Confidential

Facts

This is a defective product case. The subject accident took place on June 1, 2004. The plaintiffs were injured simultaneously while working for a mining operation in Canyon Country.

The accident took place at the primary jaw crusher, a unit 10-15 feet above the ground fed by a conveyor belt. A crew consisting of plaintiffs age 47 and 42, along with one other employee, was clearing the feeder to the jaw crusher of large rocks that had plugged the feeder.

As the company owner came upon the job site, he noticed that the crusher had stopped when a number of large rocks got stuck in the crusher. The plan was to attempt to lift the rocks from the crusher unit by attaching a lifting strap to the rocks at one end and to a hydraulic excavator bucket attachment at the other end. The bucket attached to the excavator through a hydraulic coupler.

The excavator, coupler and bucket had been owned and used by the employer since 1996. Two rocks were successfully lifted out and placed on the ground. During the process of lifting a third rock out, the lifting strap broke. The company owner was operating the excavator while the plaintiffs were on the jaw crusher. The employer lowered the bucket (which was supposedly attached securely to the coupler, which itself was attached to the excavator's bucket cylinder pins) to the ground, attached an additional lifting strap to the bucket, and then brought the excavator arm and bucket back up to the jaw crusher.

According to the employer, he had no reason to believe that the bucket would not remain securely attached to the coupler. The subject excavator, coupler and bucket had been used for similar operations in the past. Before the other end of the strap could be a hooked up to the stuck rocks, the 2,780-pound bucket fell off of the coupler and fell onto and into the jaw crusher, striking both plaintiffs, causing them severe, disabling and permanent injuries.

On the date of accident, the excavator being used for the operation was a Komatsu PC 220 LC-6L that the employer had purchased in 1996 from defendant, a California based equipment dealership. According to the testimony of the employer and the equipment salesperson, who is now retired and age 85, the defendant sold and delivered to the employer with the Komatsu excavator a Hendrix Manufacturing Company First Generation hydraulic coupler and an ESCO bucket (Hendrix was not a party to this action due to a bankruptcy discharge; Komatsu was a named defendant, but prevailed on a motion for summary judgment).

The subject excavator was delivered by defendant to the employer's jobsite with the coupler and bucket attached. The purpose of the coupler, according to Hendrix's early 1990s literature, was to facilitate changes from one work tool attachment to another. The Hendrix Coupler attaches to the Komatsu bucket cylinder pins on the arm of the excavator and then the bucket attaches to the other end of the coupler through the hydraulic attachment mechanism designed into the coupler.

PLAINTIFFS' CONTENTIONS:
The plaintiffs claimed strict liability as well as negligence against the defendants, the company (and its parent) that sold the defective Hendrix coupler to plaintiffs' employer. Plaintiffs claimed the defendants were liable under product liability law as a retailer and supplier, and the coupler was defective in design by virtue of the absence of a mechanical lock pin and a check valve. In addition, the product was defective by virtue of a failure to warn; Hendrix had distributed its first generation couplers without a maintenance manual.

Finally, the design established by Hendrix had ignored the mechanical backup that was designed by the patent holder from whom Hendrix had purchased the rights. The year after the above referenced sale by the defendant equipment dealer to plaintiffs' employer, the dealer's parent company, a wholly owned subsidiary of an international conglomerate, acquired 100 percent of the outstanding shares of the equipment dealership and began to run the approximately eight equipment shops located in California.

Of note is that the shop in Sylmar that sold the products to plaintiffs' employer, closed in 1999, and in 2002, the dealer's parent divested itself of the dealer's various shops throughout California, at which point, the dealer ceased operations in California. This was 2-3 years before the subject accident. At all relevant times, the parent company continued as a national equipment sales and service corporation and in full control over the California dealer's prior business operations. The Hendrix coupler was an after market attachment custom designed by Hendrix to fit the particular model of Komatsu hydraulic excavator in use at the time of plaintiffs' accident.

The defendant was an authorized Komatsu dealer/distributor and in 1996 sold to plaintiffs' employer the subject hydraulic excavator with the subject quick coupler and bucket attached and ready for use by plaintiffs' employer. The defendant was also a Hendrix dealer, according to the deposition testimony of Hendrix's principal employee who designed the subject coupler. It appears that defendant bought the new Komatsu excavator in December 1994 and then made it a part of its rental fleet. The defendant rented out the Komatsu excavator to multiple renters until August 1996, when it sold the excavator to plaintiffs' employer. At some time prior to August 1996, defendant obtained the Hendrix coupler and installed it on the excavator that it sold to plaintiffs' employer in August 1996.

Between 1994 and 1996, defendants owned and controlled the excavator and coupler and maintained both in their role as an equipment rental, sales and service business. Three months after defendants sold the subject excavator and coupler to plaintiffs' employer, defendants apparently performed maintenance on the subject coupler.

DEFENDANTS' CONTENTIONS:
The subject coupler was not defective in design; was accompanied by suitable warnings as to use and nothing about the coupler design caused the accident, which was caused by the employer's negligence. In addition, the defendants had sold used equipment and thus strict liability did not apply to them.

Settlement Discussions

Settlement was reached over multiple in person and phone mediation sessions, on the eve of the final status conference with Joseph Thielen, Esq. The third party action was settled without participation by the workers' compensation carrier, which had filed a lien in the third party action. Following settlement with the third parties, the plaintiffs obtained dismissal of all lien and credit rights that could be asserted by the workers' compensation carrier for the total sum as to both plaintiffs of $20,000.

Injuries

Plaintiff A suffered T12 burst fracture requiring laminectomy and pedicle screw fusing at T9-L2, posterolateral fusion at T9-L3 with iliac crest bone graft; right fifth metatarsal fracture requiring short leg cast; multiple left rib fractures; pneumothorax; scapular fracture; traumatic brain injury; complex scalp laceration requiring closure by plastics; pulmonary contusion; acute respiratory failure requiring intubation; traumatic hearing loss; tooth loss; anemia status post transfusion; electrolyte imbalance; hyponatremia; left lower lobe atelectasis and pneumonia; thrombocytosis; elevated transaminases, rhabdomyolysis. Permanent residual loss of ability to take care of all activities of daily living and residual post-traumatic stress. Plaintiff B suffered torn anterior and posterior cruciate ligaments; shoulder contusion; and multiple surgeries to left knee.

Result

Settlement for $4,275,000 for plaintiff A; $725,000 for plaintiff B.