     Case: 13-60847      Document: 00512735782         Page: 1    Date Filed: 08/15/2014




           IN THE UNITED STATES COURT OF APPEALS
                    FOR THE FIFTH CIRCUIT
                                                                           United States Court of Appeals
                                                                                    Fifth Circuit

                                      No. 13-60847                                FILED
                                                                            August 15, 2014
                                                                             Lyle W. Cayce
SHARON GRAHAM; BILLY BOB GRAHAM,                                                  Clerk

                                                 Plaintiffs-Appellees
v.

ALL AMERICAN CARGO ELEVATOR, L.L.C.,

                                                 Defendant-Appellant




                   Appeal from the United States District Court
                     for the Southern District of Mississippi
                              USDC No. 1:12-CV-58


Before STEWART, Chief Judge, and WIENER and COSTA, Circuit Judges.
PER CURIAM:*
       Defendant-Appellant All American Cargo Elevator, L.L.C. (“All
American”) manufactured and installed a residential cargo elevator in the
Mississippi home of Plaintiffs-Appellees Sharon and Billy Bob Graham. It
failed catastrophically and seriously injured Sharon, who had stepped onto the
elevator platform to unload cargo. All American insists that the district court
erred in concluding that it should have known about the danger posed by its
elevator’s under-sized drive shaft. In its bench trial, the district court held that


       * Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH
CIR. R. 47.5.4.
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                                      No. 13-60847
any    reasonable        elevator   manufacturer     would     have   researched    the
specifications of load-bearing components that it incorporated in its design. We
affirm the district court’s judgment in favor of the Grahams.
       This diversity case turns on the application of the Mississippi Products
Liability Act 1 (“MPLA”). The parties do not dispute the material facts found by
the district court. The Grahams purchased their residential cargo elevator
from All American in March 2007, and All American completed the installation
at the Grahams’ home in Pearlington, Mississippi, in June of that year. Just
over three years later, in October 2010, Sharon Graham stepped onto the
platform to retrieve a potted plant. The main shaft of the elevator drawing
mechanism broke, causing the platform to free-fall to the elevator floor, over
ten feet below. Sharon sustained a fractured left heel and other injuries.
       The Grahams filed suit in Mississippi state court in October 2011. All
American removed the case to the United States District Court for the
Southern District of Mississippi, alleging diversity jurisdiction. The district
court dismissed several of the Grahams’ claims on summary judgment.
       In October 2013, the district court conducted a three-day bench trial of
the Grahams’ four remaining claims: defective design, manufacturing defect,
and failure to warn under the MPLA; and Billy Bob Graham’s claim for loss of
consortium. After the Grahams rested their case, the court granted in part All
American’s Rule 52 motion and dismissed the Grahams’ manufacturing defect
claim.
       At the close of the bench trial, the court recited extensive findings of fact
and conclusions of law, holding All American liable on all three remaining
claims, viz., defective design, failure to warn, and loss of consortium. Because
All American raises only one issue on appeal, viz., whether the district court


       1   Miss. Code § 11-1-63.
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                                           No. 13-60847
erred in concluding that the Grahams had satisfied the twin knowledge
elements of their defective design and failure to warn claims, we address only
those of the district court’s factual findings that are relevant to the knowledge
elements of those claims. The court found that the output shaft of the elevator’s
gear sheared from metal fatigue that was caused by misalignment of the
elevator’s drum and gear, and that such misalignment could have been
prevented by high-precision machining or, more realistically, proper sizing.
The court concluded that All American acted unreasonably in failing to seek
out information about the danger posed by improper sizing of the components
it chose to incorporate in its elevator, a failure even more notable in light of
the fact that the gear manufacturer warned of this very danger in a catalog it
had published in 2002.
       The court entered judgment in accordance with its verdict, awarding the
Grahams a total of $211,886.37. All American timely filed its notice of appeal.
       When an appeal is from a bench trial, we review findings of fact for clear
error and legal issues de novo. 2 Factual findings are clearly erroneous if “(1)
the findings are without substantial evidence to support them, (2) the court
misapprehended the effect of the evidence, and (3) although there is evidence
which if credible would be substantial, the force and effect of the testimony,
considered as a whole, convinces the court that the findings are so against the
preponderance of credible testimony that they do not reflect or represent the
truth and right of the case.” 3 To reverse for clear error, we must have “a definite
and firm conviction that a mistake has been committed.” 4



       2 Delahoussaye v. Performance Energy Servs., L.L.C., 734 F.3d 389, 392 (5th Cir. 2013)
(citing Water Craft Mgmt. LLC v. Mercury Marine, 457 F.3d 484, 488 (5th Cir. 2006)).
       3   Water Craft, 457 F.3d at 488.
       4   Canal Barge Co. Inc. v. Torco Oil Co., 220 F.3d 370, 375 (5th Cir. 2000).
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                                        No. 13-60847
       When federal jurisdiction is based on diversity, we apply the substantive
law of the forum state. 5 In resolving issues of state law, “we look to the final
decisions of that state’s highest court” and, if there is no decision directly on
point, then we must determine how that court, if presented with the issue,
would resolve it. 6 In making this determination, decisions from the
intermediate state appellate court are useful. 7 Beyond Mississippi sources,
“‘[w]e may consult a variety of sources, including the general rule on the issue,
decisions from other jurisdictions, and general policy concerns.’” 8
       All American urges us to review the district court’s judgment de novo,
insisting that it creates a new duty—namely, the duty of a manufacturer to
research the specifications of components it incorporates into its designs—and
therefore involves a novel legal conclusion rather than the mere application of
existing law to the facts of the case. We disagree, but we need not resolve that
issue because the district court committed no reversible error, even under such
a heightened standard. As that court explained, “[e]ven if All American did not
have actual possession or awareness of the 2002 . . . catalog containing the
warning specific to the danger of overhung loads and the importance of proper
sizing to prevent shaft breakage, it should have, in the exercise of reasonable
care, made appropriate inquiry and known about the dangers associated with
this product.” We are satisfied that the Mississippi Supreme Court would so
hold, and All American cites only distinguishable authorities in arguing to the
contrary. Accordingly, we AFFIRM the district court’s judgment.



       5First Colony Life Ins. Co. v. Sanford, 555 F.3d 177, 181 (5th Cir. 2009) (citing Erie
R.R. Co. v. Tompkins, 304 U.S. 64, 78-79 (1938)).
       6   Chaney v. Dreyfus Serv. Corp., 595 F.3d 219, 229 (5th Cir. 2010).
       7   Id.
       8Id. (quoting Travelers Cas. & Sur. Co. of Am. v. Ernst & Young LLP, 542 F.3d 475,
483 (5th Cir. 2008)).
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