Folz v. State

• Decision Date: 08 August 1990
• Docket Number: No. 18029,18029
• Citation: 797 P.2d 246,110 N.M. 457,1990 NMSC 75
• Parties: Dorothy M. FOLZ, as Personal Representative of Sylvester C. Folz, Deceased, Steve D. Folz, Deceased, Dorothy M. Folz, Individually, and Rita Garcia, as Personal Representative of the Estate of Leo L. Garcia, Deceased, Petitioners, v. The STATE of New Mexico and the New Mexico Highway Department, an agency, Respondents.
• Court: New Mexico Supreme Court

Page 246

797 P.2d 246

110 N.M. 457

Dorothy M. FOLZ, as Personal Representative of Sylvester C Folz, Deceased, Steve D. Folz, Deceased, Dorothy M. Folz Individually, and Rita Garcia, as Personal Representative of the Estate of Leo L. Garcia, Deceased, Petitioners, v. The STATE of New Mexico and the New Mexico Highway Department, an agency, Respondents.

No. 18029.

Supreme Court of New Mexico.

Aug. 8, 1990.

[110 N.M. 459] Louis Marjon, Albuquerque and James P. Cunningham, Phoenix, Ariz., for petitioners.

Civerolo, Hansen & Wolf, William P. Gralow, Gallagher & Casados, J.E. Casados, and Butt, Thornton & Baehr, J. Duke Thornton, Albuquerque, for respondents.

Carpenter & Goldberg, William H. Carpenter and Michael B. Browde, Albuquerque, for amicus curiae New Mexico Trial Lawyers Ass'n.

Atwood, Malone, Mann & Turner, Steven L. Bell, Roswell, for amicus curiae New Mexico Defense Lawyers Ass'n.

Simons, Cuddy & Friedman, Charlotte H. Hetherington, Santa Fe, for amicus curiae Risk Management.

OPINION

RANSOM, Justice.

This wrongful death and personal injury action was brought against the state and its agency, the Highway Department, and against Slurry Seal, Inc., a highway construction company. Plaintiffs claimed that negligence in the control of traffic at a mountain-site construction project contributed to deaths and injuries from a runaway truck driven by Enrique Peters. A verdict of $651,686.85 was rendered against the Department. Under the Tort Claims Act, NMSA 1978, Sections 41-4-1 to -27 (Repl.Pamp.1989), the statutory immunity from tort liability enjoyed by a governmental entity does not apply to highway maintenance. Section 41-4-11(A). Liability, however, is limited to $500,000 "for all claims arising out of a single occurrence," Section 41-4-19(A)(3), and no judgment may include an award for exemplary or punitive damages. Section 41-4-19(B).

We issued our writ of certiorari to the court of appeals to review (1) whether the "single occurrence" limit of $500,000 applies to the sum of damages caused by the runaway truck's successive and separate collisions with multiple vehicles; (2) whether the bar to punitive damages against the Department affects the mandate of the New Mexico uniform jury instruction on wrongful death that, in fixing the amount of damages it deems fair and just, the jury should include in its award compensation for "mitigating or aggravating circumstances" attending the wrongful act, neglect, or default, SCRA 1986, 13-1830; and (3) whether, to recover for severe shock from witnessing the death of her husband and fatal injuries to her son, an injured passenger in one of the automobiles was required to prove by expert medical testimony, or otherwise, a physical manifestation of her emotional injury.

We affirm the court of appeals in its application of the "single occurrence" limit of $500,000; we reverse its finding of error in the trial court's wrongful death instruction that included a reference to "aggravating circumstances;" and we take this opportunity to reexamine the tort of negligent infliction of emotional distress articulated in Ramirez v. Armstrong, 100 N.M. 538, 673 P.2d 822 (1983). Specifically, we reject the Ramirez requirement that "[t]here must be some physical manifestation of, or physical injury to the plaintiff resulting from the emotional injury." Id. at 542, 673 P.2d at 826.

In 1981 the Department contracted with Slurry Seal to resurface a mountainous portion of Highway 82 between Cloudcroft and Alamogordo. Plaintiffs alleged that defendants knew or should have known this portion of the highway contained steep downhill grades and had a history of runaway trucks, and that they were negligent in failing to design and implement an appropriate traffic-control plan for the project. On July 22, 1981, Slurry Seal was working on a stretch of highway that ran between milepost 8.1 to the east and a tunnel to the west. For some distance east and west beyond milepost 8.1 and the tunnel, the construction company had placed a series of signs warning motorists to be prepared to stop. As the work crew resurfaced the eastbound (uphill) lane, an escort vehicle was to shuttle traffic alternately up and down the westbound lane.

