Counts v. Burlington Northern R. Co., 90-35661

• Decision Date: 30 December 1991
• Docket Number: No. 90-35661,90-35661
• Citation: 952 F.2d 1136
• Parties: Silas E. COUNTS, Plaintiff-Appellee, v. BURLINGTON NORTHERN RAILROAD COMPANY, Defendant-Appellant.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 1136

952 F.2d 1136

Silas E. COUNTS, Plaintiff-Appellee, v. BURLINGTON NORTHERN RAILROAD COMPANY, Defendant-Appellant.

No. 90-35661.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted July 1, 1991.

Decided Dec. 30, 1991.

Charles G. Cole, Steptoe & Johnson, Washington, D.C., for defendant-appellant.

Alexander Blewett, III, Hoyt & Blewett, Great Falls, Mont., for plaintiff-appellee.

Appeal from the United States District Court for the District of Montana.

Before WALLACE, Chief Judge, BEEZER and T.G. NELSON, Circuit Judges.

T.G. NELSON, Circuit Judge:

Burlington Northern Railroad Company (Burlington) appeals from an amended judgment of $320,450 in favor of former Burlington employee Silas Counts, following a bifurcated jury trial of Counts' claims under the Federal Employers' Liability Act (FELA), 45 U.S.C. §§ 51-60. Burlington appeals on grounds that Counts' theories for invalidating a release he entered into with Burlington were unprecedented or insufficient as a matter of law, and that Counts was allowed to use a jury that was tainted by prejudicial evidence from Burlington's claims file to determine damages. Because there was error in some of the several grounds for liability considered by the jury in returning a general verdict in favor of Counts, we reverse the entire case and remand it for a new trial. We also find error in the damages trial because of prejudice to Burlington due to failure to segregate or redact the exhibits from the first trial that were submitted to the jury in the second trial or, alternatively, to try the damages phase to a separate jury.

FACTS AND PROCEEDINGS

Counts injured his back and left leg in an accident in October, 1984, while he was working as a material handler for Burlington. Counts was walking on a wheel flatcar when a loose grating gave way and he fell. Burlington's records showed the flatcar had been sent for repairs the month before the accident, but the repairs were never done.

Burlington Claims Representative Ward Maser investigated Counts' accident and was assigned to negotiate with Counts. Burlington began advancing money to Counts for living expenses in November, 1984. Maser advised Counts the advances would not continue after settlement negotiations began or when Counts retained an attorney. On a few occasions, Maser told Counts there would be no more advances.

Maser's investigation revealed Counts' injuries were serious, that Burlington's liability for the accident was great, and that Counts was not at fault. Despite this information, Maser told Counts he was not that seriously injured. At Maser's suggestion, Counts attended the FELA trial of another Burlington employee, Bruce Jones. The case resulted in a verdict for Burlington because its negligence was not established. Maser called Counts after the defense verdict and told Counts the result could be the same for him.

Counts represented himself in negotiations with Maser and testified that he was afraid to retain an attorney because his advances would be cut off. Counts obtained from Maser's office a brochure entitled "Injured on the Job?," which explains the employee is free to hire a lawyer at any time, and warns of the risks of litigation. Counts spoke with, but did not retain, three lawyers about his claim prior to signing the release.

Counts had job protection in the form of a guaranteed job with Burlington until he In February, 1986, Maser told Counts the claims office in his area was closing, that there would be no more offers or advances and that this was the last chance to take Burlington's settlement offer of $138,550. Counts was not told that of this sum, $32,127 was being paid by labor relations as a buy-out of his guaranteed job rather than as compensation for his FELA claim. Counts asked Maser at this time about his lifetime job guarantee and Maser told him to take it up with labor relations. Counts accepted the net settlement offer and signed a release of all claims, which stated he was forever and permanently disabled from returning to work for Burlington. After signing the release, Counts contacted labor relations and was informed that if he signed the release, he would not have a guaranteed job any longer.

                was age 65, following the 1980 merger of the Burlington and Frisco railroads.   During the negotiation of Counts' claim, Maser suggested Counts consider taking a sedentary yard office position.   Maser contacted Maxine Timberman in the Billings labor relations department and learned that Counts would lose his guaranteed job protection if he were to take the yard job.   After discussing this with Counts, they decided to settle the claim "out-of-service," and the yard job idea was rejected
                

On November 7, 1986, Counts filed this FELA suit. Counts' earlier diversity action alleging a state law claim for fraud in the inducement against Burlington was held to be preempted by the FELA. Counts v. Burlington Northern R.R. Co., 896 F.2d 424 (9th Cir.), cert. denied, --- U.S. ----, 111 S.Ct. 54, 112 L.Ed.2d 30 (1990). The district court granted Counts' motion for summary judgment on the issue of Burlington's liability. The validity of the release and the amount of damages remained to be tried.

