EXCUSE the delay, but approximately 45 seconds before we completed this week’s edition of Texas Update, a fight broke out in our editorial staff room complete with flying beer cups, popcorn, ice and chairs. Suspensions are pending.
OSHA REGULATIONS HELD ADMISSIBLE IN PRODUCT LIABILITY CASE: LAST WEEK, the Dallas Court of Appeals held that OSHA regulations were admissible in a product liability case to counter the plaintiff’s claims that a forklift was defectively designed and caused his injuries. Juan Castillo sustained a traumatic amputation of his left leg when the stand-up forklift he was operating dropped off the edge of a loading dock. He sued the forklift manufacturer claiming that the forklift should have been designed with a door to hold him inside the operator’s compartment, which would have prevented his injury. The trial court permitted the manufacturer to introduce OSHA regulations which recommended that operators of stand-up forklifts be trained to promptly abandon ship if a tipover occurs. The manufacturer argued that a door would prevent the operator from safely exiting the forklift contrary to what OSHA recommends. The plaintiff argued that the OSHA regulation was irrelevant and thus inadmissible in a products case because it was a not a product design standard.
The appellate court affirmed the trial court’s ruling, holding that the plaintiff in a design defect case has the burden to prove a safer alternative design that would have prevented the injury. To establish a safer alternative design, a plaintiff must show that the alternative design would not, under any circumstances, impose an equal or greater risk of harm. The defendant is entitled to counter by offering evidence that the plaintiff’s proposed alternative design is not safer. The OSHA regulations were admissible in this case because they were some evidence that it was safer to have a clear exit rather than a door impeding an exit. Costilla v. Crown Equipment Corp (Tex. App. Dallas 2004).
INSURER BREACHES INSURANCE POLICY BY OFFERING TO REPLACE DAMAGED OLD ROOF WITH AN IDENTICAL NEW ROOF: Last Week, The Texas Supreme Court held that offering to replace an insured’s hail damaged roof with an identical new roof was a breach of the insuring agreement. Mex-Tex suffered hail damage to an old ballast roof on a commercial building. Rejecting a $145,460 check from Republic Insurance Company to replace the roof with an identical ballast roof, the insured retained a contractor to go ahead, without waiting on Republic, and replace the roof at a cost of $179,000 with one of the same kind, but which would be fixed to the building mechanically, rather than by ballast (that is, rocks) as the old roof had been. Mex-Tex then brought suit alleging Republic had breached the insurance policy by not paying the full $179,00 for a mechanically attached roof. The lower courts held for Mex-Tex.
Republic appealed to the Supremes arguing that it could not have breached the policy by offering to replace the insured’s roof with an identical one and refusing to pay for a more expensive one. The Supremes disagreed with Republic and said the policy provides the insurer is required to repair or replace the damaged property “with property of comparable material and quality.” Comparable does not mean identical. Said the court: “The policy clearly allows more leeway than that…and Mex-Tex’s new roof was within that leeway.” The experts testified at trial that the roofs were comparable and the only difference was cost. The Supremes also assessed an 18% delay penalty on the difference in the two amounts pursuant to article 21.55 of the Texas Insurance Code, thereby reducing the lower court’s assessment of the statutory delay penalty on the full amount of $179,000. Republic Underwriters Ins Co v. Mex-Tex, Inc. (Tex. 2004).
TxUp Defensive Strategy: While planning our defense to the inevitable prosecution arising from the recent melee in our editorial staff room, we were advised that we should simply apply for a pardon from President Bush. It seems as though he has a history of pardoning turkeys at this time of year.
By the way, we identified the staff writer who threw the first beer cup:
