Case Name: Michael ROSS, Plaintiff-Respondent, v. COLEMAN COMPANY, INC.; Coast Catamaran Corporation, a corporation, Defendants-Appellants
Court: Idaho Supreme Court
Jurisdiction: Idaho
Decision Date: 1988-07-27
Citations: 114 Idaho 817
Docket Number: No. 16295
Parties: Michael ROSS, Plaintiff-Respondent, v. COLEMAN COMPANY, INC.; Coast Catamaran Corporation, a corporation, Defendants-Appellants.
Judges: SHEPARD, C.J., and JOHNSON, J., concur.
Reporter: Idaho Reports
Volume: 114
Pages: 817–852

Head Matter:
761 P.2d 1169
Michael ROSS, Plaintiff-Respondent, v. COLEMAN COMPANY, INC.; Coast Catamaran Corporation, a corporation, Defendants-Appellants.
No. 16295.
Supreme Court of Idaho.
July 27, 1988.
Rehearing Denied Aug. 28, 1988.
Imhoff & Lynch, Boise, for defendants-appellants. James B. Lynch argued.
R. Keith Roark, Hailey, for plaintiff-respondent.

Opinion:
BAKES, Justice.
The defendants, Coleman Co., Inc. (Coleman), and Coast Catamaran Corp. (Coast), appeal from the district court's award of a judgment to plaintiff Michael Ross in spite of a jury verdict in favor of the defendants. On June 22, 1984, respondent Ross and Katherine Sateren were sailing a Hobie Cat 16 sailboat, built by Coast and marketed by Coleman, on Magic Reservoir in Blaine County, Idaho, when the mast of Ross's sailboat contacted a low-slung Idaho Power Company transmission line which crossed an inlet on the reservoir. Sateren was killed outright, and Ross was seriously injured. Ross filed tort actions against Idaho Power; Coast, the manufacturer of the sailboat; Coleman, the parent corporation of Coast; and Does I through X, alleging that their negligence was the proximate cause of the accident. Before trial Idaho Power settled with Ross. Only Coast and Coleman proceeded to trial. The trial lasted one month.
The jury's special verdict specifically found that the Hobie Cat was not defectively designed or manufactured, and was not unreasonably dangerous. The jury also found in favor of the defendants on the issue of punitive damages. The jury further analyzed the conflicting evidence and found that Idaho Power Company was 75% negligent, that plaintiff Michael Ross was 10% negligent, that defendant Coast was 10% negligent in designing the sailboat, and that defendant Coleman was 5% negligent. Because Ross's negligence, as found by the jury, was equal to or greater than either of the defendants' negligence, he was not entitled to recover against either Coast or Coleman under Idaho's comparative negligence statute, I.C. § 6-801.
After the jury returned its verdict, Ross filed several motions. One motion requested, under I.R:C.P. 49(a), that the district court make additional findings in his favor and to enter a judgment in his favor upon selected parts of the special verdict entered by the jury. The district court did make such requested special "factual" findings, concluding that the negligence of both defendants should be "aggregated," i.e., that the negligence of the subsidiary corporation, Coast, should be imputed to the parent corporation, Coleman, thereby creating a situation where Coleman's 5% negligence, "aggregated" by Coast's 10% negligence, was greater than that of Ross. Ross was thereby granted a judgment by the district court against Coleman, computed at 15% of the amount of the $2,662,376.00 injuries which the jury found that he had incurred. The judgment totaled $399,356.40.
Ross additionally moved for an award of attorney fees against the defendants based upon statements made by the defendants' attorney in his closing statement. The district court granted the motion and awarded Ross $100,000 in attorney fees and in excess of $17,000 in costs against Coleman for the alleged misconduct of their defense counsel, relying on I.C. § 12-121, I.R.C.P. 54(d) and 54(e), and I.C. § 7-601.
Ross also moved for a new trial under I.R.C.P. 59(a). Among the reasons stated in Ross's motion were the alleged misconduct in defendants' closing statement and the claim that the damages awarded by the jury were inadequate. The district court did not grant the motion, but rather stated that unless the defendants paid the full amount of the judgment entered by the court, plus costs and attorney fees, as ordered, within 28 days, the plaintiff was given the option to choose a new trial on the issue of liability only. The defendants appealed from this order without paying within the 28-day period. The plaintiff did not elect to take a new trial.
On appeal, the appellants have raised two issues: (1) that the district court erred in aggregating the negligence, i.e., by imputing and adding the 10% negligence of Coast to the 5% negligence of Coleman, thereby increasing Coleman's negligence to 15%, which was greater than that of Michael Ross's negligence, thus in effect reversing the jury's special verdict; and (2) that the district court erred in awarding attorney fees and costs under I.C. § 12-121, I.R.C.P. 54(d) and (e) and I.C. § 7-601. We conclude that the district court erred in overruling the jury's verdict, imputing Coast's negligence to Coleman, and accordingly we reverse. We also conclude that the district court erred in awarding attorney fees and costs.
I
THE TRIAL AND JURY VERDICT
Ross's complaint against Coast and Coleman alleged that the defendants "carelessly and negligently designed, constructed, manufactured, tested, certified, sold and delivered a certain boat known as a 'Hobie Cat 16' .," which was involved in the accident.
"That defendants . had knowledge of the negligent and defective design and manufacture of the Hobie Cat boat and mast by virtue of various notices received by these defendants concerning prior accidents____Said defect consisted of improper design of the boat and mast such that upon contact with a known danger, to wit, electrical wires of any sort, the electricity would enter the boat and cause grave injury or death to those on board. That defendants having full knowledge of this condition of the boat, failed to correct the condition and failed to supply warnings of the dangers to users of the boat, wholly disregarding the likelihood of serious harm to others, all of which proximately resulted in the electrocution of Katherine Kristin Sateren, a passenger on the boat, and the serious and grave injuries to Michael Ross as herein described."
The plaintiff's evidence of negligence against the defendant Coast was primarily that Coast negligently designed the Hobie Cat 16 sailboat with a mast and a substantial portion of the boat being made primarily of metal which conducted electricity and which could injure those on board. The major thrust of plaintiff's claim against the defendant Coleman was that Coleman, after acquiring the controlling stock interest in Coast in 1976, became aware of the defects in the boat, nevertheless marketed the boat and did not take the necessary steps to compel its subsidiary, Coast, to redesign the boat.
The major thrust of the defendants Coast and Coleman's evidence was to show that the primary cause of the accident was the negligence of Idaho Power in not elevating its low-hanging power lines, and also the negligence of plaintiff Ross who, knowing that the mast would conduct electricity, nevertheless attempted to sail his boat under the low-hanging power lines at a time when his faculties were impaired from drinking alcohol.. The jury, after hearing all of the conflicting evidence, resolved the conflicts in favor of the defendants, returning a verdict which found that the Hobie Cat 16 was not defectively designed; rejected plaintiff's claim to punitive damages; and held that Ross's negligence was greater than Coleman's, and equal to Coast's, thus precluding Ross from obtaining any judgment against either Coast or Coleman.
As a preliminary matter, we must consider whether the jury's findings are supported by substantial competent evidence. If they are, then both the trial court and this Court are bound by the jury's verdict. Quick v. Crane, 111 Idaho 759, 727 P.2d 1187 (1986); Dinneen v. Finch, 100 Idaho 620, 603 P.2d 575 (1979). When reviewing a jury verdict the evidence adduced at trial must be construed in a light most favorable to the party who prevailed in the jury's verdict. Nelson v. Northern Leasing Co., 104 Idaho 185, 188, 657 P.2d 482, 485 (1983) ("Here the evidence viewed from the most favorable standpoint in support of the jury's verdict can be held to demonstrate substantial negligence on the part of the Nelsons."); Mann v. Gonzales, 100 Idaho 769, 605 P.2d 947 (1980). Viewing the evidence most favorably to support the jury's verdict, the record demonstrates that in June of 1984 Ross caused his Hobie Cat 16 sailboat, which was designed and manufactured by defendant Coast, to make contact with a power line owned and operated by Idaho Power Company, which was located approximately 26 feet above the water, 14 feet below Idaho Power's 40-foot standard for power lines crossing bodies of water in which sailing boats operate. Idaho Power knew of the substandard line, but took no action to remedy the defect.
There was evidence that Michael Ross had previously sailed into the cove over which the power lines were located, that he had prior knowledge of their existence, and that he had been drinking. A fisherman who observed the boat sail into the cove testified that the boat had stopped for several minutes before he spotted smoke from the accident. Further evidence indicated that the boat had been partially de-rigged (sails had been taken down) and there was expert testimony that from the position of Sateren's body and the position of burn marks on the boát, that neither of the victims had been on the trampoline upon which the crew rides that is strung between the two hulls of the Hobie Cat 16. Furthermore, expert testimony was presented from which a jury could reasonably have inferred that one or both of the passengers debarked and were attempting to push the boat away from the power lines when the accident occurred. Thus, the jury could reasonably have concluded that even after Ross became aware that his mast had become entangled in the power lines, he knowingly and negligently attempted to remove it without having the power in the line deactivated, thus causing his own injuries.
