Iowa Elec. Light and Power Co. v. General Elec. Co., 69622

• Decision Date: 13 June 1984
• Docket Number: No. 69622,69622
• Parties: IOWA ELECTRIC LIGHT AND POWER COMPANY, Appellant, v. GENERAL ELECTRIC COMPANY, Bulldog Equities, John A. Leefers, Richard D. Raymon, and Arthur John, Inc., Appellees.
• Court: Iowa Supreme Court

Page 231

352 N.W.2d 231

IOWA ELECTRIC LIGHT AND POWER COMPANY, Appellant, v. GENERAL ELECTRIC COMPANY, Bulldog Equities, John A. Leefers, Richard D. Raymon, and Arthur John, Inc., Appellees.

No. 69622.

Supreme Court of Iowa.

June 13, 1984.

D.G. Ribble and Donna L. Paulsen, of Lynch, Dallas, Smith & Harmon, Cedar Rapids, for appellant.

David Dutton, of Mosier, Thomas, Beatty, Dutton, Braun & Staack, Waterloo, for appellee General Electric Company.

Jay P. Roberts, of Swisher & Cohrt, Waterloo, for appellees Bulldog Equities, Leefers, Raymon and Arthur John Inc.

Considered by HARRIS, P.J., and McCORMICK, McGIVERIN, SCHULTZ and WOLLE, JJ.

WOLLE, Justice.

Five year old Trevallis L. Swayze was seriously injured at the apartment complex where he resided when he put his hand inside an unpadlocked pad-mounted transformer box installed and maintained by Iowa Electric Light and Power Company (IE). IE settled Trevallis's personal injury claim, then brought this action (1) to obtain indemnity or contribution from General Electric Company (GE), which manufactured and sold the transformer, and (2) to obtain contribution from the other defendants (collectively referred to as Bulldog), who owned and operated the apartment complex in Cedar Rapids where the transformer was located. Trial to the court, with jury waived, resulted in findings and conclusions upholding IE's claim for contribution against GE and denying its other pleaded claims. On review of the IE and GE appeals and cross-appeals from the trial court's decision, we affirm.

The electrical transformer involved in Trevallis Swayze's accident was sold by GE to IE and was installed near the rear wall of a Bulldog apartment building as part of IE's electrical system which served the facility. This transformer had no warnings on it about the dangerous nature of the transformer. It was designed to be locked with a padlock, but the transformer was not locked at the time Trevallis was injured.

The trial court found that IE, GE and Bulldog would all have been held liable to compensate Trevallis for his injuries and also found that IE had settled the claim for a reasonable amount. The trial court found that IE would have been liable for negligence in failing to keep the transformer padlocked and failing to post reasonably adequate warnings of the danger. It found that GE would have been liable both on a theory of strict liability because it had sold the transformer in an unreasonably dangerous condition and on a theory of negligence because it had failed to warn of the danger when it sold the product. Finally, the trial court concluded that Bulldog too would have been liable for Trevallis's injuries because it had failed to maintain all common areas of the apartment premises in a reasonably safe condition, a breach of its duty as a landlord at common law and under Iowa Code section 562A.15(1)(c) (1979). We now must decide whether the trial court correctly decided that IE and GE, but not Bulldog, should bear equal responsibility for payment of the amount received in settlement by Trevallis.

Preliminarily we must address the standard of review in this case. Indemnity and contribution are based on equitable principles. Hunt v. Ernzen, 252 N.W.2d 445, 447-48 (Iowa 1977) (indemnity, a form of restitution, is founded on equitable principles); Best v. Yerkes, 247 Iowa 800, 810, 77 N.W.2d 23, 29 (1956) (recognizing right of equitable contribution among joint tortfeasors). This action, however, was brought as an action at law. No party requested that the case be transferred to the equity docket, and the trial court and parties tried the case as an action at law, with jury waived. Therefore, we will also treat this as an action at law on appeal. Citizens Savings Bank v. Sac City State Bank, 315 N.W.2d 20, 24 (Iowa 1982); Sanborn v. Maryland Casualty Co., 255 Iowa 1319, 1321, 125 N.W.2d 758, 759 (1964). Our review is not de novo; the trial court's findings of fact are binding upon us if supported by substantial evidence. Iowa R.App.P. 4, 14(f)(1).

I. IE's Judgment Against GE for Contribution.

A. Proximate Cause. In attempting to reverse IE's judgment against it for contribution, GE argues that the trial court did not make a sufficient finding that GE's failure to warn proximately caused the accident.

