Willis v. Ind. Harbor S.S. Co, A09-2223.

• Citation: 790 N.W.2d 177
• Decision Date: 19 October 2010
• Docket Number: No. A09-2223.,A09-2223.
• Parties: Daniel L. WILLIS, Respondent, v. INDIANA HARBOR STEAMSHIP CO., L.L.C., a foreign limited liability company, et al., Appellants, and Indiana Harbor Steamship Co., L.L.C., et al., defendants and third party plaintiffs, Appellants, v. Duluth, Missabe and Iron Range Railway Company, third party defendant, Respondent.
• Court: Court of Appeals of Minnesota

790 N.W.2d 177

Daniel L. WILLIS, Respondent,

v.INDIANA HARBOR STEAMSHIP CO., L.L.C., a foreign limited liability company, et al., Appellants,andIndiana Harbor Steamship Co., L.L.C., et al., defendants and third party plaintiffs, Appellants,

v.Duluth, Missabe and Iron Range Railway Company, third party defendant, Respondent.

No. A09-2223.

Court of Appeals of Minnesota.

Oct. 19, 2010.

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Syllabus by the Court

A party is not subject to a spoliation sanction for the loss of evidence over which the party had no physical control.

Steven S. Eckman, Eckman, Strandness & Egan, P.A., Wayzata, MN, for respondent Daniel J. Willis.

Joseph V. Ferguson, Paul W. Wojciak, Johnson, Killen & Seiler, Duluth, MN; and Robert T. Coniam (pro hac vice), Ray Robinson Carle & Davies, P.L.L., Cleveland, OH, for appellants Indiana Harbor Steamship Co., Central Marine Logistics, Inc., ArcelorMittal USA, Inc., and ArcelorMittal Minorca Mine, Inc.

Diane P. Gerth, Alfonse J. Cocchiarella, Ricke & Sweeney, P.A., St. Paul, MN, for respondent Duluth, Missabe and Iron Range Railway Company.

Considered and decided by MINGE, Presiding Judge; JOHNSON, Judge; and COLLINS, Judge.

OPINION

COLLINS, Judge. ^*

Appellants Indiana Harbor Steamship Co., Central Marine Logistics, Inc., ArcelorMittal USA, Inc., and ArcelorMittal Minorca Mine, Inc. appeal from judgment following a jury verdict in favor of respondent Daniel J. Willis on his negligence claims brought under the Jones Act, 46 U.S.C. § 30104 (2006). Appellants challenge (1) a negative-inference jury instruction based on spoliation; (2) the determination that the liability and apportionment of damages were governed by Minnesota law rather than federal maritime law; (3) the amount of damages awarded for past lost wages; (4) the amount of damages awarded for future losses; (5) the determination that appellants were governed by a provision in a contract between the dock owner and the entity contracting for transportation, rather than by the federal maritime warranty of workmanlike performance; (6) the denial of a request to determine collateral sources under Minn.Stat. § 548.251 (2008); and (7) the application of an incorrect rate for postjudgment interest. Because we conclude that appellants' challenges to the damages awards are without merit but that the negative-inference instruction was reversible error, we affirm in part, reverse in part, and remand.

FACTS

On August 27, 2004, while working as a crewman of the vessel Joseph L. Block, Willis was injured on a dock in the Duluth harbor owned by respondent Duluth, Missabe & Iron Range Railway Company (DM&IR). Willis was handling one of the Block's mooring lines used to secure the vessel when he slipped on the dock and fell. Willis testified that at the place where he fell the dock was covered by a slime of water and limestone, and that his knee hit both the dock and taconite pellets that were obscured by the milky limestone mixture. Willis eventually was diagnosed with deep vein thrombosis stemming from the injury to his knee.

Willis sued his employers, Indiana Steamship and Central Marine, under the Jones Act, claiming entitlement to maintenance and cure as well as additional compensation for his injuries under a negligence theory. Indiana Steamship impleaded DM&IR under the theory that DM&IR, as the dock owner, was liable due to the dangerous condition of the dock. Willis later amended the complaint to add DM&IR as a direct defendant, as well as to assert claims against the Block's charterer, ArcelorMittal USA, Inc., and the owner of the taconite manufacturing facility for which the cargo of the Block was destined, ArcelorMittal Minorca Mine, Inc. The district court ruled that all defendants except DM&IR were a unitary enterprise and that their fault as “vessel defendants” should be aggregated. The district court also ruled that the contract for contribution between DM&IR and ArcelorMittal Minorca Mine applied and superseded common-law concepts of contribution between DM&IR and the vessel defendants.

At trial, evidence was presented that the Block arrived at the dock at approximately 2 p.m. on August 27, 2004. Another vessel, the Callaway, had occupied the dock prior to the arrival of the Block and departed shortly after it finished unloading its cargo at 12:45 p.m. Because the Callaway's cargo did not include taconite pellets, there was testimony that any such pellets on the dock where Willis fell must have been there since before the Callaway docked that morning at approximately 2 a.m. The rulebook governing dock policies and procedures at the time required that docks be cleaned prior to vessel arrival and, in the event that they could not be cleaned, that the vessel be notified of their condition. According to a dock foreman, there had not been time between the Callaway's departure and the Block's arrival to properly clean the dock. Although the dock foreman confirmed DM&IR's policy to inform the vessel's captain if the dock was not cleaned, the foreman could not recall any instance in his 36 years' experience when a vessel was told to delay docking because of a spill on the dock or when a vessel has refused to dock because of a spill.

The foreman also testified that no accident was reported on the day Willis slipped and fell on the dock. According to the foreman, had the accident been reported, DM&IR would have investigated the incident, taking statements and documenting the condition of the dock at the time of the accident. The accident occurred on a Friday and, although Central Marine Logistics was informed of the accident on that afternoon, DM&IR was not notified of the incident until the following Monday. In light of this late notice, the district court gave a negative-inference jury instruction as a sanction based on its interpretation of the doctrine of spoliation.

The jury returned a verdict in favor of Willis in the total sum of $1,818,898, finding that Willis was entitled to compensation for $281,468 in past lost wages, $50,000 for past pain and suffering, $962,430 for future lost wages, $500,000 for future medical costs, and $251,000 for future pain and suffering. The jury apportioned 85% of the causal fault for the accident to the vessel defendants, 7.5% to DM&IR, and 7.5% to Willis. The district court ordered judgment accordingly. Appellants sought posttrial relief, which the district court denied in all respects, and this appeal followed.

ISSUES

I. Was the negative-inference jury instruction as a sanction for spoliation prejudicial error?

II. Did the district court err in determining that Minnesota premises-liability law applied to appellants?

III. Did the district court abuse its discretion in denying remittitur on the damages award for past lost wages?

IV. Did the district court abuse its discretion in denying appellants a new trial on future damages?

V. Did the district court err in applying the contractual contribution clause?

VI. Did the district court err in denying appellants' motion for determination of collateral sources?

VII. Did the district court apply the wrong rate of postjudgment interest on the verdict award?

ANALYSIS

I.

Appellants first argue that the negative-inference jury instruction based on spoliation was unwarranted under Minnesota law and unfairly prejudiced appellants on both liability and apportionment of that liability, and therefore that the district court abused its discretion in failing to grant appellants a new trial. A party may seek a new trial when there are errors of law at trial or when a party is deprived of a fair trial due to irregularities in the proceedings. Minn. R. Civ. P. 59.01(a), (f). Because the district court has the discretion to grant a new trial, appellate courts will not disturb the decision “absent a clear abuse of that discretion.” Halla Nursery, Inc. v. Baumann-Furrie & Co., 454 N.W.2d 905, 910 (Minn.1990).

The term “spoliation” generally refers to the destruction of relevant evidence by a party. Foust v. McFarland, 698 N.W.2d 24, 30 (Minn.App.2005), review denied (Minn. Aug. 16, 2005). “On review, an appellate court considers whether the district court is authorized to impose a sanction for spoliation of evidence and, if so, whether it abused its discretion by imposing such a sanction.” Wajda v. Kingsbury, 652 N.W.2d 856, 860 (Minn.App.2002) (citing Patton v. Newmar Corp., 538 N.W.2d 116, 118 (Minn.1995)), review denied (Minn. Nov. 19, 2002). The district court has broad authority in determining what, if any, sanction is to be imposed for spoliation of evidence. Patton, 538 N.W.2d at 119.

Although Black's Law Dictionary 1531 (9th ed.2009) defines spoliation as “[t]he intentional destruction, mutilation, alteration, or concealment of evidence,” Minnesota courts have held that spoliation does not have to be intentional to constitute obstruction of justice deserving of a sanction. Wajda, 652 N.W.2d at 862. Regardless of intent, disposal of evidence may be subject to a spoliation sanction when a party knows or should know that the evidence should be preserved for pending or future litigation. Patton, 538 N.W.2d at 118. As a spoliation sanction Minnesota “permits ‘an unfavorable inference to be drawn from failure to produce evidence in the possession and under the control of a party to litigation.’ ” Federated Mut. Ins. Co. v. Litchfield Precision Components, Inc., 456 N.W.2d 434, 436-37 (Minn.1990) (quoting Kmetz v. Johnson, 261 Minn. 395, 401, 113 N.W.2d 96, 100 (1962)).

Appellants argue that, because they lacked control over the dock and its condition, they cannot be subject to a spoliation sanction for changes to the condition of the dock after the accident. There is nothing in the record that indicates that appellants had any control of the dock or when the dock was cleaned. The only party who had control over the dock or would have cleaned the dock, and thus destroyed...