The evidence further demonstrated that at the time of the accident Coast was a wholly owned subsidiary of Coleman. Coleman had bought the stock of Coast in 1976. The Hobie Cat 16 had been designed in 1968 and had been manufactured continually since that time by Coast, many years prior to Coleman's acquiring Coast's stock. After acquiring Coast's stock in 1976, both companies became aware of the danger of the Hobie Cat 16 sailboat contacting electrical power lines. Coast had actively attempted to solve the dangers presented by contact between the Hobie Cat 16's 26-foot aluminum mast and power lines. Warning notices had been sent to owners, and warning labels advising sailors of the extreme hazard presented by the overhead power lines were attached to the mast. Ross had installed a new 26-foot mast on his boat just hours before the accident. At that time, he had removed the warning labels from the mast. Research was being conducted by Coast into attaching a non-conducting "comp tip" to the upper portions of the mast.
Although there was other conflicting evidence, the foregoing was substantial competent evidence to support the jury's verdict that (1) Idaho Power's 75% negligence was the primary cause of the accident, and (2) that Michael Ross's negligence was at least equal to or greater than that of either Coast or Coleman. The jury's findings in the special verdict are supported by substantial competent evidence, and thus they are unassailable. Quick v. Crane, supra; Nelson v. Northern Leasing Co., supra.
In Instruction No. 34, the court expressly instructed the jury of the consequences of finding Ross's negligence equal to or greater than that of Coast or Coleman, as pro vided in our decision in Seppi v. Betty, 99 Idaho 186, 579 P.2d 683 (1978). The jury was expressly told that by finding Ross 10% negligent, Coast 10% negligent, and Coleman 5% negligent, Ross would recover nothing from either Coast or Coleman. Thus, knowing the consequences of the verdict which they rendered, the jury must have concluded, from "their own lay sense of justice," that the defendants should not have to pay for the plaintiff's injuries. Seppi v. Betty, 99 Idaho at 193, 579 P.2d at 690.
The Special Verdict Form, which was given to the jury, required the jury to make several findings regarding the various claims of the plaintiff and the several defenses raised by the defendants. Section 1 of the Special Verdict Form (Questions 1 through 4) dealt with the plaintiff's claim of strict liability in tort. The jury, in response to Question No. 1, determined that the Hobie Cat 16 was not "defectively designed and unreasonably dangerous to person or property," thus eliminating plaintiff's claim based on strict liability in tort.
In another section of the Special Verdict the jury ruled against plaintiff Ross's claim that the defendants' conduct was such as to warrant punitive damages, thus eliminating punitive damages from the case.
In Section Two of the Special Verdict dealing with negligence and proximate cause, the jury was asked, by individual interrogatories, to evaluate separately the conduct of each actor — Idaho Power, plaintiff Ross, defendant Coast, and defendant Coleman — to determine which if any of those actors were individually guilty of negligence which was a proximate cause of the accident. The jury separately found each actor negligent.
The jury was then asked, in Questions 13 and 14, to evaluate the business relationship of defendants Coast and Coleman jointly to determine if they were jointly, rather than separately, negligent. Question No. 13, which was part of the special verdict form submitted by the plaintiff, was answered as follows:
"Question No. IS: Do you find that Coast Catamaran Corporation and Coleman Company, Inc., under these instructions, are equally at fault by reason of their business relationship which was a proximate cause of the injuries to Michael Ross?
Answer: Yes_ No 12 "
The court then, in the next section of the Special Verdict, by Question No. 14, told the jury that they were to assign percent ages of causal negligence to each of the entities for which the jury had determined negligence in the previous Questions 5-13. The jury's findings were as follows:
"SECTION THREE
"You are now to compare the extent to which the conduct of Michael Ross, Idaho Power Company, Coast Catamaran Corporation, and Coleman Company, Inc., caused the accident.
"Question No. 14: We find the parties contributed to the cause of the accident in the following percentages:
a. Michael Ross 10 %
b. Idaho Power Company 75 %
c. Unknown or Unnamed party _0_%
d. By reason of a "yes" answer to Question No. 13:
Coast Catamaran Company, and Cole-
man Company, Inc. 0 %
e. By reason of a "no" answer to Question No. 13:
(1) Coast Catamaran Company 10 %
(2) Coleman Company, Inc. 5 %
TOTAL 100 %
"In answering Question No. 14, use subparagraph "d" if you answered "yes" to Question No. 13; but use sub-paragraph "e" if you answered "no" to Question No. 13. (Emphasis supplied.) "In answering Question No. 14, the percentages of causation you find attributable to each party, whether you use sub-paragraphs a, b, c and d; or you use subparagraphs a, b, c and e; must total 100% for all parties."
The foregoing directions at the end of Question 14 were particularly instructive. By those instructions, the jury was told that if they answered "yes" to Question No. 13 [finding Coast and Coleman equally at fault by reason of their business relationship], that Coast's and Coleman's negligence should be determined jointly and not separately. [Parts a, b, c and d must total 100%.] However, if the jury answered "no" to Question No. 13, then the instructions in Question 14 directed that the jury evaluate Coast's and Coleman's negligence separately, not jointly. [Parts a, b, c and e must total 100%.] Thus, by Questions 13 and 14 (which had been submitted by the plaintiff and approved at the instruction conference), the jury was instructed to determine the negligence of Coast and Coleman either jointly, Question 14(d), or separately, Question 14(e), based upon their answers to Question 13, and the directions in Question No. 14. Those directions told the jury that "in answering Question No. 14, the percentages of causation you find attributable to each party, whether you use subparagraphs (a), (b), (c), and (d) [joint liability]; or you use subparagraphs (a), (b), (c) and (e) [separate liability]; must total 100% for all parties."
When the jury rendered its verdict, it unanimously answered Question No. 13 "no" and entered a "0" in Question 14(d), and thus, pursuant to the court's instruction in Question No. 14, found no joint negligence or joint liability on behalf of Coast and Coleman.
II
THE DISTRICT COURT'S OVERRULING THE JURY'S VERDICT
Several days after the jury returned its verdict the plaintiff moved pursuant to I.R. C.P. 49(a) to have the district court "aggregate" the negligence of Coast by imputing it to Coleman. The plaintiff argued that the jury had not decided if Coleman was liable for the negligence of its wholly owned subsidiary. After an extended oral argument, the district judge, after admitting that he was "floating in uncharted waters" with regard to his authority to grant the plaintiff's request to "aggregate" Coast's negligence into Coleman's, nevertheless determined that he would rule in favor of the plaintiff on this motion because "it appear[ed] to [him] to be more just than not to aggregate those amounts." He left it up to the plaintiff to draw up a final order setting out the reasons in the order. The final order drawn by Ross's counsel simply states as a legal conclusion that the parent Coleman is liable for the negligent acts of its subsidiary, without citing any supporting legal authority. It reads as follows:
"1. An issue omitted from the Special Verdict as submitted to the jury and not requested by either party, was the following: Is. Coleman Company, Inc., the parent corporation of Coast Catamaran Corporation, liable for the negligence of its wholly-owned subsidiary? "2. As a Special Finding, this Court concludes that Coleman Company, Inc., parent company of Coast Catamaran Corporation, a wholly-owned subsidiary, is responsible for the negligence of that subsidiary. This Finding is based upon the following facts and circumstances.
a.By reason of the joint activities of these companies, and particularly, the activities of Coleman Company, Inc., in either jointly performing, or sharing the duties of, marketing, manufacturing and financing of the product known as the Hobie Cat 16 Sailboat, there exists a common identity with regard to the product, making the parent company responsible by doctrine of respondeat superior, imputed liability or parent company liability;
b. The Court finds that Coleman instituted a policy requiring Product Development Committee meetings every month at Coast; the Committee was responsible for all design changes in Coast's existing products, including the Hobie Cat 16; Coleman exercised some control over the design of the Hobie Cat and received economic benefit from the sale of the boats;
c. The Court further finds that Coleman shared responsibility for marketing activities, financing, control and financing of research and development, advertised the product as a 'Coleman Company product,' and shared various other responsibilities, including those of directorship, leadership and control;
"3. The negligence of Coleman Company, Inc., and Coast Catamaran Corporation is therefore aggregated and Coleman Company, Inc., is responsible for 15% of the negligence which proximately caused Plaintiffs injuries. In accordance with comparative negligence law and the Special Verdict utilized by this Court and the jury, Coleman has responsibility and liability for 15% of the total jury verdict of $2,662,376.00, or the sum of $399,356.40." (Emphasis added.)
The counsel-drafted order imputing Coast's negligence to Coleman'was based solely on the parent/subsidiary relationship, described in the order as "imputed liability or parent company liability," without citing any authority for the proposition that a parent corporation is liable for the acts of its subsidiaries. The order imposing this "imputed liability or parent company liability" attempted to justify the holding because Coleman exercised "some control" over the design of the Hobie Cat and received economic benefit from the sale of the boat, and that Coleman shared responsibility for marketing, financing, control, research and development, and advertising the sailboat.
