The Shaw Group, Inc. v. Marcum

• Decision Date: 26 February 2008
• Docket Number: No. 06-4115.,No. 06-4188.,06-4115.,06-4188.
• Citation: 516 F.3d 1061
• Parties: THE SHAW GROUP, INC., Appellant/Cross-Appellant/Cross-Appellee, v. Beverly Gay MARCUM, and Belinda Gail Henly, Co-Administrators for the Estate of Van Ryan Marcum, Deceased, Appellees/Cross-Appellants.
• Court: U.S. Court of Appeals — Eighth Circuit

516 F.3d 1061

THE SHAW GROUP, INC., Appellant/Cross-Appellant/Cross-Appellee, v. Beverly Gay MARCUM, and Belinda Gail Henly, Co-Administrators for the Estate of Van Ryan Marcum, Deceased, Appellees/Cross-Appellants.

No. 06-4115.

No. 06-4188.

United States Court of Appeals, Eighth Circuit.

Submitted: October 15, 2007.

Filed: February 26, 2008.

R. Christopher Lawson, argued, Fayetteville, AR, James C. Baker Jr., and Kimberly D. Young, Little Rock, AR, on the brief, for appellant.

Will Bond, argued, Little Rock, AR, James B. McMath and Samuel E. Ledbetter, Little Rock, AR, and S. Christopher Thomason, Hope, AR, on the brief, for appellee.

Before LOKEN, Chief Judge, GRUENDER, and BENTON, Circuit Judges.

BENTON, Circuit Judge.

This wrongful death lawsuit arises out of the fatal electrocution of United States Army Private Van Ryan Marcum. His Estate sued The Shaw Group, Inc., a private contractor in charge of maintenance and repairs at Fort Benning, Georgia. The Estate alleges that Shaw negligently performed its duties under the contract with the United States Army. A jury returned a verdict against Shaw. Shaw appeals, seeking judgment as a matter of law, or alternatively a new trial. Having jurisdiction under 28 U.S.C. § 1291, this court affirms.

I.

On June 19, 2004, Private Marcum leaned his head and back against an abandoned, metal latrine, following an exercise on firing range Malone 14 at Fort Benning. The outer walls of the latrine carried a live current of electricity. Private Marcum was fatally electrocuted.

An investigation showed that the building was insufficiently grounded and improperly bonded, and had a faulty circuit breaker and a short in the wiring to a fan. The short energized the shell of the metal building. When Private Marcum sat down and leaned against the building, he completed the circuit and became the ground.

Before Private Marcum's death, Shaw was to demolish several abandoned, metal latrines, including the Malone 14 latrine, pursuant to an approved individual job order (IJO) from the Army. The approved IJO had an original "suspense date," a completion date, of March 14, 2004. Suspense dates are used to evaluate the timeliness of Shaw's work. On June 17, two days before Private Marcum's death, representatives from the Army and Shaw attended a budget meeting. Among other things, they discussed this IJO. The Army and Shaw agreed to postpone, or "slow play," the demolition of metal latrines, including the Malone 14 latrine.

Before trial, Shaw moved for summary judgment, asserting it had no duty under the contract to demolish the abandoned, metal latrines. The district court¹ ruled that Shaw had a duty to inspect, repair and maintain the Malone 14 latrine. The court also ruled that justiciable questions of fact existed regarding the demolition of the Malone 14 latrine and that foreseeability was a question for the jury because reasonable persons could differ about it. During trial, the court denied Shaw's motion for judgment as a matter of law; and after trial, the court denied Shaw's renewed motion for judgment as a matter of law and motion for new trial.

The jury returned a verdict against Shaw. It awarded $1.5 million for mental anguish to Private Marcum's father, $1.5 million for mental anguish to his mother, $3 million in damages for "loss of life," and $500,000 for conscious pain and suffering, for a total verdict of $6.5 million. On special interrogatories, the jury apportioned 75 percent of the fault to the Army and 25 percent to Shaw.

II.

This court reviews de novo the district court's decision to deny judgment, as a matter of law. Schooley v. Orkin Extermination, Co., Inc., 502 F.3d 759, 764 (8th Cir,2007). "Judgment as a matter of law is only appropriate where the evidence adduced at trial is entirely insufficient to support the verdict." Id. In making this determination, the court considers all the evidence in the record without weighing credibility, while resolving conflicts and making all reasonable inferences in favor. of the non-moving party. Id. This court will not set aside a jury verdict "unless there is a complete absence of probative facts to support the verdict and only speculation supports the verdict." Dills v. HearthStone Homes, Inc., 495 F.3d 570, 575 (8th Cir.2007). This court may "affirm the denial of a motion for judgment as a matter of law on any basis the record supports." HOK Sport, Inc. v. FC Des Moines, L.C., 495 F.3d 927, 934 (8th Cir. 2007). In this diversity case, the parties and the district court have applied the substantive law of Arkansas. See Transcontinental Ins. Co. v. Rainwater Constr. Co., LLC 509 F.3d 454, 456 (8th Cir.2007).

Shaw claims the district court erred in denying its motion for judgment as a matter of law. Shaw premises its arguments on the concepts that its duties to Private Marcum are defined exclusively by the contract and that the extent of these duties is a matter of law to be determined by the court.

Under Arkansas law, the issue of whether a duty exists is always a question of law. Lacy v. Flake & Kelley Mgmt., Inc., 366 Ark. 365, 235 S.W.3d 894, 896 (2006). "If no duty of care is owed, summary judgment is appropriate." Id. To determine what duty, if any, Shaw owed Private Marcum, this court must first determine what duty Shaw owed the Army under the contract. See Perry v. Baptist Health, 358 Ark. 238, 189 S.W.3d 54, 58 (2004) ("In Arkansas, a party may recover for damages from breach of contract when that party is a third-party beneficiary to the contract."); Wilson v. Rebsamen Ins., Inc., 330 Ark. 687, 957 S.W.2d 678, 682 (1997).

It is "a settled rule in the construction of contracts that the interpretation must be upon the entire instrument, and not merely on disjointed or particular parts of it." Byme, Inc. v. Ivy, 367 Ark. 451, 241 S.W.3d 229, 236 (2006), quoting First Nat'l Bank of Crossett v. Griffin, 310 Ark. 164, 832 S.W.2d 816, 819 (1992). "In seeking to harmonize different clauses of a contract, we should not give effect to one to the exclusion of another even though they seem conflicting or contradictory, nor adopt an interpretation which neutralizes a provision if the various clauses can be reconciled. The object is to ascertain the intention of the parties, not from particular words or phrases, but from the entire context of the agreement." Byrne, Inc., 241 S.W.3d at 236, quoting Sturgis v. Skokos, 335 Ark. 41, 977 S.W.2d 217, 223 (1998).

As the contractor, Shaw had several duties that are relevant here. Under section 5.1.4.2 Critical Systems, Shaw had a duty to keep the electrical systems and the structural integrity and safety of buildings "operational 24 hours a day, every day." Under section 5.1.2.5.4.3 IJO Work Approval, after the Army approved the IJO to demolish abandoned, metal latrines (including Malone 14 latrine), Shaw had a duty to demolish them in accordance with work scheduling practices. Shaw even had a duty to maintain and repair the Malone 14 latrine, pending demolition:

5.1.1.2.10 Facilities, Systems, and Equipment Identified for Future Replacement. The Contractor shall maintain and repair equipment as outlined in this Contract, unless otherwise directed by the KO regardless of whether specific facilities, systems, or equipment have been identified for future replacement by the Government.

Shaw had a duty to perform its work in a timely manner:

5.1.1.1.1 Customer Interface. As a part of the scheduling process, the Contractor shall coordinate all work with the facility where the work is to be done in a timely manner to preclude life-threatening situations..

. . .

5.11.1 INTRODUCTION

The Contractor effort shall be sufficient to provide functionally usable range facilities fully capable of supporting the Fort Benning training and support mission. The Contractor shall be responsible for providing timely service and maintenance to minimize any disruption of the training mission.

. . .

5.11.2.2.6 Response Times. Due to the heavy use of ranges, ranges shall be repaired within the timeframes specified by the Government so as not to delay future use of the range.

. . .

Shaw asserts the contract unequivocally provides that no work can be performed in any functional area without the issuance of a work order. Work orders are separated into three categories:

5.1.2.1 Standing Operating Orders (SOOs)

SOOs represent work that is performed on a recurring basis.... S00 work is described under SCHEDULED TASKS in Functional Areas 5.2 through 5.11, 5.15, and 5.17.

. . .

5.1.2.2. Service Orders (SOs)

SOs represent wnrk that is generally corrective in nature (e.g., repairs and replacements) or those related services that are not generally considered to be maintenance activities . Examples include minor electrical, SO work is described under UNSCHEDULED TASKS in Functional Areas 5.2 through 5.11, 5.15, and 5.17.... An SO may be initiated by the Contractor upon identification of a need for corrective action.

. . .

5.1.2.3 Individual Job Orders (IJOs) IJOs represent project-oriented work such as repairs, modifications, replacements, or installations that exceed the thresholds defined above for a SO. IJO work is described under UNSCHDULED TASKS in Functional Areas 5.2 through 5.11, 5.15, and 5.17. An IJO may be initiated ... by the Contractor upon identification of a need for a corrective action.

. . . .

Shaw may self-initiate SOs and IJOs "upon identification of a need for corrective action." This also can be done under section 5.1.2.5.1 Sources of Work: Additionally, Shaw may self-authorize SOOs and SOs under sections 5.1.2.5.4.1 SOO Work Approval and 5.1.2.5.4.2 SO Work Approval. Shaw may not commence work on an IJO without the approval of the Army Contracting Officer under section 5.1.2.5.4.3 IJO Work Approval. Because Shaw may initiate work orders and self-authorize SOOs and SOs, then the issue, as the district court correctly noted, is whether Shaw had notice of a need to...