Title: STATE EX REL BURLINGTON NORTHERN v

State: montana

Issuer: Montana Supreme Court

Document:

No. 13295 I N T H E SUPREME C O U R T OF THE STATE OF M O N T A N A 1976 STATE O F M O N T A N A ex re1 BURLINGTON N O R T H E R N INC., Rela t o r , T H E DISTRICT C O U R T O F T H E EIGHTH JUDICIAL DISTRICT O F T H E STATE OF M O N T A N A , I N AND F O R T H E C O U N T Y OF CASCADE, T H E HON. N A T ALLEN, JUDGE PRESIDING, ORIGINAL PROCEEDING : Counsel of Record: For Re l a t o r : Gough, Booth, Shanahan and Johnson, Helena, Montana Cordell Johnson argued, Helena, Montana For Respondents: Hoyt and Bottomly, Great F a l l s , Montana John Hoyt argued, Great F a l l s , Montana Filed : .&PR l4 m'f? Submitted: March 17, 1976 Decided : fiPR 1 4 1376 M r . J u s t i c e John Conway Harrison delivered t h e Opinion of t h e Court. This i s an o r i g i n a l proceeding. Relator Burlington Northern, Inc., petitioned t h i s Court f o r a w r i t of supervisory c o n t r o l o r other appropriate order. Ex p a r t e presentation on March 4 , 1976, was followed by an order of t h i s Court f o r an adversary hearing on March 17, 1976. B r i e f s were submitted, t h e matter argued and taken under advisement by t h e Court. This matter involves a Federal ~ m p l o y e r s ' L i a b i l i t y Act (FELA) case which was before t h i s Court previously (McGee v. Burlington Northern, Inc., Mont . , 540 P.2d 298, 32 St.Rep. 847). I n t h a t case r e l a t o r appealed a jury v e r d i c t i n the amount of $525,000 a g a i n s t r e l a t o r t o t h i s Court. Following t h e jury v e r d i c t and judgment, r e l a t o r r a i l r o a d company f a i l e d t o post a supersedeas bond within t h e period provided by t h e r u l e s of a p p e l l a t e c i v i l procedure and McGee levied on approximately $170,000 o f the r e l a t o r ' s a s s e t s before such bond was posted. This Court, on appeal, vacated and set a s i d e t h e judgment and ordered a new t r i a l on t h e i s s u e of damages. Following d e n i a l of a rehearing on September 13, 1975, r e l a t o r f i l e d a motion on September 18, 1975, f o r an order requiring an accounting of funds levied on by McGee a f t e r t h e jury v e r d i c t and judgment and asked f o r an order f o r r e s t i t u t i o n of such funds and f o r c o s t s on appeal. Following t h e decision of t h i s Court, McGee f i l e d a p e t i t i o n f o r a w r i t of c e r t i o r a r i i n the United S t a t e s Supreme Court. The t r i a l court ordered t h a t McGee would not have t o f i l e b r i e f s on t h e accounting and r e s t i t u t i o n o r c o s t questions u n t i l 30 days a f t e r a r u l i n g by t h e United S t a t e s Supreme Court on t h e w r i t of c e r t i o r a r i i n t h a t Court. O n January 19, 1976, t h e Supreme Court of t h e United S t a t e s denied t h e p e t i t i o n f o r a w r i t of c e r t i o r a r i . The t r i a l judge, Judge Allen, on January 27, 1976, s e t the case f o r t r i a l on April 27, 1976. McGee then f i l e d an amended complaint a l l e g i n g t h e v i o l a t i o n of the Federal Safety Appliance Act, which had been i n t h e o r i g i n a l complaint but which t h e o r i g i n a l t r i a l judge had deemed it not necessary t o r u l e upon, and i n addition alleged wi'lful and wanton conduct by r e l a t o r r a i l r o a d company a s a b a s i s f o r punitive damages. Relator r a i l r o a d company f i l e d consolidated motions directed a t t h e amended complaint and renewed i t s previous motion for an accounting and an order requiring r e s t i t u t i o n of t h e funds McGee executed on following the judgment a t t h e end of t h e f i r s t t r i a l . The t r i a l judge denied r e l a t o r ' s consolidated motions and r e l a t o r i n s t i t u t e d