THE COURT'S SPECIAL VERDICT
Before examining whether the "parent company liability" theory, which was the basis of the counsel-drafted order has any legal basis in Idaho law, we must first analyze the court's jury instructions, and the jury instruction conference, to determine if that issue was even raised by the pleadings and the evidence, and, if so, was it covered by the instructions which were given. By the Idaho Constitution, the right to a jury trial is guaranteed. Id. Const, art. 1, § 7. Here the parties expressly requested a jury trial. Accordingly, they were entitled to a jury trial on all fact issups raised in the case. See State v. Miles, 43 Idaho 46, 248 P. .442 (1926); People ex rel. Brown v. Burnham, 35 Idaho 522, 207 P. 589 (1922); Shields v. Johnson, 10 Idaho 476, 79 P. 391 (1904); Christensen v. Hollingsworth, 6 Idaho 87, 53 P. 211 (1898).
"[T]he right of trial by jury is one which should be carefully safeguarded by the courts, and when a party had demanded such a trial, he is entitled to have the benefit of the jury's findings on issues of fact; and it is not the trial court's prerogative to disregard or nullify them by making findings of his own." Mel Hardman Productions, Inc. v. Robinson, 604 P.2d 913, 917 (Utah 1979).
In overruling the jury's verdict in this case, thus denying the defendants' right to their jury trial and verdict, the district court relied on I.R.C.P. 49(a) which provides that "if . the court omits any issue of fact raised by the pleadings or by the evidence, each party waives his right to a trial by jury of the issue so omitted unless before the jury retires he demands its submission to the jury." (Emphasis supplied.) This rule was copied from Federal Rule of Civil Procedure 49(a) and must be read in conjunction with I.R.C.P. 15(b) which provides that "[w]hen issues not raised by the pleading are tried by express or implied consent of the parties, they shall be treated in all respects as if they had been raised in the pleadings." With regard to the trial of issues not pleaded, 3 Moore's Federal Practice ¶[ 15.13[2] (2d ed. 1987), states:
"The purpose of an amendment to conform to proof is to bring the pleadings in line with the actual issues upon which the case was tried; therefore an amendment after judgment which brings in some entirely extrinsic issue or changes the theory on which the case was actually tried is not permissible, even though there is evidence in the record — introduced as relevant to some other issue— which would support the amendment. This principle is sound, since it cannot be fairly said that there is any implied consent to try an issue if the parties do not squarely recognize it as an issue in the trial."
Reading Rules 49(a) and 15(b) together, the apparent meaning is that "if . the court omits any issue of fact raised by the pleadings or by the evidence [and which were tried by the express or implied consent of the parties] each party waives his right to a trial by jury on the issues so omitted unless before the jury retires he demands its submission to the jury." There are very few federal cases which have considered Rule 49(a). The commentators have stated that it is only the "inadvertent" omission by the court to submit issues which were actually raised by the pleadings or tried by the express or implied consent of the parties which justifies a court in making additional findings under Rule 49. 9 C. Wright & A. Miller, Federal Practice & Procedure: Civil § 2507, at p. 504 (1971). There is no authority which holds that a litigant can choose to submit a case to the jury on certain issues, choosing not to submit on others, or overlooking certain issues or theories and then, after losing the case before the jury, ask the trial court to retry the case upon the other issues which it chose not to raise, or through neglect failed to raise. If the rule were otherwise a litigant could, either by choice or lack of preparedness, try a case to the jury on one issue or legal theory and then, after an adverse verdict, request the court to redecide the case on the factual record made based on new research and new issues or legal theories, thus depriving the other party of his constitutional right to a jury trial on those new issues. Our cases have rejected such a practice. Masters v. State, 105 Idaho 197, 200, 668 P.2d 73, 76 (1983) ("The parties will be held to the theories upon which a cause was tried."); Eastern Idaho Loan & Trust Co. v. Blomberg, 62 Idaho 497, 506, 113 P.2d 406, 410 (1941) ("Where both parties to an action try their case upon the same theory as to the issue tendered by the pleadings, they are bound by the theory so adopted."); Idaho Gold D. Corp. v. Boise Payette Lbr. Co., 52 Idaho 766, 776, 22 P.2d 147, 150 (1933) ("Furthermore, the parties to an action are bound by the theory on which they try it."). Accordingly, we review the record to determine what issues were tried to the jury.
Ross's complaint raised no issue concerning parent-subsidiary liability or, for that matter, joint venture or joint business enterprise liability of any kind. Evidence was offered at trial to prove plaintiff's strict liability, negligence and punitive damages claims against Coast and Coleman. The attempt by plaintiff to prove his strict liability claim against Coast and Coleman required the plaintiff to submit evidence of the design, manufacturing and marketing of the sailboat by one or both of the two corporations. The attempt by plaintiff to prove the sailboat to be "unreasonably" dangerous, both for strict liability purposes and for punitive damages purposes, required plaintiff to examine the interrelationship between the two corporations, regarding their knowledge of the electrical shocking problem and the attempts to remedy it. This evidence, which was admitted in support of plaintiff's strict liability and punitive damages claims, does reflect that Coleman was involved with its subsidiary Coast in marketing, advertising and researching the modification of the aluminum mast, and generally received economic benefit from the marketing of the sailboat. The question which we must first decide is whether, based upon that evidence, the issue of parent company liability, assuming there is such a legal doctrine, was raised by that evidence, since it was not raised by the pleadings.
I.R.C.P. 15(b) provides that issues, even though not raised by the pleadings, may be tried by the "express or implied consent of the parties." (Emphasis added.) However, consent implies, and minimal due process requires, notice to a litigant of the issues being raised. When issues are not raised by the pleadings, the evidence raising the legal issue must be clear enough so that both parties know of the issue and consent to the issue being tried. As this Court said in M.K. Transport, Inc. v. Grover, 101 Idaho 345, 349, 612 P.2d 1192, 1196 (1980):
"The requirement that the unpleaded issues be tried by at least the implied consent of the parties assures that the parties have notice of the issues before the court and an opportunity to address those issues with evidence and argument. Cook v. City of Price, Carbon County, Utah, 566 F.2d 699 (10th Cir.1977); Cox v. Fremont County Public Building Authority, 415 F.2d 882 (10th Cir.1969); Otness v. United States, 23 F.R.D. 279 (D.Alaska 1959).
" 'Implied consent to the trial of an unpleaded issue is not established merely because evidence relevant to that issue was introduced without objection. At least it must appear that the parties understood the evidence to be aimed at the unpleaded issue.' MBI Motor Co., Inc. v. Lotus/East, Inc., 506 F.2d 709, 711 (6th Cir.1974).
"Where nothing in the record indicates that an unpleaded issue was litigated at trial, it is error for the trial court to base its decision on the unpleaded issue. See, e.g., Browning Debenture Holders' Committee v. Dasa Corp., 560 F.2d 1078 (2d Cir.1977); MBI Motor Co., Inc. v. Lotus/East, Inc., supra; Freitag v. The Strand of Atlantic City, 205 F.2d 778 (3d Cir.1953)." (Emphasis added.)
It is the duty of the party asserting the issues to give that notice, first by the pleadings, then by requesting appropriate jury instructions setting out those issues at least five days before trial. I.R.C.P. 51(a)(1). Joyce Brothers v. Stanfield, 33 Idaho 68, 71, 189 P. 1104, 1105 (1920) ("Error cannot be predicated on failure to instruct . in the absence of a request for such instruction."); Goodwin v. Wulfenstein, 107 Idaho 492, 690 P.2d 947 (Ct.App.1984), citing Joyce Brothers with approval.
A review of plaintiff's requested instructions and the dialogue at the instruction conference clearly indicated that by that time Ross's counsel were arguing that Coast's and Coleman's conduct could be evaluated both on a joint liability theory and on a separate basis. Ross's Requested Instructions 10 and 14 were aimed at imputing Coast's negligence to Coleman based in part on the composite business relationship between Coast and Coleman. The plaintiff, after considerable discussion, dropped Plaintiff's Requested Instruction No. 10 in favor of Plaintiff's Instruction No. 14 (which was adopted as Instruction No. 26). That instruction told the jury:
"You may find Coleman Company liable for a defect in the design of the Hobie 16 Sailboat, provided that you find all of the elements of product defect liability or negligence as required by these Instructions previously given, were proved by Plaintiff, and if you find that Coleman Company for a profit or other benefit participated in a composite business enterprise with Coast Catamaran Corporation____" (Emphasis added.)
Ross's counsel argued that the plaintiffs had introduced enough evidence during the trial to establish that Coleman was responsible for Coast's failure to correct the electrical conductivity in the Hobie Cat's mast, based primarily on the business relationship that existed between the two companies. Plaintiff's counsel stated,
"Somewhere the jury has to have an instruction [on the joint relationship], and [requested instruction] 14 links in with our special verdict [given Question 13] where we ask them that question: 'Do you find that Coleman is responsible on this basis?' And if they [the jury] say, 'no,' then the defendants had no problem. They've got no worry.
"But they're queried as to whether they do find Coleman responsible on a separate question."
The foregoing statement demonstrates that the plaintiff (and, as the conference goes on, the judge and the defendants) understood that Plaintiff's Requested Instruction No. 14 (which became final Jury Instruction No. 26) was directed toward Coleman's joint liability with Coast because of its "composite business enterprise with Coast Catamaran____" Special Verdict Questions No. 13 and 14 directly asked the jury to decide the factual issue of whether Coast and Coleman were jointly liable of separately liable.
