Gruntmeir v. Mayrath Industries, Inc.

• Citation: 841 F.2d 1037
• Decision Date: 14 March 1988
• Docket Number: No. 86-1321,86-1321
• Parties: Prod.Liab.Rep.(CCH)P 11,707 Jim GRUNTMEIR, Plaintiff-Appellee, v. MAYRATH INDUSTRIES, INC., Defendant-Appellant.
• Court: United States Courts of Appeals. United States Court of Appeals (10th Circuit)

Page 1037

841 F.2d 1037

Prod.Liab.Rep.(CCH)P 11,707

Jim GRUNTMEIR, Plaintiff-Appellee, v. MAYRATH INDUSTRIES, INC., Defendant-Appellant.

No. 86-1321.

United States Court of Appeals Tenth Circuit.

March 14, 1988.

John Gehlhausen, Lamar, Colo., for plaintiff-appellee.

Hal B. Warren of Weller, Friedrich, Hickisch, Hazlitt & Ward, Denver, Colo., for defendant-appellant.

Before McKAY, BARRETT and TACHA, Circuit Judges.

BARRETT, Senior Circuit Judge.

Appellant Mayrath Industries, Inc. (Mayrath) seeks reversal of a jury verdict and judgment in favor of Jim Gruntmeir (Gruntmeir) for severe personal injuries caused by a grain auger manufactured and distributed by Mayrath in 1975 or 1976. In 1982, Gruntmeir caught his arm on bolts protruding from a spinning drive shaft on a Mayrath grain auger while in the course of his employment with Temple & Esgar, a grain elevator company. Tempel & Esgar, covered by the immunity provision of the Colorado Workmen's Compensation Act, ¹ purchased the grain auger from an individual named Maurice Ure. Ure was a third-party defendant until sometime prior to trial and is not a party to this appeal.

The jury found Gruntmeir ten percent at fault, Mayrath sixty percent at fault, and Ure thirty percent at fault. The court reduced the total damages of $250,000 by the ten percent of fault attributable to Gruntmeir. The amount of compensatory damages is apparently not in issue. However, the jury's award of $50,000 in exemplary damages against Mayrath is disputed. Mayrath contends that there was insufficient evidence of the conduct required to impose exemplary damages, and that the court should have directed a verdict in its favor both as to exemplary damages and as to its affirmative defense of assumption of risk. Further, Mayrath argues that the trial court erred in refusing to join Tempel & Esgar as third-party defendants. A recitation of the evidence as elicited at trial is required to put these issues into context.

FACTS

A grain auger is a tube-like machine used generally to transfer grain from a truck into a grain bin or out of a bin into a truck. There were several feasible and economical designs for grain augers in 1975 and 1976, when the auger in question was manufactured, including augers with top and side drive shafts. The auger in this case was a bottom-drive auger, which could be manufactured more cheaply than a top-drive auger (R., Vol. III, p. 137). As the name suggests, a bottom-drive auger has its drive shaft at the bottom of the tube, closer to where workers are likely to be plying shovels.

As manufactured, this auger had a shield over the drive shaft to prevent inadvertent contact with the drive shaft. The evidence also suggested that the original bolts holding the drive shaft together did not protrude from the drive shaft, although this evidence was inconclusive. At the time of Gruntmeir's accident, the shield over the drive shaft had been removed either by Ure, the first owner, or by Tempel & Esgar. The bolts protruded by approximately one quarter of an inch.

When Gruntmeir was injured, he was assisting a fellow employee in moving grain from trucks into bins at Big Bend, Colorado. As they were emptying the last truck on November 9, 1982, Gruntmeir somehow caught his right arm on the bolts protruding from the spinning drive shaft of the Mayrath auger and nearly lost his arm. The evidence conflicted on whether Gruntmeir was reaching over the auger for the shovel he and his fellow employee were sharing, or whether he inadvertently backed into the drive shaft and was caught. There was a warning decal on the auger concerning operating it with missing shields, but one expert testified that caution signs would normally be read only at a worker's first exposure to a new machine. (R., Vol. V, p. 399.) The accident occurred at the end of Gruntmeir's second day of use of this auger. Moreover, the decal was covered with dirt and grease (R., Vol. III, p. 104), and Gruntmeir testified without contradiction that he had worked on farms and around farm equipment all of his life and that grain augers commonly had their safety guards removed. (R., Vol. IV, pp. 277-78.)

