Complex Litigation

No Product-Training Duty; Punitive Damages;
Medical Records

By Michael Hoenig - New York Law Journal - August 13, 2012

This article surveys recent decisions on three separate topics. First, does the sale of a complex product, such as an airplane, impose upon the manufacturer or seller a tort duty to train the user regarding risky conditions? Should lessons on use be embraced within the duty to warn? The Minnesota Supreme Court's Glorvigen decision holds "No." Second, could an ordinary automobile negligence case become a punitive damages nightmare leaving businesses exposed to uninsurable catastrophic liability? The New York Appellate Division's June 27 decision in Quiroz v. Zottola seems to suggest this possibility and, therefore, deserves special attention.

Third, while most personal injury claims are said to cause waiver of the plaintiff's physician-patient privilege and, thus, require issuance of authorizations for a claimant's medical records, exactly what has to be produced is subject to advocacy. Courts could take a restrictive approach, as occurred in the Appellate Division's July 18 decision in the Farkas case. Or "full disclosure" may be required, as occurred in the Appellate Division's June 15 decision in Boyea v. Benz. The key seems to be what exactly has been put "in controversy."

Training Lessons

Does the manufacturer of a complex product, for example, an airplane, car or riding mower, have a duty to provide training to pilots, drivers or users who purchase such products? Should such an obligation be considered a part of the manufacturer's duty to warn about dangers, risks and challenging uses of the product? On July 18, in Glorvigen v. Cirrus Design Corp.,1 the Minnesota Supreme Court answered these questions "no." Training the purchaser on how to use a product is not a tort duty.

Gary Prokop, a licensed noncommercial pilot, and his passenger died when Prokop's new Cirrus SR22 airplane crashed. He had purchased the plane one month earlier. As part of the purchase, Cirrus provided a training program for new owners designed to help already-licensed pilots transition into the SR22. One of the program's lessons detailed how to recover from a specific emergency situation but Prokop never received this lesson. He was attempting to recover from that emergency flight situation when he crashed.

For two years Prokop owned and flew a 1968 Cessna Sky Hawk logging at least 200 hours of flight time. However, piloting the Cessna is different. The SR22 had new features which made it more sophisticated and more powerful than the Cessna. As part of the purchase price, Cirrus offered a two-day, new-owner training program in a document called the "Pilot Training Agreement." Cirrus also provided other written materials including a training manual, an FAA-approved Pilot's Operating Handbook and a separate Autopilot Pilot's Operating Handbook.

"Transition training" is standard in the general aviation industry. The training builds upon the pilot's previous experience and provides proficiency in the new aircraft. Cirrus contracted with a separate flight school to provide the transition training which consisted of five separate sessions. Prokop also registered for two days of supplementary training.

Representatives of the estates of Prokop and his passenger sued Cirrus in products liability and the flight school for negligence. A jury found Cirrus 37.5 percent negligent, the flight school 37.5 percent negligent and Prokop 25 percent negligent. The jury awarded more than $19 million in total damages. On appeal Cirrus argued that it had no duty in tort to provide a training lesson on recovery from the emergency situation since any such duty arose out of the contract with Prokop. Further, providing the written manuals and instructions discharged its duty to warn and to give adequate instructions. The Minnesota Supreme Court, in a 4-2 decision, agreed. Cirrus' duty to warn did not require it to provide a flight lesson covering the emergency situation that confronted the pilot. The written manuals and instructions informing about how to deal with the problem were sufficient.

There is "no duty" in tort for manufacturers or suppliers "to train users in the safe use of their product." Indeed, no case was cited by plaintiffs obligating manufacturers to provide training lessons in order to discharge their duty to warn. The adequate written materials fulfilled that duty. The dissenting justices argued that this was a jury issue. The next question was whether Cirrus had assumed a tort duty by undertaking to contractually provide the lesson regarding the emergency situations. The court majority held "no." Breach of a contract, if any, was not recoverable in tort.

Punitive Damages

What at first blush appears to be an ordinary vehicle negligence case stemming from the collision of a garbage truck with a school bus, instead, may carry seeds of an extraordinary legal threat to businesses whose employees regularly drive within the scope of their employment. Such employers may be open to punitive damages claims for what otherwise may have been an accident caused by mere driver negligence. That seems to be a possible reading of an Appellate Division, Second Department, decision issued on June 27 bearing the name Quiroz v. Zottola.2 Punitive damages exposure creates potential economic disaster and lots of adverse consequences. For example, in New York, punitive damages are not insurable as a matter of public policy, so an employer believing it has ample insurance coverage, actually may not. Further, the ruling, projected out to its full potential consequences, could impact on employers' hiring practices and workers' ability to keep their jobs in troubled economic times. How? The interested reader can judge the possibilities.

In Quiroz, the injured plaintiff drove a school bus which was struck by defendant employer's garbage truck. Plaintiff sued defendant for personal injuries and negligent hiring, management and supervision. Plaintiff also demanded punitive damages based on allegations of gross negligence which were amplified by the bill of particulars. Defendant's answer conceded the driver was operating the truck during the course of his employment. Before discovery was complete, defendant moved to dismiss the cause of action alleging negligent hiring, management and supervision and, in effect, the demand for punitive damages. The trial court granted the motion. Plaintiff moved to renew his opposition to defendant's motion and submitted new evidence including deposition testimony by one of defendant's supervisors and documents from the truck driver's employment file. The court allowed the new evidence but adhered to its original determination.

