Vigilant Insurance Company v. McKenney's Inc

UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 12-1351
VIGILANT INSURANCE COMPANY OF NEW YORK, As Subrogee Of
Spartanburg Regional Healthcare System,
Plaintiff – Appellant,
v.
MCKENNEY'S INC.,
Defendant – Appellee,
and
ROBINS & MORTON CORPORATION,
Defendant.
Appeal from the United States District Court for the District of
South Carolina, at Spartanburg. J. Michelle Childs, District
Judge. (7:09-cv-02076-JMC)
Argued: March 19, 2013 Decided: May 24, 2013
Before SHEDD, DAVIS, and KEENAN, Circuit Judges.
Affirmed by unpublished opinion. Judge Shedd wrote the opinion,
in which Judge Davis joined. Judge Keenan wrote a separate
opinion concurring in the judgment.
Thomas David Higgins, Jr., COZEN O'CONNOR, Charlotte, North
Carolina, for Appellant. Kimila Lynn Wooten, ELMORE GOLDSMITH,
Greenville, South Carolina, for Appellee.
Unpublished opinions are not binding precedent in this circuit.
2
SHEDD, Circuit Judge:
Vigilant Insurance Company of New York (“Vigilant”) appeals
the denial of its motion for a new trial on its negligence cause
of action against McKenney’s, Inc. (“McKenney’s). We affirm.
I
In 2006, a water leak occurred at a Spartanburg Regional
Healthcare System (“Spartanburg Regional”) facility located in
Spartanburg, South Carolina. Spartanburg Regional filed a claim
with Vigilant, its property insurance carrier, for damage to its
property and medical equipment, and Vigilant paid the claim.
Thereafter, Vigilant (as subrogee) filed this lawsuit against
Robins & Morton Corporation (“RMC”), which was the general
contractor for the Spartanburg Regional facility, and
McKenney’s, which was the plumbing sub-contractor. Vigilant
alleged that the leak occurred when two pipes integrated into
the roof drain system of the Spartanburg Regional facility
separated during a rainstorm.
The case proceeded to a jury trial on two causes of action:
breach of contract against RMC and negligence against
McKenney’s. Without objection from the parties, the district
court instructed the jury concerning these causes of action and
submitted a verdict form that presented three parts for the jury
to complete. The first and second parts of the form asked the
jury simply to render a verdict on the breach of contract and
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negligence causes of action, respectively. The third part asked
the jury to state the amount of actual damages, if any, to which
Vigilant was entitled if the jury rendered a verdict for
Vigilant on either cause of action. In the first part of the
verdict form, the jury found in RMC’s favor on the breach of
contract cause of action. In the second part, the jury found in
Vigilant’s favor on the negligence claim. In the third part, the
jury entered “$0.00” as the negligence damages amount.
Immediately after the verdicts were published, the district
court thanked the jury members for their service and sent them
to the jury room, explaining: “I will need to speak with the
parties just one moment. And then you all will be excused.” J.A.
339. 1 The court then asked whether the parties took exception to
the verdicts, to which Vigilant’s counsel responded: “Yes, Your
Honor, plaintiffs do in regards to the verdict or the finding on
damages.” Id. After counsel for McKenney’s indicated that
McKenney’s had no exceptions, the court stated to Vigilant’s
1
The court reporter’s notation at this point in the trial
transcript reads “Whereupon, the jury was excused from the case
at approximately 6:21 p.m.” J.A. 339. Contrary to Vigilant’s
contention that the jury was discharged at that time, we believe
that the district court’s quoted statement makes it clear that
the jury had not in fact been discharged. See generally Summers
v. United States, 11 F.2d 583, 586 (4th Cir. 1926) (noting that
a jury is not discharged even if the court stated otherwise as
long as it “remains an undispersed unit, within control of the
court, with no opportunity to mingle with or discuss the case
with others”).
4
counsel: “[Y]ou’ll have the appropriate time to submit your
issues with respect to that in writing in accordance with our
local federal rules.” J.A. 340. Vigilant’s counsel thanked the
court, and the court then adjourned.
Several weeks later, Vigilant moved for a new trial against
McKenney’s, arguing that the zero damages negligence verdict is
inconsistent under South Carolina law. Vigilant pointed
primarily to Stevens v. Allen, 536 S.E.2d 663, 666 (S.C. 2000),
in which the state supreme court noted that a verdict “assessing
liability against the defendant but awarding the plaintiff zero
damages is inconsistent and contrary to South Carolina law.”
After explaining that a negligence cause of action has three
elements (duty of care, breach of that duty, and damages
proximately caused by the breach) the Stevens court held (1) “if
a jury finds the plaintiff has failed to prove damages
proximately caused by the defendant’s negligence, then its
verdict should be for the defendant,” and (2) “the proper and
most consistent approach of treating such verdicts is to
require, upon request, the trial court to re-submit the matter
to the jury. If the jury cannot reach a consistent verdict, the
trial court may then order a new trial nisi or a new trial
absolute.” Id.The district court denied the motion, stating: “Because
Vigilant did not bring the alleged inconsistency to the court’s
5
attention or move for re-submission of the matter to the jury,
Vigilant may have waived its right to seek a new trial.
