THS Northstar Associates v. WR Grace & Co.-Conn.

• Decision Date: 01 April 1994
• Docket Number: Civ. No. 3-87-676.
• Parties: T.H.S. NORTHSTAR ASSOCIATES, Limited Partnership, a Minnesota Limited Partnership, Plaintiff, v. W.R. GRACE & CO.-CONN., a Connecticut Corporation, Successor in Interest to Western Mineral Products Corp. and Zonolite Co., Defendant.
• Court: U.S. District Court — District of Minnesota

860 F. Supp. 640

T.H.S. NORTHSTAR ASSOCIATES, Limited Partnership, a Minnesota Limited Partnership, Plaintiff, v. W.R. GRACE & CO.-CONN., a Connecticut Corporation, Successor in Interest to Western Mineral Products Corp. and Zonolite Co., Defendant.

Civ. No. 3-87-676.

United States District Court, D. Minnesota, Third Division.

April 1, 1994.

COPYRIGHT MATERIAL OMITTED

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Floyd Earl Siefferman, Jr., Saliterman & Siefferman, Minneapolis, MN, Philip J. Goodman, Simpson & Berry, Birmingham, MI, Kenneth B. McClain, Humphrey Farrington & McClain, Independence, MO, John M. Klamann, Payne & Jones, Overland, KS, for T.H.S. Northstar Associates.

G. Marc Whitehead, Hugh V. Plunkett, John Caldwell Childs, Popham Haik Schnobrich & Kaufman, Minneapolis, MN, Harold J. Engel, Popham Haik Schnobrich & Kaufman, for W.R. Grace and Co. Thomas Victor Seifert, Marianne Eileen Durkin, Head Seifert & Vander Weide, Minneapolis, MN, for National Gypsum Co.

MEMORANDUM OPINION AND ORDER

RENNER, Senior District Judge.

INTRODUCTION

The above-entitled action came on for trial before the undersigned and a jury between October 26 and December 21, 1993. On December 17, the jury returned a verdict finding that defendant W.R. Grace ("Grace") failed to use reasonable care in designing Monokote 3, an asbestos-containing material used to fireproof the Northstar Center, and breached a duty to warn T.H.S. Northstar ("Northstar") of the hazards associated with Monokote 3. The jury found that W.R. Grace did not commit fraud against Northstar. The jury awarded Northstar $6,240,000 in compensatory damages. On December 21, following a separate proceeding, the jury awarded Northstar $13,500,000 in punitive damages.

Now before the Court are (1) W.R. Grace's motion for judgment as a matter of law, reduction of the verdict, or, alternatively, a new trial, pursuant to Federal Rules of Civil Procedure 50(b), 59 and 60; (2) Northstar's motion for judgment as a matter of law; and (3) Northstar's motion for pre-judgment interest.

DISCUSSION

I. W.R. GRACE'S MOTION FOR JUDGMENT AS A MATTER OF LAW

Rule 50 of the Federal Rules of Civil Procedure governs the entry of judgment as a matter of law. A court may grant a motion for judgment as a matter of law where "a party has been fully heard with respect to an issue and there is no legally sufficient evidentiary basis for a reasonable jury to have found for that party with respect to that issue." Fed.R.Civ.P. 50(a)(1). Where the court for any reason denies a motion for judgment at the close of the evidence, the court is deemed to submit the action to the jury subject to a later determination of the legal questions raised by the motion; the party seeking judgment as a matter of law may renew the motion not later than ten (10) days after entry of judgment. Fed.R.Civ.P. 50(b).

Following a jury verdict, the court may grant judgment as a matter of law only when a reasonable jury could not have reached the result based on the evidence presented. See Western American, Inc. v. Aetna Cas. and Sur. Co., 915 F.2d 1181, 1183 (8th Cir.1990); City of Omaha Employees Betterment Ass'n v. Omaha, 883 F.2d 650, 651 (8th Cir.1989). The standard required before a court may set aside a jury's verdict is a "rigorous" one. Western American, 915 F.2d at 1183. In evaluating a motion for judgment as a matter of law, the Court must:

"(1) resolve direct factual conflicts in favor of the nonmovant, (2) assume as true all facts supporting the nonmovant which the evidence tended to prove, (3) give the nonmovant the benefit of all reasonable inferences, and (4) deny the motion if the evidence so viewed would allow reasonable jurors to differ as to the conclusions that could be drawn."

City of Omaha, 883 F.2d at 651 (citations omitted).

A. Punitive Damages

On December 21, 1993 the jury returned a verdict awarding Northstar $13,500,000 in punitive damages. W.R. Grace now moves to vacate the judgment entered on this verdict and dismiss the punitive damage claim as a matter of law based on a recent decision of the Minnesota Supreme Court, Independent School District No. 622 v. Keene Corp., 511 N.W.2d 728 (Minn.1994) ("I.S.D. 622"), reh'g denied, (Feb. 25, 1994).

