Title: SHAHROKHFAR v STATE FARM MUT AUTO
Citation: N/A
Docket Number: 80-466
State: Montana
Issuer: Montana Supreme Court
Date: October 14, 1981

No. 80-466 IN THE SUPREME COURT OF THE STATE OF MONTANA 1981 SHAHFUN SHAHROKHFAR, Plaintiff and Respondent, STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Defendant and Appellant. Appeal from: District Court of the Eighteenth Judicial District, In and for the County of Gallatin Honorable Joseph Gary, Judge presiding. Counsel of Record: For Appellant: Lyman H . Bennett, I11 argued, Bozeman, Montana For Respondent: Anderson, Edwards and Molloy, Billings, Montana A. Clifford Edwards argued, Billings, Montana Filed: 3Cr r i ?98F Submitted: September 21, 1981 Decided : V .. OCT 1 4 1947 M r . J u s t i c e Frank B. Morrison, Jr., d e l i v e r e d t h e Opinion of t h e Court. Defendant S t a t e Farm Mutual ( S t a t e Farm) appeals an award of damages t o t h e p l a i n t i f f . P l a i n t i f f cross-appeals a D i s t r i c t Court r u l i n g t h a t reduced a p u n i t i v e damage award by t h e percentage t h a t t h e p l a i n t i f f w a s found t o be c o n t r i - b u t o r i l y negligent. W e a f f i r m t h e award of damages t o t h e p l a i n t i f f and r e v e r s e t h e reduction of p u n i t i v e damages. A S t a t e Farm insured had an automobile accident with one Bahram Shahrokhfar, brother of t h e p l a i n t i f f . S t a t e Farm paid t h e property damage of i t s insured and then, through an e x e r c i s e of subrogation r i g h t s , f i l e d an a c t i o n t o c o l l e c t damages from t h e a l l e g e d l y negligent t h i r d party. However, i n s t e a d of suing Bahram Shahrokhfar, S t a t e Farm, through its agent, Robert Heath, mistakenly sued Shahram Shahrokhfar. The p l a i n t i f f , although disputed by S t a t e Farm, t e s t i f i e d he advised S t a t e Farm t h a t t h e wrong person had been sued. Nevertheless d e f a u l t judgment was taken a g a i n s t t h e p l a i n t i f f and t h e r e a f t e r h i s d r i v i n g p r i v i l e g e s were suspended. The p l a i n t i f f knew about t h e lawsuit b u t refused t o take any a c t i o n i n defense, simply r e l y i n g upon h i s n o t i c e t o S t a t e Farm t h a t the wrong p a r t y had been sued. S t a t e Farm eventually determined t h a t t h e c o r r e c t p a r t y was Bahram Shahrokhfar, and a c t i o n was immediately taken t o set a s i d e t h e d e f a u l t judgment and r e i n s t a t e p l a i n t i f f ' s d r i v i n g p r i v i l e g e s . The p l a i n t i f f subsequently sued S t a t e Farm grounded i n t h e negligence of i t s agent and a t t o r n e y , Robert Heath. The jury found: 1. S t a t e Farm, a c t i n g through its agent, Robert Heath, w a s negligent. 2. Such negligence was a proximate cause of t h e plain- t i f f ' s damage. 3 . The p l a i n t i f f was c o n t r i b u t o r i l y negligent. 4. P l a i n t i f f ' s contributory negligence was n o t a proxi- mate cause of h i s damage. 5. Negligence was apportioned on t h e b a s i s of eighty- four percent t o t h e defendant and s i x t e e n percent t o t h e p l a i n t i f f . 6. The jury found a c t u a l damages i n t h e amount of $850 and p u n i t i v e damages i n t h e amount of $80,000. The t r i a l judge reduced t h e e n t i r e damage award by t h e s i x t e e n percent t h a t t h e p l a i n t i f f w a s found t o be negligent. The following i s s u e s are r a i s e d by appellant: 1. Did t h e D i s t r i c t Court err i n f a i l i n g t o g r a n t defendant's motion f o r a d i r e c t e d v e r d i c t based on plain- t i f f ' s f a i l u r e t o c a l l an e x p e r t witness? 2. Did t h e D i s t r i c t Court e r r i n giving the standard negligence i n s t r u c t i o n i n s t e a d of a negligence i n s t r u c t i o n t a i l o r e d t o t h e duty owed by an attorney? 