Indiana Law Review


Comparative Fault and Product Liability in Indiana

Henry Woods*

I. Introduction

Dean Prosser called the development of modern product liability law

"the most rapid and altogether spectacular overturn of an established rule

in the entire history of the law of torts.'" Section 402A of the Restate-

ment of Torts^ was promulgated less than twenty years ago. In two decades

it has received almost universal approval either judicially or legislatively.

When this development is coupled with the warranty provisions of the
Uniform Commercial Code,^ it is easy to agree with one commentator

that the law has come full circle to the old civil law maxim of caveat

venditor (let the seller beware) from the common law maxim of caveat
emptor (let the buyer beware).'*

Apparently, the relatively sudden shift in the theory of

manufacturer's liability was designed by its authors to provide

long-sought protection against dangerous and defective products

for an increasingly vulnerable consumer—a consumer caught in
a sometimes vicious commercial vortex born of a massive modern
technocracy and generated by a super-mechanized, computer-

controlled, assembly-automated, planned-obsoletized, profit-

motivated, mass-marketed, over-advertised, ultra-depersonalized

economy.^

Contemporaneously with the uprooting of long-established precedent

in the field of product liability has come a surge to adopt comparative
fault. Prior to 1969, only four states had accepted this doctrine. They

were Mississippi (1910), Georgia (1913), Wisconsin (1931) and Arkansas

(1955).^ Indiana has now become the fortieth state to adopt comparative
fault. ^ This change in basic tort law has been made both legislatively and
judicially. Without any additional complications, the massive discard of

long-established precedent in product liability law would present problems

*United States District Judge, Eastern District of Arkansas.

'Prosser, The Fall of the Citadel, 50 Minn. L. Rev. 791, 793-94 (1966) (footnote

omitted).
^Restatement (Second) of Torts § 402A (1965).

'See U.C.C. §§ 2-312 to -315 (1978).

"Leavell, The Return of Caveat Venditor as the Law of Products Liability, 23 Ark.
L. Rev. 355, 356 (1969) (footnote omitted).

'Id. at 356.

'See H. Woods, Comparative Fault § 1.11 (1978); Nebraska (1913) and South Dakota

(1941) had enacted very limited forms of comparative negligence.

'See Act of Apr. 21, 1983, Pub. L. No. 317-1983, 1983 Ind. Acts 1930 (codified

at Ind. Code §§ 34-4-33-1 to -8 (Supp. 1983)), amended by Act of Mar. 5, 1984, Pub.

L. No. 174-1984, 1984 Ind. Acts 1468 (codified at Ind. Code §§ 34-4-33-1 to -13 (Supp.

1984)).

999



UXX) INDIANA LAW REVIEW [Vol. 17:999

to the judicial establishment. When the revolution in product liability is

added to the uncertainty created by comparative fault, the resolution of

many cases becomes—in the words of the King of Siam—a puzzlement.
Five theories of liability are employed in product liability cases: (1)

negligence; (2) strict liability in tort; (3) implied warranty; (4) express war-

ranty; and (5) deceit. It is appropriate at this point to review each theory

briefly.

II. Product Negligence Cases

For almost a century, product cases based on negligence were re-

strained by the privity defense, as enunciated in Winterbottom v. Wright,^

which required contractual privity between plaintiff and supplier. Even

a legal neophyte knows that Judge Cardozo struck down the privity defense

in negligence cases in MacPherson v. Buick Motor Co.^ While the pro-

cess required fifty years, every American jurisdiction has now accepted

the MacPherson rule, and privity is no longer a problem in product cases

based on negligence. The theory alleged is generally negligence in design,

selection of materials, assembly, inspection, testing, packaging or warn-

ing. Because of practical problems of proof, the favorites with plaintiffs

are design negligence and failure to warn.

As in other negligent torts, foreseeability of probable injury is an im-

portant element in product cases based on negHgence. To constitute
negligence, an act must be one from which a reasonably careful person

would foresee such an appreciable risk of harm to others as to cause him

not to do the act or do to it in a more careful manner. '°

When the plaintiff brings a product case in negligence, the effect of
the Indiana comparative negligence statute is clear. Because the defenses

set out in Section 4 of the Indiana Product Liability Act of 1978" are

applicable only to strict Hability in tort,'^ the defenses available in a pro-

duct case in Indiana based on negligence are those available in any other

negligent tort case. Those defenses most frequently claimed are contributory

negligence and assumption of risk. However, both of these defenses are

included within the definition of "fault" in the new Indiana Comparative

'10 M & W 109, 152 Eng. Rep. 402 (1842).
*217 N.Y. 382, 111 N.E. 1050 (1916).

"Talsgraf v. Long Island R.R. Co., 248 N.Y. 339, 162 N.E.99 (1928). "The concept
of actionable negligence is relational because an act is never negligent except in reference

to, or toward, some person or legally protected interest." Hill v. Wilson, 216 Ark. 179,

183, 224 S.W.2d 797, 800 (1949) (footnote omitted).

"Act of Mar. 10, 1978, Pub. L. No. 141, Sec. 28, § 4, 1978 Ind. Acts 1308, 1309

(codified at Ind. Code § 33-1-1.5-4 (1982)), amended by Act of Apr. 21, 1983, Pub. L.
No. 297-1983, Sec. 5, § 4, 1983 Ind. Acts 1814, 1816 - 17 (codified at Ind. Code § 33-1-1.5-4

(Supp. 1984)).

''See id. § 33-1-1.5-1.



1984] PRODUCT LIABILITY KXJl

Fault Act'^ and will defeat recovery only if the plaintiff's fault "is greater

than the fault of all persons whose fault proximately contributed to the

claimant's damages.'"^

III. Strict Liability in Indiana

In 1978 Indiana adopted a statute governing all product Hability ac-

tions based on negligence or strict liability in tort, but not those based

on breach of warranty.'^ Section 1 of the statute was amended in 1983

to make it applicable only to strict liability in tort except with respect
to hmitations.'^ Section 3 follows closely the language of Section 402

A

of the Restatement of Torts. '^ Arkansas'^ and Maine' ^ are the only other

states to adopt this doctrine legislatively instead of judicially; however,

the courts in those states had declined judicial adoption. This was not

the case in Indiana, where strict liability had been judicially adopted by

the court of appeals in 1970^° and by the Indiana Supreme Court in 1973.^'

In Indiana, as in most jurisdictions, failure to supply adequate warn-

ings is considered a product defect under section 402A.^^ "In order for

the plaintiff to recover, the defect can be that the product was defectively

designed, defectively manufactured, or that the manufacturer failed to

supply adequate warnings or instructions as to the dangers associated with

its use."^^ This was not made clear in the original Product Liability Act
of 1978,^'' but the 1983 amendment added a new section 2.5 which con-
tained the following provision:

A product is defective under this chapter if the seller fails to:

(1) properly package or label the product to give reasonable

warnings of danger about the product; or

(2) give reasonably complete instructions on proper use of

the product;

''See Act of Mar. 5, 1984, Pub. L. No. 174-1984, Sec. 1, § 1, 1984 Ind. Acts 1468, 1468

(codified at Ind. Code § 34-4-33-2(a) (Supp. 1984)).

'^ND. Code § 34-4-33-4(a) (Supp. 1984).
''See Ind. Code § 33-1-1.5-1 (1982).
''See Act of Apr. 21, 1983, Pub. L. No. 297-1983, Sec. I, § 1, 1983 Ind. Acts 1814,

1814 (codified at Ind. Code § 33-1-1.5-1 (Supp. 1984)).

'''Compare Ind. Code § 33-1-1.5-3 (Supp. 1984) with Restatement (Second) of Torts

§ 402A (1965).
'«Ark. Stat. Ann. § 85-2-318.2 (Supp. 1983).
"Me. Rev. Stat. Ann. tit. 14, § 221 (1979).
'"Cornette v. Searjeant Metal Products, 147 Ind. App. 46, 258 N.E.2d 652 (1970).

^'Ayr-Way Stores, v. Citwood, 261 Ind. 86, 300 N.E.2d 335 (1973).

'^See, e.g.. Reliance Ins. Co. v. AL E. & C, Ltd., 539 F.2d 1101 (7th Cir. 1976)
(federal diversity case from Indiana).

"Hoffman v. E. W. Bliss Co., 448 N.E.2d 277, 281 (Ind. 1983) (citations omitfed);
see also Reliance Ins. Co. v. AL E. & C, Ltd., 539 F.2d 1101 (7th Cir. 1976).

''See Ind. Code §§ 33-1-1.5-2, -3 (1982).



1002 INDIANA LAW REVIEW [Vol. 17:999

when the seller, by exercising reasonable diligence, could have

made such warnings or instructions available to the user or

consumer.--

Because of the limited definition of ''user or consumer" in section

2 of the original Act,-^ there was a question as to whether third parties^^

and bystanders-*' had the same protection under the statute as formerly

afforded by Indiana case law.^"^ This omission was corrected in the 1983

amendment by the inclusion of "bystander" in the definition of ''user"

or "consumer" contained in section 2.^°

The defenses to strict liability in tort are defined in section 4 of the

product liability statute as (1) assumption of risk, (2) misuse not reasonably

expected by the seller at the time the seller sold or otherwise conveyed

the product to another party, (3) modification or alteration after delivery

to the initial user or consumer where not reasonably expectable by the

seller, and (4) conformation to the state of the art at the time of design,

labeling, packaging and manufacture.^' Since these defenses are only ap-

plicable to strict liability actions, ^^ the Indiana common law defenses to
negligence actions are unaffected by the product Hability statute."

Because the statute did not apply to a cause of action accruing before

June 1, 1978, very few interpretive cases have reached the Indiana ap-

pellate courts. Probably the most important decision to date is Dague
V. Piper Aircraft Corp.,^'^ in which the Indiana Supreme Court, respond-

^'Act of Apr. 21, 1983, Pub. L. No. 297-1983, Sec. 3, § 2.5, 1983 Ind. Acts 1814,

1815 (codified at Ind. Code § 33-1-1. 5-2. 5(b) (Supp. 1984)).
''See Ind. Code § 33-1-1.5-2 (1982).
'^See Reliance Ins. Co. v. AL E. & C, Ltd., 539 F.2d 1101 (7th Cir. 1976) (section

402A, by its terminology "person or his property," gives subrogee of a bailee standing to sue).

''See Gilbert v. Stone City Constr. Co., 171 Ind. App. 418, 357 N.E.2d 738
(1976) (bystander who is reasonably foreseeable to supplier of product may recover for injuries
caused by defective product).

"Vargo & Leibman, Products Liability, 1978 Survey of Recent Developments in In-
diana Law, 12 Ind. L. Rev. 227, 241 (1979).

''See Ind. Code § 33-1-1.5-2 (Supp. 1984).
''Id. § 33-1-1. 5-4(a) (Supp. 1984).

'-'Id. § 33-1-1.5-1.

"A statute of limitations built into the original products act provided that the action
must be brought within two years after accrual or within ten years after delivery of the
product and did not mention any theory of liabihty. See Ind. Code § 33-1-1.5-5 (1982).

The 1983 amendment to the products liability statute amended this section to apply
to the strict liability and negligence theories of recovery. Act of Apr. 21, 1983, Pub. L.
No. 297-1983, Sec. 6, § 5, 1983 Ind. Acts 1814, 1817-18 (codified at Ind. Code § 33-1-1.5-5
(Supp. 1984)). This is the only section of the act as amended that applies to the negligence
theory. Ind. Code § 33-1-1.5-1 (Supp. 1984). If the cause of action accrues more than
eight years but not more than ten years after initial delivery, it may be commenced within
two years after accrual. Id. § 33-1-1.5-5.

'M18 N.E.2d 207 (Ind. 1981).



1984] PRODUCT LIABILITY KXj3

ing to four certified questions by the United States Court of Appeals for

the Seventh Circuit, upheld the constitutionaHty of the product liability

statute under the Indiana Constitution.^^ The Seventh Circuit was prin-

cipally concerned with the statute of limitations question. In Dague, plain-

tiff 's decedent was killed July 7, 1978, in a plane crash. His widow sued
October 1, 1979, claiming defects in the manufacture of the aircraft, which

was placed in the stream of commerce in 1965. The Indiana Supreme

Court held that the action was barred. ^^ Judge Pivarnik's decision ap-

pHed the ten-year limitation to the plaintiff's theory that Piper had

negligently breached a continuing duty to warn. "The Product Liability

Act expressly appHes to all product liabihty actions sounding in tort, in-

cluding those based upon the theory of negligence, and the legislature

clearly intended that no cause of action would exist on any such product

Hability theory after ten years.
"^^

Indiana decisons before the adoption of the Product Liability Act

required that the defective article be placed in the stream of commerce.

"Stream of commerce" was not included in the original Product Liabil-

ity Act but appears now in section 3 by the 1983 amendment. ^^ "The
word 'sells' as contained in the text of § 402A is merely descriptive, and
the product need not be actually sold if it has been injected into

the stream of commerce by other means. "^^ This expansive interpre-
tation of "sells" was narrowed somewhat by Petroski v. Northern In-

diana Public Service Co,^^ where the court refused to apply section 402A
in a case where a child touched a high voltage hne."" The rationale that
the electricity was still in the defendant's power lines and thus not in

the "stream of commerce" has been criticized."*^
Other areas of settled strict liability law remain unaffected by the pro-

duct liability statute, but will be profoundly affected when the new com-
parative fault law becomes effective. Contributory negligence was not a

defense under the Product Liability Act in a strict tort liability claim; "^^

neither was it a defense under Indiana strict liability decisions. '*'* Assump-

^Ud. at 213. The products statute has also been upheld under the fourteenth amend-

ment of the United States Constitution. Scalf v. Berkel, Inc., 448 N.E.2d 1201 (Ind. Ct.

App. 1983).

"418 N.E.2d at 211.

'Ud. at 212; see also Wojcik v. Almase, 451 N.E.2d 336 (Ind. Ct. App. 1983).

''See Ind. Code § 33-1-1.5-3 (Supp. 1984).
^'Link V. Sun Oil Co., 160 Ind. App. 310, 316, 1984 312 N.E.2d 126, 130 (1974).

'°171 Ind. App. 14, 354 N.E.2d 736 (1976).

''Id. at 30-31, 354 N.E.2d at 744.

*^See Vargo, Products Liability, 1977 Survey of Recent Developments in Indiana Law,

11 Ind. L. Rev. 202, 208-09 (1978).

''See Ind. Code § 33-1-1.5-4 (Supp. 1983).
''See Perfection Paint & Color Co. v. Konduris, 147 Ind. App. 106, 118-19, 258 N.E.2d

681, 689 (1970).



1004 INDIANA LAW REVIEW [Vol. 17:999

tion of risk was a defense in product cases grounded in either negligence

or strict liability, * and continues to be a defense under the product liability

statute.'" Contributory negligence and assumption of risk'^ under the new

Comparaiixe Fault Act will not necessarily defeat a product liabihty claim

grounded in negligence. If the action is grounded in strict Hability, the

Product Liability Act of 1978 will apply/'

A. Defenses to Strict Liability

There are five basic defences to a claim founded on strict liability,

which should be examined in light of the new statutes.

I. Assumption of Risk.—Prior to the adoption of strict liability in

Indiana, whether the plaintiff's conduct was characterized as contributory

negligence or assumption of risk in a product case made little difference.

Either characterization, if proved, would defeat the claim, particularly

one based on negligence. While a warranty claim might have survived

proof of contributory negligence, there were other hurdles. ''^ After strict

liability was adopted, the distinction became vital. ^° If the plaintiff's con-

duct was denominated contributory negligence, the defense was unavailable

in a strict liability action; however, if plaintiff assumed the risk, his strict

liability claim would be completely defeated. The assumption of risk

defense was carried over from Indiana strict liability cases to subsection

4(b)(1) of the Product Liability Act.^' The language used in this subsec-

tion closely parallels comment n to 402A.^^

''Id. See also Petroski, 171 Ind. App. 14, 354 N.E.2d 736; Gilbert v. Stone City Constr.

Co., 171 Ind. App. 418, 357 N.E.2d 738 (1976).

*'See Ind. Code § 33-1-1. 5-4(b)(l) (Supp. 1984).
"'The terms "incurred risk" and "assumption of risk" are both used in the new Com-

parative Fault Act. Many of the cases use the terms interchangeably. In the comment to
Indiana Pattern Jury Instruction 5.61 it is said that "assumption of risk" applies where

contractual relations exist and the doctrine of "incurred risk" applies where the relation-

ship is noncontractual. In product cases this distinction could result in much confusion.
Product cases and section 402A of the Restatement generally use the term "assumption
of risk," which is used for the most part in this article. This does not do violence to the

comment to Pattern Jury Instruction 5.61 since most litigation arises as a result of the
sale of a product.

"*For a discussion of the problems that may arise when a plaintiff brings his action
under both strict liability and negligence theory see infra notes 215-232 and accompanying text.

*^See infra notes 132-154 and accompanying text.
^'^This point was clearly made by the court of appeals in Kroger Co. v. Haun, 177

Ind. App. 403, 379 N.E.2d 1004 (1978).
"See Ind. Code § 33-1-1. 5-4(b)(l) (Supp. 1984): "It is a defense that the user or

consumer bringing the action knew of the defect and was aware of the danger and nevertheless

proceeded unreasonably to make use of the product and was injured by it."
'^On the other hand the form of contributory negligence which consists in volun-
tarily and unreasonably proceeding to encounter a known danger, and commonly
passes under the name of assumption of risk, is a defense under this Section as
in other cases of strict liability. If the user or consumer discovers the defect and



1984] PRODUCT LIABILITY 1(XJ5

Indiana case law has given a broad sweep to this defense. In a duty

to warn case, it was observed that "where the danger or potentiality of

danger is known or should be known to the user, the duty does not
attach. "^^ The Seventh Circuit Court of Appeals, reviewing Indiana law

in a diversity product liability case, concluded that Indiana follows the

"open and obvious danger" rule.^"* "Under Indiana law, a product is not
defectively designed where its dangerous properties are patent. . . . ob-

vious dangers are not a basis for liability under section 402A."^^ On this
issue, Indiana has followed the New York case of Campo v. SchofieldJ^
The Campo rule has now been repudiated in most jurisdictions, including
New York.^'

The difficulty of distinguishing between assumption of risk, at least

in its secondary sense, and contributory negligence has been remarked

upon by many courts and virtually all commentators.^^ Indeed, over half
of the American jurisdictions have now merged the concepts of con-
tributory negligence and assumption of risk.^^ Adoption of comparative

fault has accelerated this trend in a number of jurisdictions.^"
Distinguishing between these concepts in Indiana is particularly difficult

because the Indiana courts have used contributory negligence terminology

to define assumption of risk.^' The definitional confusion in the Indiana

is aware of the danger, and nevertheless proceeds unreasonably to make use of
the product and is injured by it, he is barred from recovery.

Restatement (Second) of Torts § 402A comment n (1965).
"Nissen TrampoHne Co. v. Terre Haute First Nat'l Bank, 332 N.E.2d 820, 825 (Ind.

Ct. App. 1975) (citations omitted), rev'd on other grounds, 265 Ind. 457, 358 N.E.2d

974 (1976).

^^Burton v. L.O. Smith Foundry Products Co., 529 F.2d 108 (7th Cir. 1976).

''Id. at 112.

^'301 N.Y. 468, 95 N.E.2d 802 (1950). For a full history of the Campo rule in the
Indiana courts, see Vargo, Products Liability, 1976 Survey of Recent Developments in In-

diana Law, 10 Ind. L. Rev. 265, 280, n.61 (1976).
''H. Woods, Comparative Fault § 14:32 (1978). Typical is the statement of the Col-

orado Court of Appeals in Pust v. Union Supply, 38 Colo. App. 435, 443, 561 P. 2d 355,

362 (1978), aff'd en banc, 196 Colo. 192, 583 P. 2d 276 (1978):

The "open and obvious" rule of Campo has been the subject of frequent and
fervent attack by legal commentators . . . and significantly, the rule of Campo
has recently been expressly disavowed by the New York Court of Appeals, Micallef
V. Miehle Co., 39 N.Y.2d 376, 384 N.Y.S.2d 115, 348 N.E.2d 571 (1976). We
find Micallef and the position taken by the commentators to be persuasive and

therefore reject the Campo "open and obvious" rule.
38 Colo. App. 435, 443, 561 P. 2d 355, 362.

'^See 2 Harper & James, Law of Torts 1191 (1956). These distinguished scholars
have taken the position that except for "express assumption of risk" the term and concept

should be abolished because it is only a form of contributory negligence.

"H. Woods, Comparative Fault §§ 6:1-: 11 (1978).
''Id. § 6:8.

*'For instance, in Cornette v. Seargeant Metal Products, 147 Ind. App. 46, 258 N.E.2d

652 (1970), a strict liability case in which section 402A was first adopted by an Indiana



1006 INDIANA LAW REVIEW [Vol. 17:999

case law was pointed out by Judge Sullivan in Kroger Co. v. Haun.''^

While noting that contributory negligence and assumption of risk are

"sometimes virtually indistinguishable", Judge Sullivan, nevertheless, pro-

vided an extremely thorough analysis in an attempt to draw a meaningful

distinction from the Indiana cases/^

2. Lack of Foreseeability.—As noted, foreseeability is part of the
definition oi negligence.'' Taking the position that negligence concepts

have no part in strict liability, some courts have rejected the foreseeabil-

ity requirement in strict liability; others have retained the requirement in

even strict liability cases.'- Indiana has chosen to follow the latter view.^'

However, even where foreseeability is made an element of strict liability,

it is not the foreseeability defined in negligence cases but rather foreseeabil-

ity limited as to the use of the product. The United States Court of

Appeals for the Third Circuit has made this point effectively:

The use of foreseeability in the court's instructions here does

not reflect this limitation . . . [I]t subverted the intention of §

402A by permitting a vendor to avoid liability on the basis of

being unable to anticipate the precise manner in which the injury

occurred.

