Price v. Inland Oil Co.

OPINION OF THE COURT

JAMES HUNTER, III, Circuit Judge:

This case arises from an unfortunate accident at the Hanover Wire Cloth Company on February 10, 1975. On that date, a Hanover employee, Tyrone Price, was seriously burned when his clothing, having been splashed with a flammable hydrocarbon substance known as “naphtha” or “mineral spirits,” accidentally became ignited by a cigarette spark. Price brought suit against the supplier of the naphtha, appellant, Amsco, Division of Union Oil Company of California (“Amsco”), on both a negligence and strict liability theory.1 During pre-trial proceedings, however, appellee narrowed the focus of his case to a cause of action under strict liability only. Nonetheless, the trial judge, following the jury’s answers to special interrogatories, molded a verdict for the plaintiff based on negligence under Restatement (Second) of Torts, § 388 (Supp.1981). Because we find that negligence as a theory of liability was not properly before the court or jury, and that the jury’s response to the special interrogatories clearly established that appellant was not liable under strict liability, we will vacate the district court’s judgment and order judgment to be entered for the appellant.

FACTS

Amsco supplied mineral spirits to Price’s employer, Hanover Wire, for use as a cleaning solvent.2 The deliveries were made in bulk, usually from a 1500 gallon Amsco tank truck.3 They were pumped from the delivery tank into underground storage tanks, from which the Hanover employees could supply their departments.4 Although “flammable” signs appeared on the delivery tank, Amsco did not supply “no smoking” signs for the areas in which the solvent was used. It did, however, supply safety data sheets to Hanover’s safety director explaining the dangers of the mineral spirits. The employees, in turn, received safety booklets *93from Hanover, not Amsco. Price received a handbook warning him of the hazards of naphtha. Transcript of Proceedings at 131-32, reprinted in Appendix at 153a-54a. Nevertheless, one day after he finished cleaning some spools with the substance, he lit a cigarette. Immediately, he became engulfed in flames and suffered serious injuries.

Price brought suit in district court against Amsco. His complaint stated that “[his] injuries were caused by the defective and unreasonably dangerous condition of the ... solvent when it left defendant’s control, in that it was not reasonably safe for those uses which could reasonably be foreseen,” and that “[defendant wilfully and/or with gross negligence failed to warn plaintiff of said defect.”5 The parties attended five pre-trial settlement conferences; after each, the magistrate filed a report labeling the case simply as “Personal Injury — Products Liability.” Shortly before trial, when it became apparent that the parties would not settle, plaintiff’s counsel filed a pretrial memorandum delineating strict liability as the only theory upon which plaintiff would proceed at trial. His pre-trial memorandum stated, “The plaintiff’s theory of liability is based solely on section 402A of the Restatement of Torts 2d, that is interpreted by the Superior Court of Pennsylvania in the case of Berkebile v. Brantley Helicopter Corp., 225 Pa.Super. 349, 311 A.2d 140, 143.” Both section 402A and Berkebile discuss only a strict liability theory for damages.

The court indicated that it would file a pre-trial order on Feb. 1, 1977 designating the issues and theories for trial.6 It never did. Instead, the case proceeded directly to trial where plaintiff’s counsel centered its case on Amsco’s failure to provide adequate warnings on its product. Couching his questions in the language of section 402A,7 plaintiff’s counsel repeatedly asked his expert witness: “Do you have an opinion ... as to whether the mineral spirits were in a defective and unreasonably dangerous condition at the time they were sold?” Transcript of proceedings at 92, reprinted in Appendix at 114a. In his closing argument, he also argued that the “guts” of his case was the defective and unreasonably dangerous condition of the product at the time of its delivery. Transcript of Proceedings at 180, reprinted in Appendix at 202a. It is unclear from the record on what theory Amsco focused its defense. Amsco’s rebuttal evidence was directed primarily at the adequacy of the warnings, however, as will be discussed later, this is an issue under either a negligence or strict liability theory. On appeal appellant contends that it defended the case only on a strict liability theory.

