                                                                           FILED
                                                               United States Court of Appeals
                                                                       Tenth Circuit
                      UNITED STATES COURT OF APPEALS
                                                                    December 3, 2008
                            FOR THE TENTH CIRCUIT                  Elisabeth A. Shumaker
                                                                       Clerk of Court



    JACOB ROBERT SCHNEIDER,

                Plaintiff-Appellant,

    v.                                                    No. 08-1111
                                              (D.C. No. 1:06-CV-02227-LTB-BNB)
    CATERPILLAR, INC.,                                     (D. Colo.)

                Defendant-Appellee.


                             ORDER AND JUDGMENT *


Before HOLMES, ANDERSON, and BALDOCK, Circuit Judges.



         Plaintiff-appellant Jacob Robert (“J.R.”) Schneider appeals the district

court’s grant of summary judgment to defendant Caterpillar, Inc., on his claim of

product liability. The case stems from an accident in 2004 in which

Mr. Schneider was crushed while riding on a screed, a piece of asphalt-paving




*
       After examining the briefs and appellate record, this panel has determined
unanimously to grant the parties’ request for a decision on the briefs without oral
argument. See Fed. R. App. P. 34(f); 10th Cir. R. 34.1(G). The case is therefore
ordered submitted without oral argument. This order and judgment is not binding
precedent, except under the doctrines of law of the case, res judicata, and
collateral estoppel. It may be cited, however, for its persuasive value consistent
with Fed. R. App. P. 32.1 and 10th Cir. R. 32.1.
equipment manufactured by Caterpillar. 1 In granting summary judgment to

Caterpillar, the district court held that the screed was “manufacturing equipment”

as defined under Colorado law, and that, as a matter of law, it did not contain a

“hidden defect.” Colorado’s statute of repose therefore barred Mr. Schneider’s

claims. We reverse.

      To understand this case, it is helpful to know a little about the

asphalt-paving process, particularly the function and operation of screeds. In the

paving process, hot mix asphalt is poured into a hopper attached to the front of

the paver. The hot mix is then moved by a conveyor to the rear of the paver

where augers distribute the hot mix to the screeds. A screed is an attachment at

the rear of the paver which applies the asphalt at the desired depth and then

compacts and smooths it. After the paver/screeds make their pass depositing

asphalt, rollers follow to compact and roll the asphalt to the proper density and

surface texture.

      The paver involved in this accident had two screeds, one attached to each

side of the paver. It takes three people to run this paving machine, an operator

located atop the central paver, and one operator who stands on each screed. The

screeds can be extended or retracted by means of a hydraulic device on either side

1
      It is undisputed that, although Caterpillar, Inc., is the named defendant, the
products involved in this case were actually manufactured by Caterpillar Paving
Products Inc., a wholly owned subsidiary of Caterpillar. Early on, Caterpillar
agreed that it was unnecessary for Mr. Schneider to amend his complaint to
correctly identify defendant.

                                         -2-
to allow for varying widths of asphalt application. The screed extensions can be

extended or retracted independently. The right screed extension can be operated

by a toggle switch on the far right side of the screed and the left screed extension

can be operated by a toggle switch on the far left side of the screed. In addition,

there is a panel box mounted on each screed with a toggle switch, and there are

switches mounted on the paver-operator’s control panel. Thus, the hydraulics are

operated by a total of six extension-control-toggle switches, three for each side.

The screed includes an extension tube that extends or contracts with the screed

when the hydraulics are operated.

      Once the screed is activated by one of the toggle switches, the movement

cannot be overridden or interrupted by another switch. To stop the motion of the

screed, the same toggle switch that initiated the action must be used to reverse it.

Neither the screed nor the paver has an emergency or master-control switch that

can interrupt or override the activation or movement of the screed.

      At the time of the accident, Mr. Schneider was an employee of LaFarge

North America and was working as part of an asphalt-paving crew, although, on

the day of the accident, he was not working on either the paver or the screed.

Instead, he was assigned to operate a landscape tractor and to use a rake and

shovel to groom the new asphalt so that joints where the new asphalt abutted

earlier laid asphalt or concrete gutters would be sealed and smooth. After the

paver completed one particular pass and was backing up to begin another,

                                          -3-
Mr. Schneider decided to ride on the screed-extension tube as the paver backed

up. This saved him from having to run back to the other end of the job in the 110

degree weather to be ready for the next pass. For some unknown reason, as

Mr. Schneider was sitting on the extension tube, the screed began to retract,

crushing him. The retraction stopped, and the screed extended slightly, but then

it retracted again crushing Mr. Schneider a second time and causing serious

injury. After hearing Mr. Schneider’s screams and while the accident was still in

progress, two of the operators on the paver/screed tried repeatedly and without

success to stop the retraction by operating the toggle switches at their various

stations. It is unknown why the retraction finally stopped.

      Mr. Schneider filed suit alleging strict product liability and negligence.

