Kimberley Hoff 17 Nov 2012 PAR 116 Case Brief #2 Case Name: Atler v. Murphy Enterprises Inc.

Case Citation: 136 N.M. 701, 1054 P.3d 1092 (N.M. App. 2004). FACTS On 26 Sept 1998, Plaintiff Vanessa Alter was injured on a ride call the Cliff Hanger at the New Mexico State Fair; the ride was owned by Butler Amusements, Inc. and leased to Defendant Murphy Enterprises, Inc. with a contract that stipulated providing qualified personal to operate and maintain the ride. Defendant also had a contract with the State Fair to provide midway attractions requiring them to maintain all rides and inspect them daily1. Other Defendants were included in the initial complaint but Plaintiff settled with or dismissed claims with them before trial. Defendant admitted negligence but denied it was reckless or the proximate cause of Plaintiffs injuries. Plaintiff was awarded $371,330 in compensatory damages, with the Defendant liable for 66% of injuries, and punitive damages of $998,725. Defendant appealed on five points: Error of the trial judges instructions on the punitive damages standard, Error in not rejecting punitive damages as a matter of law due to insubstantial evidence, Error in failing to offset damages by amount of Plaintiffs settlement with other defendants, Error in refusal to include settled Defendant Safety Counselling, Inc. (SCI) on the special verdict form allocating fault, And error in instruction not to consider remedial measures taken by manufacturer Dartron as evidence of negligence, creating juror prejudice against Defendant. ISSUE Is it permissible under due process for jury instructions to accommodate punitive damages being assessed against a corporate defendant for negligent behavior and may those instructions be challenged on appeal? May substantial evidence be reweighed on appeal? What is the standard for reasonability of punitive damages? When must punitive damages be offset? When may non-parties be considered for allocation of fault in a verdict?
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Carnival Ride Insurance Act, NMSA 1978, 57-25-1 57-25-6 (1993, as amended through 1996).

May subsequent remedial measures of a third party be admitted as evidence of negligence? RULE Jury instructions become the law of the case against which the sufficiency of the evidence is to be measured2.Objections must be raised in specific language before the retirement of the jury3. Due process is not violated by accommodating punitive damages for negligent corporate defendants. Substantial evidence claims will not be reweighed unless the trial court was grossly in error4. Punitive damages are reviewed de novo on appeal5 and are generally reasonable if they are a single-digit multiple of compensatory damages6. Offset of punitive damages must take place when a case is tried under joint and several liability7. In order to be considered for allocation of fault, the defendant must show that the non-party had a duty that was breached and was a proximate cause of the plaintiffs injuries8. Subsequent remedial actions are usually not admissible as evidence of negligence9. ANALYSIS Defendant argued that trial court jury instructions erred on several counts, however standard conference on the instructions took place before the jury was retired and multiple changes were made due to points raised by Defendant or Plaintiff, including to the two instructions (9 and 31) that described possible grounds for punitive damages. Defendant did not at that time specifically object to the instructions on grounds of inconsistency so objections on those grounds cannot be invoked on appeal310. Substantial evidence claims will not be reweighed on appeal unless the lower courts decision is found to be arbitrary or abusive4. Testimony during trial established substantial evidence that Defendant did not meet its contractual requirements with the State Fair to inspect and properly staff independent rides and thus the appeals court did not reweigh the evidence. The appeals court did review the appropriateness of punitive damages de novo, considering degree of reprehensibility of the defendants misconduct, disparity between harm suffered by the plaintiff and the punitive damages award, and the difference between the punitive damages awarded by the jury and the civil penalties imposed in comparable cases5. In this case, Defendants negligence resulted in exactly the kind of harm the inspection mandate was intended to prevent, and thus punitive damages were to be
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State v. Smith, 104 N.M. 729, 730, 726 P.2d 883, 884 (Ct.App. 1986). Gillingham v. Reliable Chevrolet, 1998-NMCA-143, 16-18, 126 N.M. 30, 966 P.2d 197, Rule 1-051(I) NMRA; Echols v. N.C. Ribble CO., 85 N.M. 240, 246, 511, P.2d 566, 572 (Ct.App. 1973). 4 Las Cruces Profl Fire Fighters v. City of Las Cruces, 1997-NMCA-044, 12, 123 N.M. 329, 940 P.2d 177. 5 Aken v. Plains Elec. Generation & Transmission Coop., Inc., 2002-NMSC-012, 17, 132 N.M. 401, 49 P.3d 662. 6 State Farm Mutual Automobile Insurance Co. v. Campbell, 538 U.S. 408, 424-25, 123 S.Ct. 1513, 155 L.Ed.2d 585 (2003). 7 Hinger v., Parker & Parsley Petroleum Co., 120 N.M. 430, 447-48, 902 P.2d 1033, 105051 (Ct.App.1995). 8 Jaramillo v. Kellogg, 1998-NMCA-142, 5, 126 N.M. 84, 966 P.2d 792. 9 Rule 11-107 NMRA. 10 Woolwine v. Furrs, Inc., 106 N.M. 492, 496, 745 P.2d 717,721 (Ct. App. 1978).

expected. The amount of punitive damages was 3.79 times the award of compensatory damages and punitive damages are generally considered reasonable if the ratio of punitive to compensatory damages is in the single digits6. Defendants claim that the case should be considered under joint and several liability, and thus include an offset in punitive damages for the amount other Defendants settled for before trial, was not supported by the fact that all Plaintiffs claims for joint and several liability were dismissed before trial and the verdict was returned on the basis of comparative fault as both parties requested in their jury instructions7. SCI should have been included on the special verdict form as a defendant to whom the jury could allocate fault only if Defendant could show that SCI committed a breach of duty that was a proximate cause of Plaintiffs injuries8. Because there was a period of almost two weeks between SCIs responsibility for inspection ending and the accident occurring, in which time the new inspector reported issues with the ride to Defendant, the trial court correctly found that SCI could not be attributed as a proximate cause and did not include them on the form. Defendants argument that subsequent remedial measures made by the rides original manufacturer, Dartron were not admissible was correct in the general principle of the law9, although since Dartron was not a party to this lawsuit its remedial measures may not have been covered by this principle11. Plaintiff did not protest the exclusion of this evidence but correctly argued that the fact that the jury attributed 30% of the fault to Dartron even when told to exclude that evidence is proof enough that the remedial measures did not in fact prejudice the jury against the Defendant. Error is not grounds for setting aside a civil verdict unless it affects the substantial rights of the parties12. CONCLUSION Trial court punitive damage instructions did not err. Punitive damages were supported by substantial evidence and did not violate due process. Defendant was not entitled to offset Plaintiffs settlement from the jury award. SCI was not improperly omitted from the special verdict form. Third-party remedial measures and their exclusion from evidence did not prejudice the jury against the defendants. Lower court verdict affirmed in full.

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Couch v. Astec Industries, Inc., 2002-NMCA-084, 26, 132 N.M. 631, 53 P.3d 398. Kennedy v. Dexter Consolidated Schools, 2000-NMSC-025, 26, 129 N.M. 436, 10 P.3d 115.