Appeal from the United States District Court for the Eastern District of Wisconsin. Nos. 80 C 462, 80 C 463, 80 C 464 -- Terrance T. Evans, Judge.
Cudahy, Eschbach, Circuit Judges, and Aspen, District Judge.*fn*
Appellants Leonard and Patricia Gracyalny, Michael and Virginia Steier, and Roberta K. Sherwood, individually and as personal representative of her husband Francis Sherwood, appeal from the order of the district court granting appellee Westinghouse Electric Corporation's motion for summary judgment in this action in strict tort liability and negligence.*fn1 For reasons set forth herein, we reverse and remand.
In 1964, Westinghouse delivered a unit of its Model 144-GC-500 oil circuit breaker to Wisconsin Public Service Corporation ("WPS"), where it was installed at the WPS Quincy Street substation in Green Bay, Wisconsin.*fn2 On August 8, 1979, Francis Sherwood, Leonard Gracyalny and Michael Steier, employees of WPS, were testing this unit at the Quincy Street substation, when it exploded and caught fire. All three men were seriously burned, and Sherwood died of his injuries four days later.*fn3
Oil circuit breakers are designed to interrupt current in an electrical distribution system in the event that a short circuit or other fault in the system occurs. This interruption is accomplished through a series of contacts contained within a large tank and surrounded by oil. When a fault occurs in the electrical distribution system, the contacts within the oil circuit breaker separate, resulting in arcing between the contacts. The quenching of the arcing in the oil (used because of its superior insulation qualities) acts to inhibit the flow of the electrical current. Model 144-GC-500 includes a dashpot, a relatively small container located near the top of the tank and partially submerged in the oil within the tank. The dashpot contains a piston and has a small opening at its bottom. When the oil circuit breaker interrupts the electrical current, the piston moves down forcing the oil in the dashpot into the tank.
Between November, 1964, and January 20, 1965, Westinghouse learned that units of Model 144-GC-500 were malfunctioning. The malfunctions reportedly occurred when the breaker interrupted low magnitude current. Westinghouse assigned George B. Cushing, an engineer, to determine the cause of the problems. Cushing tested Model 144-GC-500 and found that improper arcing from the top of the main contact to the dashpot, located above that contact, caused the breaker failure.*fn4 In laboratory testing, Cushing simulated breaker failure and observed that the terminal of the arc was on the bottom of the dashpot. Arcing occurred when the piston in the dashpot was moving down, discharging oil into the tank. Since the dashpot normally contained air bubbles, the piston would discharge a mixture of oil and air into the tank, resulting in a line of bubbles extending down from the dashpot to the main contact. The bubbles created a path through the oil along which arcing would occur.*fn5
Cushing recommended that a barrier of insulating material be installed beneath the dashpot to correct this malfunction. To achieve this, he developed an L-shaped baffle. The baffle was designed to extend beneath the dashpot and deflect the discharge to the surface of the oil, thereby eliminating the possibility of arcing to the bottom of the dashpot. This baffle was installed on all new 144-GC-500 1200 ampere oil circuit breakers.
Westinghouse also decided to furnish baffles to customers already using Model 144-GC-500. Cushing sent a memorandum dated March 17, 1965, to Westinghouse's electric utility manager, F. P. Tauger, which reported instances of malfunctioning oil circuit breakers and specified that "in at least three instances the resulting internal short circuit has caused severe damage to the breaker involved. In two instances the safety of personnel was in jeopardy." Cushing also recommended that the dashpot baffle be installed. Tauger, in turn, sent a letter to Westinghouse electric zone managers recommending that their customers install the baffles at a convenient time. Since installation was a relatively simple procedure, the customers were to install the baffles themselves. The communications by Cushing and Tauger stated that there were seven failures and over 2,000 breakers in service.*fn6 Cushing and Tauger's communications also warned that the potential consequences of failure were serious.
On April 13, 1965, Westinghouse transmitted a letter under the signature of sales manager C. A. Lins to WPS, discussing the failure of oil circuit breakers. The letter stated, inter alia, that:
We now have over 2,000 14.4 KV circuit breakers of the type "144 GC" in service. Out of this number of breakers our attention has been drawn to seven failures which occurred when interrupting currents of few amperes under recovery voltage conditions which would normally appear harmless. Although this is a very small percentage of failures, since this is a single tank type breaker the resulting failures became phase-to-phase failures with the possibility of extensive damage to other equipment and personnel. For this reason we instituted a very through [sic] investigation in an effort to determine the reason for the failures.
We will provide baffles for your installation at a convenient time without charge. In looking over my records, I find that one of this type of breaker is installed at Menominee under your requisition 79560, and three breakers were shipped to Quincy Street under requisition 81895. You may also have other breakers of this type on which the records have been removed from my files. Please note that the 144 G type of breaker is not affected.
Please let me know how many of these baffles will be required. We anticipate that installation can be made by your personnel at some convenient inspection time and we do not believe that the incidence of trouble would suggest that an immediate program be initiated to install the baffles.
In response to this letter, WPS wrote Westinghouse on April 15, 1965, requesting baffles for seven oil circuit breakers. One of the circuit breakers listed by WPS was a Series 230 breaker, which Westinghouse had not specifically mentioned in prior correspondence. However, WPS did seek baffles for all three Model 144-GC-500 circuit breakers at the Quincy Street substation. Westinghouse subsequently shipped WPS six baffles.
Of the seven circuit breakers listed by WPS in their April 15, 1965, letter, baffles were installed on five, including two at the Quincy Street substation. A baffle was located on the shelf of a storage department in Wausau and was installed on a sixth breaker located in Wausau, Wisconsin. No dashpot baffle, however, was installed on the oil circuit breaker that exploded and caught fire on August 8, 1979.
The district court detailed a number of undisputed facts in the record. C. A. Lins, the Westinghouse sales manager under whose signature the letter notifying WPS of circuit breaker failures was sent, had no recollection of the failure of 144-GC-500 circuit breakers mentioned in Cushing's March 17, 1965, report. He also did not recall any personal contact with WPS concerning the installation of baffles. After Westinghouse sent baffles to WPS, Westinghouse undertook no follow up procedures to verify that the baffles were installed. Finally, no circuit breaker equipped with a dashpot baffle has ever failed, and the parties agreed that the accident would not have occurred had the baffle been properly installed.
In granting Westinghouse's motion for summary judgment, the district court emphasized the WPS is a skilled company involved in a highly technical enterprise. Determining that Westinghouse could rely on WPS to properly install the baffles, the district court held that the letter sent to WPS and the furnishing of uninstalled baffles constituted an adequate warning. The court added that insofar as the defect in the circuit breaker was hidden, Westinghouse's letter rendered the defect "open and obvious." Finally, the court concluded that Westinghouse's argument that WPS's ...