Opinion ID: 2604299
Heading Depth: 2
Heading Rank: 1

Heading: Negligence and the Standard of Performance

Text: The architect maintains that the trial court committed reversible error by instructing the jury to apply a negligence standard to the engineer's performance. Two jury instructions are at issue: INSTRUCTION NO. 6 Under the theory of implied indemnity, [the architect] must prove by a preponderance of the evidence that [the engineer] produced a design which was due to [its] negligence and which caused [the architect] to suffer damages as a result of such design. INSTRUCTION NO. 7 In regard to the implied indemnity theory you are instructed that [in] performing professional services for a client, an engineer has the duty to have that degree of learning and skill ordinarily possessed by reputable engineers. It is his further duty to use reasonable diligence and his best judgment in the exercise of his professional skill and in the application of his learning, in an effort to accomplish the purpose for which he was employed. A failure to perform any such duty is negligence. The degree of care, skill and judgment which is usually exercised by an engineer is not a matter within the common knowledge of jurors or lay persons. These standards are within the special knowledge of experts in the field of engineering and can only be established by their testimony. You may not speculate or guess what those standards of care, skill and judgment are but must attempt to determine[ ] this from the testimony of legal experts called for that purpose. On review, this Court considers whether the instructions, taken as a whole, adequately and clearly advise the jury of the applicable law. L. U. Sheep Company v. Board of County Commissioners of County of Hot Springs, 790 P.2d 663, 672 (Wyo.1990). Reversible error from an improper instruction requires a showing on the record that substantial rights were affected. Condict v. Whitehead, Zunker, Gage, Davidson & Shotwell, P.C., 743 P.2d 880, 885 (Wyo.1987). Sufficient prejudice arises from a demonstration that the instruction confused or misled the jury with respect to the proper principles of law. DeJulio v. Foster, 715 P.2d 182, 186 (Wyo. 1986). A number of factors may be considered in measuring the degree of prejudicial error, including: (1) the extent to which there is conflict in the evidence on critical issues; (2) whether or not the respondent's argument to the jury may have contributed to the instruction's misleading effect; (3) whether or not the jury requested a re-reading of the erroneous instruction or of related evidence; (4) the closeness of the jury's verdict; and (5) the effect of other instructions in curing the error. Condict, 743 P.2d at 886 (quoting 1 California Forms of Jury Instruction, Procedures and Instructions § 1.13[3] (1987) (footnotes omitted)). Initially, the engineer contends that the architect's objections to Instruction Nos. 6 and 7 were procedurally inadequate since the architect did not supplement its oral objections with proposed alternative written instructions. In support of its argument, the engineer relies upon Runnion v. Kitts, 531 P.2d 1307 (Wyo.1975), Texas Gulf Sulphur Company v. Robles, 511 P.2d 963 (Wyo.1973), and Logan v. Pacific Intermountain Express Company, 400 P.2d 488 (Wyo.1965). While this Court has previously stated that waiver occurs when a litigant orally objects to the form or language of a jury instruction without submitting a proposed alternative written instruction, we have been less than consistent in our application of the alleged rule. See, e.g., Davis v. Consolidated Oil & Gas, Inc., 802 P.2d 840 (Wyo.1990); City of Cheyenne v. Simpson, 787 P.2d 580 (Wyo. 1990); TG v. Department of Public Assistance and Social Services, Sheridan ( In re CH ), 783 P.2d 155 (Wyo.1989); Hashimoto v. Marathon Pipe Line Co., 767 P.2d 158 (Wyo.1989); Condict, 743 P.2d 880; Haley v. Dreesen, 532 P.2d 399 (Wyo.1975); Runnion, 531 P.2d 1307; Texas Gulf Sulphur Company, 511 P.2d 963; and Logan, 400 P.2d 488. W.R.C.P. 51 [1] provided in pertinent part: No party may assign as error the giving or the failure to give an instruction unless he objects thereto before the jury retires to consider its verdict, stating distinctly the matter to which he objects and the grounds of his objection. The purpose of W.R.C.P. 51 is to require litigants to timely inform the trial judge of contended errors in the jury instructions so that corrections or modifications may be made, if necessary. Davis, 802 P.2d at 843; Story v. State, 721 P.2d 1020, 1045 (Wyo.), cert. denied, 479 U.S. 962, 107 S.Ct. 459, 93 L.Ed.2d 405 (1986). Consistent with the plain language and purpose of W.R.C.P. 51, we now clarify that [a]n objection stating distinctly the objectionable matter and the grounds for objection is sufficient to preserve a jury instruction issue for appeal. 9 CHARLES ALAN WRIGHT & ARTHUR R. MILLER, FEDERAL PRACTICE AND PROCEDURE § 2553 at 643 (1971). We acknowledge, however, that supplementation of an oral objection with proposed alternative jury instructions is the better practice, and we strongly encourage such procedure. Id. at 635. Upon a review of the record, we are satisfied that the architect lodged sufficient objections to Instruction Nos. 6 and 7 for this Court to consider its arguments. The core of the controversy between the parties required the determination of whether it was the architect or the engineer who assumed the ultimate responsibility for the system's failure. The first instance responsibility to the original claimant, the Corps of Engineers, was resolved by the architect's settlement agreement and payment. JUSTIN SWEET, LEGAL ASPECTS OF ARCHITECTURE, ENGINEERING, AND THE CONSTRUCTION PROCESS § 36.01 (3d ed. 1985). Indemnity derives from an express or implied contract and enforces one party's duty to respond for all the damages. Wyoming Bank and Trust Company v. Waugh, 606 P.2d 725, 730 (Wyo.1980). Because no express indemnity agreement existed between the parties, the doctrine of implied contractual indemnity must supply the means to determine the ultimate responsibility. Richardson Associates v. Lincoln-DeVore, Inc., 806 P.2d 790, 811 (Wyo.1991). A cause of action for implied contractual indemnity arises when there is a relationship between the party seeking indemnity and the party against whom indemnity is sought, such that the latter owes an independent duty to the former. Vickery v. Reliable Electric Company, 703 F.2d 488, 491 (10th Cir.1983) (citing Pan American Petroleum Corporation v. Maddux Well Service, 586 P.2d 1220, 1224 (Wyo.1978)). The instruction dispute requires a determination of whether the trial court properly utilized a negligence standard to determine the engineer's underlying responsibility. A case which remains instructive is Miller v. New York Oil Company, 34 Wyo. 272, 243 P. 118 (1926). Miller owned an apartment house in Casper, Wyoming. The personal representative of a tenant who was asphyxiated from carbon dioxide poisoning in one of the apartment's bathrooms successfully sued Miller for negligence. The suit claimed Miller knew that a gas water heater had been improperly installed and negligently failed to warn or correct the condition. While an appeal was pending, Miller agreed to a settlement. Afterward, Miller filed an action for indemnity against the company with which he had contracted to install the water heater, New York Oil Company. This Court defined New York Oil Company's duty to Miller as requiring the exercise of ordinary or due care, and Miller was required to prove that duty had not been performed. 34 Wyo. at 279, 243 P. 118. The Court ruled, under a sufficiency-of-the-evidence standard, that Miller established New York Oil Company's failure to exercise due care. 34 Wyo. at 282, 243 P. 118. New York Oil Company protested that indemnity should not be allowed since Miller was adjudged guilty of negligence in the suit by the deceased tenant's personal administrator. 34 Wyo. at 284, 243 P. 118. The Court held that Miller's liability in the first action grew out of a non-delegable duty he owed the deceased. Id. Because Miller's negligence was constructive or secondary, he could still recover indemnity from New York Oil Company, the primarily negligent party, since its wrongful acts exposed Miller to liability. 34 Wyo. at 283-84, 243 P. 118. In Miller, the court cited an equitable implied indemnity rule that between parties indemnity was available, where one does the act or creates the nuisance, and the other does not join therein, but is merely exposed to liability and suffers damage. He may recover from the party whose wrongful act has thus exposed him. In such case the parties are not in pari delicto as to each other, though as to third persons either may be held liable. 34 Wyo. at 283, 243 P. 118 (quoting Gray v. Boston Gas Light Co., 19 Am.Rep. 324 (Mass.1873)). The modern statement of indemnity is contained in the RESTATEMENT OF RESTITUTION: A person who, in whole or in part, has discharged a duty which is owed by him but which as between himself and another should have been discharged by the other, is entitled to indemnity from the other, unless the payor is barred by the wrongful nature of his conduct. RESTATEMENT OF RESTITUTION § 76 at 331 (1937). The rule applies to contractual or quasi-contractual duties as well as a duty to pay created by a tort. Id. at cmt. b. An essential principle of implied contractual indemnity states that the party seeking indemnity must be without active fault on his part. Wyoming Johnson, Inc. v. Stag Industries, Inc., 662 P.2d 96, 102 (Wyo. 1983) (quoting Eazor Express, Inc. v. Barkley, 441 Pa. 429, 272 A.2d 893 (1971)); Chirco Construction Company, Inc. v. Stewart Title and Trust of Tucson, 129 Ariz. 187, 189, 629 P.2d 1023, 1025 (Ct.App. 1981); 42 C.J.S. Indemnity § 32 (1991). Owings v. Rose, 262 Or. 247, 497 P.2d 1183 (1972), illustrates an implied contractual-indemnity