Appeals from the United States District Court for the Southern District of Indiana, Indianapolis Division, No. 86-1012, S. Hugh Dillin, Judge.
Cudahy, Coffey, Circuit Judges, and Grant, Senior District Judge.*fn* Cudahy, Circuit Judge, concurring in part and dissenting in part.
Plaintiff-appellant Peter Bishop appeals the trial court's grant of a directed verdict in favor of the defendant-appellee, Firestone Tire and Rubber Company. Bishop claimed that Firestone was strictly liable in tort under Indiana law for injuries that Bishop sustained as a result of a truck tire explosion. Bishop also asserted that the jury instructions were improper as to his negligence claim. We affirm.
Peter Bishop began working for the Delphi Limestone Company, Inc. in the summer of 1977, and as part of his duties, Bishop disassembled, repaired, and remounted the rims in the truck tires. Bishop was trained in the procedure of servicing truck tires and was instructed that it was important to inspect and make sure that all the component parts of the tire rim were properly assembled and seated in the rim gutter prior to the inflation of the tire. If the component parts of the tire rim were not properly assembled and seated in the rim gutter, it is possible that the lock ring assembly will separate and eject from the rim gutter during the inflation procedure. To avoid this type of accident and the possibility of injury, the employees of the Delphi Limestone Company were instructed to use a safety cage*fn1 whenever they inflated a truck tire.
On August 9, 1978, the shop foreman directed Bishop to repair four tires. After Bishop had repaired and reset the rim in the first tire and while inflating the same, the lock ring assembly separated and violently ejected from the rim gutter severely injuring Bishop. Bishop testified at trial that prior to the explosion he inspected the rim base of the tire and the lock ring assembly and observed that the lock ring appeared to be properly assembled and seated in the rim.
On July 17, 1980, Bishop filed suit against Firestone on two separate theories of liability, alleging that Firestone was strictly liable in tort and also negligent in defectively designing the lock ring assembly. On September 2, 1983, 579 F. Supp. 397 (1983), the United States District Court for the Northern District of Indiana granted Firestone's motion for summary judgment ruling that the ten-year Indiana statute of repose for products liability actions barred Bishop's claim. Bishop appealed to this court, and we reversed and remanded for trial holding that the statute was not a bar to Bishop's claim. Bishop v. The Firestone Tire & Rubber Company, 742 F.2d 1460 (7th Cir. 1984). The parties agreed to have the case transferred from the Northern District of Indiana to the United States District Court for the Southern District of Indiana. The defendant Firestone moved for a directed verdict on Bishop's product liability claim under the theory of strict liability at the close of the plaintiff's case, and the district court took the motion under advisement and granted the same (motion) after hearing the testimony of Firestone's initial defense witness. The court directed that the trial continue on Bishop's negligence claim, and at the conclusion of the trial the jury found that Firestone was not negligent in producing a defective lock ring that allegedly caused the rim assembly to separate and violently eject from the rim gutter, injuring Bishop.
Initially Bishop maintains that the trial court erred in granting Firestone's motion for a directed verdict on Bishop's claim that Firestone was strictly liable in tort. "This court has held that state law standards govern the denial of a motion for a directed verdict in diversity cases." Gonzalez v. Volvo of America Corporation, 752 F.2d 295, 301 (7th Cir. 1985). In Gonzalez we stated that "because we apply the substantive law of Indiana to the facts of this case, Indiana's standard for directed verdict controls." Id. In American Optical Company v. Weidenhamer, 457 N.E.2d 181 (Ind. 1983), the Indiana Supreme Court established the standard governing the grant or denial of a directed verdict and stated:
"Determining whether or not evidence is sufficient for the purpose proffered requires both a quantitative and a qualitative analysis with the avowed purpose of determining whether or not it can be said, with reason, that such purpose was thereby fulfilled. If opposite conclusions could, with reason, be drawn, then it cannot be said that the evidence was insufficient. The key word that is present in all of our variously worded explanations, by inference if not expressly, is "reasonable." Quantitatively, evidence may fail only if it is absent, that is only when there is none at all. Qualitatively, however, it fails when it cannot be said, with reason, that the intended inference may logically be drawn therefrom; and this may occur either because of an absence of credibility of the witness or because the intended inference may not be drawn therefrom without undue speculation."
