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CUNNINGHAM v. QUAKER OATS CO.

May 5, 1986

IAIN CUNNINGHAM, an Infant, by his parents RONALD J. CUNNINGHAM and MARGARET CUNNINGHAM, and RONALD J. CUNNINGHAM and MARGARET CUNNINGHAM, Plaintiffs,
v.
QUAKER OATS COMPANY, Fisher-Price Division, Defendant



The opinion of the court was delivered by: CURTIN

JOHN T. CURTIN

In 1971, infant Iain Cunningham of Ontario, Canada ("plaintiff infant") ingested an object manufactured by defendant, and, as a result, suffered serious injury. *fn1" This case came to trial in June, 1981, at which time the jury awarded a total damage amount of $1,800,000 to Iain, $525,000 to his father, and $775,000 to his mother. *fn2"

In an order dated May 2, 1983, this court held that Ontario law, applicable in this case, required that the jury's verdict on the issue of Iain's pain and suffering be reduced from $500,000 to $125,000. *fn3" It was also held at that time that Mr. and Mrs. Cunningham ("plaintiff parents") had a right to recover the value of the services they provided to Iain, and that all plaintiffs were entitled to prejudgment interest at a rate of 7.75 percent per annum. *fn4"

 In a subsequent order, dated August 5, 1985, this court granted plaintiffs' motion to add Iain Cunningham's mother Margaret Cunningham as a party plaintiff, and decreed that such amendment would relate back to the date of the original complaint. *fn5" Finally, this court declined to disturb the jury's verdict on the matter of damages for services to Iain by his parents, and denied defendant's motion for a new trial. *fn6"

 The purpose of the present order is to decide the remaining outstanding issues in this case. It must be decided whether (1) the jury's verdict with respect to plaintiff parents' loss of past, present and future guidance, care and companionship sustainable under Ontario law; and (2) given that the verdict in this case was rendered in terms of Canadian funds, what is the proper currency conversion rate is to be applied here. I will examine these matters in greater detail below.

 Loss of Past, Present and Future Guidance, Care and Companionship

 It is well established that Section 60(2) of the Ontario Family Law Reform Act ("FLRA") allows, in pertinent part, for the recovery of:

 (d) an amount to compensate for the loss of guidance, care and companionship that the claimant might reasonably have expected to receive from the injured person if the injury had not occurred. *fn7"

 As defendant rightly points out in its papers and plaintiffs do not dispute, the FLRA was not passed until March, 1978, well after the injury to infant plaintiff. The crucial questions, therefore, in this matter concern (1) the possible retroactivity of the pertinent FLRA language, and (2) if it is found that the FLRA is not retroactive, whether defendant has preserved or waived its right to challenge the propriety of the award to plaintiff parents for loss of their son's guidance, care and companionship.

 The parties' positions with respect to the above questions is as follows. Defendant first contends that the case of Yuill v. McMullen, 25 Ont.2d 178 (Ontario High Court of Justice 1979), aff'd 110 D.L.R. 3d 256 (Ontario Court of Appeal 1980), states that the provisions of the FLRA are not to be applied retroactively. See also Murray v. Murray, 25 Ont.2d 321 (Ontario High Court of Justice, 1979). As a result, defendant contends that plaintiff parents have no post-FLRA right to recover for any loss sustained as a result of a pre-FLRA occurrence and, therefore, the awards to plaintiff parents for loss of guidance, care and companionship must be entirely excluded now. See also Item 184, Supplemental Affidavit of Ronald Joseph Rolls.

 In opposition, plaintiffs argue that, the facts of this case show that defendant, itself, urged that the FLRA govern the instant lawsuit. In fact, plaintiffs contend that, based on their acceptance of defendant's position that the plaintiff parents were entitled to recover for guidance, care and companionship under Ontario law, plaintiffs requested this court to instruct the jury regarding these elements of damages.