3 . Did the District Court err i n f a i l i n g t o withdraw t h e question of p u n i t i v e damages from t h e jury? 4. Did t h e D i s t r i c t Court err i n f a i l i n g t o i n s t r u c t t h e jury on t h e d o c t r i n e of assumption of r i s k ? 5. Did t h e D i s t r i c t Court err i n f a i l i n g t o i n s t r u c t on m i t i g a t i o n of damages? 6. Did t h e D i s t r i c t Court err i n n o t r e q u i r i n g t h e jury t o r e t u r n a general v e r d i c t reducing t h e amount of damages themselves r a t h e r than reserving t h a t matter f o r t h e c o u r t ? P l a i n t i f f , a s cross-appellant, raises t h e following i s s u e : 1. Did t h e D i s t r i c t Court err i n reducing t h e p u n i t i v e damage award by t h e percentage t h a t t h e jury found t h e p l a i n t i f f t o be negligent? S t a t e Farm f i r s t argues t h a t t h e D i s t r i c t Court should have d i r e c t e d a v e r d i c t i n favor of defendant because p l a i n - t i f f d i d n o t produce an e x p e r t t o t e s t i f y t h a t S t a t e Farm's agent, Robert Heath, was negligent. W e hold t h a t an e x p e r t witness w a s n o t necessary under t h e s e circumstances. The r u l e i s well-established i n Montana t h a t , regarding matters ". . . with r e s p e c t t o which a layman can have no knowledge a t a l l , t h e c o u r t and jury must be dependent on e x p e r t evidence." Callahan v. Burton (1971), 157 Mont. 513, 520, 487 P.2d 515, 518-519, quoting Schwnacher v. Murray Hospital (1920), 58 Mont. 447, 462, 193 P. 397, 402. S t a t e Farm argues t h a t the a c t i o n of i t s agent, Robert Heath, i n f i l i n g a complaint a g a i n s t t h e wrong defendant (1) involves t h e t e c h n i c a l e x p e r t i s e of an a t t o r n e y , (2) must be judged by t h e standards applicable t o a t t o r n e y s , and ( 3 ) t h e testimony of an a t t o r n e y i s necessary i n order t o determine whether t h e conduct conformed t o acceptable p r a c t i c e f o r an a t t o r n e y under s i m i l a r circumstances. I n t h i s case S t a t e Farm's agent, Robert Heath, a n a t t o r n e y , f i l e d t h e complaint a g a i n s t a person who w a s n o t involved i n the accident. Though t h i s f a c t was brought t o t h e a t t e n t i o n of Heath, t h e l i t i g a t i o n w a s pursued t o judg- ment. Whether t h e a c t i o n s of S t a t e Farm's agent and a t t o r n e y under t h e s e circumstanceswere "negligent" w a s well w i t h i n t h e r e a l m of knowledge of a layperson. Nothing l e g a l l y t e c h n i c a l i s involved i n judging Heath's conduct. Expert testimony i s n o t required and, under t h e f a c t s of t h i s case, would n o t have been h e l p f u l . The second i s s u e urged by a p p e l l a n t i s t h a t t h e D i s - t r i c t Court f a i l e d t o properly i n s t r u c t t h e jury on a "negligence standard . " Court's i n s t r u c t i o n no. 6 s t a t e d : "Every person, o r corporation, is responsible f o r i n j u r y t o the person o r property of another, caused by want of ordinary c a r e o r s k i l l , (sub- j e c t t o the doctrine of comparative negligence, which i s defined elsewhere i n these i n s t r u c t i o n s ) . When used i n these i n s t r u c t i o n s , negligence means want of such ordinary c a r e o r s k i l l . Such want of ordinary c a r e o r s k i l l e x i s t s when t h e r e i s a f a i l u r e t o do t h a t which a reasonable and prudent person would o r d i n a r i l y have done under the circumstances of t h e s i t u a t i o n , o r doing what such person under the e x i s t i n g circumstances would n o t have done. " S t a t e Farm objected t o t h e i n s t r u c t i o n f o r t h e reason t h a t S t a t e Farm' s attorney, Robert Heath, was a c t i n g i n h i s professional capacity and t h e s k i l l required of him was ordinary s k i l l of a professional p r a c t i c i n g i n t h e s a m e