At the end of the trial, the court informed the parties that it planned to submit special interrogatories to the jury. It offered each side an opportunity to comment on its proposed instructions and recommend their own. The trial court would not consider, however, appellant’s key objection to the instructions; that is, that negligence, as a theory of liability, was not argued at trial and therefore should not be presented to the jury.

The trial judge ultimately submitted the following four interrogatories to the jury:

1. Was the product (mineral spirits) in a defective and unreasonably dangerous condition at the time of delivery by the defendants by reason of inadequate warnings concerning flammability?
*942. If so, was the inadequacy of the warning concerning its flammability a proximate cause of plaintiff’s injury?
3. Did the defendants know or should they have reasonably foreseen, that the product would be used by persons, that is, such as plaintiff, unaware of its flammability and of the hazards of smoking while using the product?
4. Was the plaintiff guilty of contributory negligence?

The first question, which in the circumstances of this case correctly posits the question of liability under Restatement (Second) of Torts § 402A, was answered by the jury in the negative. The third question, however, which represents one of the elements that must be proved to find the defendant negligent, was answered affirmatively.

The trial court molded the jury’s answers to Interrogatories # 1 and # 3 into a judgment in favor of the plaintiff based on negligence under Restatement (Second) of Torts, § 388. Following the verdict, appellant moved for a judgment n. o. v. or, alternatively, for a new trial. It argued that (1) the trial court erred in submitting a negligence theory under Restatement (Second) of Torts, § 388 to the jury since there had been no prior indication that the case was being pursued on such a theory and appellant therefore had no opportunity to present defense evidence on the issue, and (2) that even if section 388 was a possible basis for liability, the jury’s responses to the special interrogatories did not establish all of the elements requisite for the court’s verdict.8 The trial judge ruled against appellant on both issues.9 We now address the first of these.

DISCUSSION

A. Negligence Under § 388 & The Trial Court’s Abuse of Discretion

While a trial judge has broad discretion to determine which issues may be pursued at trial, Moore v. Sylvania Electr. Products, Inc., 454 F.2d 81 (3d Cir. 1972), he should exercise that discretion with an eye toward the expectations of the parties. In the instant case, it is clear that the trial judge permitted a negligence theory under section 388 of the Restatement (Second) of Torts to be presented to the jury because he erroneously believed that he was required to do so under this court’s holding in Dougherty v. Hooker Chemical Co., 540 F.2d 174 (3d Cir. 1976).10 In Dougherty this court discussed in great detail a manufac*95turer’s liability under section 388 for harm caused by a product lacking adequate warning of its dangerous propensities. Dougherty, 540 F.2d 178-82. The trial court in the instant case correctly found that Dougherty and section 388 could provide a possible basis for recovery.

Under § 388, liability arises when the seller, having reason to know that its product is likely to be dangerous for its intended use, and having no reason to believe that the intended user will realize its dangerous condition, nevertheless fails to exercise reasonable care to inform the user of the dangerous condition.

Dougherty, 540 F.2d at 177.

Therefore, if Amsco had supplied the naphtha knowing it to be dangerous and it had reason to believe that Price, the user of the product, would not realize its dangerous condition, and it failed to exercise reasonable care to inform him of its dangerous condition, then a jury could have found the appellant guilty of negligence.11

The problem in the instant case, however, is that appellee’s counsel did not properly pursue the negligence theory. Rather, it limited itself by its pre-trial memorandum to a strict liability theory, under section 402A only.12 The trial court’s effort to resurrect appellee’s negligence claim prejudiced the appellant and must be considered an abuse of discretion.

Ordinarily, the scope of a case will be limited by the trial court itself in a pre-trial order. Under F.R.Civ.P. 16,13 the trial court may conduct pre-trial conferences and simplify in a pre-trial order the issues to be presented at trial. This order then supersedes the pleadings and directs the future course of the action. Theories of liability not raised pre-trial may be considered dropped from the case. Idzojtic v. Pennsylvania Railroad Co., 47 F.R.D. 25, 30 (W.D. Pa.1969) (“A ‘theory’ or ‘position’ of liability not asserted at the pre-trial conference or otherwise should be forclosed at trial, for one of the primary purposes of pre-trial is the elimination of surprise and unfairness to the other side.”).

