DaFONTE v. UP RIGHT INC (1991)

OPINION

STATEMENT OF THE CASE

Fifteen-year-old Mark DaFonte (plaintiff) was injured while working for Van Erickson Ranches (Van Erickson or employer) by a grape harvester manufactured by Up–Right, Inc. (Up–Right).   Following an 11–day trial, the jury found plaintiff's economic damages to be $355,000, his noneconomic damages to be $300,000 and apportioned the fault 15 percent to plaintiff, 45 percent to Van Erickson and 40 percent to Up–Right.   The parties agreed the gross damages award should be reduced by 15 percent ($98,250), the amount attributable to plaintiff's comparative fault.   Pursuant to Civil Code 1 section 1431.2 (Proposition 51), the trial court further reduced the award by $135,000 or 45 percent of the noneconomic damages attributable to Van Erickson.   Judgment was entered in favor of plaintiff and against Up–Right in the sum of $421,750 plus costs.   Both parties appeal from the judgment.

Up–Right contends:  (1) the court should have excluded evidence of a subsequent accident with a harvester, (2) the court should have instructed the jury regarding Van Erickson's Labor Code violations, (3) there is insufficient evidence of Up–Right's negligence, and (4) the verdict should have been reduced by the amount plaintiff received in workers' compensation benefits.   We will agree with the fourth contention and modify the judgment to reflect the workers' compensation benefits reduction.

On his cross-appeal, plaintiff contests only the propriety of the court's reduction of his recovery under section 1431.2.   We will conclude section 1431.2 does not apply in a personal injury action initiated by an employee against a third party tortfeasor who, along with the employer, is found to be comparatively responsible for the employee's injuries.   Accordingly, the judgment will be further modified to reflect no section 1431.2 reduction.

STATEMENT OF FACTS

On August 30, 1987, about 2 p.m., plaintiff was cleaning a mechanical grape harvester while in the employ of Van Erickson.   It was his second day on the job and he had been at work since midnight.   He was instructed to clean the harvester by spraying it down with a hose while the conveyer belts were running.   As he was cleaning the machine, he noticed some debris caught in the nip point of the lower conveyer belt.   As described by plaintiff's expert, “The nip point is where the conveyer starts rolling around the roller, so that the conveyer is feeding in around the roller.”   When he was unable to dislodge the material with the hose, plaintiff attempted to remove it with his hands.   Plaintiff successfully removed debris two times, but the third time his fingers were taken into the machine at the nip point.   He could not remove his hand nor could he turn the conveyer off because the switch was on top of the machine, completely out of reach.   He yelled for help, but the machine was so noisy that his father, who was working on the machine next to him, did not hear him for about 15 minutes.   By then, his arm was mangled up to the elbow and had to be amputated.

Plaintiff's supervisor, James Woodward, spent about 15 minutes showing him how to clean the harvester, but did not point out the sign on the machine which read, “Danger.   Rotating Machinery.   Keep Hands Out While Engine is Running.”   Plaintiff did not recall seeing the sign before he was hurt.

Plaintiff received workers' compensation benefits of $23,676.04 to the time of trial.   American Insurance Company, Van Erickson's workers' compensation carrier, filed a complaint in intervention against Up–Right seeking reimbursement for the amounts it expended for plaintiff.

Plaintiff sought damages from Up–Right on theories of strict product liability and negligence.   Plaintiff's experts testified that the harvester had a design defect because the nip point on the lower conveyer was not guarded and there was no emergency switch available to a worker to enable him to stop the conveyer and minimize his injuries if he became stuck in the nip point.   In addition, plaintiff presented evidence that Up–Right was negligent for not instructing Van Erickson how to safely clean the harvester.   Although Up–Right's engineers were aware that safe cleaning of the harvester required two persons, one to hose down the machine and one person at the operator's position on top of the harvester, they failed to communicate this either in the operator's manual or during the maintenance classes they held for users, including Van Erickson.

Up–Right's experts, in turn, testified that although the nip point was a recognized hazard, a guard was not feasible because it would interfere with the operation of the conveyers and an additional on/off switch for the conveyers created other dangers.   They were of the opinion that the harvester could be safely cleaned by one person if he followed the warning on the harvester and kept his hands out of the machinery while the engine was running.

In a special verdict the jury found the Up–Right harvester was not defective but that Up–Right was negligent.   The jury also found that plaintiff and his employer were negligent and their negligence contributed to plaintiff's injury.   The jury found plaintiff suffered $355,000 in economic damages and $300,000 in noneconomic damages.   It found American Insurance Company suffered $10,000 in economic damages.