Similarly, the use of foreseeability by the trial court with

reference to the "foreseeability" of injury or harm is improper,
for it is foreseeability as to the use of the product which establishes

the limits of the seller's responsibility.^'

state court, the following definition of assumption of risk was given from an earlier negligence

case:

The doctrine of assumed or incurred risk "... is based upon the proposi-
tion that one incurs all the ordinary and usual risks of an act upon which he
voluntarily enters, so long as those risks are known and understood by him, or
could be readily discernible by a reasonable and prudent man under like or similar
circumstances." StalUngs et al. v. Dick, 139 Ind. App. 118, 129, 210 N.E.2d 82, 88

(1966), (Transfer denied).

147 Ind. App. at 54, 258 N.E.2d at 657.

*M77 Ind. App. 403, 379 N.E.2d 1004 (1978).
*'In summary. Judge Sullivan concluded that assumption of risk applies when the

plaintiff comes upon a risk or danger caused by defendant's negligence, knows of and ap-
preciates its magnitude, but nevertheless accepts it voluntarily. The plaintiff is contributor-
ily negligent when his conduct fails to conform to that of a reasonable person under similar
circumstances. "Thus, where plaintiff's conduct has been voluntary and knowing as well
as unreasonable, courts and commentators have observed that the two defenses overlap and
are sometimes virtually indistinguishable." Id. at 416, 379 N.E.2d at 1012 (citations omitted).

''*See supra note 10 and accompanying text.
*'The rationale supporting these two views is well-exphcated by United States District

Judge Eschbach in Sills v. Massey-Ferguson, Inc., 296 F. Supp. 776, 781 (N.D. Ind. 1969).
**Shanks v. A.F.E. Indus., 416 N.E.2d 833 (Ind. 1981); Chrysler Corp. v. Alumbaugh,

342 N.E.2d 908 (Ind. Ct. App. 1976); Gilbert v. Stone City Constr. Co., 357 N.E.2d 738
(Ind. Ct. App. 1976).

^'Eshbach v. W. T. Grant's & Co., 481 F.2d 940, 943 (3d Cir. 1973).



1984] PRODUCT LIABILITY 1007

In Shanks v. A.F.E. Industries, Inc.,^^ the Supreme Court of Indiana may
well have accepted the view of foreseeability which requires that the defen-

dant must have been able to foresee the precise manner in which the in-

jury occurred, the view rejected by the Third Circuit, and by most other

jurisdictions/^

Another typical case is Conder v. Hull Truck Lift, Inc.^^ In Conder, the

injured employee-operator of a forklift sued its lessor for injury sustain-

ed when the forklift overturned. It was undisputed that the accident oc-
curred because of a maladjusted carburetor which made the forklift defec-
tive. Shortly before the accident the carburetor had malfunctioned with

two other employees, including a foreman, which fact was not reported

to the lessor or to the plaintiff. The court held that the jury could pro-

perly find an unforeseeable intervening proximate cause. Significantly, the

court defined proximate cause as containing the necessary element of

foreseeability.^' This is contrary to most authorities, who hold foreseeability
to be an element in standard of care but not proximate cause. ^^

The holding in Conder may be contrasted with Rhoads v. Service
Machine Co.,^' a decision from the United States District Court of Arkan-

sas. In Rhoads, plaintiff-employee lost her arm in a power press and sued
the manufacturer. The press was supposed to have had controls as a safety

device, but they had not been activated by the purchaser-employer. The

duty of affixing these controls had been delegated to plaintiff's employer.

The trial judge refused to set aside a verdict for the plaintiff, holding that

where the occurrence of the intervening cause is foreseeable to

the original actor or where his conduct substantially increases the

likeHhood of the occurrence of the intervening cause, the original

conduct, if negligent, is still considered to be a "proximate cause"

of the injury, and the original actor remains liable for the ultimate

consequences of his negligence.^'*

*M16 N.E.2d 833 (Ind. 1981).

"The Indiana Supreme Court stated: "Unquestionably, the facts and evidence sup-
porting Shanks' theory reveal the development of a situation which was especially unforeseeable

to A.F.E." Id. at 838 (citation omitted). This language sounds as though the court rejected

liability because the precise manner in which the plaintiff was injured could not have been

foreseen by the defendant before the accident occurred, an approach that has not been

generally accepted. See Vargo, Products Liability, Survey of Recent Developments in In-

diana Law, 15 Ind. L. Rev. 289, 296-97 (1982).
^M35 N.E.2d 10 (Ind. 1982).

''Id. at 14.

'^Compare Restatement (Second) of Torts § 289 (1965) with id. § 435; see Collier

v. Citizens Coach Co., 231 Ark. 489, 330 S.W.2d 74 (1959). The Indiana Pattern Jury

Instructions do not include foreseeability in the definition of proximate cause. Indiana Pattern

Jury Instructions § 5.81 (1968).

"329 F Supp. 367 (E.D. Ark. 1971).

'*Id. at 374 (citations omitted).



KX)S INDIANA LAW REVIEW [Vol. 17:999

The inhibiting influence of foreseeabihty in Indiana product liability

cases is demonstrated by the history of Evans v. General Motors Corp.^^

Evans was an Indiana diversity case and one of the early "second im-

pact" or "enhanced injury" cases. Plaintiff claimed that her decedent

was killed in a broadside collision because of the failure of the automobile

manufacturer to equip its product with side rails. The Seventh Circuit

Court of Appeals affirmed a dismissal of the case: "The intended pur-

pose of an automobile does not include its participation in coUisions with

other objects, despite the manufacturer's ability to foresee the possibility

that such collisions may occur. "^^ At about the same time, the Eighth
Circuit Court of Appeals reached the opposite result in Larsen v. General

Motors Corp.^^ Larsen has been followed almost universally, in contrast

to Evans, which found favor only in Indiana, Mississippi, and West

Virginia. As noted by the Seventh Circuit, when later overruHng Evans

in Huff V. White Motor Co.:''

One who is injured as a result of a mechanical defect in a
motor vehicle should be protected under the doctrine of strict

liability even though the defect was not the cause of the collision

which precipitated the injury. There is no rational basis for limiting

the manufacturer's liability to those instances where a structural

defect has caused the collision and resulting injury. This is so

because even if a collision is not caused by a structural defect,

a collision may precipitate the malfunction of a defective part
and cause injury. In that circumstance the collision, the defect,

and the injury are interdependent and should be viewed as a com-

bined event. Such an event is the foreseeable risk that a manufac-

turer should assume. Since collisions for whatever cause are fore-

seeable events, the scope of liability should be commensurate with
the scope of the foreseeable risks. ^^

Like Evans, Huff arose out of Indiana and the court was bound by
Indiana law. The change in result was attributed mainly to Indiana's adop-
tion of strict liability in tort.^° Some of the problems found in these cases
derive from a confusion of the concepts "unintended" and "un-
foreseeable." It may not be intended that an automobile will become in-
volved in a collision but it is certainly foreseeable that this will happen.^'

It makes little sense to deny recovery to the housewife who splashed clean-

"359 F.2d 822 (7th Cir.), cert, denied, 385 U.S. 836 (1966), overruled in Huff v.
White Motor Co., 565 F.2d 104 (7th Cir. 1977).

'*359 F.2d at 825.

"391 F.2d 495 (8th Cir. 1968).
^'565 F.2d 104 (7th Cir. 1977).

"'Id. at 109.

*"Id. at 106.

"'See supra text accompanying note 79.



1 984] PRODUCT LIABILITY 1 fX>9

ing fluid in her eye for the reason that "the cleansing preparation was

not intended for use in the eye."^^

The recent amendment to the Product LiabiHty Act^^ perhaps made
some changes in the role of foreseeability in Indiana product liability law.

The first sentence of Subsection 4(b)(2) of the Product Liability Act of

1978 is amended to read as follows: 'Tt is a defense that a cause of the

physical harm is a misuse of the product by the claimant or any other
person not reasonably expected by the seller at the time the seller sold

or otherwise conveyed the product to another party. "^^ This sentence

formerly read: 'Tt is a defense that a cause of the physical harm is a
nonforeseeable misuse of the product by the claimant or any other

person.
"^^

Subsection 4(b)(3) formerly read: 'Tt is a defense that a cause of the

physical harm is a nonforeseeable modification or alteration of the pro-

duct made by any person after its delivery to the initial user or consumer
if such modification or alteration is the proximate cause of physical

harm."^^ This subsection now reads:

It is a defense that a cause of the physical harm is a modifica-

tion or alteration of the product made by any person after its
delivery to the initial user or consumer if such modification or

alteration is the proximate cause of physical harm where such
modification or alteration is not reasonably expectable to the

seller.*'

An entirely new section 2.5 is inserted.** Subsections (a), (c), and (d)
in the new section read as follows:

(a) A product is in a defective condition under this chapter
if, at the time it is conveyed by the seller to another party, it

is in a condition:

(1) not contemplated by reasonable persons among those con-
sidered expected users or consumers of the product; and

(2) that will be unreasonably dangerous to the expected user or

consumer when used in reasonably expectable ways of handhng

or consumption.

*'Sawyer v. Pine Oil Sales Co., 155 F.2d 855, 856 (5th Cir. 1946).

''See Act of Apr. 21, 1983, Pub. L. No. 297-1983, 1983 Ind. Acts 1814 (codified

at Ind. Code § 33-1-1.5-1 to -5 (Supp. 1984)).
'^IND. Code § 33-1-1. 5-4(b)(2) (Supp. 1984).

«^IND. Code § 3M-1.5-4(b)(2) (1982).
''Id. § 33-1-1. 5-4(b)(3).

''Id. § 33-1-1. 5-4(b)(3) (Supp. 1984).

»'Act of Apr. 21, 1983, Pub. L. No. 297-1983, Sec. 3, § 2.5, 1983 Ind. Acts 1814,

1815-16 (codified at Ind. Code § 33-1-1.5-2.5 (Supp. 1984)).



1010 INDIANA LAW REVIEW [Vol . 1 7 : 999

(c) A product is not defective under this chapter if it is safe for
reasonably expectable handling and consumption. If an injury

results from handling, preparation for use, or consumption that

is not reasonably expectable, the seller is not liable under this

chapter.