t h i s proceeding under Rule 7 and Rule 17, Rules of Appellate C i v i l Procedure, asking t h i s Court t o exercise supervisory c o n t r o l over the d i s t r i c t court i n the case. This Court i s requested t o exercise c o n t r o l over t h r e e matters: (1) Whether r e l a t o r is e n t i t l e d t o r e s t i t u t i o n of funds taken by McGee on executions, where t h e d i s t r i c t court judgment upon which t h e executions were based was s e t a s i d e and vacated on appeal. ( 2 ) Whether punitive damages can be considered f o r any purpose i n an FELA case. (3) Whether those portions of 1 4 c ~ e e ' s amended complaint which do not comply with the provisions of Rule 8, M.R.Civ.P., should be ordered s t r i c k e n . W e w i l l first consider i s s u e s (1) and ( 3 ) . These i s s u e s a r e premature a t t h i s s t a g e of t h e proceedings. Issue ( I ) , the r e s t i t u t i o n of funds, W e noe t h a t a t the time of t h e f i r s t t r i a l McGee received a v e r d i c t i n t h e amount of $525,000 f o r serious i n j u r i e s received. While t h a t judgment was reversed, t h e matter was returned f o r r e t r i a l on t h e question of damages. Because of r e l a t o r ' s f a i l u r e t o post a supersedeas bond, c e r t a i n a s s e t s were levied upon and t h i s Court finds no e r r o r on the p a r t of the t r i a l court i n not granting r e l a t o r ' s motion f o r an accounting a t t h i s stage of the case. Relator c i t e s and argues Anderson v. Border, 87 Mont. 4, 285 P. 174, a s controlling on t h e r e s t i - tution of monies levied upon by McGee. W e do not find Anderson controlling f o r i n t h a t case there was a f i n a l judgment from which no further appeal was taken. Here, the case is about t o be r e t r i e d . For t h i s Court t o now c a l l f o r an accounting and r e s t i t u t i o n would not only i n t e r f e r e with the t r i a l court's handling of the case, but would cause additional delay i n a case t h a t has been s e t f o r r e t r i a l on April 27, 1976. Issue (3) i s directed a t the amended complaint. W e w i l l not i n t e r f e r e a t t h i s p r e t r i a l stage of the proceedings with the t r i a l c o u r t ' s decision t o allow the amended complaint t o stand. While we agree t h a t one of the purposes of the Montana Rules of C i v i l Procedure i s t o provide simple, concise and d i r e c t pleadings, we do not find an abuse of discretion by the t r i a l judge i n not granting r e l a t o r ' s motion t o s t r i k e M c ~ e e ' s amended complaint. As previously noted, t h e amended complaint reinstated a count covering violation of the Federal Safety Appliance Act (45 U.S.C. $ 1 e t seq.). Federal cases construe t h i s Act a s an amendment t o and a part of F E L A (45 U.S.C.551 e t seq.) and the two a c t s should be read and applied together. W e find t h a t punitive damages a r e not proper f o r a violation of t h i s Act. Urie v. Thompson, 337 U.S. 163, 69 S.Ct. 1018, 93 L ed 1282, 1 1 ALR2d 252; Chicago & N.W.Ry.Co. v. Chicago, R . I . & P.R.Co., 179 F.Supp. 33, a f f ' d 280 F.2d 110, cert.den. 364 U.S. 931; International-G.N.Ry.Co. v. United States, 268 F.2d 409; Holfester v. Long Island Railroad Co., 360 F.2d 369; Underwood v. Missouri-Kansas-Texas Railroad Co., 191 Kan. 338, 381 P.2d 510; Atlantic Coast Line R.Co. v. Moore, 135 Fla. 485, 186 So. 210. The remaining issue, issue (2), t h a t of allowing McGee t o plead punitive damages i n h i s amended complaint, was e r r o r on the part of the t r i a l court. The Federal ~ m ~ l o ~ e r s ' L i a b i l i t y Act i s a s i t s name implies, a federal a c t , and when applicable i s the exclusive remedy against the r a i l r o a d s for i n j u r i e s t o t h e i r employees. Metropolitan Coal Company v. Johnson, 