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Breaking Legal Developments

07-02-2001

Published by:
Peter A. Lynch, Esq.
of Cozen O'Connor
palynch@cozen.com
http://www.cozen.com

 

EXECUTIVE SUMMARY:      This weekly newsletter covers:

  1. Texas Appellate Court Finds Explosion Case Caused by Gross Negligence Necessitating a Retrial
  2. North Carolina Court Permits Battery Failure Case To Proceed
  3. Florida Appellate Court Finds Spoliation Claim Should Have Been Permitted To Proceed


(1) TEXAS APPELLATE COURT FINDS EXPLOSION CASE CAUSED BY GROSS NEGLIGENCE NECESSITATING A RETRIAL

In Hall v. Diamond Shamrock Refining Co., No. 04-99-00370-CV, the Texas Court of Appeals for the Fourth District reviewed an explosion case resulting in the death of an employee. An explosion and fire occurred at Diamond Shamrock's refinery at the McKee Plant in the Refinery Light Ends ("RLE") compressor building. Diamond Shamrock was a self-insured subscriber under the Texas Workers' Compensations Laws. Charles Otis Hall ("Charles") was an employee of Diamond Shamrock working at the refinery when the explosion occurred.

The fire was caused when the first stage compressor cylinder on the No. 2 RLE compressor pulled in liquid during the start-up procedure, which caused the cylinder internal bypass cover plate to crack. Hydrocarbon liquid and gas leaked from the cracked cover plate and was ignited from an unidentified source, which resulted in the fire and explosion. Three employees in the feed prep unit-Ellis Thornburg, Charles Hall, and Kevin Smith-were severely injured and sent to the Lubbock Burn Center. As a result of the explosion, Charles received third degree burns over fifty percent of his body, which caused his death eight days later.

The sequence of events show that on April 1, 1996, at 11:00 a.m., the hydrocracker unit was in the process of starting up. During the process of starting up, the hydrocracker fractionator overhead accumulator that normally vents vapors started carrying liquid into the RLE compressor first stage suction drum. The first stage suction drum has an accumulator with a pump that operates automatically to pump liquid out of the system. At 3:00 p.m., the RLE compressor first stage suction drum level alarm signaled a high level. The high level alarm was supposed to automatically shut down the engines, but the liquid level in the suction drum went above the sight glass and the operating personnel had to manually shut down the engines. The operating personnel reported that the system failed to shut down the engines on the high suction drum level. By 4:50 p.m., the suction drum level was back to normal, and liquid was not being carried into the system from the hydrocracker fractionator. During the period of time the RLE compressors were down, liquid was being pumped from the first stage suction liquid accumulator into the first stage discharge line. During later investigations of the explosion, Diamond Shamrock found that the check valve failed and that the No. 2 RLE compressor's first stage discharge valve leaked.

At approximately 5:00 p.m., the evening operating crew was in the process of starting up the No. 2 RLE compressor engine. The evening operating crew, consisting of Ellis Thornburg, Charles Hall, and Kevin Smith, followed the written procedures to start these engines. The machine was rolled with air and started without incident. When the operating crew started to load the No. 2 RLE compressor, the discharge valve on the first stage cylinder was opened first. The pressure on the line down stream of the first stage cylinder discharge block valve was estimated to have been thirty to forty pounds. When the discharge valve was opened, the pressure in the line forced liquid out through the valve on the torch line, which was still open and also through the valve on the recirculating line into the suction of the first stage compressor cylinder. The machine, which was running at the time, was trying to compress liquid instead of vapors and caused the cap to break and the ensuing fire. A very small amount of liquid was required for this to occur. The accident was caused when the first stage compressor cylinder discharge block valve leaked, and the first stage discharge check valve failed during the time both engines were down for approximately two hours due to high levels of liquid in the suction accumulator.

