Kansas City Power & Light v. Bibb & Assoc.

• Decision Date: 09 May 2006
• Docket Number: No. WD 64456.,No. WD 64480.,WD 64456.,WD 64480.
• Citation: 197 S.W.3d 147
• Court: Missouri Court of Appeals
• Parties: KANSAS CITY POWER & LIGHT COMPANY, Appellant-Respondent, v. BIBB & ASSOCIATES, INC., et al., Defendant, Rockwell Automation, Inc., Respondent-Appellant.

197 S.W.3d 147

KANSAS CITY POWER & LIGHT COMPANY, Appellant-Respondent, v. BIBB & ASSOCIATES, INC., et al., Defendant, Rockwell Automation, Inc., Respondent-Appellant.

No. WD 64456.

No. WD 64480.

Missouri Court of Appeals, Western District.

May 9, 2006.

Motion for Rehearing and/or Transfer to Supreme Court Denied June 27, 2006.

Application for Transfer Denied August 22, 2006.

William D. Beil and Randall E. Hendricks, Co-Counsel, Kansas City, MO, for appellant-respondent.

Susan F. Robertson, Columbia, Steven P. Sanders, Co-Counsel, St. Louis, MO, for respondent-appellant.

Before JAMES M. SMART, P.J., ROBERT G. ULRICH and LISA WHITE HARDWICK, JJ.

ROBERT G. ULRICH, Judge.

This case involves product liability and negligence claims asserted by Kansas City Power & Light Company (KCPL) against Rockwell Automation, Inc. (f/k/a Allen-Bradley Company LLC) based on a defective Troubleshooting Guide and a defective programmable logic controller (PLC). KCPL asserted that defects in the two products caused or contributed to cause a natural gas explosion that destroyed a 12-story boiler at KCPL's Hawthorn 5 power plant on February 17, 1999. The jury returned a verdict in favor of KCPL for $452,000,000 in damages. It assessed fault at 30% to Rockwell and 70% to KCPL. The trial court entered judgment in favor of KCPL in the amount of $190,867. In entering judgment, the trial court calculated KCPL's damages as $97,622,191.16 after deductions for settlements paid by other defendants and accounting for KCPL's fault but found as a matter of law that a contractual limitation of liability provision operated to limit Rockwell's liability to KCPL to $190,867. The judgment also awarded post-judgment interest commencing on the date of the jury's verdict. KCPL appeals the judgment raising six points. Points I, II, III, IV, and V allege that the trial court erred for various reasons in applying as a matter of law Rockwell's affirmative defense based on contractual limitation of liability. Point VI alleges that the trial court erred in failing to submit KCPL's failure to warn and instruct claims based on the Troubleshooting Guide and the Rockwell training materials. Rockwell cross-appeals raising two points. Point I of the cross-appeal alleges trial court error in the calculation of damages. Finally, point II of the cross-appeal alleges that the trial court erred in awarding post-judgment interest to commence on the date of the jury verdict rather than the date of the judgment. The judgment of the trial court is reversed, and the case is remanded with directions.

FACTS

KCPL filed suit in April 2001 against several defendants including Bibb and Associates, Inc., Forney Corporation, and Respondent Rockwell to recover damages relating to a natural gas explosion on February 17, 1999, that destroyed the boiler at its Hawthorn 5 power plant. KCPL alleged that Hawthorne 5 employed a natural gas and coal-fired boiler to produce electric power and that the explosion caused damage to the property and other losses that exceeded $600,000,000.

KCPL alleged in its petition that beginning in 1993, various defendants were involved in the replacement of the burner management system (BMS) at the Hawthorn 5 power plant. A BMS is an electronically-controlled fuel safety mechanism that controls and monitors fuel delivery into the boiler heating system. KCPL alleged that Bibb prepared a proposal and bid specifications for the replacement BMS; that Forney designed, produced, and installed the BMS; and that Rockwell designed and manufactured the programmable logic controller (PLC), which was utilized by the BMS. KCPL also alleged that Rockwell designed and published a Troubleshooting Guide for use in resolving operation issues involving PLCs. KCPL alleged that defects in both the design of the BMS and its components and in the Troubleshooting Guide resulted in the erroneous transmission of signals to open gas valves and to fire igniters that caused the boiler explosion.