Following the verdict, the parties agreed that the gross judgment of $655,000 should be reduced by $98,250 because of plaintiff's 15 percent comparative fault.   Pursuant to section 1431.2, the court reduced the verdict by $135,000, or 45 percent of the $300,000 noneconomic damages attributable to Van Erickson.   The court rejected Up–Right's contention that the judgment should be further reduced by the amount of workers' compensation plaintiff received and entered a judgment of $421,750 plus costs against Up–Right.

DISCUSSION

 1.–3.**

 4. Should the judgment be reduced by the amount plaintiff received in workers' compensation benefits?

 In Witt v. Jackson (1961) 57 Cal.2d 57, 17 Cal.Rptr. 369, 366 P.2d 641, the California Supreme Court held that an employer who sought reimbursement in his employee's third party civil action for workers' compensation benefits paid was barred from recovering if the employer's negligence also contributed to the employee's injury.   However, to avoid double recovery by the employee, the third party tortfeasor was able to reduce the judgment against him by the amount of compensation benefits which had been paid to the plaintiff employee.  (Id. at pp. 72–73, 17 Cal.Rptr. 369, 366 P.2d 641.)

Seventeen years later, after Li v. Yellow Cab Co. (1975) 13 Cal.3d 804, 119 Cal.Rptr. 858, 532 P.2d 1226 established comparative negligence in California, the court modified the rule and held that the negligent employer was entitled to application of comparative negligence principles to a reimbursement claim in a third party action.  (Associated Construction & Engineering Co. v. Workers' Comp. Appeals Bd. (1978) 22 Cal.3d 829, 842, 150 Cal.Rptr. 888, 587 P.2d 684.)

“When the issue of an employer's concurrent negligence arises in a judicial forum, application of comparative negligence principles is relatively straightforward.   The third party tortfeasor should be allowed to plead the employer's negligence as a partial defense, in the manner of Witt.   Once this issue is injected into the trial, the trier of fact should determine the employer's degree of fault according to the principles of American Motorcycle [Assn. v. Superior Court (1978) 20 Cal.3d 578, 146 Cal.Rptr. 182, 578 P.2d 899].   The court should then deduct the employer's percentage share of the employee's total recovery from the third party's liability—up to the amount of the workers' compensation benefits assessed against the employer.   Correspondingly, the employer should be denied any claim of reimbursement ․ to the extent that his contribution would then fall short of his percentage share of responsibility for the employee's total recovery.”  (Associated Construction & Engineering Co. v. Workers' Comp. Appeals Bd., supra, 22 Cal.3d at p. 842, 150 Cal.Rptr. 888, 587 P.2d 684, fn. omitted.)

The court demonstrated this procedure in Aceves v. Regal Pale Brewing Co. (1979) 24 Cal.3d 502, 156 Cal.Rptr. 41, 595 P.2d 619.   Plaintiff Aceves brought an action for damages for injuries he sustained while working for Arons to demolish a building owned by defendant Regal Pale Brewing Company.   State Compensation Insurance Fund, Arons's carrier, filed a complaint in intervention for reimbursement of the sum of $1,679.30 paid in workers' compensation benefits to Aceves.   The jury returned a general verdict in favor of Aceves for $22,140.   In response to special interrogatories, the jury apportioned fault as follows:  5 percent to Aceves, 75 percent to employer Arons and 20 percent to defendant Regal Pale Brewing Company.   After applying comparative negligence principles to the verdict, the trial court rendered judgment that defendants were liable for 20 percent of the total verdict ($4,428) and that plaintiff in intervention's claim was to be reduced by 75 percent to $419.18.   Plaintiff's recovery was therefore set at $4,008.18 ($4,428 minus $419.82).²  (Id. at p. 507, 156 Cal.Rptr. 41, 595 P.2d 619.)

The Supreme Court found the judgment was incorrectly calculated.   The proper method of computing plaintiff's recovery was to first subtract from the total award the proportionate amount attributable to the plaintiff's negligence ($22,140 minus $1,107, 5 percent of $22,140, equals $21,033) and then to subtract the proportionate amount attributable to the employer's negligence up to the amount of the workers' compensation benefits paid ($21,033 minus $1,679.30 equals $19,353.70).   Since the employer's percentage share of responsibility for plaintiff's recovery was greater than the compensation benefits it paid, its carrier's claim for reimbursement should have been denied.   Thus, plaintiff Aceves would recover $19,353.70 in damages;  and plaintiff in intervention, State Compensation Insurance Fund, would receive nothing.  (Aceves v. Regal Pale Brewing Co., supra, 24 Cal.3d at p. 512, 156 Cal.Rptr. 41, 595 P.2d 619.)