On occasion, when the trial court has failed to file a pre-trial order, this court has still been willing to hold the parties bound by pre-trial representations. Specifically, *96in Knight v. Otis Elevator Co., 596 F.2d 84 (3d Cir. 1979), we held that a theory not directly in a party’s pre-trial memoranda was appropriately excluded from argument at trial. We also noted in Anderson v. Republic Motor Inns, Inc., 444 F.2d 87 (3d Cir. 1971) that a pre-trial memorandum may limit the parties and the contentions which may be considered at trial.

Our willingness to bind a party by a pre-trial memorandum as well as a pre-trial order arises from our recognition that in almost one-third of the cases where pre-trial proceedings are conducted, the trial judge, as did the one in the instant case, fails to file a pre-trial order. 3 Moore’s Federal Practice ¶ 16.18, at 16-38 n.1; Report of the Proceedings of the Judicial Conference of the United States 79-80 (1962). In such cases, we believe it proper to look to the purpose of Rule 16 to determine whether the effect of the pre-trial negotiations was to limit the issues at trial.

“The chief purposes of the pre-trial conferences are to define and simplify the issues, to lessen surprise at trial and the risk of judicial error, to conclude stipulations on matters of evidence, and to promote settlements.” 3 Moore’s Federal Practice ¶16.03. The courts have repeatedly focused on the element of surprise to determine whether it would be unjust to permit a party to argue a legal or factual theory at trial that had not been pursued in pre-trial procedures. See generally McCarthy v. Lerner Stores Corp., 9 F.R.D. 31 (D.C.Cir.1949). For example, in Mains v. United States, 508 F.2d 1251 (6th Cir. 1975), the court stated that “the pre-trial conference serves ... to expedite disposition of cases by simplifying the issues and eliminating surprise.” Id. at 1259. See also Monod v. Future, Inc., 415 F.2d 1170 (10th Cir. 1969); Idzojtic, 47 F.R.D. at 30; Wiggins v. City of Philadelphia, 331 F.2d 521, 526 (3d Cir. 1964); Payne v. S.S. Nabob, 302 F.2d 803 (3d Cir. 1962) (party limited to voluntary admissions in pre-trial memorandum). In the instant case, the appellant claims that it was surprised to find that after a pre-trial memorandum had explicitly stated that the appellee sought recovery only under section 402A, the trial court was willing to submit a theory of negligence to the jury under section 388.

We accept appellant’s argument. Although the trial judge may have believed that section 388 had been a theory of liability throughout the trial, its basis was not one that provided an adequate warning to the appellant of the theories against which it had to defend. This court did not hold in Dougherty that whenever the adequacy of the warnings is the key issue in a products liability case, both negligence and strict liability must be presumed to be theories of liability. Rather, we expressly noted that

The pre-trial order [in that case] limited the trial of liability solely to the issue of the adequacy of warnings ..., but in so doing, did not delineate any particular theory. In its oral opinion, the district court utilized language characteristic of strict liability and negligence theories. Similarly, the parties on appeal have made no effort to distinguish between either theory nor have they analyzed the cases which they have cited in terms of one theory or the other.

Dougherty, 540 F.2d 176 n.l (emphasis added). By contrast, appellee in the instant case did focus only on one theory. His pre-trial memorandum explicitly stated that section 402A was the only theory of liability. Appellant reasonably based its defense on the last pre-trial indication of appellee’s position. In the absence of a pre-trial order to the contrary, we must assume that the pre-trial memorandum represented the parties’ and the court’s consensus on the theory for liability. If the trial court was going to reject this position, it should have done so before trial. To do so after the submission of evidence, was an abuse of discretion. Section 388 was not properly at issue in the instant case and therefore could not provide a basis for liability.

B. Strict Liability Under § 402A

Without section 388, the only theory for liability remaining in this case is strict liability under section 402A of the Restate*97ment of Torts.14 If, as it appears, the trial judge correctly charged the jury on section 402A, then the jury's answer to special interrogatory # 1 eliminates that theory and judgment should be entered for the appellant.15

Section 402A provides:
(1) One who sells any product in a defective condition unreasonably dangerous to the user or consumer or to his property is subject to liability for physical harm thereby caused to the ultimate user or consumer, or to his property, if
(a) the seller is engaged in the business of selling such a product and
(b) it is expected to and does reach the user or consumer without substantial change in the condition in which it is sold.

