Cooper learned it could minimize tread separations by improving the antioxidant protections (AO protection) in its rubber used in skim stock (also referred to as belt compound or coat stock) to make its tires better able to resist the degradation from oxygen over time. In support of this theory, Toe offered numerous exhibits purporting to show Cooper used the same skim stock in all its tires (the skim stock is referred to as 525C) and experienced a rise in tread separations after introducing the skim stock in 1995 until Cooper issued a product change notification in February 2000 that the skim stock would be changed across the board for passenger and light truck tires. The Texarkana plant, however, did not implement the change until it depleted its skim stock inventory after the manufacture of the tire involved here.
Cooper moved in limine and objected at trial to several exhibits on
grounds that other tires mentioned in the exhibits were not proven to
be substantially similar to the GTS 2846 tire at issue,*fn3
and thus the exhibits were irrelevant, or any relevance was
substantially outweighed by undue prejudice.*fn4
Toe responded that the exhibits reflect Cooper's concerns about the increase in tread separations due to the faulty skim stock and showed Cooper's knowledge of the problems with the skim stock.
The district court ruled that documents indicating that Cooper "had problems with all their tires will come in, because that includes the spec in this case or the tire in this case." The court stated that it would, however, place on plaintiff a burden to show that it is all the tires or all the rubber or all the whatever, and if it's not, it won't come in, because I think Cooper's knowledge of facts that they had problems with all their tires, including this one, is relevant. If they had a problem with a totally different spec which may somehow be related, it's not going to come in.
The court later explained further:
If the document says, "we have a big problem with our Classic II tires," it will come in. If it says, "We have a problem with a subpart of our Classic II tires," or it lists specific tires and this one is not included, it will not come in. If it's global, it comes in if it can relate down. If it does not, it will not.
Cooper was allowed a standing objection on grounds of relevance, hearsay, and lack of substantial similarity to the subject tire in both time and substance. Cooper did not request a limiting instruction on the purpose for the evidence, whether to show notice and knowledge or to show a dangerous defect in the tires.
Following a month-long trial, the jury came to a non-unanimous verdict that Cooper was at fault based on defects in the tire. The majority of jurors found Cooper 100% at fault for the accident and awarded damages in the amount of $32.8 million. The jury awarded Toe (used here in the singular) more than $28.4 million, some $24.5 million of which was for future medical expenses, and most of that value was for twenty-four-hour in-home nursing care for the rest of her life. Cooper argued that Toe's needs were adequately met at the Norwalk rehabilitation center at a cost of $5000 per month.
Cooper's post-trial motions were denied, including its request for a remittitur of future medical expenses or new trial.
On appeal Cooper contends: (1) the court erred in its evidentiary rulings: (a) permitting the plaintiffs to introduce documents regarding warranty and liability claims involving tires, failure modes, and causes of failure not proven to be substantially similar to those involved in this case; (b) admitting Exhibit 502, which involved warranty claims for light truck tires; (c) admitting Exhibit 36 (a memorandum discussing warranty claims for different model tires and including oral comments from Texas tire dealers) over Cooper's hearsay objection; (d) allowing the jury to view video excerpts of the depositions of Dwayne Beach and Larry Wilch, which depositions were taken for cases pending in California years before the accident in this case occurred; (e) refusing to permit Cooper to submit further testimony from two witnesses, Sergeant Randy Wacha, a State Patrol accident reconstruction expert, and former Cooper engineer Lyle Campbell; and (f) permitting Toe's expert Troy Cottles to testify about "awling," a procedure discontinued by Cooper years before the subject tire was manufactured.
Cooper further argues (2) the district court erred in using Jury Instruction No. 32, which told the jury that Cooper would be liable for defects caused by the nail in the tire so long as it was "foreseeable" that the subject tire might pick up a nail in its lifetime; Cooper also asserts (3) there was insufficient evidence to submit the issue of punitive damages to the jury, and (4) the future medical expenses award to Toe is "flagrantly excessive because it conflicts with the requirement under Iowa law that a plaintiff be awarded only 'reasonable and necessary' medical expenses."
II. Scope and Standard of Review.
1. Evidentiary rulings. We review a district court's evidentiary rulings for an abuse of discretion. See McClure v. Walgreen Co.,613 N.W.2d 225, 235 (Iowa 2000). 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 v. United Fire & Cas. Co., 572 N.W.2d 565, 569 (Iowa 1997) (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 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.
2. Jury Instructions. "We review alleged errors in jury instructions for correction of errors at law." Boyle v. Alum--Line, Inc., 710 N.W.2d 741, 748 (Iowa 2006). "It is error for a court to refuse to give a requested instruction where it 'correctly states the law, has application to the case, and is not stated elsewhere in the instructions.'" Deboom v. Raining Rose, Inc., 772 N.W.2d 1, 5 (Iowa 2009) (quoting Vaughan v. Must, Inc., 542 N.W.2d 533, 539 (Iowa 1996)). If an error in instructions results in prejudice, a reversal is warranted. See id. Jury instructions should be considered together and in their entirety. Anderson v. Webster City Cmty. Sch. Dist., 620 N.W.2d 263, 265 (Iowa 2000). Reversal is warranted if the instructions have misled the jury. Id. Prejudicial error occurs when the district court "materially misstates the law." Id.
3. Sufficiency of evidence to submit punitive damages. If a claim is supported by substantial evidence, the issue must be submitted to the jury-this includes the issue of punitive damages. See Mercer v. Pittway Corp.,616 N.W.2d 602, 617 (Iowa 2002) (noting the evidence to support an award of punitive damages must be "clear, convincing, and satisfactory"). Punitive damages are appropriate only when actual or legal malice is shown. Schultz v. Sec. Nat'l Bank, 583 N.W.2d 886, 888 (Iowa 1998). Mere negligent conduct is therefore not sufficient to support a claim for punitive damages. Beeman v. Manville Corp. Asbestos Disease Compensation Fund, 496 N.W.2d 247, 256 (Iowa 1993).
4. Damages. "'We review the district court's denial of a motion for a new trial based on the claim a jury awarded excessive damages for an abuse of discretion.'" WSH Props., L.L.C. v. Daniels, 761 N.W.2d 45, 49 (Iowa 2008) (quoting Estate of Pearson ex rel. Latta v. Interstate Power & Light Co., 700 N.W.2d 333, 345 (Iowa 2005)).
1. Evidentiary rulings. Cooper raises numerous complaints about the district court's evidentiary rulings. a. "Substantially similar incidents." Relying upon Mercer, 616 N.W.2d 602, Cooper argues that the district court erroneously permitted the plaintiffs to introduce documents regarding warranty and liability*fn5 claims involving tires, failure modes, and causes of failure not proven to be substantially similar to those involved in this case. In Mercer, our supreme court remanded for a new trial in a case in which the plaintiffs asserted a smoke detector had failed to alarm, resulting in injury to one child and the death of another. See 616 N.W.2d at 629. On appeal, the manufacturer of the smoke detector contended the trial court had erroneously admitted evidence of consumer ...