Party Notice: IDA CHRISTINA FUA CRUZ VS. JOEL ENRIQUE ANDINO SANCHEZ et al

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TODD P. EMANUEL (SBN 169301)

DEIRDRE O’REILLY-MARBLESTONE (SBN 88008)

EMANUEL LAW GROUP
702 Marshall St., Ste. 400
Redwood City, CA 94063
Telephone: (650) 369-8900
Facsimile: (650) 369-4228

Email: todd@teinjurylaw.com

ELECTRONICALLY

FILED

Superior Court of California,
County of San Francisco

12/21/2015

Clerk of the Court
BY:ROMY RISK

Deputy Clerk

SUPERIOR COURT OF THE STATE OF CALIFORNIA
FOR THE COUNTY OF SAN FRANCISCO — UNLIMITED JURISDICTION

IDA CRISTINA CRUZ FUA,
Plaintiff,
v.

JOEL ENRIQUE ANDINO SANCHEZ, and
individual; CAROLINE MILLER, an
individual; TAX! EQUIPMENT LEASING
LLC, a Limited Liability Company; SAN
FRANCISCO INDEPENDENT TAXI
ASSOCIATION, a Corporation; YELLOW
CAB COOPERATIVE, INC., a Corporation;
and DOES 1 through 50, Inclusive,

Defendants.

CASE NO: CGC-11-515542

PLAINTIFF’S NOTICE OF LODGING OF
COPIES OF OUT OF STATE AUTHORITIES

Date: January 12, 2016
Time: 9:30 a.m.
Dept.: 608

Judge: Honorable Garrett Wong

PLAINTIFFF’S NOTICE OF LODGING OF CopPIES OF OUT-OF-STATE AUTHORITIES — CASE No. CGC-11-515542=

oOo ON ODO OHO BF WD

Plaintiff IDA FUA hereby submits for the Court’s convenience copies of the
following out-of-state court decisions and the section of the Restate Second of Agency
cited in Fua’s Memorandum of Points and Authorities in Opposition to Defendant Yellow
Cab's Motion for Judgment Notwithstanding the Verdict.

TABLE OF AUTHORITIES

EX. 1, Restatement Second of Agency, §267..........0..00cceceececsseeeeeeeteerereeeererees 1,4,6
EX. 2. Restatement Second of Agency, §8............0 ccc ccceeeeeeeeeeceeeeeeeeenneneeeeeneeened 4
CASES

EX. 3. House v. Armour of America, Inc.

(Utah 1996) 929 P.2d 340 oo. eccecccesesssssseesssessssessssseeesssenesssvessssisessatecessnesssnecssersens 9
EX. 4. Middleton v. Frances

(Ky. 1934) 77 S.W.2d 425, 426 o.oo ccc neces reaeceeeseeneetecsieneseaneeseseeneeuesneeene 4
EX. 5. Schutte v. Celotex Corp.

(Mich.CtApp. 1992) 492 N.W.2d 773 ..ccs.cccsccssssecsssseessssesssssseseesssssensieesssersssesseseceese 9
EX. 6. Technical Chemical Co. v. Jacobs

(Tex. 1972) 480 S.W.2d 602 woes scence cscse seen ceassesssssesaesesaonecesseneerensnesssesegnenenee 9
Dated: December 21, 2015 RESPECTFULLY SUBMITTED,

EMANUEL Law GROUP

Lit b

TODD P. EMANUEL, ESQ.
Attorneys for Plaintiff IDA FUA

1

PLAINTIFFF’S NOTICE OF LODGING OF COPIES OF OUT-OF-STATE AUTHORITIES — CASE NO. CGC-11-51554242/21/2015 Restat 2d of Agency, § 267

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Restat 2d of Agency, § 267

Copy Citation

Restatement 2d, Agency = Rule Sections Chapter 2+ Ljability of Principal to Third Pereon: Torte Topic 2 Liability for Authorized Conduct or Conduct
mployment

§ 267 Reliance Upon Care or Skill of Apparent Servant or Other Agent

One who represents that another is his servant or other agent and thereby causes a third person justifiably to rely upon the care or skill of such
apparent agent is subject to liability to the third person for harm caused by the lack of care or skill of the one appearing to be a servant or other agent
as if he were such.

COMMENTS & ILLUSTRATIONS
Comment:

a. The mere fact that acts are done by one whom the injured party believes to be the defendant's servant is not sufficient to cause the apparent master to be liable.
There must be such reliance upon the manifestation as exposes the plaintiff to the negligent conduct. The rule normally applies where the plaintiff has submitted himself
tothe care or protection of an apparent servant in response to an invitation from the defendant to enter into such relations with such servant, A manifestation of
authority constitutes an invitation to deal with such servant and to enter into relations with him which are consistent with the apparent authority.

Illustrations:
1. P, a taxicab company, purporting to be the master of the drivers of the cabs, in fact enters into an arrangement with the drivers by which the drivers operate

independently. A driver negligently injures T, @ passen:
drivers, P is subject to liability to T in an action of tort.

r, and also 8, @ person upon the street. P is not liable to B. If itis found that T relied upon P as one furnishing safe

2. P invites T to his house,

ending to him A, who is dr

sved in P's livery and hence appears to be P's personal chauffeur. In fact, A is a driver operating independently. The
driver is guilty of wanton conduct in driving and thereby injures T. P may be liable to T.