Restatement (Second) of Torts, § 402A.16 The Restatement continues:

(2) The rule stated in Subsection (1) applies although
(a) the seller has exercised all possible care in the preparation and sale of his product, and
(b) the user or consumer has not bought the product from or entered into any contractual relation with the seller.

Id. At trial, appellee alleged that Amsco s product, naphtha, was defective and unreasonably dangerous because it lacked sufficient warnings of the product’s flammability. The appellee argued that Amsco should have provided, in addition to the “flammable” signs on the delivery containers, “no smoking” signs for the areas in which naphtha was used.

Under the Restatement, inadequate warnings constitute a defect in a product and produce an unreasonably dangerous condition.17 However, as we have noted in note 16 supra, even though Pennsylvania in 1966 adopted § 402A, the Pennsylvania Supreme Court subsequently deleted the term “unreasonably dangerous” from that Section. In other respects, Pennsylvania, in adopting the Restatement section, has yet to clarify its interpretation of the nature of the warnings in a case such as this one. Under circumstances such as are presented here, it has not specified whether a supplier will be required to provide specific warnings of its product’s danger to all users into whose hands the product may fall.18

This court need not predict the future course of Pennsylvania tort law. In *98the instant case, the trial judge chose the outermost reaches of section 402A law for its interrogatory to the jury. Even if Pennsylvania would require the supplier to extend adequate warnings to the employee, special interrogatory # 1 and the explanation by the court following it were broad enough to cover that theory of liability. Therefore, the jury’s negative response to that interrogatory excluded the possibility of Amsco’s liability under section 402A.

The trial judge began his interrogatories with the following question:

Was the product — that is, mineral spirits — in a defective condition at the time of delivery by the defendants by reason of inadequate warnings concerning its flammability?

Transcript of Proceedings at 202, reprinted in Appendix at 224a. On its face, this interrogatory presents only a narrow view of liability under section 402A; it focuses on a supplier’s responsibility for the condition of its product at the time of delivery. However, at the conclusion of his charge,' the jury was presented with a broader theory of section 402A liability. The district court informed the jury, with regard to Interrogatory # 1, that

The plaintiff’s theory of the case or one of the plaintiff’s theories of the case is that in order to avoid this product being in a defective condition unreasonably dangerous to the user or consumer, the notice of its dangerous proclivities, the notice of its flammability and so forth should have been in such form that it would be appreciated by the ultimate consumer. And the question for you to resolve is: under the circumstances under which there [sic] deliveries were made who was the ultimate consumer? Were the defendants aware and should they have been aware that the product was being used by persons in the plant who would not be aware of its dangerous proclivities?
As I pointed out, this aspect of the case does overlap to a large extent the negligence aspect of the case and you could find the product unreasonably dangerous if you conclude that under all of the circumstances the form of the warning was inadequate to bring the relevant information to the attention of the ultimate user or consumer; and I leave all of those factual nuances and inferences for you to sort out and resolve on the basis of the evidence in the case.

Transcript of Proceedings at 240, reprinted in Appendix at 263a (emphasis added). The jury declined to find that even if adequate warnings must be supplied to the employee as “ultimate user,” Amsco had breached this duty. Therefore, without deciding what theory of liability Pennsylvania would apply under section 402A, we are certain that under even the most expansive theory possible appellant was found not liable under section 402A.19

CONCLUSION

The district court in this case erroneously awarded damages to the appellee. It was improper to award damages under a negligence theory because section 388, if ever raised as a basis for liability, had been abandoned during the pre-trial stages of the case. The district court also could not properly permit damages under a strict liability theory. Its first special interrogatory to the jury and the accompanying explana*99tion presented a comprehensive question of liability under section 402A. The jury’s answer to that interrogatory established that there was no liability under strict liability.

Accordingly, we must vacate the lower court’s judgment and order that judgment be entered for the appellant.