Notwithstanding any waiver by Vigilant of the right to seek a
new trial, the court finds the verdict rendered in this case to
be consistent with the evidence presented at trial.” J.A. 358. 2
The court explained that it had considered the entire record,
including the jury instructions and verdict form, and concluded
that “the jury’s verdict and damage assessment can be logically
harmonized and the jury’s verdict should be sustained.” J.A.
362.
II
We review the denial of a new trial motion for abuse of
discretion. Gregg v. Ham, 678 F.3d 333, 342 (4th Cir. 2012). A
district court abuses its discretion when it acts arbitrarily or
irrationally, fails to consider judicially recognized factors
2
Regarding waiver, the district court looked to White v.
Celotex Corp., 878 F.2d 144, 146 (4th Cir. 1989), in which we
interpreted Fed. R. Civ. P. Rule 49(b) and explained: “Proper
respect for the Rule mandates that failure to bring any
purported inconsistencies in the jury’s verdict to the attention
of the court prior to the release of the jury will constitute a
waiver of a party’s right to seek a new trial.” The court noted
that although “Vigilant indicated that it took exception to the
verdict, [Vigilant] did not specifically mention any grounds for
the exception. Particularly, Vigilant did not note any perceived
inconsistency in the verdict or request that the jury conduct
further deliberations to clarify the verdict.” J.A. 358. To the
extent that Rule 49(b) is pertinent to this case, we note that
the state court procedure outlined in Stevens is consistent with
our decision in White.
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constraining its exercise of discretion, relies on erroneous
factual or legal premises, or commits an error of law. United
States v. Thompson-Riviere, 561 F.3d 345, 348 (4th Cir. 2009).
Vigilant primarily contends, as it did below, that the
negligence verdict is legally inconsistent under South Carolina
law, and it argues that the district court abused its discretion
by concluding otherwise. For its part, McKenney’s argues that
the court correctly ruled that the negligence verdict is not
inconsistent. We agree with McKenney’s on this point.
When, as here, a party contends that the verdict is
inconsistent, we are required to determine whether the verdict
can be sustained on any reasonable theory. Atlas Food Sys. &
Servs., Inc. v. Crane Nat’l Vendors, Inc., 99 F.3d 587, 599 (4th
Cir. 1996). Unquestionably, the negligence verdict in this case
resembles the negligence verdict in Stevens because the juries
in both cases rendered a general plaintiff’s verdict but awarded
zero damages. If our analysis ended with only this comparison,
we might be inclined to agree with Vigilant that the negligence
verdict in this case is inconsistent. However, Stevens does not
control the outcome of this case because this jury, like all
federal juries, “serve[d] under the district judge’s guidance,”
Price v. Glosson Mot. Lines, Inc., 509 F.2d 1033, 1036 (4th Cir.
1975), and the district court was not required to, and did not,
7
instruct the jury to render its verdict in a form that accords
with Stevens. 3
Instead, included among the district court’s instructions
are several instructions 4 that we believe, in conjunction with
the verdict form, fairly permitted the jury to render the zero
damages negligence verdict. See generally TransDulles Ctr., Inc.
v. USX Corp., 976 F.2d 219, 227-28 (4th Cir. 1992) (rejecting
claim of verdict inconsistency where verdict accords with jury
instructions); City of Richmond v. Madison Mgmt. Group, Inc.,
918 F.2d 438, 458 (4th Cir. 1990) (noting that even “‘a jury
3
Stevens states a general principle of South Carolina law,
but it does not require that a district court instruct the jury
in a certain manner, and neither party has argued to the
contrary. See Noel v. Artson, 641 F.3d 580, 588 (4th Cir. 2011)
(noting that appellate opinions “articulate general principles
of law that decide cases,” and they “are not jury instructions,
nor are they meant to be”).
4
See J.A. 40-41 (“Any failure to exercise due care on the
part of McKenney’s . . . in the construction of the building
would constitute negligence or carelessness. If such negligence
or carelessness on the part of McKenney’s did exist, . . . your
next question would be: Is the negligence or carelessness of
McKenney’s a proximate cause of the damages sustained by
Spartanburg Regional?”); J.A. 41 (“If you find McKenney’s
negligent per se, . . . you must still determine whether
Vigilant has suffered any damages and whether those damages were
proximately caused by McKenney’s negligence per se”); J.A. 44-45
(“If you find . . . that Vigilant has met its burden of proving
that McKenney’s is liable to it for negligence . . ., then you
must determine the amount of damages Vigilant should receive, if
any. . . . If Vigilant proves its claims, it also has the burden
of proving, again by a preponderance of the evidence, that it
suffered damages.”). Neither party has argued that these or any
other instructions are erroneous.