profession. Defendant proposed an i n s t r u c t i o n which pro- vided: "By undertaking professional s e r v i c e t o a c l i e n t , an a t t o r n e y represents t h a t he has t h e necessary degree of s k i l l and learning t o do so. That decree [ s i c ] of s k i l l and learning i s generally measured by the s k i l l and learning possessed by other attorneys i n good standing p r a c t i c i n g i n s i m i l a r l o c a l i t i e s under s i m i l a r circumstances . "It is h i s f u r t h e r duty t o use t h a t s k i l l and learning a s o r d i n a r i l y used i n l i k e cases by reputable members of h i s profession p r a c t i c i n g i n similar l o c a l i t i e s and under similar circum- stances and t o be d i l i g e n t and use h i s b e s t judgment and learning i n an e f f o r t t o accomplish t h e purpose f o r which he i s employed. "The v i o l a t i o n of any of these d u t i e s is a form of negligence. " I f you should f i n d t h a t Robert E. Heath f a i l e d t o c a r r y our [ s i c ] on any one o r more of these d u t i e s and such f a i l u r e was t h e proximate cause of the damage t o which t h e p l a i n t i f f complains, then your v e r d i c t must be f o r the p l a i n t i f f . "The way i n which you may decide whether Robert E. Heath possessed and used t h e knowledge and s k i l l and c a r e which the law demands of him i s from evidence presented i n t h i s t r i a l by a t t o r - neys c a l l e d as expert witnesses." Our d i s p o s i t i o n of t h e f i r s t i s s u e resolves t h e pro- p r i e t y of giving t h e above-quoted i n s t r u c t i o n offered by S t a t e Farm. W e have held t h a t it was n o t necessary t o c a l l an expert witness and, therefore, it would have been improper t o give the i n s t r u c t i o n offered by defendant. Had defendant offered t h e i n s t r u c t i o n without reference t o the necessity of c a l l i n g expert witnesses, nevertheless, t h e D i s t r i c t Court could n o t have committed e r r o r prejudi- cial t o defendant S t a t e Farm by giving a standard i n s t r u c - t i o n on negligence and refusing the i n s t r u c t i o n proposed by S t a t e Farm. An i n s t r u c t i o n which caused S t a t e Farm1 s a t t o r - ney, Robert Heath, t o be judged by professional standards would only increase the standard of care and r e q u i r e more of S t a t e Farm's attorney than was required under the i n s t r u c - t i o n given by t h e court. Under these circumstances, S t a t e Farm c l e a r l y cannot claim prejudice. I n i t s t h i r d assignment of e r r o r , S t a t e Farm contends t h a t punitive damages should have been withdrawn from t h e jury. Appellant argues t h a t (1) t h e r e was no evidence of compensatory damage, and ( 2 ) the conduct of S t a t e Farm w a s l e g a l l y i n s u f f i c i e n t t o j u s t i f y the submission of a punitive damage issue. There w a s evidence from which t h e jury could i n f e r t h a t t h e p l a i n t i f f suffered r e s t r i c t i o n s , and thereby compensatory damage, from having h i s driving p r i v i l e g e s revoked. Any s u b s t a n t i a l c r e d i b l e evidence of compensatory damages i s s u f f i c i e n t t o j u s t i f y submission of punitive damages t o t h e jury. Lauman v. Lee (1981), - Mont. - , 626 P.2d 830, 38 St-Rep. 499. I n Lauman w e affirmed an award of p u n i t i v e damages although t h e jury f a i l e d t o f i n d any s p e c i f i c d o l l a r amounts of compensatory damage suffered. I n t h i s case t h e jury d i d make a f i n d i n g of compensatory damage and awarded $850 t h e r e f o r . Under these f a c t s t h e r e was s u f f i c i e n t evidence of compensatory damage t o j u s t i f y t h e submission of t h e p u n i t i v e damage i s s u e . Next, a p p e l l a n t a l l e g e s e r r o r i n submission of p u n i t i v e damages claiming i n s u f f i c