WORTHINGTON CORPORATION v. Lease Management, Inc.

Citation352 F.2d 24
Decision Date09 October 1965
Docket NumberNo. 15848.,15848.
PartiesWORTHINGTON CORPORATION, a Delaware corporation, Plaintiff-Appellee, v. LEASE MANAGEMENT, INC., a Michigan corporation, Defendant-Appellant.
CourtUnited States Courts of Appeals. United States Court of Appeals (6th Circuit)

Edward D. Wells, Grand Rapids, Mich., Byron P. Gallagher, Mount Pleasant, Mich., and Cholette, Perkins & Buchanan, Grand Rapids, Mich., of counsel, on brief, for appellant.

Lawrence Zelle, Minneapolis, Minn., Robins, Davis & Lyons, Minneapolis, Minn., of counsel, Schmidt, Smith, Howlett & Halliday, Grand Rapids, Mich., Laurence D. Smith, Grand Rapids, Mich., of counsel, on brief, for appellee.

Before O'SULLIVAN, PHILLIPS and EDWARDS, Circuit Judges.

EDWARDS, Circuit Judge.

This appeal is from a jury verdict and judgment for plaintiff in the amount of $118,777.90.1 The suit, brought under federal diversity jurisdiction, arose out of an explosion of a generator being installed by plaintiff on the premises of Wolverine Electric Cooperative. The explosion wrecked the generator and killed Lester Lewis, an employee of defendant. Plaintiff claimed (and the jury verdict must be read as agreeing) that defendant Lease Management, Inc.'s, negligence was a proximate cause of the explosion. Defendant Lease Management, Inc., appeals claiming, among other things, that plaintiff was contributorily negligent and that the trial judge committed reversible error by not submitting this issue to the jury.

Wolverine Electric Cooperative is an electric power-producing cooperative which operates a plant at Vestaburg, Michigan. In 1959 it decided to expand its electric power output by installation of a sixth generator and signed a contract with plaintiff Worthington Corporation for purchase and installation of the generator. Worthington started performance of the contract (which placed risk of loss on it until acceptance and payment) and as of November 24, 1959, was still working on the generator, although it was installed and in operation.

The generator was designed to use two types of fuel — natural gas and diesel oil. Wolverine had a contract with a near-by oil and gas field, owned by Rock Oil & Gas Company, for the furnishing of natural gas at a rate more economical to it than diesel oil. The gas came from Rock Oil's Edmore field six miles away via a pipeline owned by Wolverine. Rock Oil's contract required it to furnish gas "dry and free from solids and liquids."

In 1958, after date of Rock Oil's contract with Wolverine, Rock Oil contracted with defendant Lease Management, Inc., to take over management, operation and maintenance of its Edmore field. It appears that under Rock Oil's arrangement with Lease Management, Inc., defendant Lease Management stepped into Rock Oil's shoes in all respects as far as this litigation is concerned, since Rock Oil was dismissed on motion as a party defendant and no appeal is brought pertaining to that dismissal.

On November 24, 1959, the chief operator of the Vestaburg plant for Wolverine, Mr. Myron Wood, noticed that the new generator being installed by plaintiff Worthington was losing power. He switched the generator over from gas to oil fuel and drove to the Edmore field to find out what was wrong. Previously Rock Oil had told Wolverine's personnel to contact a Mr. Lewis at the field about any problems, and Wood did so. Lester Lewis, originally a Rock Oil employee, had been placed on defendant Lease Management's payroll when the latter took over the Edmore operation. Lewis checked and determined there was no trouble at the field, whereupon Wood drove back to the Wolverine plant, followed by Lewis.

At trial of this case, Wood testified that he and Lewis decided to take the "regulator" off the gas pipeline at a point located on the outside wall of the plant. The regulator was located in close proximity to the air intake for the Worthington generator which was still in operation. He testified that Lewis had brought a tool box with him to the plant and that he and Lewis removed the regulator, disassembled and cleaned it out, and reassembled it.

Wood also testified:

"Q (By Mr. Zelle) What was done after the regulator had been taken apart?
"A It was reassembled.
"Q Who reassembled it?
"A Mr. Lewis and I.
"Q What was done next?
"A We went out to blow out the line.
Q You went to blow out the line?
"A That is right."

In any event, Wood then went to a "gas house" 60 feet away where the pipeline meter and valves were located while Lewis stood near the place where the regulator had been removed, leaving a 12-inch open gap in the pipeline. Wood's testimony continued:

"Q (By Mr. Zelle) * * *
What next happened?
"A I opened the valve and closed it.
"Q What valve is that?
"A This was the valve that was in the three-inch line. I opened it and closed it. I opened it and at that time the dirt blew out and a second later the thing blew up.
"Q What dirt blew out?
"A How?
"Q What dirt are you talking about? You mean the dirt in the line?
"A The dirt came out of the line. There was a cloud of dirt came out of this line. The first time I opened it we got an awful charge of dirt out of it, and the second time I opened it, we still got some dirt out of it, but not as much and just an instant after that things happened."

The "things" which happened were the explosion of the generator which killed Lewis and occasioned the damage to the generator for which this suit was filed.

At trial of this case an engineer employed by plaintiff Worthington (called as a witness by plaintiff) testified in effect that the explosion had occurred because the removal of the regulator had left an opening in the gas pipeline close to the air intake for the Worthington generator. The air intake (located on the outside of the building within three feet of the regulator on the pipeline) drew air at the rate of 10,000 cu. ft. per minute into the engine cylinder. When Wood turned the valve on for the second time, gas coming out of the opening at a rate of 7,400 cu. ft. per minute was mixed with air, sucked into the air intake and into the engine cylinder and ignited by the exhaust flame, resulting in the explosion.

