No. 8 4 - 4 8 5
IN THE SIJPREME COURT OF THE STATE OF MONTANA
1985
JACK D. ANDERSON,
Plaintiff and Respondent,
BURLINGTON NORTHERN, INC.,
a Delaware Corporation,
Defendant and Appellant.
APPEAL FROM: District Court of the Eighth Judicial District,
In and for the County of Cascade,
The Honorable John M. McCarvel, Judge presiding.
COUNSEL OF RECORD:
For Appellant:
Moulton, Bellingham, Longo & Mather; K. Kent ~ o o l e n
argued, Billings, Montana
For Respondent:
Kelly & Halverson, P.C.; Sheehy, Prindle & Finn;
Victor R. Halverson argued, Billings, Montana.
Submitted: September 20, 1985
Decided: November 26, 1985
Filed:
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Clerk
Mr. Chief Justice J. A. Turnage delivered the Opinion of the
Court.
This is an appeal from the District Court's granting of
partial summary judgment on liability and jury verdict on
damages in a personal injury action brought pursuant to the
Federal Employers' Liability Act and the Federal Boiler
~nspectionAct.
We considered the following issues on appeal:
1. Whether the District Court erred in granting re-
spondent's motion for partial summary judgment on the viola-
tion of the Boiler Inspection Act.
2. Whether the District Court erred by improperly
removing the i-ssuesof causation from the jury.
3. Whether the District Court erred in denying appel-
lant's challenge for cause to juror Dailey.
4. Whether the District Court committed reversible
error in refusing to instruct the jury regarding the
nontaxability of any award. made by the jury to injured rail-
road employee.
5. Whether the District Court erred in instructing the
jury to include medical expenses incurred by respondent in
its damages award even though some or all of those expenses
had been covered by appellant's insurer.
6. Whether the District Court erred in adding a di-
rected verdict for medical expenses to the jury award when
the jury had been instructed. to include medical expenses in
its award.
We affirm the judgment of the District Court on all
issues except the sixth. We reverse the District Court's
directed verdict which added $11,795.25 to the jury verdict.
Respondent, Jack D. Anderson, was a locomotive engineer
employed by the appellant, Burlington Northern Railroad
Company (BN), working on a train assigned to snowplow service
north and west of Saco, Montana. During a lull in the opera-
tions, respondent entered a toilet compartment at the rear of
the Locomotive. The toilet compartment is a small room about
six feet wide by seven feet long used for storage of tools
and equipment as well as providing toilet facilities for the
crew. The compartment is dimly lit.
Respondent claims that as he walked into the compart-
ment, he tripped and stumbled head-on into the sandbrum on
the opposite wall of the compartment. Without looking to see
what may have caused his fall, respondent left the compart-
ment and informed other crew members of the accident. The
other crew members then checked the compartment and found a
pilot, an iron skirt which serves as a cow catcher, on the
floor of the compartment. Apparently, the pilot had been
recently stored out-of-the-way in the compartment. The
jerking from the snowplowing operation jarred the pilot out
to a point in front of the compartment entrance where respon-
dent tripped.
As a result of the accident, respondent suffered from
neck pain. He sought treatment from an orthopedic surgeon,
Thomas Power, M. D., in Great Falls. A cervical sprain was
diagnosed, and respondent was treated with rest, traction and
physical therapy. Respondent continued to suffer from neck
pain and went to an orthopedic surgeon in San Francisco,
Arthur White, M.D. Dr. White diagnosed the injury as a
herniated disc and performed a cervical fusion on August 1,
1.978. The surgery relieved respondent's pain for awhile.
However, the pain resumed and rendered the respond.ent
incapable of working.
Respondent then brought this action in the Eighth
Judicial District to recover damages for personal injuries
sustained within the scope of his employment as a locomotive
engineer for BN.
In the meantime, BN's insurer had paid respondent's
medical expenses in accordance with a collective bargaining
agreement. Respondent filed a motion in limine to prevent
any mention of appellant's payment of the medical expenses
during trial. Respondent maintained that the insured's
payment of the medical expenses was a collateral source of no
benefit to appellant. The District Court agreed and granted
respondent's motion and directed a verdict in favor of re-
spondent on his claim for medical expenses. The District
Court also granted respondent's motion for partial summary
judgment holding that the pilot on the floor of the toilet
compartment constituted a violation of the Boiler Inspection
Act for which defendant was strictly liable. The issues of
causation and damages were submitted to the jury. The jury
returned a verdict for damages of $195,000 to which the
directed verdict of $11,795.25 for medical expenses was added
for a total judgment of $206,795.25. RN appeals that
judgment .
