City of Houston v. Sam P. Wallace and Co.

• Decision Date: 18 July 1979
• Docket Number: No. B-8192,B-8192
• Parties: CITY OF HOUSTON, Petitioner, v. SAM P. WALLACE AND CO. et al., Respondents.
• Court: Texas Supreme Court

Page 669

585 S.W.2d 669

CITY OF HOUSTON, Petitioner, v. SAM P. WALLACE AND CO. et al., Respondents.

No. B-8192.

Supreme Court of Texas.

July 18, 1979.

Rehearing Denied Sept. 25, 1979.

Robert M. Collie, Jr., City Atty., Dale M. Tingleaf, Asst. City Atty., Houston, for petitioner.

Wyckoff, Russell, Dunn & Frazier, Robert L. Adams and Clare K. Steadham, Houston, for respondents.

Fulbright & Jaworski, Sim Lake, Houston, for Precision Insulation Co.

POPE, Justice.

City of Houston complains of the trial court's denial of its motions for mistrial and new trial. It says the basis for the motions was that Maurice Little, its co-plaintiff in a suit against Sam P. Wallace Company, Inc., secretly made a settlement with Wallace Company just before final arguments and then changed his posture by arguing that City of Houston, rather than defendant Wallace Company, was at fault in causing City of Houston's property damages and Little's personal injuries. While the jury was deliberating and counsel for City of Houston was absent from the courtroom, Little asked for a nonsuit. City of Houston did not discover the secret settlement nor learn of the nonsuit until one week later. The jury answered special issues adversely to both City of Houston and Little and the trial court rendered judgment that City of Houston take nothing. The court of civil appeals affirmed the judgment. 574 S.W.2d 864. We reverse the judgments of the courts below and remand the cause for another trial.

City of Houston sued Wallace Company and Precision Insulation Company, Inc. for property damages to its water cooling plant at the Houston Intercontinental Airport which resulted from an explosion and fire on October 19, 1971. Wallace Company had a contract with City of Houston to construct certain additions to its water cooling plant and Precision Insulation had a subcontract with Wallace Company to perform certain insulation work. Little, an employee of Precision Insulation, in a separate suit against Wallace Company, claimed damages for personal injuries he suffered in the same accident. The trial court consolidated the City's suit seeking damages for its property loss and Little's suit seeking damages for his personal injuries. Wallace Company's answer asked for indemnity against Precision Insulation and Precision Insulation prayed for judgment against City of Houston. The trial court aligned City of Houston and Little as co-plaintiffs and Wallace Company and Precision Insulation as defendants.

Little, an insulator, was assigned the task of insulating some water pipes that were located a few feet above a large metal box-like container in which was housed an electrical switch gear. Little had to use a roll scaffold to climb on top of the switch gear box so he could reach the water pipes that he had to insulate. While Little was standing on a board that someone had laid across the top of the switch gear box, there was a series of electrical explosions followed by a fire which destroyed the City's plant and seriously injured Little.

At trial, all the parties had closed their evidence and the court was preparing its charge when Little and Wallace Company settled their differences. They did not tell the court or City of Houston about the settlement; so the court submitted special issues by which both City of Houston and Little sought to establish Wallace Company's negligence. Another series of issues asked about Precision Insulation's negligence. Other issues inquired about contributory negligence on the part of City of Houston and also Little. Each party was allowed forty-five minutes to argue to the jury, and each party used the time allotted. City of Houston made the first argument, followed in turn by Little, Wallace Company and Precision Insulation.

City of Houston opened the jury arguments by explaining its theory for fixing liability upon Wallace Company. It read to the jury and urged answers to certain specific issues that would fix responsibility upon Wallace Company. ¹ Counsel closed his argument by explaining to the jury that Little's attorney would follow him, saying: "The reason that is done that way is because the Rules of Civil Procedure provided that we have the burden of proof, Mr. Barker (Little's counsel) and I . . . after the defendants tell their story we get to have a few more minutes with you to rebut anything they may have said."

Little's counsel began his argument by explaining why his client was not contributorily negligent and by urging the severity of Little's injuries. He then wholly switched his direction. He argued that Wallace Company, his ostensible adversary, did not know about the presence of the dangerous condition, did not fail to inspect the premises in the area of the switch gear, did not operate the water lines that ran over the switch gear box, did not fail to perform its work in a good and workmanlike manner, and that the evidence would not support a finding against Wallace Company on those issues. Little's argument also urged the defeat of his co-plaintiff's right of recovery against Wallace Company by his argument that City of Houston was operating the electrical equipment in an overloaded condition, as Wallace Company had contended during trial. Little's counsel told the jury that the overloading issue should be answered against City of Houston, "We do," and that similar answers should be made to the accompanying negligence and proximate cause issues. Little's counsel also argued that the jury should answer affirmatively the issue which asked if the water was being run through the pipes at the request and for the benefit of City of Houston. The jury returned a favorable verdict for the defendants, Wallace Company and Precision Insulation, as Little had argued.

The judgment form that was circulated for approval of the attorneys one week after the jury returned its verdict contained a recital that Little had announced to the court during jury deliberations that he wished to take a nonsuit. That was when City of Houston learned for the first time about the settlement and the nonsuit. It promptly filed a motion asking for a mistrial. At the mistrial hearing, counsel for plaintiff Little admitted that "the real consideration for my settlement is the fact that I would not argue negligence against Sam P. Wallace Company." The court overruled the motion for mistrial and later overruled City's motion for a new trial based on the same complaint.

At the commencement of the trial, both City of Houston and Little had actions against Wallace Company as their common adversary. The trial court properly and fairly cast them as plaintiffs after the consolidation of the two cases. Rule 174(a), Tex.R.Civ.P. The fairness of the alignment turned into unfairness when, unknown to City of Houston, its ally and confederate became its adversary. City of Houston, under an adversary proceeding, had the burden to develop and present its own case, but it did not have the additional burden to defeat the Trojan Horse that had secretly invaded City's camp. Counsel for Little switched sides and then undermined his co-plaintiff's and his own case as alleged.

In Degen v. Bayman, 200 N.W.2d 134 (S.D.1972), the plaintiff settled with one co-defendant who then changed positions and argued for the plaintiff and against his co-defendant, saying:

I have no doubt, ladies and gentlemen, that in this case you're going to give Billy Degen a verdict and believe me, in this argument and particularly in a case like this, I think the attorneys have a real responsibility to be candid with the jury, and I'm trying to be with you because this is a very serious case.

There isn't any doubt in my mind but what you're going to give Billy Degen a verdict. There isn't any doubt in my mind that it's going to be a substantial one.

In reversing the case, the court said:

Not knowing the motive for the evaporation of adversary vigor between plaintiff and Bayman, this benevolent candor coming from a joint tortfeasor could only appear to the jury as a shattering admission.

The protective order was a proper exercise of discretion. However, the responsibility to assure a fair trial is continuous. The court should not have allowed it to be used as a collusive advantage. When that appeared, a limited rescission was necessary to let the adversary process put the issues in perspective.

Little's counsel had no business making an argument to the jury at all. After his settlement with Wallace Company,...