Qwest Serv. Corp.. v. Blood

• Decision Date: 20 June 2011
• Docket Number: No. 09SC534.,09SC534.
• Citation: 252 P.3d 1071
• Parties: QWEST SERVICES CORPORATION and Qwest Corporation, Petitionersv.Andrew BLOOD, Carrie Blood, and Public Service Company of Colorado, d/b/a Xcel Energy, Respondents.
• Court: Colorado Supreme Court

252 P.3d 1071

QWEST SERVICES CORPORATION and Qwest Corporation, Petitioners

v.Andrew BLOOD, Carrie Blood, and Public Service Company of Colorado, d/b/a Xcel Energy, Respondents.

No. 09SC534.

Supreme Court of Colorado, En Banc.

May 23, 2011.As Modified on Denial of Rehearing June 20, 2011.*

Gibson, Dunn, & Crutcher LLP, Gregory J. Kerwin, Robert C. Marshall, Frederick R. Yarger, Denver, Colorado, Treece, Alfrey, Musat & Bosworth, P.C., Thomas N. Alfrey, Robert J. Zavaglia, Jr., Denver, Colorado, Attorneys for Petitioners.Fogel, Keating, Wagner, Polidori and Shafner, P.C., William L. Keating, Michael O'Brien Keating, Denver, Colorado, Hale Westfall, LLP, Richard A. Westfall, Peter J. Krumholz, Denver, Colorado, Attorneys for Respondents, Andrew Blood and Carrie Blood.White and Steele, P.C., David J. Nowak, John Lebsack, Denver, Colorado, Attorneys for Respondent, Public Service Company of Colorado.John W. Suthers, Attorney General, Daniel D. Domenico, Solicitor General, Megan Paris Rundlet, Assistant Attorney General, Denver, Colorado, Attorneys for Amicus Curiae State of Colorado.Center for Constitutional Litigation, P.C., Andre Mura, Washington, D.C., Ogborn, Summerlin, & Ogborn LLC, Thomas D. Neville, Denver, Colorado, Attorneys for Amicus Curiae American Association for Justice.Wheeler Trigg O'Donnell LLP, Malcolm E. Wheeler, Denver, Colorado, Mayer Brown LLP, Evan M. Tager, Washington D.C., Attorneys for Amicus Curiae Chamber of Commerce of the United States of America.Ayd & Johnson, James D. Johnson, Denver, Colorado, Attorneys for Amicus Curiae Colorado Defense Lawyers Association.Justice MARTINEZ delivered the Opinion of the Court.

Petitioner Qwest Services Corporation (“Qwest”) was found negligent for failing to maintain a utility pole that collapsed while respondent Andrew Blood was climbing it as part of his employment as a lineman with respondent/third-party defendant Public Service Company of Colorado, doing business as Xcel Energy (“Xcel”). The jury determined that Qwest was 100% at fault for Blood's injuries and awarded $9,917,600 for economic damages, $10,000,000 for physical impairments and disfigurement, $1,000,000 for non-economic damages, and $750,000 for loss of consortium. The jury further awarded $18,000,000 in exemplary damages after finding that Qwest acted willfully and wantonly in failing to maintain the pole and by failing to have a periodic inspection program that would have detected the pole's dangerous condition. Upon review, the court of appeals upheld the majority of the award in the published opinion of Blood v. Qwest Services Corporation, 224 P.3d 301 (Colo.App.2009). Qwest sought certiorari review in this Court seeking a new trial on all issues and a reversal of the judgments in favor of Blood and Xcel.

We granted certiorari on two issues related to the award of exemplary damages. ¹ We hold that the U.S. Supreme Court's decision in Philip Morris USA v. Williams, 549 U.S. 346, 127 S.Ct. 1057, 166 L.Ed.2d 940 (2007), does not support Qwest's facial challenge to section 13–21–102(1), C.R.S. (2010). Qwest's as-applied challenge to section 13–21–102(1) also fails because the trial court's instruction to the jury to disregard post-accident evidence in assessing exemplary damages was sufficient to comply with Philip Morris.

We also conclude, on de novo review, that the evidence is sufficient to demonstrate that Qwest's failure to implement a periodic pole inspection program was “willful and wanton” beyond a reasonable doubt and thereby satisfies the requirements for an exemplary damages award under section 13–21–102(1)(a).

Finally, we hold that the jury's $18 million exemplary damages award is within a constitutionally permissible range which is not “grossly excessive.” After conducting a de novo review of the record and analyzing the three guideposts announced in BMW of North America v. Gore, 517 U.S. 559, 575, 116 S.Ct. 1589, 134 L.Ed.2d 809 (1996), we conclude that Qwest's failure to implement a periodic pole inspection program was sufficiently reprehensible to justify an exemplary damages award slightly less than compensatory damages.