. Price also brought suit against co-defendant, Inland Oil Co. Inland is not a party to this appeal; it settled with appellee and executed a joint tort-feasor release after the trial. District Court Memorandum and Order at 1 n.l, reprinted in Appendix at 303a.

. Hanover Wire is not a party to this action. Recovery against Hanover Wire was limited to benefits under the workmen’s compensation and occupational safety laws.

. The record indicates that at times deliveries were made -in 55 gallon drums. The drums contained warning labels stating “PETROLEUM NAPHTHA” and “COMBUSTIBLE LIQUID.” There is no indication, however, that the appellee, Price, ever saw such warnings.

. Hanover had exclusive control over the work place and the storage of the naphtha.

. Plaintiffs complaint at 2, reprinted in Appendix at 6a.

. Pre-trial Report by U.S. Magistrate Richard A. Powers, III (Dec. 14, 1976).

. Section 402A, in pertinent part, provides:

(1) One who sells any product in a defective condition unreasonably dangerous to the user or consumer or to his property is subject to
liability for physical harm thereby caused to the ultimate user or consumer, or to his property, if
(a) the seller is engaged in the business of selling such a product and
(b) it is expected to and does reach the user or consumer without substantial change in the condition in which it is sold.

Restatement (Second) of Torts, § 402A (Supp. 1981) (emphasis added).

. See note 11 infra.

. Since the denial of a motion for judgment n. o. v. is not an appealable order, State National Bank of El Paso v. United States, 488 F.2d 890 (5th Cir. 1974); Dostal v. Baltimore & Ohio R.R. Co., 170 F.2d 116 (3d Cir. 1948), this court will treat Inland Oil’s appeal as an appeal from the entry of judgment on the verdict. See Gray v. General Motors Corp., 434 F.2d 110 (8th Cir. 1970). Nonetheless, we are limited by the same standard of review that bound the district court when it considered Amsco’s motion for judgment n. o. v. 5A Moore’s Federal Practice H 50.15. We must view the evidence and all inferences from it in a light most favorable to Price, the party against whom the motion was made. Samuels v. Health & Hospital Corp., 591 F.2d 195 (2d Cir. 1979); Fireman’s Fund Ins. Co. v. Videfreeze Corp., 540 F.2d 1171, 1178 (3d Cir. 1976).

. The trial court stated to counsel at the close of evidence:

The Court: Now I invite counsel to suggest interrogatories to be submitted to the jury to resolve the factual issues in the case.
I will state, I am not at all sure what the factual issues are and I will explain why I have difficulties. So far as I am concerned the only reason this case goes to the jury is because of the Third Circuit decision in Dougherty v. Hooker Oil.

Transcript of Proceedings at 162-63, reprinted in Appendix at 184a-85a. Following the charge to jury, the court further explained to appellant’s counsel its reason for submitting the § 388 theory to the jury.

Mr. Renneisen: I recognize why you charged on 388, but I believe the plaintiff’s counsel stated repeatedly he was only proceeding on a 402A.
The Court: I know, I am trying to do him a favor and myself a favor by not having to try the case twice.

Mr. Renneisen: I understand that, but 1 except to that charge. That is all I have. Transcript of Proceedings at 239, reprinted in Appendix at 262a.

. We note in response to appellant’s second contention, see text accompanying note 9 supra, that the jury was never asked two of the three section 388 elements: (1) whether Amsco knew or should have known that the naphtha was likely to be dangerous in the use for which it was supplied, and (2) whether Amsco used reasonable care to inform the user of its dangerous condition. Although Amsco admitted that it knew naphtha was dangerous even in its proper usage, the reasonableness of its care in informing the users of the product’s danger, part (c) of section 388, remained at issue in the case. Accordingly, it should have been included in the special interrogatories. Without a finding that appellee failed to use reasonable care to inform the user of the naphtha of its dangers, it was error for the trial court to mold a section 388 verdict. See Dougherty, 540 F.2d at 179.

