Shugart v. Central Rural Elec. Co-op.

• Decision Date: 08 April 1997
• Docket Number: No. 95-6250,95-6250
• Citation: 110 F.3d 1501
• Parties: 97 CJ C.A.R. 524 David SHUGART and Kathy Shugart, husband and wife, Plaintiffs-Third Party-Defendants-Appellants, v. CENTRAL RURAL ELECTRIC COOPERATIVE, Defendant-Third Party-Plaintiff-Appellee,
• Court: U.S. Court of Appeals — Tenth Circuit

Page 1501

110 F.3d 1501

97 CJ C.A.R. 524

David SHUGART and Kathy Shugart, husband and wife Plaintiffs-Third Party-Defendants-Appellants, v. CENTRAL RURAL ELECTRIC COOPERATIVE, Defendant-Third Party-Plaintiff-Appellee,

No. 95-6250.

United States Court of Appeals,Tenth Circuit.

April 8, 1997.

Mark A. Cox, Oklahoma City, OK, for Plaintiffs-Third Party-Defendants-Appellants.

Kevin E. Krahl, Hornbeek, Krahl & Vitali, Oklahoma City, OK, for Defendant-Third Party-Plaintiff-Appellee.

Before SEYMOUR, Chief Judge, ANDERSON and BRORBY, Circuit Judges.

SEYMOUR, Chief Judge.

In this personal injury action, plaintiffs David and Kathy Shugart obtained a jury award in their favor of $40,000 in actual and $10,000 in punitive damages. They appeal, challenging several rulings by the trial court. We affirm the jury award, but reverse the district court's reduction in actual damages by the proportion of David Shugart's contributory negligence. ¹

I.

Mr. and Mrs. Shugart, Texas residents, brought this diversity action against defendant Central Rural Electric Cooperative (CREC), an Oklahoma corporation. They sought damages for injuries suffered by Mr. Shugart when he touched an energized transformer operated by CREC in Logan County, Oklahoma, which had fallen to the ground after its support pole footing was eroded by flood waters. The accident occurred on July 16, 1993, while Mr. Shugart, an oil field worker, was waiting for a backhoe to extract his service truck from deep sand. Mr. Shugart testified that, while waiting, he and another worker played a game of catch; during that game Mr. Shugart fell onto the transformer. Mr. Shugart admitted that he saw the transformer on the ground before his fall and that he should have been more cautious of his movements in its vicinity. He had, however, assumed the transformer was de-energized.

Although it was suggested at trial that Mr. Shugart might actually have been tampering with the transformer when he was injured, it was undisputed that the transformer was energized for several months after it fell to the ground. It was also undisputed that CREC had notice the transformer was down before Mr. Shugart's injury, but failed to follow its own procedures which would have alerted it to the transformer's energized state and permitted it to repair its pole before Mr. Shugart's injury. Mr. Shugart suffered burns on his hands, where the electric current entered his body, and on his feet and chest, where the current exited his body. He was hospitalized for over a month and required several debridement and skin graft operations.

Mr. Shugart sought actual damages for past medical expenses, possible future medical expenses, pain and suffering, and diminished earning capacity. He also sought punitive damages. Mrs. Shugart sought damages for past and future loss of consortium resulting from Mr. Shugart's injury. The trial was bifurcated on the issue of damages. In phase one, the jury found Mr. Shugart fifty percent contributorily negligent and awarded the Shugarts $40,000 in actual damages. In phase two, the jury awarded the Shugarts $10,000 in punitive damages. The district court then applied the jury's finding of comparative negligence to reduce the actual damage award to $20,000. The Shugarts now seek review of a variety of specific issues and of the district court's denial of their motion for a new trial.

II.

A. Application of Contributory Negligence to Actual Damages

At trial, the Shugarts objected to the district court's bifurcation of actual and punitive damages, and to the jury instructions and verdict form used for contributory negligence. They claimed that Oklahoma law, as enunciated in Graham v. Keuchel, 847 P.2d 342 (Okla.1993), requires an unbifurcated trial and different damage instructions. After the jury rendered its verdict, the Shugarts made a motion to enter judgment in the amount of $40,000 without reduction for Mr. Shugart's contributory negligence, which the district court denied.

"[A]s a federal court sitting in diversity, our role is to ascertain and apply [state] law" to reach the result the Oklahoma Supreme Court would reach if faced with the same question. Leadville Corp. v. United States Fidelity & Guaranty Co., 55 F.3d 537, 539 (10th Cir.1995) (internal quotation omitted). We "review de novo a district court's determination of state law." Salve Regina College v. Russell, 499 U.S. 225, 231, 111 S.Ct. 1217, 1221, 113 L.Ed.2d 190 (1991).