In its answer, Rockwell denied liability and asserted thirty affirmative defenses, one of which was that Rockwell's liability for KCPL's damages was limited by the limitations of liability provision set out in the documents accompanying the sale of the product to KCPL. Thereafter, Rockwell filed a motion for partial summary judgment based on the contractual limitation of remedies defense. It asserted that the contract between KCPL and Forney for the design and installation of the BMS contained a limitation of liability provision that precluded KCPL from recovering against Forney or its vendors economic damages including but not limited to lost profits, loss of use, and the cost of replacement power. The contract terms, Rockwell asserted, also limited any remaining monetary liability of Forney and its vendors to the contract price, which was $190,867.¹ Rockwell contended that because it was a Forney vendor under the facts surrounding its sale of the PLC, the contract terms limited KCPL's recovery against it.

KCPL opposed Rockwell's motion for summary judgment and filed its own motion for summary judgment regarding Rockwell's limitation of liability defense. KCPL argued that Forney could not enforce the limitation of liability for several reasons and, thus, Rockwell could not enforce the limitation. Alternatively, KCPL argued that even if the provision was enforceable, Rockwell was neither a third-party beneficiary of the Forney/KCPL contract nor a vendor of Forney because The Reynolds Company, an entity unrelated to Rockwell, bought the PLC from Rockwell and sold it to Forney.

The trial court, the Honorable Jon R. Gray, entered an order denying Rockwell's and KCPL's motions for summary judgment regarding the contractual limitation of liability defense. It found that genuine issues of material fact remained in dispute and that "[t]he nature of both motions are such that the Court can re-visit each at the close of the plaintiff's evidence and/or at the close of all the evidence."

Prior to trial, KCPL filed a motion in limine to exclude the Forney/ KCPL contract and other evidence or argument concerning the limitation of liability provision. At the hearing on the motion, KCPL argued that the limitation of liability provision could not be enforced for all of the reasons previously raised in its motion for summary judgment and that whether the provision applied to Rockwell was a question of law. The trial court, the Honorable J.D. Williamson, Jr., indicated that it would not reconsider the ruling of Judge Gray on the motions for summary judgment. It noted that the applicability of the limitation of liability provision to Defendant Rockwell was an issue that did not need to be addressed at that point in the trial and that the provision, if it applied to the defendant Rockwell, would not be relevant unless a verdict were entered against Rockwell. The court further noted that the affirmative defense was not a jury issue and that if the provision applied, the court would apply it at the end of the case depending upon the verdict and the assessment of damages. Finally, the court indicated that if the Forney/KCPL contract were relevant for any other issue other than the limitation of liability provision, or if any factual disputes existed pertaining to application of the provision, the parties should provide separate briefs regarding those issues. The court, therefore, sustained KCPL's motion to exclude the contract and other evidence concerning the limitation of liability provision, and the case proceeded to trial.

The case was submitted to the jury on four verdict directing instructions, two based on the Troubleshooting Guide and two based on the PLC. Instruction 5 submitted a strict liability product defect claim regarding the Troubleshooting Guide. It directed an assessment of fault to Rockwell if the jury believed that Rockwell sold the Troubleshooting Guide in the course of its business and the guide was defective and unreasonably dangerous when put to a reasonably anticipated use. Instruction 7 submitted a negligence design claim regarding the Troubleshooting Guide and directed an assessment of fault to Rockwell if the jury believed that Rockwell designed the Troubleshooting Guide, the guide failed to tell users to verify ASB module switch settings, and Rockwell failed to use ordinary care in the design of the guide. Instruction 9 submitted a strict liability product defect claim regarding the PLC. It directed an assessment of fault to Rockwell if the jury believed Rockwell sold the PLC in the course of its business and the PLC was in a defective condition unreasonably dangerous when put to a reasonably anticipated use. Finally, Instruction 11 submitted a negligent design claim regarding the PLC. The instruction directed an assessment of fault to Rockwell if the jury believed that Rockwell designed the PLC; the PLC has rack addressing in the ASB modules instead of on the rack backplane, or rack address setting is by dip switches in the ASB module instead of visible switches on the front of the ASB module, or the PLC does not fault when the ASB modules are swapped between racks without changing the addresses; and Rockwell failed to use ordinary care in designing the PLC. At Rockwell's request, a comparative fault instruction was also submitted.

A general verdict form was submitted to the jury. It read, in pertinent part:

On the claim of Plaintiff for compensatory damages, we, the undersigned jurors, assess percentages of fault as follows:

Defendant Rockwell Automation, Inc. ___% (zero to 100%)

(formerly known as Allen-Bradley Co.) Plaintiff Kansas City Power & Light Co. ___% (zero to 100%)

TOTAL ___% (zero OR 100%)

We, the undersigned jurors, find the total amount of Plaintiff's damages disregarding any fault on the part of Plaintiff to be $________ (stating the amount).

Rockwell offered two alternative verdict forms including one allowing the jury to apportion fault between...