(d) A product is not defective under this chapter if the product
is incapable of being made safe for its reasonably expectable use,

when manufactured, sold, handled, and packaged properly. ^^

Significantly, the term "foreseeable" is avoided and the term "reasonably

expectable" is substituted in the above sections. These amendments to

the Product Liability Act may inspire a fresh look at the concept of
foreseeability in strict liability cases by the Indiana courts. "Non-

foreseeable" and "unforeseeable" have not been defined in Indiana as

the equivalent of "not reasonably expectable," although there is evidence

that the legislative intent was to make these terms synonymous. ^°

3. Misuse.—Section 4 of the Product Liability Act of 1978 makes
it a defense to a strict liability claim "that a cause of the physical harm
is a misuse of the product by the claimant or any other person not

reasonably expected by the seller at the time the seller sold or otherwise

conveyed the product to another party. "^' Presumably, this means that

when an automobile racer buys an automobile tire for ordinary use and

installs it on his racing car, he cannot complain when it blows out during
an automobile race.^^ Nor can a plaintiff complain when "the injury results

from abnormal handling, as where a bottled beverage is knocked against

a radiator to remove the cap . . . ."^^ Failure to use a guard on a grind-

ing wheel has been held to be conduct that would justify the submission

of the "misuse" defense to the jury.^^ Plaintiff argued that such failure

only constituted contributory negligence and would not be a defense to

a strict liability or warranty claim based on injury from disintegration

of the grinding wheel. ^^

"Misuse" as a defense to strict liability was considered thoroughly

by the Indiana Court of Appeals in Fruehauf Trailer Division v.

Thornton. '^^ In that case a truck driver sued a tire manufacturer for in-

juries sustained when a tire blew out, causing the truck to overturn. The
defendant claimed that the plaintiff drove an excessive distance after the

'iND. Code § 33-1-1. 5-2.5(a), (c), (d) (Supp. 1984).
''"See Vargo, Products Liability, 1983 Survey of Recent Developments in Indiana Law,

17 IND. L. Rev. 255, 282 (1984).

"IND. Code § 33-1-1. 5-4(b)(2) (Supp. 1984).
''Restatement (Second) of Torts § 395 comment j, illustration 3 (1965).
''Id. § 402(A) comment h.
'"McGrath v. Wallace Murray Corp., 496 F.2d 299 (10th Cir. 1974).
"Id. at 302-03 n.6.

»*174 Ind. App. 1, 366 N.E.2d 21 (1977).



1984] PRODUCT LIABILITY 1011

blowout and that it was therefore entitled to an instruction on misuse.

The trial court instructed on contributory negligence and not misuse. On
appeal, the manufacturer claimed that "if there was evidence to support

an instruction on contributory negligence, there was evidence—the same
evidence—to support a misuse instruction."^^ The court distinguished the
two concepts: "Since misuse involves a subjective determination of con-

tinuing conduct in the presence of a known defect, and contributory
negligence presumes an objective determination of failure to find or guard

against a defect when a duty to do so is present, the two concepts are

mutually distinguishable."'^ The court went on to hold that since there

was insufficient evidence to show that plaintiff voluntarily continued to

drive on the defective tire after the blowout, the misuse instruction was

properly refused.^'

The distinction between contributory negligence and misuse is presently

of great importance under Indiana law. The former is not a defense to

a strict liability claim; the latter is a complete defense. In Hoffman v.
E.W. Bliss Co.,^°^ a power press double-tripped and crushed the plain-
tiff's hand. The jury was instructed as follows: " 'If you find that the
plaintiff was . . . inadequately instructed . . . this would constitute a

misuse of the equipment and be a complete defense. . . .' "'"' The Indiana

Supreme Court found this instruction to be an error since

it is use in a manner contrary to legally sufficient instructions

that is misuse. It defies logic to hold a user has misused a pro-

duct when its danger is not open and obvious and moreover no

one has warned the user of the presence of a latent danger

associated with the product's use.'°^

The importance of the distinction between misuse and contributory

negligence will remain after the new Comparative Fault Act becomes ef-
fective on January 1, 1985,'°^ since Senate Bill Number 419 of 1984
eliminated product misuse from the definition of fault in the Indiana Com-
parative Fault Act.'"'* Misuse remains as a defense to strict liability in

the Product Liability Act of 1978.'°'

4, Modification or Alteration.—Another defense to strict liability con-
tained in the Product Liability Act of 1978 is "a modification or altera-

tion of the product made by any person after its delivery to the initial

'Ud. at 10, 366 N.E.2d at 29.

''Id. at 11, 366 N.E.2d at 29.

''Id. at 12, 366 N.E.2d at 30.

'°M48 N.E.2d 277 (Ind. 1983).

'"'Id. at 281 (quoting the trial court's instructions).

'"'Id. at 283.

'"'See Act of Apr. 21, 1983, Pub. L. No. 317-1983, Sec. 1, § 3, 1983 Ind. Acts. 1930.

1933 (codified at Ind. Code § 34-4-33-3 (Supp. 1984)).
'°^Act of Mar. 5, 1984, Pub. L. No. 174-1984, Sec. 1, § 2, 1984 Ind. Acts 1468, 146S

(codified at Ind. Code § 33-4-33-2(a) (Supp. 1984)).
'"'See Ind. Code § 33-1-1. 5-4(b)(2) (Supp. 1984).



101

:

INDIANA LAW REVIEW [Vol. 17:999

user or consumer if such modification or alteration is the proximate cause

of physical harm where such modification or alteration is not reasonably

expectable to the seller.""" Apparently, a plaintiff is not barred from

recovery if the alteration is reasonably expectable. Comment p to section
402A states that "the mere fact the product is to undergo processing,
or other substantial change, will not in all cases relieve the seller of liability

under the rule stated in this Section."
'°^ Cornette v. Searjeant Metal Pro-

ducts, Inc.,^^^ wherein section 402A was initially adopted in Indiana, in-

volved alteration of a product. The defect in a power press was caused

by removal of an air filter after the press left the manufacturer's plant.

In Cornette, such an alteration exculpated the manufacturer.'"^

Another such case is Conder v, Hull Lift Truck, Inc.^^° where a forklift

manufactured by AUis-Chalmers overturned and injured plaintiff. The ac-

cident was caused by a maladjusted carburetor. Hull, lessor of the forklift,

had converted the fuel system from gasoline to liquid propane gas,

dismantling and rebuilding the carburetor with parts involved in the malad-

justment. The supreme court held that this was an unforeseeable interven-

ing cause which insulated Allis-Chalmers.'"

The product liability statute makes one important change from Indiana

case law. The burden of proving non-alteration formerly rested on the

plaintiff."^ Under the Product Liability Act of 1978, the burden of prov-

ing alteration is on the defendant."^ This is a noteworthy change, as is

illustrated by Craven v. Niagara Machine and Tool Works, Inc., a case
applying the old standard by placing the burden on the plaintiff."'' Plain-

tiff's hand was crushed between the ram and the platen of a power press.
After the machine was received by plaintiff 's employer, a flywheel guard

which prevented an operator from using the flywheel to "inch down"
the press had been removed. The accident resulted when the operator was
"inching" the press down by using the flywheel. The trial court found
an unforeseeable alteration and granted judgment for the manufacturer

because the defect "was a result of a substantial change in the condition
of the product.""^ In its first opinion the court of appeals reversed."^

On rehearing, however, the trial court was affirmed because "we failed

"'Id. § 33-1-1. 5-4(b)(3).

""Restatement (Second) of Torts § 402A comment p (1965).
"••147 Ind. App. 46, 258 N.E.2d 652 (1970).
""Id. at 55, 258 N.E.2d at 657.

"M35 N.E.2d 10 (Ind. 1982).
'"Id. at 15.

'""Specifically, in order to show himself entitled to relief under § 402A (l)(b), supra,
a plaintiff must carry the burden of proving that no substantial change occurred in the
condition of the product in which it was sold." 147 Ind. App. at 54, 258 N.E.2d at 657.

"»Ind. Code § 33-l-1.5-4(a), (b)(3) (Supp. 1984).
"Ml 7 N.E.2d 1 165 (Ind. Ct. App. 1981); on reh'g 425 N.E.2d 654 (Ind. Ct. App. 1981).
'"417 N.E.2d at 1168.

"Vf/. at 1172.



1984] PRODUCT LIABILITY 1013

to give proper consideration to plaintiff's burden of establishing that no

substantial change occurred.""^

In Indiana an alteration not reasonably expectable would seem to be

a complete defense in a strict liability case. It is not included in the defini-

tion of fault contained in the Comparative Fault Act.'"* Though arguably

affected by the Product Liability Act and the amendments thereto, such

decisions as Cornette and Conder should be unaffected by Indiana's adop-

tion of comparative fault.

5. State of the ^r/.—Section 4(b)(4) of the Product Liability Act reads

as follows: "When physical harm is caused by a defective product, it is
a defense that the design, manufacture, inspection, packaging, warning,

or labeling of the product was in conformity with the generally recog-

nized state of the art at the time the product was designed, manufac-

tured, packaged, and labeled.""^

As with modification or alteration, compliance with the state of the

art would seem to be a complete defense not subject to comparative fault.

With regard to this section the observation of two Indiana commentators

is worth noting:

If the term "generally recognized" refers to actual industry prac-

tices in use at the time of design or manufacture, the provision

would conflict with the generally accepted view that state of the

art is only to be judged by what is scientifically and economically

feasible, not by comparison with general industry custom.'^"

It is worthy of note that the Indiana courts have held that standards set

by an entire industry can be found to be negligent'^' and that the standard

of care in negligence law is established independent of custom and usage. '^^

B. Strict Liability and Economic Loss

If a defective tire blows out and causes total loss of plaintiff's car,

he can recover. What if, however, he is sold a defective car; can he recover
damages for his economic loss from the seller of the car on the basis

of strict liability in tort? The New Jersey Supreme Court in Santor v.
A. & M. Karagheusian^^^ extended the doctrine of strict liability to a purely
economic loss. The plaintiff purchased carpeting that developed a defect.
The court held the manufacturer liable for the difference in the price paid

for the carpet and its actual market value on the basis of strict liability

in tort.'^^

"M25 N.E.2d at 655 (Ind. Ct. App. 1981).
'''See Ind. Code § 34-4-33-2(a) (Supp. 1984).
"^IND. Code § 33-1-1. 5-4(b)(4) (Supp. 1984).
'^"Vargo & Leibman, Products Liability, 1978 Survey of Recent Developments in In-

diana Law, 12 Ind. L. Rev. 227, 248-49 (1979) (footnote omitted).

'^'Gilbert v. Stone City Constr. Co., 171 Ind. App. 418, 429, 357 N.E.2d 738. 745 (1976).

'^^Walters v. Kellam & Foley, 172 Ind. App. 207, 230-31, 360 N.E.2d 199, 214 (1977).
'^M4 N.J. 52, 207 A.2d 305 (1965).