This Court, in Holland v. Peterson, 95 Idaho 728, 518 P.2d 1190 (1974), quoting from Mendenhall v. MacGregor Triangle Co., 83 Idaho 145, 149, 358 P.2d 860, 862 (1961), held that where a party fails to request further instructions amplifying the terms of a given instruction, no error may be predicated on the trial court's failure to fully amplify the instruction further. In this case, it was the plaintiff himself who requested Instruction No. 26 advising the jury that they could find the Coleman Company liable for Coast's defective or negligent design of the sailboat if they find "that the Coleman Company for a profit or other benefit participated in a composite business enterprise with Coast Catamaran____" The plaintiff cannot complain, after the jury has returned its verdict, that that instruction was not adequate to place before the jury any liability which might be imposed upon Coleman as a result of the parent-subsidiary relationship. Holland v. Peterson, supra; Mendenhall v. MacGregor Triangle Co., 83 Idaho 145, 149, 358 P.2d 860, 862 (1961). A party cannot complain of the adequacy or correctness of instructions which it itself has requested the court to give. 75 Am.Jur.2d Trial § 576 (1974), citing Moeller v. St. Paul City R. Co., 16 N.W.2d 289 (1944) (a party requesting a certain instruction cannot afterward complain that such an instruction should not have been given); see also Papp v. Cantrell, 96 Idaho 751, 536 P.2d 746 (1975) (holding that where the jury was instructed on damages in accordance with defendant's requested instructions, the defendant could not subsequently complain that the damage award was excessive). As stated in Goldsmith v. Diamond Shamrock Corp., 767 F.2d 411, 415-416 (8th Cir.1985):
"In addition, assuming that the district court had the authority to grant the new trial, the exercise of such authority in this .case was an abuse of discretion. [Citations omitted.] The instructional error on which the new trial order was based was invited by Diamond through its requested jury instructions, and courts generally find no ground for reversal when the instructions given were consistent with the position of the party seeking relief."
If Instruction No. 26 was inadequate, it was the plaintiff's responsibility to submit an instruction which more specifically set out the legal issues that it was asserting, Holland v. Peterson, supra, rather than wait until after the jury decided the case and then request the court to retry the issue of parent-subsidiary liability. We conclude that any issue of parent-subsidiary liability was subsumed by Instruction No. 26 and Special Verdict Questions 13 and 14, and was answered by the jury in the negative. The trial court erred in concluding that those issues had not been resolved by the jury.
However, even assuming that the "parent company liability" issue had not been decided by the jury; and that it was not waived by the plaintiff's failure to submit a more comprehensive and inclusive instruction than the given Instruction No. 26; and that it had been tried by the consent of the parties, express or implied, and that the court had inadvertently failed to instruct the jury on the issue; we nevertheless find no legal basis for imposing liability on a parent corporation for the acts of its subsidiary under the circumstances of this case. Our analysis is based primarily upon our own research because the trial court's order set out no legal authorities or analysis for its decision, and the respondent's brief has made little analysis of this issue.
First, the Idaho legislature, when it enacted comparative negligence legislation, adopted the "individual rule" which requires that, when comparing percentages of negligence, the negligence of the plaintiff must be compared against each individual defendant in determining whether the plaintiff may recover. I.C. § 6-801, 6-802 and 6-803; Odenwalt v. Zaring, 102 Idaho 1, 624 P.2d 383 (1980). The statute re quires that a plaintiff prove that a defendant's negligence was greater than that of the plaintiff before a judgment can be rendered against that defendant. Odenwalt v. Zaring, supra.
Furthermore, the Constitution and statutes of this state expressly limit the individual or personal liability of a stockholder of a corporation for the obligations of a corporation. Id. Const, art. 11, § 17; I.C. § 30-1-25. Whether the stockholder owns one share or all the shares, the Constitution and statutes have set the policy that no liability inures merely as the result of that stock ownership. The Court of Appeals recently summarized these provisions and this Court's prior decisions in Baker v. Kulczyk, 112 Idaho 417, 732 P.2d 386 (Ct.App.1987), stating:
"In general, a corporate status limits liability. I.C. § 30-1-25. For the court to disregard the corporate entity, two requirements must be met. First, there must 'be such a unity of interest and ownership that the separate personalities of the corporation and the individual no longer exist____' Chick v. Tomlinson, 96 Idaho 483, 485, 531 P.2d 573, 575 (1975) (quoting Surety Life Ins. Co. v. Rose Chapel Mortuary, Inc., 95 Idaho 599, 601, 514 P.2d 594, 596 (1973)). The second requirement is met by a showing that 'if the acts are treated as those of the corporation an inequitable result will follow, .' id., or that it would 'sanction a fraud or promote injustice.' Minich v. Gem State Developers, Inc., 99 Idaho 911, 917, 591 P.2d 1078, 1084 (1979) (quoting from Tom Nakamura, Inc. v. G. & G. Produce Co., 98 Idaho 183, 457 P.2d 422 (1969))." Baker v. Kulczyk, 112 Idaho 417, 419-420, 732 P.2d 386, 388-89 (Ct.App.1987).
Neither requirement is met in this case. Coast was a corporation separately owned and operated by others long before its stock was acquired by Coleman. After Coleman acquired the stock of Coast, both corporations were operated as separate entities, and there is nothing in the record to reflect that "the separate personalities of the corporation[s] and the individuals] no longer exist." Baker v. Kulczyk, 112 Idaho at 420, 732 P.2d at 389. There is nothing in the record to reflect that the corporate structures are a mere sham, with no corporate formalities being followed by the operators, as was the case of Surety Life Ins. Co. v. Rose Chapel Mortuary, Inc., 95 Idaho 599, 514 P.2d 594 (1973). In fact, the record reflects the contrary. The record would not support a finding that Coast was merely the alter ego of Coleman.
This case is strikingly similar to Hassinger v. Tideland Elec. Membership Corp., 622 F.Supp. 146 (E.D.N.C.1985). That case was another action brought against Coast Catamaran and Coleman because of another accident in which one of their Hobie Cat sailboats struck a low-hanging power line electrocuting the occupants. The federal district court held as a matter of law that there was not even a triable issue of fact on the plaintiff's claim that the parent corporation Coleman was liable for the acts of its subsidiary Coast. The court decided the case under North Carolina law, which is similar to the law set out in our cases of Chick v. Tomlinson, 96 Idaho 483, 531 P.2d 573 (1975), and Surety Life Ins. Co. v. Rose Chapel Mortuary, Inc., 95 Idaho 599, 514 P.2d 594 (1973). The federal court in the Hassinger case held:
"Plaintiffs' evidence is simply insufficient to show that Coast is a corporate phantom which exists as a mere puppet and device of Coleman with respect to the manufacture and design process. North Carolina cases are clear that this type of control is required in order to invoke the instrumentality doctrine.
"Secondly, even assuming plaintiffs have presented the requisite demonstration of control by Coleman of Coast, they have failed to present any evidence that such 'control' was used to commit a fraud or wrong or to perpetrate the violation of a statutory or other positive legal duty, or a dishonest and unjust act. Even if complete control exists, some additional circumstances of fraud are necessary in order to invoke the instrumentality doctrine. Ram Textiles, Inc. v. Hillview Mills, Inc., 47 N.C.App. 593, 267 S.E.2d 700, 703 (1980); Huski-Bilt, Inc. v. First Citizens Bank & Co., 271 N.C. 662, 157 S.E.2d 352 (1967).
"Accordingly, the court holds that the evidence considered in the light most favorable to plaintiffs does not entitle them to have the jury pass on the instrumentality or alter ego claim and therefore defendant Coleman's motion for summary judgment is GRANTED." 622 F.Supp. at 152.
There is nothing in this record to reflect that Coast was inadequately capitalized and as a result could not respond to a judgment against it. In fact, the record affirmatively shows that Coast has a net worth of several millions of dollars and could respond to any judgment rendered against it. To recognize Coast's corporate structure and not hold Coleman liable for Coast's negligence would not "sanction a fraud or promote injustice." Tom Nakamura, Inc. v. G. & G. Produce Co., 93 Idaho 183, 457 P.2d 422 (1969). Therefore, even if the trial court had been authorized to make post trial special findings concerning the "parent company liability" issue as asserted by the plaintiff Ross, there was absolutely no legal basis in this record for the trial court to impose liability on Coleman for any negligence of Coast.
Furthermore, the jury in its answer to Special Interrogatory 7, found that Coast's negligence consisted of "negligen[ce] in connection with the designing of the Hobie Cat 16 sailboat and/or mast." The negligent designing by Coast occurred in 1968, long before Coleman acquired Coast's stock. In no event could Coleman be held liable for the negligence of Coast which occurred prior to the time that Coleman acquired Coast's stock.
"In certain cases the negligence of one person may be imputed to another to charge the latter with liability to a third person injured by reason of such negligence. Generally, where there is an attempt to hold one person civilly liable for the negligence of another, it must be made to appear that the relation of principal and agent or master and servant existed between the two at the time the tort was committed, and that the tortious act was committed in the course of employment or.within the scope of the agency, or that the person sought to be held responsible was engaged in a joint venture or enterprise with the one who was negligent." 58 Am.Jur.2d Negligence § 458 (1971). (Emphasis added.)