In this case, the court properly subtracted from the total award the proportionate amount attributable to the plaintiff's negligence ($655,000 minus $98,250 (15 percent of $655,000) equals $556,750).   However, the court then should have subtracted the proportionate amount attributable to the employer's negligence up to the amount of the workers' compensation benefits paid ($556,750 minus (45 percent of $655,000 up to $23,676.04) $23,676.04 equals $533,073.96).   Thus, under the Associated Construction & Engineering Co. v. Workers' Comp. Appeals Bd. formula, the verdict should have been reduced by the total amount of workers' compensation benefits paid.   The judgment must be modified accordingly.

 5. Does section 1431.2 apply when the employer and a third party tortfeasor are found to be responsible for plaintiff's injuries?

 In 1986, the California voters approved an initiative measure, the Fair Responsibility Act of 1986 (§§ 1431 to 1431.5), known as Proposition 51, which modified the traditional joint and several liability doctrine.  (Evangelatos v. Superior Court (1988) 44 Cal.3d 1188, 1192, 246 Cal.Rptr. 629, 753 P.2d 585.)   The act limited an individual tortfeasor's liability for noneconomic damages to a proportion of such damages equal to the tortfeasor's own percentage of fault.  (Ibid.)  Up–Right contends section 1431.2 applies in this case and renders it liable only for the noneconomic damages commensurate with its percentage of fault.   Plaintiff submits Proposition 51 does not apply because the verdict rendered in this case did not create a joint and several obligation owed by Up–Right and Van Erickson to plaintiff.

These contentions pose a problem of statutory interpretation:  was Proposition 51 meant to apply in a personal injury action initiated by an employee against a third party tortfeasor who, along with the employer, is found to be comparatively responsible for the employee's injuries?

Proposition 51 was adopted to change the rule of joint and several liability.   The common law joint and several liability doctrine produced some unfair situations in which defendants who bore only a small share of fault for an accident could be left with the obligation to pay all or a large share of the plaintiff's damages if other more culpable tortfeasors were insolvent.   (Evangelatos v. Superior Court, supra, 44 Cal.3d at p. 1198, 246 Cal.Rptr. 629, 753 P.2d 585.)   To remedy these inequities, Proposition 51 amended section 1431's presumption that an obligation imposed on several persons is joint and not several, and added section 1431.2, subdivision (a) which provides:

“In any action for personal injury ․ based upon principles of comparative fault, the liability of each defendant for non-economic damages shall be several only and shall not be joint.   Each defendant shall be liable only for the amount of non-economic damages allocated to that defendant in direct proportion to that defendant's percentage of fault, and a separate judgment shall be rendered against that defendant for that amount.”

While the “any action for personal injury” language of section 1431.2 is general enough to encompass this action, the section is included under chapter 2 of the Civil Code entitled “Joint or Several Obligations.”   Thus, the reasonable interpretation of the section is that in ordinary tort actions with multiple defendants where liability for noneconomic damages was formerly joint and several, it is now several.   This conclusion is bolstered by the Proposition 51 ballot pamphlet language.

 In construing initiative measures, the courts often refer to the analysis and arguments in the voter's pamphlet as evidence of the intent behind the measure.  (Carlos v. Superior Court (1983) 35 Cal.3d 131, 143, 197 Cal.Rptr. 79, 672 P.2d 862.)   Proposition 51's analysis indicates it was not intended to apply in a third party action, stemming from an employment injury, that does not result in joint and several liability.

The summary prepared by the Attorney General reads in part:

“MULTIPLE DEFENDANTS TORT DAMAGE LIABILITY:  INITIATIVE STATUTE.   Under existing law, tort damages awarded a plaintiff in court against multiple defendants may all be collected from one defendant.   A defendant paying all the damages may seek equitable reimbursement from other defendants.   Under this amendment, this rule continues to apply to ‘economic damages,’ ․ however, for ‘non-economic damages,’ ․ each defendant's responsibility to pay plaintiff's damages would be limited in direct proportion to that defendant's percentage of fault․”  (Evangelatos v. Superior Court, supra, 44 Cal.3d at p. 1243, 246 Cal.Rptr. 629, 753 P.2d 585, emphasis added.)