Id. at 184. In Dettman v. Sumner, 474 N.E.2d 100 (Ind. App. 1985), the court in applying the standard that the Indiana Supreme Court established in American Optical stated:
"We discern the American rule to be where an opposing party during trial filed a T.R. 50(A) motion [motion for directed verdict] for judgment at the conclusion of the evidence of any party having the burden of proof on an issue, the trial court is to determine whether or not it can be said, with reason, the evidence proffered by the burdened party is sufficient to support that party's contentions. Such determination is to be made by a two-step analysis of all the direct and circumstantial evidence then available. First, it must determine whether
(a) quantitatively, reasonable evidence supporting the burdened party's allegations is absent, that is, none at all exists. If so, the motion is to be granted. If such evidence is present, however, the court must then determine whether
(b) qualitatively, a reasonable inference the burdened party's allegations are true logically may be drawn from such evidence.
Qualitative failure in this sense, occurs if the trial court reasonably can say, either
(1) the witness(es) presenting such evidence is (are) not credible, or
(2) the inference the burdened party's allegations are true may not be drawn without undue speculation."
Accordingly, in reviewing Bishop's appeal in this diversity case, we analyze Bishop's claim that the district court improperly granted Firestone's motion for a directed verdict and apply the two-step Indiana analysis in reviewing a trial court's decision to grant or deny a motion for directed verdict. Initially we examine Indiana products liability law in order that we might determine the plaintiff's burden of proof.
In 1978, the Indiana legislative codified the doctrine of strict products liability in Indiana Code § 33-1-1.5-3. Section 33-1-1.5-3 states:
"Sec. 3. Codification and Restatement of Strict Liability in Tort. The common law of this state with respect to strict liability in tort is codified and restated as follows:
(a) One who sells any product in a defective condition unreasonably dangerous to any user or consumer or to his property is subject to liability for physical harm thereby caused to the user or consumer or to his property if that user or consumer is in the class of persons that the seller should reasonably foresee as being subject to the harm caused by the defective condition, and, if:
(1) the seller is engaged in the business of selling such a product, and
(2) the product is expected to and does reach the user or consumer without substantial change in the condition in which it is sold.
(b) The rule stated in Subsection (a) applies although:
(1) the seller has exercised all possible care in the preparation and sale of this product, and
(2) the user or consumer has not bought the product from or entered into any contractual relation with the seller."
Ind. Code § 33-1-1.5-3 (West 1983). Thus, Bishop is required to establish that Firestone sold a "product in a defective condition unreasonably dangerous to any user." Ind. Code § 33-1-1.5-3 (West 1983). In Bemis Company, Inc. v. Rubush, 427 N.E.2d 1058, 1061 (Ind. 1981), the Indiana Supreme Court explained that in order for a plaintiff to prevail in a products liability case under a theory of strict liability, he must establish that the allegedly defective product was dangerous in a way that an ordinary user of the product would not expect. Thus, the defect "must be hidden and not normally observable, constituting a latent danger in the use of the product" before a manufacturer is liable under the Indiana product liability statute. Id. See also Bridgewater v. Economy Engineering Company, 486 N.E.2d 484, 489 (Ind. 1985). In J. I. Case Company v. Sandefur, 245 Ind. 213, 197 N.E.2d 519, 523 (1964), cited and quoted with approval in Bemis Company, Inc. v. Rubush, 427 N.E.2d 1058, 1062 (Ind. 1981), the Indiana Supreme Court stated that "there must be reasonable freedom and protection for the manufacturer. He is not an insurer against accident and is not obligated to produce only accident-proof machines." Id. Under Indiana law, "the emphasis is on the duty to avoid hidden defects or concealed dangers." Id.
Turning to Bishop's claim that the district court improperly granted Firestone's motion for a directed verdict on his product liability claim, initially we must determine whether "quantitatively, reasonable evidence supporting the burdened party's allegations is absent, that is, none at all exists." Dettman, 474 N.E.2d at 104. Bishop presented the expert testimony of a Dr. Gibson,*fn2 concerning a purported design defect in the tire rim lock ring assembly:
"[Plaintiff's Counsel] Q. Do you have an opinion, Doctor Gibson, whether the characteristic of this ring to open at the gap, because of its design configuration and the steel of which it is ...