'''Id. at 68-69, 207 A.2d at 314.



1014 INDIANA LAW REVIEW [Vol. 17:999

Judge Traynor, then sitting as Chief Justice of the CaHfornia Supreme

Court in Seely v. White Motor Co.,'^^^ roundly condemned this extension

of the doctrine which he had originally expounded. His view was that

when economic losses resuh from commercial transactions, the parties

should be relegated to the law of sales:

Although the rules governing warranties complicated resolution

of the problems of personal injuries, there is no reason to con-

clude that they do not meet the "needs of commercial transac-

tions." The law of warranty ''grew as a branch of the law of

commercial transactions and was primarily aimed at controlling

the commercial aspects of these transactions."

Although the rules of warranty frustrate rational compensa-

tion for physical injury, they function well in a commercial

setting.'-*

The clear majority of jurisdictions follow the view of Judge Traynor and

apply the law of sales to commercial transactions.'^'

Both the comparative fault law and the Product Liability Act of 1978

also seem to adopt Judge Traynor's view, since they do not embrace

economic loss in any of the definitions contained in section 1(a) of the

former''^ and section 2 of the latter. '^^ The Indiana Supreme Court has

previously indicated that it would make no distinction in imposing liabil-
ity for "economic loss" in contrast to personal injury.'^" Any doubt regard-
ing economic loss from gradually evolving property damage was dispelled
by an amendment to the definition of "physical harm" originally con-
tained in the Product Liability Act of 1978, which now is defined as
"bodily injury, death, loss of services, and rights arising from any such
injuries, as well as sudden, major damage to property. The term does not
include gradually evolving damage to property or economic losses from
such damage."'^' Without more extensive statutory language, it is unclear
how the legislature intended economic loss arising from "sudden major
damage to property" to be treated.

'^^63 Cai. 2d 9, 403 P.2d 145, 45 Cal. Rptr. 17 (1965).
'"Id. at 16, 45 Cal. Rptr. at 22, 403 P. 2d at 150 (citations omitted).
''Mnglis V. American Motors Corp., 197 N.E.2d 921 (Ohio Ct. App. 1964), aff'd,

3 Ohio St. 2d 132, 209 N.E.2d 583 (1965); Price v. Gatlin, 241 Ore. 315, 405 P. 2d 502
(1965); Ford Motor Co. v. Lonon, 217 Tenn. 400, 398 S.W.2d 240 (1966).

''See Act of Apr. 21, 1983, Pub. L. No. 317-1983, Sec. 1, § 1(a), 1983 Ind. Acts

1930, 1930, (codified at Ind. Code § 34-4-33-l(a) (Supp. 1984)).
"'See Ind. Code § 33-1-1.5-2 (1982).
"""The contention that a distinction should be drawn between mere 'economic loss'

and personal injury is without merit." Barnes v. Mac Brown and Co., 264 Ind. 227, 230,
342 N.E.2d 619, 621 (1976).

'Act of Apr. 21, 1983, Pub. L. No. 297-1983, Sec. 2, § 2, 1983 Ind. Acts 1814,
1815 (codified at Ind. Code § 33-1-1.5-2 (Supp. 1984)).



1 984] PRODUCT LIABILITY 1015

IV. Warranty

Indiana adopted the most restrictive of the three proposed alternatives

in the Uniform Commercial Code'^^ dealing with privity in the sale of

products:

A seller's warranty whether express or implied extends to any
natural person who is in the family or household of his buyer
or who is a guest in his home if it is reasonable to expect that
such person may use, consume or be affected by the goods and
who is injured in person by breach of the warranty. 133

The restrictive effect of this section is illustrated by Lane v. Barringer.^^'^

Plaintiff's daughter, while shopping with her mother, dropped a bottle

of drain cleaner which broke and splashed caustic material on plaintiff's

legs. The court upheld dismissal on the ground of lack of privity between

the plaintiff and the manufacturer, the suppHer of the container, and the

distributor.'^^

While there is some language in older Indiana cases that an implied

warranty sounding in tort did not require privity, it is clear that such

a theory has now merged with strict liability: "Under Indiana law a count
based on tortious breach of implied warranty is dupHcitous of a count

based on strict liability in tort and both counts may not be pursued in
the same lawsuit." '^^ Strict Hability in the early stages of its development

was treated by some courts as a warranty concept. '^^ A tortious breach
of warranty in Indiana has now been absorbed by the new doctrine of
strict liability in tort and the only implied warranties are the contract war-

ranties as set forth in the Uniform Commercial Code—merchantability'^*
and fitness for a particular purpose' ^^—plus the common law warranty
of habitabihty. The Uniform Commercial Code also recognizes express
warranties.

'"^

The contract warranties are not very satisfactory in personal injury

product litigation because of several engraftments from the law of sales.

Besides the above-mentioned privity problem, there are other serious

hurdles. One is the necessity of estabUshing a sale."" Another is the re-

'''See U.C.C. § 2-318 (1978).

'"IND. Code § 26-1-2-318 (1982).
'407 N.E.2d 1173 (Ind. Ct. App. 1980).
^Neofes v. Robertshaw Controls Co., 409 F. Supp. 1376, 1379 (S.D. Ind. 1976) (cita-

tion omitted).

'"Neofes v. Robertshaw Controls Co., 409 F. Supp. 1376, 1379 (S.D. Ind. 1976).

'''See Henningsen v. Bloomfield Motors, 32 N.J. 358, 161 A.2d 69 (1960).
"«IND. Code § 26-1-2-314 (1982).
'Id. § 26-1-2-315.

'Id. § 26-1-2-313.

'A lease or bailment for hire is generally held to be a sale. Cintrone v. Hertz Truck

134,

1351

,39^

140



1016 INDIANA LA W REVIEW [Vol . 1 7 :999

quirement of notice of breach of warranty."*^ As Dean Prosser pointed

out, the majority of courts (at least under the Uniform Sales Act) have

enforced the notice requirement, even in personal injury cases. "*^ "As ap-
plied to personal injuries ... it [the notice requirement] becomes a booby-

trap for the unwary. '"*•* Under the Uniform Commercial Code, both ex-

press and implied warranties may be disclaimed if done in a conscionable
manner.'"" However, "[l]imitation of consequential damages for injury

to the person in the case of consumer goods is prima facie unconscion-

able . . . .'"-^^

Because of the above considerations, warranties have not been very

popular in product cases, particularly since the advent of strict liability.

Sometimes the Commercial Code's four-year statute of limitations"^^ is

advantageous. The plain meaning of the Code would seem to be that the

statute begins to run when the seller tenders delivery. '^^ Such has been

the view of the cases.
'"^^

There is another potential advantage to a warranty product action:

Contributory negligence is not a defense to implied or express warranty. '^°

"Only more specific forms of plaintiff's misconduct, such as assumption

of risk and misuse of the product, may be relied upon by the defendant
by way of defense.'"^'

Another type of warranty has importance in Indiana, the warranty

of fitness for habitation. In Theis v. Heuer,^^^ the court held that a war-

ranty of fitness for habitation exists between a builder-vendor and a first

purchaser of a dwelling house, and that warranty extends to subsequent

purchasers when a latent defect later appears. '^^ This is a common law

Leasing & Rental Serv., 45 N.J. 434, 212 A.2d 769 (1965). A prospective customer cannot
bring an implied warranty action because there has been no sale. Lasky v. Economy Grocery
Stores, 319 Mass. 224, 65 N.E.2d 305 (1946); Day v. Grand Union Co., 113 N.Y.S.2d
436 (1952). Whether certain transactions are sales or services is a knotty problem. It has

been particularly true in the blood bank cases. See the review of these cases in Russell
V. Community Blood Bank, 185 So. 2d 749 (Fla. Dist. Ct. App. 1966), aff'd, 196 So.
2d 115 (Fla. 1967).

"^The Uniform Commercial Code provides that "the buyer must within a reasonable
time after he discovers or should have discovered any breach notify the seller of breach
or be barred from any remedy . . . ." Ind. Code § 26-l-2-607(3)(a) (1982).

""Prosser, The Assault upon the Citadel: Strict Liability to the Consumer, 69 Yale

L.J. 1099, 1131 n.l84 (1966).

'''Id. at 1130.

'^'IND. Code § 26-1-2-316 (1982).
'''Id. § 26-1-2-719(3).

'"Id. § 26-1-2-725.

"'Id.

"'See, e.g., Rufo v. Bastian-Blessing Co., 417 Pa. 107, 207 A.2d 823 (1965).
""Gregory v. White Truck &. Equip. Co., 163 Ind. App. 240, 323 N.E.2d 280 (1975).
'''Id. at 257, 323 N.E.2d at 290.

"M49 Ind. App. 52, 270 N.E.2d 764 (1971), opinion adopted, 280 N.E.2d 300 (Ind.
1972).

"'Barnes v. Mac Brown & Co., 264 Ind. 227, 342 N.E.2d 619 (1976).



1984] PRODUCT LIABILITY 1017

and not a Code warranty; however, it has much in common with the
warranty of merchantability in the Uniform Commerical Code and also
with strict liability. As one commentator has suggested, "proving that

a house is not fit for ordinary purposes should be the same as proving

that the house is defective under the strict liability statute. '"'''

V. Fraud and Deceit

To maintain a cause of action for deceit, the plaintiff must prove
an intentional representation by the defendant of a material fact, which

representation was known by the defendant to have been false, and which
was relied on by the plaintiff to his detriment. '^^ Although there is no

privity requirement in product cases where the supplier concealed

knowledge of the danger, this high standard of proof is difficult to meet,

and most plaintiffs prefer to ground their actions in strict liability or war-

ranty. By statute, the remedies for fraud include all remedies for the non-
fraudulent breach of warranty. '^^ Since fraud and deceit are intentional

torts, they are excluded from the operation of the Indiana Comparative

Fault Act.'^' Contributory negligence is not a defense to a product case

based on fraud and deceit. Finally, many of these cases involve a prayer
for equitable relief.

'^^

VI. Indemnity

Section 6 of the Product Liability Act states: "Nothing contained here-

in shall affect the right of any person found liable to seek and obtain in-

demnity from any other person whose actual fault caused a product to

be defective. '"^^ Section 7 of the new Indiana Comparative Fault Act
maintains this status: "In an action under this chapter, there is no right

of contribution among tortfeasors. However, this section does not affect
any rights of indemnity.'"^" Thus, the Indiana law of indemnity remains

intact and unaffected by these statutes.

The Indiana law of indemnity and contribution was thoroughly
reviewed by United States District Court Judge S. Hugh Dillin in McClish
V. Niagara Machine & Tool Works.^^^ In contrast to contribution, indem-

"•*Copeland, The Implied Warranty of Habitbility and the Use of the Uniform Com-
mercial Code by Analogy, 1983 Ark. L. Notes 10, 17.

