Opinion ID: 414040
Heading Depth: 2
Heading Rank: 4

Heading: Third-Party Suit.

Text: 57 Zurich filed its third-party subrogation action against Black & Veatch shortly after SJLP brought suit against Zurich. Zurich alleged that Black & Veatch negligently designed and installed Boiler No. 6 and that any damage to the boiler resulted from Black & Veatch's negligence. 11 58 After SJLP presented its evidence against Zurich and the Fire Carriers, Black & Veatch moved for a directed verdict on Zurich's third-party complaint. Although Zurich had not yet presented any evidence, the trial court granted the directed verdict. The trial court based its decision on the testimony of SJLP's officers and employees, holding that SJLP, by its own admission, had been, as a matter of law, contributorily negligent in operating the boiler. Accordingly, the court ruled that Zurich could not bring a third-party negligence action against Black & Veatch. 59
60 Black & Veatch designed SJLP's electrical generating station located in St. Joseph, Missouri. Boiler No. 6 is part of that station. The boiler burns fuel to heat water into steam, which in turn rotates a turbine and generates electricity. The boiler is approximately ten stories tall. 61 Using a series of instruments, plant operators control the water level in the boiler drum and the startup process of the boiler. The startup is the period of time, generally several hours, needed to heat the water in the boiler to the point that it will generate enough steam to operate the turbine. During the startup, the water level fluctuates. The boiler operators may add or drain water to maintain a normal water level. The water level must not be allowed to drop too low, however, or the boiler may be damaged by overheating. 62 The operators use two general types of instruments to measure the water level in the boiler drum. The first is a direct reading Yarway gage glass and the second is an independent remote water level instrument. The boiler had three different remote water instruments: a Yarway normal level indicator, a Foxboro drum level indicator and recorder, and a Bacton drum level switch. In addition, the instruments are all connected to an alarm system of horns and lights designed to indicate an abnormal water level. 63 Before the direct reading Yarway gage glass and the three remote water level instruments will accurately represent the water level, the operators must follow certain preliminary procedures. Each of the three remote water level instruments has sensing lines that measure the water level responding to pressure created by the weight of water or steam in those sensing lines. In order for the remote instruments to give accurate readings, the sensing lines must be completely full of water. Preferably, the sensing lines should be filled before the start up process begins. 64 The direct reading Yarway gage glass is considered the most reliable of the water level instruments, and was usually the instrument to which SJLP afforded the most deference. The gage glass is a vertical pipe attached to the water drum. Through a system of prisms, lights, color strips and mirrors, the gage allows the operators to see the water level in the pipe, and, if it is functioning properly, the level in the pipe will be the same as that in the drum. 65 To check the accuracy of the gage glass, a process known as a blowdown is used before starting up the boiler. To conduct a blowdown, the operators seal off the water supply from the drum to the vertical pipe and drain the water from the pipe. If the gage glass is working properly, it will indicate that no water is in the drum. 66 Because the gage glass is more reliable than the remote instruments, the operators at SJLP generally conducted a blowdown before starting up the boiler. They did not, however, always fill the sensing lines in the remote instruments. 67
68 In ruling on Black & Veatch's motion for a directed verdict, the district court found that SJLP failed to follow any of the above cautionary procedures to ensure the instruments were accurate on the night the boiler was damaged. The court found, based on the testimony of the boiler operators called by SJLP, that the operators neither filled the sensing lines in the remote instruments nor conducted a blowdown of the gage glass prior to startup. Furthermore, the court found that throughout the startup procedure, SJLP's boiler operators ignored several signs that indicated something was wrong and that the startup process should have been halted. The court stated that had the operators heeded these warning signals and shut the boiler down earlier, very little damage would have resulted to the boiler. 69 The trial court concluded that it was not necessary for Zurich and the Fire Carriers to present any evidence against Black & Veatch because: (1) SJLP's operators' testimony rose to the level of a judicial admission of contributory negligence; (2) no reasonable person could rightfully disagree that SJLP was contributorily negligent; (3) Zurich's and the Fire Carriers' causes of action against Black & Veatch were identical to SJLP's; (4) SJLP could not controvert its witnesses' testimony; and (5) Zurich, because it stood in the shoes of SJLP, was bound by SJLP's testimony. 70 After reviewing the record, we determine that the trial court erred in failing to hear all the evidence on the issue of contributory negligence before granting a directed verdict. Rule 50(a) of the Federal Rules of Civil Procedure provides that a party may move for a directed verdict at the close of the evidence offered by an opponent. 12 Under the district court's rationale, the relevant opponent after whose presentation of evidence the directed verdict could be granted was SJLP. The court reasoned that because Zurich stood in the shoes of SJLP as a subrogee to SJLP's rights, Zurich was bound by the judicial admissions which SJLP's testimony effectively created. 71 In the context of this case, however, Zurich and SJLP cannot fairly be characterized as the same opponent. While Zurich may stand in the shoes of SJLP insofar as being bound by SJLP's testimony and being subject to any defenses available against SJLP, Zurich is not limited to SJLP's evidence in proving its case. Had Zurich been allowed to present its evidence, Zurich may have been able to explain or elaborate on the testimony of SJLP's operators. Zurich might have been able to convince a reasonable person that the operators were not contributorily negligent in shutting down the boiler two hours later than the trial court found prudent. The trial court held that SJLP's operators' testimony rose to the level of judicial admissions. SJLP, however, carried the burden of explaining or justifying the actions of its operators. SJLP's cause of action against Zurich and the Fire Carriers was based in contract. Thus, whether the testimony SJLP presented served to indicate contributory negligence on its part did not affect its claims against the Fire Carriers. Zurich's cause of action against Black & Veatch, on the other hand, rested on the tort theory of professional negligence. Zurich carried the burden of rebutting the evidence of contributory negligence already in the record in order to make a case submissible for the jury. 72 On appeal, Zurich contends that had it been allowed to put on its case it would have presented evidence that SJLP's operators were not contributorily negligent when starting up the boiler. Zurich states that it would have called as a witness Riley Woodson, an engineer for Black & Veatch who was in charge of designing the boiler and who was familiar with its operation. Zurich states that Woodson testified in his pretrial deposition that he believed SJLP's operators acted properly under the circumstances, and that there were a host of considerations the operators had to take into account in addition to the warning signals cited by the trial court. Woodson also stated that, under the circumstances, it is very difficult to speculate after the fact whether the instruments and information available to the operators unequivocally showed that the operators should shut down the boiler. 73 In addition to offering Woodson's testimony, Zurich argues that several boiler operators who were on duty during the startup were not called by SJLP to testify, and that one of these witnesses might have offered evidence showing the operators did not act carelessly. Zurich argues that one of these witnesses might have testified that: (1) someone did blowdown the gage glass before startup; (2) a blowdown is not the only way to ensure accuracy of the gage glass; and (3) on the night of the startup it was not clear the boiler was functioning abnormally or that the only proper action to take was to shut down the boiler. 74 Whether Zurich would have been able to survive a motion for directed verdict on this issue after presenting its evidence remains an open question. That issue cannot be resolved on the present record. Accordingly, without expressing any view as to the sufficiency of Zurich's case, we reverse the district court's dismissal of Zurich's third-party action and order a new trial on that issue. 75