cause of action brought by a group of architects against a structural engineering firm under the RESTATEMENT OF RESTITUTION. The architects contracted with the engineers to design a superior floor for a manufacturing plant but, following the completion of construction, the concrete floor cracked and eroded. Owings, 497 P.2d at 1185. After settling a lawsuit brought by the plant's owner, the architects sued the engineers for indemnity. The court required proof that (1) the party seeking indemnity had discharged a legal obligation or duty owed to a third party; (2) the party against whom indemnification was sought was also liable to the third party; and (3) as between the two parties, the obligation should be discharged by the party against whom indemnification was sought. Id. Applying these standards, the Oregon Supreme Court affirmed the jury's verdict that the engineers' negligence in their flooring design required them to indemnify the architects. Id. at 1186-88. The architect in this case misreads its own authority in arguing that it was severely prejudiced by the challenged instructions. The architect says that the factually similar case of Hill v. George Engine Company, 190 F.Supp. 417 (E.D.La. 1961), should govern. However, a careful reading of Hill reveals that the implied contractual duty owed was breached by the negligent installation of an engine component. Hill owned a tugboat, the M.V. Waw Hoss, which towed barges through a series of Louisiana locks. During one trip, the tugboat's drive system failed to reverse, and a barge it was towing struck and damaged a lock gate. The drive system failed because a small bolt and nut had vibrated loose. Hill settled a damage claim with the Corps of Engineers and sued the George Engine Company, the company which installed the drive system, for indemnification. While no express indemnification agreement existed between the parties, the court found that the George Engine Company's implied-contractual-indemnity duty was to properly perform the work and services and hold Hill harmless from any foreseeable damages resulting from improper performance. Hill, 190 F.Supp. at 420. The court ruled that the George Engine Company negligently installed the drive system and failed to perform its agreement properly, competently, and safely. Id. Instruction No. 6 was fully in accord with this precedent. While the language of Instruction No. 6 represented an inelegantly phrased statement of the law, the instruction correctly required the architect to prove that the engineer was negligent in discharging its contractual duty to design the system. In its answer and counterclaim, the architect understood that, despite the contractual origin of the indemnity action, the engineer's underlying negligence was at issue. The architect averred that the engineer's negligence is the direct and proximate cause of the Corps of Engineers' claim and that the engineer was entirely responsible for the financial settlement the architect paid. The architect's action retained its character as being one for a breach of contract despite the fact that recovery turned upon the engineer's standard of performance. Weyerhaeuser Steamship Co. v. Nacirema Operating Co., 355 U.S. 563, 569, 78 S.Ct. 438, 442, 2 L.Ed.2d 491 (1958); Ryan Stevedoring Co. v. Pan-Atlantic Steamship Corporation, 350 U.S. 124, 134, 76 S.Ct. 232, 100 L.Ed. 133 (1956). Instruction No. 7 stated a standard of performance for an engineer performing a professional service. The architect challenges the standard-of-performance instruction, arguing that its burden was to prove that the engineer breached its contractual duty, not that a standard of care for professional engineers was violated. The architect's argument misstates the applicable law. The distinction between a contract action and a tort action is that the breach of contract is the failure to perform a duty expressly stated or implied by the terms of the agreement, whereas a tort is the violation of a duty which is imposed by law. Tamarac Development Company, Inc. v. Delamater, Freund & Associates, P.A., 234 Kan. 618, 675 P.2d 361, 363 (1984). The applicable standard of performance for the engineer was that which arose or was implied by the contract with the architect. Resolving the question of whether Instruction No. 7 stated an appropriate standard of performance requires an analysis of the duty imposed by the oral agreement between the architect and the engineer to design the system. The traditional formulation of a professional's standard of performance directs: An engineer's duty is to exercise such care, skill, and diligence as people engaged in the engineering profession ordinarily exercise under like circumstances. JAMES ACRET, ARCHITECTS & ENGINEERS § 1.08 at 12 (2d ed. 1984). This standard of performance is imposed by law in tort actions for negligence. Weston v. New Bethel Missionary Baptist Church, 23 Wash. App. 747, 598 P.2d 411, 414 (1978) (stating the