During discovery, Burlington produced the contents of the Counts' claims file up to the date the release was signed. The court later ordered Burlington to produce the entire file, including six documents prepared after the release was signed. The file contained a "close-out" sheet prepared by Maser, which contained his assessment that "Counts could have had an easy chance at a large verdict in court. I feel that $138,550 is a good settlement for the BN in that Counts is finally off the books."

Burlington's motion for a bifurcation of the trial to determine validity of the release and then, if necessary, damages, was granted. On the first day of trial, Burlington filed a motion requesting separate jury panels for the two trials. Burlington was concerned about the prejudicial impact of the information contained in its claims file during the damages trial. The motion, renewed several times, was denied.

Burlington's motion for a directed verdict on the validity of the release was denied. The jury returned a general verdict finding the release invalid. Burlington's motion for judgment notwithstanding the verdict was denied. Following the damages trial, the jury awarded Counts $459,000. The district court entered an amended judgment, offsetting the amount previously paid to Counts by Burlington. Burlington timely appeals and we have jurisdiction pursuant to 28 U.S.C. § 1291.

STANDARDS OF REVIEW

Whether or not this case was submitted to the jury on incorrect theories of law is a question of law, reviewable de novo. See United States v. McConney, 728 F.2d 1195, 1201 (9th Cir.) (en banc), cert. denied, 469 U.S. 824, 105 S.Ct. 101, 83 L.Ed.2d 46 (1984). The district court's determination on bifurcation of trials is reviewed for abuse of discretion. See Hirst v. Gertzen, 676 F.2d 1252, 1261 (9th Cir.1982); United States v. 1,071.08 Acres of Land, 564 F.2d 1350, 1352 (9th Cir.1977).

DISCUSSION

I. The Trial of the Validity of the Release

A. The Inadequate Consideration Theory for Invalidating the Release

The jury was instructed that they could find the release was not supported by adequate consideration if it found a large This instruction does not correctly state FELA law on challenging a release for want of consideration. The Supreme Court has held that adequate consideration exists for a release of FELA claims when there are mutual concessions by the employee and the employer, and if the employee who gives the release receives something of value to which he had no previous right. Maynard v. Durham & S. Ry. Co., 365 U.S. 160, 163, 81 S.Ct. 561, 563, 5 L.Ed.2d 486 (1961).

                disparity between the amount of the release and Counts' actual monetary loss.   Counsel for Burlington preserved its objection to this instruction for appeal.   Counsel specifically objected to the following language in the consideration instruction:  "A release is not supported by adequate consideration is [sic] there is a large disparity between the amount of the release and the actual monetary loss which the injured party eventually incurred."
                

In Maynard, the employee claimed that all he received in exchange for his release was his paycheck, to which he had an absolute right, and nothing more. Id. The Supreme Court held there was a genuine issue of fact concerning the presence of consideration for the release by Maynard. Id. In this case, however, according to Counts' own computations, he received $70,423 in addition to his wage entitlement in exchange for signing the release. Under Maynard, the release in this case was supported by adequate consideration and the issue should not have been submitted to the jury. The instruction stated incorrect law and the error was not harmless.

Generally, where there is an error of law in submitting one of a number of theories to the jury, the general jury verdict is tainted because it is impossible for the reviewing court to determine with certainty whether the theory upon which the jury based its verdict is a proper theory. Sunkist Growers, Inc. v. Winckler & Smith Citrus Products Co., 370 U.S. 19, 29-30, 82 S.Ct. 1130, 1136, 8 L.Ed.2d 305 (1962); Kern v. Levolor Lorentzen, Inc., 899 F.2d 772, 777 (9th Cir.1990). However, this court "may construe a general verdict as attributable to one of several theories if it was supported by substantial evidence and was submitted to the jury free from error." Kern, 899 F.2d at 777, citing Traver v. Meshriy, 627 F.2d 934, 938 (9th Cir.1980).

The factors we must consider in deciding whether to exercise this discretion are: (1) the potential for confusion of the jury; (2) whether the losing party's defenses apply to the count upon which the verdict is being sustained; (3) the strength of the evidence supporting the count relied...