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Inc. v. Time Warner Cable Midwest, LLC

Court of Appeals of Missouri, Western District, First Division

November 21, 2017

J.J.'S BAR AND GRILL, INC., D/B/A JJ'S RESTAURANT, ET AL., Appellants-Respondents,
v.
TIME WARNER CABLE MIDWEST, LLC, Respondent-Appellant.

         Appeal from the Circuit Court of Jackson County, Missouri The Honorable Robert M. Schieber, Judge.

          Before: Cynthia L. Martin, Presiding Judge, James E. Welsh, Judge and Karen King Mitchell, Judge.

          Cynthia L. Martin, Judge.

         Time Warner Cable Midwest, LLC ("TWC") appeals from a judgment awarding property damages to JJ's Bar and Grill, Inc. d/b/a JJ's Restaurant ("JJ's Restaurant") and JJ's Building, LLC ("JJ's Building"). TWC alleges error in the use of three verdict directing instructions and in the admission of expert testimony. JJ's Restaurant and JJ's Building cross-appeal alleging error in the reduction of their judgments by the amount of earlier settlements payments.

         Finding no reversible error, we affirm.

         Factual and Procedural Background[1]

         TWC is a video services provider authorized to install fiber optic cable in public rights-of-way by the Missouri Public Service Commission ("PSC"). In early 2013, TWC undertook to install underground fiber optic cable to service the Plaza Vista project at 900 W. 48th Place on the west side of the Country Club Plaza (the "Polsinelli Offices").

         JJ's Restaurant operated a restaurant ("JJ's") in a building owned by JJ's Building. JJ's was located on the north side of 48th Street, across the street from the Polsinelli Offices. TWC's fiber optic cable was to be installed running south under an alley on the east side of JJ's and then under 48th Street.

         TWC entered into an agreement with Heartland Midwest, LLC ("Heartland") to install the underground fiber optic cable. TWC was aware that Heartland intended to use a trenchless technology known as horizontal directional drilling ("HDD") to install the fiber optic cable. HDD technology utilizes a drill to bore a hole underground through which utilities can be pulled, without excavating the surface.

         Heartland notified Missouri One Call[2] of its intent to install the underground cable. USIC, a utility locating service, marked buried utilities near the location of the planned installation, including those of Missouri Gas Energy ("MGE"), Kansas City Power & Light ("KCP&L"), and the City of Kansas City streetlights. USIC uses color-coded lines of paint to mark underground utilities. USIC placed a single yellow line (signifying an underground natural gas line) and a single red line (signifying an underground electric line) on the paved surface near the intersection of the alley on the east side of JJ's and 48th Street.

         Heartland dug a pothole where the painted locator lines were placed. At a depth of approximately 22-24 inches, Heartland found two adjacent black conduits. Heartland concluded that one of the black conduits was the located electric line, and that the other was the located gas line.

         Heartland then began drilling to install TWC's fiber optic cable. Heartland sat its drill to bore at a depth of approximately 37 inches. Heartland did not dig the pothole to the depth of the anticipated bore path. Heartland thus did not observe the bore head cross under the two black conduits exposed by its pothole. As Heartland bored beneath the two black conduits, the boring drill struck a 2 inch high pressure natural gas line owned by MGE.

         The damage to the gas line caused natural gas to escape. Natural gas migrated under the asphalt alley and into JJ's, where it accumulated, ignited, and exploded. One JJ's employee was killed. Several persons were injured. JJ's and the building it occupied were destroyed.

         On May 3, 2013, JJ's Restaurant and JJ's Building filed suit against MGE, USIC, Heartland, and TWC. JJ's Restaurant and JJ's Building subsequently settled with MGE and Heartland. On July 15, 2015, JJ's Restaurant and JJ's Building filed a second amended petition against TWC and USIC. The claims asserted against TWC were for negligence involving an inherently dangerous activity; negligence involving work that is dangerous in the absence of special precautions; negligence involving work performed in a public place; and negligence per se.

         Following a six week trial, JJ's Restaurant and JJ's Building tendered proposed verdict directors for their claims against TWC for negligence involving an inherently dangerous activity requiring special precautions (Instruction No. 5); for negligence involving work performed in a public place (Instruction No. 6); and for negligence per se (Instruction No. 7). The verdict directors were submitted to the jury over TWC's objections, as discussed in greater detail, infra.

         The jury returned a verdict on August 27, 2015 assigning 98% fault to TWC, 0% fault to USIC, and 2% fault to JJ's Restaurant. The jury awarded compensatory damages to JJ's Restaurant in the amount of $3, 500, 000, and to JJ's Building in the amount of $2, 400, 000. After applying the comparative fault allocation, the trial court entered judgment on September 9, 2015 in favor of JJ's Restaurant in the amount of $3, 430, 000, and in favor of JJ's Building in the amount of $2, 352, 000.[3] The judgment was entered "subject to offsets or credits that this court deems appropriate pursuant to any and all post-trial motions."

