Products Liability Law Daily Negligence claims against school bus seller over brakes barred by collateral estoppel
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Friday, May 20, 2016

Negligence claims against school bus seller over brakes barred by collateral estoppel

By John W. Scanlan, J.D.

The parents of two minor children who were injured in a school bus crash could not bring negligence claims against the retail seller of the bus for improper brake installation and failure to warn because these claims already had been litigated in an earlier case against the manufacturers of the bus and the brakes, the U.S. Court of Appeals for the Eighth Circuit held in affirming the dismissal of their claims (A.H. v. Midwest Bus Sales, Inc., May 19, 2016, Riley, W.).

According to the school bus driver, the bus’s brakes failed and it crashed into a pickup truck, resulting in serious injuries to the two minors. Their parents separately brought suit in Missouri state court against the manufacturer of the brakes, the manufacturer of the bus, and the parent company of the bus manufacturer. They also initially brought suit against Midwest Bus Sales, Inc., the retail seller of the bus, but Midwest was not named in either of the final amended complaints. The parents alleged that the brake manufacturer was strictly liable for selling defective automatic slack adjusters (ASAs), a brake system component, and for failing to warn that the ASAs were unreasonably dangerous; the bus maker was strictly liable for selling a defective bus; and the bus maker’s parent company negligently failed to warn the bus manufacturer that manual adjustment of the ASAs was dangerous. The defendants argued that the bus driver caused the accident by mistakenly pressing the accelerator instead of the brake pedal, and the jury found for the defendants on all claims. This verdict was upheld on appeal.

The parents then filed suit in state court against Midwest, alleging that the company inspected the bus prior to delivering it to the school district but negligently failed to discover that three or four of the ASAs had been improperly installed, and that it knew of the hazards of manual adjustment of the ASAs but negligently failed to warn the school district of these hazards. Midwest moved to dismiss, arguing that the claims were barred by res judicata, collateral estoppel, and the rule against claim splitting. The district court found that res judicata barred the claims and dismissed them without considering the collateral estoppel or claim splitting arguments. The parents appealed.

Improper installation. The parents could not litigate the issue of whether Midwest could be liable for negligently failing to discover an improper installation of the ASAs on the bus because the jury in the earlier case decided that the minors’ injuries were not caused by improper installation of ASAs. At trial, the bus manufacturer had not disputed that the bus was sold in the course of its business or that it was used in a manner reasonably anticipated. As a result, in order for the jury to have reached its verdict in favor of the bus manufacturer, it necessarily had to have found either that the bus was not in a defective condition unreasonably dangerous, or that it was in such a condition but that this condition did not cause or contribute to causing the injuries to the minors. Therefore, the issue of improper installation already had been decided.

Failure to warn. Similarly, the parents could not litigate whether Midwest knew but failed to warn the school district that manual adjustment of the ASAs made them unsafe. In the earlier trial, the brake manufacturer did not dispute that the ASAs were sold in the course of its business, they were used in a manner reasonably anticipated, and it did not warn against manually adjusting the ASAs. As a result, in finding in favor of the brake manufacturer, the jury had to have concluded either that the ASAs were not unreasonably dangerous, or that they were unreasonably dangerous but that this was not the cause or a contributing cause of the crash. Therefore, the minors’ injuries could not have resulted from an alleged failure to warn by Midwest.

The case is No. 15-2318.

Attorneys: Anita Porte Robb (Robb & Robb) for A.H. Matthew W. Geary (Dysart & Taylor) for Midwest Bus Sales, Inc.

Companies: Midwest Bus Sales, Inc.

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