"'Mercer v. Elliott, 208 Cal. App. 2d 275, 25 Cal. Rptr. 217 (1962); Fowler v. Ben-

ton, 229 Md. 571, 185 A.2d 344 (1962); Lindberg Cadillac Co. v. Aron, 371 S.W.2d 651

(Mo. Ct. App. 1963); Haarberg v. Schneider, 174 Neb. 334, 117 N.W.2d 796 (1962).
'^^ND. Code § 26-1-2-721 (1982).
'''See Act of Mar. 5, 1984, Pub. L. No. 174-1984, Sec. 1, § 2, 1984 Ind. Acts 1468,

1468 (codified at Ind. Code § 34-4-33-2(a) (Supp. 1984)).
'''See, e.g.. Gentry v. Little Rock Road Mach. Co., 232 Ark. 580, 339 S.W.2d 101

(1960).

'^'IND. Code § 33-1-1.5-6 (1982).
'"Ind. Code § 34-4-33-7 (Supp. 1984).
'*'266 F. Supp. 987 (S.D. Ind. 1967).



lOlS INDIANA LAW REVIEW [Vol. 17:999

nity shifts the entire burden of HabiHty and damage from one party to

another. Judge DiUin noted: "In the absence of express contract ... In-

diana follows the general rule that there can be no contribution or in-

demnity as between joint tort-feasors.'"^^ Exceptions to the general rule

do exist, however, and implied indemnity can be asserted (1) where the

indemnitee has only an imputed or vicarious liability for damage caused

by the indemnitor;'^' (2) where one is constructively liable to a third per-

son by operation of some special statute or rule of law which imposes

upon him a non-delegable duty, but is otherwise without fault; '^"^ and (3)
where a merchant sells a defective product which harms the ultimate

user, he is entitled to indemnity from the manufacturer or supplier.'^'

By providing that it will not "affect the right of any person found

liable to seek and obtain indemnity from any other person whose actual

fault caused a product to be defective,'"" section 6 of the Product Liability

Act seems to be in accord with the third exception. Most courts have

allowed indemnity in favor of an innocent retailer who has been held
liable for a manufacturing defect. '^^

Indiana follows the common law rule that there is no contribution
among joint tort-feasors.'^^ This rule remains unchanged by either the
Product Liability Act or the Comparative Fault Act.'^^ If the fault of

plaintiff and defendant is to be compared, it seems highly illogical not

to compare fault among the culpable defendants. Many of the jurisdic-
tions adopting comparative fault have incorporated a contribution system

in the comparative fault statute; others have contemporaneously adopted

a contribution statute based on proportionate fault. '^°

VIL The Indiana Comparative Fault Act

A. Definition of Fault

The Indiana Comparative Fault Act does not take effect until January

1, 1985, and does not apply to any civil action that accrues before that

date.'" Thus, it will be several years before there are definitive interpreta-

tions of this Act by the Indiana appellate courts. The Indiana Act is a

'"Id. Sit 989 (footnotes omitted).

'''See Indiana Nitroglycerin & Torpedo Co. v. Lippencoff Glass Co., 165 Ind. 361,
75 N.E. 649 (1905); Biel, Inc. v. Kirsch, 130 Ind. App. 46, 153 N.E.2d 140 (1958).

'''See McNaughton v. City of Elkhart, 85 Ind. 384 (1882).
"'See Frank R. Jelleff, Inc. v. Pollak Bros., 171 F. Supp. 467 (N.D. Ind. 1957).

"'\^D. Code § 33-1-1.5-6 (1982).
"\See, e.g., Langford v. Chrysler Motors Corp., 513 F.2d 1121 (2d Cir. 1975); Farr

V. Armstrong Rubber Co., 288 Minn. 83, 179 N.W.2d 64 (1970).
'"See cases cited in McLish v. Niagara Mach. & Tool Works, 266 F. Supp. 987, 989

n.5 (S.D. Ind. 1967).

"''See supra text accompanying notes 163 & 164.
""See the text of the various statutes collected in H. Woods, Comparative Fault (1978).
''Act of Apr. 21, 1983, Pub. L. No. 317-1983, Sec. 3, 1983 Ind. Acts 1930, 1933.



1984] PRODUCT LIABILITY 1019

comparative fault act, in contrast to most similar legislation which speaks

in terms of comparative negligence. In fact, the language of the Indiana

Act tracks the language of section 1(b) of the Uniform Comparative Fault

Act almost exactly. '^^ It contains the most comprehensive definition of

"fault" contained in any legislation passed to date except statutes in

Minnesota' ^^ and Washington, '^'' which are also modeled on the Uniform

Comparative Fault Act, and Arkansas,''^ which furnished the model for

the Uniform Act. However, a 1984 amendment removed strict liability,
warranty, and product misuse from the definition of "fault" in the In-

diana Act.'^^ Maine' ^^ and New York'^^ have passed comparative fault
acts that are not as comprehensive as those mentioned above. A number
of other jurisdictions have adopted comparative fault judicially to some

degree; these are Alaska, California, Hawaii, Kansas, Mississippi, Mon-
tana, Oregon, and Wisconsin. '^^ The Indiana Act embraces every type

of conduct'^" except intentional conduct. Presumably most types of con-

tributory fault will not be a defense to intentional conduct.'*' In the con-

text of product liability, all the theories of liability are embraced with

the exception of fraud and deceit, a theory which is rarely employed.

All the usual defenses are covered except product misuse. Strict liability

cases will be governed by the Product Liability Act of 1978 as amended

in 1983.
'«^

B. Comparative Fault Systems

In product cases accruing in Indiana after January 1, 1985, the New
Hampshire rule of comparative fault will be applied both to the theories

of liability and to the defenses. The New Hampshire system of comparative
fault has become the most popular choice with state legislatures. It per-

mits a plaintiff to recover if his fault equals that of defendant. He is

'''Compare Act of Apr. 21, 1983, Pub. L. No. 317-1983, Sec. 1, § 2, 1983 Ind. Acts

1930, 1930 (codified at Ind. Code §§ 34-4-33-2 (Supp. 1984)) with Unif. Comp. Fault Act
§ 1(b), 12 U.L.A. 35 (Supp. 1984).

'''See Minn. Stat. Ann. § 604.01 (West Supp. 1984)
'''See Wash. Rev. Code Ann. § 4.22.005 (Supp. 1984)
'''See Ark. Stat. Ann. § 27-1763 (1979).
"'See Act of Mar. 5, 1984, Pub. L. No. 174-1984, Sec. 1, § 2, 1984 Ind. Acts 1468, 1468.

'"See Me. Rev. Stat. Ann. tit. 14, § 156 (1979).
"'See N.Y. Civ. Prac. Law § 1411 (McKinney 1976).
"'See H. Woods, Comparative Fault §§ 6:3-6:10 (1978 & Supp. 1983).
""Indeed, Indiana even includes "unreasonable failure to avoid an injury or to mitigate

damages." Ind. Code § 34-4-33-2(a) (Supp. 1984). Hopefully these provisions will be read
together and applied to seat belt cases, the failure of a motorcyclist to wear a crash helmet

and similar cases. Certainly, the plaintiff 's failure to mitigate damages after his damages

have occurred should play no part in moving his percentage of fault over 50% and thus
depriving him of any recovery at all.

"This is the general rule. H. Woods, Comparative Fault § 7:1 (1978).
"'See Ind. Code § 33-1-1.5-1 to -5 (Supp. 1984); id. § 33-1-1.5-6 to -8 (1982).



1020 INDIANA LAW REVIEW [Vol. 17:999

only barred if his fault "is greater than the fault of all persons whose

fault proximately contributed to the claimant's damages. '"^^

Mississippi, the first state to adopt comparative negligence, opted for

the pure form under which a plaintiff can recover from a negligent defen-

dant, regardless of the extent of plaintiff's own negligence. '^^ The
Mississippi statute was copied from the Federal Ernployers Liability Act/*^

which is incorporated by reference into the Jones Act.'^^ There has been

much litigation under these statutes in Indiana, so there is some famiUarity
with a comparative fault system. Florida, California, Alaska, Michigan,

New Mexico, Illinois, Iowa, and West Virginia have adopted comparative
fault judicially without awaiting legislative enactment.'^' All except West

Virginia have chosen the "pure" form.

In addition to the seven states mentioned above. New York, Rhode
Island, Louisiana, Washington, and Mississippi have "pure" comparative

statutes, making a total of twelve such jurisdictions. No jurisdiction has
adopted the New Hampshire plan judicially, but fifteen states including
Indiana have adopted it legislatively.'^^ Eleven states have adopted the

Georgia-Arkansas plan, which requires a plaintiff to be less negligent than

the defendant in order to recover. '^^ Nebraska permits comparison if the

defendant's negligence is gross and the plaintiff's negligence is slight.'^"

South Dakota originally adopted the Nebraska plan, but later removed

the requirement of gross negligence on the defendant's part.'^'

C. Multiple Parties

Is the comparison of the plaintiff's fault to be made with the fault
of each defendant individually or with the fault of all defendants in the

aggregate? Resolution of this question has caused great difficulty and a

split among the authorities. Statutory language has solved the problem
in some states and the language in section 4 of the Indiana Act would
seem to militate toward a comparison with the defendants' fault in the

aggregate since the fault comparison is made with "all persons whose fault
proximately contributed to the claimant's damages." '^^ This language seems

'"Ind. Code § 34-4-33-4(a) (Supp. 1984). Otherwise, his fault only diminishes his recovery
under id. §-3.

"'Miss. Code Ann. § 11-7-15 (1972). This system is best illustrated by a recent
Washington case in which the jury found the plaintiff 99% negligent, the defendant 1%
negligent, and damages of $350,000. Judgment was correctly entered for $3,500. Lamborn
V. Phillips Pac. Chem. Co., 89 Wash. 2d 701, 575 P.2d 215 (1978).

'''See H. Woods, Comparative Fault, § 1:11 (1978).
'''Id. § 3:5.

'''Id. § 4:2 (1978 & Supp. 1983).
'"Id. § 4:4 (1978 & Supp. 1983).
"Ud. §§ 4:2, 4:3 (1978 & Supp. 1983).
"'Id. § 4:5

""Id.

'"Ind. Code § 34-4-33-4(a), (b) (Supp. 1984).



1984] PRODUCT LIABILITY 1021

to closely approximate the statutes of Texas'^^ and Kansas,'''' both of which

hold that the comparison should be made with the combined negligence
of the defendants. When the statutory language is not clear, there is a
split among the authorities.'^^ The importance of this issue is shown by
the following fact situation, which is not unusual. Assume plaintiff is found

40% at fault and each of two defendants 30% at fault. Is plaintiff bar-
red or is there a recovery of 60% of the damages? The language of the
Indiana statute dictates recovery based on these percentages.

