Mills v. Guthrie County Rural Elec. Co-op. Ass'n

• Decision Date: 18 April 1990
• Docket Number: No. 88-1581,88-1581
• Citation: 454 N.W.2d 846
• Parties: Richard MILLS and Laureen Mills, Appellants, v. GUTHRIE COUNTY RURAL ELECTRIC COOPERATIVE ASSOCIATION, Appellee.
• Court: Iowa Supreme Court

Page 846

454 N.W.2d 846

Richard MILLS and Laureen Mills, Appellants, v. GUTHRIE COUNTY RURAL ELECTRIC COOPERATIVE ASSOCIATION, Appellee.

No. 88-1581.

Supreme Court of Iowa.

April 18, 1990.

Rehearing Denied May 23, 1990.

David J. Welu of Welu and Welu, Redfield, for appellants.

Hugh J. Cain, Stephen R. Eckley, and Thomas G. Fisher, Jr. of Duncan, Jones, Riley & Finley, P.C., Des Moines, for appellee.

Considered by HARRIS, P.J., and SCHULTZ, CARTER, SNELL, and ANDREASEN, JJ.

CARTER, Justice.

Plaintiffs, Richard Mills and Laureen Mills, who recovered a judgment against the defendant, Guthrie County Rural Electric Cooperative Association, for damages arising from an electrical fire in plaintiffs' hog farrowing facility, appeal urging that trial court errors resulted in an inadequate recovery of damages. Upon considering the arguments of the parties, we affirm the district court's determination of the liability issue, reverse its judgment as to the damage issue, and remand the case for a retrial as to plaintiffs' damages.

Plaintiffs are husband and wife who farm northwest of Redfield in Dallas County. The defendant is engaged in the business of production, sale, and distribution of electricity to rural customers. On March 6, 1986, a fire destroyed plaintiffs' hog farrowing facility, including livestock and other personal property contained therein. The livestock destroyed in the fire included approximately one hundred eight baby pigs, thirteen unbred sows, thirty-six bred sows, eight replacement gilts, and twenty lambs. The cause of the fire was an imbalance in electrical voltage delivered to plaintiffs' farm.

The fire was investigated by an insurance adjuster employed by defendant's insurance carrier. Plaintiffs had numerous conversations with this adjuster over a period of several months. They contend that the adjuster at all times acknowledged defendant's liability and made repeated promises that a favorable settlement offer would be made. The adjuster did eventually make a settlement offer which plaintiffs rejected. When that offer was later increased, it was again rejected.

Plaintiffs commenced this action based on theories of res ipsa loquitur, specific negligence, statutory violations, strict liability, tortious interference with business relationships, bad-faith failure to settle, and intentional infliction of emotional distress. The liability issues were ultimately submitted to the jury on a single theory of specific negligence. The jury found in plaintiffs' favor and allowed a recovery of $30,062.

On this appeal, plaintiffs claim that the trial court should have submitted the liability issues on a theory of strict liability in addition to negligence. They also contend that the court erred in not submitting their tortious interference and failure-to-settle claims, in excluding evidence of lost profits, and in failing to allow the jury to award damages for emotional distress and punitive damages. Other significant facts which bear upon our decision in this appeal are stated and considered in our discussion of the legal issues presented.

I. Failure to Submit Additional Legal Theories Concerning Defendant's Liability.

We first consider plaintiffs' contention that the district court erred in failing to submit additional legal theories under which the jury might find the defendant liable. This argument pertains, inter alia, to the proffered theories of res ipsa loquitur, statutory violation, strict liability in tort, tortious interference with a business relationship, and tortious refusal to settle. The defendant argues that plaintiffs may not predicate reversible error on liability issues when the verdict of the jury was in his favor on the matter of liability. We agree.

The district court submitted the issue of defendant's liability under a single theory of specific negligence. The jury found that the defendant was negligent and awarded damages. This court has consistently held that errors against a party are cured by a verdict in that party's favor unless the error goes to the amount of damages. Nassif v. Pipkin, 178 N.W.2d 334, 337 (Iowa 1970); Edgren v. Scandia Coal Co., 171 Iowa 459, 474, 151 N.W. 519, 524-25 (1915); Thew v. Miller, 73 Iowa 742, 743, 36 N.W. 771, 772 (1888). Apart from the question of punitive damages, which we consider separately, plaintiffs make no suggestion that the elements of damage that would have been recoverable under the theories of liability not submitted would have differed from those elements of damage recoverable under their negligence claim.

Plaintiffs assert that certain of their pleaded causes of action, if sustained, would have permitted the jury to award exemplary damages. In considering the facts on which plaintiffs' claim is predicated, we do not believe that this contention is correct. The evidence revealed that the conduct which caused the voltage irregularity was (a) defendant's use of split bolt connectors instead of compression connectors to connect a grounding jumper wire to the main neutral line, and (b) defendant's failure to discover the dangerous situation which that omission presented.

We have said that an award of punitive damages is not appropriate unless it is established that the defendant acted with actual or legal malice. Barnhouse v. Hawkeye State Bank, 406 N.W.2d 181 (Iowa 1987). In applying this rule, we have held that

[a]ctual malice is shown by such things as personal spite, hatred, or ill will. Legal malice is established by showing wrongful conduct committed with a willful or reckless disregard for the rights of another. More than mere negligence must be shown.

Id. at 184; Klooster v. North Iowa State Bank, 404 N.W.2d 564, 572 (Iowa 1987). Defendant's conduct was not sufficiently egregious to permit the recovery of punitive damages. The trial court correctly refused to submit any claim of punitive damages to the jury.

Plaintiffs urge that defendant's conduct should be measured not only by the acts which caused the voltage irregularity but also by the conduct employed in settlement negotiations with the plaintiffs. We cannot agree that defendant's conduct with respect to settlement, even when viewed in the light most favorable to the plaintiffs, permits a recovery of punitive damages.

This court has previously held that a third-party claimant may not maintain a bad-faith tort action against an insurer of one who has tortiously damaged that claimant. See Long v. McAllister, 319 N.W.2d 256, 262 (Iowa 1982). It appears that the actions of which plaintiffs complain were primarily those of defendant's liability insurance carrier. We do not believe that the insured may be vicariously liable for such actions under circumstances in which the insurer would not be liable under the holding in Long.

Plaintiffs' assignments of error pertaining to evidentiary issues relating to liability (such as the exclusion of the adjuster's concession of liability) and the district court's refusal to grant partial summary judgment or partial directed verdict on the liability issues are also subject to the rule that errors against a party are cured by a verdict in that party's favor. Consequently, we need not consider these claims on the merits.

II. Refusal of Amendment Claiming Intentional Infliction of Emotional Distress.

Prior to trial, plaintiffs filed a motion to amend their petition to assert a claim for intentional infliction of emotional distress. The trial court refused to allow the amendment. It did not indicate in this ruling that the proffered amendment was untimely but, rather, found that the factual allegations did not give rise to such a claim.

No specific offer of proof was made at the time of this ruling. Considering the totality of the evidence adduced at trial, however, we find no basis for having included such a claim in the issues submitted to the jury. We need not base this determination on whether the degree of emotional distress, if any, which plaintiffs were shown to have suffered was sufficient to sustain an intentional infliction claim. The court must first determine whether the relevant conduct of the defendant was sufficiently outrageous to permit such a claim. See Roalson v. Chaney, 334 N.W.2d 754, 756 (Iowa 1983).

In making that determination, we have followed the requirement set forth in Restatement (Second) of Torts section 46 comment d. For conduct to be sufficiently outrageous to permit an intentional infliction claim, it must go beyond all possible bounds of decency and be regarded as atrocious and utterly intolerable in a civilized community. Harsha v. State Sav. Bank, 346 N.W.2d 791, 801 (Iowa 1984). Indeed, we have recognized that it is not even sufficient that the conduct in question would have entitled the plaintiff to punitive damages. Vinson v. Linn-Mar Community School Dist., 360 N.W.2d 108, 118 (Iowa 1984). Judged by these standards, defendant's conduct, as shown by the evidence, fell far below that which is required in order to sustain a claim for intentional infliction of emotional distress.

III. Rulings by the Court Restricting Proof of Lost Profits.

We next consider plaintiffs' contention that the trial court erred in refusing to permit the jury to award damages for lost profits and in excluding the testimony of witnesses with respect to their lost-profit claims. The only elements of damage which the trial court submitted to the jury were the destruction of personal property (including the value of the animals) and the destruction of the farrowing building. In ruling on defendant's motion in limine seeking to exclude evidence of lost profits, the trial court sustained those motions in their entirety and continued to adhere to that ruling in the face of offers of proof submitted by plaintiffs. In making up the jury instructions, the trial court refused to submit any issue on lost profits as an element of damage.

Defendant seeks to uphold the court's rulings precluding proof of lost profits on...