The analysis by the legislative analyst states:

“In some cases, the court decides that more than one other party is responsible for the loss.   In such cases, all of the other parties causing the loss are responsible for paying the damages, and the injured party can collect the damages from any of them.   If the other responsible parties are not able to pay their shares, a party whose relative fault is, for example, 25 percent may have to pay 100 percent of the damages awarded by the court.”   (Evangelatos v. Superior Court, supra, 44 Cal.3d at p. 1243, 246 Cal.Rptr. 629, 753 P.2d 585, emphasis in original.)

Neither of these statements applies in a third party action by an employee injured as a result of the joint negligence of his employer and a third party.

 When an employee is injured in the course of employment, he may receive compensation benefits from his employer even if the injury results from the negligence of a third party.   But a cause of action for damages also arises against the third party tortfeasor.  (Lab.Code, § 3852.)   Either the employee or the employer may bring the action, the employee for damages, the employer for reimbursement of compensation paid.  (Ibid.)  In the action, the third party tortfeasor can plead the employer's negligence as a partial defense and the factfinder can determine the employer's degree of fault according to comparative negligence principles.   If the employer is found partially responsible for the employee's injury, the court deducts the employer's percentage share of the employee's total recovery from the third party's liability—up to the amount of workers' compensation benefits assessed against the employer.   But, the employer is not liable for the damages awarded in the third party action and the third party tortfeasor cannot seek indemnity from the employer for that portion of the damages awarded that reflects the employer's percentage of fault in excess of the worker's compensation benefits paid.  (Lab.Code, § 3864;  Associated Construction & Engineering Co. v. Workers' Comp. Appeals Bd., supra, 22 Cal.3d at p. 842, fn. 9, 150 Cal.Rptr. 888, 587 P.2d 684;  E.B. Wills Co. v. Superior Court (1976) 56 Cal.App.3d 650, 654, 128 Cal.Rptr. 541.)

 Thus, under the workers' compensation scheme, the employer of an employee, injured as a result of the joint negligence of the employer and a third party, is only obligated to pay workers' compensation benefits to the injured employee regardless of fault and the extent of the employee's actual damages.   The employer is not liable for the damages awarded in the third party action.   In this context, the employer (or the employer's workers' compensation carrier) is not a “defendant” within the meaning of section 1431.2.   Even though the verdict may apportion fault between the employer and the third party tortfeasor, the employer incurs no legal obligation—joint, several or joint and several—as a result of the judgment entered.

On the other hand, the obligation imposed on the third party tortfeasor as a result of the action is that set out in section 1714:  “Every one is responsible ․ for an injury occasioned to another by his want of ordinary care or skill in the management of his property or person, ․”  Thus, the third party tortfeasor is severally liable for all the employee's damages, including that portion which represents the negligent employer's share in excess of the amount paid in workers' compensation benefits.  (E.B. Wills Co. v. Superior Court, supra, 56 Cal.App.3d at p. 654, 128 Cal.Rptr. 541.)

Accordingly, the obligations of the employer and the third party tortfeasor to the injured employee are separate and distinct, not joint and several.   Since Proposition 51 addresses only joint and several obligations, it does not apply in this case.   The verdict should not have been reduced by $135,000, Van Erickson's 45 percent of the noneconomic damages.

DISPOSITION

The first paragraph of the judgment is modified to read, “That plaintiff, Mark DaFonte, have judgment against the defendant, Up–Right, Inc., for damages in the sum of $533,073.96,³ with interest thereon at the rate of ten percent per annum from May 12, 1989.”   As so modified, the judgment is affirmed.   Plaintiff shall recover his costs on appeal from defendant, Up–Right, Inc.

FOOTNOTES

FN1. All statutory references are to the Civil Code unless otherwise indicated..  FN1. All statutory references are to the Civil Code unless otherwise indicated.

FOOTNOTE.   See footnote *, ante.

2.   The opinion does not explain why this figure is $419.82 while the one above is $419.18.

3.   $655,000 minus $98,250 (for plaintiff's 15 percent contributory negligence) equals $556,750 minus $23,676.04 (workers' compensation benefits paid) equals $533,073.96.

BEST, Presiding Justice.

STONE (WM. A.) and VARTABEDIAN, JJ., concur.