Respondent's action is based upon violation by BN of
two federal statutes known as the Boiler Inspection Act, 45
U.S.C. § 22 et seq., (a portion of the Safety Appliance Act)
and the Federal Employers ' Liability Act (FELA), 45 U. S .C.
§ 51 et seq. In particular, 45 U.S.C. S 23 provides:
It shall be unlawful for any carrier to
use or permit to be used on its line any
locomotive unless said locomotive, its
boiler, tender, and all parts and appur-
tenances thereof are in proper condition
and safe to operate . .
. that the same
may be employed in the active service of
such carrier without unnecessary peril
to life or limb ...
In Callihan v. Burlington Northern, Inc. (~ont.1982), 654
P.2d 972, 975, 39 St.Rep. 2158, we followed the United States
Supreme Court decision in 1,illy v. Grand Trunk R. Co. (1943),
317 U.S. 481, 485, 63 S.Ct. 347, 87 L.Ed. 411, in holding
that this section interacts with the FELA to impose absolute
Liability on anyone that violates it. Callihan, 654 P.2d at
975, also determined tha.t recovery for a Boiler Inspection
Act violation requires a showing of: (1) a violation of the
Act, and (2) injury proximately caused by that violation.
Appellant here claims that whether or not the piece of
pilot on the fl-oor violated the Boiler Inspection Act was a
question of fact for the jury and that it was error for the
District Court to grant summary judgment on that issue. A
large iron object on the floor of a dimly ].it walkway in a
moving locomotive seems to us to involve "unnecessary peril
to life or limb" so as to violate the Act, but without more
this would be a conclusion for the jury to make. However, in
this case we are not left to our own resources in construing
the Act. The Federal Rail-road Administration, Department of
Transporta.tion, has set the standard by imposing the follow-
ing railroad locomotive safety regulation:
Floors of cabs, passageways, and com-
partments shall be kept free from oil,
water, waste or any obstruction that
creates a slipping, tripping or fire
haza-rd. Floors shall be properly treat-
ed to provide secure footing.
49 C.F.R. S 229.119(c).
There is uncontroverted evidence that there was a pilot
in the walkway in violation of this rule. In Lilly, 317 U.S.
at 488, the United States Supreme Court, when faced. with a
similar rule, held that a rule adopted in exercise of the
Interstate Commerce Commission's authority to set standards
of compliance with the Boiler Inspection Act acquires the
force of law and becomes an integral part of the Act. Re-
cause the Federal Railroad Administration has taken over the
functions of the Interstate Commerce Commission with respect
to railroad safety, 49 U.S.C. § 1655(e) and (f), this holding
is directly applicable to the instant case. BN, by violating
a rule that was adopted in exercise of the Federal Railroad
Administration's authority to set standards of compliance
with the Boiler Inspection Act, has also violated the Act.
Appellant questions whether this rule was properly
before the District Court. However, the rule was referred to
in depositions presented with the motion for summary judg-
ment. Moreover, in Lilly, supra, the federal rule had not
been called to the attention of the trial court. The Supreme
Court held that it will take judicial notice of federal rules
setting standards of compliance with the Boiler Inspection
Act. Lilly, 317 U.S. at 488. We will not ignore the federal
rule now.
Even if there was no violation of the Act as a matter
of law because of the federal regulation, the District Court
could have found the violation issue proper for summary
judgment because of BN's own safety rule No. 112 which was
before the court. Rule No. 112 provides:
To avoid stumbling, tripping, and fall-
ing, floors, gangways and steps of
locomotives must be kept free of sup-
plies, tools, and loose equipment.
Such a safety rule is strong evidence that a violation of
that rule would present "unnecessary peril to life and limb."
Eecause appellant has provided nothing to counter this evi-
dence of a Boiler Inspection Act violation, summary judgment
was appropriate.
II
The second prong of our test for recovery under the
Boiler Inspection Act is whether the violation of the Act
proximately caused plaintiff 's injury. Callihan, supra. RN
argues that the District Court failed to properly consider
the issue of causation. We disagree.
By granting summary judgment on liability, the District
Court took the issue of whether BN1s viol-ation of the Boiler
Inspection Act caused the accident from the jury. Appellant,
however, claims that there was insufficient evidence to
establish the cause of respondent's accident because respon-
dent did not see what he tripped over and the other witnesses
did not see the accident. Appellant then speculates that
respondent may have tripped over something besides the pilot.
However, we follow the rule that inferences drawn from cir-
cumstantial evidence can be as probative as direct evidence.
