Lewis v. FAG Bearings Corp.

• Decision Date: 30 September 1999
• Citation: 5 S.W.3d 579
• Court: Missouri Court of Appeals
• Parties: (Mo.App. S.D. 1999) Shannon Lewis, Plaintiff-Appellant/Cross-Respondent, v. FAG Bearings Corporation, Defendant-Respondent/Cross-Appellant. 22379 & 22399 0

5 S.W.3d 579 (Mo.App. S.D. 1999)

Shannon Lewis, Plaintiff-Appellant/Cross-Respondent, v. FAG Bearings Corporation, Defendant-Respondent/Cross-Appellant.

22379 & 22399

Missouri Court of Appeals Southern District

09/30/99

Appeal From: Circuit Court of Newton County, Hon. Frank D. Connett, Jr.

Counsel for Appellant: Daniel E. Scott and Glenn R. Gulick, Jr.

Counsel for Respondent: Bryan Cave, Stephen M. Bledsoe and David F. Oliver

Opinion Summary: None

Montgomery and Barney, JJ., concur.

Phillip R. Garrison, Chief Judge

These cases involve an appeal and cross-appeal from a judgment for compensatory damages and a judgment notwithstanding the verdict on punitive damages. Shannon Lewis ("Plaintiff") filed suit against FAG Bearings Corporation ("Defendant") for injuries allegedly arising from exposure to trichloroethylene ("TCE"). A jury found for Plaintiff and awarded her $716,000 in compensatory damages and assessed $1,250,000 in punitive damages. The trial court granted Defendant's motion for judgment notwithstanding the verdict on the punitive damages award. Plaintiff appeals the entry of the judgment notwithstanding the verdict in Case No. 22399, and Defendant appeals the judgment awarding compensatory damages in Case No. 22379.

Defendant utilized TCE, which is now classified as a hazardous substance and hazardous waste under federal guidelines, at its manufacturing facility in Joplin, Missouri from 1970 to 1982. There was evidence that during those years, TCE was dumped or leaked into pits, lagoons, and onto the ground at Defendant's facility. The land sloped to the south from Defendant's facilities, in the direction of the Village of Silver Creek ("Silver Creek").¹

Plaintiff lived in Silver Creek with her family from 1985, when she was ten years old, until 1989. During that time, she drank well water, played outdoors, played in a local creek and pond, played in dirt at a nearby construction site, and sometimes slept in the basement of their home which occasionally contained moisture from groundwater. According to the testimony, during the time that she lived in Silver Creek Plaintiff started having health problems which continued after the family moved in 1989. It was Plaintiff's contention that exposure to the TCE caused her to experience numerous and continuing health problems including brain damage, cognitive deficits, personality changes, fatigue, muscle aches, headaches, malaise, and upper respiratory problems.

Following the jury verdict, the trial court denied Defendant's motion for judgment notwithstanding the verdict, or in the alternative, for a new trial as it related to the verdict for compensatory damages, but entered a judgment notwithstanding the verdict on the claim for punitive damages. In doing so, the trial court held that the issue of punitive damages should not have been submitted to the jury because Plaintiff had failed to make a submissible case on that claim.

In her only point on appeal, Plaintiff contends that the trial court erred in entering a judgment notwithstanding the verdict on the issue of punitive damages. She claims that she presented a submissible punitive damage case because the evidence showed that Defendant knew or was charged with knowledge as early as 1981 that TCE from its facilities was causing contamination with a high probability of injury to nearby residents, and it failed to take any action to correct it, notify the Silver Creek residents, or cooperate with the State's later investigation and cleanup efforts.

On appeal from a judgment notwithstanding the verdict, appellate courts review the evidence and reasonable inferences favorable to the jury verdict and disregard contrary evidence that does not support the verdict. Moore v. City of Park Hills, 924 S.W.2d 301, 302 (Mo. App. E.D. 1996). A defendant's motion for judgment notwithstanding the verdict should be granted only where the plaintiff failed to make a submissible case. Id.

In this case, there was evidence that Defendant knew of leaks of TCE during the years that it used the chemical. In fact, Defendant disposed of TCE on portions of its property which generally sloped towards Silver Creek during a period of time prior to Plaintiff moving to that area. The individual in charge of disposing of the TCE testified that Defendant stopped disposing of it on the ground and started storing it in barrels about the time the Environmental Protection Agency ("EPA") started issuing regulations concerning the chemical. The evidence indicated that, although he made his supervisor aware that the barrels were leaking, they remained on Defendant's property for over a year. Defendant stopped using TCE in 1982 when it no longer conducted the manufacturing processes that used the chemical.