The Second Department reversed. After describing the legal dynamics on a motion to dismiss, the court observed that a claim for negligent hiring, retention, supervision or training is permitted "when punitive damages are sought based upon facts evincing gross negligence in the hiring or retention of an employee." Here plaintiff submitted new evidence which showed that defendant-employer "may have received anonymous complaints that [the driver-employee] drove the garbage truck…fast and recklessly, and that [the defendant-employer] may have known that [the driver] had one or more violations on his driver's license prior to the subject accident." Accordingly, concluded the appellate panel, the cause of action for negligent hiring, etc. and the demand for punitive damages should not have been dismissed.

Ponder the stunning, practical implications of this seemingly simple ruling. Employers of drivers may, upon penalty of punitive damages, have to reconsider hiring or retaining drivers whose employment record includes "anonymous complaints" of "fast and reckless driving." Similarly, if the employer knows (or perhaps should have known) that the employee-driver "had one or more violations on his driver's license" prior to an accident, the employer may be open to a negligent hiring and retention claim for punitive damages. How many capable drivers at some time have had "one or more violations" on their licenses? Should they be fired for that reason? How many businesses may receive "anonymous complaints?" Indeed, some businesses post a sign on their vehicles, "How am I driving?" and provide a phone number to call. Should receipt of one or two or three "anonymous complaints" force the employer to discharge the driver to avoid punitive damage exposure? If that is one implicit lesson hidden within the Quiroz ruling, what seems like an ordinary traffic accident case has far-ranging effect.

Medical Records

A suit for personal injuries normally puts into controversy the mental or physical condition of a party. Pre- and post-injury medical records are then routinely discoverable and claimants are expected to issue medical authorizations to facilitate disclosure of the claimant's medical history. It is not pleasant for one's personal, sensitive and sometimes intimate medical history to be revealed to strangers but this is a price to be paid when a party's mental or physical condition is placed in controversy. Exactly what physical or mental condition is "in controversy" in a given case, however, is sometimes contested. The initial burden of proving the condition that will be subject to "full disclosure" is on the party seeking the information.

However, there is tension between a strong, liberal policy of full disclosure of all matter "material and necessary" in the prosecution or defense of an action and information that is protected by the physician-patient privilege and thus exempted from disclosure. This tension is frequently resolved in favor of disclosure based on the broad nature of plaintiff's injury claims. Nevertheless, there is room for advocacy here and, depending on how the claims are articulated and how forcefully the issue is argued, courts may be persuaded to take different approaches. This dynamic is reflected in two recent Appellate Division decisions, Farkas v. Orange Regional Medical Center,3 issued by the Second Department on July 18 and Boyea v. Benz,4 issued by the Fourth Department on June 15.

In Farkas, the plaintiff mother sued for medical malpractice during pregnancy and birth on behalf of her infant plaintiff. In a preliminary conference, the trial court directed plaintiffs to provide authorizations for the mother's prenatal, obstetrical and gynecological records pertaining to the births of her six nonparty children. Plaintiffs, however, moved to vacate the order to release medical records outside the period of pregnancy at issue in this case. The trial court then agreed. The appellate court affirmed.

Here the physician-patient privilege prevented disclosure unless it had been waived by plaintiff affirmatively placing her mental or physical condition in issue. A defense expert's affidavit posited that the mother's previous pregnancies may have been a cause of the infant plaintiff's injuries. That showing demonstrated the prior records were "material and necessary." But this by itself did not mean that the plaintiff mother had waived the privilege regarding the other pregnancies. Plaintiff's assertion of the privilege regarding the other pregnancies came with a price, however: Plaintiffs will be precluded from introducing evidence at trial on matters covered by the privilege asserted.

In Boyea v. Benz, the Fourth Department rejected a restrictive approach to such disclosure. Plaintiff was a passenger in an automobile struck by defendant's vehicle. Claiming injuries to her neck, back, shoulders and other body parts, she also particularized headaches, dizziness, heart palpitations, emotional anguish and suffering and "inability and limited ability to engage in life's enjoyments and loss of employment and career." Plaintiff provided authorizations for defendants to obtain her medical records but limited those to post-accident treatment of her neck and back. Defendant moved to compel pre-accident records and plaintiff relented, agreeing to provide those "for the body parts at issue."

During discovery, it became apparent that plaintiff had suffered from a pre-existing medical illness. A psychotherapist's notes two years before the accident indicated that plaintiff had not worked in two years and that she was applying for Social Security Disability (SSD) benefits. Defendants sought plaintiff's authorization for records from Social Security. At oral argument on the motion, plaintiff withdrew her claim for emotional distress as a result of the accident. The motion judge ordered plaintiff to authorize release of all pre-accident medical records relating to enumerated body parts but denied compulsion of records relating to pre-accident applications for SSD benefits. The court did, however, order production to defendants of all administrative determinations of pre-accident SSD benefits. It also ordered that all post-accident SSD records be submitted to the court for in camera review. Not satisfied, defendants appealed.

The Appellate Division held that all SSD records, whether pre- or post-accident, had to be produced. Although plaintiff withdrew her claim for emotional distress due to the accident, her other broad allegations of injury—limited ability to perform normal daily functions and social activities, inability to engage in life's enjoyments, loss of employment and career—could have resulted from physical injuries sustained in the accident, from her pre-existing medical condition or some combination of them. The pre-existing mental condition could be relevant on her claim for damages due to an "inability to lead a normal life," etc. Accordingly, the appellate court ordered all records relating to SSD benefits to be reviewed in camera by the trial court to ascertain whether they are "material and related to any physical or mental condition placed in issue by plaintiff."

Michael Hoenig is a member of Herzfeld & Rubin.

Endnotes:

1. 2012 Minn. LEXIS 305 (Minn. Sup. Ct. July 18, 2012).

2. 2012 NY Slip Op 05159 (2d Dept., June 27, 2012).

3. 2012 NY Slip Op 05610 (2d Dept., July 18, 2012).

4. 2012 NY Slip Op 04860 (4th Dept., June 15, 2012).

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