Court Opinion

ID: 9002356
Source: CourtListenerOpinion
Date Created: 2022-11-27 13:17:56.365557+00
Date Added: 2024-06-11T17:11:13.715217
License: Public Domain

ALTIMARI, Circuit Judge,
concurring in part and dissenting in part:
It is clear that a default judgment has the effect of conclusively establishing two elements of a plaintiffs case: whether a defendant’s acts or omissions were negligent and whether those acts or omissions proximately caused an injury to a plaintiff. See Trans World Airlines, Inc. v. Hughes, 449 F.2d 51, 69-70 (1971), rev’d on other grounds, 409 U.S. 363, 93 S.Ct. 647, 34 L.Ed.2d 577 (1973). However, Trans World Airlines was equally clear in holding that a default does not alleviate plaintiff’s burden of establishing that the injury was the proximate cause of all of the damages claimed by the defendant. Id.; see also Fehlhaber v. Indian Trails, Inc., 425 F.2d 715, 717 (3d Cir.1970) (holding that a default judgment did not preclude the court from assessing damages according to comparative negligence). Put differently, a default judgment establishes whether a plaintiff suffered damage; it does not, however, establish the amount of those damages. The holding in Trans World Airlines is both binding and sensible, but the majority pays it no heed. Because the majority’s opinion is at odds with binding circuit precedent, I must respectfully dissent from that portion of the majority’s .decision which holds that where the damages “naturally flow from the injuries pleaded”, a default removes from a plaintiff the burden of establishing that the amount of damages claimed was proximately caused by the injury suffered.
As the majority indicates, the underlying action in this case stemmed from a fire on February 13, 1988, at a warehouse owned by appellant Elul Realty Corp. (“Elul”). Appellee Greyhound Exhibitgroup, Inc. (“GEX”) was a tenant in the building, and suffered significant property damage as a result of the fire. In its complaint, GEX did not allege that Elul’s negligence caused the fire. Rather, the complaint asserts that the fire spread as a result of Elul’s negligence in maintaining a sprinkler system.
At the hearing on damages, the magistrate refused to allow the Supervising Fire Marshall in attendance at the fire to testify in Elul’s behalf. The Fire Marshall had previously submitted an. investigative re*162port in which he described how the fire originated through “horseplay” among a few of GEX’s employees. In an affidavit, the Fire Marshall concluded that even if the sprinkler system had been fully operational it would have had a negligible effect in controlling the fire. As the Fire Marshall noted, the sprinkler head above the point of origin of the fire was in the roof. Therefore, according to the Fire Marshall, even if the sprinkler system had been fully operational, by the time sufficient heat had risen to activate it, the fire would have already reached the flammable liquid stored by GEX, and the sprinkler system could not have controlled the fire. However, the Fire Marshall’s testimony was deemed irrelevant by the magistrate, since it did not speak to the amount of damages caused by the fire.
The district court did not question the exclusion of this testimony; neither does the majority. Indeed, according to the majority, to permit the introduction of evidence of GEX’s contributory negligence “effectively contests settled issues of liability, i.e. who in fact caused the fire damage.” This statement makes clear that the majority’s decision, by inflating the admission of liability to encompass damages as well as injury, has sub silentio relieved the plaintiff of the burden of proving “those damages arising from the acts and injuries pleaded”, Trans World Airlines, 449 F.2d at 70, in direct contravention of Trans World Airlines’ holding that a default judgment only proves “the fact of ... the injury”, not the extent thereof. Id. The end result of this compression is that the plaintiff is relieved of its burden of showing that the breach of the duty of care, for which defendant is liable, proximately caused the damages alleged. See Trans World Airlines, 449 F.2d at 70.
Elul’s default established its liability only as to the fact of the injury alleged, not the extent of the damages proximately caused by that injury. Id. at 69. This is because when a defendant defaults, the “burden of establishing proximate cause is satisfied as to liability if proximate cause is adequately alleged in the complaint.” Id. at 70 (emphasis in original). However, the default judgment did not relieve GEX of establishing that the injury proximately caused by Elul’s negligence was in turn the cause of the “damages arising from the acts and injuries pleaded and in this sense it was [plaintiff’s] burden to show ‘proximate cause.’ ” Id. In other words, Etui's default established the existence of its liability, not the extent of its liability. Id. at 70; see also Restatement (Second) of Torts § 454 cmt b. (1965) (proof of proximate cause is necessary for the establishment of liability, as well as for the establishment of the amount of damages where liability is admitted).
Under Trans World Airlines, Elul’s default precluded it from grounding its defense on an assertion that it properly maintained the sprinkler system. The default also established that Elul’s negligent act proximately caused the fire to spread, which was the injury alleged. Id. at 70. However, the default judgment did not give GEX a “blank check” to recover damages “it had suffered from whatever source.” Id. Consequently, GEX had the burden of proving that all of the damages alleged were proximately caused by the spread of the fire, which by reason of the default was admitted to have been the proximate result of Elul’s negligent acts or omissions. In order to meet this burden, GEX should have been required to prove that none of the damages was proximately caused by the negligence of its own employees in starting the fire or in its negligent storage of flammable materials.
Because the district court failed to require GEX to submit such proof, and in fact denied Elul the opportunity to submit proof that the damages were not the sole result of the injury for which it was liable, I would vacate the award and remand for a determination of the extent to which Elul’s negligence proximately caused the damages suffered by GEX.