On August 8, 1997, Donna Hall, the surviving widow of Charles, filed suit in Bexar County pursuant to the Texas Workers' Compensation Act and Article 16, Section 26 of the Texas Constitution to recover punitive damages from Diamond Shamrock. On November 9, 1998, the jury returned a verdict for Hall in the amount of $42.5 million. Immediately after the jury was polled, Diamond Shamrock, in open court, moved for the trial court to limit the recovery of punitive damages to $200,000 pursuant to chapter 41 of the Civil Practices and Remedies Code. On November 23, 1998, Hall filed a motion for judgment on the jury's verdict. On December 7, 1998, Diamond Shamrock filed a motion for judgment notwithstanding the verdict ("JNOV"). At a hearing on December 17, 1998, the trial court heard arguments from both parties on the motions presented. The trial court denied Diamond Shamrock's motion for JNOV, denied Hall's motion for judgment, and granted Diamond Shamrock's motion made in open court to limit the recovery of punitive damages. On April 28, 1999, the trial court entered a final judgment. which limited Hall's recovery to $200,000. The Appellate Court later held the recovery should not have been so limited and ordered a retrial on the matter.

Diamond Shamrock complains that the evidence was legally and factually insufficient to support the jury's finding of gross negligence. Specifically, Diamond Shamrock contended that Hall failed to meet the objective and subjective tests for gross negligence.

Gross negligence includes two elements: (1) viewed objectively from the actor's standpoint, the act or omission must involve an extreme degree of risk, considering the probability and the magnitude of the potential harm to others; and (2) the actor must have actual, subjective awareness of the risk involved, but nevertheless proceed in conscious indifference to the rights, safety, or welfare of others. See Tex. Civ. Prac. & Rem. Code Ann. 41.001(7)(B) (Vernon 1997); Mobil Oil Corp. v. Ellender, 968 S.W.2d 917, 921 (Tex. 1998). Evidence of simple negligence is not enough to prove either the objective or subjective elements of gross negligence. See Ellender, 968 S.W.2d at 921. Circumstantial evidence is sufficient to prove either element of gross negligence. See Ellender, 968 S.W.2d at 921; Transportation Ins. Co. v. Moriel, 879 S.W.2d 10, 22-23 (Tex. 1994).

A corporation may be liable in punitive damages for gross negligence only if the corporation itself commits gross negligence. See Ellender, 968 S.W.2d at 921. A corporation is liable for punitive damages if it authorizes or ratifies an agent's gross negligence or if it is grossly negligent in hiring an unfit agent. See id. A corporation is also liable if it commits gross negligence through the actions or inactions of a vice principle. See Ellender, 968 S.W.2d at 922; Hammerly Oaks, Inc. v. Edwards, 958 S.W.2d 387, 389 (Tex. 1997). "Vice principal" encompasses: (a) corporate officers; (b) those who have authority to employ, direct, and discharge servants of the master; (c) those engaged in the performance of nondelegable or absolute duties of the master; and (d) those to whom the master has confided the management of the whole or a department or a division of the business. See Ellender, 968 S.W.2d at 922; Hammerly Oaks, 958 S.W.2d at 391.

In determining whether acts are directly attributable to the corporation, the reviewing court does not simply judge individual elements or facts. See Ellender, 968 S.W.2d at 922. Instead, the court should review all the surrounding facts and circumstances to determine whether the corporation itself is grossly negligent. See Ellender, 968 S.W.2d at 922; McPhearson v. Sullivan, 463 S.W.2d 174, 176 (Tex. 1971). Whether the corporation's acts can be attributed to the corporation itself, and thereby constitute corporate gross negligence, is determined by reasonable inferences the fact finder can draw from what the corporation did or failed to do and the facts existing at relevant times that contributed to a plaintiff's alleged damages. See Ellender, 968 S.W.2d at 922.

An appellate court must sustain a gross negligent finding if legally sufficient evidence shows both that the complained of act or omission was likely to result in serious harm and that the defendant was consciously indifferent to the risk of harm. If there is no legally sufficient evidence of either the objective or subjective elements of gross negligence, the court must reverse a gross negligence finding. Challenges to the legal sufficiency of the evidence must be sustained when the record discloses one of the following: (1) a complete absence of evidence of a vital fact; (2) the court is barred by rules of law or evidence from giving weight to the only evidence offered to prove a vital fact; (3) the evidence offered to prove a vital fact is no more than a mere scintilla of evidence; or (4) the evidence established conclusively the opposite of a vital fact. See Merrell Dow Pharmaceuticals, Inc. v. Havner, 953 S.W.2d 706, 711 (Tex. 1997). In reviewing legal sufficiency, the court is required to determine whether the proffered evidence as a whole rises to a level that would enable reasonable and fair-minded people to differ in their conclusions. See Moriel, 879 S.W.2d at 25.

If a party is attacking the legal sufficiency of an adverse finding of an issue on which it did not have the burden of proof, the attacking party must demonstrate on appeal that there is no evidence to support the adverse finding. See Croucher v. Croucher, 660 S.W.2d 55, 58 (Tex. 1983). In reviewing a no evidence issue, you must consider all of the record evidence in the light most favorable to the party in whose favor the verdict has been rendered, and every reasonable inference deducible from the evidence is to be indulged in that party's favor. See Associated Indem. Corp. v. CAT Contracting, Inc., 964 S.W.2d 276, 285-86 (Tex. 1998).

When reviewing a challenge to the factual sufficiency of the evidence, you must consider all of the evidence in the record. See Plas-Tex, Inc. v. U.S. Steel Corp., 772 S.W.2d 442, 445 (Tex. 1989). If a party is attacking the factual sufficiency of an adverse finding on an issue to which the other party has the burden of proof, the attacking party must demonstrate that there is insufficient evidence to support the adverse finding. See Hickey v. Couchman, 797 S.W.2d 103, 109 (Tex. App.--Corpus Christi 1990, writ denied). In reviewing an insufficiency of the evidence challenge, you must first consider, weigh, and examine all of the evidence which supports and which is contrary to the jury's determination. See Plas-Tex, 772 S.W.2d at 445. Courts should set aside the verdict only if the evidence, which supports the jury finding, is so weak as to be clearly wrong and manifestly unjust. See Cain v. Bain, 709 S.W.2d 175, 176 (Tex. 1986).

The court examined the record to determine whether the evidence was legally and factually sufficient to support the jury's finding that Diamond Shamrock's actions involved an extreme degree of risk to Charlie Hall. See Ellender, 968 S.W.2d at 921. Under the objective element of gross negligence, "extreme risk" is not a remote possibility of injury or even a high probability of minor harm, but rather the likelihood of serious injury to the plaintiff. See id.

Harry McAninch, an engineering consultant and Hall's expert witness, specified the reasons for the explosion on April 1, 1996: (1) liquids were pumped and pressured into the compressor system; (2) Diamond Shamrock defectively designed the system-the design incorporated putting the liquids back into the compressor system; (3) inadequate start-up procedures for the compressor; (4) inadequate training of the operating personnel; and (5) the drain valves were out of service and were covered with dirt. McAninch testified that because of these reasons, Diamond Shamrock was grossly negligent in this case. Moreover, sending liquids through a vapor line to the feed prep unit posed an extreme degree of risk to Diamond Shamrock employees and constituted gross negligence. In fact, Diamond Shamrock knew these circumstances posed an extreme degree of risk on April 1, 1996. Diamond Shamrock's pumping design or configuration posed an extreme degree of risk to Diamond Shamrock employees. McAninch testified that Diamond Shamrock's sketch of the system clearly showed that Diamond Shamrock was pumping liquid out of the first stage suction drum right back into the first stage discharge line. According to McAninch, Diamond Shamrock created an unsafe condition for the operators when liquids were put back into a vapor system, which caused the fire and explosion and the death of Charlie Hall.

McAninch testified that check valves were for only one purpose, and that was to prevent reverse rotation of equipment. It is common industry knowledge that check valves were not designed to prevent the leakage of liquids. In fact, Diamond Shamrock management knew that check valves did not prevent the leakage of liquids. For example, Shannon Gillespie, the feed prep plant superintendent, said that the check valve allowed liquids to back-up through the discharge line. Kenneth Sorenson, Ph.D., an engineering consultant and expert witness for Diamond Shamrock, testified that the check valve is considered a safety feature to protect the compressor, but agreed that check valves leak and are not usually relied upon as a leak-tight device. According to Sorenson, there is an expectation that there will be some leakage past check valves. Check valves are not designed to create a leak proof seal for liquids or gas. In addition, Sorenson agreed that getting hydrocarbon liquids into the suction side of an operating compressor is an extremely dangerous situation and could be deadly.