Caterpillar moved for summary judgment, arguing that Colorado’s statute of

repose, Colo. Rev. Stat. § 13-80-107, bars claims against it seven years after the

equipment is first put into use. 2 The parties do not dispute that the machine was

first put into use more than seven years before Mr. Schneider’s accident. The



2
      Colo. Rev. Stat. § 13-80-107(b) provides in pertinent part:

            no such [product liability action for personal injury] shall be
      brought on a claim arising more than seven years after such
      equipment was first used for its intended purpose by someone not
      engaged in the business of manufacturing, selling, or leasing such
      equipment, except when the claim arises from injury due to hidden
      defects . . . .”


                                         -4-
dispute here centers on whether, as a matter of law, there was a “hidden defect” in

the screed that would except this action from the statute of repose. 3

      In its order, the district court carefully analyzed whether the screed was

“manufacturing equipment” and concluded that it was. That conclusion is not at

issue on appeal. We turn, therefore, to whether, as a matter of law, there was no

genuine issue of material fact as to the existence of a hidden defect in the

paver/screed.

      As the forum state, Colorado provides the substantive law in this diversity

case, and whether that law was properly determined by the district court is a

question we review de novo. Eaton v. Jarvis Prods., 965 F.2d 922, 925 (10th Cir.

1992). Because Caterpillar is the moving party, it had the burden of showing that

it was entitled to summary judgment, id. at 925-26, while Mr. Schneider is given

considerable latitude to prove the existence of a factual controversy, Davidson v.

Am. Online, Inc., 337 F.3d 1179, 1182 (10th Cir. 2003).

            This court reviews a summary judgment decision de novo,
      viewing the evidence in the light most favorable to the non-moving
      party. Summary judgment is appropriate “if the pleadings, the
      discovery and disclosure materials on file, and any affidavits show

3
             Unlike a statute of limitations, a statute of repose may bar a
      claim before the injury occurs. A statute of repose limits the liability
      of a manufacturer or seller by setting a fixed time after the sale or
      first use of an item beyond which the manufacturer or seller of that
      item will not be held liable.

Anderson v. M.W. Kellogg Co., 766 P.2d 637, 640 (Colo. 1988) (en banc) (citation
omitted).

                                          -5-
      that there is no genuine issue as to any material fact and that the
      movant is entitled to judgment as a matter of law.”

Archuleta v. Wal-Mart Stores, Inc., 543 F.3d 1226, 1231 (10th Cir. 2008)

(quoting Fed. R. Civ. P. 56(c)) (citation omitted).

      Colorado law defines a defect as not simply a mechanical or functional

defect but “one which makes the product unreasonably dangerous.” Wayda v.

Comet Int’l Corp., 738 P.2d 391, 393 (Colo. App. 1987), overruled on other

grounds by Anderson v. M.W. Kellogg Co., 766 P.2d 637, 643 (Colo. 1988) (en

banc). “[F]or a product to contain a ‘hidden defect[,]’ . . . it must have a defect

that creates an unreasonably dangerous condition which is not readily apparent.”

Wayda, 738 P.2d at 393. Something that is an “open and obvious danger” is not a

hidden defect. Compare Eaton, 965 F.2d at 929 (lack of trigger guard on large

hydraulic slaughter-house-meat cutter too obviously dangerous to be hidden);

Anderson, 766 P.2d at 644 (same for lack of guard where the underside of a

conveyor belt met a head pulley); with Wayda, 738 P.2d at 393 (issue of fact as to

whether erratic timing of rotation arm inside vacuum thermo-forming machine

was unreasonably dangerous); Niemet v. Gen. Elec. Co., 843 P.2d 87, 91

(Colo. App. 1992) (defect hidden where it could not be discovered until

transformer was cut in half).

      The test for determining whether a defect is hidden is an objective one and

requires a judgment as to “whether the defect was not readily apparent or


                                          -6-
discoverable by a reasonably prudent user.” Anderson, 766 P.2d at 643. Other

than in a summary judgment context where the movant may be able to show that

no genuine issue of material fact exists as to the presence of a hidden defect, see,

e.g., Eaton, 965 F.2d at 928; Anderson, 766 P.2d at 644, the hidden-defect

question is normally a question of fact, Urban v. Beloit Corp., 711 P.2d 685, 687

(Colo. 1985) (en banc); Wayda, 738 P.2d at 393.

      On appeal, Mr. Schneider argues that the lack of any clear means to stop

the screed retraction was hidden and not obvious. The district court disagreed,

holding:

             The first alleged defect – no way to override an inadvertent
      activation of one of the screed extension activation switches – cannot
      be considered hidden. At the February 28, 2008, hearing, Plaintiff
      repeatedly described the defect as “failure to provide clear means” to
      override an accidental switch activation. Plaintiff’s expert, Olaf [sic]
      Jacobson, likewise described the defect as the failure to include
      “clear identification of the shut off procedure and an easily
      accessible, clearly marked emergency button,” “a red mushroom
      shaped button,” “an emergency shutoff switch that is clearly
      identified,” or “clear means to stop the screed retraction.” Compared
      to Niemet [v. General Electric Co.], 843 P.2d 87 – in which the
      defect in an electrical transformer was not discoverable until the
      transformer was cut in half – the lack of a “clearly marked” override
      switch, “red mushroom shaped button” or other “clear means” to stop
      the screed retraction would have been immediately obvious had
      anyone bothered to look.