265 F.2d 173, Any s u i t s f o r i n j u r i e s under the Act and r i g h t s t o recover must be predicated on negligence. Herdman v. Penn.R.Co., 228 F.2d 902, 352 U.S. 518, 77 S.Ct. 455, 1 L ed 2d 508. While the F E L A provides t h a t s u i t s may be f i l e d i n e i t h e r federal o r s t a t e courts, there can be no question t h a t the r i g h t s created by the Act a r e governed by the decisions of the federal courts. Bowman v. I l l i n o i s Central Railroad Co., 1 1 I11.2d 186, 142 N.E.2d 104, cert.den. 355 U.S. 837, 78 S.Ct.63, 2 L ed 2d 49. With the enactment of FELA, Congress took over the f i e l d of employers' l i a b i l i t y t o employees i n i n t e r s t a t e transportation by r a i l , and a l l s t a t e laws upon the subject were superseded. The r i g h t s and obligations of an employee and the employer depend on t h e FEU a s construed by the federal courts. This Court recognized t h i s principle i n Resner v. N.P.Ry.Co., 161 Mont. 177, 505 P.2d 86. See a l s o Davee v. Southern Pacific Company, 25 Cal.Rptr. 445, 375 P.2d 293; D o w v. Carnegie-Illinois Steel Corporation, 165 F. 2d 777. Therefore, f o r guidance on whether punitive damages a r e an element of damages t o be considered i n F E L A cases, we look t o the federal jurisdiction. W e note here, t h a t though F E L A has been i n existence nearly 70 years, the question of punitive damages has never been considered and passed on by the United States Supreme Court. The highest court t o consider the question was t h e Sixth Circuit i n 1971, when it overturned a r u l i n g of a federal D i s t r i c t Court, and ruled t h a t punitive damages a r e not t o be considered. I n Kozar v. Chesapeake and Ohio Railway Company, 449 F.2d 1238, 1240, 1242, the Court said: I I Punitive Damages I1 Since we hold that punitive damages are not recoverable under the Federal ~mployers' Liability Act, no purpose would be served by setting forth the facts upon which the appellee relies to support the $70,000 award. I I There are two basic reasons advanced in the I Omnibus Opinion' of the District Court for sub- mitting to the jury, under the usual instructions, the issue of punitive damages. First, it is argued that the legislative history of the Act indicates that it was not its purpose to limit or take away 1 any remedy' available at common law and at common law punitive damages were available. Second, per- mitting the recovery of punitive damages advances the objective of the Act to ' [place] such stringent liability upon the railroads for injuries to their employees as to compel the highest safeguarding of the lives and limbs of men in this dangerous employment. I We conclude that neither reason is a sound basis for accepting an interpretation of the Act that would permit the unprecedented recovery of punitive damages. "Admittedly, the legislative history of the Act shows that its provisions were not to limit or take t away any remedy1 available at common law to an injured employee. But it is a mistake to characterize the right to recover punitive damages at common law a 1 common law remedy'. There is an important distinction I between a remedy1 which Eouvier's Law Dictionary de- 1 fines as the means employed to enforce a right or redress an injury1, and 'damages1 which are defined asl[t]he indemnity recoverable by a person who has sustained an injury + : 9: and the term includes not only compensatory, but also exemplary or punitive or I vindictive ; v + i ; k damages. Damages are simply a measure of injury, and to say that at common law there was I punitive damages as a right of action' or there was 1 available the common law remedy action of punitive I damages' or a punitive damages remedy' is a misuse of the legal terminology. Thus, when the legislative history of the Act is examined and