Rehearing Denied and Rehearing En Banc Denied August 18, 1970.
RIVES, Circuit Judge:
The plaintiff, Richard W. Gorsalitz, sued the defendant, Olin Mathieson Chemical Corporation, for damages to compensate for extremely severe personal injuries sustained by the plaintiff while working on the premises of the defendant in Lake Charles, Louisiana.
The final two interrogatories and the jury's answers were as follows:
The defendant Olin moved under Rule 50(b) for judgment n.o.v. and, in the alternative, for a new trial. Also, as third party plaintiff, the defendant moved for judgment for indemnity against the third party defendant, General Electric; which, in turn, moved to dismiss the third party complaint or, in the alternative, for a directed verdict in its favor.
The district court denied the defendant's motion for judgment n.o.v. It found that the verdict should be reduced from $1,380,000.00 to $690,633.00 and that, if plaintiff filed an appropriate remittitur within twenty days, the motion for new trial would be denied. Otherwise the verdict would be set aside and the motion for new trial would be granted. The plaintiff filed the remittitur under protest and reserved his right to appeal. The court entered judgment for the plaintiff Gorsalitz (and the intervenor Electric Mutual) against the defendant Olin for $690,633.00 with interest from the date of the judgment. It denied Olin's claim for indemnity and entered judgment in favor of the third party defendant, General Electric.
Olin appeals both from the judgment against it in favor of the plaintiff and the intervenor, and from the judgment denying its claim of indemnity against General Electric. Gorsalitz appeals from the final judgment and from the order conditionally requiring him to file a remittitur.
Olin's Appeal Against Gorsalitz
Olin asserts against Gorsalitz a single claim of error, namely:
We find no merit in Gorsalitz's counterpoints Nos. 1 and 2. Olin did file a motion under Rule 50(b) for judgment n.o. v. and in the alternative for a new trial, asserting as one ground that "[t]he Court erred in submitting to the jury over the timely and proper objections of this Defendant Interrogatories Nos. 1 and 2 and the sub-parts thereof." However, Olin's objections to those two interrogatories were so phrased as not to assert a contention that plaintiff's exclusive remedies were under the Louisiana Workmen's Compensation Law. Nor did Olin's motion for judgment n.o.v. or for a new trial otherwise attack the jury's answer to Interrogatory No. 5.
We do not, however, agree with Gorsalitz's view that the cases upon which
Gorsalitz's counterpoint No. 3 to the effect that Texas law, rather than Louisiana law, should determine the question of whether Gorsalitz could maintain a tort action for damages against Olin is precluded by this Court's decision of the identical underlying question of law in Tucker v. Texas Company, 1953, 203 F.2d 918. We see no purpose in adding to the discussion of the question contained in that case, or in accepting Gorsalitz's implied invitation to consider overruling that case, unless we reach the conclusion that under Louisiana law the judgment should be reversed for failure to grant Olin's motion for a directed verdict.
On his counterpoint No. 4, Gorsalitz fares better. We find that the evidence presented a fact issue as to whether the work contracted for by General Electric was a part of Olin's "trade, business, or occupation" within the meaning of LSA-R.S. 23:1061, quoted in n. 2, supra, and the jury's finding on that issue in its answer to Interrogatory No. 5 must be sustained.
By its answers to interrogatories, Olin admitted that, on October 21, 1964, it contracted with General Electric to effect repairs on two large transformers then located in Olin's plant at Lake Charles, Louisiana. They were the only transformers of such size and nature located in the plant. The two transformers were installed in 1948. Olin had never through its own employees performed any major repairs upon those transformers. Olin further answered the interrogatories:
Olin's supervisor of steam power and utilities, in Olin's employ for 24 years, testified that to buy the equipment to do this type of work would constitute "an unjustified expenditure" for Olin, for example, a filter press to filter this type of oil would cost about $5,000.00.
An electrician employed by Olin for 18 years testified that Olin is not staffed to do the type of work contracted for by General Electric, and that during the past eighteen years Olin has contracted out that type of work either to General Electric or to Westinghouse.
Another electrician who had been employed by Olin for 24 years did not remember that these transformers had ever been serviced before.
Olin's purchasing agent, in its employ for 19 years, testified that this type of large industrial transformer was repaired under contract either by Westinghouse Electric Corporation or by General Electric.
An electrical contractor, familiar with the practice of industries in Louisiana and in the Gulf Coast area, testified that industrial organizations do not keep the type of equipment necessary to do this kind of checking and repair, but that this is a type of specialized repair and inspection, customarily contracted out either to General Electric or to Westinghouse.
Olin's manager of industrial relations testified that Olin is a very large corporation with operations throughout the world. It has 700 employees in its plant at Lake Charles, Louisiana, where it produces such inorganic chemicals as soda ash, caustic soda, ammonia, hydrocene, nitric acid and sodium nitrate. Just what service the two transformers perform in that business is not explained, but we think the inference is clear that the transformers are an integral part of the business. The critical question, however, is not whether the transformers themselves are essential to the business, but whether the work being done by Gorsalitz when he was injured was a part of Olin's trade, business or occupation.
Originally the district court simply submitted Interrogatory No. 5 in the form requested by the defendant Olin and without any explanation or instruction. After several hours' deliberation, the court received a note from the jury, upon which the Judge conferred in chambers with counsel and then instructed the jury:
After the jury retired, defendant Olin's counsel stated that while he agreed with the first part of the charge relating to burden of proof, he objected to the remainder of the instruction, but stated no grounds for his objection. Thus, under Rule 51, Fed.R.Civ.P., Olin has not preserved for review its objection to the court's instruction to the jury. It has, however, preserved for review its motion for a directed verdict based on the ground that the work being done by plaintiff Gorsalitz "constituted a part of the trade, business and occupation of this Defendant; this Defendant was, therefore, in law Plaintiff's employer and Plaintiff's sole cause of action, if any, arising out of said occurrence is for Workmen's Compensation benefits."
The State Courts' construction of the two State statutes involved is, of course, binding upon the federal courts in this diversity action. This Court has made a number of attempts to divine the meaning of the controlling Louisiana cases.
There are cases where the work is, as a matter of law, an essential and integral part of the principal's business.
This Court's latest decision on the subject has said:
Arnold v. Shell Oil Co., 5 Cir. 1969, 419 F.2d 43, 50.
On the other hand, speaking of cases where the activities were more remotely connected with the principal's business, the Court of Appeals of Louisiana, Third Circuit, said:
Shird v. Maricle, supra, 156 So.2d at 478-479.
It is worth repeating that the district court charged the jury without objection that "It is agreed that the burden of proof to establish the affirmative of Interrogatory Number 5 is upon the defendant, Olin Mathieson Chemical Corporation." In objecting to the remainder of the instruction, Olin's counsel stated particularly that he concurred in this part of the charge relating to the burden of proof. Under the federal standard for testing the sufficiency of the evidence for submission of a case to the jury,
In the present case, the jury could reasonably and properly believe from the evidence (1) that the inspection and repairs being executed by Gorsalitz were not ordinary and regular maintenance but were part of an infrequent major overhaul made at irregular intervals, often exceeding eighteen or twenty years;
Since the evidence is ample to sustain such findings or beliefs, the jury could reasonably and properly conclude that Olin and the industry as a whole were not going counter to the statute in always contracting out the kind of work being performed by Gorsalitz. Since such contracts were always with either General Electric or Westinghouse, large corporations of undoubted solvency, no reasonable argument could be presented that the practice operated to defeat the purpose of the Louisiana statute:
Shird v. Maricle, supra, 156 So.2d at 478. Indeed, for the jury to determine that the work being done by Gorsalitz at the time of his injury was part of Olin's regular trade, business, or occupation would be to depart from the purpose of the statute and instead to convert the statute into an instrument for forcibly treating a relationship as that of master and servant, which the parties themselves considered as principal and an independent contractor's employee, then a business invitee of the principal. Such an application of the statute would be a perversion of the meaning and intent of the statute. We conclude that the district court properly denied Olin's motion for a directed verdict.
We come next to the several questions presented by Gorsalitz's appeal.
Does the granting of a remittitur in jury cases violate the Seventh Amendment's command that "no fact tried by a jury shall be otherwise re-examined * * * than according to the rules of the common law"?
We agree with Professor Moore that the use of remittitur by federal district courts "has become so universal * * *, and has had the apparent approval of so many Supreme Court cases, that it cannot be contended that its use is unconstitutional without a judicial uprooting of precedent akin to that effected by Erie-Tompkins," 6A Moore's Federal Practice, 2nd ed., ¶ 59.05, pp. 3739, 3740 (footnotes omitted).
The Supreme Court has repeatedly approved the practice. In Northern Pacific R.R. Co. v. Herbert, 1886, 116 U.S. 642, 646, 647, 6 S.Ct. 590, 29 L.Ed. 755, Justice Field speaking for the Court said:
That holding and the remittitur practice were fully discussed by the elder Justice Harlan in Arkansas Valley Land & Cattle Co. v. Mann, 1889, 130 U.S. 69, 72-76, 9 S.Ct. 458, 32 L.Ed. 854, saying in part:
130 U.S. at 74, 9 S.Ct. at 459.
Remittitur is reconciled with the Seventh Amendment by Mr. Justice Sutherland speaking for the Court in Dimick v. Schiedt, 1935, 293 U.S. 474, 486, 55 S.Ct. 296, 79 L.Ed. 603:
In theory at least the plaintiff's constitutional right of trial by jury is preserved.
Was there sufficient factual basis to justify the trial court in conditionally requiring any remittitur?
The ground of defendant Olin's motion for new trial relating to damages reads as follows:
There was no claim of any improper argument or of any appeal to passion or prejudice in the introduction of evidence or the conduct of the trial. Instead, the district court found that the facts of the case, the severity of the injury and the medical treatment aroused undue sympathy on the part of the jury.
In a recent case of this kind, Taylor v. Washington Terminal Company, 1969, 133 U.S.App.D.C. 110, 409 F.2d 145, cert. den. 396 U.S. 835, 90 S.Ct. 93, 24 L.Ed.2d 85, Judge Skelly Wright has evolved a practical test of "abuse of discretion." We quote at some length, omitting footnotes:
409 F.2d at 147-149.
We think the same test should be applied in deciding whether the trial court erred in requiring some remittitur as a condition for denying a motion for new trial. Applying that test in the light of the present record, we think that the trial judge, in the exercise of his necessarily broad discretion, could properly find that some part of this large verdict resulted from undue sympathy on the part of the jury. We hold, therefore, that the district court did not err in conditionally requiring some remittitur, and pass on to the question of the amount of remittitur required.
What action should this Court take as to the amount of remittitur?
The jury answered Interrogatory 6 with one lump sum, $1,380,000.00. In its memorandum the district court undertook to consider various elements of damage. As to "loss of earnings from date of injury to trial," it expressed the view that it was reasonable for the jury to award $46,213.00; as to "loss of earnings from time of trial for life expectancy," it stated, "The court believes that $250,000.00 will reasonably compensate the plaintiff for loss of future earnings for the duration of his life"; as to "medical expenses incurred to date of trial," the court found a figure of $56,000.00; as to "medical expenses from date of trial for life expectancy," the court found that the jury could determine that an additional $66,120.00 in future medical expenses was probable. The court then said that "The foregoing amounts total $490,633.00 which leaves $889,367.00 to pain and suffering," and then considered the elements of "pain and suffering, past and future," finally concluding:
Gorsalitz, as appellant, vigorously attacks the court's computations of the various items of damages. We pretermit consideration of such detailed criticisms of the court's rationale because we agree with Gorsalitz's over-all attack that the court committed an error of law in failing to apply the proper test of excessiveness, which we hold was the maximum which the jury could reasonably find. We agree with the view expressed in 3 Barron & Holtzoff, Federal Practice
We need not write at length on this standard applicable to determining the amount of remittitur because it has been so fully and ably discussed by Judge Rubin in Glazer v. Glazer, E.D.La.1968, 278 F.Supp. 476, 478-482. We adopt the rationale of Judge Rubin in that part of his opinion.
In the present case the district court simply substituted its view of a reasonable amount to award the plaintiff for the verdict of the jury. The forceful language of Mr. Justice Sutherland employed in another context in Dimick v. Schiedt, supra, would aptly describe the result of an affirmance of the amount of remittitur required by the district court:
293 U.S. at 487, 55 S.Ct. 301.
We come next to Gorsalitz's contention that interest on the final judgment should run from the date of return of the jury verdict.
Rule 58, Fed.R.Civ.P., prescribes the respective duties of the court and of the clerk as to the entry of judgment upon a verdict of a jury. Upon a general verdict for a sum certain "the clerk, unless the court otherwise orders, shall forthwith prepare, sign, and enter the judgment without awaiting any direction of the court." "Upon a special verdict or a general verdict accompanied by answers to interrogatories, the court shall promptly approve the form of the judgment, and the clerk shall thereupon enter it." Rule 58 further provides that "[a] judgment is effective only when entered as provided in Rule 79(a)."
28 U.S.C. § 1961 provides that "interest shall be calculated from the date of the entry of the judgment, at the rate allowed by State law." Article 5072 of Vernon's Annotated Texas Statutes provides in part that, "All judgments in the courts of this State shall bear interest at the rate of 6% per annum from and after the date of judgment * * *."
The jury verdict was returned on October 10, 1968. One week later, on October 17, 1968, the defendant Olin filed its motion for judgment n. o. v. and in the alternative for a new trial. The district court entered its memorandum opinion indicating that it would require a remittitur as a condition for denying the motion for new trial on March 20, 1969. The plaintiff Gorsalitz filed his remittitur under protest on April 8, 1969. The final judgment for $690,633.00 "with interest thereon from this date at the rate of six per cent (6%) per annum until paid" was entered on April 18, 1969.
A similar question was decided by the Second Circuit in Murphy v. Lehigh Valley R. Co., 1946, 158 F.2d 481, 485:
Whatever might be our ruling if we consider the procedural rules alone, a more substantial question as to the peculiar nature of the jury's verdict must be considered in this case. Interrogatory No. 6 and the jury's answer have been quoted early in this opinion. The interrogatory asked what amount of money "if now paid in cash" will reasonably compensate the plaintiff. The court instructed the jury:
Thus the jury's verdict was based upon the premise that the amount answered be "now paid in cash." Upon this substantive basis, we think that the amount ultimately awarded by the court's final judgment should draw interest from October 10, 1968, the date of the jury's verdict.
Olin's Appeal Against General Electric
Olin, in a third-party complaint against General Electric (G.E.), sought indemnification for its liability to Gorsalitz. The complaint was premised upon the provisions of an indemnity clause printed on the reverse side of a "service order" submitted by Olin to G.E. several days before Gorsalitz's injury. The district court in a well-reasoned opinion entered judgment for G.E. On appeal Olin contends that, as a matter of law, the district court erred in failing to enter judgment for Olin pursuant to the indemnity agreement. However, we find that the district court properly entered judgment for G.E.