W.R. Grace previously moved to dismiss the punitive damage claim under Eisert v. Greenberg Roofing & Sheet Metal Co., 314 N.W.2d 226, 228 (Minn.1992). At that time the Court distinguished Eisert, which held that a plaintiff could not recover punitive damages for property damage without personal injury under a strict liability theory, from the present action, which involved liability theories in addition to strict liability. Rather, the Court followed the court of appeals' decision in I.S.D. 622 which, also distinguishing Eisert, affirmed a punitive damages award on a property damage claim where no personal injury was alleged. 495 N.W.2d 244 (Minn.Ct.App.1993), aff'd in part and rev'd in part, 511 N.W.2d 728 (Minn. 1994). Accordingly, the Court submitted the punitive damages claim to the jury.

Before the Court entered judgment in this case, however, the Minnesota Supreme Court reversed the court of appeals in I.S.D. 622, holding that punitive damages are not available to a plaintiff who suffers only property damage, regardless of the theories of liability alleged in the case. I.S.D. 622, 511 N.W.2d at 732-33. The supreme court's ruling was rendered final on February 24, 1994, when the supreme court, en banc, denied the petition for rehearing.

As Minnesota law governs the claims in this case, the Court, sitting in diversity, is bound by the decisions of the Minnesota Supreme Court. Because this case involved only property damage and no personal injury, the Court must, under I.S.D. 622, set aside the punitive damages award in the amount of $13,500,000 and dismiss the punitive damages claim as a matter of law.

B. Primary Assumption of Risk

Grace contends that it is entitled to judgment as a matter of law under the primary assumption of risk doctrine; alternatively, Grace argues that the Court erred by failing to instruct the jury on primary assumption of risk, thus warranting a new trial.

The primary assumption of risk doctrine relates to whether the defendant had a duty initially to protect the plaintiff from harm. Henkel v. Holm, 411 N.W.2d 1, 4 (Minn.Ct.App.1987). Primary assumption of risk applies "only where parties have voluntarily entered a relationship in which plaintiff assumes well-known, incidental risks. As to these risks, the defendant has no duty to protect the plaintiff and, thus, if the plaintiff's injury arises from an incidental risk, the defendant is not negligent." Wagner v. Thomas J. Obert Enter., 396 N.W.2d 223, 226 (Minn.1986) (quoting Olson v. Hansen, 299 Minn. 39, 216 N.W.2d 124, 127 (1974)).

Secondary assumption of risk, which under Minnesota law has merged into contributory negligence, provides "an affirmative defense to an established breach of duty which may only be raised when the plaintiff has voluntarily chosen to encounter a known and appreciated danger created by the negligence of the defendant." Id. at 226 (quoting Olson, 216 N.W.2d at 127).

Although closely related to secondary assumption of risk, primary assumption of risk remains a distinct theory. As described by the Minnesota Supreme Court:

"The mere fact that plaintiff would, in the exercise of ordinary care, have known or appreciated the danger is not sufficient. Where the facts are such that plaintiff must have had knowledge, the situation is equivalent to actual knowledge; but where it merely appears that he should or could have discovered the danger, the defense is contributory negligence and not assumption of risk."

Beckman v. V.J.M. Enters., Inc., 269 N.W.2d 37, 39 (Minn.1978) (quoting Coenen v. Buckman Building Corp., 278 Minn. 193, 153 N.W.2d 329, 338 (1967)). Primary assumption of risk "`involves comprehension that a peril is to be encountered and a willingness to encounter it. It differs from contributory negligence, based on carelessness, by being an exercise of intelligent choice.'" Id. (citations omitted). For primary assumption of risk to apply, the plaintiff must manifest his acceptance of the risk and his consent "`to undertake to look out for himself and relieve the defendant of the duty.'" Andren v. White-Rodgers Co., 465 N.W.2d 102, 105 (Minn.Ct.App.1991) (citations omitted).

Primary assumption of risk applies to very few cases. Wagner, 396 N.W.2d at 226; Rusciano v. State Farm Mut. Auto. Ins., 445 N.W.2d 271, 273 (Minn.Ct.App. 1989); Goodwin v. Legionville S.S.P. Tr. Ctr., 422 N.W.2d 46, 50 (Minn.Ct.App.1988). This doctrine applies typically where the risk assumed is inherent in a particular activity itself, such as a dangerous sporting event. See e.g., Wagner, 396 N.W.2d 223 (involving roller skating); Olson v. Hansen, 216 N.W.2d 124 (Minn.1974) (snowmobile roll-over); Springrose v. Willimore, 192 N.W.2d 826 (Minn.1971) (injured in automobile drag race); Henkel v. Holm, 411 N.W.2d 1 (Minn. Ct.App.1987) (injured while fighting). Where the risk is hidden or unanticipated, primary assumption of risk will not lie. Armstrong v. Mailand, 284 N.W.2d 343, 352 (Minn.1979).

The decision whether to instruct the jury on assumption of risk lies within the sound discretion of the trial court. Rusciano, 445 N.W.2d 271, 273. There is no abuse of discretion in failing to instruct on assumption of risk where the jury can "relate the evidence to a typical comparative negligence instruction." Id.; Willmar Poultry Co. v. Carus Chem. Co., 378 N.W.2d 830, 836 (Minn.Ct.App.1985). The concepts of acceptance and consent dictate whether the primary assumption of risk theory is appropriate to submit to the jury. Andren v. White-Rodgers Co., 465 N.W.2d 102, 105 (Minn.Ct. App.1991). Furthermore, a court may omit an instruction on primary assumption of risk where the "evidence shows the claimant assumed some risk and the other party's conduct enlarged that inherent...