In the Court of Appeals of Iowa s14

IN THE COURT OF APPEALS OF IOWA

No. 3-949 / 03-0444

Filed February 27, 2004

WALTER JOHNSON and BRENDA JOHNSON,

Plaintiffs-Appellants,

vs.

HARLEY-DAVIDSON MOTOR COMPANY GROUP, INC., HARLEY-DAVIDSON/BUELL CYCLE CENTER, INC., B.C. ENTERPRISES, INC. OF CEDAR RAPIDS, IOWA, C & B MANUFACTURING, INC., d/b/a HITCH DOC and C.M.T. MANUFACTURING, INC.,

Defendants-Appellees.

Appeal from the Iowa District Court for Linn County, David S. Good, Judge.

David Dutton, James Hellman, and Carolyn Rafferty of Dutton, Braun, Staack & Hellman, P.L.C., Waterloo, for appellants.

John Bickel of Shuttleworth & Ingersoll, P.L.C., Cedar Rapids, for appellee B.C. Enterprises.

Mark Fonken of Jardine, Logan & O’Brien, P.L.L.P., Lake Elmo, Minnesota, for appellee C & B Manufacturing.

Timothy Hamann of Clark, Butler, Walsh & Hamann, Waterloo, for appellee Harley Davidson/Buell Cycle Center.

Richard Stefani of Gray, Stefani & Mitvalsky, P.L.C., Cedar Rapids, and Mark Kircher of Quarles & Brady L.L.P., Milwaukee, Wisconsin, for appellee Harley-Davidson Motor.

Maureen Tobin and Jason Casini of Whitfield & Eddy, P.L.C., Des Moines, for appellee C.M.T. Manufacturing.

Heard by Sackett, C.J., and Vaitheswaran and Eisenhauer, JJ.

SACKETT, C.J.

The plaintiffs-appellants, Walter and Brenda Johnson, appeal from the district court’s grant of summary judgment in favor of all defendants in their product liability claims. The plaintiffs claim none of the defendants proved the absence of genuine issues of material fact and that the defendants are not entitled to summary judgment as a matter of law. They contend the court made credibility determinations, fact findings, and misapplied the law. The plaintiffs also assert the district court erred in denying their motion to amend their petition to recharacterize the claims as those recognized by our supreme court in a decision filed eight days after the pleadings deadline had passed.

I. Background facts.

In 1997 Donald Hansen purchased a Harley-Davidson motorcycle from defendant B. C. Enterprises, Inc. (“BC”). He had a trailer hitch installed that was manufactured by defendant C & B Manufacturing, Inc., d/b/a Hitch Doc (“Hitch Doc”). In the spring of 1999 Hansen decided to sell the motorcycle. Defendant Harley-Davidson/Buell Cycle Center, Inc. (“Cycle Center”) allowed Hansen to display his motorcycle at the Cycle Center. The plaintiffs saw the motorcycle there and purchased it the next day. In June 1999 the Plaintiffs purchased a trailer manufactured by defendant C.M.T. Manufacturing, Inc. (“CMT”). In October 1999 the plaintiffs were riding their motorcycle with the trailer attached. While coming around a curve in the Arizona mountains, Walter attempted to stop quickly because of an accident ahead in the road. He lost control, the motorcycle flipped on its side, Brenda was thrown from the motorcycle, and both plaintiffs were injured.

II. Proceedings.

The plaintiffs filed suit on December 1, 2000. They brought claims against defendant Harley-Davidson Motor Company Group, Inc. (“Harley-Davidson”), Cycle Center, BC, Hitch Doc and CMT. Their claims against Harley-Davidson were for strict liability in tort, asserting the motorcycle was defective and unreasonably dangerous, and for negligence in failing to provide adequate warnings regarding the risk in towing a trailer behind a motorcycle. The plaintiffs’ claim against Cycle Center alleged negligence in Cycle Center’s failure to provide adequate warnings regarding the risk in towing a trailer behind a motorcycle. Their claims against BC alleged negligence regarding the dangers associated with installing a hitch on a motorcycle, and failure to provide adequate warnings regarding the risk in towing a trailer. The plaintiffs’ claims against Hitch Doc alleged negligence in failing to provide adequate warnings regarding the risk in towing a trailer, and that the hitch became unreasonably dangerous when attached to the motorcycle. The plaintiffs’ claims against CMT alleged negligence in failing to provide adequate warnings regarding the risk in towing a trailer, and that the trailer became unreasonably dangerous when attached to the motorcycle.