         On September 16, 2015, TWC filed a motion to amend the judgment pursuant to section 537.060[4] to reflect reductions for settlements reached with MGE and Heartland. On October 9, 2015, TWC also filed a motion for judgment notwithstanding the verdict, or in the alternative for new trial, which was never ruled on by the trial court. Over JJ's Restaurant and JJ's Building's objections, the trial court granted TWC's motion to amend the judgment, in part, to reflect reduction for settlement payments made by MGE and Heartland to JJ's Restaurant and JJ's Building. The trial court denied the motion to amend to the extent it sought reduction for a settlement payment made to Jimmy Frantze. The trial court entered an amended judgment on November 17, 2015, reducing the damages awarded to JJ's Restaurant to the amount of $1, 492, 000, and to JJ's Building to the amount of $1, 514, 000 ("Judgment").

         On November 30, 2015, TWC filed a second motion to amend the judgment that was never ruled on by the trial court. TWC filed a notice of appeal on January 15, 2016, and a second notice of appeal on March 17, 2016. JJ's Restaurant and JJ's Building filed a notice of cross-appeal on January 20, 2016, and a second notice of cross-appeal on March 18, 2016.

         Analysis

         TWC raises four points on appeal. Points One, Two and Three claim error in the submission of Instructions 5, 6, and 7, the verdict directors for negligence involving an inherently dangerous activity requiring special precautions, for negligence involving work performed in a public place, and for negligence per se. Point Four claims error in denying TWC's motion to strike JJ's Restaurant and JJ's Building's expert witness because the expert intended to testify about legal conclusions and legal duties.

         JJ's Restaurant and JJ's Building assert a single point in their cross-appeal. They claim error in the reduction of judgments entered in their favor by settlement payments made to them by MGE and Heartland because the settlement payments were disputed, requiring TWC to prove the affirmative defense of reduction before the jury was discharged.

         Points One, Two and Three

         TWC's first, second, and third points on appeal challenge verdict directors. "Whether a jury was properly instructed is a question of law that this Court reviews de novo." Edgerton v. Morrison, 280 S.W.3d 62, 65 (Mo. banc 2009) (citation omitted).

         The trial court did not err in submitting Instruction No. 5, the verdict director for negligence in the performance of inherently dangerous work without taking special precautions (Point One)

         TWC complains that Instruction No. 5, the verdict director for negligence based on an inherently dangerous activity, was legally erroneous because (i) there was no substantial evidence that HDD work is inherently dangerous, and (ii) the instruction failed to comply with MAI 31.15 as the allegations in Paragraph Second were not "special precautions."

         (i) Substantial evidence supported finding that HDD trenching is an inherently dangerous activity

         TWC first complains that substantial evidence failed to establish that HDD trenching is an inherently dangerous activity. Relevant to this complaint, Paragraph First of Instruction No. 5 provided:

In your verdict, you must assess a percentage of fault to defendant Time Warner Cable Midwest, LLC, whether or not plaintiff JJ's Bar & Grill, Inc. d/b/a JJ's Restaurant was partly at fault, if you believe:
First, performing horizontal directional drilling in the Country Club Plaza was an inherently dangerous activity because it was a congested urban area with multiple utilities and hard surfaces, and . . . .

         Finding HDD to be an inherently dangerous activity was an essential predicate to TWC's vicarious liability for Heartland's negligence. "Persons are usually held liable for negligence on the part of those they hire to accomplish their purposes." Ballinger v. Gascosage Elec. Co-op., 788 S.W.2d 506, 511 (Mo. banc 1990) (overruled on unrelated grounds by Zueck v. Oppenheimer Gateway Properties, Inc., 809 S.W.2d 384 (Mo. banc 1991)). There is an exception to this general rule "for the hiring of independent contractors responsible to the employer for the result bargained for, but not subject to control as to the means of accomplishment." Id. The independent contractor exception to vicarious employer liability does not apply, however, "if the work [an independent contractor is] contracted for is an 'inherently dangerous activity.'" Id.

For activities of this kind the owner [employer] remains liable for the torts of the contractor, simply for commissioning the activity. The liability attaches without any need for showing that the employer is in any respect negligent. It is purely vicarious.

Id. It is uncontested that Heartland was TWC's independent contractor. Thus, TWC was not vicariously liable at common law for Heartland's negligence unless the work Heartland was contracted to perform involved an inherently dangerous activity.

