Handy v. City of Lawton , 63 O.B.A.J. 2309 ( 1992 )

HODGES, Vice Chief Justice.

The threshold issue in this case is whether, on a second appeal, the Court of Appeals was bound by its decision in the first appeal. We answer in the affirmative. After the district court granted summary judgment in favor of the defendants, the plaintiff appealed. The Court of Appeals, Division 2, vacated the summary judgment and remanded the case. After the time lapsed for filing a petition for certiorari, that decision became final. After a jury trial, the case was appealed a second time. On the second appeal, the Court of Appeals, Division 1, rendered a decision inconsistent with the decision in the first appeal.

On the afternoon of April 2, 1986, Steve Handy, the plaintiff (Handy), was standing in his front yard with his brother. Handy was a police officer for the City of Lawton, defendant (City). He was not on duty at the time. Gary Grzeskiewicz, also an officer with the City, arrived in his patrol car at his residence across the street from the Handy residence. Grzeskiewicz got out of his car and went in his house. Remembering that he had forgotten his house keys, he went back outside. On the way to get his keys out of the car, he and Handy exchanged quips. At that time, Grzeskiew-icz drew his weapon and waved it in the air. While Grzeskiewicz was returning the gun to the holster, it discharged striking Handy on the right side of his face. This incident occurred at 2:57 p.m. Grzeskiewicz’s shift ended at three o’clock.

Handy was taken to the hospital. He returned to light duty about a month after the incident. In early August, Handy returned to full duty status.

Handy and his wife, Susan, filed suit against Grzeskiewicz and the City of Law-ton alleging that the City of Lawton failed to properly hire, train and supervise its employees and that the city was liable on the theory of respondeat superior based on Grzeskiewicz’s negligence. The City moved for summary judgment arguing that at the time of the incident Grzeskiewicz was not acting within the scope of his employment. The trial court granted the motion.

Handy appealed the trial court’s ruling. The Court of Appeals, Division 2, in an unpublished opinion vacated the summary judgment finding that a material dispute of facts existed and remanded' the case (Handy I). No petition for certiorari was filed and the decision of the Court of Appeals, Division 2, became final.

Grzeskiewicz was voluntarily dismissed from the lawsuit. The case was tried to a jury. At the end of Handys’ evidence, the City’s demurrer as to the issue of improper hiring, training and supervising of Grzesk-iewicz was sustained. But the City’s demurrer as to the issue of respondeat superior was overruled. At the conclusion of trial, the City’s motion for directed verdict on the issue of respondeat superior was overruled. The jury returned a verdict in favor of both Steve and Susan Handy. The City moved for a judgment notwithstanding the verdict or a new trial. The motions were denied.

The City appealed the denial of the demurrer, the jury’s verdict, the denial of the motion for directed verdict, and the denial of the motion for judgment notwithstanding the verdict and for a new trial. The Court of Appeals, Division 1, reversed the jury’s verdict and found that Grzeskiewicz was not acting within the scope of his employment when the incident occurred (Handy II). Division 1 determined that the trial court erred when it denied the City’s motions for a demurrer and for a directed verdict. It reversed the trial court’s order denying the City’s motion for new trial and the judgment entered on the jury verdict. The Handys filed a Petition for Certiorari arguing that the Court of Appeals, Division l’s reversal was against the law of the case as established by Division 2’s opinion finding summary judgment improper.

“Neither demurrer to evidence nor motion for directed verdict.should be sustained unless there is an entire absence of proof to show any right to recover.” Fletcher v. Meadow Gold Co., 472 P.2d 885, 888 (Okla.1970). Both a demurrer and a motion for a directed verdict should be denied when there is a dispute of material fact or when reasonable minds could differ. Id. This is thé same standard applied to a motion for summary judgment. See Roach v. Atlas Life Ins. Co., 769 P.2d 158, 163 (Okla.1989). In reversing the district court’s grant of summary judgment in this case, Division 2 of the Court of Appeals implicitly found a dispute of material fact and that reasonable minds could differ on the facts presented. See Id.

The evidence presented at trial was substantially the same as the facts argued in the motion for summary judgment. If reasonable minds could differ when those facts were presented on summary judgment, then reasonable minds could differ when the same facts were presented at trial.

In the syllabus of Safeway Stores, Inc. v. Fuller, 193 Okla. 237, 142 P.2d 849 (1943), this Court stated, “The decision on first appeal is ‘law of the case’ in all subsequent stages, and will not ordinarily be reviewed on-second appeal, where facts are substantially the same.” Division 2’s decision that reasonable people could differ on the facts in the evidentiary material presented in the motion for summary judgment became the law of the case and that issue was not reviewable thereafter. The facts presented at trial were substantially the same as those presented in the motion for summary judgment. Division 2’s decision finding a dispute of fact was binding on the trial court and on subsequent appeals. Therefore, the Court of Appeals, Division 1, erred when it found that the trial court should have granted the demurrer and the motion for a directed verdict and remanded for a new trial. Division 1 was bound by Division 2’s decision.

The City argues that its liability for the tortious acts of an employee rests, not only upon proof that its employee’s action was within the scope of his employment, but also upon the evidence that the act was done as a means of carrying out his duties. See Mistletoe Express Service v. Culp, 353 P.2d 9, 16 (Okla.1960). According to the City, the Court of Appeals decision in Handy I was based entirely upon the “scope of employment” prong. The City contends that neither the evidentiary materials submitted to support the summary judgment, or its reversal, or any trial evidence raises a genuine issue of material fact concerning the second prong.