Both parties conceded at trial (and before us) that the generator — built to consume gas in great quantities — fell into the "dangerous instrumentality" category.

Defendant's testimony at trial tended to establish that the regulator had previously been removed several times to blow out the gas line, and that plaintiff Worthington knew, or should have known, of its possibility. Defendant's testimony also tended to establish that the design and layout of the Worthington generator was done by an architectural firm working with plaintiff Worthington.

Under Michigan law, which, of course, we apply here, defendant was required to plead and prove contributory negligence as an affirmative defense. Michigan Court Rules No. 111.7. But likewise under Michigan law, contributory negligence if affirmatively proven, bars plaintiff's recovery, and, ordinarily, is held to be an issue for jury consideration. McKinney v. Yelavich, 352 Mich. 687, 90 N.W.2d 883 (1958); Serratoni v. Chesapeake & O. Ry. Co., 333 F.2d 621 (C.A. 6, 1964); Hileman v. Northwest Engineering Co., 346 F.2d 668 (C.A. 6, 1965).

Indeed, exceptions to jury consideration are rare. In the much cited Van Steinburg case, Justice Cooley stated the basic Michigan rule as to them. "The case, however, must be a very clear one which would justify the court in taking upon itself this responsibility." Detroit & Milwaukee Railroad Co. v. Van Steinburg, 17 Mich. 99, 120 (1868). While this was said about a verdict directed against a plaintiff, it also applies to an instruction against a defendant on the issue of contributory negligence. See Hileman v. Northwest Engineering Co., supra. And, of course, on an instructed verdict on this issue, we review the evidence applicable to it from the point of view favorable to the party (here the defendant) who was deprived of a jury decision. Price v. Firestone Tire and Rubber Company, 321 F.2d 725 (C.A. 6, 1963); see also, Ware v. Nelson, 351 Mich. 390, 88 N.W.2d 524 (1958).

A careful review of this record convinces us that there was testimony from which the jury could have found or inferred 1) that plaintiff Worthington was responsible for the design and layout of the generator which located its air intake near the removable regulator, 2) that plaintiff knew, or should have known, of the possibility that the regulator might be removed in order to blow out the line while the plant was operating, and 3) that such location of the air intake of an acknowledged dangerous instrumentality was negligence which contributed as a proximate cause of this explosion.

In this vigorously disputed and closely balanced negligence contest, the failure to instruct that a finding that plaintiff was guilty of negligence which contributed as a proximate cause to the happening of the accident would require a verdict for defendant was in our judgment error which could easily have affected the result.

While what we have said clearly requires reversal for new trial, some of the other issues in this appeal may again be presented and some comment on them may be helpful.

In the background of this case — and adding to its complexity at both trials — has been a very interesting document. During the course of both trials defendant sought to introduce a contract which it claimed had been executed between plaintiff Worthington, its insurance carrier, and Wolverine Electric Cooperative and its insurance carrier. By the terms of this instrument Wolverine's insurance carrier and Worthington's insurance carrier in effect split an agreed estimate of actual damages to the generator of $102,570.66. This figure was reduced by $5,000 deductible charged to Worthington and it omitted any profit Worthington might have contemplated on the generator. Each insurer paid Worthington $48,785.30.

The contract further provided for a release to Wolverine...

To continue reading

Request your trial
5 cases
  • Johnston v. Pierce Packing Co.
    • United States
    • U.S. Court of Appeals — Ninth Circuit
    • March 9, 1977
    ...MacDonald, 96 F.2d 437, 438-39 (9th Cir.), cert. denied, 305 U.S. 624, 59 S.Ct. 86, 83 L.Ed. 399 (1938); Worthington Corp. v. Lease Management, Inc., 352 F.2d 24, 29 (6th Cir. 1965), cert. denied, 383 U.S. 937, 86 S.Ct. 1068, 15 L.Ed.2d 854 (1966); 5 J. Moore, Federal Practice P 43.08 (2d e......
  • Chumbler v. McClure
    • United States
    • U.S. Court of Appeals — Sixth Circuit
    • October 23, 1974
    ...for the Estate of Dr. McClure. Since Dr. McClure was deceased, the plaintiff was confronted with the Tennessee Dead Man's Statute, Tenn.Code Ann. 24-105, 1 see Worthington Corp. v. Lease Management, Inc., 352 F.2d 24 (6th Cir. 1965), cert. den. 383 U.S. 937, 86 S.Ct. 1068, 15 L.Ed.2d 854 (1......
  • Kemp v. Beasley
    • United States
    • U.S. Court of Appeals — Eighth Circuit
    • October 27, 1965
  • Chesapeake and Ohio Railway Company v. Barnaby
    • United States
    • U.S. Court of Appeals — Sixth Circuit
    • July 23, 1969
    ...defense under Michigan law. See, e. g., Rouse v. Michigan United Ry., 158 Mich. 109, 122 N.W. 532 (1909); Worthington Corp v. Lease Management, Inc., 352 F.2d 24 (6th Cir. 1965), cert. denied, 383 U.S. 937, 86 S.Ct. 1068, 15 L.Ed.2d 854 Appellant's complaint, however, is not based on the ul......
  • Request a trial to view additional results

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT