Jameson v. Liquid Controls Corp.

Decision Date06 October 2000
Docket NumberNo. S-99-048.,S-99-048.
Citation260 Neb. 489,618 N.W.2d 637
PartiesRichard JAMESON and Sandhill Oil Company, appellees and cross-appellants, v. LIQUID CONTROLS CORP., appellant and cross-appellee, and Aetna Casualty and Surety Company, intervenor-appellee and cross-appellant.
CourtNebraska Supreme Court

Jeffrey H. Jacobsen and Bradley D. Holbrook, of Jacobsen, Orr, Nelson, Wright, Harder & Lindstrom, P.C., Kearney, for appellant.

Robert G. Pahlke, of The Van Steenberg Firm, Scottsbluff, and Warren R. Arganbright, of Arganbright Law Office, Valentine, for appellees.

Patrick B. Donahue, of Cassem, Tierney, Adams, Gotch & Douglas, Omaha, for intervenor-appellee.

WRIGHT, CONNOLLY, GERRARD, STEPHAN, McCORMACK, and MILLER-LERMAN, JJ.

MILLER-LERMAN, J.

I. NATURE OF CASE

Liquid Controls Corporation (Liquid Controls) appeals from a jury verdict entered by the district court for Thomas County which found in favor of Richard Jameson (Richard) in a strict liability action against Liquid Controls and awarded him $5 million in damages. Liquid Controls claims the district court erred in denying its motion for reduction of judgment, in failing or refusing to give certain jury instructions, and in denying its amended motion for new trial. Aetna Casualty and Surety Company (Aetna), pursuant to its petition in intervention, cross-appeals the district court's ruling denying Aetna any subrogation interest in certain settlement proceeds received by Richard. Richard cross-appeals, claiming the district court erred in denying his posttrial motion for attorney fees and expenses. We affirm in part, and in part reverse the decision of the district court and remand the cause for further proceedings consistent with this opinion.

II. STATEMENT OF FACTS

Richard is an employee of Sandhill Oil Company (Sandhill), a fuel delivery business owned and operated by Richard's father, Allan Jameson. Richard was injured in a work-related accident on July 16, 1995, when gasoline vapor from a fuel delivery truck owned by Sandhill escaped, igniting and burning Richard.

The truck was outfitted with a fuel pump manufactured by the Blackmer company and with a fuel meter manufactured by Liquid Controls. At the time of the accident, Richard and Allan Jameson were attempting to fix a problem with the truck's fuel delivery system. As part of that process, Allan Jameson loosened several bolts holding a strainer plate on the fuel meter. When the two men again attempted to pump fuel through the system, gasoline vapor escaped from where the bolts had been loosened and ignited. Richard was severely burned over more than 65 percent of his face and body.

As a result of his injuries, Richard received approximately $450,000 from Aetna in workers' compensation benefits.

On March 21, 1996, Richard and Sandhill filed a petition, suing Blackmer and Liquid Controls under separate theories of negligence and strict liability as to each defendant. Richard and Sandhill also sued two other defendants who were dismissed prior to trial. Attached to the petition was an assignment from Tammi Jameson, Richard's wife, assigning her loss of consortium claim to Richard, which claim Richard and Sandhill also raised against Liquid Controls and Blackmer in the petition. Richard and Sandhill sought damages for Richard's past and future medical expenses, past and future lost earnings, disability, and pain and suffering. Richard also sought damages as assignee under Tammi Jameson's loss of consortium claim. On April 22, 1996, Blackmer answered Richard and Sandhill's petition. Blackmer amended its answer on October 28, 1998. Liquid Controls filed its initial answer on August 30, 1996. On October 16, 1998, Liquid Controls filed an amended answer. In their separate amended answers, Blackmer and Liquid Controls, inter alia, denied the petition's allegations and affirmatively alleged that Richard's injuries were caused by Richard's and Allan Jameson's negligent actions. In its amended answer, Liquid Controls also alleged that its fuel meter was manufactured according to the state of the art.

On August 5, 1996, Aetna filed a petition in intervention in the action and claimed a subrogation interest in any settlement or judgment Richard might receive. According to the record, Aetna's counsel attended 39 depositions, conferred with Richard and Sandhill's counsel, participated in trial preparation, and observed portions of the trial.

The 8-day jury trial began on November 30, 1998. The record contains approximately 1,800 pages of testimony from 27 witnesses and over 200 exhibits. To the extent they are necessary, further facts and rulings from the trial are incorporated in our analysis below.

On December 9, 1998, after the close of evidence but before the case was submitted to the jury, Blackmer settled with Richard and Sandhill and was dismissed with prejudice from the case. The record does not contain a written copy of any settlement agreement. According to counsels' representations to the court in the bill of exceptions and in posttrial pleadings, Blackmer agreed to pay a total of $1,425 million in settlement as follows: (1) $25,000 to Garnett Jameson, Richard's mother, and Allan Jameson, and (2) $1.4 million to Richard and Tammi Jameson. Of this $1.4 million, $250,000 was to be used to fund a trust for Richard's benefit and $950,000 was to be paid directly to Richard. The record is unclear if the remaining $200,000 was to be paid directly to Tammi Jameson or paid to Richard as the assignee of Tammi Jameson's loss of consortium claim.

On December 9, 1998, the case against Liquid Controls was submitted to the jury. The record shows that the case against Liquid Controls was submitted with Richard as the only plaintiff and that the only theory of liability submitted to the jury was strict liability. The jury was told that Blackmer was no longer a party to the case but was not told that Blackmer had settled out. The jury was not asked to apportion or consider Blackmer's liability. As part of Richard's burden of proof, however, the jury was instructed to consider the actions of Sandhill and its employees and whether those actions might have caused Richard's injuries. Specifically, the jury was instructed in instruction No. 2 as follows:

In this regard, you may consider whether the injury suffered by Richard Jameson was caused solely by the conduct of Sandhill Oil Company or its employees. If you do not find that the actions of Sandhill Oil Company or its employees were the only proximate cause of the plaintiff's injury, you may not consider that conduct in any way in determining the issues involving the defendant, Liquid Controls. If you find that the actions of Sandhill Oil Company or its employees were the only proximate cause of the plaintiff's injury, your verdict will be for the defendant.
Further, you may not consider in any way the actions of the Plaintiff, Richard Jameson, in determining whether the defendant, Liquid Controls is strictly liable under Nebraska law.

On December 10, 1998, the jury returned a verdict against Liquid Controls and in favor of Richard in the amount of $5 million. Following the jury verdict, on December 17, Liquid Controls filed its motion for new trial. On December 29, Liquid Controls filed an amended motion for new trial and a motion for reduction of the judgment based upon the Blackmer settlement. On January 6, 1999, Richard filed a posttrial motion for a determination of attorney fees pursuant to Neb.Rev.Stat. § 48-122 (Cum. Supp.1996), which the district court also treated as a motion under Neb.Rev.Stat. § 48-118 (Cum.Supp.1996), to determine Aetna's subrogation rights. All of these motions came on for hearing on January 6, 1999.

In an order dated January 11, 1999, the district court denied Aetna any subrogation rights in the Blackmer settlement proceeds, ruling that it would be inequitable to allow Aetna to invade the trust or recover funds arising from Richard's pain and suffering or loss of consortium claims. The district court also ruled that it was premature to determine whether Aetna had any subrogation interest in the judgment in Richard's favor against Liquid Controls because those proceeds had not been and would not be paid out until after the appeal process was concluded. The district court overruled all other posttrial motions.

Liquid Controls appealed. Aetna and Richard cross-appealed.

III. ASSIGNMENTS OF ERROR

On appeal, Liquid Controls has assigned four errors, which combine to form three. Liquid Controls claims, restated, that the district court erred (1) in overruling its motion for a reduction of the jury's verdict because it was entitled to a credit as a result of the Blackmer settlement; (2) in failing or refusing to instruct the jury as to Liquid Controls' affirmative defenses; and (3) in overruling Liquid Controls' motion for new trial because the jury verdict was excessive and was the result of speculation, guess, or conjecture.

On cross-appeal, Aetna assigns three errors which combine to form one. Aetna claims that the district court erred in determining that Aetna was not entitled to any payment from the Blackmer settlement funds in order to satisfy its subrogation interest.

On cross-appeal, Richard assigns as error the district court's failure to award attorney fees and expenses out of any recovery by Aetna.

IV. STANDARDS OF REVIEW

On questions of law, a reviewing court has an obligation to reach its own conclusions independent of those reached by the lower courts. Hausman v. Cowen, 257 Neb. 852, 601 N.W.2d 547 (1999); Gallner v. Gallner, 257 Neb. 158, 595 N.W.2d 904 (1999).

To establish reversible error from a court's refusal to give a requested instruction, an appellant has the burden to show that (1) the appellant was prejudiced by the court's refusal to give the tendered instruction, (2) the tendered instruction is a correct statement of the law, and (3) the tendered instruction is warranted by the evidence....

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