Finally, it must be pointed out that the trial court's action, in overruling the jury's verdict and "aggregating," i.e., imputing the negligence of Coast to Coleman, was contrary to the court's Seppi v. Betty Instruction No. 34, which was given pursuant to the rule announced in our case of Seppi v. Betty, 99 Idaho 186, 579 P.2d 683 (1978). In Seppi, we held that the trial court should instruct the jury on the consequences of the special findings which they make in their verdict. We stated:
"It would be incredibly naive to believe that jurors, after having listened attentively to testimony of the parties and a parade of witnesses and after having heard the arguments of counsel, will answer questions on a special verdict form without giving any thought to the effect these answers will have on the parties and to whether their answers will effectuate a result in accord with their own lay sense of justice. With respect to most questions, the jury would have to be extremely dull witted not to be able to guess which answers favor which parties." Seppi v. Betty, 99 Idaho 186, 193, 579 P.2d 683, 690 (1978).
As we said in Seppi, jurors are as much concerned with the final result which their verdicts will render, as with the specific findings which they make apportioning negligence among the various parties. Accordingly, in Seppi we opted in favor of disclosure to the jury of the consequences of their findings and approved the trial courts instructing the juries of the consequences of their verdicts.
The trial court in this case did give a Seppi v. Betty instruction. In Instruction No. 34, the court told the jury:
"You are now to compare the negligence of the parties and Idaho Power Company. If you find the plaintiffs negligence equal to or more than the total amount of negligence of either defendant or Idaho Power Company, he will receive nothing from that entity, regardless of the amount of damages you may find that he sustained. To the extent that you find the plaintiff negligent in an amount less than any of these entities the total amount of damages sustained by him will be reduced by the amount of percentage of negligence you may attribute to him. For example, if you find Michael Ross's negligence was less than Coast Catamaran Corporation, Michael Ross's recovery will be reduced by any percentage of negligence that you may have attached to him. The same analysis applies to Michael Ross and either Coleman Company, Inc., or the Idaho Power Company."
Thus, the jury in this case was told that if they answered Question No. 13 "no," thereby requiring them to evaluate Coast's and Coleman's negligence separately, not jointly, in Special Verdict Question No. 14, and if they "find the plaintiff's negligence equal to or more than the total amount of negligence of either defendant [Coast or Coleman] ., he [the plaintiff] will receive nothing from that entity."
When the jury answered Question No. 13 "no" and then assessed 10% negligence to plaintiff Ross, and separately assessed only 10% negligence to defendant Coast and 5% to defendant Coleman, the jury understood that under Instruction No. 34, the plaintiff would "receive nothing from [either Coast or Coleman]." Based on Seppi, it is apparent that the jury intended by its verdict that the plaintiff Ross collect nothing from the defendants Coast and Coleman. Yet when the trial court imputed the negligence of Coast to Coleman, contrary to the jury's verdict, it rendered the advice given in the Seppi v. Betty Instruction No. 34 erroneous. The jury was not accurately told what the consequences of its findings would be, but was erroneously told that, by its verdict, the plaintiff would "receive nothing from" Coast and Coleman, when in fact, as a result of their verdict, and the trial court's "aggregating" action, a judgment of nearly $400,000 was rendered against Coleman. Had the jury been correctly advised in Instruction No. 34 that the trial court intended to impute the negligence of Coast to Coleman, in spite of their finding of no joint negligence in their answers to Special Verdict Questions Nos. 13 and 14, the jury may well have allocated the negligence to Ross, Coast and Coleman in different proportions in order to accomplish their apparent "lay sense of justice" that Ross recover nothing by their verdict.
It is apparent that at the time the trial court gave the jury its Seppi v. Betty Instruction No. 34, it had no thought that it would be "aggregating" (imputing) the individual negligence of Coast to Coleman in the event that the jury answered Special Interrogatory No. 13 "no," finding no joint negligence against Coast and Coleman. A review of the trial court's statements after trial, when it made the decision to "aggregate," discloses that the trial judge was basically just substituting his findings of how the negligence should have been apportioned for the findings of the jury. However, there was substantial evidence to support the jury's findings, and accordingly, the trial court's action, which in effect amounted to a judgment notwithstanding the verdict, is clearly contrary to our case law. Quick v. Crane, supra; Dinneen v. Finch, supra; Seppi v. Betty, supra.
In sum, then, the trial court erred when it overrode the jury's factual findings in Special Verdict Questions No. 13 and 14 which held that Coast and Coleman's negligence should be assessed on a separate basis, and that no joint or imputed negligence existed between them because of their "composite business relationship." Accordingly, the judgment entered against Coleman is reversed, and the cause is remanded with directions to enter judgment on the jury's verdict in favor of Coleman and Coast.
Ill
THE SANCTIONS FOR MISCONDUCT BY DEFENSE COUNSEL
One month prior to the beginning of the trial, Ross filed a motion in limine to preclude any mention to the jury of a settlement agreement between Ross and Idaho Power Company. The district court orally granted the motion, stating that the settlement agreement could not be mentioned without first making an off-the-record offer of proof as to the particular valid need to disclose the agreement. The trial court in orally granting the motion indicated that it would prepare a formal order and serve it upon the parties. However, no such formal order was entered and served by the trial court, as required by I.R.C.P. 16.
At the beginning of the jury selection process, one month later, the district court, in apparent contradiction of its earlier decision to withhold knowledge of the settlement from the jury, advised the entire jury venire that:
"Defendants in this matter are Coleman Company, Inc., and Coast Catamaran Corporation. Only Coleman Company, Inc., and Coast Catamaran Corporation are defendants at this trial, due to a settlement agreement reached between Michael Boss and the Idaho Power Company. The settlement with Idaho Power is not an issue nor to be considered in this case." (emphasis added).
Thereafter, on four other occasions, the district court, in its instructions to the jury, advised them of the settlement agreement reached between Michael Ross and Idaho Power Company. Plaintiff Ross admits in his brief that similar "statements [were made] to the jury by plaintiff's counsel regarding the fact of settlement between Idaho Power and Ross," although arguing in the brief that plaintiff's statements "were declaratory rather than argumentative, that is, these statements did not ask the jury to draw any inference about negligence or damage based upon Idaho Power's settlement."
In its argument to the jury the defendants' counsel also referred to the settlement agreement. No contemporaneous objection was made by plaintiff's counsel to counsel's statement, as required by our decision in Rojas v. Lindsay Mfg. Co., 108 Idaho 590, 701 P.2d 210 (1985) (since Rojas' counsel failed to object, move for a mistrial, or seek a cautionary instruction, the issue has not been preserved); Annau v. Schutte, 96 Idaho 704, 535 P.2d 1095 (1975). After the case had been submitted to the jury and the jury had been deliberating for nearly a day, Ross's attorneys then requested the court to give a supplemental instruction to the jury regarding the effect of the settlement between Ross and Idaho Power Company. Ross's counsel argued that defense counsel's mention of the settlement agreement was prejudicial, even though he acknowledged that "in the trial, the court made mention a couple of times, or we did, that Idaho Power had settled." After considerable discussion, the court granted the motion and gave Plaintiff's Requested Jury Instruction No. 43, which read:
"You are hereby instructed that under Idaho law, the total amount of the judgment awarded to Michael Ross shall be reduced by that amount, which Idaho Power has heretofore paid to Michael Ross, pursuant to the settlement between Michael Ross and Idaho Power Company."
The jury retired to deliberate, but was immediately recalled to "change the word 'the' to 'any' in the phrase 'the judgment,' so it says 'any judgment'." The altered instruction was then read to the jury again, and they retired for further deliberations.
Sometime thereafter, the jury sent a note to the court stating:
"We don't understand No. 34. Will Idaho Power be subtracted from our dollar amount, and then the percentage difference between Ross and Coast Catamaran Company-Coleman be taken from the difference? Or will Idaho Power be subtracted from our dollar amount and the difference be reduced by the percentage negligence of Ross?"
In response to that request, the court and counsel discussed the matter and agreed that the following additional instruction, No. 44, be given:
"In response to your question: (1) Do not consider the settlement in any manner, for any purpose, when answering the Special Verdict. (2) Instruction 43 was designed simply to let you know that the court will make any adjustments to your verdict that might be necessary."
After being so instructed, the jury again retired to deliberate and, sometime thereafter, returned its verdict for the defendants.
Four days later, on October 21, 1985, the plaintiff Ross filed three motions: a motion to make additional findings and enter judgment in favor of Ross; a motion for a new trial; a motion for attorney fees and costs, and sanctions. The trial court granted the motion for additional findings and judgment as discussed in Part II herein. The court also gave the plaintiff an option to elect a new trial as an alternative to the $399,356.40 judgment which it had entered in favor of plaintiff, if the plaintiff elected within five days to accept the new trial in lieu of the judgment. The plaintiff elected to keep the judgment and not accept the new trial, as discussed in Part II, supra.
Regarding the motion for attorney fees, costs and sanctions, the trial judge orally stated he was granting this motion based on I.C. § 12-121, I.R.C.P. 54(d)(1) and 54(e)(1), and held that the defendants were liable for $100,000 in attorney fees and $17,000 in costs. The trial court stated that the award was based on its finding that defense counsel had failed to conduct settlement negotiations in good faith, and further on the court's "overwhelming belief that the order prohibiting settlement argument was willfully, consciously, and deliberately violated [by defense counsel]."