Harley-Davidson moved for summary judgment, claiming plaintiffs’ strict liability claims should be dismissed because the motorcycle was not unreasonably dangerous or defective; that the plaintiffs’ claims Harley-Davidson was negligent in failing to warn non-users of the motorcycle must be dismissed because Harley-Davidson had no duty to warn non-users; and that the plaintiffs’ failure to warn claims should be dismissed because the plaintiffs received repeated warnings not to tow a trailer and because they could not demonstrate that any additional or different warning would have prevented them from towing the trailer. The plaintiffs resisted the motion, claiming Harley-Davidson had a duty to warn; that Harley-Davidson had actual knowledge its motorcycles were being altered, and knew of the danger of towing a trailer behind the motorcycle; that the warnings were clearly inadequate; that Harley-Davidson must prove plaintiffs understood the probability and gravity of the potential hazards of towing a trailer behind the Harley-Davidson motorcycle; and that proximate causation is ordinarily an issue for the fact finder. The plaintiffs further claimed their amended and substituted petition was not limited to design defects, and that Harley-Davidson was liable for foreseeable alterations to its product which render the product unsafe.

The district court granted Harley-Davidson’s motion for summary judgment on all claims. It concluded the plaintiffs lacked expert testimony to support their strict liability claim, that no liability can result from modifications beyond the manufacturer’s control, and that Harley-Davidson could not be held responsible for the plaintiffs’ failure to heed the warnings not to tow a trailer. The court concluded Harley-Davidson had no special relationship with any of the other defendants such as would give rise to a duty to warn. Concerning the adequacy of the warnings, the court found as a matter of law that the written and verbal warnings were adequate. It also found the plaintiffs had not given any indication that any warning would have stopped them from towing the trailer and that towing the trailer was a superseding cause of the accident, relieving Harley-Davidson from any liability.

Cycle Center moved for summary judgment, claiming it had no duty to warn plaintiffs because it did not act as a seller nor did the transaction at issue constitute the functional equivalent of a consignment sale; that its alleged failure to warn did not act as the proximate cause of plaintiffs’ injuries; that plaintiff Walter Johnson’s failure to properly brake was the sole cause of plaintiffs’ injuries; and that it owes no duty to plaintiffs based on public policy considerations. The plaintiffs resisted the motion, claiming Cycle Center had a legal duty to warn them; that summary judgment was inappropriate because questions of fact exist as to whether Cycle Center’s failure to warn was a proximate cause of plaintiffs’ injuries; and that summary judgment was inappropriate because questions of fact exist as to whether plaintiff Walter Johnson’s braking of the motorcycle was the sole cause of his injuries.

The district court granted Cycle Center’s motion for summary judgment on all claims. It found there was no evidence of any oral or written consignment agreement between Hansen and Cycle Center or any evidence of an exchange of money that would support a finding of a consignment sale. It concluded there was no special relationship between the plaintiffs and Cycle Center that would give rise to a duty to warn. Concerning proximate causation, the court concluded the plaintiffs’ act of towing the trailer was a superseding cause, the warnings given were adequate, and no factor attributable to Cycle Center was a cause of the accident.

CMT moved for summary judgment, claiming no duty to warn exits where the plaintiffs had actual knowledge of the hazard, and that plaintiffs cannot demonstrate a causal link between any additional warning by CMT and plaintiffs’ decision to pull a trailer with the motorcycle; and that plaintiffs cannot satisfy the required elements of a design defect claim under principles of strict liability under Iowa law. Plaintiffs resisted the motion, claiming that CMT had a duty to warn of hazards associated with towing a trailer behind a Harley-Davidson motorcycle; that CMT is held to have the knowledge of experts, since it is a manufacturer, giving CMT superior knowledge warranting a duty to warn of the reasonably foreseeable danger of injuries; that the warnings were clearly inadequate; that CMT must prove plaintiffs understood the probability and gravity of the potential hazards of towing a trailer behind the Harley-Davidson motorcycle; and that proximate causation is ordinarily an issue for the fact finder. Plaintiffs further claim their amended and substituted petition is not limited to design defects, and that CMT remains liable for its altered product when it was attached to the motorcycle because it was reasonably foreseeable that the alteration would be made and the alteration did not unforeseeably render the product unsafe.

The district court granted CMT’s motion for summary judgment on all claims. It reiterated its findings and conclusions concerning duty to warn: that the verbal and written warnings were adequate to make the danger open and obvious, that the plaintiffs’ actions were a superseding cause, and there was no indication any warning would have stopped the plaintiffs from towing the trailer. The court concluded the product liability claim failed because the plaintiffs offered no evidence of a reasonable alternative design for the trailer. It also concluded negligent marketing was not a cause of action recognized in products liability cases in Iowa.