Comment:

b. The rules stated In Sections 228-237, stating what acts are within the scope of employment, apply. Thus, except in the case of misrepresentations, a purported master
ordinarily is not liable for conduct of an apparent servant not actuated in some measure by an intent to perform the service in which he is apparently engaged. The rules
stated in Sections 212-214 may apply, however; if the manifestation creates a relation in which there is a non-delegable duty that care, skill, or honesty be uss
that the apparent servant acts solely for his personal purposes does not prevent liability.

he fact

Illustrations:

3. P, a department store, contracts with T, as an independent contractor, to give medical attention to patrons of the store, T appearing as an employee. For the purpose of
robbery, T hits on the head a patron seeking medical attention. ° is no more llable than he would be if T were his servant.

4, Same facts as in Iilustration 3, except that by mistake T gives poison to a patron of the store, who takes It in the belief that it Is medicine. Ps liable for the harm,

5. Same facts as in Illustration 1, except that the driver for his own purposes insults the passenger and steals his money. P is liable to the passenger for the insult and the
ther.

REPORTER'S NOTES,

Recent cases not citing the Restatement, involving liability based on reliance upon the relation of agency or ownership, or making the distinction between those relying
and others, follow: DePerca vy, Liggett & Myers Tobacco Co., 81 F.2d 777 (8th Cir, 1936), apparent authority to invite plaintiff to ride with servant; Gosneyv, Metropolitan
1 (Sth. Cir. 1940), where reliance was not found; Gilbert. v. 2 Drv Goods Co., 237 Ala, 249, 186 So. 179 (1939). reliance upon

Life Ins

Sound.

independent contractor in department store as latter's servant; Zevon v. Tennebaum, 73 Ariz, 281, 240 P.2d $48 (1952), where harmed plaintiff accepted services in
belief that they were by defendant's servant; Fireman's Fund Indem, Co. v, Longshore Beach & Country Club, 127 Conn, 493, 18 A.2d 347 (1941), in which appearance
of agency not found; Stuyvesant Corp. v, Stahl, 62 So.2d 18 (Fia.19521, hotel liable to guest for act of apparent servant; Herbert v. Lanahoff, 185 La, 105, 168 So, S08
(4936). where no appearance of agency found; Timmins v. FN, Joslin Co,, 303 Mass. 540, 22 N.E.2d 75, 123 A.l.R, $91 (1939), purchase of defective bread at grocery
store appearing to be operated by defendant; Doualas v, Lana, 124 S,W.2d 642 (Mo.App.19391, defendant held liable for negligence of concessionaire; Getlar v.
Rubinstein, 171 Misc, 40, 11 N.Y.S.2d 943 (1939), affirmed 258 Avp.Dlv. 795, 16 N.Y.S.2d 527, plaintiff, hiring horse from apparent riding master of defendant, hurt by
negligence of “riding master"; Rubbo v, Huahes Provision Co., 67 Ohio App. 123, 25 N.E.2d 144 (1940), affirmed 138 Ohio St. 178, 34 N.E.2 202, store owner liable for
harny caused to person purchasing bad rabbit meat from apparent agent of defendant; Johnson v, Wagner Provision Co,, 141 Ohio St, $84,.49 N.E,24 925 (1943)
customer at store stipped on partion of premises appearing to be occupied by defendant; Ragana v, Socony Vacuum Ol Co., 376 Pa, 271, 101 A.2d G88 (1954), where not
sufficient evidence to prove appearance of agency; Hudson v, Ohio Bus Line Co., $6 Ohio App. 483, 11 N.E.2d 113 (1937), taxicab company which was not in fact master
of negligent driver held not table to person not a passenger.

Cross Reference

(0005 16&crid=6o6Ga%be-Bed7-41b0-9c93-0d 186fa04 152&pdstartin=snapshot&patypeoisearch=

U212/21/2015 Restat 2d of Agency, §8

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Restat 2d of Agency, § 8

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Restatement 2d, Agency = Rule Sections Chapter 4- Introductory Matters Tovie 1- Definitions

§ 8 Apparent Authority

Apparent authority is the power to affect the legal relations of another person by transactions with third persons, professedly as agent for the other,
arising from and in accordance with the other's manifestations to such third persons.

COMMENTS & ILLUSTRATIONS
Comment:

2. Apparent authority results from a manifestation by a person that another is his agent, the manifestation being made to a third person and not, as when authority is
created, to the agen!

. It is entirely distinct from authority, either express or implied. The power to deal with third persons which results from it may, however, be identical
with the power created by authority as it is where the principal's statements to the third person are the same as to the agent and are similarly interpreted. On the other
hand, the power may be greater ar smaller than that resulting from authority. If it exists, the third person has the same rights with reference to the principal as where
the agent is authors
may have no privilege to exercise it and may not even knaw he has it, Although normally it results from a prior relation of principal and agent, this is not necessarily the

In the relation between principal and agent, however, apparent authority differs from authority, in that the one having jt may not be a fiduciary,

case. Further, one who is authorized to act for the principal makes the latter a party to the transaction whether or not the third person believes the agent to be
authorized or is even aware of the existence of the principal. See §§ 144 and 186. On the other hand, apparent authority exists only with regard to those who believe and
have reason to believe that there is authority; there:can be no apparent authority created by an undisclosed principal. The rules of interpretation of apparent authority

are, however, the same as those for authority, substituting the manifestation to the third person in place of that to the agent. See §§ 27 and 49

Ilustrations:

1. P vert
as to T, apparent authority.

to A directing him to act as his agent for the

Jo of Blackacre. P sends a copy of this letter to T, a prospective purchaser. A has authority to sell Blackacre and,