Barich v. Ottenstror (1976), 170 Mont. 38, 42, 550 P. 2d 395,
397. Furthermore, the party opposing a motion for summary
judgment on a record which reveals no issue of material fact
must present facts of substantial nature, and conclusionary
or speculative statements are insufficient to raise genuine
issues of material fact. Barich, supra; Rule 56, M.R.Civ.P.
The depositions establish that respondent went into the
toilet compartment and fell, hurting his head and shin.
Respondent's co-workers saw him enter the compartment, heard
a "thump" and a shout, saw respondent come out of the com-
partment, listened to respondent's immediate complaints, and
immediately investigated the compartment where they found the
pilot near the door. The obvious inference from this evi-
dence is that respondent tripped over the pilot. Appellant
only speculates that something else caused the accident. As
such, the trial court was entitled to conclude that BN's
violation of the Boiler Inspection Act in not keeping a
walkway free of obstructions caused the accident.
Appellant also argues that the jury was improperly
instructed on the issue of causation. The same argument that
the jury failed to consider causation under similar facts to
the instant case was considered by this Court in Callihan,
supra. In Callihan, plaintiff injured his back when the seat
he was sitting on in a BN locomotive broke. We held that the
jury was properly instructed on the issue of causation where
instructions clearly limited the award of damages to damages
for injuries proximately caused by the accident. Callihan,
654 P.2d at 975. In the instant case, Court Instruction No.
7 stated:
In this case, Plaintiff seeks damages
under a law of the United States common-
ly called the Federal Boiler Inspection
Act. It has been determined by this
Court that on February 28, 1978, at the
time of the fall for which Jack Anderson
seeks to recover, the Defendant,
Burlington Northern, Inc., was in viola-
tion of the Federal Boiler Inspection
Act, by reason of the presence of a
piece of metal pilot in the entry way to
the toilet compartment of Burlington
Northern locomotive number 1820.
Therefore, the only issues for your
consideration are:
(1) Whether Plaintiff was injured as a
result of the acciden-t occurring on
February 28, 1978; and
( 2 ) The amount of damages, if any,
Plaintiff is entitled to receive for any
injuries which you may find were caused
by the accident of February 28, 1978.
Court Instruction No. 12 instructed the jury similarly. As
such, the iury was not improperly instructed on the issue of
causation.
I11
Appellant specifies that the District Court erred in
not disqualifying juror Dailey upon challenge for cause. We
adhere to the rule that the trial court is in a better posi-
tion to judge the prejudice of jurors and its findings and
its decision will not be set aside unless the error is mani-
fest or there j.s a clear abuse of discretion. Liss v.
KreiteL (1973), 162 Mont. 144, 147, 509 P.2d 841, 843. The
rule is the same where there has been the forced use of a
peremptory challenge. Abernathy v. Eline Oil Field Services,
Inc. (1982), 650 P.2d 772, 777, 39 St.Rep. 1688, 1696.
Here, during appellant's voir dire of prospective iuror
Dailey, Dailey revealed that he is a grain farmer that uti-
lizes BN yearly to ship his grain. He stated that he felt RN
was grossly overcharging for its services. Appellant chal-
lenged the juror for cause. The trial judge then questioned.
Dailey to determine if he held any feelings of animosity
toward EN that would preclude him from awarding damages
fairly. Dail-ey denied any such animosity, and the judge
denied the challenge. While we think it may have been best
to dismiss Dailey because other jurors were readily avail-
able, we can see no abuse of discretion.
IV
RN contends that the trial court erred in failing to
instruct the jury on the nontaxability of any award made by
the jury. We recently considered the same argument in Dallas
v. Burlington Northern, Inc. (Mont. 1984), 689 P.2d 273, 277,
41 St.Rep. 1902, 1908. The Federal Circuit Courts of Appeal-
are not in agreement on this issue. See Flanagan v.
Burlington Northern, Inc. (8th Cir. 1-980), 632 F.2d 880, 889,
and O'Byrne v. St. Louis Southwestern Ry. (5th Cir. 1980),
632 F.2d 1285, 1287. We will adhere to our holding in Dal-
-
las, 689 P.2d at 278, that in a case where the jury awards
the exact amount of damages projected by the economist any
error in failing to give a nontaxability instruction is
harmless. This holding was based on the rationale that the
jury clearly did not award a sum for some future tax
obligation.
In the instant case, the jury awarded $195,000, or
$45,000 less than the $240,000 in damages projected by the
economist. Therefore, by the rationale in Dallas, any error
in failing to give the nontaxability instruction is harmless.