8
verdict inconsistent on its face does not require a new trial if
the inconsistency may reasonably be attributed to the jury’s
misunderstanding of the jury instructions’” (citation omitted)).
These instructions can reasonably be understood to have split
the elements of negligent conduct from the element of negligence
damages, telling the jury that if it first found McKenney’s to
have been negligent, it should then proceed to consider whether
Vigilant was entitled to damages. This interpretation is
consistent with the verdict form, which asked the jury in part 2
to render a verdict on the “claim for negligence” and then, in
part 3, to state the amount of damages, “if any,” to which
Vigilant was entitled (if it prevailed on either cause of
action). See Bensch v. Davidson, 580 S.E.2d 128, 131 (S.C. 2003)
(noting, in the context of a discussion regarding the
consistency of a general verdict, that the “if any” damages
language in the verdict form indicated that the jury could find
no damages even if they found for the counterclaim plaintiffs on
their contract counterclaim). 5
5
Although Bensch involves a breach of contract claim, the
principle announced in Stevens (which is a negligence case)
would nonetheless be applicable generally because proof of
damages is a necessary prerequisite to both negligence and
breach of contract claims. See Fuller v. E. Fire & Cas. Ins.
Co., 124 S.E.2d 602, 610 (S.C. 1962) (breach of contract action
requires proof of damages). Thus, as a general rule, a zero
damages verdict would normally be improper in both types of
(Continued)
9
III
The instructions in this case sufficiently conveyed to the
jury that Vigilant bore the burden of proving each of the three
elements of the negligence claim, and we are satisfied that the
zero damages negligence verdict comports with the instructions.
Therefore, the verdict is not inconsistent, and the district
court did not abuse its discretion in denying the motion for a
new trial.
AFFIRMED
cases. Of course, for the reasons we have explained, the general
rule is inapplicable here.
10
BARBARA MILANO KEENAN, Circuit Judge, concurring in the
judgment.
Vigilant did not timely object to the jury verdict as
inconsistent. Because the district court correctly recognized
that Vigilant waived its right to request a new trial, I would
affirm the judgment on that basis without addressing the merits
of the asserted inconsistency.
Under Rule 49(b) of the Federal Rules of Civil Procedure,
counsel must object to any perceived inconsistency in the jury
verdict before the jury is discharged. 1 White v. Celotex Corp.,
878 F.2d 144, 146 (4th Cir. 1989) (per curiam). The failure to
bring any such inconsistency to the court’s attention prior to
the release of the jury “will constitute a waiver of a party’s
right to seek a new trial.” Id.The purpose of the rule is to encourage the efficiency of
the trial process by giving the jury the opportunity to
reconcile any inconsistency in the verdict rather than by
requiring the parties to present all of the evidence again to
another jury. Id. If a party does not timely object, “the
court will effectively lose the opportunity to have the jury
reconsider the inconsistency,” and “[a]s a result, the primary
1
The parties do not dispute that Rule 49(b) is applicable
in this case.
11
purpose of Rule 49(b) will have been defeated.” Austin v.
Paramount Parks, Inc., 195 F.3d 715, 726 (4th Cir. 1999).
In this case, after the jury verdict holding McKenney’s
liable for negligence but awarding zero damages was published,
the district court inquired outside the presence of the jury
whether there were any objections. Although counsel for
Vigilant objected “to the verdict or the finding on damages,”
he did not elaborate on the grounds for his objection or request
that the matter be resubmitted to the jury. The jury was
dismissed at the conclusion of this hearing. 2
Because Vigilant's counsel did not apprise the district
court of the basis for his objection, the court was deprived of
the opportunity to have the jury remedy the asserted
inconsistency. See Skillin v. Kimball, 643 F.2d 19, 20 (1st
Cir. 1981) (holding inconsistent verdict argument waived despite
counsel’s remark “that he thought the jury's work was
inconsistent” before the jury was discharged because “he did not
pursue any relief”). Thus, a decision permitting Vigilant to
seek a new trial under such circumstances “would undermine the
2
Contrary to Vigilant’s assertion, the record reflects that
the jury was discharged only upon the conclusion of the hearing,
not before. Accordingly, we disagree with Vigilant's argument
that Vigilant was not provided the opportunity to object. See
Fed. R. Civ. P. 46.
12
incentives for efficient trial procedure” underlying Rule 49(b).
Id.; see also White, 878 F.2d at 146.
Accordingly, in my view, Vigilant waived its right to
request a new trial because counsel did not bring the asserted
inconsistency to the district court’s attention before the jury
was excused. See White, 878 F.2d at 146. I would affirm the
judgment on that basis without addressing the separate question
whether the verdict was inconsistent as alleged.
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