The Court of Appeals in Handy I must have considered both prongs of the rule because it quoted the standard that an employer is liable for harm inflicted while the agent is acting within the “scope of employment” and the act is an incident of the employee’s service to the principal. Because the Court of Appeals found summary judgment improper on the issue of the City’s liability, it necessarily found that there were genuine issues of fact as to the second prong, as well as the first prong.

An appellate court’s decision settles and determines, not only all questions actually presented, but all questions existing in the record and involved in the decision by implication. See Jones v. Medlock, 201 Okla. 109, 202 P.2d 212 (Okla.1948). When Handy I was brought, all of the facts about both the scope of the officer’s employment and the requirements for carrying out his duties were known or could have been developed. The sufficiency of those same facts were determined by the Court of Appeals in Handy I and may not be questioned on subsequent appeal.

Even if we were to assume that under the law-of-the-case doctrine, the decision in Handy I did not bar the issue for subsequent litigation, there is ample evidence requiring the submission to the jury of both aspects of the test for respondeat superior liability. For example, the following testimony supports the verdict: The shooting occurred while the officer was “on duty;” he had not signed off on his police radio; he was not only in uniform and carrying a weapon but was required to be in uniform and carry a weapon; the officer’s squad car was at the shooting scene; he was required to take his squad car home as part of the policy of crime deterrence; he was required to respond to calls upon request even after his shift ended; he responded to the shooting by calling the police dispatcher; a firearms review board that investigates complaints of firearm misuse by officers while performing official acts found him in violation of policy; this was not an isolated occurrence of weapon misuse by Lawton police officers; and an important component of the City’s crime deterrence is the presence of uniformed officers with weapons. Therefore, even if the law-of-the-case doctrine did not apply here, the Court of Appeals erred when it reversed the jury’s verdict based on the evidence presented at trial.

The City also appealed the trial court’s post-trial denial of the Motion for Remittitur. The Court of Appeals, Division I, did not review this issue because it held for the City. The petition for certiorari brought by the Handys did not address the issue of remittitur. Under Okla.Stat. tit. 12, ch. 15, app. 3, rule 3.15, on petition for certiorari, the case will be decided on the reviewable issues presented on appeal. The issue of remittitur was presented in the appeal.

The City contends that as an employer it has, as a fringe benefit, a comprehensive, group, self-insured health plan. Handy’s brief supports the City’s contention because it stated the collective bargaining agreement between the City and the police officers provides for a group health insurance program. The City asserts that, because payments for Handy’s medical bills were paid from this fund, it is entitled to a credit of those payments.

The principal case relied on is Overturff v. Hart, 531 P.2d 1035, 1038 (Okla.1975), in which the Court found that payments made by a defendant to a plaintiff before trial could be used to reduce the judgment if the money came from the defendant’s independent fund. Otherwise, the collateral source rule applies — payments made to the injured party from other sources are not credited against the tort-feasor’s liability. The City asserts that the insurance fund in this case is similar to the insurance fund used in Overturff, and the medical payments should be used to reduce the judgment.

The parties in Overturff were not employer and employee, but a driver and passenger in a car accident. In that case, the insurer was only obligated to pay the damages that the defendant was legally obligated to pay. Therefore, the insurance payments in Overturff were not provided as a benefit to an employee but as part of the defendant’s liability insurance. In the present case, the insurer's obligation for the medical bills was not contingent on the City’s liability.

Section 61 of title 23 provides the measure of damages:

For the ■ breach of an obligation not arising from contract, the measure of damages, except where otherwise expressly provided by this chapter, is the amount which will compensate for all detriment proximately caused thereby, whether it could have been anticipated or not.

In Denco Bus Lines v. Hargis, 229 P.2d 560 (Okla.1951), we applied this statute. In so doing we stated:

Upon commission of a tort it is the duty of the wrongdoer to answer for the damages wrought by his wrongful act, and that is measured by the whole loss so caused and the receipt of compensation by the injured party from a collateral source wholly independent of the wrongdoer does not operate to lessen the damages recoverable from the person causing the injury.

Id. at 561.

In Folkestad v. Burlington N. Inc., 813 F.2d 1377, 1381 (9th Cir.1987), the court addressed the issue of whether employer’s purchased insurance benefits may offset liability and stated that the courts were unanimous that the determining factor was the purpose and nature of the fund, and not merely the source. If the fund is for general hospital and medical coverage upon which the insured may make a claim without regard to liability on the part of the employer, the policy is a fringe benefit, and is part of the employee’s income. The collateral source rule prohibits a set-off of benefits received thereunder by the employee. However, if the fund is viewed as a contribution by the employer to a fund to protect it from liability or an express provision in the collective bargaining states that a set-off is allowed then the benefits may offset the judgment.

In this case, the City admits that the insurance is a fringe benefit and does not state that the collective bargaining allows a set-off. As a fringe benefit, the insurance was a part of Handy’s income and cannot be used to offset the judgment. The trial court was correct in denying the motion for remittitur.

The Court of Appeals’ opinion is vacated. The judgment of the trial court is affirmed.

CERTIORARI PREVIOUSLY GRANTED; COURT OF APPEALS’ OPINION VACATED;,, DISTRICT COURT’S JUDGMENT AFFIRMED.

LAVENDER, HARGRAVE, ALMA WILSON, KAUGER and SUMMERS, JJ., concur. OPALA, C.J., concurs in part, dissents in part. SIMMS, J., dissents.