2, Same facts as in THlustration 1, except that in the letter to A, P adds @ postscript, not included in the copy to, telling A te make fo sale until after communication with
P. A has no authority to sall Blackacre but, as to T, he has apparent authority,

3. Some facts as in Tilustration 1, except that after A and T have received the letters, P telegraphs a revocation to A. A has no authority but, as to T, he has apparent
authority to sell Blackacre,

4. Some facts as in Tilustration 1, except that A never receives the letter directed to him. Nevertheless he has apparent authority as to T.
Comment:

b. The manifestation of the principal may be made directly to a third person, or may be made to the community, by signs, by advertising, by authorizing the agent to
state that he is authorized, or by continuously employing the agent. See Sections 27 and 49 for further statements asto its creation and interpretation

Alustrations:

5. P gives to A a written power of attorney to sell Blackacre and Whiteacre. A shows this to B, A sells Blackacte to 8 and Whiteacre to C, who has not seen the power of
attorney. A had apparent authority to sell to B but not ta C.

6. A, with at he is P's local agent and also has a sign put over his place of business to that effect. To those reading the
advertisements or the sign, A has apparent authority to act for P; to those not so doing and not otherwise having information, A has no apparent authority.

's acquiescence, advertises in the paper:

Comment:

6. Belief by third person. Apparent authority exists only to the extent that it is reasonable for the third person deating with the agent to believe that the agent is
authorized. Further, the third person must believe the agent to be authorized. In this respect apparent authority differs from authority since an agent who is authorized
can bind the principal to a transaction with a third person who does not believe the agent to be authorized,

d. Apparent authority distinguished from estoppel. Apparent authority is based upon the principle which has led te the objective theory of contracts, namely, that in
contractual relations ong should ordinarily be bound by what he says rather than by what he intends, so that the contract which results from the acceptance of an offer is:
that which the offeree reasonably understands, rather than what the offeror means. It follows, therefore, that when one tells a third person that another is authorized to
make a contract of a certain sort, and the other, on behalf of the principal, enters into such a contract with the third person, the principal becames immediately 4
contracting party, with both rights and liabilities to the thied person, ierespective of the fact that he did not intend to contract or that he had directed the “agent” nok to
contract, and without reference to any change of position by the third party,

Estoppel on the other hand, as stated in § 8 B, is essentially a principle in the law af torts developed in order to prevent loss to an innocent person. See $§ 872 and 894 of
the Restatement of Torts. Like apparent authority, it is based on the idea that one should be bound by what he manifests irrespective of fault; but it operates only to
compensate for foss to those relying upon the words and not to create rights in the speaker, It follows, therefore, that one basing his claim upon the rules of estoppel

must show not merély reliance, which is requirad when the claim is based upon apparent authority, but also such a change of position that it would be unjust for the

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speaker to deny the truth of his words. Estoppel is dealt with as a form of deceit, in which the ramedy is to hold the speaker to the truth of his statements instead of
creating a tort action for misrepresentation. The one estopped is given no rights thereby

In the usual agency case, however, little turns upon the distinction. In fact, the elements of estoppel are so frequently present that the courts have repeatedly stated that
apparent authority is based upon estoppel. It would be more accurate to say that both are based wpon an underlying principle that one should be bound by his words. In
the agency cases, the apparent principal can usually ratify in any event; furthermore, it is not irrational to hold that merely entering into a contract is a change of position
which would enable the third person to bring an action against the principal. However, itis useful to preserve the distinction. Thus, when a writing is required to authorize
an agent to sell land and the agent was authorized only orally, but the principal tells the third person that the agent was authorized, there is no apparent authority, but
the principal would be estopped from denying it. See § 31. Further, where a purported principal has not affirmatively misled the third person but has merely carelessly
failed to take affirmative steps to deny that another was his agent, the imposition of liability is so extraordinary that it is doubtful whether he should be made fable to @

third person who has made a contract with the pretended agent but has not otherwise changed his position

Illustrations:

7. Pauthorizes A ta contract with T, sending Ta copy of the authorization. P telegraphs A not to deal with T and mails a letter to T to the same effect. A receives the
telegram, but immediately goes to T, making an apperentiy authorized contract with him, Just as they Maish signing the memorandum, T receives the letter from P.
subject to liability to T; Tis subject to liability to P. Neither has the right of rescission without the consent of the other,

8. P gives Aa writing which states that A is authorized to buy Blackacre for P, but at the same time telis A that, before contracting for it, he is to get P's consent. A makes
a contract for the purchase of Blackacre from 7. Later T contracts to sell it ta X. In the competition for Blackacre, P is entitled to it. ff the power to bind P were to be based
upon estoppel, P would lose. There is no possibility of, and no opportunity for, ratification in any event, since by hypothesis P is bound to the contract,

9. A, with apparent authority, but not authorized by P, contracts for P to buy grain from T. After the transaction, T notifies P that he will not make delivery. P has a cause
of action against T. P would have no action against 7, if apparent authority were regarded as based wholly upon the principle of estoppel,

10. P orally directs A to sell Blackacre in a state in which written authority is required to effectuate the transfer of real property. Upon an inquiry by T as to A’s authority, P
says: "Ihave given A authority to convey it", whereupon T enters into @ contract with A on P's behalf for its purchase and makes a partial payment. in an action by T
specifically to enforce his agreement, P is estopped to defend on the ground that A was not authorized in writing,

Comment:

©. Authority -- apparent, ostensible, inferred, implied. As pointed out in Comment ¢ to Section 7, apparent authority has an entirely different meaning from inferred or
implied authority. The latter terms are merely descriptive of the way in which authority is created, whereas apparent authority is not necessarily coincidental with
authority. In fact, apparent authority is generally inferred or implied from manifestations of the principal to third persons, and hence it is correct to speak of implied or
inferred apparent authority in most of the situations whore apparent authority exists. Ostensible authority is merely a synonym for apparent authority and is so used by
many courts. Apparent authority may coexist with authority either with the same limits, or with larger or smaller limits. When the acts of an agent in dealing with a third

person are within the limits of either authority or apparent authority, the principal becomes a party to the transaction, In non-consensual transactions entered into by the
agent where there has been no reliance by a third person upon the existence of authority, the presence or absence of an appearance of authority is immaterial. Compare

Section 267, which states the liability for acts of apparent servants.
Illustration:

11. The Ace Taxi Company employs no drivers but merely receives orders from prospective passengers and puts “Ace Taki Company” on cabs owned and operated by
independent drivers, One of these drivers collides negligently with another automobile, damaging one of his passengers who reasonably believed the Taxi Company to be
the employer. The Taxi Company is Hable to the passenger but nat to the owner of the other automobile.

Comment:

f. Use by the courts, The term “apparent authority” has been broadly used by the courts to describe the power which agents have in creating liability against their
principals, although without authority. Thus, it has been used as a basis for imposing liability upen an undisclosed principal (see § 195), as well as in a variety of other
situations dealt with in Chapter 6, where policy considerations require that the principal should he lable for unauthorized conduct. It is balieved that the results reached in
such cases are sound and that the only objection to the use of apparent authority is its indefiniteness. In its proper setting, the term enables the courts to exercise a kind
of business equity as they have been enabled to do by the use of the term “scope of employment”. In the law of torts, “proximate cause" is similarly used to indicate
liability. In the Restatement of this Subject, however, apparent authority is used in the restricted sense, as defined in this Section,

9. Cross References. Section 27 states the way in which apparent authority can be created, and Section 49 states that the rules for interpreting apparent authority are
the same as those for interpreting authority, except that the third person's knowledge replaces that of the agent. Section 159 and 292 state that the principal and the
third party are bound to transactions conducted by an agent when acting within his apparent authority. Estoppel is further distinguished from apparent authority in
Sections 8 8, 49 and 141,

REPORTER'S NOTES

Comment d states that a transaction conducted by one whe acts within his apparent authority has the same effect upon the lability of the principal and the other party to
the transaction as if the actor were authorized. Thus, where the apparent agent purports to make a contract or to convey from or to receive property on behalf of the
|, however, thet apparent

principal, the transaction is effective at once, binding both parties irrespective of change of position by the third party. It has been argue:
jon by the principal that the agent is authorized and hence that the principal Is liable only on the ground of estoppel. This would

authority results from a misrepresent:
require a change of position, by the third party in actions against the principal and he would not be liable to the principal upon the transaction, in the absence of
ratification by the principal.

When the original Restatement was written there had been much discussion as to which of the two views was consistent with the cases. The courts had used the term
apparent authority loosely, having utilized it even in cases where the principal was wholly undisclosed and where obviously there was no representation of authority
Brooks v. Shaw, 197 Mass. 376, 84.N.E, 110 (1908), See also the comment of Judge Learned Hand in Kidd v. Thomas A. Edison, Inc., 239 F. 405 (0,C.N.¥.1917),
affirmed 242 £923 (2d Cir.). In such cases, “apparent authority” has meant only power to bind. The question whether “apparent authority” Is based wholly upon
estoppel was raised and decided adversely to the Restatement position in Reo Motor Co.v, Barnes, 9 S.W.20 374 (Tex.Clv.Agp,1928), There it was held that where an
agent with only apparent authority had contracted to sell an automobile, the purchaser acquired no right against the principal until he had made a payment. On the other
hand, it was said in Cox, Inc. v. Humble Refining Co., 16 S.W.2d 285 (Tex.Com.App.1929), that apparent authority is distinct from estoppel. To the same effact, see
Anolinv, Marr Canning Co,, 152 Ark, 1, 237 S.W, 440 (1922), and Commercial Credit Co, v. Macht. 89 Ind,Apo, 59, 165.N.£, 766 (19291, In these cases a contract was.

‘enforced against the principal by one who had not changed position. In many cases where an executory contract is enforced against the principal, it does not appear

whether there was a change of position by the third person other than by entering into the transaction, as in Continental Jewelry Co. v, Weilbacher, 17 LaAnp, 420, 136

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$0,110 (1931), There are very few cases in which the precise point has been raised. Since the principal can ratify an unauthorized act, his affirmance permits him to
maintain an action against the other party so that in this type of case the problem of suit by him seldom arises. In actions by the third party against the principal, in
almost all the cases there has been some change of position by the third party, as in the payment of money or the transfer of property. In all of these cases it is,

recognized that there must be a reasonable belief by the third party in order to establish the existence of apparent authority and there have been @ few cases in v
court expressly stated that the apparent authority is based upon estoppel. In California and Georgia the estoppel idea was written into the codes of a century ago.

The situation has not substantially changed since the Restatement was issued. Section & has been cited with approval many times by the courts; to @ less extent §§ 49,
189 and 292, which deal with the interpretation and effect of apparent authority, have been thus cited, However, there are still many cases in which the courts have
stated, as distinct from held, that the principal is not bound unless the third person has changed his position; there are few cases in which the point has been directly
passed upon.

It Is believed that the statements in these sections do not require change. They are based upon the fundamental theory of contracts, that is: where one manifests to

another that he is willing to contract upon specific terms which the other accepts, there is a contract binding upon both parties. In accordance with this basic idea, when a
person has made a representation that another is authorized to enter into a particular transaction with a third person and with knowledge of this representation the third
person enters into the relation, the situation is precisely the same as if the principal himself hed manifested to the third person that he was willing to become a party

The idea that the principal's lability is based upon 2 misrepresentation was the result of the early 19th century thinking with reference to contracts: It was thought that
there had to be a meeting of the minds; if, however, one of the contracting parties had misrepresented his intent he would be estopped to deny what he had stated to be
his intent. With the development of the objective theary of contracts this theory has been almost entirely superseded. The courts, however, continue to some extent to
use the earlier language with reference to apparent authority. In fact, however, it does not seem credible that when the matter is called to their attention they woul!
revert to the tort theary. It would not only be contrary to our present idea of contracts, but it would result in uncertainty in a large number of commercial transactions,

since where the third person has not changed his position the principal could at will either disclaim liability or, by ratifying, hold the other party. It would be unfortunate to

accentuate the peculiarities of ratification by bringing within it the situations where the principal has manifested that the agent is authorized.

Further, the estoppel theory is inconsistent with the rules of ratification. Assuming, as tl
cases in which the third person has not changed his position at the time of ratification. In fact it is normal for any change of position to occur at the time when the original

‘ourts do, that ratification has the same effect as authorization, there are many

transaction was conducted. Ratification has the same element as authorization
situation, the estoppel cases are definitely distinguished rom the affirmance without estoppel. See § 103.

merely a manifestation of consent, except that it is to a prior act. In the ratification

To support the continuance of the Restatement position are not only the decisions which nave cited the Restatement sections with approval but also cases in which the
courts have stated that the principal was bound either on the theory of authority or apparent authority without scrutinizing which was effective; also the cases in which

in which the ratio decidendi indicates that the principal

the courts have denied the principal's liability on executory contracts because there was no apparent authority
uid have been liable had apparent authority been found.

See also; Abbott, Of the Nature of Agency, 9 Harv.t..R. 507 (1896); Cook, Agency by Estoppel, S Col.L.R. 36 (1905); Cook, Agency by Estoppel, a Reply, 6 CoLL.R. 34
(1905); Ewart, Agency by Estoppel, § Col.L.R. 354 (1905); Montrose, The Basis of the Power of an Agent in Cases of Actual and Apparent Authority, 16 Can.B.R. 757
(1038).

Cross Reference

ALR Annotations:

Doctrine of apparent authority as applicable where relationship !s that of master and servant. 2 8.1.8.2 406,
Digest System Key Numbers:
Principal and agent 99-115.

Restatement of the Lav, Seeénd, Agency

Copyright (c) 1958, The American Law Institute

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341

342

House v. Armour of America, Inc., 929 P. 2d 340 - Utah: Supreme Court 1996 - Google Scholar

929 P.2d 340 (1996)

Ann C. HOUSE, individually and as personal representative of the Estate of Freddie Floyd
House, Plaintiff, Respondent, and Cross-Petitioner,
v.
ARMOUR OF AMERICA, INC., a California corporation; Lawco Police Supply, a Utah
corporation; E.l. DuPont de Nemours, a Delaware corporation, and John Does Ill through XX,
Defendants, Petitioners, and Cross-Respondents.

No. 950088.
Supreme Court of Utah.
December 13, 1996.

*341 Charles P. Sampson, H. Michael Drake, Paul M. Simmons, Stewart M. Hanson, Jr., Salt Lake City, for plaintiff,
respondent, and cross-petitioner.

David B. Watkiss, David K. Watkiss, Carolyn Cox, Salt Lake City, for Armour and DuPont.

*342 Tim Dalton Dunn, J. Rand Hirschi, Salt Lake City, for Lawco.

ON CERTIORARI TO THE UTAH COURT OF APPEALS

DURHAM, Justice:

We granted certiorari in this products liability case to review the Utah Court of Appeals’ decision in House v. Armour of
America, Inc., 886 P.2d 542 (CtApp.1994), cert. granted, 899 P.2d 1231 (Utah 1995), reversing summary judgmentin
favor of defendants Armour of America, Inc. (Armour), and Lawco Police Supply (Lawco) and affirming summary
judgment for defendant E.I. DuPont de Nemours (DuPont). Defendants Armour and Lawco claim that the court of
appeals erred in finding that material issues of fact remained as to (1) whether defendants owed a duty to the deceased,
Lt. Fred Floyd House, to warn him about the limitations of his body armor, (2) whether they satisfied this duty, and (3)
whether their possible breach of this duty caused Lt. House's death. Plaintiff Ann C. House cross-petitions, claiming that
the court of appeals erred in finding that defendant DuPont did not owe a duty to warn Lt. House of his vest's limitations.
We agree with the court of appeals on all issues and affirm.

I. FACTS

The facts of this case are detailed in the court of appeals' opinion in House v. Armour of America, Inc., 886 P.2d at 545-
47. We briefly summarize them here. Lt. House was a corrections officer for the Utah State Department of Corrections
and the "point man" for one of the Department's two Special Weapons and Tactics (SWAT) Teams formed in 1980. The
point man is the team member who takes the lead position in any tactical situation. In January 1988, Lt. House's SWAT
team was called to assist federal and state law enforcement agencies during a siege of a family compound in Marion,
Utah. On January 28, 1988, while carrying out an arrest plan designed by the FBI, Lt. House was fatally shot by a".30
caliber steel-jacketed round fired from a Plainfield carbine rifle" by one of the family members. House, 886 P.2d at 546.
When he was killed, Lt. House was wearing a body armor vest the SWAT team had purchased in 1981. Although his vest

contained hard ceramic inserts which upgraded its stopping capabilities, the bullet struck the nonceramic inside edge
of the hard armor chest panel and then penetrated through the soft-body portion of the vest, causing Lt. House's death.

Ann House, Lt. House's widow, brought this products liability action against defendants Lawoo, the distributor of the vest,

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https://scholar.google.com/scholar_case?case=5741944590427493758q=929+ P.2d+340&hI=en&as_sdt=2006

Armour, the manufacturer of the vest, and DuPont, the manufacturer of KEVLAR®, the fiber woven into the ballistic fabric
used in the body armor vest. She claimed that defendants breached their duty of care by failing to adequately warn Lt.
House of the limitations and capabilities of his body armor 21 Specifically, she argued that defendants should have
warned him that his vest would not resist rifle fire.

Atthe trial level, defendants moved for summary judgment, which the trial court granted after finding either that
defendants did not have a duty to warn, that they satisfied any duty they may have had, or that any breach of duty did not
cause Lt. House's death. On appeal, the court of appeals reversed and remanded as to Lawco and Armour but affirmed
the trial court's finding that DuPont did not owe a duty to warn.

Il. ANALYSIS

Summary judgment is appropriate only when no genuine issues of material fact exist and the moving party is entitled to
judgmentas a matter oflaw. Utah R.Civ.P. 56(c). Thus, "because summary judgment is granted as a matter of law rather
than fact, we review the legal conclusions of both the trial court and the court of appeals for correctness.” Butterfield v.
Okubo, 831 P.2d 97,.*343 102 (Utah 1992) (citing Ward v. Richfield City, 798 P.2d 757, 759 (Utah 1990); Division of

Consumer Protection v. Rio Vista Oil, Ltd., 786 P.2d 1343, 1347 (Utah 1990); CECO Corp. v. Concrete Specialists, inc.
772 P.2d 967, 969 (Utah 1989); Madsen v. Borthick, 769 P.2d 245, 247 (Utah 1988)).

A. Duty to Warn

The court of appeals correctly stated that under Utah law, a manufacturer may be held strictly liable for any physical
harm caused by its failure to provide adequate warnings regarding the use ofits product. House, 886 P.2d at 547; see
Restatement (Second) of Torts § 402A & cmt. (4 965)31 Where a manufacturer "knows or should know ofa risk
associated with its product," the absence or inadequacy of warnings renders that product “unreasonably dangerous,"
subjecting the manufacturer to strict liability. House, 886 P.2d at 547 (citing Grundberg v. Upjohn Co., 813 P.2d 89, 97
Utah 1991)).

Defendants argue that they did not have a duty to provide warnings about the limitations of Lt. House's vest because (1)
the dangers associated with using body armor are open and obvious, and (2) Lt. House was a member of a
knowledgeable and sophisticated group that knows the capabilities and limitations of armor vests. The court of appeals
reversed as to both of these issues, holding that genuine questions of material fact exist, precluding a finding that
defendants owed no duty as a matter of law. /d. at 648-50. We agree.

1. The Open and Obvious Danger Rule

Defendants initially argue that the court of appeals erred in failing to find that because the hazards connected with using
body armor are open and obvious, defendants did not have a duty to warn Lt. House about the limitations of his vest. We
agree with the court of appeals’ ultimate conclusion that a genuine issue of material fact exists as to whether the relevant
danger to Lt. House — that his vest would not resist certain high-velocity ammunition — was open and obvious fo a
reasonable user. However, because the court of appeals’ analysis may suggest that Utah has "abandoned" the open

and obvious danger rule in all circumstances /4l we must clarify.

Mostjurisdictions adopting the position taken in section 402A of the Restatement of Torts have held that if the danger
posed by the use of a product is "generally known and recognized,” then the seller is not required to warn about that
danger. See Restatement, § 402A emt. 81 see also Allan E. Korpela, Annotation, Failure to Warn as Basis of Liability
Under Doctrine of Strict Liability in Tort, 53 A.L.R.3d 239, 257-59 (1973 & Supp.1994). These jurisdictions assert:

Where the risks of the product are discernible by casual inspection, such as the danger that a knife can
cut, or a stove burn, the consumer is in just as good a position as the manufacturer to gauge the dangers12/21/2015 House v. Armour of America, Inc., 929 P. 2d 340 - Utah: Supreme Court 1996 - Google Scholar

associated with the product, and nothing is gained by shifting to the manufacturer the duty to warn.

Laaperi v. Sears, Roebuck & Co., 787 F.2d 726, 730-31 (1st Cir.1986); see also Elliott v. Brunswick Corp., 903 F.2d

344 1505, 1506-07 (11th Cir.1990) (danger of rotating boat propeller sufficiently obvious to preclude imposition “344 of
liability upon manufacturer of outboard motor); Plante v. Hobart Corp., 771 F.2d 617, 620 (1st Cir.1985) (placing one's
hand into blades of potato chopper); Sherk v. Daisy-Heddon, Div. of Victor Comptometer Corp., 498 Pa. 594, 450 A.2d
615, 618-20 (1982) (firing BB gun at another at close range).