Causation is an element essential for finding a party liable in a tort action. To constitute a proximate cause of harm to another, a party's conduct must have been a substantial factor in bringing about that harm. Oak Leaf Country Club, Inc. v. Wilson, 257 N.W.2d 739, 746 (Iowa 1977); Pedersen v. Kuhr, 201 N.W.2d 711, 713 (Iowa 1972); Restatement (Second) of Torts §§ 430-33 (1965).

On this issue GE concentrates its fire on the following statement in the trial court's decision: "Had reasonable warnings been attached to the transformer, the incident may have been averted." GE asserts that the trial court was required to find not just that the accident "may" have been averted but that it definitely would have been averted.

It is clear that the trial court found GE's conduct to be a proximate cause of the accident, despite its use of the phrase "may have been averted." Earlier in its opinion, the trial court stated that GE's failure to place a warning on the transformer "was a proximate cause of the personal injury and damages suffered by Trevallis Swayze." The trial court thereby made a sufficient finding of proximate cause.

Generally questions of proximate cause are for the jury; only in exceptional cases may they be decided as matters of law. Iowa R.App.P. 14(f)(10). Here, substantial evidence in the record supports the trial court's finding of proximate cause. The trial court could properly find from all of the surrounding circumstances that if GE had affixed to its product an appropriate warning about the danger lurking in the transformer, the apartment complex manager, the parents of the children who played around the transformer or other persons would have taken precautions either to keep children away from the transformer or to make sure the transformer remained locked. See DeSantis v. Parker Feeders, Inc., 547 F.2d 357, 364 (7th Cir.1976).

The record contains sufficient evidence to support the trial court's finding that GE's failure to affix appropriate warnings to the transformer it sold was a proximate cause of the accident and injuries to Trevallis.

B. Superseding Cause. GE also argues that IE's negligence in failing to keep the transformer box padlocked was a superseding cause of Trevallis Swayze's injury, relieving GE of liability.

A determination of whether another person's conduct constitutes a superseding cause is usually a question of fact, and it is a question of law only in extreme circumstances where it is manifestly clear that the intervening conduct was a superseding event. Haumersen v. Ford Motor Co., 257 N.W.2d 7, 15 (Iowa 1977); Schnebly v. Baker, 217 N.W.2d 708, 729 (Iowa 1974). We will not reverse such a determination if it is supported by substantial evidence. Iowa R.App.P. 14(f)(1). Moreover, an intervening act or force will not relieve a negligent defendant of liability if that act or force was a normal consequence of the defendant's conduct or was reasonably foreseeable by that defendant. Haumerson v. Ford Motor Co., 257 N.W.2d at 15.

Section 442 of the Restatement (Second) of Torts sets out several factors which should be considered in determining whether an intervening act or force constitutes a superseding cause:

The following considerations are of importance in determining whether an intervening force is a superseding cause of harm to another:

a. The fact that its intervention brings about harm different in kind from that which would otherwise have resulted from the actor's negligence;

b. The fact that its operation or the consequences thereof appear after the event to be extraordinary rather than normal in view of the circumstances existing at the time of its operation;

c. The fact that the intervening force is operating independently of any situation created by actor's negligence, or, on the other hand, is or is not a normal result of such a situation;

d. The fact that the operation of the intervening force is due to a third person's act or his failure to act;

e. The fact that the intervening force is due to an act of a third person which is wrongful toward the other and as such subjects the third person to liability to him;

f. The degree of culpability of a wrongful act of a third person which sets the intervening force in motion.

Although GE contends that several of the above subsections are favorable to its superseding cause defense, all of the listed factors must be considered together. Section 447 of the Restatement, referred to in the comments to section 442, is also instructive in determining whether an intervening act constitutes a superseding cause:

The fact that an intervening act of a third person is negligent in itself or is done in a negligent manner does not make it a superseding cause of harm to another which the actor's negligent conduct is a substantial factor in bringing about, if

(a) the actor at the time of his negligent conduct should have realized that a third person might so act, or

(b) a reasonable man knowing the situation existing when the act of the third person was done would not regard it as highly extraordinary that the third person had so acted, or

(c) the intervening act is a normal consequence of a situation created by the actor's conduct and the manner in which it is done is not extraordinarily negligent.

We approve the Restatement analysis. Applying these Restatement principles to the facts of this case, we agree with the trial court's conclusion that IE's conduct was not a superseding cause which relieved GE of liability. The trial court found, on the basis of substantial evidence in the record, that GE should have foreseen that the transformer might at some time be left unlocked by IE...