         "[T]he determination of whether an activity is inherently dangerous, while initially a question of law, is ultimately a question of fact." Hatch v. V.P. Fair Foundation, Inc., 990 S.W.2d 126, 134 (Mo. App. E.D. 1999). "To initially determine whether an activity is inherently dangerous . . . the trial judge should begin by ascertaining the nature of the activity and the manner in which the activity is ordinarily performed." Id. at 136 (internal citation omitted). "If after considering these factors the trial court concludes the activity does not involve some peculiar risk of harm, then the activity is not inherently dangerous as a matter of law." Id. "If the trial court does not so find, then the question should be submitted to the jury pursuant to MAI 16.08."[5] Id.

         TWC objected to submission of Instruction No. 5 during the jury instruction conference, arguing that the use of HDD technology in the Country Club Plaza was not an inherently dangerous activity as a matter of law. The trial court denied TWC's objection, and thus concluded that sufficient evidence permitted submission of the issue to the jury. On appeal, TWC claims this was error because no substantial evidence supported a conclusion that HDD work is inherently dangerous.

         "Any instruction given to the jury must be supported by substantial evidence in the record." Kearby v. Wichita Southeast Kansas, 240 S.W.3d 175, 180 (Mo. App. W.D. 2007). "'Substantial evidence is competent evidence from which a trier of fact can reasonably decide the case.'" Id. (quoting Mathis v. Jones Store Co., 952 S.W.2d 360, 366 (Mo. App. W.D. 1997)). "In determining whether there is substantial evidence to support the instruction, this court views the evidence and all reasonable inferences therefrom from the standpoint most favorable to the party offering the instruction." Id. To prevail on a no substantial evidence challenge, TWC must demonstrate that no evidence in the record tends to prove that HDD underground boring presents a substantial risk of harm unless adequate precautions are taken. See Ivie v. Smith, 439 S.W.3d 189, 200 (Mo. banc 2014) (explaining the no substantial-evidence challenge). TWC cannot sustain this burden.

         MAI 16.08 defines "inherently dangerous activity" as:

[A]n activity that necessarily presents a substantial risk of harm unless adequate precautions are taken. [, but does not include a risk of harm that is not inherent in or a normal part of the work to be performed and that is negligently created solely as a result of the improper manner in which the work under the contract was performed.][6]

         The evidence established that HDD trenchless technology is a less intrusive means of burying underground cables, as the technology avoids open trenches and street cuts. As a result, however, HDD trenchless technology involves "blind drilling, " as a drill bores underground to create an unexposed path through which cable can be pulled. By its nature, HDD trenchless technology thus carries with it the inherent risk that the drill bore will encounter a buried object that cannot be seen. It is not the improper manner of doing HDD work which creates this risk. Rather, it is the work itself, normally performed, which creates this risk. The risk exists unless adequate precautions are taken to insure that preexisting utility lines and cables are located and avoided by the drill bore.

         Based on the evidence, this risk is heightened when HDD work is performed in an urban area. There is an increased prevalence of underground utilities and cables in urban areas. And when HDD work is performed in an area covered by a hard surface (such as asphalt or concrete), escaping gas has nowhere to disperse should a natural gas line be struck, causing gas to migrate along the underground line and into buildings serviced by the line.

         TWC counters that "the mere performance of HDD in and of itself does not inevitably lead to harm or injury in the absence of 'special precautions.'" [TWC's Brief, p. 23] TWC argues that "even if a contractor fails to take the routine precaution of having utilities marked before performing HDD, hitting a facility is not certain, and some utilities that could be hit present no immediate danger at all, such as sewer, water or a fiber optic cable." [TWC's Brief, p. 23-24] This argument is unpersuasive for two reasons.

         First, it is irrelevant that HDD technology can be performed without encountering an underground utility even in the absence of special precautions. "The essence of inherent danger . . . is the need for special precaution. It is not sufficient for [a] defendant to show that the work can be done safely." Ballinger, 788 S.W.2d at 509. TWC's argument underscores, in fact, that the risk of encountering underground utilities is inherent to HDD technology, and is not a risk created by negligence performance of the work, and is a risk that cannot be avoided unless adequate precautions are taken. Hatch, 990 S.W.2d at 137 (holding that trial court properly instructed jury to determine whether bungee jumping is inherently dangerous because a "risk of injury from a fall is a risk that inheres in bungee jumping itself in the absence of adequate precautions and . . . the risk was not negligently created solely as a result of the improper manner [of performing] the work").

