Riggle v. Allied Chemical Corp.

• Citation: 180 W.Va. 561,378 S.E.2d 282
• Decision Date: 10 February 1989
• Docket Number: No. 18135,18135
• Court: Supreme Court of West Virginia
• Parties: Dale Winters RIGGLE, et al. v. ALLIED CHEMICAL CORP., et al.

Page 282

378 S.E.2d 282

180 W.Va. 561

Dale Winters RIGGLE, et al. v. ALLIED CHEMICAL CORP., et al.

No. 18135.

Supreme Court of Appeals of West Virginia.

Feb. 10, 1989.

Syllabus by the Court

1. " 'The law favors and encourages the resolution of controversies by contracts of compromise and settlement rather than by litigation; and it is the policy of the law to uphold and enforce such contracts if they are fairly made and are not in contravention of some law or public policy.' Syllabus Point 1, Sanders v. Roselawn Memorial Gardens, 152 W.Va. 91, 159 S.E.2d 784 (1968)." Syllabus Point 2, State ex rel. Vapor Corp. v. Narick, --- W.Va. ----, 320 S.E.2d 345 (1984).

2. "Disclosure to the jury of the general nature of a "Mary Carter" settlement agreement is not required in each case; such disclosure lies within the sound discretion of the trial court. Where the "Mary Carter" agreement is not reached until after all or most of the evidence has been presented, and the settling defendant during closing argument and examination does not indicate to the jury a realignment of loyalties so as to prejudice the nonsettling defendant(s), it is within the sound discretion of the trial court to refuse to disclose the general nature of the "Mary Carter" agreement to the jury." Syllabus Point 5, Reager v. Anderson, --- W.Va. ----, 371 S.E.2d 619 (1988).

3. " 'Contracts of indemnity against one's own negligence do not contravene public policy and are valid.' Syllabus Point 1, Sellers v. Owens-Illinois Glass Co., 156 W.Va. 87, 191 S.E.2d 166 (1972)." Syllabus Point 4, State ex rel. Vapor Corp. v. Narick, --- W.Va. ----, 320 S.E.2d 345 (1984).

4. " 'The action of a trial court in admitting or excluding evidence in the exercise of its discretion will not be disturbed by the appellate court unless it appears that such action amounts to an abuse of discretion. Point 10 Syllabus, State v. Huffman, 141 W.Va. 55, 87 S.E.2d 541 (1955).' Syllabus Point 5, Casto v. Martin, 159 W.Va. 761, 230 S.E.2d 722 (1976)." Syllabus Point 5, Grillis v. Monongahela Power Co., --- W.Va. ----, 346 S.E.2d 812 (1986).

Terence M. Gurley, Patrick S. Casey, Shrader, Stamp, Byrd, Byrum & Companion, Wheeling, for Griffith Brothers.

Paul T. Tucker, John E. Artimez, Jr., Wheeling, for Allied Chemical.

James G. Bordas, Linda M. Bordas, Bordas & Bordas, Wheeling, for Dale Winters Riggle.

NEELY, Justice:

Appellant, Griffith Brother's Contractors, Inc., was an independent contractor (now defunct), hired by appellee Allied Chemical Corporation, to repair the lining of a chemical waste pond at Allied's plant in Marshall County. Appellee Dale Riggle was an employee of Griffith Brothers. On 1 April 1981, Mr. Riggle was draining the chemical waste in the pond with a pump supplied by Allied. While trying to fix a problem with the pump, Mr. Riggle was sprayed with the chemical waste and became permanently disabled with severe respiratory problems.

Mr. Riggle and his wife filed suit against both companies in February, 1982. ¹ In Counts I and II of their complaint, plaintiffs sought $600,000 compensatory, and $5,000,000 punitive damages from Allied for its alleged negligence. In Count III of their complaint, plaintiffs asserted a Mandolidis ² claim against Griffith Brothers for gross negligence in its alleged failure to advise Mr. Riggle that the waste pond's contents were dangerous, and sought $5,100,000 in damages from Griffith Brothers.

Allied answered the complaint and asserted a cross-claim against Griffith Brothers based on a written indemnity provision contained in their contract. ³ Griffith Brothers answered the cross-claim asserting that the indemnity provision was unconscionable and, therefore, unenforceable. The trial court dismissed plaintiffs' Mandolidis claim against Griffith Brothers but kept the latter as a party because of Allied's cross-claim based on the contractual indemnity provision. Plaintiffs did not object to the dismissal of their Mandolidis claim against Griffith Brothers.

Allied obtained leave of court to limit its indemnity cross-claim against Griffith Brothers to $500,000, the limit of the latter's insurance coverage. Allied then moved for partial summary judgment on the validity and enforceability of the indemnification provision. ⁴ The circuit court held that Allied could enforce the indemnity agreement for any judgment up to $500,000. Six days before trial, Griffith Brothers filed a motion to amend its answer to the indemnity cross-claim to assert fraud and estoppel as affirmative defenses. The court denied appellant's motion to amend.

At this point, unless the jury were to find Allied solely negligent, Allied had exposure only for a verdict in excess of $500,000. Although settlement discussions had taken place for several months before trial, no agreement was reached. However, after the first day of trial when the jury was selected, Allied reached a settlement agreement with plaintiffs. They informed Griffith Brothers' counsel of the settlement and the following day put the terms of the "Mary Carter" settlement agreement on the record before the Court. ⁵

Allied agreed to remain a defendant in the suit, and actively to pursue its cross-claim against Griffith Brothers. In the event of a defense verdict, Allied would give plaintiffs $125,000. In the event of a plaintiffs' verdict, Allied would pay plaintiffs $150,000, subject to a partial refund if the jury did not assess 100% fault to Allied. If Allied were not 100% at fault, and if the jury verdict were $350,000, but less than $500,000, the plaintiffs would refund Allied $50,000; if the verdict were $500,000 or more, the refund would be $75,000. Allied would pay plaintiffs everything it recovered in its crossclaim against Griffith Brothers and Allied and plaintiffs also agreed not to disclose the agreement to the jury. The trial court denied Griffith Brothers' subsequent motion to inform the jury of the settlement agreement and to realign the parties to position Allied and plaintiffs on the same side.

At trial, because of the "Mary Carter" agreement, Allied did not present the extensive defense it had originally planned. Griffith Brothers maintains that defense would have included expert testimony on Mr. Riggle's pre-existing condition from two pulmonary specialists, Dr. Bowles and Dr. Owens. ⁶ Both doctors had been deposed during pretrial discovery. After the settlement agreement was revealed and Allied did not call these experts, Griffith Brothers sought to use their depositions, or to get a continuance to secure their, or similar, testimony. The trial court refused these motions because the depositions were discovery depositions that did not include the experts' qualifications, and because a continuance would prejudice the plaintiffs and Allied.

Another expert, Dr. Elizabeth Storey, had examined Mr. Riggle at his counsel's request. Because the doctor would be out of the country at the time of trial, the plaintiff took her deposition for trial use, and also made a videotape of the deposition. Plaintiffs' counsel decided to read the deposition into evidence rather than show the videotape to the jury. Griffith Brothers requested that the court require plaintiffs to show the videotape, which request the court denied.

The jury returned a verdict of $500,000 for plaintiffs, and apportioned causation at 55 percent to Allied and 45 percent to Griffith Brothers. ⁷ Because plaintiffs' Mandolidis action against Griffith Brothers had been dismissed by the trial court, the entire judgment was assessed directly against Allied. The trial court later granted Allied judgment for $500,000 in its indemnity cross-claim against Griffith Brothers. Griffith Brothers appeals, arguing nine assignments of error. These assignments of error fall into three categories those concerning (1) the "Mary Carter" settlement agreement; (2) the contractual indemnity provision; and, (3) evidentiary rulings of the trial court.

I

Griffith Brothers argues that the court committed reversible error when he refused its request to disclose the "Mary Carter" settlement agreement to the jury. It also asserts the court erred by failing to grant its motion to realign the parties and by granting Allied's motion for judgment on its cross-claim. Griffith Brothers argues that because of the settlement, plaintiffs and Allied joined forces in an effort to prove the accident was the fault of Griffith Brothers and that the jury should have been made aware of the true loyalties of the parties. Griffith Brothers also argues that because Allied limited its exposure by agreement to $150,000, Griffith Brothers should have to pay Allied only $150,000 as indemnification.

Allied and plaintiffs respond that the settlement agreement by its terms was clearly not an overall settlement of plaintiffs' claim that would define Griffith Brothers' indemnity exposure, but rather an agreement that guaranteed plaintiffs a recovery in exchange for limiting Allied's exposure in the event of a plaintiffs' verdict in excess of $500,000. As for shifting trial tactics to the prejudice of Griffith Brothers, Allied and plaintiffs argue that they did nothing to prejudice Griffith Brothers unfairly. ⁸

Last year, in Reager v. Anderson, --- W.Va. ----, 371 S.E.2d 619 (1988), we examined the validity of a "Mary Carter" settlement agreement. As we discussed in State ex rel. Vapor Corp. v. Narick, --- W.Va. ----, 320 S.E.2d 345 (1984), such an agreement has four necessary attributes:

1. The agreeing defendants must remain in the action in the posture of defendants.

2. The agreement must be kept secret.

3. The agreeing defendants guarantee to the plaintiff a certain monetary recovery regardless of the outcome of the lawsuit.

4. The agreeing defendants' liability is decreased in direct proportion to the increase in the nonagreeing defendants' liability.

320 S.E.2d at 347-8. ⁹

We pointed out in Syllabus Point 2 of Vapor, quoting syllabus point 1 of ...