I. Facts and Procedure

Andrew Blood, a lineman employed by Public Service Company of Colorado, doing business as Xcel Energy (“Xcel”), suffered severe and permanent injuries while working on wood utility pole numbered P5905 owned by Qwest Services Corporation (“Qwest”). P5905 was installed in 1958.² In 1960, Qwest and Xcel entered into a Joint Use Contract (“JUC”) that allowed Xcel to use Qwest's poles. In 2004, Union Pacific's operations required that P5905 be moved from the railroad's right of way. Xcel developed and executed a plan to relocate P5905.

Three weeks before Blood's injury, an Xcel crew removed P5905's high voltage lines using a bucket truck. Two weeks later, Qwest removed the phone cable and sole supporting guy line from P5905. On June 29, 2004, Xcel assigned Blood to remove its attachments from P5905. Blood visually inspected P5905, and determined that it was well-placed in the ground. Blood also sound-tested P5905 by striking it numerous times with a heavy hammer to detect internal rot. He believed the pole was solid enough to climb, a belief shared by other experienced Xcel lineman on the scene. Thus, rather than using a bucket truck, Blood climbed the pole and started removing Xcel's attachments. As he was removing the last crossarm, P5905 broke, carrying Blood to the ground.

Due to the force of the fall, Blood suffered a burst fracture of his T–12 and L–1 vertebrae, a forward dislocation of his T–11 vertebra on his T–12 vertebra, a broken pelvis and a fractured right femur. Even though surgeons at Saint Anthony's Central, a level one trauma center in Denver, were able to stabilize and realign Blood's spinal column, he was rendered a T12 paraplegic from the waist down. As a result, he has impaired motor skills and sensory functions in his legs, a neurogenic bladder, limited bowel function, sexual and reproductive dysfunction, and impaired cognitive function due to the medications that are necessary to alleviate the chronic neuropathic pain that often results from a spinal injury.

A. The Complaints

Blood sued Qwest for negligence, claiming that the accident was attributable to Qwest's failure to adopt a periodic pole inspection, maintenance, and repair program that would have discovered P5905's decay prior to Blood's accident. Blood's wife, Carrie, also sued Qwest for loss of consortium. Blood later amended his complaint to request exemplary damages based on Qwest's knowledge that its poles would rot over time and endanger linemen and the public.

Qwest brought a third-party complaint against Xcel seeking, among other things, contractual indemnity under the JUC. Article XII of the JUC provided that each party was responsible for injuries to its employees arising from a jointly used pole where the injuries were caused by the concurrent negligence of the parties or could not be traced to the sole negligence of the other party. Qwest argued that Xcel was negligent in failing to properly train its employee Blood and should have to pay for all of his damages pursuant to Article XII.

Xcel, in turn, raised the affirmative defense that Qwest could not enforce the liability-shifting provisions in Article XII of the JUC because it failed to perform a material term of the contract, namely to implement a periodic pole inspection program. In response to this affirmative defense, Qwest presented two arguments. First, Qwest argued that a periodic pole inspection program was not a material term of the JUC as demonstrated by the fact that Xcel had abandoned its own inspection program in 1995. Hence, Qwest argued that its failure to implement a periodic pole inspection program did not constitute a breach of the JUC. In the alternative, Qwest argued that Xcel had waived its right to declare a breach of the JUC due to the fact that Xcel continued to perform the JUC after Blood's accident despite knowing that Qwest still did not have a periodic pole inspection program in place. Qwest did not seek to bifurcate its contract claim against Xcel from Blood's negligence claim.

B. Periodic Pole Inspection Program

There was extensive evidence in the record about the type of periodic pole inspection program that should have been in place to detect the rot that caused P5905's failure. The JUC mentioned the Edison Electric Institute manual (the “manual”) and the National Electrical Safety Code (“NESC”) as “accepted modern methods” for inspecting, maintaining, and repairing poles. The 1959 edition of the manual recommends that the first inspection of a wooden pole be conducted 24 years after the pole is installed, followed by periodic inspections every 12 years. Similarly, the NESC has specific safety requirements regarding residual strength and requires a periodic inspection program with appropriate documentation.

Qwest's resident pole safety expert, Edwin Dauenhauer, agreed that if a pole is not periodically inspected, it can develop below ground internal rot and eventually collapse, causing property damage, serious injury or even death. He thus agreed that Qwest had an obligation—independent of any contract—to maintain its poles in a safe condition. Moreover, he conceded that the only way to detect below ground internal rot was with a periodic pole inspection program that includes ground-line inspections and bore-hole samples.

Testimony at trial indicated that a periodic pole inspection program would have detected P5905's internal rot. Under such a program, P5905 would have been inspected around 1979–1982 and again around 1990–1994. Both parties' experts agreed that such periodic inspections, which would have included the necessary below ground bore samples, would have detected P5905's decay and structural instability, likely averting Blood's accident.

Nonetheless, despite the known safety threat of collapsing poles, Qwest possessed no...