A number of experts testified for both parties. One of Gruntmeir's two experts testified that damage to and removal of the drive shaft shield in a bottom-drive auger is inevitable (R., Vol. III, p. 141), and that Mayrath dealers do not stock extra guards (R., Vol. III, p. 142). Moreover, he asserted that this particular auger, although cheaper to manufacture, is dangerous because of the likelihood of damage to the drive shaft shield from trucks (R., Vol. III, pp. 147-48) because the drive shaft shield was not designed to withstand any kind of blow from a truck (R., Vol. III, pp. 149-50). The witness opined that the guard should have been strong enough to damage the drive shaft and render the auger inoperable if the guard were demolished (R., Vol. III, p. 150), or there should have been an interlock mechanism. Such mechanisms had been available since the early 1960's (R., Vol. III, pp. 148-49). The witness also testified that there were efficient ways to attach the gear box to the drive shaft without protruding bolts (R., Vol. III, p. 165), although it was unclear from the evidence whether or not the auger came from the factory with protruding bolts.

Gruntmeir's second expert witness testified that accident prevention was an engineering problem and that designers of machinery must expect and allow for human error (R., Vol. V, p. 374). He asserted that designs safer than the bottom-drive auger had been known since before 1975 (R., Vol. V, p. 381). He also testified there was considerable literature indicating safety guard removal was a common problem (R., Vol. V., p. 383), and that one well-known study found that fifty percent of all grain auger accidents involved a missing safety guard (Id.). The witness concluded that it was forseeable that the guard on the grain auger in question would be removed (R., Vol. V, p. 386) and that the common farm worker would have no appreciation by training and experience of how quickly he could be caught on an unshielded drive shaft and how rapidly serious injury would occur (R., Vol. V, p. 388). The guard used by Mayrath was inadequate (R., Vol. V, pp. 390-91), and Mayrath should have known the guard would be removed and not replaced (R., Vol. V, p. 396).

Mayrath's president, Edward Appleby, testified on cross-examination that Mayrath did not comply with recommendations made in 1970 by the National Safety Council regarding the shielding of equipment (R., Vol. VI, p. 546). Mayrath did not obtain the advice of insurance company safety engineers, state factory inspectors or local safety council engineers regarding the design of the guard over the drive shaft (Id.), nor did Mayrath test the guard on the bottom-drive auger since it was the same as the one they had used on the top-drive auger (R., Vol. VI, p. 550). Appleby admitted that if a guard were damaged in the harvest process, there was a good chance the harvest would be completed without the guard on the machine (R., Vol. VI, p. 558). Appleby also testified that he knew in 1975 through 1977 that farm worker injuries as a result of contact with grain augers were a serious problem and that the drive shaft was one of the most dangerous areas of a grain auger (R., Vol. VI, p. 559-60). He further testified that he knew that a grain auger with a guard on it that has a reasonable probability of being removed is dangerous to farm workers (R., Vol. VI, p. 563). Despite this, Appleby testified that Mayrath had no definite plans to change the design of the auger (R., Vol. VI, p. 561).

I. Exemplary Damages

Mayrath contends that this evidence, even when viewed in a light most favorable to the plaintiff, as we have done in reciting it, is insufficient as a matter of law on the issue of exemplary damages. Mayrath asserts that the court should have granted its motion for directed verdict as to this issue and should not have submitted it to the jury.

In considering a motion for directed verdict, the trial court in a diversity case must view the evidence and the inferences to be drawn therefrom in the light most favorable to the party against whom the motion is directed. Peterson v. Hager, 724 F.2d 851, 853-54 (10th Cir.1983). When the evidence is so viewed, a directed verdict is proper only when the evidence is so patently in favor of the moving party that a jury verdict in favor of the opposing party would be improper and would have to be set aside by the trial judge. Id. It is, of course, the court's task to decide whether there is sufficient evidence to justify a finding of exemplary damages. Alley v. Gubser Development Co., 785 F.2d 849 (10th Cir.), cert. denied, --- U.S. ----, 107 S.Ct. 457, 93 L.Ed.2d 403 (1986).

Exemplary damages are available only pursuant to statute in Colorado. Kaitz v. Dist. Court, 650 P.2d 553 (Colo.1982). Colo.Rev.Stat. Sec. 13-21-102 (1973) provides as follows:

In all civil actions in which damages are assessed by a jury for a wrong done to the person, or to personal or real property, and the injury complained of is attended by circumstances of fraud, malice or insult, or a wanton and reckless disregard of the injured party's rights and feelings, the jury, in addition to actual damages sustained by such party, may award him reasonable exemplary damages.

The elements necessary for an award of punitive damages must be established beyond a reasonable doubt. Frick v. Abell, 198 Colo. 508, 602 P.2d 852 (1979). Further, there must be evidence that the act causing the injuries was done with an evil intent and with the purpose of injuring plaintiff or with such a wanton and reckless disregard of plaintiff's rights as to evidence a wrongful motive. Id. "Wanton and reckless" disregard in the context of exemplary damages has been defined as "conduct that creates a substantial risk of harm to another and is...