shows that Congress never intended the Act as a restriction on the remedies available to an injured employee, if is not referring to a damages theory. Moreover, the eases cited by the District Court as examples of early common law cases permitting recovery of punitive damages are distinguishable from the case of a railroad employee or an employee's administrator suing his employer for injuries or death suffered on the job. Most of the cases relied upon by the District Court are cases of intentional torts. I he District Court, in its Omnibus Opinion', correctly set forth the humanitarian and beneficient reasons for the adoption of the Federal ~mployers' Liability Act by Congress. However, no matter how persuasive this policy argument may be, it cannot stand as the law in light of the clear, unambiguous state- ments in the line of Supreme Court authorities holding that damages recoverable under the Act are compensatory only. 11 In Gulf, Colorado and Santa Fe Railway Company v. McGinnis, 228 U.S. 173, 175-176, 33 S.Ct. 426,427, 57 L.Ed. 785 (1913), i t i s stated: "'1n a s e r i e s of cases l a t e l y decided by t h i s court, the a c t i n t h i s aspect has been construed a s intended only t o compensate the surviving r e l a t i v e s of such a deceased employe f o r the actual pecuniary l o s s resulting t o the particular person o r persons f o r whose benefit an action i s given. The recovery must therefore be limited t o compensating those r e l a t i v e s f o r whose benefit the administrator sues a s a r e shown t o have sustained some pecuniary loss. Michigan Central Railroad v. Vreeland, 227 U,S.59, [33 S.Ct. 192, 57 L.Ed. 4171; American Railroad [Co. of Porto Rico] v. Didricksen, 227 U.S. 145, 33 S.Ct. 224, 57 L.Ed. 4561. In the l a s t c i t e d case, speaking of the ~mployers' L i a b i l i t y Act, we said (p.149, [33 S.Ct. p. 2251): "The cause of action which was created i n behalf of the injured employ& did not survive h i s death, nor pass t o h i s representatives. But the a c t , i n case of the death of such an employ& from h i s injury, creates a new and d i s t i n c t r i g h t of action f o r the benefit of the dependent r e l a t i v e s named i n the s t a t u t e . The damages recoverable a r e limited t o such l o s s a s re- s u l t s t o them because they have been deprived of a reasonable expectation of pecuniary benefits by t h e wrongful death of t h e injured employe. The damage i s limited s t r i c t l y t o the f i n a n c i a l l o s s thus sustained." 11 1 The s t a t u t o r y action of an administrator i s not f o r the equal benefit of each of the surviving r e l a t i v e s f o r whose benefit the s u i t i s brought. Though the judgment may be f o r a gross amount, t h e i n t e r e s t of each beneficiary must be measured by h i s o r her individual pecuniary loss. That apportionment i s f o r the jury t o return. This w i l l , of course, exclude any recovery i n behalf of such a s show no pecuniary loss. 1 i ' i >k 9: I I In Michigan Central Railroad Company v. Vreeland, 227 U.S. 59, 68-69, 33 S.Ct. 192,195, 57 L.Ed. 417 (1913), i n commenting upon the type of action created by the Federal Employers1 L i a b i l i t y Act and the damages recoverable, the following unequivocal statements a r e made: "'1t i s a l i a b i l i t y f o r the l o s s and damage sustained by r e l a t i v e s dependent upon the decedent. It i s therefore a l i a b i l i t y f o r the pecuniary damage r e s u l t i n g t o them, and f o r t h a t only. * i ' i *"I McGee c i t e s and argues a number of cases decided before Kozar: Petition of Den Norske Amerikalinje, 276 F.Supp. 163; Gunnip v. Warner Co., 43 F.R.D. 365, 10 A L R Fed 528; P h i l l i p v. United States Lines Co., 240 F.Supp. 992; Urie v. Thompson, 337 U.S. 163, 69 S.Ct. 1018, 93 L ed 1282. Particular reliance i s placed i n the case of United States Steel Corporation v. Fuhrman, 407 F.2d 1143, 10 A L R Fed 500, cert.den. 398 U.S. 958, 90 S.Ct. These same zrguments were made with no a v a i l t o t h e Sixth C i r c u i t i n Kozar, where t h e Court held: "We do n o t believe t h a t United S t a t e s S t e e l Corporation v. Fuhrman, 407 F.2d 1143 (6th C i r . 