. Furthermore, although appellee’s complaint did allege negligence, it made no mention of section 388 and the pertinent language cited therein. As the trial court succinctly noted: “[Pjlaintiff is at pains to say the only theory he wants to go to the jury is 402A and he is not doing it on any other theory.” Transcript of Proceedings at 163, reprinted in Appendix at 185a.

. F.R.Civ.P. 16 provides:

In any action, the court may in its discretion direct the attorneys for the parties to appear before it for a conference to consider
(1) The simplification of the issues;
(2) The necessity or desirability of amendments to the pleadings;
(3) The possibility of obtaining admissions of fact and of documents which will avoid unnecessary proof;
(4) The limitation of the number of expert witnesses;
(5) The advisability of a preliminary reference of issues to a master for findings to be used as evidence when the trial is to be by jury;
(6) Such other matters as may aid in the disposition of the action.
The court shall make an order which recites the action taken at the conference, the amendments allowed to the pleadings, and the agreements made by the parties as to any of the matters considered, and which limits the issues for trial to those not disposed of by admissions or agreements of counsel; and such order when entered controls the subsequent course of the action, unless modified at the trial to prevent manifest injustice.

. In 1978 the Pennsylvania Supreme Court dropped from its § 402A doctrine the term “unreasonably dangerous.” Azzarello v. Black Bros. Co., 480 Pa. 547, 391 A.2d 1020 (1978). Thus, to this extent, Pennsylvania’s formulation of strict liability under § 402A does not track that of the Restatement.

. Section 402A of the Restatement (Second) of Torts was adopted by Pennsylvania Supreme Court as the law of Pennsylvania in Webb v. Zem, 422 Pa. 424, 220 A.2d 853, 854 (1966). But see Azzarello v. Black Bros. Co., 480 Pa. 547, 391 A.2d 1020 (1978).

. Appellee admits in his brief that Interrogatories # 1 and # 3 address separate theories of liability:

Specifically, the first Interrogatory was framed in terms of Section 402A of the Restatement of Torts 2nd while the third Interrogatory was framed in terms of Section 388 of the Restatement of Torts 2nd. The first Interrogatory spoke only in terms of the product being defective and unreasonably dangerous at the time of delivery by reason of inadequate warnings concerning flammability. The Jury by answering in the negative found that indeed the product was not defective at time of delivery as to inadequate warnings concerning fíammability. However, in answering the third Interrogatory in the affirmative, the Jury found that the defendants, under a negligence standard, failed to reasonably foresee that the product would be used by persons such as the instant appellee who would be unaware of flammability and of the hazards of smoking while using the product.

Appellee’s Brief at 29 (emphasis in original). Therefore, we need not address the issue of whether the jury’s answer to Interrogatory # 3 may have suggested some possible ground for liability under section 402A.

. See Comment h to section 402A which clarifies that a product, as to which adequate warning of danger involved in its use is required, sold without such warning is in a “defective condition.” Comment j states that “in order to prevent the product from being unreasonably dangerous, the seller may be required to put directions or warning, on the container, as to its use. See also Incollingo v. Ewing, 444 Pa. 263, 299, 282 A.2d 209, 219-30 (1971).

. But see Pegg v. General Motors Corp., 391 A.2d 1074, 1083 (Sup.Ct.Pa.1978).

. The dissent argues persuasively that the 402A interrogatory (Interrogatory 1) was improperly framed and that the corrective charge was ambiguous in that the jury was not specifically instructed that the corrective charge pertained to Interrogatory 1 and not to Interrogatory 3 (§ 388 claim). The short answer to both of these arguments is that at no time did the plaintiff object either to the form of the interrogatory or to the language or the specificity of the corrective charge. We must assume therefore that insofar as the plaintiff was concerned, both the interrogatory and the corrective charge met with his satisfaction. See Fed.R. Civ.P. 49(a); 51. Had the plaintiff believed that the charge was ambiguous or did not relate to the interrogatory, or that the interrogatory was incorrect, there was ample opportunity to except. No such exceptions were taken. Indeed, no cross appeal was ever filed claiming that the jury’s verdict on the 402A claim should be reversed. Thus we are satisfied that the jury’s verdict with respect to Interrogatory 1 (§ 402A claim) should be upheld.