         Second, TWC's argument improperly suggests that because an accidental encounter with underground utilities is only rarely catastrophic, HDD work is not inherently dangerous. The severity of potential harm is not relevant to determining whether an activity is inherently dangerous. The Restatement (Second) of Torts sec. 427 cmt. b (1965)[7] provides:

It is not . . . necessary to the employer's liability that the work be of a kind which cannot be done without a risk of harm to others, or that it be of a kind which involves a high degree of risk of such harm, or that the risk be one of very serious harm, such as death or serious bodily injury. . . . It is sufficient that work of any kind involves a risk, recognizable in advance, of physical harm to others which is inherent in the work itself, or normally to be expected in the ordinary course of the usual or prescribed way of doing it, or that the employer has special reason to contemplate such a risk under the particular circumstances under which the work is to be done.[8]

         The trial court did not err in submitting for the jury's determination whether HDD work in a congested urban area is an inherently dangerous activity.

         (ii) The disjunctive submissions in Paragraph Second of Instruction No. 5 were authorized by MAI 31.15

         TWC next complains that the disjunctive submissions in Paragraph Second of Instruction No. 5 were not special precautions as required by MAI 31.15, and were instead allegations of collateral negligence in the performance of the work "dressed up as special precautions." [TWC's Brief, p. 27]

         Heartland's negligence was disjunctively submitted by Paragraph Second of Instruction No. 5:

         Second, while conducting its horizontal directional drilling, Heartland Midwest either:

i. failed to determine the horizontal and vertical location of the 2" polyethylene MGE gas main running under the sidewalk on the north side of 48th Street before engaging in directional drilling in close proximity to that line; or
ii. failed to recognize that neither of the two black plastic conduits uncovered and observed by the Heartland Midwest drilling crew at approximately a 24" depth was a gas main; or
iii. failed to contact MGE or USIC to have them inspect the two black plastic conduits to determine whether or not one was the gas main; or
iv. failed to dig below the depth of the planned bore path in order to visualize the bore head as it safely passed through the location of the underground facilities; or
v. failed to maintain a minimum vertical separation of three feet from other facilities that existed in the right-of-way, including the MGE gas main; or
vi. failed to immediately notify MGE, 911, or the One Call Notification Center that it had struck the MGE gas main with its boring device; and
Third, Heartland Midwest, in one or more of the respects submitted in Paragraph Second, was thereby negligent[.]

         TWC does not argue that these disjunctive submissions were unsupported by substantial evidence. TWC argues only that these contentions of negligence exceed those for which it could be vicariously liable because they did not each involve the failure to take a "special precaution." TWC's argument reflects a fundamental misapprehension of the law.

         If it is established that the work of an independent contractor involves an inherently dangerous activity, then the employer "remains liable for the torts of the contractor." Ballinger, 788 S.W.2d at 511. The employer's "liability attaches without any need for showing that the employer is in any respect negligent." Id.

"[A] person who engages a contractor to do work of an inherently dangerous character remains subject to an absolute, nondelegable duty to see that it is performed with that degree of care which is appropriate to the circumstances, or in other words, to see that all reasonable precautions shall be taken during its performance, to the end that third persons may be effectually protected against injury."

Hatch, 990 S.W.2d at 134-35 (quoting 41 Am.Jur.2d Independent Contractors sec. 41 (1968)).

         However, an employer "who hires an independent contractor to perform an inherently dangerous activity . . . is not vicariously liable for every act of [the] independent contractor that causes injury to a third party." Id. at 135. "[I]f the contractor's negligence is 'collateral, ' the general rule of landowner non-liability [for the work of an independent contractor] applies." Id. (citing Nance v. Leritz, 785 S.W.2d 790, 793 (Mo. App. E.D. 1990); Restatement (Second) of Torts sec. 426 cmt. a (1965)). "The Restatement defines collateral negligence as 'negligence which is unusual or abnormal, or foreign to the normal or contemplated risks of doing the work, as distinguished from negligence which creates only the normal or contemplated risk.'" Id. (quoting Restatement (Second) of Torts sec. 426 cmt. a (1965)). "[T]he proper focus for the factfinder is whether the landowner contemplated or should have contemplated the type of negligence committed by the independent contractor." Id. at 136 (citing Nance, 785 S.W.2d at 793; Restatement (Second) of Torts sec. 426 cmt. b (1965)).

         The inquiry, therefore, is not (as TWC suggests) whether the acts or omissions alleged in the disjunctive in Paragraph Second each involved the failure to take a "special precaution." The inquiry is whether the acts or omissions alleged in the disjunctive in Paragraph Second were unusual or foreign to the normal contemplated risks of performing an inherently dangerous activity-in this case, HDD work. We conclude they were not. The disjunctive submissions in Paragraph Second each involved normal, contemplated risks of performing HDD work: failing to assess the presence of underground utility lines or cables; failing to avoid ...


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