Vendelin v. Costco Wholesale Corp.

• Decision Date: 01 July 2004
• Docket Number: No. 29080.,29080.
• Citation: 95 P.3d 34,140 Idaho 416
• Parties: Vera VENDELIN, Plaintiff-Respondent, v. COSTCO WHOLESALE CORPORATION, a Washington corporation, Defendant-Appellant.
• Court: Idaho Supreme Court

95 P.3d 34

140 Idaho 416

Vera VENDELIN, Plaintiff-Respondent, v. COSTCO WHOLESALE CORPORATION, a Washington corporation, Defendant-Appellant.

No. 29080.

Supreme Court of Idaho, Boise, January 2004 Term.

July 1, 2004.

Eberle Berlin Kading Turnbow & McKlveen, Chtd., Boise, for appellant. Warren E. Jones argued.

Chasan & Walton, LLC, Boise, for respondent. Andrew M. Chasan argued.

SCHROEDER, Justice.

Vera Vendelin (Vendelin) was injured while shopping at the Boise Costco store when a display of garden stepping-stones partially collapsed and fell on her lower body. She filed suit against Costco to recover damages sustained as a result of the accident. The district court subsequently granted her motion to amend the complaint to add a prayer for punitive damages. Following trial, the jury awarded both compensatory and punitive damages. Costco appealed.

I. BACKGROUND AND PRIOR PROCEEDINGS

On March 16, 2000, Vera Vendelin was shopping at the Costco Wholesale Corporation's ("Costco") store in Boise, Idaho. She encountered a display of garden stepping-stones. The stones were packaged individually and stacked approximately five feet high in a freestanding display which rested upon a wooden pallet. As she attempted to remove a box from the display, several boxes of garden stepping-stones fell, hitting her lower body and legs.

Vendelin sued Costco and demanded a jury trial. Costco answered the complaint. During the discovery phrase of litigation the district court issued several orders compelling Costco to fully respond to Vera's discovery requests. On August 19, 2002, the district court issued its third order compelling responses to Vendelin's discovery requests and amending its previous order governing proceedings. The order allowed Vendelin to file pre-trial motions, including motions concerning punitive damages, until September 6, 2002, and extended the discovery deadline for both parties to September 6, 2002.

Vendelin moved to amend her complaint to add a prayer for punitive damages pursuant to I.C. § 6-1604 on September 6, 2002. A hearing on the motion was held on September 19, 2002. The district court issued a memorandum decision and order granting the motion to amend on September 27, 2002.

Vendelin filed a supplemental disclosure of expert witnesses on September 30, 2002, naming Mr. Severn, a CPA, whom she intended to call to testify concerning the financial condition of Costco. Costco filed a motion to vacate on October 3, 2002, seeking a continuance of the October 7, 2002, trial date or, alternatively, an order denying the testimony of the newly named expert witness. The record does not explain whether this motion was considered or ruled upon by the district court, but the trial commenced as scheduled on October 7, 2002.

On the first day of trial Costco pointed out that Vendelin had not yet filed an amended complaint setting forth the punitive damage claim. Over Costco's objection, the district court allowed the filing of an amended complaint, which was subsequently filed on October 8, 2002. Costco filed an amended answer on October 9, 2002, and the trial proceeded.

Vendelin's physician, Dr. Johans, testified that he had successfully performed back surgery to alleviate a herniated disk with nerve compression on December 17, 1999, approximately three months prior to the accident at Costco. Following her March 17, 2000, accident at Costco, Vendelin was again diagnosed with a compressed nerve from a herniated disk, and Dr. Johans performed a second surgery on April 26, 2000. According to Dr. Johans, the second surgery was necessitated by the Costco accident. He testified that the second surgery was less successful than the first and that Vendelin would continue to experience back pain into the indefinite future. Dr. Johans apportioned fifty percent of Vendelin's current back pain to the first surgery and the other fifty percent to the second surgery.

Vendelin also presented the testimony of Mr. Grisim, an expert with over thirty-two years of experience in the field of retail safety and accident prevention. Grisim testified concerning the industry standard of care and concluded that Costco's merchandise stacking procedures were inadequate. He testified that there are no uniform training procedures within the Costco organization relating to the proper stacking of merchandise. Rather, Costco employees are trained on the job through a "buddy system" in which new employees are teamed with senior employees. According to Grisim, this process is an extreme deviation from industry standards of care since there is no way to insure that proper procedures are being transferred from the senior employees to the junior employees. He also testified concerning an accident summary report prepared by Costco during discovery that listed over nine hundred other accidents reported by Costco customers involving falling merchandise from 1998 through 2000. Based on this information, he testified that Costco either knew or should have known prior to the accident that it lacked adequate training procedures for the proper and safe stacking of store merchandise. The testimony of several Costco employees corroborated Grisim's testimony concerning Costco's use of the so-called "buddy system" and the fact that Costco lacked uniform and standardized procedures for training personnel how to identify and address hazards involving improperly stacked merchandise.

After the presentation of Vendelin's case-in-chief, Costco moved for a partial directed verdict as to the claim for punitive damages, arguing that there was no evidence that Costco acted with the "extremely harmful state of mind" required to sustain an award of punitive damages. The district court denied the motion.

The jury returned a special verdict in favor of Vendelin, finding that Costco's negligence was a proximate cause of the accident. The jury awarded Vendelin $161,058.44 in compensatory damages. The jury also found that the acts of Costco which proximately caused injury to Vera constituted an extreme deviation from reasonable standards of conduct and that they were performed with wantonness or outrageousness. The jury awarded $401,392.00 in punitive damages. The district court issued its judgment confirming the jury's award.

On appeal Costco raises several challenges to the district court's rulings, as well as to the evidence supporting the jury's verdict.

II. THE DISTRICT COURT DID NOT ERR IN ALLOWING THE AMENDMENT TO ADD A CLAIM FOR PUNITIVE DAMAGES

A. Standard of Review

Costco maintains that the district court erred in allowing amendment of the complaint to include a claim for punitive damages, asserting that the district court misinterpreted I.C. § 6-1605, that the district court did not hold a hearing on the issue, and that there was no showing that Costco's conduct was oppressive, fraudulent, wanton, malicious or outrageous as required by I.C. § 6-1604. Costco maintains that this Court should exercise free review of the district court's decision to allow the amendment.

To support a motion to add punitive damages under I.C. § 6-1604, Vendelin was required to establish a reasonable likelihood she could prove by a preponderance of the evidence that Costco acted oppressively, fraudulently, wantonly, maliciously or outrageously. See Weaver v. Stafford, 134 Idaho 691, 699-700, 8 P.3d 1234, 1242-43 (2000)

(citing Vaught v. Dairyland Ins. Co., 131 Idaho 357, 362, 956 P.2d 674, 679 (1998)). The decision of the district court that Vendelin established such a reasonable likelihood is reviewed for an abuse of discretion. Id. at 700, 8 P.3d at 1243. The abuse of discretion inquiry examines (1) whether the district judge correctly perceived the issue as one of discretion; (2) whether the district judge acted within the outer boundaries of her discretion and consistently with the legal standards applicable to the specific choices available to her; and (3) whether the district judge reached her decision through an exercise of reason. Id. (citing Sun Valley Shopping Ctr. v. Idaho Power, 119 Idaho 87, 94, 803 P.2d 993, 1000 (1991)). Costco has presented no factual or legal basis to deviate from this standard of review, therefore, its argument that this Court should apply free review to the trial court's decision to grant Vendelin's motion to amend is rejected.

B. The district court did not abuse its discretion by granting the motion to amend her complaint to add a claim for punitive damages.

Costco carries the burden of showing that the district court committed error. See Western Cmty. Ins. Co. v. Kickers, Inc., 137 Idaho 305, 306, 48 P.3d 634, 635 (2002)

. None of Costco's arguments on appeal establish error in granting the motion to amend the complaint pursuant to I.C. § 6-1604.

Costco claims that no hearing was held on the issue of punitive damages as required by I.C. § 6-1604. A review of the record shows this to be incorrect. There was a hearing. At the time of hearing, I.C. § 6-1604 provided in pertinent part:¹

(1) In any action seeking recovery of punitive damages, the claimant must prove, by a preponderance of the evidence, oppressive, fraudulent, wanton, malicious or outrageous conduct by the party against whom the claim for punitive damages is asserted.

(2) In all civil actions in which punitive damages are permitted, no claim for damages shall be filed containing a prayer for relief seeking punitive damages. However, a party may, pursuant to a pretrial motion and after hearing before the court, amend the pleadings to include a prayer for relief seeking punitive damages. The court shall allow the motion to amend the pleadings if the moving party establishes at such hearing a reasonable likelihood of proving facts at trial sufficient to support an award of punitive damages. A prayer for relief added pursuant to this section shall not be barred by lapse of time under any applicable limitation on the time in which an action may be brought or claim asserted,

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