rule that an engineer is guilty of negligence if he fails to apply the skill and learning which is required of similarly situated engineers). We recognize that the contracting parties may agree to a standard of performance which is greater than the typical skill usually exercised by others of its profession standard. See, e.g., Town of Winnsboro v. Barnard & Burk, Inc., 294 So.2d 867, 877-78 (La.Ct.App. 1974) (en banc). In this action, however, no express contract terms existed which varied the standard of performance. Richardson Associates, 806 P.2d at 811. The oral agreement between the architect and the engineer called for a system design. Our task is to consider what standard of performance is implied by such an agreement. The architect argues that the engineer impliedly agreed to provide a workable system useful to the Corps and to hold [the architect] harmless for damages incurred when the designed system would not work. We believe this statement overreaches by implying a warranty of fitness for a particular purpose is applicable to professional services. The implied warranty of fitness for a particular purpose is applicable to contracts for the sale of goods, not for professional services. See Wyo.Stat. § 34.1-2-315 (1991). An engineer, or any other so-called professional, does not warrant his service or the tangible evidence of his skill to be merchantable or fit for an intended use. These are terms uniquely applicable to goods. Rather, in the preparation of design and specifications as the basis of construction, the engineer or architect warrants that he will or has exercised his skill according to a certain standard of care, that he acted reasonably and without neglect. Breach of this warranty occurs if he was negligent. Accordingly, the elements of an action for negligence and for breach of the implied warranty are the same. Audlane Lumber & Builders Supply, Inc. v. D.E. Britt Associates, Inc., 168 So.2d 333, 335 (Fla.Ct.App.1964), cert. denied, 173 So.2d 146 (Fla.1965). The sound policy reason to avoid an outcome-oriented standard, such as the one the architect suggests, is that the  likely understanding between the client and the professional designer is not that a successful outcome will be achieved when professional services are purchased but that the professional will perform as would other professionals. SWEET, LEGAL ASPECTS OF ARCHITECTURE, ENGINEERING, AND THE CONSTRUCTION PROCESS, supra, § 17.07 at 355 (emphasis in original). We find nothing in the agreement between the architect and the engineer which would require a variance from the standard of performance applicable to professionals. Instead, we believe sound policy reasons support the continued vitality of the majority rule limiting liability to situations in which the professional is negligent. Architects, doctors, engineers, attorneys, and others deal in somewhat inexact sciences and are continually called upon to exercise their skilled judgment in order to anticipate and provide for random factors which are incapable of precise measurement. The indeterminate nature of these factors makes it impossible for professional service people to gauge them with complete accuracy in every instance. Thus, doctors cannot promise that every operation will be successful; a lawyer can never be certain that a contract he drafts is without latent ambiguity; and an architect cannot be certain that a structural design will interact with natural forces as anticipated. Because of the inescapable possibility of error which inheres in these services, the law has traditionally required, not perfect results, but rather the exercise of that skill and judgment which can be reasonably expected from similarly situated professionals. City of Mounds View v. Walijarvi, 263 N.W.2d 420, 424 (Minn.1978). The use of expert witnesses to establish the professional standard of performance is consistent with Wyoming law. For example, a physician's performance can only be evaluated after expert opinion about the standard of care is offered unless the care is so obviously wanting in reasonable skill that laymen would discern it. Roybal v. Bell, 778 P.2d 108, 112 (Wyo. 1989); Govin v. Hunter, 374 P.2d 421, 424 (Wyo.1962). Similarly, expert opinion was required to determine if the engineering design submitted by the engineer was below the requisite level of professional skill and competence. Govin, 374 P.2d at 422-23. Instruction No. 7 accurately stated the professional standard of performance present in the contract between the architect and the engineer. Instruction No. 6 correctly defined a violation of that standard as occurring if the engineer was negligent. The question of whether indemnity should be allowed or denied on the basis of the engineer's breach of that standard or the architect's independent negligence then became a question of fact for the jury's determination. Pearson Ford Company v. Ford Motor Company, 273 Cal.App.2d 269, 78 Cal.Rptr. 279, 283 (1969).