In 1991, the Missouri Department of Health notified the Missouri Department of Natural Resources ("MDNR") that TCE had been found during routine sampling of wells in Silver Creek. Additional testing revealed that some wells directly south of Defendant's property had TCE levels substantially higher than the maximum containment level for drinking water. As a result of these discoveries, the MDNR conducted an investigation, including site inspections, which resulted in a request that the EPA provide bottled water to the residences where the TCE levels were found to be above acceptable levels, and the MDNR recommended that the EPA place the "site"² on the National Priorities List.³ Subsequent inspections and assessments resulted in TCE being found in the ground water on Defendant's property, which flows to the south in the direction of Silver Creek. As of 1992, wells were found to be contaminated as far south as two miles from Defendant's property, and in 1993, surface water running off Defendant's property still contained evidence of TCE. The MDNR eventually concluded that Defendant was the primary, if not the sole, source for the TCE contamination, and that it could not account for approximately 30,000 gallons of the chemical which it had purchased over the years.

Plaintiff argues that even if Defendant had no specific purpose to harm anyone, punitive damages were authorized. She cites Alack v. Vic Tanny Int'l, 923 S.W.2d 330, 339 (Mo. banc 1996) and Kansas City v. Keene Corp., 855 S.W.2d 360, 375 (Mo. banc 1993), for the proposition that punitive damages are authorized if the evidence shows that Defendant was aware of its conduct, and "at that time" was conscious of a high probability that its conduct would injure a specific class of persons.

In support of this point, Plaintiff points out that Defendant stopped its practice of dumping waste TCE on its property in approximately 1980 or 1981 when the EPA issued regulations prohibiting the disposal of TCE on the ground. Defendant then began storing the waste in barrels on its property and continued to do so for at least a year even though some of its employees pointed out to management that the barrels were leaking on the ground and asked that they be hauled off. Plaintiff also points to evidence that Defendant had disposed of TCE on the ground for a number of years before the EPA issued the regulations against disposing of it in that manner, and that after the regulations were issued and it started storing the sludge in barrels, it did nothing to clean up or warn of the TCE that had been disposed of in areas of the property where ground water ran to the south in the direction of Silver Creek. In this regard, Plaintiff notes that there was evidence that a ditch that Defendant pumped TCE into ran to the south in the direction of a pond on neighboring property, and that Defendant was notified on a "couple of occasions" that fish kills had occurred in the pond.⁴

Trial of this case began on March 3, 1998, and was subject to the Missouri Supreme Court's decision that evidence must meet the clear and convincing standard of proof on all claims for common law punitive damages. Rodriguez v. Suzuki Motor Corp., 936 S.W.2d 104, 111 (Mo. banc 1996). Cases have described the clear, cogent and convincing standard of proof as that which instantly tilts the scales in the affirmative when weighed against evidence in opposition; evidence which clearly convinces the fact finder of the truth of the proposition to be proved. In Interest of M.N.M., 681 S.W.2d 457, 459 (Mo. App. W.D. 1984).⁵

The issue of punitive damages was submitted under the following instruction:

If you find in favor of plaintiff under Instruction Number 8, and if you believe that:

First, defendant did not warn persons who might be thereby affected of [sic] the release of TCE and did not attempt to remedy any contamination caused by the release, and

Second, defendant knew or had information from which defendant, in the exercise of ordinary care, should have known that such conduct created a high degree of probability of injury, and

Third, defendant thereby showed complete indifference to or conscious disregard for the safety of others, then in Verdict A, you may find that defendant FAG is liable for punitive damages.⁶Plaintiff's theory requires supporting evidence that Defendant knew, or should have known, at the time it failed to warn or attempt to remedy the contamination, that its conduct created a high degree of probability of injury.

Plaintiff's punitive damage claim was based upon her claim for compensatory damages which, in turn, was based upon her exposure to TCE while living in Silver Creek between 1985 and 1989. There was no proof that Defendant was aware prior to 1991 that any wells in Silver Creek were contaminated with TCE. Likewise, there was no proof that Defendant was aware, prior to the DNA investigations, that TCE had migrated from its property to property in Silver Creek or any other location at which Plaintiff might have been exposed.

In a negligence case, punitive damages are awardable only if, at the time of the negligent act, the defendant knew or had reason to know that there was a high degree...