Ranburger v. Southern Pacific Transp. Co.

• Decision Date: 16 June 1988
• Docket Number: No. CV-87-0061-PR,CV-87-0061-PR
• Citation: 157 Ariz. 551,760 P.2d 551
• Parties: Tana RANBURGER, Plaintiff/Appellee, v. SOUTHERN PACIFIC TRANSPORTATION COMPANY, a Delaware corporation, National Railroad Passenger Corporation, also known as Amtrak, a corporation organized under the Rail Passenger Service Act of 1970, as amended, and the laws of the District of Columbia, and Weyman L. Moreland, Defendants/Appellants.
• Court: Arizona Supreme Court

Page 551

760 P.2d 551

157 Ariz. 551

Tana RANBURGER, Plaintiff/Appellee, v. SOUTHERN PACIFIC TRANSPORTATION COMPANY, a Delaware corporation, National Railroad Passenger Corporation, also known as Amtrak, a corporation organized under the Rail Passenger Service Act of 1970, as amended, and the laws of the District of Columbia, and Weyman L. Moreland, Defendants/Appellants.

No. CV-87-0061-PR.

Supreme Court of Arizona, In Banc.

June 16, 1988.

Reconsideration Denied Sept. 20, 1988.

Fred J. Pain, Jr., Scottsdale, for plaintiff/appellee.

Evans, Kitchel & Jenckes, P.C. by William M.J. Shattuck, Phoenix, for defendants/appellants.

MOELLER, Justice.

JURISDICTION

Stephen Ranburger (Ranburger) was fatally injured when his car collided with a

                [157 Ariz. 552] train.  His wife, Tana Ranburger (plaintiff), brought a wrongful death action against Southern Pacific Transportation Company, AMTRAK, the engineer, and the City of Phoenix on behalf of herself and her two minor children.  The jury awarded the plaintiff $250,000 in compensatory damages against all defendants and $100,000 in punitive damages against all defendants except the City.  The City did not appeal.  The remaining defendants appealed both awards.  The court of appeals affirmed the award of compensatory damages, and remanded for a new trial on punitive damages, 157 Ariz. 547, 760 P.2d 547.   We granted review on the punitive damages issues and have jurisdiction pursuant to Ariz.  Const. art. 6, § 5(3) and Rule 23, Arizona Rules of Civil Appellate Procedure, 17A A.R.S
                

ISSUES

We granted review to consider several interrelated issues raised by the opinion of the court of appeals:

1. Did the court of appeals correctly conclude that the evidence was sufficient to support an award of punitive damages?

2. If so, did the court of appeals err in remanding the punitive damages claim for retrial because the jury had been incorrectly instructed?

3. If remand was correct, should the new trial be limited to the issue of whether punitive damages should be awarded, or should the new trial also determine the amount of such punitive damages?

Our resolution of the first issue is dispositive of the case; therefore, we do not reach the second and third issues.

FACTS

On December 21, 1980, at 12:28 a.m., Ranburger was killed when the car he was driving collided with a westbound Amtrak passenger train operated by Southern Pacific personnel. Ranburger was scheduled to report for work at 12:30 a.m. at the Garrett Turbine Engine Company, located just north of the crossing. Coming from the south on 36th Street in Phoenix, Ranburger had a good view of approaching westbound trains. The red flashing lights and the bells at the crossing were operating, as were the train's horn and headlights. There was no gate at the crossing, but standard warning signs were posted and the roadway was appropriately marked several feet from the crossing. Ranburger did not stop before attempting to cross the tracks, and one eyewitness said it looked as though Ranburger was trying to beat the train through the crossing.

The engineer and fireman who were operating the train both testified at trial. Neither saw Ranburger's car prior to impact. Both testified that the train was traveling between thirty-two and thirty-four miles per hour at the point of impact. However, the plaintiff's expert estimated the speed at slightly less than sixty miles per hour, the posted speed limit. Eyewitnesses' estimates of the train's speed varied from below forty to over fifty miles per hour. One witness testified that he had "never really noticed a train moving that fast before." ¹

Approximately 3,400 automobiles passed over this crossing daily. Auto traffic was especially heavy during Garrett's shift changes, such as the one at 12:30 a.m. Garrett workers testified that the warnings at this particular crossing came on well before the train actually arrived. Consequently, some cars crossed even after the warnings were activated. In fact, at least two other cars ignored the warnings and went through this crossing minutes before the Ranburger crash.