Having thus held, we are compelled to comment that in
the future it would be better for a trial court to give a
nontaxability instruction to the jury. Such an instruction
is easily made and would remove any doubt as to whether the
jury overcompensated plaintiff on the basis of an erroneous
assumption that the judgment will be taxed. We make this
comment because of trial courts' reliance on previous hold-
ings by this Court that future income tax liability is an
improper consid-eration in formulating an award for loss of
future earnings. See Torchia v. Burlington Northern, Inc.
(1977), 174 Mont. 83, 96, 568 P.2d 558, 566; McGee v.
Rurlirlgton Northern, Inc. !1977), 174 Mont. 466, 477, 571
P.2d 784, 791. Those holdings have been overruled by the
TJni.ted States Supreme Court in Norfolk & Western 13.y. v.
Liepelt (1980), 444 U.S. 490, 100 S.Ct. 755, 62 L.Ed.2d 689.
After Liepelt, it is proper to give the nontaxability
instruction.
The medical expenses Anderson incurred for trea.tment of
the injuries he sustained in the February 28, 1.978, accident
were paid directly by Travelers' Insurance Company; or, they
were paid by Burlington Northern and Burlington Northern was
reimbursed by Travelers. Prior to trial, Anderson's motion
in limine to prohibit EN from showing that BN or Travelers
had paid these expenses was granted. EN claims that the
trial court erred. in excluding this evid.ence because that
evidence shows Anderson incurred no loss for medical expenses
related to the accident. The trial court excluded the evi-
dence because the insurance was a collateral source.
The insura.nce arrangement was under Travelers Group
Policy No. GA2300. This policy was obtained pursuant to a
health. and welfare agreement between participating ra.il
carriers and numerous ra.ilway labor organizations, including
the Brotherhood of Locomotive Engineers of which appellant is
a member. BN argues that evidence of benefits obtained by
Anderson through this policy should be admitted because the
insurance is not a collateral source. For proof that the
insurance is not a collateral source, EN points to the health
and welfare a-greementwhich specifically states:
... The parties ...
intend that
benefits provid.ed under the policy
contract will satisfy any right of
recovery against the employing railroad
for such benefits to the extent of the
benefits so provided. Accordingly,
- - ( I ) Benefits provided under the policy
contract will be offset against any
right of recovery the employee may have
against the employing railroad for
hospital, surgical, medical or related
expenses of any kind specified in the
policy contract.
The collateral source rule has been applied in an FELA
setting by the federal circuit courts with the only question
being whether the insurance is in fact a collateral source.
See generally Patterson v. Norfolk and Western Railway Co.
(6th Cir. 1973), 489 F.2d 303; Blake v. Delaware and Hudson
Railway CO. (2nd Cir. 1973), 484 F.2d 204- Title 45 U - S - C *
S 55 of the FELA broadens application of the collateral
source rule with respect to the circumstances in the instant
case. That statute is 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 lia-
bility 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, 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 a-ctionwas brought.
The United States District Court for the District of Montana
has recently interpreted this statute as it applies to the
same health and welfare agreement we are dealing with here in
an order issued by Chief Judge Battin in the case of John L.
Herbst v. Burlington Northern Railroad Co., CV-84-5l-l3LG.
Judge Battin determined that 45 U.S.C. § 55 allows BN to "set
off only the premiums, not what the premiums bought" and
prevents BN "from contracting away the benefits of S 55 as
was attempted by the Health and Welfare Agreement between the
union and the railroad." As a result, Judge Battin granted
Herbst's motion in limine to prevent introduction of medical
expenses already paid by BN and its insurance company. We
will follow Judge Battin's interpretation of 45 U.S.C. S 55
and hold that the provision of the collective bargaining
agreement relied upon by BN is void. Accordingly, the col-
lateral source rule applies to the paid medical expenses, and
the trial court properly prevented introd.uction of evidence
as to their payment.
Along with the jury verdict for damages of $195,000,
the District Court added a directed verdict of $11,795.25 for
medical expenses. However, the District Court's jury In-
struction No. 12 states:
... The amount of any award shall
include :
1. The reasonable value of medical care,
services and supplies reasonably re-
quired and actually given in the treat-
ment of Plaintiff ...
BN complains that this instruction plus the directed verdict
and. the insurance paid medical expenses results in triple
recovery by Anderson for incurred medical expenses. The
point is well taken.
It is reversible error to instruct a jury to include
medical expenses in its award and. then to add a directed
verdict for the same medical expense on top of the jury
award.
We therefore affirm the judgment for $1-95,000 but
reverse the directed verdict of $11,795.25.
We concur:
Justices"
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Hoq. Jack L. Green, District
Judge, sitting in place of Mr.
Justice John C. Sheehy, who
deems himself disqualified