Leo Caballero individually, and as Co-representative of the Estate of Pedro Jaciel Caballero (deceased), and as Co-Representative of the Estate of Emilia Vales (deceased); Yolanda Elizabeth Medrano Villa, individually, and as Co-Representative of the Estate of Pedro Jaciel Caballero (deceased); Cesar Caballero individually, and as Representative of the Estates of Cesar Isaac Caballero (deceased) and Luz Lizeth Galvan (deceased), and as Co-Representative of the Estate of Emilia Vales (deceased); Osmar Caballero individually, and Solidad Avila, individually and as Co-Representative of the Estate of Salma Guadalupe Caballero (deceased), Plaintiffs,
Ford Motor Company, Michelin Americas Research & Development, Michelin NA, Inc., and Michelin France, Defendants.
Submitted: December 6, 2013
Upon Defendant Ford Motor Company's Motion for Partial Summary Judgment: GRANTED
Timothy E. Lengkeek, Esquire, Young Conaway Stargatt & Taylor, LLP, Richard L. Denney, Esquire, Denney & Barrett, Attorneys for Plaintiffs.
Christian J. Singewald, Esquire, Timothy S. Martin, Esquire, White & Williams, LLP, Attorneys for Defendant Ford Motor Company.
Before the Court is defendant Ford Motor Company's ("Defendant") Motion for Partial Summary Judgment on the plaintiffs' ("Plaintiffs") punitive damages claim, filed on August 30, 2013. For the reasons explained below, Defendant's motion is GRANTED.
II. FACTUAL AND PROCEDURAL CONTEXT
This lawsuit arises from a single-vehicle accident that occurred on May 3, 2010, on a Federal Mexican highway ("Highway 40") in the State of Durango, Mexico. Plaintiff Leo Caballero ("Leo") was the driver of the 2000 Ford Explorer ("Explorer") involved in the accident. The driver's side rear tire allegedly suffered a tread separation which caused Leo to lose control of the vehicle. As a result, the Explorer rolled over numerous times, allegedly causing the seat-belts to fail and the roof of the vehicle to crush the other occupants inside the vehicle. Plaintiffs Leo and Cesar Ivan Caballero ("Cesar") were injured, but survived the accident, however, Salma Caballero ("Salma"), Emilia Vallez ("Emilia"), Luz Lizeth Galvan ("Luz"), Cesar Isaac Caballero ("Cesar Isaac"), and Pedro Jaciel Caballero ("Pedro") (collectively "Decedents") did not survive.
Plaintiffs are Mexican citizens, but do not reside in the State of Durango. The Explorer was sold to its first owner in Missouri, and Leo purchased it in Kansas. Defendant is a Delaware corporation, with its principal place of business in Dearborn, Michigan. Defendant manufactured the Explorer involved in the accident.
Plaintiffs assert claims of negligence, strict liability, and post-sale failure to warn,  and seek punitive damages with respect to Defendant's allegedly defective design and marketing of the Explorer. Defendant contends that Plaintiffs are not entitled to punitive damages because the issue of punitive damages is governed by Michigan law, and Michigan law does not recognize punitive damages. In the alternative, Defendant contends that Mexican law (State of Durango) is applicable to Plaintiffs' punitive damages claim. According to Defendant, the vehicle in question was primarily designed and developed in Michigan, the significant decisions concerning its design and development occurred in Michigan, and the primary decisions regarding testing and the manufacturing process of the vehicle also occurred in Michigan.
In response, Plaintiffs assert that [t]he overwhelming majority of vehicles [that] Defendant designs and manufactures are sold outside . . . of Michigan. Plaintiffs maintain that both Delaware and Missouri have a significant interest in this dispute: Delaware, because it is Defendant's state of incorporation and because Defendant does business in the state; Missouri, because it is where the Explorer was manufactured and where it was placed "in the stream of commerce."
Pursuant to "general conflict of laws principles, the forum court will apply its own conflict of law rules to determine the governing law in a case." Delaware courts conduct a two-part inquiry to determine the applicable law. First, the Court determines if there is an actual conflict. "In determining whether there is an actual conflict, Delaware state courts . . . answer a single and simple query: does application of the competing laws yield the same result?" In the event of an actual conflict of law, Delaware courts apply the most significant relationship test from Section 145 ("Section 145") of the Restatement (Second) Conflict of Laws ("Restatement").
"Choice-of-law determinations must be made as to each issue when presented, not to the case as a whole." Plaintiffs argue that Delaware law, or in the alternative, the law of the state where the relevant conduct occurred (Michigan law for design issues; Missouri law for manufacturing and marketing issues) should apply. Defendant contends Michigan law, or in the alternative, Mexican law (State of Durango) is applicable.
The Court finds that an actual conflict exists between Delaware law and Michigan law on the issue of punitive damages. It is undisputed that applying Delaware law or Michigan law to Plaintiffs' punitive damages claim will not yield the same results. While Michigan allows for the imposition of "exemplary damages, " "[i]t is well established that generally only compensatory damages are available in Michigan and that punitive sanctions may ...