Diamond Shamrock's management and operating personnel knew of the risk involved when liquids entered into the compressor system. Bob Kerns, Vice-President of Operations for Ultramar Diamond Shamrock, admitted that Diamond Shamrock had a situation that ensured that liquids were going to enter into the compressor system. Kerns recognized the fact that new operating procedures would have prevented this accident. Had the operating personnel opened the discharge valve, used the drain valves and drained the liquid, this accident would have been prevented. James Wyatt, a refinery superintendent, recognized that liquids in the vapor line to a compressor posed an extreme degree of risk to Diamond Shamrock personnel. Barry Glasgow, another refinery superintendent, agreed that liquids entering into a gas compressor could cause an explosion, which could injure employees and possibly cause the death of some people in that unit. Charlie Archibeque, the plant manager, recognized that liquids should be kept out of the compressor. Curtis Chamblee, the feed prep unit supervisor on the day shift, agreed that liquids being carried through the vapor line to the low stage suction drum posed an extreme degree of risk to Diamond Shamrock personnel.

In addition to the management, the operating personnel knew of the extreme risk involved when liquids enter into the compressor system. For example, Gary Schnaufer, an assistant operator in the hydrocracker unit who was responsible for the fractionator and the overhead accumulator on the day of the accident, said that when the compressor pulls in liquids, a major explosion occurs. Schnaufer was concerned about the liquid that he was sending to the feed prep unit. He went against the orders of his supervisor, Ron Morris, an operator in the hydrocracker unit, and sent the liquid to storage. Jay Hayes, an assistant operator in the feed prep unit, was also concerned with the high level of liquids, but Morris told him not to send it to storage. Dennis Hunt, an operator helper in the hydrocracker unit, knew that Schnaufer was making a decision contrary to his supervisor's orders. Hunt knew that liquids in the compressor were dangerous and involved a safety risk. Stephen Hendricks, an operator in the feed prep unit, testified that any time in an oil refinery can be a dangerous time and start-up procedures were not considered normal operations. As a result, surprise incidents can occur.

In reviewing all the facts and circumstances objectively from Diamond Shamrock's standpoint, the court found that the design of the refinery ensuring that liquids would go back into the compressor system involved an extreme degree of risk to others that greatly increased the likelihood of serious injury. In addition, everyone at the plant-from the Vice President and Plant Manager, Bob Kerns, down to the operator helpers-knew that introducing even a small amount of liquid into a compressor would result in an explosion. A petrochemical refinery is an inherently hazardous venture because the potential for disaster is enormous. See Seminole Pipeline Co. v. Broad Leaf Partners, Inc., 979 S.W.2d 730, 742 (Tex. App.--Houston [14th Dist.] 1998, no pet.). In view of the highly dangerous character of a petrochemical refinery, Diamond Shamrock must "use a degree of care to prevent damage commensurate to the danger which it is its duty to avoid." Id. at 743 (quoting Prudential Fire Ins. Co. v. United Gas Corp., 145 Tex. 257, 199 S.W.2d 767, 772-73 (1946)). Because Diamond Shamrock's actions involved an extreme degree of risk to its operating personnel, including Charlie Hall, there was legally sufficient evidence to support the first element of gross negligence.

In addition, viewing all of the evidence in the record, the court found that the evidence was factually sufficient to support the jury's finding that Diamond Shamrock's action involved an extreme degree of risk to others that greatly increased the likelihood of serious injury. Although Bob Kerns testified that the start-up procedures did not necessarily have anything to do with causing this accident and that the bleeder valves on the discharge line were not that important, the evidence shows that if there would have been procedures in place to drain the discharge valves before starting up the No. 2 RLE compressor, this accident could have been prevented. The jury, as the trier of fact, judges the credibility of the witnesses, assigns the weight to be given their testimony, and resolves any conflicts or inconsistencies in the testimony. See Gunn Buick, Inc. v. Rosano, 907 S.W.2d 628, 630 (Tex. App.--San Antonio 1995, no writ). Because the jury resolved any conflicts in the expert testimony regarding Diamond Shamrock's actions and omissions involving an extreme degree of risk, the court found that the evidence was factually sufficient to support the jury's verdict. In considering, weighing, and examining all of the evidence, which is contrary to the jury's determination, the court did not find the weight of the evidence to be wrong or unjust. As a result, there was factually sufficient evidence to support the first element of gross negligence.