At the time of the tragedy giving rise to this lawsuit, the escort vehicle was proceeding uphill through the construction site, leading a line of seven to twelve eastbound vehicles. A flagman at the uphill end of the construction had stopped about ten westbound cars when there came into view a heavily-laden truck proceeding at great speed downhill in the westbound lane. Its wheels were smoking. The truck, driven by Peters, had experienced brake failure and was out of control. Peters managed to swerve around the stopped, westbound vehicles and back into the westbound lane. By this time the escort vehicle and the first two cars in the line of vehicles proceeding uphill had cleared the construction area and had returned to the eastbound lane. Peters, unable to stop or avoid the oncoming traffic, sideswiped the third vehicle as its driver, Nettye Motten, attempted to maneuver into the uphill lane and out of the path of the runaway truck. Peters' truck continued downhill and collided with three other vehicles, one driven by George Allegar, another by Sylvester Folz, and a third by Sherri Calkins. Finally, the truck struck a Slurry Seal construction vehicle and came to a stop. In striking these five vehicles, Peters' truck had travelled a distance of 500 to 600 feet. The jury allocated twenty percent of the fault to Peters, thirty-five percent to Slurry Seal, and forty-five percent to the Department.

Thomas Tallant, the minor son of Nettye Motten, was injured. Sylvester Folz died at the scene of the accident. His wife, plaintiff Dorothy Folz, suffered multiple injuries, while their son Steven died several days later as the result of his injuries. Leo Garcia, an employee of Slurry Seal, was thrown from the construction vehicle and burned to death in a fire caused by a ruptured gasoline tank. The jury awarded damages as follows: Dorothy Folz, individually, $306,907.10; Dorothy Folz, as personal representative of the estate of Sylvester Folz, $206,203.18; Dorothy Folz, as personal representative of the estate of Stephen Folz, $329,107.02; Rita Garcia, as personal representative of the estate of Leo Garcia, $500,000; and Nettye Motten, on behalf of Thomas Tallant, $105,975.76. The verdict against the state was $651,686.85, or forty-five percent of the total. The court entered judgment for plaintiffs but limited the damages recoverable against the state to a total of $500,000 on the basis of the liability cap.¹

Department's acts gave rise to a single occurrence. Plaintiffs contend each collision of the runaway truck was a separate occurrence, and, therefore, the statutory limitation of $500,000 applies separately to all victims injured as a result of each of five occurrences. The court of appeals concluded that plaintiffs' aggregate recovery against the state must be limited to $500,000 because plaintiffs' injuries arose from a single occurrence as that term is used in Section 41-4-19(A)(3).² We agree.

The term "single occurrence" is not defined in the Tort Claims Act. In its opinion, the court of appeals drew upon the interpretation given that term in the judicial decisions of other jurisdictions concerned with the meaning of liability insurance contracts. Within that context three approaches have been used: (1) looking to the effects of the accident, that is, the number of injured persons, e.g., Kuhn's of Brownsville, Inc. v. Bituminous Casualty Co., 197 Tenn. 60, 270 S.W.2d 358 (1954); (2) looking to the proximate cause or causes of the injury or injuries, e.g., Home Indemnity Co. v. City of Mobile, 749 F.2d 659 (11th Cir.1984); and (3) looking to the event which triggered liability, that is, the one event of an unfortunate character that takes place without foresight or expectation and subjects the insured to liability. See, e.g., Shamblin v. Nationwide Mut. Ins. Co., 332 S.E.2d 639 (W.Va.1985). See generally Annotation, What Constitutes Single Accident or Occurrence Within Liability Policy Limiting Insurer's Liability to a Specified Amount per Accident or Occurrence, 64 A.L.R. 4th 668 (1988).³

-- "Effects" (number of injured persons) does not determine number of occurrences. With regard to statutory maximum awards, legislatures have used three approaches to address recovery for multiple plaintiffs or claims: the "per incident or occurrence" standard; the "per person or claimant" standard; and the "per claim" standard. See Annotation, Validity and Construction of Statute or Ordinance Limiting the Kinds or Amount of Actual Damages Recoverable in Tort Action Against Governmental Unit, 43 A.L.R. 4th 19, 26 (1986).⁴ New Mexico utilizes a "per person" standard permitting an award of damages up to $300,000 to each person for all claims arising out of a single occurrence, see Section 41-4-19(A)(2), subject further to a higher $500,000 limit for all claims arising out of a single occurrence. See Sec. 41-4-19(A)(3).

Under the New Mexico scheme it cannot be argued that the number of injured persons was intended to determine the number of occurrences, i.e., that the legislature intended to adopt the so-called "effects" approach in articulating the "single occurrence" standard. While the limitation on all claims of individual persons is determined by subsection (A)(2), subsection (A)(3) clearly addresses the aggregate claims of multiple plaintiffs with any number of claims arising out of the same occurrence. This interpretation is consistent with both the express and implicit interpretations given similar "per person" and "per occurrence" limitation provisions in other jurisdictions. See, e.g., Gleason v. City of Oklahoma City, 666 P.2d 786 (Okla.Ct.App.) (when aggregate limitation on damages not reached, multiple claimants were each entitled to recover up to "...