Peterson v. Nevada Motor Rentals, Inc.

• Decision Date: 17 March 1970
• Docket Number: No. 22736,22736
• Citation: 470 P.2d 905,28 Colo.App. 102
• Parties: Gordon V. PETERSON and the Pacific Employers Insurance Company, Plaintiffs in Error. v. NEVADA MOTOR RENTALS, INC., a Nevada corporation, and W. J. Digby, an individual, Defendants in Error. . I
• Court: Colorado Court of Appeals

Page 905

470 P.2d 905

28 Colo.App. 102

Gordon V. PETERSON and the Pacific Employers Insurance Company, Plaintiffs in Error. v. NEVADA MOTOR RENTALS, INC., a Nevada corporation, and W. J Digby, an individual, Defendants in Error.

No. 22736.

Colorado Court of Appeals, Div. I.

March 17, 1970.

.

Myrick, Criswell & Branney, Englewood, for plaintiffs in error.

Albert B. Dawkins, Denver, for defendants in error.

PIERCE, Judge.

This case was originally filed in the Supreme Court of the State of Colorado, and was subsequently transferred to the Court of Appeals under authority vested in the Supreme Court.

Plaintiffs in error were plaintiffs below; defendants in error were defendants below. Plaintiff, Gordon V. Peterson, will hereinafter be referred to as Peterson; defendant, Nevada Motor Rentals, Inc., will be referred to as Nevada; defendant, W. J. Digby, will be referred to as Bill Digby; and W. J. Digby, Inc., which is not a party to this action, will be referred to by that corporate name or as the Company.

On January 6, 1960, Gordon V. Peterson, an employee of W. J. Digby, Inc., was injured in an accident involving a tractor-trailer unit owned by Nevada, and leased to W. J. Digby, Inc., sometime around 1957. We are not informed as to the exact date on which W. J. Digby, Inc., became the bailee of this particular unit. Peterson and another driver named Nicklan had driven the fully-loaded unit from Colorado to Arizona. On their return trip to Denver, after having delivered their original cargo and subsequently obtaining a 30,000 lb. cargo to haul back to Denver, the 'short line drive' (the drive shaft linking the first and second drive axles of the tractor) dropped out of the tractor, severing an air hose and rendering the brakes on the first and second drive axles inoperative. Peterson and Nicklan, after safely stopping and inspecting the vehicle, then proceeded some 25 miles to Prescott, Arizona, where they 'pulled' the second drive axle to avoid damage to the differential on that axle from freewheeling. Thereafter, and without repairs to the brake hose itself, they drove approximately 90 miles to Flagstaff, Arizona, where Peterson called W. J. Digby, Inc., in Denver, to obtain authority (required, Peterson claimed, by company policy) to make repairs. He talked to James Digby, the President of the Company, who referred him to one John Buckhold, who was apparently the shop foreman for all equipment operated by W. J. Digby, Inc., although the evidence did not establish conclusively who actually employed him. Buckhold authorized Peterson to plug the broken air line, only, in order to stop air leakage. This repair, although returning brakes to the first drive axle of the tractor, did not cure the lack of brakes on the second drive axle.

After plugging the air line, Peterson and Nicklan resumed their return trip to Denver. They proceeded from Flagstaff, across Arizona and through New Mexico, crossing into Colorado by way of Raton Pass. Nicklan was driving when they came down the Colorado side of Raton Pass; Peterson was sleeping. At a point south of Trinidad, Colorado, while still on Raton Pass, the accident occurred. Peterson awoke as the tractor-trailer unit was in mid-air, overturning down a precipice at the edge of the road. When the vehicle had come to rest, Peterson immediately asked Nicklan what had happened, and testified at trial that Nicklan told him, 'I lost it coming down the hill; didn't have enough brakes to hold it.'

As a result of this accident, Peterson was severely injured. He subsequently collected a workmen's compensation claim from W. J. Digby, Inc., through its insurance carrier, which, in turn, became a plaintiff-subrogee in this action.

The record shows that prior to 1959, Bill Digby was the principal stockholder of W. J. Digby, Inc., which he sold on January 1, 1959, to his son, James Digby, in exchange for a promissory note. James took over the operation of the Company and, at least, made interest payments on that note. The evidence indicates that Bill Digby did not remain in the employ of the Company, and that he drew no salary after the sale. He did, however, have some contact with the operation of the Company in that drivers hired by the Company were ordered to report breakdowns or other troubles either to Bill Digby or to his son, James; and Bill, from time to time, did direct corporate employees' work, and on at least one occasion meted out punishment to an errant driver. There are other indications in the record that he was consulted about company policy and exercised some degree of control over Company matters. The record also shows that Bill Digby was the majority stockholder of the defendant, Nevada, whose principal business was to lease tractor-trailer units to W. J. Digby, Inc.

The instant action does not involve an attempt to recover from W. J. Digby, Inc. on grounds of negligence, since Peterson is precluded from recovering on grounds of negligence, because he elected to take a workmen's compensation claim against that Company. He attempts to recover from defendant Bill Digby on grounds that Bill is liable to him under common law negligence theory; and to recover from Nevada Motor Rentals, Inc., on grounds of implied warranty of fitness for purpose, or in the alternative, strict liability in tort, in that, he alleges, the subject tractor-trailer unit was defective; and such defect was the proximate cause of his jury. These allegations were contained in plaintiffs' fourth amended complaint. The defendants answered by filing a general denial, and by setting up defenses of unavlidable accident, contributory negligence, assumption of risk, and negligence of persons other than parties to this action.

At the close of plaintiffs' case, defendants moved for a directed verdict which was granted. The plaintiffs appeal from this ruling.

Plaintiffs assign as error the trial court's finding of no agency between Bill Digby and W. J. Digby, Inc.; and the finding that Bill Digby could not be held liable in negligence. They further assign as error the trial court's finding that...