Hitch Doc moved for summary judgment, claiming it had no duty to warn of the potential hazards of towing a trailer behind a motorcycle, and that the hitch was neither defective nor unreasonably dangerous. Plaintiffs resisted the motion, claiming that Hitch Doc had a duty to warn of hazards associated with towing a trailer behind a Harley-Davidson motorcycle; that Hitch Doc is held to have the knowledge of experts, since it is a manufacturer, giving Hitch Doc superior knowledge warranting a duty to warn of the reasonably foreseeable danger of injuries; that the warnings were clearly inadequate; and that Hitch Doc must prove plaintiffs understood the probability and gravity of the potential causation is ordinarily an issue for the fact finder. Plaintiffs further claimed their amended and substituted petition is not limited to design defects, and that Hitch Doc had actual knowledge that installing a hitch on Harley-Davidson motorcycles was not recommended and could pose potential hazards to consumers if used to tow a trailer.

The district court granted Hitch Doc’s motion for summary judgment on all claims. The court incorporated its conclusions concerning duty to warn and failure to warn from the portion of its ruling concerning CMT. It concluded the rationale for granting CMT’s motion for summary judgment concerning the claim of a defective or unreasonably dangerous product applied to the identical claims against Hitch Doc.

BC filed a motion regarding discovery, seeking to take a further deposition of plaintiff Walter Johnson because he intended to add injuries to his hand from an accident with a power saw to his claim for damages. The plaintiffs resisted this motion, claiming there is no change in circumstances warranting an additional deposition. BC also filed a motion to extend discovery deadlines in order to name a new expert witness, and the plaintiffs did not resist this motion. The district court granted the motion for additional deposition, but denied the request it be videotaped.

The plaintiffs filed a motion to amend their petition, seeking to add claims of fraud against Hitch Doc and CMT based on the supreme court’s decision in Wright v. Brooke Group, Ltd., 652 N.W.2d 159 (Iowa 2002). Hitch Doc and CMT resisted the motion, contending the time for amending pleadings had passed. The district court denied the motion to amend as prejudicial and because it did not believe the amended claims would survive under Wright.

III. Scope of review.

We review a district court’s grant or denial of summary judgment for correction of error at law. Iowa R. App. P. 6.4; Crippen v. City of Cedar Rapids, 618 N.W.2d 562, 565 (Iowa 2000). Summary judgment is appropriate when there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. Iowa R. Civ. P. 1.981(3). A genuine issue of material fact exists if a reasonable fact finder could return a verdict for the nonmoving party. Baratta v. Polk County Health Servs., Inc., 588 N.W.2d 107, 109 (Iowa 1999). The facts are viewed in the light most favorable to the party opposing the motion for summary judgment. Gerst v. Marshall, 549 N.W.2d 810, 811 (Iowa 1996). The moving party has the burden to establish there are no material facts in dispute. Schlueter v. Grinnell Mut. Reins. Co., 553 N.W.2d 614, 615 (Iowa Ct. App. 1996). The moving party also may demonstrate a right to summary judgment by establishing the limits of the other parties' proof. If the moving party can show the nonmoving party has no evidence to support an outcome determinative element of that party's claim, the moving party will prevail on summary judgment. Wilson v. Darr, 553 N.W.2d 579, 582 (Iowa 1996) (citing Griglione v. Martin, 525 N.W.2d 810, 813 (Iowa 1994)).

IV. Discussion.

A. Harley-Davidson.

1. Negligent Failure to Warn the Plaintiffs. To prevail on a claim against a manufacturer for negligent failure to warn, unless the danger is open and obvious, a plaintiff must establish (1) the manufacturer knew or should have known of the danger, (2) any warnings given were inadequate, and (3) an adequate warning would have altered the plaintiff’s conduct and avoided the injury. Lovick v. Wil-Rich, 588 N.W.2d 688, 700 (Iowa 1999); Olson v. Prosoco, Inc., 522 N.W.2d 284, 289-90 (Iowa 1994). The undisputed evidence shows Harley-Davidson knew pulling a trailer was dangerous. The court concluded the warnings were adequate and the plaintiffs had given no indication any warning would have prevented them from pulling a trailer. The plaintiffs contend the evidence relating to the adequacy of the warnings was disputed and the court erred in invading the province of the jury by deciding disputed questions of fact in ruling on the motions for summary judgment. They point to their expert’s opinion Harley-Davidson’s warnings on the air cleaner on the motorcycle and in the owner’s manual were inadequate in content and presentation.