This case was tried before this court's landmark decisions in Rawlings v. Apodaca, 151 Ariz. 149, 726 P.2d 565 (1986), and Linthicum v. Nationwide Life Ins. Co., 150 Ariz. 326, 723 P.2d 675 (1986). The trial court instructed the jury that it could award punitive damages if it found, by a

                [157 Ariz. 553] preponderance of the evidence, that the defendants' conduct was "grossly negligent, reckless, willful or wanton."   This instruction was then in common use.  It is now recognized as improper both with respect to the standard of conduct and to the burden of proof.   See, e.g., Filasky v. Preferred Risk Mut. Ins. Co., 152 Ariz. 591, 599 n. 3, 734 P.2d 76, 84 n. 3 (1987).  The defendants contended on appeal both that the instruction was incorrect and that the evidence was insufficient to support the punitive damage award.  The court of appeals held that the evidence was sufficient under the recently clarified standard of conduct.  It remanded the punitive damages portion of the case for retrial with proper jury instructions
                

CURRENT STANDARD FOR PUNITIVE DAMAGES

It is now clear under Arizona law that punitive damages are appropriate only if the defendant acted with an "evil mind." This "evil mind" may be established where a defendant acts with the intent to injure or where his acts are motivated by spite or ill will. It may also be inferred when a defendant acts to serve his own interests, consciously disregarding a substantial risk of significant harm to others. Bradshaw v. State Farm Mut. Auto. Ins. Co., 157 Ariz. 411, 422, 758 P.2d 1313, 1324 (1988).

To assist us in our analysis of the evidence, we turn to our decisions handed down since the "evil mind" standard was clarified. We affirmed the punitive damage award in Hawkins v. Allstate Ins. Co., 152 Ariz. 490, 733 P.2d 1073, cert. denied, --- U.S. ----, 108 S.Ct. 212, 98 L.Ed.2d 177 (1987). In that case the defendant insurance company, as a matter of company policy and over a long period of time, made deductions from claim payments for conditions which did not exist. For example, in handling a claim for the total loss of an automobile, it routinely deducted $35 for cleaning and $5 for tire wear, regardless of the car's actual condition. As an additional company policy, it instructed its agents to consistently make offers substantially below fair value, hoping the insured would not notice the relatively small bogus deductions from the total value and would be likely to take the offer in order to get the car fixed quickly. Noting the undisputed wrongfulness of the conduct, the duration of it, the fact that it was established company policy and its effect on innumerable claimants, this court affirmed the jury's punitive damage award. Id. at 498, 502, 733 P.2d at 1081, 1085.

We also affirmed the award of punitive damages in Bradshaw v. State Farm Mut. Auto. Ins. Co., 157 Ariz. 411, 758 P.2d 1313 (1988), where the insurance company consciously disregarded a substantial risk of significant harm to others by filing a lawsuit against a claimant which it knew was groundless. We have reversed several other awards of punitive damages because the evidence was insufficient under our new standard. See, e.g., Volz v. Coleman Co., 155 Ariz. 567, 748 P.2d 1191 (1987); Gurule v. Illinois Mut. Life & Cas. Co., 152 Ariz. 600, 734 P.2d 85 (1987); Filasky v. Preferred Risk Mut. Ins. Co., 152 Ariz. 591, 734 P.2d 76 (1987).

Courts in other jurisdictions following standards similar to Arizona's have denied punitive damages where there was no evidence that railroad officials or employees had clear notice of an abnormal danger. For example, in Anderson v. Chesapeake & Ohio Ry. Co., 147 Ill.App.3d 960, 101 Ill.Dec. 262, 498 N.E.2d 586 (1986), the court found no "conscious disregard" even though the railroad admittedly knew of several previous accidents at the same crossing, and experts testified that the crossing was extrahazardous. The court, distinguishing Stromquist v. Burlington, infra, 112 Ill.App.3d 37, 67 Ill.Dec. 629, 444 N.E.2d 1113 (1983), believed that there had to be something more, such as evidence that "defendant knew of and refused to remedy or repair a specific dangerous condition " which had caused the previous accidents, before a jury could infer even recklessness sufficient to find willful and wanton conduct. 147 Ill.App.3d at 965, 101 Ill.Dec. at 268, 498 N.E.2d at 592 (emphasis added). See also Louisiana & North West R.R. Co. v. Willis, 289 Ark. 410, 711 S.W.2d 805 (1986) (evidence insufficient where Punitive damages have been allowed under a standard similar to Arizona's in Montana and Illinois. In these cases, the defendants had significant notice of a particularly dangerous condition and unjustifiably failed to rectify that condition. In Runkle v. Burlington Northern, 188 Mont. 286, 613 P.2d 982 (1980), the crossing was protected only by a stop sign and crossbucks. Members of the town council in which the crossing was located had written letters to various railroad officials urging them to slow the trains through the town and to install additional safety devices. There was also evidence that a railroad official had called a railroad employee who also served as a member of the town council, and said, "[Y]ou have worked for the railroad long enough to know better than to suggest reducing the speed of trains." Id. at 295, 613 P.2d at 991. Based on this evidence, the court believed a jury could properly award punitive damages. In the Stromquist case, 112 Ill.App.3d 37, 67 Ill.Dec. 629, 444 N.E.2d 1113 (1983), noted above, punitive damages were held appropriate where the railroad refused to correct a known dangerous condition at a crossing which had been the site of other fatal accidents unless the city agreed, in exchange, to close a different crossing.

[157 Ariz. 554] company plan to install signals at crossing failed due...