1969). which reversed the D i s t r i c t Court i n P e t i t i o n of Den Norske Amerikalinje A/S, 276 F.Supp. 163 (N. D. Ohio, 1967), requires a d i f f e r e n t r e s u l t from t h e conclusion t h a t punitive damages a r e not recover- a b l e under FELA. Den Norske did hold t h a t punitive damages w e r e recoverable from a t o r t f e a s o r i n an admiralty proceeding and volunteered the statement t h a t Section 59 of FELA permitted a deceased r a i l - roader t o sue f o r punitive damages. However, t h e Mississippi case of Ennis v. Yazoo & M.V. Ry., 118 Miss. 509, 79 So. 73 (1918), c i t e d by the D i s t r i c t Court a s allowing punitive damages was a s t a t e wrongful death a c t i o n controlled by s t a t e law, and a c t u a l l y by way of negative inference the opinion of t h e Mississippi court recognizes t h a t compensatory I damages a r e t h e measure of damages * * * recoverable 1 under t h e Federal ~ m p l o y e r s ' L i a b i l i t y Act. Also, t h e statement i n the opinion of t h e D i s t r i c t Court t h a t Section 59 of t h e Act added by t h e Amendment of 1910 permits recovery of punitive damages i s r e f u t e d i n St. Louis I . M . & S.R. Company v. C r a f t , 237 U.S. 648,658, 35 S.Ct. 704, 706, 59 L.Ed. 1160 (1915). 11 I O n t h e contrary, it [ § 591 means t h a t t h e r i g h t e x i s t i n g i n the injured person a t h i s death--a r i g h t covering h i s l o s s and suffering while he l i v e d , but taking no account of h i s premature death o r of what he would have earned o r accomplished i n the n a t u r a l span of l i f e - - s h a l l survive t o h i s personal r e p r e s e n t a t i v e t o t h e end t h a t it may be enforced and the proceeds paid t o t h e r e l a t i v e s indicated, And when t h i s provi- sion ard § I a r e read together t h e conclusion i s un- avoidable t h a t the personal representative i s t o r e - cover on behalf of t h e designated b e n e f i c i a r i e s , not only such damages a s w i l l compensate them f o r t h e i r own pecuniary l o s s , but a l s o such damages a s w i l l be reason- ably compensatory f o r t h e l o s s and s u f f e r i n g of t h e in- jured person while he l i v e d . ' (Emphasis added). I I Den Norske was reversed by t h i s Court i n Fuhrman on t h e grounds t h a t t h e findings of f a c t upon which t h e D i s t r i c t Court r e l i e d t o make t h e award of punitive damages were c l e a r l y erroneous, and any inference t h a t may be extracted from the reading of Fuhrman t h a t puni- t i v e damages may be recoverable i n an admiralty proceeding cannot be regarded a s c o n t r o l l i n g i n t h i s case." For the foregoing reasons we hold t h a t punitive damages cannot be considered i n an FELA case. This opinion s h a l l c o n s t i t u t e a w r i t of supervisory c o n t r o l f o r t h e guidance of t h e t r i a l court. We Concur: A 1 / J ' f & * q 4 * + . - i ti, Justices. ' hon. Jack Shanstrom, DistrJct Judge, i sitting for Chief Justice Harrison. 1 t4r. J u s t i c e 3ene 3. DaLy s p e c i a i l y concurring i n p a r t and dissenting i n p a r t : I concur with t h e majority except a s t o the r a t i o n a l e jubi'iiitted t o support i t s holding on i s s u e (2), punitive damages. N e may be bound by the decisions of the highest f e d e r a l c o u r t , huwever, I do not find t h e r a t i o n a l e i n Kozar p a r t i c u l a r l y uersuasive .