Aplt. App. Vol. II at 437-38.

      As noted above, summary judgment is inappropriate if there is a genuine

issue as to any material fact. See Fed. R. Civ. P. 56(c). Mr. Schneider argues


                                          -7-
that a genuine issue of material fact exists as to whether the design of the

paver/screed contained a hidden defect. We agree.

      The dispute over whether there was a hidden defect results from the

contrary evidence provided by the expert witnesses for each side. See Wayda,

738 P.2d at 393 (holding professional engineer’s conclusion that machine at issue

was defective raised genuine issues of fact regarding the existence of a hidden

defect). We refer here only to the major conflict in the evidence from each party.

      After studying the physical evidence, the design of the paver, and the

actions of the various individuals involved, Olof Jacobson, a mechanical engineer

retained by Mr. Schneider, concluded that “[t]he injury was caused by defects in

the design of the Caterpillar paver.” Aplt. App. Vol. I at 165. Further,

      [t]he control system was designed defectively, resulting in
      unexpected response to operator actions when more than one toggle
      switch was actuated. The function and response of the controls is not
      described in operating manuals, nor is the switch operation described
      to operators in training provided by Caterpillar. This defect in the
      control system was hidden and did not become apparent until the
      accident was in progress. Caterpillar did not consider this defect
      during design and Caterpillar was apparently not aware of how the
      control system would respond until testing was performed in 2007.

Id. Mr. Jacobson further concluded:

      Proper design of a control system for such a machine should include
      a master control or an emergency shutoff switch that is clearly
      identified on the machine and in the operator’s manuals. In an
      emergency, it should be clear to all personnel how to stop the screed
      retraction. As designed, the subject paver control system had no
      means to stop the screed from retracting. Once it became known that
      J.R. Schneider was being injured, the operators did not know how to

                                          -8-
      stop the screed from moving. This confusion is the result of
      defective design of the control system.

Id. at 162. “This defect is hidden and not obvious.” Id. at 163.

      In contrast to this evidence, Michael Netka, the worldwide product support

manager for Caterpillar Paving Products Inc., testified that, in preparation for his

deposition, he had tested the screed controls to determine what would happen if

one of the screed controls was activated to move the screed in an outward

direction and then a second control was activated to retract the screed. As

happened in the accident, nothing happened when the second control was

activated. The screed continued moving in the original direction as dictated by

the operation of the first switch. Id. at 251-52. Mr. Netka testified that he did

not believe the absence of an override function on the screed controls to be

dangerous. Id. at 253. He further testified that he saw no problem in the fact that

none of Caterpillar’s literature points out to a user that there is no override

facility for the screed controls. Id. at 253-54.

      As mentioned, the district court held that the lack of a “way to override an

inadvertent activation of one of the screed activation switches [] cannot be

considered hidden.” Id. Vol. II at 437. As support the district court cited the

argument of Mr. Schneider’s counsel at the summary-judgment hearing who had

described the defect as “failure to provide clear means” to override. Id. The

court also referred to Mr. Jacobson’s evidence describing the defect as the


                                          -9-
“failure to include ‘clear identification of the shut off procedure and an easily

accessible, clearly marked emergency button,’ ‘a red mushroom shaped button,’

‘an emergency shutoff switch that is clearly identified,’ or ‘a clear means to stop

the screed retraction.’” Id. at 437-38. The court concluded that the absence of

any of these “clearly marked,” or “red mushroom-shaped button” or other “clear

means” to interfere with the screed extension “would have been immediately

obvious had anyone bothered to look.” Id. at 438.

      We think this conclusion misses an essential point, namely that, until this

accident happened, no one knew that there was no override capacity to reverse the

operation of the screeds apart from reversing the toggle switch that had caused the

operation in the first place. A reasonably prudent user would notice the absence

of any stop button, including a red mushroom-shaped one, only if it was apparent

that such a button should be present in the first place. But it was not apparent

simply by looking at the paver, the screeds, or the toggle switches or by operating

them in a normal way that the screed and the paver were designed so that there

was no capacity for one switch to override another. In fact, Mr. Netka, the

Caterpillar expert, had to study the technical specifications of the paver and

perform his own field test before he clearly understood the screed-control

situation. Contrary to the district court’s theory, we are not persuaded that “had

anyone bothered to look,” they would have noticed this defect. We think,

therefore, that there is a genuine issue of material fact as to whether the

                                         -10-
paver/screed contained a hidden defect. Because this record, taken as a whole,

could ultimately lead a rational trier of fact to find for Mr. Schneider, a genuine

issue of material fact remains for trial. Cf. Ulissey v. Shvartsman, 61 F.3d 805,

808 (10th Cir. 1995).

      The judgment of the district court is REVERSED, and this case is

REMANDED for further proceedings in accordance with this order and judgment.


                                                     Entered for the Court



                                                     Stephen H. Anderson
                                                     Circuit Judge




                                         -11-