i e n t evidence of reprehensible conduct on t h e p a r t of S t a t e Farm. This contention i s disposed of i n Graham v. Clarks Fork Nat. Bank (1981), - Mont. , 631 P.2d 718, 38 St.Rep. 1140. I n t h e Graham case w e found s u f f i c i e n t evidence t o j u s t i f y t h e submission of p u n i t i v e damages from t h e following f a c t s : (1) The defendant had seized p l a i n t i f f ' s cows, mistakenly thinking they belonged t o a bank debtor; and ( 2 ) when t h e p l a i n t i f f attempted t o recover h i s cows, t h e bank adamantly refused t o divulge t h e i r l o c a t i o n and t h e r e a f t e r returned them t o t h e wrong location. W e held t h a t such f a c t s r a i s e d an i s s u e f o r t h e j u r y ' s consideration of punitive damages under t h e "recklessness" standard enunciated i n Klind v. Valley County Bank (1924), 69 Mont. 386, 222 P. 439. I n t h i s case S t a t e Farm sued t h e wrong person and though advised of i t s mistake, refused t o make a c o r r e c t i o n . A s i n Graham, these f a c t s a r e s u f f i c i e n t f o r t h e jury t o determine t h a t S t a t e Farm acted r e c k l e s s l y and t h a t it be s u b j e c t t o t h e sanction of p u n i t i v e damages. Next, a p p e l l a n t urges r e v e r s a l f o r f a i l u r e of t h e D i s t r i c t Court t o i n s t r u c t t h e jury on "assumption of r i s k . " S t a t e Farm submitted an assumption of r i s k i n s t r u c t i o n which was refused. S t a t e Farm contends t h a t t h e p l a i n t i f f assumed t h e r i s k by f a i l i n g t o obtain l e g a l counsel and allowing S t a t e Farm t o proceed t o a d e f a u l t judgment. Assumption of r i s k i s a defense which f i n d s i t s r o o t s i n the employee/employer r e l a t i o n s h i p . Its application t o t o r t i o u s conduct outside t h a t r e l a t i o n s h i p should be nar- rowly confined. The essence of assumption of r i s k i s a contention t h a t p l a i n t i f f v o l u n t a r i l y exposed himself t o a danger which was f u l l y appreciated. The conduct involves a subjective standard r a t h e r than the o b j e c t i v e standard applicable t o contributory negligence. Brown v. North Am. Mfg. Co. (1978), 176 Mont. 98, 576 P.2d 711. Here t h e D i s t r i c t Court determined t h e r e was s u f f i c i e n t evidence of carelessness on the p l a i n t i f f ' s p a r t t o r e q u i r e submission of contributory negligence t o t h e jury. However, t h e t r i a l c o u r t determined t h a t assumption of r i s k w a s n o t applicable. There i s no evidence t h a t the p l a i n t i f f f u l l y appreciated the r i s k of n o t obtaining l e g a l counsel. The D i s t r i c t Court d i d n o t abuse its d i s c r e t i o n i n f a i l i n g t o i n s t r u c t on the defense of "assumption of r i s k . " Appellant requested t h e t r i a l c o u r t t o i n s t r u c t on "mitigation of damages" and proposed t h e following i n s t r u c t i o n : "A person who has sustained damage by t h e wrongful a c t of another i s bound t o e x e r c i s e reasonable c a r e and diligence t o avoid l o s s and t o minimize the damages, and he may not recover f o r damages which could have been prevented by reasonable e f f o r t s on h i s p a r t o r by expeditures [ s i c ] t h a t he might reason- ably have made." Counsel f o r t h e p l a i n t i f f objected t o t h e proposed i n s t r u c t i o n f o r t h e reason t h a t t h e D i s t r i c t Court had previously i n s t r u c t e d on comparative negligence and the m i t i g a t i o n i n s t r u c t i o n was repeti. t i o u s . P l a i n t i f f f u r t h e r argued t h a t the proposed i n s t r u c t i o n w a s i n c o n f l i c t with t h e comparative negligence i n s t r u c t i o n because f a i l u r e t o m i t i g a t e damage could prevent recovery r a t h e r than reduce recovery. The D i s t r i c t Court refused t h