Initially, the conflict-of-laws question must be resolved. As a federal court in a diversity case, we must follow and apply the conflict rules of Texas. Klaxon Co. v. Stentor Co., 1941, 313 U.S. 487, 61 S.Ct. 1020, 85 L.Ed. 1477; Center Chemical Co. v. Avril, Inc., 5 Cir. 1968, 392 F.2d 289. We agree with the district court, and both parties are in accord, that the interpretation of a contract executed in Texas but to be performed wholly outside the state is governed by the law of the place of performance. Cockburn v. O'Meara, 5 Cir. 1944, 141 F.2d 779, 782; Castilleja v. Camero, Tex.1967, 414 S.W.2d 424, 426. Therefore, the law of Louisiana is controlling in our interpretation of Olin and G.E.'s indemnity agreement.
The relevant portion of the indemnity clause provides:
It is clear under Louisiana law that indemnification for one's own negligence must be specifically expressed and made unmistakably plain.
The critical language of the indemnification agreement under consideration is that G.E. agrees to indemnify Olin for any claim, loss, liability, etc., resulting from injuries, death or damages "occasioned by acts or omissions, whether or not negligent, of [G.E.'s] officers, employees, agents or subcontractors * * *." This language fails to meet the "clear and specific" test of Louisiana law that G.E. intended to indemnify Olin for Olin's own negligence. To the contrary, a reasonable construction of the language would be that G.E. intended to indemnify Olin only for acts or omissions of G.E.'s employees. In that there is no evidence that Gorsalitz's injuries resulted from acts or omissions of G.E.'s officers, employees, agents or subcontractors,
Olin's entire argument is premised on Jennings v. Ralston Purina Co., supra, the only relevant Louisiana case which we have found that permitted indemnification for the indemnitee's own negligence. We must conclude, however, as did the district court, that Jennings is factually distinguishable. The indemnitee agreement in Jennings provided that the contractor-indemnitor hold the owner-indemnitee harmless from "any loss, damage, liability and expense * * directly or indirectly arising or growing out of the performance of this Contract * * *." 201 So.2d at 174. The court concluded that, regardless of how strictly
A comparison between the Jennings agreement and Olin and G.E.'s agreement demonstrates a clear and unequivocal intent in Jennings, as compared to the contrary intent in this case, to indemnify the indemnitee against his own negligence. That Jennings is distinguishable is also demonstrated by a recent Louisiana case which discusses Jennings and the other Louisiana cases in this area. Arnold v. Stupp Corp., La. App.1967, 205 So.2d 797, 799, 802-803.
Insofar as concerns either Olin's appeal against Gorsalitz or Olin's appeal against General Electric, the judgments are affirmed. As to Gorsalitz's appeal, the respective amounts of the remittitur and of the final judgment are vacated and the case is remanded for redetermination of the amount of conditional remittitur and the entry of such orders and judgments as are not inconsistent with the foregoing opinion. The costs of appeal are taxed against Olin.
Affirmed in part, and in part vacated and remanded.
ON PETITION FOR REHEARING AND PETITION FOR REHEARING EN BANC
The Petition for Rehearing of Olin Mathieson Chemical Corporation is denied and no member of this panel nor Judge in regular active service on the Court having requested that the Court be polled on rehearing en banc (Rule 35 Federal Rules of Appellate Procedure; Local Fifth Circuit Rule 12), the Petition for Rehearing En Banc is denied.
LSA-R.S. 23:1032 and 23:1061.
"In addition to this, this piece of bone which is decaying, becoming infected, might damage the remaining of the soft tissue or hard structure tissue. This is why we feel that it is better according with the clinical adjustment at the time we see the patient, if it is wise to wait or maybe operate."
The operations are performed under local anesthetic. The patient continues mentally aware and feels some pain and discomfort. The surgeon foresees a probability of future operations to remove sharp pieces of bone and prevent pain and discomfort every three to six months:
Gorsalitz's right middle ear and his external ear have been destroyed. His seventh cranial nerve which supports motor functions to most of the muscles of expression of the face was destroyed. An opening into the maxillary sinus has persisted since his injury and food can get in and come out of his nose. He complains of headaches and dizziness on occasions. In a spell of dizziness shortly before the trial, he fell and broke his leg.