There was no error in bifurcating the trial. "[B]ifurcation of trials is permissible in federal court even when such procedure is contrary to state law." Oulds v. Principal Mut. Life Ins. Co., 6 F.3d 1431, 1435 (10th Cir.1993). There is no indication the district court abused its discretion in bifurcating the trial here. Neither were the jury instructions on comparative negligence erroneous, since they comported with Oklahoma's Uniform Jury Instructions. Compare Instruction No. 29, Aplt.'s App. at 137, and Verdict Form # 3, id. at 143, with OKLAHOMA UNIFORM JURY INSTRUCTIONS CIVIL (OUJI) 118, 131 (2d ed. 1996). But we agree with the Shugarts that Graham prohibited the district court from applying Mr. Shugart's contributory negligence to reduce the actual damages award after the jury had found that CREC's conduct warranted an award of punitive damages.

In Graham, the plaintiffs appealed a jury verdict in a medical malpractice claim for the wrongful death of a child and bodily injury to the child's mother. Graham, 847 P.2d at 345. The case was remanded with instructions to bifurcate the wrongful death claim from the bodily injury claim so that the jury did not impute the mother's ordinary negligence to the child, id. at 357, to instruct on punitive damages, id. at 363-64, and to instruct on comparative fault with respect to the mother's bodily injury claim, id. at 367. On this last issue, the Oklahoma Supreme Court stated that a comparison between a plaintiff's ordinary negligence and a defendant's conduct cannot be made after "a defendant's behavior has been established as willful and wanton." Id. at 362 (emphasis omitted). Although apportionment of damages is required when the defendant's conduct is merely negligent, that "same apportionment of fault into percentage figures becomes impermissible once a defendant's behavior has been established as willful and wanton." Id. (emphasis omitted). This difference in treatment is mandated because "[w]hile 'ordinary' and 'gross' negligence differ in degree, 'negligence' and 'willful and wanton misconduct' differ in kind." Id. (emphasis omitted).

The court in Graham concluded that "[c]ontributory negligence may not be compared either to preclude or reduce a plaintiff's recovery where the defendant's conduct is willful or wanton." Id. (emphasis omitted). As support for its view, the court cited with approval a Wyoming case which elucidates the application of this rule to jury verdicts. Id. at 361 n. 95 (citing Danculovich v. Brown, 593 P.2d 187 (Wyo.1979)). After a defendant's willful and wanton conduct is found, a plaintiff should be "awarded (1) pecuniary damages without adjustment for comparable negligence, and (2) exemplary damages in an amount that is fair and just." Danculovich, 593 P.2d at 196. Oklahoma juries are now so instructed. Instruction No. 9.17A of the Oklahoma Uniform Jury Instructions thus states:

You are instructed that negligence is not a defense to conduct that is either willful and wanton or intentional. Therefore, if you find that the conduct of [Defendant] was willful and wanton or intentional, then you shall use the Blue Verdict Form and not reduce the amount of [Plaintiff]'s damages on account of any negligence of [Plaintiff].

OUJI 108 (emphasis added) (citing Graham, 847 P.2d at 363).

Despite the foregoing, CREC argues that the district court was correct in reducing the Shugarts' award of actual damages. First, CREC suggests that the court's comments in Graham regarding comparison of ordinary negligence and willful and wanton conduct are mere dicta. We disagree. Although the court admits that the guidance it offers is not dispositive of the appeal, Graham, 847 P.2d at 345 n. 3, its comments are not dicta. The court states it is making a statement of Oklahoma law "critical to a complete resolution of the issues now before us," which is meant to guide the trial court on remand. Id. at 361 & n. 98 (emphasis omitted). As a court sitting in diversity, we are not free to disregard this guidance. Moreover, even if it were dicta, our role as a diversity court mandates us to determine and apply state law as we believe the Oklahoma Supreme Court would. See Leadville Corp., 55 F.3d at 539. Graham and the Oklahoma Uniform Jury Instructions, which are adopted by the Oklahoma Supreme Court, Okla.S.Ct.Admin.Doc. 93-3, give us clear guideposts on this issue.

Alternatively, CREC argues that Graham should be restricted to a "fact situation involving ... parental negligence in a medical malpractice case which had not been bifurcated." Aplee.'s Br. at 10. We disagree. Although there are aspects of Graham which are unique to cases of parental negligence in a child's wrongful death claim, the discussion of the distinction between willful and wanton conduct and mere negligence is universal in application. When the court addressed the possible comparison of the mother's ordinary negligence with defendant's willful and wanton conduct, the court was concerned with the mother's individual claim for bodily injury. That claim was neither dependent on the mother's status as parent nor affected by the bifurcation of the child's wrongful death claim. The court considered whether, in the face of willful and wanton conduct, it would be appropriate to reduce the mother's actual damages by the proportion of her contributory negligence. The court stated that it would not. To ensure that such a comparison would not be made, the court ordered the jury on remand to be instructed "that while...