The Indiana statute also requires the fact-finder to consider the fault

of unsued third parties in determining the total percentage of fault. '^^

Assume in a product liability case that some of the fault is attributed

by the jury to the product designer over whom jurisdiction cannot be
obtained. Suit is maintained against the manufacturer who was also at
fault for a defect in the manufacture. The jury finds that the plaintiff

is 50% at fault, the manufacturer 25% at fault, and the designer 25%.
Clearly the plaintiff can recover because his fault is not greater than 50%
of the total fault involved in the incident and the action is against one

defendant/^^ Assume that damages are $100,000. Plaintiff would multiply

$100,000 by 25% (amount of fault of only sued defendant), and his
recovery would be $25,000. In this situation if plaintiff was 60% at fault
and the sued manufacturer and the unsued designer were each 20% at
fault, plaintiff could not recover.

Let us carry the example one step further. Assume that plaintiff sues
D\ a product manufacturer, Z)^ designer of the product, and D\ a com-
ponent part manufacturer, alleging independent acts of fault on the part

of each. Assume that the jury finds plaintiff 30% negligent, £)' 20%,
D^ 25%, and D' 25% negligent, and sets the damages at $100,000. The
jury would multiply $100,000 by the percentage of fault of each defen-

dant and enter a verdict against each defendant in the amount of the

product.'^' The verdict against D' would be $20,000; against D\ $25,000,
and against D\ $25,000. The verdicts would total $70,000 ($100,000 less
the 30% representing plaintiff's negligence).

Again, assume the above illustration, but that D"^ is an additional

defendant as a principal of the agent D\ Then there would be a joint
and several judgment in the amount of $25,000 against D^ and D\'^'

However, the other judgments would be several only, as indicated by the

Indiana Act. If D^ and D^ have become bankrupt, plaintiff is out of luck

'''See Tex. Rev. Civ. Stat. Ann. art. 2212a (Vernon Supp. 1984).
'''See Kan. Stat. Ann. § 60-258a (1976).
"'The cases are collected in H. Woods, Comparative Fault §13:1 (1978).
"*Ind. Code § 34-4-33-5(a)(l), (b)(1) (Supp. 1984).
'''See id. § 34-4-33-5(a)(2), (3).

"'See id. § 34-4-33-5(b)(4).

"'The joint and several liability of D' and D* arises from their treatment as a single

party under id. § 34-4-33-2(b).



lO:: INDIANA LAW REVIEW [Vol. 17:999

because there is no joint and several judgment against D\ Z)\ and D\^°^
Verdicts are entered individually against each of them. The same is true
whenever an unsued person whose fault contributed to the incident is in-

volved. Assume again in the last illustration that jurisdiction was not ob-
tained over D-, the designer, who nevertheless was assessed 25% of the
fault. Assume further that D^ went bankrupt. Plaintiff could then recover
only the $20,000 assessed against D^ even though his net damage was

$70,000.

The Indiana statute most nearly resembles that of Kansas in providing

only several liability between defendants^"' and in permitting the assess-

ment of fault against unsued parties. ^°^ Whatever percentage is assessed

against these unsued or unsuable entities reduces the amount of plain-

tiff 's recovery. This aspect of the Indiana Act, reflected by the Kansas

experience, is very unfavorable to the plaintiff. For instance, in Kansas

the fact finder must assess the fault of an immune spouse; ^°^ an employer
with workers' compensation immunity;^"'* a released party; ^"^ and a super-

visory parent in an injured minors claim. ^°^ Under the Indiana Comparative

Fault Act, the claimant's employer may not be considered a nonparty, ^°^

and therefore the employer's fault cannot be considered, which may
generate confusion in cases where the immune employer is clearly at fault
in the accident out of which the claim arose.

Where a retailer sells a defectively manufactured product, should the
manufacturer and retailer be considered a single party?^°^ This is a most

important question. If they are to be considered a single party, the liability

would in all probability be joint and several. A recent unreported maritime
case illustrates the problems that can be involved. ^°^ Plaintiffs' decedent

was asphyxiated while asleep on a yacht manufactured by defendant Boatel

'°"See id. § 34-4-33-5(b)(4).

'"^See Coca-Cola Bottling Co. v. Vendo Co., 455 N.E.2d 370, 372 (Ind. Ct. App.

1983) ("We are also aware that Indiana's prospective comparative negligence statute . . .
does not provide for contribution among joint tortfeasors, but instead limits recovery against
each primary tortfeasor to a percentage of the damages corresponding to that defendant's

degree of fault." (footnote omitted)).

'"'Kan. Stat. Ann. § 60-258a(d) (1976). See Kansas cases collected in H. Woods Com-
parative Fault, (1978 & Supp. 1983); see generally id. § 13:4.

^"^Miles V. West, 224 Kan. 284, 580 P.2d 876 (1978).

^"^Scales V. St. Louis - S.F. Ry., 2 Kan. App. 2d 491, 582 P.2d 300 (1978); McLesky
V. Noble Corp., 2 Kan. App. 2d 240, 577 P.2d 830 (1978). The 1984 amendment to the
Indiana Comparative Fault Act provides: "A nonparty shall not include the employer of
the claimant." Ind. Code § 34-4-33-2(a) (Supp. 1984). This means that in Indiana, contrary
to Kansas, the fault of the employer cannot be used to reduce plaintiff-employee's recovery.

^^'McCart v. Muir, 230 Kan. 618, 641 P. 2d 384 (1982).

^"^Lester v. Magic Chef, 230 Kan. 643, 641 P. 2d 353 (1982).

""See Ind. Code § 34-4-33-2(a) (Supp. 1984).
""See Ind. Code § 34-4-33-2(b) (Supp. 1984).
^°^This case is unreported but is discussed at some length in H. Woods, Comparative

Fault § 13:12 at 243-44 (1978).



1984] PRODUCT LIABILITY 1023

and sold by defendant Medlin Marine. The yacht's air conditioning com-

ponents were sold to Boatel by defendant Marine Development Corpor-

ation, and one was installed in the bilge of the yacht. Boatel drilled

drain holes over the air conditioning generator exhaust. Carbon monox-

ide was introduced through these holes and distributed throughout the

yacht by the air conditioning unit. The case was tried in admiralty against

the three above-mentioned defendants. The manufacturer, Boatel, was in-

solvent and defaulted. United States District Judge Eisele held that both

Boatel (the manufacturer) and Marine Development (the air conditioning

manufacturer) were negligent, the latter for failure to warn with regard

to the placement of its unit in the yacht. Responsibility was divided be-

tween these two defendants, 80^o on Boatel and 20% on Marine. Medlin,
who sold the yacht and admittedly was nothing more than a conduit,
was found responsible on the theory of implied warranty and strict liability

in tort. As between Marine Development (the air conditioning manufac-

turer) and Medlin (the retail seller), responsibility was divided 50-50.

Although Medlin was granted indemnity against the insolvent manufac-

turer, it was relegated to 50-50 contribution as a joint tort-feasor with

respect to Marine. The United States Court of Appeals for the Eighth

Circuit affirmed by an equally divided court. Even though admiralty law

applied in the above case, Indiana courts will soon be faced with similar

situations and could confront identical issues. In such a situation, would
they consider Medlin (the retailer), Boatel (the maniifacturer) and Marine
(the component manufacturer) as single parties so that joint and several
liability would apply, thus allowing the plaintiff to recover his entire judg-
ment against any one party? Although Marine had no relationship to
Medhn, it was a component supplier to Boatel. Would Boatel and Marine
be single parties? These questions will have to be answered by the Indiana
courts.

D. Settlements

Where a settlement is made with one of several tort-feasors, do the
remainder get credit for the dollar amount paid or the percentage of fault

assessed against the settling tort-feasors? California follows what is known
as the River Garden rule.^'° According to that rule, a tort-feasor may
settle and be dismissed from the case as long as the settlement is made
in good faith. The remaining tort-feasors receive credit only for the dollar

amount of the settlement. Other jurisdictions such as New Jersey give
credit to the remaining tort-feasors only to the extent of any percentage

of fault allocated by the jury.^" Pennsylvania gives credit for either the

^'°See River Garden Farms v. Superior Court, 26 Cal. App. 3d 986, 103 Cal. Rptr.

498 (1972).

^" Under the New Jersey Comparative Negligence Law " 'only the percentage amount
equal to the percentage of negligence attributable to the settling defendant is deducted, no

matter what the size of the settlement.' " Kotzian v. Barr, 81 N.J. 360, 368 n.2, 408 A.2d



1024 INDIANA LAW REVIEW [Vol. 17:999

dollar amount on the percentage of fault allocated, whichever is greater. ^'^

These states permit contribution among joint tort-feasors as do most
jurisdictions.-'- The Indiana Comparative Fault Act retains the common
law rule which does not permit contribution among joint tort-feasors.^"*
The effect of the Comparative Fault Act is to reduce the Hability of the

remaining tort-feasors by the percentage of fault allocated to the settling

party. The amount paid by the settling party has no effect on the amount

owed by the remaining tort-feasors whose liability is fixed entirely by the

percentage of fault assessed severally against them by the fact finder.

VIII. Multiple Theories

It is very common for the plaintiff in a product Hability case to in-
clude separate counts in the complaint for negligence and strict liability.

The interaction of the Comparative Fault Act with the Product Liability

Act could cause great confusion for the litigators, the court, and the jury

in such a case.

Assume that P is injured while working on a machine at his place
of employment. He sues D\ the manufacturer of the machine, and i)^
the seller, on theories of negligence and strict liability. P's employer,

Ey is immune under the Workmens' Compensation Act,^'^ and cannot
be a nonparty under the Comparative Fault Act.^'^ Through the process

of discovery, £)' and D^ reach the conclusion that P's injury was caused

at least in part by the misuse of the machine by E. The defendants also

find evidence that P's negligence contributed to his own injury and that
P incurred the risk involved in the use of the machine.

D^ and D^ first must be careful to keep straight their defenses to

the separate counts of the complaint. If E's misuse of the machine is

alleged to be the sole cause of P's injury, then P's recovery from D^

and D^ would be barred under the strict hability count; however, if £"s

misuse combined with a defect in the product to cause P's injury, then

P's strict liability recovery would not be barred (although £"s rights as

a worker's compensation lienholder would be barred).^' ^ £"s misuse of

the product is no defense to the negligence claim.^'^ In addition, although

131, 133, n.2 (1979) (quoting Rogers v. Spady, 147 N.J. Super. 274, 278, 371 A.2d 285,

288 (App. Div. 1977)).