e i n s t r u c t i o n . S t a t e Farm argues f o r mitigation premised upon t h e same f a c t s submitted t o t h e jury f o r consideration under comparative negligence. W e agree with t h e p l a i n t i f f t h a t , under t h e f a c t s of t h i s case, it would have been improper to i n s t r u c t on "mitigation of damages." The jury properly was allowed t o consider p l a i n t i f f ' s conduct i n f a i l i n g t o respond t o t h e summons and i n f a i l i n g t o r e t a i n counsel, under the compara- t i v e negligence i n s t r u c t i o n . Any negligence found t o e x i s t would properly reduce compensatory damages suffered. Nothing e l s e could be accomplished with a "mitigation of damage" i n s t r u c t i o n and t h e t r i a l c o u r t properly refused t o i n j e c t t h i s r e p e t i t i o u s and p o t e n t i a l l y confusing issue. The l a s t i s s u e r a i s e d by S t a t e Farm c l a i m s e r r o r i n t h e D i s t r i c t Court's r e f u s a l t o allow t h e jury t o r e t u r n a general verdict. Special i n t e r r o g a t o r i e s , usually strongly supported by defense attorneys, were submitted t o the jury and t h e jury made s p e c i a l findings which have been previously s e t f o r t h i n t h i s opinion. The s p e c i a l findings of the jury could n o t have worked any prejudice f o r S t a t e Farm, b u t do provide t h e b a s i s f o r p l a i n t i f f ' s cross-appeal. The v e r d i c t form found t h a t p l a i n t i f f w a s negligent b u t t h a t such negligence w a s n o t a proximate cause of p l a i n t i f f ' s damage. However, the jurors, when l a t e r questioned by t h e D i s t r i c t Court, s t a t e d t h a t they intended t o reduce plain- t i f f ' s award by t h e percentage t h e jury found p l a i n t i f f t o be negligent. Eased upon t h i s assurance, t h e D i s t r i c t Court reduced p l a i n t i f f ' s damages by s i x t e e n percent, t h e percen- tage found by the jury t o represent p l a i n t i f f ' s negligence. Both t h e compensatory and punitive awards w e r e so reduced. The j u r y ' s explanation t o t h e D i s t r i c t Court was incon- s i s t e n t with the finding made by t h e jury on t h e v e r d i c t form. However, t h e only p a r t y who could be prejudiced was t h e p l a i n t i f f and t h e p l a i n t i f f does n o t claim e r r o r . P l a i n t i f f concedes t h a t t h e compensatory award can be re- duced by s i x t e e n percent although on t h e v e r d i c t form p l a i n t i f f ' s negligence was n o t found t o be a proximate cause of damage. P l a i n t i f f only a s s i g n s e r r o r a r i s i n g o u t of reduction of t h e p u n i t i v e damage award. This Court has n o t previously r u l e d on t h e question of whether p u n i t i v e damages can be reduced by t h e percentage of p l a i n t i f f ' s contributory negligence. Since t h e purpose of p u n i t i v e damages i s t o punish the defendant and n o t t o compensate t h e p l a i n t i f f , w e f i n d t h a t such an award bears no reasonable r e l a t i o n s h i p t o the p l a i n t i f f ' s conduct. Therefore, w e hold t h a t p u n i t i v e damages cannot be reduced by the percentage of p l a i n t i f f ' s contributory negligence. This holding i s supported by o t h e r j u r i s d i c t i o n s . Arnoco P i p e l i n e Co. v. Montgomery (W.D. Ok. 1980), 487 F.Supp. 1268; Tampa E l e c t r i c Co. v. Stone & Webster Engineering Corp. (M.D. Fla., Tampa Div., 1973), 367 F.Supp. 27. The compensatory damages of $850 a r e reduced by plain- t i f f ' s contributory negligence i n t h e amount of s i x t e e n percent. The p u n i t i v e damage award i n t h e amount of $80,000 is affirmed in t o t a l . This case i s remanded t o t h e D i s t r i c t Court with d i r e c t i o n s t o e n t e r judgment accordingly. W e concur: :Tfi&d ) 9-1 k/J L L 4 j . U Chief us tick n , - / I