The court of appeals noted that with the passage of Utah's comparative fault statute, subsequent Utah court decisions
have departed from the strict all-or-nothing rule. See Mutherin v. Ingersoll-Rand Co., 628 P.2d 1301, 1303 (Utah 1981)
(holding that plaintiffs misuse of product in strict products liability case was not complete bar to recovery); Donahue v.
Durfee, 780 P.2d 1275, 1279 (Utah.CtApp.1989) (abolishing "open and obvious" danger rule in landowner negligence
actions). The court declared that in light of this precedent and in accord with other jurisdictions, "the presence of an
“open and obvious’ danger is merely one factor for the trier of fact to consider when assessing the liability of the
defendant in a strict liability case — it does not operate as a complete bar to the injured party's recovery." House, 886
P.2d at 548 (citing, among others, Wheeler v. John Deere Co., 935 F.2d 1090, 1104 (10th Cir. 1991)).

Many jurisdictions have found that enabling a manufacturer to escape liability because the product's dangerousness is
patent encourages manufacturers to continue to design "bad" products as long as they make the danger obvious.
Hence, these jurisdictions have stated, “The law, we think, ought to discourage misdesign rather than encouraging itin
its obvious form.” Caterpillar Tractor Co. v. Donahue, 674 P.2d 1276, 1283 (Wyo.1983) (quoting Palmer v. Massey-
Ferguson, Inc., 3 Wash.App. 508, 476 P.2d 713, 718 (1970).

“[I]f the productis a carrot-topping machine with exposed moving parts, or an electric clothes wringer
dangerous to the limbs of the operator, and if it would be feasible for the maker of the product to install a
guard or safety release, it should be a question for the jury whether reasonable care demanded such a
precaution, though its absence is obvious."

Id. (quoting 2 Harper & James, The Law of Torts § 28.5, at 1543 (1956)). Although we find no fault with this reasoning,
we do not believe that this concern is equally applicable to products which, because of their nature and intended use,
cannot be economically designed in a safe manner, such as knives. Moreover, we find persuasive the reasoning of the
United States Court of Appeals for the First Circuit: "If a manufacturer had to warn consumers against every such obvious
danger inherent in a product, ‘[t]he list of obvious practices warned against would be so long, it would fill a volume.”
Laaperi, 787 F.2d at 731 (quoting Plante v. Hobart Corp.. 771 F.2d 617, 620 (1st Cir.1985)}). Accordingly, we conclude
that a "manufacturer cannot be held liable for injuries which result from patent dangers, inherent in the product,
completely within the cognition of a reasonable user, and incapable of being economically alleviated." Wheeler v. John
Deere Co., 935 F.2d 1090, 1104 (10th Cir.1991).

However, as noted by the court of appeals, even though a product may contain a patent danger which cannot be
economically alleviated, the "product may still be unreasonably dangerous if the hazards or risks associated with its use
were not such that they should have been realized by a reasonable user or consumer of the product." House, 886 P.2d
at 548. The Restatement provides that a product is unreasonably dangerous if "[]he article sold [is] dangerous to an
extent beyond that which would be contemplated by the ordinary consumer who purchases it, with the ordinary
knowledge common to the community as to its characteristics.” Restatement (Second) of Torts § 402A cmt. i (1965); see
also Wheeler, 935 F.2d at 1104 (holding that although danger of placing limb in running combine was open and
obvious, defective design of combine that increased chance of accidental injury made combine more dangerous than
expected).

With these principles in mind, we must determine whether the danger posed to Lt. House was open and obvious as a
matter of law. We agree with defendants that Lt. House's body armor contained an open and obvious hazard which

345 could not be economically alleviated; it did not provide complete *345 coverage of vulnerable body parts. Thus,
defendants did not have to war Lt. House that he could still be injured or killed by ammunition striking uncovered areas.
See Linegar v. Armour of America, Inc. 909 F.2d 1150, 1154 (8th Cir.1990) (holding that defendant had no duty to warn

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of limited nature of protection offered by bullet resistant vest). However, the bullet that killed Lt. House did not strike an
exposed area. The bullet hit his body armor, which failed to contain it and thus shield Lt. House fram harm, If any
reasonable user of Lt. House’s body armor would have believed that the vest could stop a bullet fired from a high-caliber
rifle, when in reality it would not, then the product would fail to meet the reasonable expectations ofits users and thus
would pose an unreasonable danger requiring an adequate warning. After reviewing the facts set forth in the record, we
cannot say as a matter of law that the limitations of Lt. House's vest were open and obvious to a reasonable user of that
vest. Therefore, the court of appeals correctly held that "there are material issues of fact sufficient to preclude the trial
court's grant of summary judgment." House, 886 P.2d at 549.

2. The Sophisticated User

Defendants next argue that even if the danger of rifle fire was not open and obvious, the court of appeals erred in
holding that whether Lt. House was a sophisticated user and thus knew or should have known of the limitations of his
vestis "for the jury to decide." /d. at 550. We agree with the court of appeals, however, that the facts are insufficient to find
as a matter of law that Lt House was a sophisticated user and that the group to which he belonged knew about the
limitations of his vest.

To avoid liability because the injured party was a sophisticated user, defendants must show that the “ultimate user
possesses special knowledge, sophistication, or expertise" to such an extent that "the user's knowledge of the danger is
equivalent to prior notice." /d. at 549 (citing Billiar v. Minnesota Mining & Mfg. Co., 623 F.2d 240, 243 (2d Cir.1980)). As
the court of appeals noted, defendants need not show that Lt. House actually knew about the danger but that the
“community” to which Lt. House belongs "generally knows" about the danger. /d. (citing Jackson v. Coast Paint &
Lacquer Co., 499 F.2d 809, 812 (9th Cir.1974)). In other words, to sustain a conclusion that no duty was owed to the user
because of his professional status, the court must “find the record evidence to be undisputed that the user actually knew
of the danger or that, based on the user's special expertise and the circumstances of the transaction, the supplier
reasonably could have believed that he knew of the danger.” Halter v. Waco Scaffolding & Equipment Co., 797 P.2d 790.
794 (Colo.Ct. App.1990).

Defendants argue that Lt. House was "a highly and specially trained prison officer and a weapons instructor who ... had
investigated the threat protection levels afforded by soft and hard body armor and determined the protection level" and
thus was "clearly knowledgeable regarding the characteristics of soft body armor vests." However, after reviewing the
record, we agree with the court of appeals that there was insufficient evidence "that any of the extensive training
completed by Lt. House or other members of the SWAT Team involved the use and capabilities of body armor." House.
886 P.2d at 550. Moreover, Lt, House's SWAT team only started looking into purchasing and using body armor in 1980.
Many team members testified that their initial investigation into the different types of body armor — which led to their
purchase of the Armour vests in 1981 — was conducted informally and haphazardly. Consequently, when Lt. House was
killed, the team not only lacked knowledge about the capabilities of body armor, but also lacked experience in using the
product. See Buettner v. R.W. Martin & Sons, 47 F.3d 116, 120 (4th Cir.1995) (finding that injured party was
sophisticated user where he had fourteen years of experience in using commercial equipment); Lloyd v. John Deere
Co., 922 F.2d 1192, 1196 (5th Cir.1991) (twenty-seven years of experience with tractors made plaintiff sophisticated
user).

Ultimately, although many of the SWAT team members stated that they believed their soft-body armor would not contain
rifle *346 fire, there is enough disputed evidence to prevent us from concluding as a matter of law that the capabilities
and limitations of Lt. House's vest were generally known by all of Lt. House's SWAT team. We therefore affirm the court of
appeals.

B. Satisfaction of the Duty to Warn

We also agree with the court of appeals that in light of the evidence in the record, a genuine issue of fact exists as to

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whether (1) the information on the label attached fo Lt. House's vest provided an adequate warning and/or (2) Lt. House
received an Armour brochure which adequately described each vest's capabilities and limitations. First, defendants’
argument that the label "specifically advised" that the vest would not contain certain rounds is without support in the
record. The label on Lt. House's vest contained the following information:

THIS VEST WILL CONTAIN
44 MAG. 240 GR. (6" BBL)

U.S.A. 9mm 124 GR. FMJ 357 MAG. 125 GR. SJHP (6" BBL)
22 MAG. (6" BBL) 38 CAL. 00 BUCKSHOT

NOT FOR A.P. ROUNDS

ARMOUR OF AMERICA

P.O. BOX 1405

BEVERLY HILLS, CA 90213

DO NOT MACHINE WASH OR DRY CLEAN.

CLEAN WITH DAMP CLOTH AND SMALL AMOUNT OF SOAP.

Looking at all disputed facts and inferences, reasonable minds could reach different results on whether this information
provided an adequate warning. The court of appeals succinctly set forth the necessary requirements for an adequate
warning. We therefore adopt its analysis and agree that this issue "presents a question of fact, to be resolved by the trier
of fact." House, 886 P.2d at 551 (citing DeBry v. Valley Mortgage Co., 835 P.2d 1000. 1004 (Utah.CtApp.1992)).

Second, after reviewing the testimony presented at the hearing and in depositions, we also agree with the court of
appeals that “itis disputed whether Lt. House received the Armour information booklet or brochure. Moreover, no
member of the SWAT Team could recall, specifically, whether they ever saw such a brochure." /d. Therefore, we cannot
hold that as a matter of law defendants satisfied their duty to warn.

C. Causation

Defendants finally argue that the court of appeals erred in (1) allowing a "heeding presumption" to assist plaintiffin
meeting her burden on the issue of causation and (2) concluding that there was a material issue of fact regarding
whether defendants’ failure to warn was the proximate cause of Lt. House's death.

In any failure to warn claim, a plaintiff must show that the failure to give an adequate warning in fact caused the injury;
ie., that had warnings been provided, the injured party would have altered his use of the product or taken added
precautions to avoid the injury. See Barson v. E.R. Squibb & Sons, Inc., 682 P.2d 832, 836-37 (Utah 1984). But "if the
event which produced the injury would have occurred regardless of the defendant's conduct,” then the failure to provide
a warning is not the proximate cause of the harm and the plaintiffs claim must fail. House, 886 P.2d at 552 (quoting Lunt

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v. Mount Spokane Skiing Corp., 62 Wash.App. 353, 814 P.2d 1189, 1194 (1991)). Defendants contend that plaintiff
cannot show that Lt. House would have altered his conduct had a warning been given because (1) Lt. House did not
know that he would be faced with rifle fire; (2) the arrest plan minimized any exposure to gunfire, and Lt. House would
therefore have been in the same position no matter what he believed about the capabilities of his vest; and (3) no one
would intentionally expose oneself to any type of fire because of the inherent limitations in the *347 coverage of any
body armor. The court of