We conclude that the district court's award of costs and attorney fees in this case was erroneous for several reasons and, accordingly, we reverse.
1. The district court's imposition of attorney fees was based in substantial part upon its finding that the defense counsel had failed to conduct settlement negotiations in good faith. However, this Court has held that the failure to enter into or conduct settlement negotiations is not a basis for awarding attorney fees under I.C. § 12-121 and I.R.C.P. 54(e)(1). Payne v. Foley, 102 Idaho 760, 639 P.2d 1126 (1982). Today, we again make explicit that which we held in Payne v. Foley, supra, that "there is no authority in a trial court to insist upon, oversee, or second guess settlement negotiations, if any, and certainly no authority to impose sanctions for 'bad faith' bargaining." Payne v. Foley, supra 102 Idaho at 763, 639 P.2d at 1129 (Bistline, J., specially concurring). The district court erred when it imposed costs and attorney fees for failure to engage in good faith settlement negotiations, and accordingly the order must be reversed for that reason.
2. While trial courts have discretion in determining whether or not settlement agreements between some of the parties will be disclosed to the jury, Quick v. Crane, supra, once the trial court determines to permit the disclosure, and in fact instructs the jury (in this case several times) regarding the settlement agreement, both parties are ordinarily entitled to refer to the court's instructions in their arguments to the jury. It would be an unusual case, requiring a very specific showing, in order to justify a trial court prohibiting the litigants from mentioning the court's instructions in their closing argument to the jury. After deciding to instruct and advise the jury of the settlement agreement between Ross and Idaho Power, the trial court made no statement that the instruction was not to be mentioned in closing argument, nor did he state any reason at that time why it should not be referred to.
Plaintiff's counsel himself referred to their settlement with Idaho Power in his jury argument with no criticism from the court. It would certainly raise equal protection problems to permit one party to refer to the settlement agreement, but deny the other party that same right. Plaintiff's claim that defense counsel had violated the in limine order, when they themselves had violated it, troubled the trial court. He stated,
"Whether or not the violation of that [by Mr. Lynch] adds up to requiring the sanctions that Mr. Schlender talks about, is something that is a little harder for me to deal with. I think Mr. Lynch does point out in a way that is more clear to me now than it was when I was listening to st [closing argument], how Mr. Roark's final argument was a long way from faithful adherence to the fact and was as inappropriate in many ways as a lot of the ideas that Mr. Lynch presents. I don't know what the court should do about that."
A review of the hearing on the motion in limine conducted a month before the trial commenced discloses that the main purpose for the plaintiff's motion in limine was to prevent the fact of the settlement agreement from being brought to the attention of the jury. At the hearing on the motion for sanctions, plaintiff's counsel stated that he was aware of our then recent case of Rojas v. Lindsay Mfg. Co., 108 Idaho 590, 701 P.2d 210 (1985), which required counsel to make a contemporaneous objection to the mention of a settlement agreement in final argument or the objection was waived. He was concerned about the rule in Rojas which he stated required the plaintiff to stand up and object at the time, observing that, by objecting, he thereby draws more attention to the settlement agreement. He stated, "Now, you can't unring the bell as far as counsel's statement is concerned. The jury at that point knows there is a settlement agreement, and the only thing counsel for the plaintiff can do is emphasize to the jury the existence and importance of a settlement agreement." However, in this case it was not the defendant, but the trial court itself which "rang the bell" and instructed the jury several times on separate occasions regarding the settlement agreement with Idaho Power. Plaintiff's counsel also referred to the settlement agreement. The bell having been rung both by the trial court in its instructions and the plaintiff in his argument to the jury, the trial court could not "unring the bell" by penalizing the defendants for doing that which both the court and the plaintiff had previously done. The plaintiff, having done so, can hardly complain of the defendants' reference to the same settlement agreement.
We can only assume that when the trial court made the decision to instruct the jury regarding the settlement agreement it, in effect, withdrew its oral order entered on the motion in limine. The fact that the district court failed to finalize the order in written form and serve it upon the parties, as he stated he would do, and as required by the rules, I.R.C.P. 16(c), further supports that conclusion and further deprives the order of the vitality which it might otherwise have had for purposes of imposing sanctions, as will be discussed infra.
Finally, if there was any error in either side referring to the Idaho Power settlement agreement during the trial or the final argument, that error was ameliorated by the giving of supplemental Instructions Nos. 43 and 44. By Supplemental Instruction No. 43, which the plaintiff requested, the court advised the jury that "the total amount of any judgment awarded to Michael Ross shall be reduced by the amount of the Idaho Power settlement." Then subsequently, in response to the jury's specific question, the court advised the jury, in Instruction No. 44, "not to consider the settlement in any manner, for any purpose, when answering the special verdict." The court advised the jury that it "will make any adjustments to your verdict that might be necessary" as the result of the settle ment agreement. These two special instructions, which were given after the jury had been deliberating for a day, and which were segregated from the other instructions and were specially called to the jury's attention — one at the express request of the jury — were sufficient to remove the taint of any violation of the court's oral in limine order by either party, assuming that that order still had any vitality considering all the events which occurred subsequent to the court rendering its oral in limine order.
3. The trial court's order stated that it was granting the award of attorney fees pursuant to I.C. § 12-121 and I.R.C.P. 54(e)(1), and I.C. § 7-601. Assuming that the in limine order still had viability, and assuming that it had only been violated by the defendants, none of those authorities authorizes the trial court to award $100,000 in attorney fees under these circumstances. First, I.C. § 12-121 provides that the trial court may award attorney fees to the "prevailing party." The defendants Coast and Coleman were the prevailing parties in the jury trial and, accordingly, no award of attorney fees could be made against them under I.C. § 12-121. Secondly, even if a litigant is a prevailing party under I.C. § 12-121, I.R.C.P. 54(e)(1) limits the award of attorney fees to those cases in which the court "finds from the facts presented to it that the case was brought, pursued or defended frivolously or without foundation____" (Emphasis added.) The award of attorney fees under I.R.C.P. 54(e)(1) and I.C. § 12-121 is directed to those defenses which are not supported by any factual evidence in the record. See Minich v. Gem State Developers, Inc., 99 Idaho 911, 591 P.2d 1078 (1979). Here, not only was there substantial evidence to support the defense, the defendants prevailed. Accordingly, the case was not defended frivously or unreasonably, and thus no award of attorney fees could be assessed under I.C. § 12-121 and I.R.C.P. 54(e) against the defendants.
Attorney misconduct can be a basis for the imposition of sanctions under I.C. § 7-601 et seq., which was referred to in the trial court's written order. I.C. § 7-601 defines contempts and states that "[t]he following acts or omissions in respect to a court of justice, or proceedings therein, are contempts of the authority of the court: . (5) Disobedience of any lawful judgment, order or process of the court." Assuming, arguendo, that the district court's order granting the motion in limine had been disobeyed by either counsel in this case, they could have been cited for contempt under I.C. § 7-601. However, a contempt proceeding under I.C. § 7-601 et seq. is a special proceeding, criminal in nature, because a violation thereof is punishable by fine or imprisonment. I.C. § 7-610; Bandelin v. Quinlan, 94 Idaho 858, 499 P.2d 557 (1972). Because of the criminal nature of such a contempt proceeding, our cases hold that a person charged with contempt under I.C. § 7-601 is entitled to certain procedural due process protections before the court can impose sanctions. He is entitled to notice of the exact charges against him, proof that he had knowledge of the terms of the court's order he was alleged to have violated, notice of the sanctions which might be imposed against him (fine or jail term), and a trial or hearing on the charges raised. Bandelin v. Quinlan, supra. While those proceedings may be more summary in cases where the contempt was committed in the presence of the court, rather than outside the presence of the court, I.C. § 7-603, the proceeding is nevertheless criminal in nature and minimal due process requirements must be met. In this case, much of the procedural due process was lacking. In particular, plaintiffs motion for attorney fees, costs and sanctions was based on I.C. § 12-121 and Rule 54(e), with no reference to I.C. § 7-601. At no time during the proceedings was defense counsel advised that he was being charged with criminal contempt under I.C. § 7-601, or the nature of those proceedings. The trial court's oral order granting attorney fees and costs only mentioned Rule 54(e), asserting that defense counsel's tactics constituted "frivolity or unreasonable defense." It was only in the final order drafted by plaintiff's counsel that I.C. § 7-601 was even mentioned. That is particularly significant given the fact that the alleged contemptuous conduct was against counsel, but the criminal sanctions were imposed, not against the counsel, but against the two defendants Coast and Coleman.