 Plaintiffs say that, because of the above, and because defendant failed to object to this court's instructions or submissions of special questions on the FLRA and/or failed to argue that the FLRA was not applicable to this action, defendant consented to the trial of these claims. See Rule 15(b) of the Federal Rules of Civil Procedure. See also Dean Foods Co. v. Albrecht Dairy Co., 396 F.2d 652 (8th Cir. 1968). Cf. Roth v. McAllister Bros., Inc., 316 F.2d 143 (2d Cir. 1963); National Utility Service, Inc. v. Whirlpool Corp., 325 F.2d 779 (2d Cir. 1963), Rule 51 of the Federal Rules of Civil Procedure. *fn8" Therefore, plaintiff says that defendant cannot properly argue at the present time that plaintiffs have failed to state a claim upon which relief can be granted pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure. Cf., Weaver v. Bowers, 657 F.2d 1356 (3rd Cir. 1981), cert. denied, 455 U.S. 942, 71 L. Ed. 2d 653, 102 S. Ct. 1435 (1982).

 Alternatively, plaintiff states that any valid 12(b)(6) defense now raised by defendant was not timely raised pursuant to Rule 12(h)(2); that is, "at the trial on the merits." See, e.g., Snead v. Department of Social Services, 409 F. Supp. 995, 1000 (S.D.N.Y. 1975), judgment vacated on other grounds, 425 U.S. 457 (1976). Therefore, plaintiff contends that this defense has been waived. Snead v. Department of Social Services, supra.

 Moreover, plaintiffs argue that even if defendant is properly allowed to argue that Ontario law does not permit the plaintiff parents to recover for loss of guidance, care and companionship, plaintiff parents recovery for this loss is adequately supported under Canadian common law, and should be allowed by this court (citing Hasson v. Hamel, 16 Ont.2d 517 (Essex County Court, 1977); Fread v. Chislett, 123 D.L.R. 3d 181, 187 (Ontario High Court of Justice 1981)). *fn9"

 Finally, plaintiffs argue that the jury's award to the plaintiff parents for the loss of guidance, care and companionship of their minor child is fair and reasonable given the circumstances involved here, and, therefore, should be allowed to stand. *fn10" Plaintiffs state that it is their understanding of the law in this case that there is no legal limit on the amount of damages which may properly be awarded for the loss of guidance, care and companionship (Item #183, Exh. G, Affidavit of Kenneth Earle Howie; see also Item 136), and that the Ontario courts have interpreted the meaning of loss and guidance, care and companionship in an extremely broad fashion ( Thornborrow v. Kane, 32 Ont.2d 740 (Ontario High Court of Justice 1981).

 Defendant disagrees. It argues that the nonretroactivity of the FLRA creates a Rule 12(b)(6) defense because of plaintiffs' failure to state a claim upon which relief can be granted. Weaver v. Bowers, supra. Defendant also argues that this issue is not before the court for the first time by way of a post-trial motion, but rather pursuant to this court's order during trial reserving all Canadian law issues until post-trial. *fn11" Accordingly, defendant believes that this issue must be regarded as having been raised "at the trial," within the meaning of Rule 12(h)(2) of the Federal Rules of Civil Procedure. *fn12" Therefore, defendant argues that it is not estopped from raising this issue now.

 Alternatively, defendant contends that, at the very least, defendant should not be precluded from raising the FLRA's nonretroactivity in response to the mother's claims, given her recent addition by the court as a party plaintiff here. *fn13" Defendant also argues that, wholly separate from the issue of defendant's preservation of the nonretroactivity defense in this case, that Rule 12(h)(2) cannot be properly construed to permit the creation of a claim which has no existence whatever under the applicable Canadian law, *fn14" especially where unfair surprise or "windfall" would result by doing so. *fn15"

 Finally, defendant also argues that, even if it somehow waived its rights to raise the issue of FLRA's retroactivity, this court should nevertheless reduce the plaintiff parents' awards to bring this case into line with other awards by Canadian courts under the FLRA. Mason v. Peters, 30 Ont.2d 402 (Ontario High Court of Justice, 1980), aff'd, 139 D.L.R. 3d 104 ...


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