^'^Daughtery v. Hershberger, 386 Pa. 367, 126 A.2d 730 (1956). See a discussion of

Dougherty in H. Woods, Comparative Fault § 13:7 (1978).
^"Twenty states have now adopted some version of the Uniform Contribution Among

Tortfeasors Act. H. Woods, Comparative Fault § 13:7 (1978 & Supp. 1983).
^'^Coca-Cola Bottling Co., v. Vendo Co., 455 N.E.2d 370, 372 (Ind. Ct. App.

1983) (dicta).

'"See Ind. Code § 22-3-2-6 (1982).
''^Id. § 34-4-33-2(a) (Supp. 1984).

'''Id. § 33-2-1. 5-4(b)(2) (Supp. 1984).

^''Originally, Indiana included product misuse as an element of fault, but the 1984



1 984] PRODUCT LIA BILIT Y 1 025

P's contributory negligence would be a percentage fault factor on the

negligence count,
^'^

it would be no defense to the strict liability claim. ^^''

Finally, "unreasonable" assumption of risk would be a complete defense

to P's strict liability claim,
^^'

but only a percentage fault factor in the

negligence count.
^^^

At trial, P puts on his evidence of the liability of Z)' and Z)^ The
defendants then present the jury with their evidence of £"s misuse of the

product, and of P's contributory negligence and incurrence of the risk

by using the machine. P presents any rebuttal evidence and both sides
make their final arguments.

The court must then instruct the jury regarding the different applica-

tions of the misuse, contributory negligence, and incurred risk defenses

to the negligence and strict liability theories. In addition, the court must

distinguish for the jury the contributory negligence defense from incurred

risk, which is sometimes a difficult task.^^^ Finally, unless the parties agree

otherwise, the court must instruct the jury in accordance with the Com-
parative Fault Act regarding how the jury should determine its verdict. ^^''

A number of results are possible that would raise questions about
the appropriateness of and consistency between the jury's verdicts on the

negligence and strict liability claims. The simplest result would be a ver-

dict for £)' and D^ on the strict liability count, and a finding that P was
70% at fault, D' was 15% at fault, and D^ was 15% at fault on the
negligence count. These verdicts would be consistent under the theory that

P incurred the risk and that this accounted for 70% of the total fault
involved in the accident. ^^^ Thus, P would be barred from recovery.

However, suppose the jury found the same percentages of fault on

the negligence count, but returned a verdict for P on the strict liability
claim. Did the jury commit error, or are these results reconcilable by at-
tributing P's 70% fault to contributory negligence, which, unlike incur-
red risk, is not a defense to a strict liability claim? Will the court attempt

amendment removed it. See Act of Mar. 5, 1984, Pub. L. No. 174-1984, Sec. 1, § 2, 1984
Ind. Acts 1468, 1468 (codified at Ind. Code § 34-4-33-2(a) (Supp. 1984)).

^"IND. Code § 34-4-33-2(a) (Supp. 1984).
""See Ind. Code § 33-1-1. 5-4(b) (Supp. 1984); Perfection Paint & Color Qo. v. Kon-

duris, 147 Ind. App. 106, 118-19, 258 N.E.2d 681, 689 (1970).

^^'IND. Code § 33-1-1. 5-4(b)(l) (Supp. 1984).
^^Ud. § 34-4-33-2(a).

"^See supra notes 58-63 and accompanying text.

""Ind. Code § 34-4-33-5 (Supp. 1984).
"Theoretically, incurred risk is nothing more than consent, and operates to negate

the duty element of a negligence case. Thus it should constitute a complete defense, since
one either consents to a risk or does not; however, by including incurred risk within its

definition of fault, the legislature must not have intended that incurred risk be a complete

defense in a negligence action under the Comparative Fault Act. Thus, a jury verdict assigning

less that 100% of the fault to a plaintiff where the defense is incurred or assumed risk
would be consistent with the Act.



1026 INDIANA LAW REVIEW [Vol. 17:999

to construe the verdicts as being consistent, or will it require that it affir-

matively appear that the verdicts are consistent before allowing them to

stand?

Similar questions would arise if the jury returned a verdict for P on
the strict liability claim, and found P 10% at fault and D' and D^ each
45^0 at fault on the negligence claim. Would the court allow the strict

liability verdict to stand or would it reverse on the possibility that the

jury assigned P 10% of the fault based on evidence that he incurred the
risk, a defense to strict liability?

Suppose that these facts are altered just slightly so that the jury returns

a verdict for P on the strict liability count and finds each of the defen-
dants 50% at fault. Will P be allowed to choose his verdict? If so, he
will almost certainly choose the strict hability verdict which, unlike the

negligence finding, gives rise to joint and several liability between Z)' and

D\ protecting P against the insolvency of either.
The presence of the defense of misuse by E will also present special

problems in a product case based both on neghgence and strict Hability.

For example, has the jury committed error if it returns a negligence ver-

dict of D\ 30% at fault, D\ 30% at fault, and P, 0% at fault? One could
assume from such a verdict that the jury found E's misuse of the injury-

causing machine to be responsible for the remaining 40% of the fault,
but does the Comparative Fault Act permit this result? The Act states:
"The percentage of fault figures of parties to the action may total less
than one hundred percent (100%) if the jury finds that fault contributing

to cause the claimant's loss has also come from a nonparty or
nonparties. "^^^ Clearly, by statute, E may not be made a nonparty^^'
and thus could not have a percentage of fault assigned directly to him.

Does the language quoted above permit the indirect assignment of a percen-

tage of fault that would be assigned to E if he were a nonparty to be
allocated to the parties to the action? If the above-quoted language does

permit an implicit assignment of a fault percentage to E, the result will

be that P bears the loss for that percentage, because E will have workers'
compensation immunity against P.^^^

This raises the problem of workers' compensation liens. The Com-
parative Fault Act excepts such liens from the general rule that when a
claimant's recovery is diminished by his comparative fault or by the un-

collectability of the full value of his claim, then any subrogation claim

or other lien (except a workers' compensation or occupational disease lien)

that arose out of the payment of medical or other benefits is diminished

in the same proportion as the claimant's recovery. ^^^ A worker's compen-

226

227

iND. Code § 34-4-33-5(a)(l) (Supp. 1984).
Id. § 34-4-33-2(a).

'''See Ind. Code § 22-3-2-6 (1982).
Id. § 34-4-33-12 (Supp. 1984).

229



1984J PRODUCT LIABILITY ]()21

sation or occupational disease lienholder would recover the full amount

of his lien regardless of the diminution of the plaintiff's recovery. The

Product Liability Act states:

Where the physical harm to the claimant is caused jointly by a

defect in the product which made it unreasonably dangerous when

it left the seller's hands and by the misuse of the product by a

person other than the claimant, then the conduct of that other

person does not bar recovery by the claimant for the physical

harm, but shall bar any right of that other person, either as a

claimant or as a lienholder, to recover from the seller on a theory

of strict liability. ''°

Assuming that it is permissible for the jury to assign indirectly a

percentage of fault to a ghost nonparty such as E on the negligence claim,
suppose the jury returns a verdict for P on the strict liability claim and
a finding on the negligence claim that P was not at fault in any percen-
tage, £)' was 20% at fault and D^ 30% at fault. The implication of such
a verdict is that the jury found £"s misuse of the machine to contribute

50% of the total fault in the accident. That 50% would be uncoUectable
to P because of £"s workers' compensation immunity. Would E still be
entitled to his undiminished lien under the Comparative Fault Act,^^' or

would E be barred from recovering his lien under the Product Liability
Act?^^^ If P had any choice in the matter, he would surely choose his
strict liability remedy, not only to avoid paying £"s lien, but also to ob-

tain joint and several liability from Z)' and Z)^

The hypothetical fact situation set forth above is neither unusual nor

particularly complex; the results, however, could be both. As parties and
nonparties and other product liability theories are added, the potential

problems grow exponentially. Obviously, the trial of a product liability

case that involves Indiana's Comparative Fault Act and the Product Liabil-

ity Act will be a challenge to bench, bar, and jury. Perhaps the solution

lies in the judicious use of interrogatories and special verdicts. However,

the Act is quite specific on how the case is submitted to the jury.
Presumably, the Section being procedural, it would not be binding on the

federal courts.

IX. Conclusion

Although on the whole the Indiana Comparative Fault Act represents

a stride forward, some of its aspects deserve criticism. The abandonment

of joint and several liabihty has not worked well in Kansas and is a step

backward in the view of most commentators and most courts who have

230

231

232

Id. § 33-1-1. 5-4(b)(2) (Supp. 1984).

See supra text accompanying note 229.

See supra text accompanying note 232.



1028 INDIANA LAW REVIEW [Vol. 17:999

considered this question.-" In addition, asking the fact finder to assess

fault of a nonparty would seem to be fraught with a danger of unfairness
and even fraud. It is easy for one or more of the actual parties to
manipulate the role of a nonparty."" Third party practice permitted in

most jurisdictions will ensnare virtually all who have a real stake in the
litigation. Trying parties in absentia is never satisfactory, especially when
the result has a profound effect on those who are present and partici-
pating.^^- One the other hand, the Indiana Act attempts a comparison
of the plaintiff's fault with the fault of all others whose fault contributed

to the incident, even where those others may not be made parties to the
lawsuit. In theory this should yield a more accurate determination of
percentages of fault than is possible where the fault of such unsuable

parties is not considered at all.

Indiana is in step with the trend of the times in opting for comparative

fault, and is to be commended for rejecting "blindfolding," under which
the jury may not be told of the ultimate effect of its answers to the
interrogatories."^ The adoption of comparative fault between plaintiff and

defendant should lead to the opportunity for comparative fault to be ap-

plied among multiple defendants. Some jurisdictions have incorporated
a system of proportionate assessment of fault between defendants as a

feature of their comparative fault acts."^ This commendable step could

easily be incorporated into the Indiana Act. The litigation which will un-

fold in the near future over the Act will be the best indicator of its

workability, and of the changes that can be made to improve the Act.

^"Oakley v. United States, 622 F.2d 447, 449 (9th Cir. 1980); Department of Transp.

V. Webb, 409 So. 2d 1061, 1063 (Fla. Dist. Ct. App. 1981); Cornell v. Langland, 109 111.

App. 3d 472, 477, 440 N.E.2d 985, 988 (1982); MacLachlan v. Brotherhood Oil Corp.,

404 N.E.2d 1272, 1273 (Mass. App. Ct. 1980); Anderson v. Harry's Army Surplus, 117

Mich. App. 601, 610, 324 N.W.2d 96, 100 (1982).

""The same dangers seem to be inherent here as in the use of Mary Carter agreements.

See Note, Mary Carter in Arkansas: Settlements, Secret Agreements and Some Serious Prob-

lems, 36 Ark. L. Rev. 576 (1983).

'''See H. Woods, Comparative Fault §§ 13:2, 13:3 (1978).

'''See H. Woods, Comparative Fault § 18:2 (1978), where cases and statutes are

collected showing that "blindfolding" is being rejected in a majority of states.

'''See id. § 13:6.