2. Subjective Element of Gross Negligence: Conscious Indifference

Having found that the evidence was legally and factually sufficient to support the jury's finding that the actions and omissions of Diamond Shamrock involved an extreme degree of risk, the court reviewed the evidence to determine if Diamond Shamrock had actual, subjective awareness of the risk involved, but nevertheless proceeded in conscious indifference to the rights, safety, or welfare of others. See Ellender, 968 S.W.2d at 921. Under the second element of gross negligence, "actual awareness" means that the defendant knew about the peril, but its acts or omissions demonstrated that it did not care.

McAninch, Hall's expert witness, testified that Diamond Shamrock had subjective awareness of the risk involved, but nevertheless proceeded with conscious indifference as to the rights, safety, and welfare of others. Specifically, McAninch testified that Diamond Shamrock proceeded with conscious indifference and demonstrated that it did not care by defectively designing a system that allowed liquids into the compressor, by having inadequate start-up procedures, by inadequately training its personnel, and by covering the drain valves with dirt.

Ellis Thornburg, an assistant operator assigned to the feed prep area, testified the employees in the feed prep unit had experienced problems with the check valve before the explosion occurred. According to Thornburg, the equipment had been written up to be fixed two times before the accident occurred and was not fixed until after the explosion. Steven Hendricks, an operator in the feed prep unit on the daylight shift, testified that if someone were to write up the check valve to be fixed, it would have to be written up on the work list. There were three copies of the work list-one copy stayed in the unit and two copies were sent to the unit supervisor. However, Hendricks testified he was not advised by Curtis Chamblee, the feed prep unit supervisor, to write up the check valve. Shannon Gillespie, a refinery superintendent, learned that somebody had written up the check valve to be fixed prior to April 1, 1996. Ken Sorenson, Diamond Shamrock's expert witness, admitted that if Diamond Shamrock had been put on notice by some person that there was a problem with the check valve, then Diamond Shamrock would have had an awareness of the danger created by the potential problem with that specific check valve.

Thornburg further testified that Diamond Shamrock never trained the personnel to test the low stage check valve. Testing the check valve was not part of the start-up procedures. In addition, Diamond Shamrock never instructed or trained its employees to periodically test the discharge valve to make sure it was working properly. According to Thornburg, Diamond Shamrock never warned or communicated about the possibility that the check valve in the discharge line of the low stage compressor could actually fail. In addition, the discharge valve was not greased regularly, and as far as Thornburg knew, the discharge valve had never been greased. There were no procedures in place for feed prep personnel to check for liquids in the discharge line. The bleeder valves that would allow the liquid in the discharge line to be drained were covered with dirt and nobody knew they were there. Shannon Gillespie testified that there were no procedures in place to check the check valve on April 1, 1996. In addition, there were no procedures in place to check the spool area of the discharge line before the start-up of the RLE compressor to check and see if liquids were there. According to Ken Sorenson, Diamond Shamrock could have tested the discharge valve and check valve for an increase in pressure. If there was such an increase in pressure, then that would have indicated to Diamond Shamrock that there may have been a problem with the valves. After the explosion occurred, Diamond Shamrock placed new procedures into effect, which included testing the check valve and the discharge valve and draining the liquids from the discharge line.

Curtis Chamblee testified that there was no maintenance done on the check valve or the discharge valve that he was aware of during the time he worked in the feed prep unit. Chamblee also testified that he had never been aware of a situation where liquids had gotten past the check valve, beyond the discharge valve and into the discharge line. According to Chamblee, there was no need to look for liquids in the discharge line of the compressor.

Ken Sorenson testified that based upon a reasonable engineering probability the fire and explosion was the result of an unexpected and very unlikely combination of several circumstances that happened to come together at the same time. Specifically, the combination of the failed check valve and the leaking discharge valve allowed liquids to back flow down the discharge line toward the compressor while it was shut down, in conjunction with the fact that there was liquid being pumped into that line. According to Sorenson, "the accident goes away" if you take out any of these elements.

The evidence shows that Bob Kerns had first-hand knowledge of two prior compressor explosions that resulted from liquid in the vapor system. Kerns testified that in the early 1970s, Diamond Shamrock had two explosions in a gasoline plant compressor building that involved liquids in RLE compressors. The compressors in those accidents functioned the same as the No. 2 RLE compressors do today. Kerns testified that after the first explosion there was no re-piping or redesign at the gasoline plant compressor building. But after the second explosion, Kerns participated in redesigning the compressors by designing some bleeder systems that Diamond Shamrock thought would solve the problem. According to Kerns, the bleeder system was designed so that Diamond Shamrock could check the compressor prior to start-up to see if there were liquids in the lines. The bleeder valves were put in the system so that liquid could be bled off when the plant was operating. The personnel that worked on that unit were instructed to check the bleeders for liquids in the compressor system.

Kerns also testified about the differences in the explosion that occurred on April 1, 1996 and the explosions in the early 1970s. According to Kerns, the earlier explosion was caused by liquids getting into the compressor by condensing in the suction line and then pooling into the compressor due to cold weather. There was no check valve failure or leaking discharge valve during the 1970s explosion like there was in the April 1, 1996 explosion. Kerns testified that there were different circumstances, different hook-ups, and different causes between the earlier explosions and the April 1, 1996 explosion. According to Ken Sorenson, Diamond Shamrock's expert witness, the occurrence of some similar event with a similar result would be enough to put Diamond Shamrock on notice that it had a problem that needed correcting. However, the event would have to be similar enough to tie the two situations together.

Having reviewed the evidence in a light most favorable to the jury's finding to determine if Diamond Shamrock had actual, subjective awareness of the risk involved, but nevertheless proceeded in conscious indifference to the rights, safety, or welfare of others, the court found that the evidence was legally sufficient to support the jury's finding. Corporate safety policies, or lack of them, can serve as the basis for a gross negligence finding. See Louisiana-Pacific Corp. v. Andrade, 19 S.W.3d 245, 247 (Tex. 1999); Ellender, 968 S.W.2d at 924-25. For example, in Mobile Oil Corp. v. Ellender, the plaintiff produced evidence that Mobil had a detailed policy of monitoring, testing, and warning its own employees to protect them from risks associated with exposure to benzene, but did not do so for contract workers. See Ellender, 968 S.W.2d at 924-25. The Texas Supreme Court concluded that this policy was legally sufficient evidence that Mobil knew of the extreme risks of benzene exposure, and despite this knowledge had an "unwritten practice or policy" of not warning or testing contract workers, which permitted the jury to infer that Mobil knew the risks of benzene exposure yet proceeded with conscious indifference toward the safety of contract workers. See id.

Here, Diamond Shamrock knew the risks involved when liquids entered into the compressor, yet proceeded with conscious indifference toward the safety of its operating personnel by defectively designing a system that allowed liquids into the compressor, by having inadequate start-up procedures, by inadequately training its personnel, and by covering the bleeder valves with dirt. For instance, the personnel that worked in the gasoline plant during the 1970s were instructed to check the bleeder valves for liquids in the compressor system, yet despite this knowledge, the personnel in this case were not trained or instructed how to do this. The evidence also shows that Diamond Shamrock was put on notice of the defective check valve and despite this knowledge, did not correct the problem. Because Diamond Shamrock was actually aware of the risk, yet proceeded with conscious indifference toward its personnel, the evidence is legally sufficient to support the second element of gross negligence.

Moreover, viewing all of the evidence in the record, we find that the evidence is factually sufficient to support the jury's finding that Diamond Shamrock had actual, subjective awareness of the risk involved, but nevertheless proceeded in conscious indifference to the rights, safety, or welfare of others. Even though Ken Sorenson testified that the fire and explosion resulted from an unlikely and unexpected combination of circumstances, the evidence shows that Diamond Shamrock was put on notice of the defective check valve and that maintenance was not done on the check valve or the drain valve. In addition, although the evidence shows that the prior explosions were under different circumstances than the April 1, 1996 explosion, the evidence shows that Diamond Shamrock knew that the prior explosions were caused by liquids getting into the compressor and despite this knowledge, failed to properly train or instruct its personnel to look for liquids in the compressor system. As a result, the evidence establishes Diamond Shamrock knew about the risk involved, but its acts or omissions demonstrated that it did nothing to correct the problem. Because the jury resolved any conflicts in the testimony regarding Diamond Shamrock's conscious indifference to the rights, safety, and welfare of its personnel, the court found that the evidence was factually sufficient to support the jury's verdict. In considering, weighing, and examining all of the evidence, which is contrary to the jury's determination, the court did not find the weight of the evidence to be wrong or unjust. Accordingly, there was factually sufficient evidence to support the second element of gross negligence.

Because the evidence was legally and factually sufficient to support the jury's finding of both the objective and subjective elements of gross negligence, the court overruled the defendant's argument.


(2) NORTH CAROLINA COURT PERMITS BATTERY FAILURE CASE TO PROCEED

In Dewitt v. Eveready (June 19, 2001) No. COA00-695, the North Carolina Court of Appeals reversed a summary judgment order entered for the defendant. The plaintiff was injured when he suffered burns from batteries that leaked. He filed an action alleging strict liability, negligence and breach of warranty. The plaintiff claimed after using a light he set it aside. He went to replace the batteries and he felt some moisture. After returning the lantern, he felt burning on his foot and he was diagnosed with third and fourth degree burns on his ankle. .

The defendant's manager testified about four different occurrences can cause pressure to build up in a battery. None involved a product defect. The manager did describe a safety device in the product allowing gases to escape if pressure builds up. This allows the gas and fluid to escape without exploding. X-rays of the batteries revealed the batteries had leaked. The defendant's claimed the failure was not the result of a product defect. The plaintiff's expert stated a small have been present in the battery but he was unable to state that was present when the plaintiff bought the battery.

The Appellate Court held because of the testimony of the plaintiff he installed the batteries correctly a reasonable person could find the leakage of fluid from the batteries was a malfunction of the batteries. The evidence was sufficient to overturn summary judgment for the defendant for strict liability.


(3) FLORIDA APPELLATE COURT FINDS SPOLIATION CLAIM SHOULD HAVE BEEN PERMITTED TO PROCEED

In Hagopian v. Publix Supermarket, No. ND99-3301(pdf viewer needed) (June 20, 2001), the Florida Court of Appeals Fourth District, reviewed a trial court's decision to direct a verdict for a defendant on a spoliation claim. The plaintiff was injured by an exploding bottle at a store. An accident report was filled out and the store refused to give a copy to the injured party. The remaining six pack was collected and it was disputed if parts of the exploded bottle existed. The plaintiff ultimately brought an action against the store and manufacturer. The manufacturer settled and the case proceeded against the store. The spoliation claim proceeded under one theory that the settlement with the manufacturer would have been better if the six pack and other evidence had not been disposed off by the store.

The trial court directed a verdict for the store on the spoliation claim. The Court of Appeals found that was error. The jury had found against the plaintiff on its strict liability claim against the store. The Court of Appeals found the spoliation claim would have permitted an adverse inference against the store, which it noted would have assisted the plaintiff's claim against the store. Hence, the matter was reversed and the spoliation claim permitted to go forward on the retrial.

Mr. Lynch can be reached at Cozen and O'Connor, 501 West Broadway, Suite 1610, San Diego, California 92101, 800-782-3366 (voice), 619-234-7831 (fax), palynch@cozen.com (e-mail), http://www.cozen.com. Follow us on Twitter at @firesandrain.

Please direct comments, suggestions, stories, and other items to the author by e-mail at palynch@cozen.com

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