Even if the procedural due process required by our cases had been rendered, the question then becomes whether or not the trial court abused its discretion in imposing sanctions. As previously discussed, the purpose of the court's oral in limine order was to prevent the settlement agreement from being called to the jury's attention. However, the court itself, subsequent to the in limine order, instructed the jury several times on the settlement agreement, and it was also mentioned by the plaintiff's counsel. Even though there was no contemporaneous objection to the defense counsel's statement, a day later when it was called to the court's attention the jury was specifically instructed not to consider the settlement agreement in arriving at its determination of negligence and causation pursuant to the special verdict. The trial court made conflicting statements on whether or not, in its opinion, the defense counsel's comments had any effect on the trial. While his final order, prepared by counsel, finds prejudice to the plaintiff, the court's statements at the time of the hearing suggest otherwise. He stated:
"But Mr. Lynch also makes some very good points about, when you bother to have a new trial, and that you have to look not only at individual errors and faults, but would a new trial produce a different result, and is the result at all supported by the evidence, and those questions, I think, are much more difficult to deal with, and I'm going to read both briefs especially the plaintiff's final brief with a little more care. . I'm not inclined to grant a new trial for the reasons that I've indicated, although I haven't thought it through entirely. So I'll have to wait on that. I think it was urged that I take that part under advisement for a while."
Finally, I.C. § 7-610 limits any sanction or penalty for contempt under I.C. § 7-601 to a fine of $500 or 5 days in jail. The court's action in imposing $100,000 attorney fees and $17,000 costs as sanctions against the defendants exceeded his statutory authority under I.C. § 7-610 by $116,500.00.
For all the reasons set out above, we conclude that the trial court erred egregiously in imposing sanctions against the defendants in this matter, and the order awarding $100,000 attorney fees and $17,-000 costs is set aside.
IV
CONCLUSION
The verdict of the jury in this case was supported by substantial competent evidence. The trial court erred when it ignored the jury's finding that no "joint enterprise" existed between Coast and Coleman and entered findings and a judgment in favor of Ross against Coleman. The trial court's imposition of attorney fees on Coast and Coleman pursuant to I.R.C.P. 54(e)(1) and I.C. § 7-601 was erroneous and an abuse of discretion under the specific facts of this case.
The judgment of the trial court is reversed, and the cause is remanded with directions to enter judgment for the defendants on the jury's verdict. Costs to appellants. No attorney fees.
SHEPARD, C.J., and JOHNSON, J., concur.
. The alleged misconduct consisted of the defense counsel's reference in his closing argument to the fact that Idaho Power Company had settled the case with Ross. The reference purportedly violated an in limine order issued by the trial court approximately one month prior to trial. That issue is discussed in Part III, infra,
. The district court's order reads as follows: "The court further finds that the plaintiff was denied the right to a fair trial, and therefore, unless the full amount of the judgment entered herein, plus costs and attorney's fees as the court ordered, is paid to the plaintiff within 28 days from the date of this court's order, plaintiff is granted the right to a new trial on the issue of liability only to be filed within 5 days after the initial 28-day period. In the' event the plaintiff does not so elect within the 5-day period the judgment shall become final. In the event the defendants elect to not pay the judgment within that time period, plaintiff elects a new trial, the defendants shall pay for all reasons stated, and further, as a justifiable cost, sanction and penalty, all the attorney's fees and costs hereby awarded to be paid within 15 days following expiration of the initial 28-day period."
. At trial defendants produced evidence intended to demonstrate their theory that the boat stopped against telephone wires and the neutral power line, just short of the active phase line, and that Ross had de-rigged the boat before contact was made between the phase line and the neutral line which caused the electrical shock; that Ross and Sateren got off the boat; that Sateren was attempting to push the boat away from the wires when a gust of wind pushed the boat into the phase line resulting in the extreme electrical shock that caused her death and Ross's injuries. This evidence was based in part on expert testimony regarding how the power line was rigged with circuit breakers which were designed to shut the line down when a foreign object contacted the line.
. "[Special Verdict] SECTION TWO
"Question No. 5: Was the Plaintiff Michael Ross negligent?
Answer: Yes 12 No_
"Question No. 6: If the answer to Question No. 5 was "yes", was the negligence of Michael Ross a proximate cause of the accident?
Answer: Yes 12 No_
"Question No. 7: Was the Defendant Coast Catamaran Corporation negligent in connection with the designing of the Hobie 16 sailboat and/or mast?
Answer: Yes 12 No_
"Question No, 8: If your answer to the foregoing question No. 7 was "yes", was the negligence of Coast Catamaran Corporation a proximate cause of the accident?
Answer: Yes 12 No_
"Question No. 9: Was the defendant Coleman Company, Inc., negligent?
Answer: Yes 12 No_
"Question No. 10: If your answer to Question No. 9 was "yes," was the negligence of Coleman Company, Inc., a proximate cause of the accident?
Answer: Yes 12 No_
"Question No. 11: Was the Idaho Power Company negligent?
Answer: Yes 11 No 1
"Question No. 12: If your answer to Question No. 11 was "yes", was the negligence of the Idaho Power Company a proximate cause of the accident?
Answer: Yes 12 No_
. The plaintiffs requested special verdict form is not included in the appeal record. However, the transcript of the jury instruction conference discloses that special verdict questions 13 and 14 were taken from plaintiffs requested special jury verdict form, as orally amended by plaintiffs counsel at the jury instruction conference.
. The transcript clearly demonstrates that the district court judge was unaware of any authority upon which to base his order. The court stated as follows:
"When we're considering the aspect of this case that deals with aggregation, I have to say to myself, 'I feel persuaded that the plaintiff ought to win,' and I was unsure of whether or not there was any authority to do that, and the reason that I feel that the plaintiff ought to win is not because I wish to second guess a jury's decision concerning whether or not the defendants ought to he held negligent, my motivation is simply because I believe that I collectively found that the defendants were negligent in an amount of 15%____
"Initially, when reading Mr. Lynch's brief, that specific subject, I was reading along and being educated to the fact that Idaho comparative negligence law is considered the individual or Wisconsin rule approach, and that did seem to have some analogous support for his position that then you shouldn't aggregate. But I don't think that that support is that real. I think it's more illusory than real, and that our court — our appellate court could consistently, with the Wisconsin rule, generally, find that when there is a close relationship, and in this case I certainly find that close relationship, that was expressed in the paragraph read by Mr. Schlender between Coleman and Coast. I don't think there's any doubt about that. And it appears to me to be more just than not to aggregate those amounts.
"On the question of authority to do so, I think I'm floating in uncharted waters either direction as far as Idaho law is concerned, and my guess is that I ought to do what I think is right, rather than to try and predict a conservative approach, somehow, by the Idaho Supreme Court. I have no doubt that whether I rule one way or the other, this matter is going to be available for its review, and I don't know why I should do one approach compared to the other. I should do what I feel the facts suggest and compel the court to do, and in this case, I would say that inasmuch as the jury found a ten and five percent split, that considering the connection between these two defendants, why the amount ought to be aggregated, and I will accept that motion of the plaintiffs to make such aggregation and to present that in the verdict along with a — I guess it's a judicial finding that that relationship existed." (Emphasis added.)
Thus, it is evident from the above colloquy that the district court's decision to impute ["aggregate"] Coast's negligence to Coleman was not based upon any particular legal theory or any specific set of evidence produced at trial, but rather was based upon the court's overall feeling as to what was the most just result.
. The burden of proof in a negligence action rests on the plaintiff. Harper v. Hoffman, 95 Idaho 933, 523 P.2d 536 (1974). Before an issue may be properly before the court it must be presented to the trial court by allegations in the pleadings and evidence touching on a particular question. Miller v. Miller, 88 Idaho 57, 396 P.2d 476 (1964).
. "Rule 51(a)(1). Instructions to jury. — Requests — Objections.—No later than five (5) days before the commencement of any trial by jury, any party may file written requests that the court instruct the jury on the law as set forth in such request, and such requested instructions must be served upon and received by all parties to the action at least five (5) days before the commencement of the trial. The court shall not be required to consider any requested instructions not filed and served upon the parties as required by this rule, but the court may reasonably permit any party to file and serve written requests for instructions at any time up to and including the close of the evidence at the trial upon the grounds that such requested instructions concern matters arising during the trial of the action which could not reasonably have been anticipated by the party requesting such instructions or were overlooked in the original requested instructions....."
. The plaintiff was separately seeking both compensatory and punitive damages from both corporations. While the pleadings contain no allegation of joint enterprise responsibility, or parent/subsidiary liability, after all of the evidence was in, and the parties gathered for the instruction conference, the plaintiff's discussions of his requested instructions indicated that he was hedging his primary argument of separate liability of each individual defendant by requested jury instructions that also were directed toward allowing the jury to assess a single negligence percentage for Coast and Coleman jointly.
. Plaintiffs Requested Instruction No. 10 reads: "Coleman Company, Inc., may be liable for any losses caused by the Hobie Cat 16 if you find that Coleman Company, Inc., participated in the manufacture, marketing and distribution of the Hobie Cat 16, or, Coleman Company, Inc., derived an economic benefit from placing the product in the stream of commerce or was in a position to eliminate the unsafe character of the product."
. Plaintiffs Requested Instruction No. 14 reads: "You may find Coleman Company liable for a defect in the design of the Hobie 16 Sailboat, provided that you find all of the elements of product defect liability or negligence as required by these Instructions previously given, were proved by Plaintiff, and if you find that Coleman Company for a profit or other benefit participated in a composite business enterprise with Coast Catamaran Corporation whereby a consumer demand for a product and a reliance upon the product was created by Coleman Company which placed a defective product in the stream of commerce." (Emphasis added.)
. The respondent's brief attempts to support the trial court's action, not upon the "parent company liability'' theory, but upon an argument that Coast and Coleman were joint venturers and therefore were jointly liable for the negligence of each other. As earlier pointed out, however, that issue was never raised by the pleadings, and the trial court made no such finding of a joint venture, nor did the trial court make any analysis of the factors necessary to establish a joint venture as set out in our cases of Easter v. McNabb, 97 Idaho 180, 541 P.2d 604 (1975), and Holland v. Peterson, 95 Idaho 728, 518 P.2d 1190 (1974). Nor did the trial court find Coast and Coleman jointly liable for the plaintiffs damages, as would have been the case had there been a joint venture. Rather, the trial court imposed liability solely against Coleman for Coast's negligence on an imputed liability theory, which negates any suggestion that the trial court found a joint venture to exist between the parties. Accordingly, cases like Krengel v. Midwest Automatic Photo, Inc., 295 Minn. 200, 203 N.W.2d 841 (1973), and Reber v. Hanson, 260 Wis. 632, 51 N.W.2d 505 (1952), are not in point. In Krengel, the trial court found joint venture liability when that issue had not been submitted to the jury. In Reber, the jury found joint liability. However, in this case the jury found no joint liability, and the trial court made no finding of joint enterprise liability.
Respondent also argues that Ogg v. City of Springfield, 121 Ill.App.3d 25, 76 Ill.Dec. 531, 458 N.E.2d 1331 (Ill.App.Ct.1984), supports the trial court's action in holding Coleman liable for Coast's negligent design of the Hobie Cat sailboat. However, Ogg is totally inapposite. Ogg was a strict liability products case, not a negligence case. The Illinois appellate court in Ogg rejected Coleman's claim that it should not have been held liable because it had not been proved that it was the manufacturer of the sailboat. The Illinois court held that in a strict liability case for a product found to be defective and unreasonably dangerous, a parent company which participates in the marketing and distribution of that unreasonably dangerous product, and which derives economic benefit from placing it in the stream of commerce, is strictly liable in tort for damages caused by the defective product, even if it was manufactured by its subsidiary, Coast. However, in this case, the jury specifically found that the sailboat in which Ross was injured was not defectively designed or unreasonably dangerous. The jury's answer to Special Interrogatory No. 7 unanimously rejected plaintiff Ross's strict liability in tort claim. Accordingly, the Ogg case provides no support for the trial court's action in this case.
. In Odenwalt, this Court held that the legislature, in enacting I.C. § 6-801, rejected the "unit rule" whereby a plaintiffs right to recover is established if the plaintiffs negligence is less than the combined negligence of all defendants. In support of that interpretation of the statute, we stated:
"It would be incongruous to suggest that where there is one defendant and one plaintiff, and both are found to be equally negligent (50%), the plaintiff recovers nothing . but where there are two defendants and one plaintiff and all three are found to be equally negligent (331/3%), the plaintiff may recover 66 /3 of his damages from either defendant." Odenwalt v. Zaring, 102 Idaho at 5, 624 P.2d at 388.
The Court rejected the "unit rule," recognizing that it would "frequently achieve) ] a harsh and unjust result." Odenwalt, 102 Idaho at 5, 624 P.2d at 388.
. "[Art. 11] § 17. Liability of stockholders— Dues. — Dues from private corporations shall be secured by such means as may be prescribed by law, but in no case shall any stockholder be individually liable in any amount over or above the amount of stock owned by him."
"[I.C. §] 30-1-25. Liability of subscribers and shareholders. — A holder of or subscriber to shares of a corporation shall be under no obligation to the corporation or its creditors with respect to such shares other than the obligation to pay to the corporation the full consideration for which such shares were issued or to be issued."
. Plaintiff proved Coast's and Coleman's net worth as part of its $6,279,960.00 claim for punitive damages, which was based upon 2% of their combined net worth.
. "My old Dean of law school once said that you have to, in a trial court especially, tell the judge why you ought to win and then you ought to — Then you have to tell him how he can help you win.
"When we're considering the aspect of this case that deals with aggregation, I have to say to myself, 7 feel persuaded that the plaintiff ought to win, 'and I was unsure of whether or not there was any authority to do that, and the reason that I feel that the plaintiff ought to win is not because I wish to second guess a jury's decision concerning whether or not the defendants ought to be held negligent, my motivation is simply because I believe that I collectively found that the defendants were negligent in an amount of 15%."
. Concurrent with the filing of its other motions, the plaintiff filed a motion for a new trial. The district court did not address separately the motion for new trial and the alleged grounds therefor or make any analysis of the motion, as required by our recent case of Quick v. Crane, 111 Idaho 759, 727 P.2d 1187 (1986). Rather, after entering judgment against Coleman for $399,356.40, the court merely stated that the plaintiff was denied the right to a fair trial, and unless the defendants pay "the full amount of the judgment entered herein, plus costs and attorney fees as the court ordered, . within 28 days from the date of this court's order," then the "plaintiff is granted the right to a new trial on the issue of liability only to be filed within 5 days after the initial 28-day period. In the event the plaintiff does not so elect within the 5-day period the judgment shall become final." See n. 2, infra. The plaintiff elected to keep its judgment and not accept a new trial. No issue is raised on appeal by either party concerning the propriety of or the effect of the court's alternative new trial order. Accordingly, we do not address it.
. Chronologically, the record shows that the motion in limine was filed in August, 1985, and a hearing was held on August 26, 1985. Trial began on September 16, 1985, and on that afternoon the judge told the entire panel of the settlement agreement. The jury was selected by the afternoon of the next day, and the judge once again informed the jury in Instruction No. 1 that Idaho Power was not a party due to the settlement agreement. At the close of the evidence and just before closing statements, the trial court gave further instructions to the jury and, in Instruction No. 21, the district court once again told the jury that Idaho Power had settled with the plaintiff. Finally, after the jury had retired to deliberate, they sent out a clarification question regarding the Idaho Power settlement, and the trial court submitted Jury Instruction No. 43 and then later Jury Instruction No. 44 in an attempt to clarify the effect of the settlement agreement between Idaho Power and Ross. In other words, during the course of the trial the trial court informed the jury members five different times that a settlement agreement existed between plaintiff Ross and Idaho Power, The settlement agreement was contained in the instructions that were given to the jury and used as part of the jury's deliberations.
. Defendant's counsel first referred to the settlement during closing argument when he was discussing damages. He stated:
"Mr. Ross has settled with the power company and they're suing Coast and Coleman and the message is clear. It isn't compensatory damage that is really the issue. It's either exaggerated compensatory figures, or punitive figures. You can take your choice. As a matter of fact, one of the good tactics lawyers sometimes use is build up this case for punitive damages and then say, 'Okay, but if you don't like that, give them that, but be fair and come back and grab this other punitive figure'. Now, I maintain, simply: If you'll just think about the logic of it, you're looking at two punitive figures. And I think you're going to have to decide, in all honesty and all justice, is my role here to compensate, if you decide that's the thing, or is my role here to engage in punishment of the company?"
Later, when discussing the evidence as it related to the comparative negligence of the various parties, he stated: 'The power company has admitted its negligence. They sat up here on this stand and admitted it and they've settled and they're not here."
. Counsel for plaintiff was requested to prepare the order. The counsel-drafted order in-eluded, for the first time, reference to I.C. § 7-601, which will be discussed, infra.
. The version of I.R.C.P. 16(c) in effect at the time of this trial was rescinded by this Court and replaced by the current I.R.C.P. 16(f). Both the present and the previous rule are substantially the same. I.R.C.P. 16(c) stated:
"Rule 16(c). Pre-trial order. — After the pretrial conference or the filing of a pre-trial stipulation, the court shall enter a pre-trial order pursuant to Rule 16(a) in generally the form described in Rule 16(b)(6). The court shall forthwith cause copies of the signed pretrial order to be served on all parties or their attorneys of record in the action."
The present version, I.R.C.P. 16(f), reads:
"Rule 16(f). Pre-trial order. — After the pretrial conference or the filing of a pre-trial stipulation, the court shall enter a final pretrial order pursuant to Rule 16(d) in generally the form described in Rule 16(e)(6). The court shall forthwith cause copies of the signed pre-trial order to be served on all parties or their attorneys of record in the action."
. "7-601. Contempts defined. — The following acts or omissions in respect to a court of justice, or proceedings therein, are contempts of the authority of the court:
"(5) Disobedience of any lawful judgment, order or process of the court."
. "12-121. Attorney's fees. — In any civil action, the judge may award reasonable attorney's fees to the prevailing party or parties, provided that this section shall not alter, repeal or amend any statute which otherwise provides for the award of attorney's fees. The term 'party' or 'parties' is defined to include any person, partnership, corporation, association, private organization, the state of Idaho or political subdivision thereof."
. Indeed, even the remote injustices which can be caused by the applicability of the joint and several liability doctrine in states where the "unit rule" is used can be precluded as has been done in Texas, pursuant to Tex.Rev.Civ.Stat. Ann. article 2212(a), § 2(b) which requires that a plaintiffs negligence is compared with the total negligence of all the defendants, but where a defendant's negligence is less than plaintiffs, such a defendant can only be held liable for that portion of the award attributable to his own negligence.