Jacobs v. Dm&e

#25811, #25827-a-JKM
2011 S.D. 68IN THE SUPREME COURT
OF THE
STATE OF SOUTH DAKOTA
* * * *
DONALD JACOBS, Plaintiff and Appellee,
v.
DAKOTA, MINNESOTA & EASTERN
RAILROAD CORPORATION, A
DELAWARE CORPORATION, Defendant and Appellant.
* * * *
APPEAL FROM THE CIRCUIT COURT OF
THE THIRD JUDICIAL CIRCUIT
BROOKINGS COUNTY, SOUTH DAKOTA
* * * *
HONORABLE DAVID R. GIENAPP
Judge
* * * *
RONALD A. PARSONS, JR. of
Johnson, Heidepriem & Abdallah, LLP
Sioux Falls, South Dakota
RICK A. RIBSTEIN of
McCann, Ribstein, & McCarty, PC
Brookings, South Dakota
GREGORY T. YAEGER of
Yaeger, Jungbauer & Barczak, PLC
Saint Paul, Minnesota Attorneys for plaintiff
and appellee.
BRIAN J. DONAHOE
ONNA B. HOUCK
WILLIAM D. SIMS of
Cutler & Donahoe LLP Attorneys for defendant
Sioux Falls, South Dakota and appellant.
* * * *
ARGUED ON MAY 25, 2011
OPINION FILED 10/12/11
#25811, #25827
MEIERHENRY, Retired Justice
[¶1.] Donald Jacobs worked for Dakota, Minnesota, & Eastern Railroad
Corporation (DM&E). Jacobs was injured on the job when he fell on snow-covered
ice. Jacobs suffered severe injuries to his elbow and shoulder as a result. He
subsequently filed a personal injury claim under the Federal Employers’ Liability
Act (FELA), which permits suit against railroads for an employee’s injury that
“result[s] in whole or in part from [the railroad’s] negligence.” 45 U.S.C. § 51. After
a jury trial, the jury returned a verdict in Jacobs’s favor. The jury awarded
$300,000 in damages. DM&E appeals, raising several issues. Jacobs raises one
issue by notice of review.
[¶2.] Jacobs’s injury occurred on January 7, 2007, while performing his
duties as a rail-car mechanic for DM&E in Huron, South Dakota. His duties took
him into the rail yard to check with the train crews for any mechanical problems.
He reached each crew by driving a vehicle over the graveled paths in the rail yard.
On the day of his injury, snow and ice had accumulated on the rail yard grounds.
Because of the snow and ice, Jacobs wore work-issued “ice cleats” over his boots.
Even with the ice cleats, he slipped and fell on a patch of snow-covered ice as he
returned to his vehicle after talking to one of the crews. The fall fractured his elbow
and ultimately caused an injury to his shoulder. Both his elbow and shoulder
required surgery. As a result of his injuries, Jacobs has permanent lifting
restrictions.
[¶3.] Jacobs filed suit against DM&E under FELA. Jacobs alleged that
DM&E’s negligence caused his injuries. The jury ultimately awarded Jacobs
-1-
#25811, #25827
$300,000. DM&E filed a motion for a judgment as a matter of law and alternatively
moved for a new trial. The trial court denied both motions and ordered that
interest be paid on the judgment, calculated from the day of the verdict. DM&E
also filed a motion for a set-off of $16,086.06 for wage-continuation payments made
to Jacobs as a form of short-term disability benefits. The trial court granted that
motion.
[¶4.] DM&E raises the following issues on appeal:
1. Whether the trial court erred in allowing evidence of drainage
problems and, if that evidence was admissible, erred in failing to
enter a judgment as a matter of law.
2. Whether the trial court abused its discretion in denying DM&E’s
motion for a new trial.
3. Whether the trial court erred in ordering prejudgment interest
from the time of the verdict until the entry of judgment.
[¶5.] By notice of review, Jacobs raises the following issue on appeal:
4. Whether DM&E was entitled to a set-off on the judgment.
Analysis and Decision
[¶6.] 1. Whether the trial court erred in allowing evidence of
drainage problems and, if that evidence was admissible,
erred in failing to enter a judgment as a matter of law.
[¶7.] DM&E presents two arguments under this issue. First, DM&E claims
that the trial court erred by admitting photographs and testimony concerning water
pooling and drainage in the rail yard. The photographs, which were taken months
after Jacobs’s accident, showed the area of his fall and other areas of the rail yard.
Jacobs offered the photographs and accompanying testimony to show that the rail
yard’s poor drainage caused ice to form. DM&E claims that Jacobs unfairly used
-2-
#25811, #25827
the evidence to show that the poor drainage was “known to DM&E and caused ice to
form, which was the basis for concluding that ice accumulation was foreseeable.”
DM&E questions the relevancy of the evidence and asserts that the “admission of
this evidence was improper and unfairly prejudicial far beyond any probative
value.” 1
[¶8.] We review evidentiary rulings under the abuse of discretion standard.
Stockwell v. Stockwell, 2010 S.D. 79, ¶ 42, 790 N.W.2d 52, 66. An abuse of
discretion occurs when the trial court’s ruling is “clearly against reason and
evidence.” DFA Dairy Fin. Servs., L.P. v. Lawson Special Trust, 2010 S.D. 34, ¶ 17,
781 N.W.2d 664, 669 (citation omitted). Here, the photographs and testimony were
relevant to show the rail yard’s alleged drainage problems. Even though DM&E
may not agree with the evidence, it was able to cross examine and rebut it. We find
no abuse of discretion in admitting the photographs and testimony.
[¶9.] As to the second argument under this issue, DM&E argues that it is
entitled to a judgment as a matter of law on the issue of foreseeability. Both parties
agree that for Jacobs to prevail on his claim, DM&E must have foreseen the hazard
that ice accumulation presented. See CSX Transp., Inc. v. McBride, __ U.S. __, 131
S. Ct. 2630, 2634, 180 L. Ed. 2d 637 (5-4 decision) (citing Gallick v. Baltimore &
Ohio. R.R. Co., 372 U.S. 108, 117, 83 S. Ct. 659, 665, 9 L. Ed. 2d 618 (1963) (stating
1. DM&E also argues that Jacobs’s expert witness misinterpreted deposition
testimony on which he based his conclusions. DM&E contends that it
objected to those misinterpreted portions of the deposition testimony. But, by
DM&E’s own admissions, those objections were sustained. Therefore it is
unclear what relief DM&E seeks on appeal.
-3-
#25811, #25827
that “reasonable foreseeability of harm is an essential ingredient of [FELA]
negligence”)). DM&E contends that the trial court should have granted its motion
for a judgment as a matter of law because Jacobs presented “no evidence” that it
was foreseeable that ice would accumulate in the area of his accident. This Court
reviews the denial of a motion for a judgment as a matter of law for an abuse of
discretion. See Cooper v. Rang, 2011 S.D. 6, ¶ 4 n.1, 794 N.W.2d 757, 758 n.1.
Further, this Court “view[s] the evidence and testimony in a light most favorable to
the verdict.” Id.[¶10.] In its brief, DM&E argues that foreseeability is a prerequisite to
concluding that an employer’s negligence proximately caused an employee’s injury.
The United States Supreme Court recently addressed what an employee needs to
prove under FELA to satisfy the proximate cause standard. See McBride, __ U.S.
__, 131 S. Ct. at 2636-37.
[¶11.] McBride’s central holding reaffirmed the proximate cause standard
pronounced in Rogers v. Mo. Pac. R.R. Co., 352 U.S. 500, 77 S. Ct. 443, 1 L. Ed. 2d
493 (1957). In Rogers, the Court held that an employer was liable under FELA if
the employer’s “negligence . . . played any part at all” in bringing about the
employee’s injury. McBride, __ U.S. __, 131 S. Ct. at 2638 (citing Rogers, 352 U.S.
at 508, 77 S. Ct. at 443) (emphasis added). 2 In addressing Rogers’ “any part”
standard, the McBride Court defined proximate cause:
2. In reaffirming the “any part” standard from Rogers, the McBride Court relied
on the “statutory history and precedent on which Rogers drew”:
(continued . . .)
-4-
#25811, #25827
The term “proximate cause” is shorthand for a concept: Injuries
have countless causes, and not all should give rise to legal
liability. See W. Keeton, D. Dobbs, R. Keeton, & D. Owen,
Prosser and Keeton on Law of Torts § 42, p. 273 (5th ed. 1984)
(hereinafter Prosser and Keeton). “What we . . . mean by the
word ‘proximate,’” one noted jurist has explained, is simply this:
“[B]ecause of convenience, of public policy, of a rough sense of
justice, the law arbitrarily declines to trace a series of events
beyond a certain point.” Palsgraf v. Long Island R.R. Co., 248
N.Y. 339, 352, 162 N.E. 99, 103 (1928) (Andrews, J., dissenting).
McBride, __ U.S. __, 131 S. Ct. at 2637 (citations original).
[¶12.] Regarding foreseeability, the McBride Court stated that juries must
initially be asked in FELA cases whether the railroad “‘fail[ed] to observe that
degree of care which people of ordinary prudence and sagacity would use under the
_________________________
(. . . continued)
Before FELA was enacted, the “harsh and technical” rules of
state common law had “made recovery difficult or even
impossible” for injured railroad workers. Trainmen v. Virginia
ex rel. Virginia State Bar, 377 U.S. 1, 3, 84 S. Ct. 1113, 12 L. Ed.
2d 89 (1964). “[D]issatisfied with the [railroad’s] common-law
duty,” Congress sought to “supplan[t] that duty with [FELA’s]
far more drastic duty of paying damages for injury or death at
work due in whole or in part to the employer’s negligence.”
Rogers, 352 U.S. at 507, 77 S. Ct. 443. Yet, Rogers observed, the
Missouri court and other lower courts continued to ignore
FELA’s “significan[t]” departures from the “ordinary common-
law negligence” scheme, to reinsert common-law formulations of
causation involving “probabilities,” and consequently to “deprive
litigants of their right to a jury determination.” Id., at 507, 509–
510, 77 S. Ct. 443. Aiming to end lower court disregard of
congressional purpose, the Rogers Court repeatedly called the
“any part” test the “single” inquiry determining causation in
FELA cases. Id., at 507, 508, 77 S. Ct. 443 (emphasis added).
McBride, __ U.S. __, 131 S. Ct. at 2638-39 (citations original). Thus, the
Court recognized the distinction between the common law proximate-cause
standard and the FELA proximate-cause standard.
-5-
#25811, #25827
same or similar circumstances?’” McBride, __ U.S. __, 131 S. Ct. at 2643 (quoting
Gallick, 372 U.S. at 118, 83 S. Ct. at 665). The Court went on to note that “the jury
may be told that ‘[the railroad’s] duties are measured by what is reasonably
foreseeable under like circumstances.’” Id. (quoting Gallick, 372 U.S. at 118, 83 S.
Ct. at 665).
[¶13.] In this case, the trial court instructed the jury on foreseeability under
FELA as “requir[ing] Defendant to guard against those risks of dangers of which it
knew or by the exercise of due care should have known. In other words Defendant’s
duty is measured by what a reasonably prudent person would anticipate or foresee
resulting from particular circumstances.” The trial court further instructed that
because the amount of care exercised by a reasonably prudent
person varies in proportion to the danger known to be involved
in what is being done, it follows that the amount of caution
required in the use of ordinary care will vary with the nature of
what is being done, and all the surrounding circumstances
shown by the evidence in the case. As the danger that should
reasonably be foreseen increases, so the amount of care required
by law also increases.
Given McBride’s recent statement of the law concerning FELA cases, we conclude
that these instructions accurately advised the jury on the issue of foreseeability.
[¶14.] Furthermore, there was a factual basis in the record for the jury to
conclude that DM&E could foresee that a hazard could exist from ice accumulation
on the rail yard. Jacobs points out, as a practical matter, that ice accumulation in
South Dakota, especially in January, is foreseeable. Moreover, DM&E employee
Kevin Walton, who worked on the rail yard the day before Jacobs’s accident,
testified that the rail yard was as slippery the day before Jacobs’s accident as it was
on the day of the actual accident. And Jacobs presented expert testimony through
-6-
#25811, #25827
Raymond Doffany, who opined that DM&E should have known that ice could
accumulate on its Huron rail yard given the location and weather conditions. In
fact, DM&E had certain safety precautions to prevent accidents like Jacobs’s,
which, according to Jacobs, indicated that DM&E actually knew of the dangers of
ice accumulation. These precautions included clearing ice and snow from the rail
yard, issuing “ice cleats” to employees, and salting and sanding slippery sections of
ground.
[¶15.] Collectively, these facts sufficiently demonstrate that DM&E could
foresee that ice could accumulate on its rail yard thereby creating a hazard. See
Ferguson v. Moore-McCormack Lines, Inc., 352 U.S. 521, 523, 77 S. Ct. 457, 458, 1
L. Ed. 2d 511 (1957). It was, therefore, appropriately left to the jury to decide
whether DM&E “fail[ed] to observe that degree of care which people of ordinary
prudence and sagacity would use under the same or similar circumstances.” See
McBride, __ U.S. __, 131 S. Ct. at 2634 (quoting Gallick, 372 U.S. at 118, 83 S. Ct.
at 665). Consequently, the trial court did not abuse its discretion in denying
DM&E’s motion for a judgment as a matter of law on foreseeability.
[¶16.] 2. Whether the trial court abused its discretion in denying
DM&E’s motion for a new trial.
[¶17.] DM&E’s argument under this issue is related to the appropriateness of
the jury instruction given on loss of earning capacity. The trial court instructed the
jury on loss of earning capacity as follows:
Loss of future earning capacity is the reduction in the ability to
work and earn money generally, rather than a reduction in the
ability to work and earn money in a particular job. In
determining loss of future earning capacity, you may award
-7-
#25811, #25827
Plaintiff damages for those earnings he is reasonably certain to
lose in the future due to DM&E’s conduct.
In considering this element of damages, you should consider the
Plaintiff’s age, health, skill, training, experience, work habits,
and whether the loss of earning capacity is temporary or
permanent . . . .
DM&E did not object to this instruction at trial or propose an alternative
instruction when settling jury instructions at the close of trial. Yet DM&E now
proposes that a new instruction be given on remand that “reflect[s] the current
regulatory environment and employment realities” after the adoption of the
Americans with Disabilities Act of 1990 and ADA Amendments Act of 2008.
Because DM&E did not appropriately preserve this issue, we decline to address it.
See Alvine Family Ltd. P’ship v. Hagemann, 2010 S.D. 28, ¶ 20, 780 N.W.2d 507,
514 (stating that an objection to jury instructions must be made clearly on the
record to preserve the issue for appeal) (citations omitted); Knudson v. Hess, 1996
S.D. 137, ¶ 12, 556 N.W.2d 73, 77 (“Having never raised the issue . . . at the trial
level and having made no objection to the jury instruction on these grounds,
[Plaintiff] cannot now assert that the trial court erred on matters it was never
asked to determine.”) (citations omitted).
[¶18.] DM&E further argues that under the “reasonably certain” standard,
Jacobs failed to produce sufficient evidence of his future loss of earning capacity.
DM&E claims that the evidence Jacobs used to establish loss of future earning
capacity was deficient because it was based on speculation.
[¶19.] Generally, to recover for loss of earning capacity, the loss must be
“reasonably certain” to occur. Marnette v. Morgan, 485 N.W.2d 595, 598 (S.D.
-8-
#25811, #25827
1992); Martinez v. Union Pac. R.R. Co., 82 F.3d 223, 227-28 (8th Cir. 1996).
Testimony was given comparing Jacobs’s ability to perform certain jobs before and
after his injury. This testimony established that Jacobs’s injury left him with
significant work limitations that have affected his ability to perform his duties as a
rail-car mechanic. Further, a vocational rehabilitation expert testified that Jacobs’s
earning capacity has been negatively affected, which has reduced his wage
expectation considerably.
[¶20.] DM&E does not dispute these facts on appeal. Rather, DM&E argues
that there was no “evidence [presented] at trial that [Jacobs] was reasonably certain
to lose his job with DM&E.” Notably, after his accident, DM&E continued to
employ Jacobs in a position that accommodated his work limitations. But DM&E
has not guaranteed Jacobs continued employment. Furthermore, there were
sufficient facts making it reasonably certain that Jacobs would suffer a loss of
earning capacity. The jury had before it evidence that Jacobs suffered a severe and
debilitating injury that limited his ability to perform basic tasks as a rail-car
mechanic. As a result, if Jacobs were forced to find work outside of the
accommodating position DM&E created for him, Jacobs’s expectation for pay would
be reduced. Thus, the record contained evidence that it was reasonably certain that
Jacobs would suffer a loss of earning capacity. Consequently, the trial court did not
abuse its discretion in denying DM&E’s motion for a new trial on this issue.
[¶21.] DM&E also argues under this issue that “the trial court erred in
failing to give a special verdict form with interrogatories so that the issue of
potentially speculative loss of earning capacity damages could be assessed.” This
-9-
#25811, #25827
Court has cautioned “trial courts to use special interrogatories in order to avoid
confusion” in some cases but has also stated that “it [is] not an abuse of discretion to
use . . . general verdict form[s].” Zahn v. Musick, 2000 S.D. 26, ¶ 42-43, 605
N.W.2d 823, 832. We have also stated that “[t]rial courts would be well advised in
cases such as this to submit special interrogatories to the jury regarding the amount
awarded for each element of damages. Such a practice would eliminate confusion
over what part of the award, if any, was for such services, and aid in meaningful
appellate review.” Id. ¶ 42 (quoting Stormo v. Strong, 469 N.W.2d 816, 825 (S.D.
1991)). Here, we reaffirm that even though special interrogatories are preferable in
cases like this, the trial court did not abuse its discretion in deciding not to give
them.
[¶22.] 3. Whether the trial court erred in ordering prejudgment
interest from the time of the verdict until the entry of
judgment.
[¶23.] DM&E argues that the trial court erred when it ordered DM&E to pay
prejudgment interest from the date of the verdict because “prejudgment interest is
not allowed under FELA.” This issue arose at trial after DM&E moved for a stay of
execution of judgment under SDCL 15-6-62(b) 3 until all post-trial motions were
3. SDCL 15-6-62(b) provides:
In its discretion and on such conditions for the security of the
adverse party as are proper, the court may stay the execution of
or any proceedings to enforce a judgment pending the
disposition of a motion for a new trial made pursuant to § 15-6-
59, or of a motion for relief from a judgment or order made
pursuant to § 15-6-60, or of a motion for judgment in accordance
with a motion for a directed verdict made pursuant to § 15-6-50.
-10-
#25811, #25827
addressed. The trial court granted DM&E’s motion. Jacobs responded to DM&E’s
post-trial motions and requested that the trial court clarify whether its order
staying execution also stayed interest. Jacobs specifically contended that
prejudgment interest was not at issue here. Instead, Jacobs argued that post-
judgment interest was what he was pursuing. Jacobs further argued that a stay of
execution generally does not stay interest. The trial court ultimately concluded that
awarding interest in this case was appropriate because South Dakota’s post-
judgment interest statute and FELA do not conflict.
[¶24.] SDCL 15-16-3 provides that “[w]hen a judgment is for the recovery of
money, interest from the time of the verdict or decision until judgment be finally
entered must be added to the judgment of the party entitled thereto.” For cases
involving FELA, prejudgment interest is a matter of federal law and is prohibited.
Monessen Sw. Ry. Co. v. Morgan, 486 U.S. 330, 335-36, 108 S. Ct. 1837, 1842-43,
100 L. Ed. 2d 349 (1988). Prejudgment interest has been defined as interest from
the date of judicial demand until the verdict. See La. & Ark. Ry. Co. v. Pratt, 142
F.2d 847, 849 (5th Cir. 1944). FELA, however, only supersedes state statutes to the
extent that they conflict. Id.[¶25.] The interest permitted in this case was not prejudgment interest
because it was not calculated from the date of judicial demand until the verdict. See
id. Rather, the interest was calculated and permitted from “the time of the verdict”
under SDCL 15-16-3. Consequently, FELA and SDCL 15-16-3 do not conflict with
respect to post-judgment interest. Because they do not conflict, the trial court did
-11-
#25811, #25827
not err in permitting Jacobs to receive post-judgment interest from the date of the
verdict under SDCL 15-16-3.
Notice of Review #25827
[¶26.] 1. Whether DM&E was entitled to a set-off on
the judgment.
[¶27.] Jacobs filed a notice of review challenging the trial court’s set-off of
$16,086.06 from the judgment against DM&E. The trial court granted this set-off
because DM&E paid Jacobs wage-continuation benefits after his injury. Jacobs
admits DM&E paid him the $16,086.06, but argues it may not have been included
in the jury’s verdict.
[¶28.] Whether a set-off was appropriate is reviewed under the abuse of
discretion standard. See 20 Am. Jur. 2d Counterclaim, Recoupment, Etc. § 11
(noting that “[t]he right of setoff itself is essentially an equitable right, which courts
may enforce at their discretion”) (citing Newbery Corp. v. Fireman’s Fund Ins. Co.,
95 F.3d 1392 (9th Cir. 1996); Mynatt v. Collis, 274 Kan. 850, 57 P.3d 513 (2002);
Junak v. John, 420 N.W.2d 668 (Minn. Ct. App. 1988); Reisman v. Indep. Realty
Corp., 89 N.Y.S.2d 763 (N.Y. App. Div. 1949); Lake Mary Ltd. P’ship v. Johnston,
145 N.C. App. 525, 551 S.E.2d 546 (2001)). Under 45 U.S.C. § 55 of FELA, DM&E
is entitled to a set-off because it continued to pay Jacobs’ wages. The law provides
as follows:
Any contract, rule, regulation, or device whatsoever, the purpose
or intent of which shall be to enable any common carrier to
exempt itself from any liability created by this chapter, shall to
that extent be void: Provided, That in any action brought
against any such common carrier under or by virtue of any of
the provisions of this chapter, such common carrier may set off
therein any sum it has contributed or paid to any insurance,
-12-
#25811, #25827
relief benefit, or indemnity that may have been paid to the
injured employee or the person entitled thereto on account of the
injury or death for which said action was brought.
Id.Based on the record, we find the trial court did not abuse its discretion by granting
the set-off.
[¶29.] Affirmed.
[¶30.] GILBERTSON, Chief Justice, and KONENKAMP, ZINTER, and
SEVERSON, Justices, concur.
[¶31.] WILBUR, Justice, not having been a member of the Court at the time
this action was submitted to the Court, did not participate.
-13-