Barras v. Monsanto Co.

• Decision Date: 07 May 1992
• Docket Number: No. A14-90-00544-CV,A14-90-00544-CV
• Citation: 831 S.W.2d 859
• Parties: Donald R. BARRAS, et al., and James L. Slaughter, et al., Appellants, v. MONSANTO COMPANY, Appellee. (14th Dist.)
• Court: Texas Court of Appeals

Page 859

831 S.W.2d 859

Donald R. BARRAS, et al., and James L. Slaughter, et al., Appellants, v. MONSANTO COMPANY, Appellee.

No. A14-90-00544-CV.

Court of Appeals of Texas Houston (14th Dist.).

May 7, 1992.

Rehearing Denied June 18, 1992.

Gail Magers, James M. Yeretsky, Robert Hall, Owen W. Cecil, Susan M. Marett, Houston, Russell H. McMains, Corpus Christi, Dalton L. Jones, League City, for appellant.

Jesse R. Pierce, Edward M. Carstarphen, Houston, for appellee.

Before J. CURTISS BROWN, C.J., and MURPHY and CANNON, JJ.

OPINION

J. CURTISS BROWN, Chief Justice.

Mary Carter agreements ¹ are at the center of this appeal involving 222 present and former homeowners in a subdivision adjacent to the site of a chemical plant. Prior to voir dire, the trial court informed the jury panel that the homeowners had dismissed claims they had asserted against the subdivision's homebuilders and against its developers, Farm & Home Savings Association and Ayrshire Corporation, and that they had joined them in pursuing damage claims against Monsanto Company for disposing chemicals and hazardous waste at the plant site. Actually, the homebuilders were not parties to the agreements. ² The trial court's prepared statement also revealed that any money the homeowners might be entitled to receive from Monsanto would be shared between the "homeowners on the one hand and Farm & Home Savings on the other hand." After a four-month trial, followed by a week of deliberation, the jury concluded that Monsanto was not negligent and had not engaged in "abnormally dangerous" activity. After entering a final judgment, the trial court granted the homeowners' motion to disregard the jury's negative answer to the strict liability issue and held that an affirmative response was established as a matter of law. Monsanto does not appeal that ruling, but neither does it admit that its activities were a producing cause of appellants' injuries.

In 247 points of error, the homeowners attack the use of the Mary Carter agreements, as well as the jury's answers to negligence and strict liability issues. In addition, the homebuilders--Donald R. Barras, Park Avenue Homes, Inc., Travis B. Campbell, and T.B. Campbell, Inc.--raise 25 points of error, claiming they were unfairly tainted by the Mary Carter agreements, and that the jury's improper responses to negligence and strict liability questions precluded them from recovering for damage to their construction companies and personal damages caused by the failure of the businesses. We affirm.

In 1957, Monsanto promised Charles Hard and Ralph Lowe $50,000 if, within 90 days, they could successfully regenerate 100,000 pounds of spent copper from wastes that Monsanto generated in the manufacture of acrylonitrile, an essential building block in the production of acrylic textiles, fabrics, and plastic. Lowe testified that he had no knowledge of the chemical business and that Hard's knowledge of chemistry was limited to "mixing a pretty good scotch and soda." Rather, they relied on a Monsanto chemical engineer, Al Withrow, who served as Hard-Lowe's "technical angel" and a third founder of the company. Monsanto claims that it did not know that Withrow was moonlighting at Hard-Lowe until he left Monsanto in 1960 to work full-time at Hard-Lowe. The fledgling Hard-Lowe Chemical Company succeeded in the reclaiming process, and Monsanto became Hard-Lowe's first customer for refining and reprocessing chemical byproducts into resaleable commodities. From 1957 to 1982, Hard-Lowe and its successors operated on land next to where the homeowners would eventually purchase their homes in Southbend Subdivision near Friendswood. The Hard-Lowe plant site became known as the "Brio Superfund Site," as Brio Refining Co., Inc. was the last company to operate the plant prior to abandoning it.

Monsanto did not own the Hard-Lowe plant, nor did it participate in Hard-Lowe's decision to purchase the land for the refinery. However, appellants contend that Monsanto controlled Hard-Lowe's operations, directing or supervising the storage of toxic waste in unlined, earthen pits at the Brio site in disregard of state-of-the-art technology of the time. Appellants claim that Monsanto guaranteed operators of the site a $10,000 profit per month, supplied them with full-time technical assistance, and provided, repaired, and replaced their equipment and facilities. In short, owner Lowe testified that Monsanto "paid for everything." Further, the Hard-Lowe office manager testified that during the 1960s, approximately 98 to 99 percent of the plant's "chemical income came from Monsanto." In addition, Monsanto employees testified they knew of pollution problems at the site.

The homeowners claim that Monsanto's dumping of toxic waste at the plant resulted in loss of market value to the homeowners' properties, physical pain, mental anguish, and the need for future medical monitoring. In October 1984, the federal government placed the plant site on the National Priorities List as causing "an imminent and substantial endangerment to the public health or welfare or the environment because of the actual or threatened release of hazardous substances." Subsequently, Monsanto and thirteen other chemical companies, each named as a "Potentially Responsible Party" (PRP) under federal law, formed a task force to voluntarily investigate and clean up the plant site under the auspices of the Environmental Protection Agency. The trial court concluded that "Monsanto employees direct and carry out virtually all of the operations of the Task Force," and appellants claim that Monsanto's involvement in the clean-up is but a facade to cover up its central role in creating and polluting the site. Appellants contend that instead of disclosing what it knew about the dangers of the plant site, Monsanto actually encouraged people, through the Task Force, to move into the Southbend subdivision: in a June 1986 newsletter, the Task Force published that its "consensus" was that potential homeowners should "not be afraid, from a health standpoint, to buy in Southbend."

I. Mary Carter Agreements

We begin our review with the trial court's decision to instruct the venire panel regarding the Mary Carter agreements. At a lengthy pretrial hearing on motions in limine, the appellants argued that (1) the agreements should not be introduced until after voir dire and opening statements, (2) the amount of the agreements should not be disclosed, and (3) the agreements should not be used to impeach testimony of the homeowners. In addition, counsel for the homebuilders stated that his clients were not parties to the agreements.

Monsanto asked the trial court to admit the agreements from the beginning of trial so the jury would know in advance the financial alignment of the plaintiffs. Monsanto sought admission of the agreements with objectionable portions deleted, and it suggested a limiting instruction that the jury not consider them for purposes of liability.

In response to Monsanto's request, counsel for appellants clarified their position by urging the trial court to make a statement from the bench advising the jury of the settlement agreements:

What we were suggesting is that once you start down this trail there's all kinds of mischief and misimpressions that can occur so the best thing to do is for the Court to advise the jury that there has been an agreement between Farm & Home and the Plaintiffs and this has been accomplished.

You announce that from the Bench and the jury understands that, yes, we have entered into an agreement and, yes, I formerly represented Farm & Home.... It comes from the Bench as an official statement from the Court and the jury should take that.

Thereafter, counsel for the homebuilders argued that the agreements should not be admitted at all, contending that they were assignments of interest, not Mary Carter agreements, and as such should not be shown to the jury.

The next day, the trial judge made clear her intention to disclose the agreements "in the initial part of voir dire" by making a statement informing the jury of the relationships and alignment of the parties, and admitting the formula, but not the amount, of the agreements. Both sides would be allowed to question the voir dire panel as to how the agreements "would affect their ability to serve and formulate opinions in the case."

Before voir dire began, the trial court read the following instruction to the panel:

The plaintiffs in this case now own or did own houses in the Southbend Subdivision, have entered into agreements with Farm & Home Savings Association and Ayrshire Corporation, the two companies that developed the Southbend Subdivision, and with Pulte Home Corporation, Ryland Group, Inc., T.B. Campbell, Inc., Park Avenue Homes, Inc., and Donald Bauer [sic], all of whom built and sold homes in the Southbend Subdivision, whereby the developers and homebuilders have paid the plaintiff homeowners a sum of money and have agreed to pay them more money in the future regardless of the verdict in this case.

In exchange for those payments, the plaintiff homeowners have dismissed the claims they were asserting against the developers and homebuilders.

As part of those agreements, the plaintiff homeowners and Farm & Home Savings Association and Ayrshire Corporation, along with Pulte Home Corporation, Ryland Group, Inc., T.B. Campbell, Inc., Park Avenue Homes, Inc. and Donald Bauer [sic] have agreed to cooperate in the pursuing of this lawsuit against Monsanto.

In the event it is ultimately decided in this case that the plaintiff homeowners are entitled to receive any money from Monsanto, that money will be shared between the plaintiff homeowners on the one hand and Farm & Home Savings on the other hand.

No objection was made. The trial court invited counsel for appellants to proceed, and voir dire began.

The Texas Supreme Court has stated that settlement agreements between a plaintiff and a...