HICKS v. OCEAN SHORE (1941)

Plaintiff sued for damages for injuries incurred during the course of his employment with defendants. Compensation for such injuries had been awarded and paid, but the suit was maintained under the special provisions of the Workmen's Compensation Act (later incorporated into sections 3706–3709 of the Labor Code, St.1937, p. 271 et seq.), where the employer had failed to carry compensation insurance. The trial was by jury, which returned a verdict of $15,000. Upon a premature motion for a new trial the verdict was ordered reduced to $10,000. Upon a second and proper motion for a new trial the verdict was ordered reduced to $8,500, and, in addition thereto, the plaintiff was awarded $1,700 as attorney's fees. The appeal is taken from this judgment, and from the order denying defendants' motion for a new trial. It is presented on four volumes of typewritten transcripts of 2233 pages, with five volumes of printed briefs covering more than 3700 pages.

Plaintiff had been employed by the Adams Construction Company in the operation of a power shovel under a contract with defendants for operations leading to clearing away rock and dirt from the face of a tunnel on the railroad right of way which had been out of operation for many years. On June 24, 1936, the contract with the Adams Company was terminated, and on the following day the defendants took over the operations with the same equipment and employees. On June 30th the plaintiff was injured when his right hand became enmeshed in the unguarded gears of the shovel. The plaintiff gave different versions of how the accident occurred—first, that he left his seat in the front part of the machine, intending to go to the rear to look at the carburetor; second, that, as he had his head out one of the windows watching a rock slide, he was struck on the head by a falling rock, knocked unconscious, and then fell inside the cabin and regained consciousness when his hand struck the gears. Some 2,000 pages of the reporter's transcript is filled with testimony relating to the physical conditions of the territory in which the work was being done and particularly with the danger, known to both employer and employee, from slides due to the loose rock on the banks under which the work was being done. We do not state the facts of this phase of the case because, as will be seen, they are not material to the issues of this appeal. The plaintiff offered evidence that he was thirty-two years of age at the time of the injury, was married and had a daughter fourteen years old at the time of the trial; that both wife and daughter were dependent upon him for support. He offered evidence of his physical injuries and of his earning capacity prior and subsequent to the accident. The defendants offered to prove that their failure to secure compensation insurance prior to the accident was not deliberate or wilful, but was an oversight. This offer was denied by the trial court. Upon the motion for a new trial the defendants offered evidence disclosing that the plaintiff had testified falsely as to his age, employment, and earnings. On this appeal he insists that his admitted perjury is beyond the cognizance of either the trial or the appellate courts.

The unusual character of the case is emphasized by these facts: The plaintiff appeared in the usual manner before the industrial accident commission and was awarded compensation for his injuries, all medical treatment, and hospitalization. This award called for a weekly payment to plaintiff of $27.50 during his disability, and he states that $2,114.50 had been paid by the defendants under this award, but, whether this was the amount paid at the time the complaint was filed, at the time of the trial, or when his brief was filed, he does not state. He does say that the award of the commission was “paid in full”. In any event the award was made by the commission on the basis of the injuries suffered and upon the uniform standard for all such injuries. Then, because the defendants had failed to take out insurance, the plaintiff was permitted under the statute to sue for damages the same “as if this division (of the act) did not apply.” By the terms of the act the “compensation” theretofore awarded and paid is to be deducted from the final judgment and the cause of action for damages is to be heard without regard to the provisions of the Labor Code. In the trial of the action special rules of pleading and practice are specified which are pertinent to the issues on this appeal.

Section 3706 of the Labor Code reads: “If any employer fails to secure the payment of compensation, any injured employee or his dependents may proceed against such employer by filing an application for compensation with the commission, and, in addition, may bring an action at law against such employer for damages, as if this division did not apply.” Section 3708 reads: “In such action it is presumed that the injury to the employee was a direct result and grew out of the negligence of the employer, and the burden of proof is upon the employer, to rebut the presumption of negligence. It is not a defense to the employer that the employee was guilty of contributory negligence, or assumed the risk of the hazard complained of, or that the injury was caused by the negligence of a fellow servant. *”

Section 3709 reads: “If, as a result of such action for damages, a judgment is obtained against the employer in excess of the compensation awarded under this division, the compensation awarded by the commission, if paid, or security is given for its payment and is approved by the court, shall be credited upon such judgment.”

Plaintiff grounded his charge of negligence upon three specific acts—digging into the base of a high bank of material which had a known tendency to slip; failure to maintain lookouts to warn the operator of sliding or falling rocks; maintaining unguarded gears in the cab adjacent to the operator's seat. By the terms of the statute the defendants are presumed to have been negligent in all these particulars, as well as in any other which might support the verdict. With the burden upon defendants to rebut these presumptions it is apparent that there is no field for discussion of the evidence upon an appeal from the verdict. The only answer that can be made is that defendants were negligent because of the presumption. There is no question of reasonableness of the presumption, substantiality of the evidence offered, or fairness to the employer. He is presumed negligent, even though the injury was caused by the wilful and deliberate act of the employee contrary to all instructions of his employer and in the face of the utmost care on the part of the employer. We emphasize this feature because of the extended arguments of counsel on the issues of negligence, contributory negligence and assumption of risk. It is important also in relation to the insistence of the defendants that in many particulars the plaintiff testified falsely in relating the circumstances of the accident. All these questions are beyond the consideration of the court. All the testimony offered by plaintiff may be untrue, nevertheless, the presumption of negligence is all that is necessary to support the verdict, because that presumption is itself evidence. And when the statute declares that an issuable fact shall be presumed, it in effect declares that such presumption is substantial and satisfactory evidence of the fact in issue, and, though it is permitted to rebut the presumption, this merely creates a conflict for the jury to determine and leaves no debatable question for the appellate court. To illustrate the point—plaintiff claimed negligence because defendants failed to provide a safe place for him to work since the embankment was composed of loose material given to frequent slides. Defendants countered that the embankment was not dangerous and that its condition was well known to the employee and was perfectly safe when proper care was exercised by the operator of the shovel. But assumption of risk and contributory negligence are both barred as defenses to such an action, and the negligence of the defendants is presumed. The plaintiff claimed that defendants were negligent in failing to maintain lookouts to warn him when rocks were falling. His second explanation of the accident was that, while he had his head out of the window watching a slide of rocks, one hit him on the head, rendering him unconscious. Hence, though the asserted negligence in failing to maintain lookouts had no proximate relation to the accident, the defendants are, nevertheless, presumed to have been negligent. His third charge of negligence is the failure to cover or guard the gears under the floor of the cab. Defendants countered with proof that the gears and the cab were maintained in the usual and approved manner, and that plaintiff had been warned specifically always to turn off the motor before leaving his seat in the cab. But contributory negligence is not a defense in such an action, hence the presumption of negligence still holds.

For the reasons given it would serve no purpose to analyze the mass of testimony offered by both parties on these various issues, or to discuss the attacks made upon the veracity of the plaintiff in his descriptions of the circumstances of the accident. And it would serve no useful purpose to discuss those cases where the reverse of this situation appears—where the verdict of the jury is against the presumption, and the question arises whether the evidence offered to rebut the presumption is sufficient and substantial. It is sufficient here that, under the express terms of the statute, the defendants are presumed to have been negligent, and that such presumption is sufficient to support the verdict as to this liability.

The serious question relates to the amount of the verdict. The defendants assert that it is excessive and that the excess was procured by the false testimony and prejudicial misconduct of the plaintiff. The facts bearing upon this phase of the case are these: Plaintiff alleged in his complaint that he was thirty-three years of age and testified that he had a wife and a fourteen-year-old daughter dependent upon him for support. When defendants questioned him as to when and where he was born the trial court sustained his objections to the inquiry. Mortality tables were given the jury showing the life expectancy of the plaintiff; evidence was offered showing that he could have done the same class of work in which he was engaged until he reached the age of fifty, and throughout the trial emphasis was given to his loss of earning power because of having been deprived of the ability to carry on such work for the period of seventeen years. On further detail of his loss of earning power the plaintiff testified that he had sought employment with the Associated Oil Company after the accident and had been refused because of his injured hand. In all of these instances the plaintiff was shown to have testified falsely when the true facts were discovered and presented to the court upon defendants' motion for a new trial. If plaintiff were thirty-three as he testified during the trial which was held in 1937 he would have been born in the year 1904. In the year 1917 he enlisted in the United States Navy under the name Prescott John Hicks. He would then have been but thirteen years of age. He was dishonorably discharged from the navy and was married in 1920 in the city of Fresno under the name of Jack P. Hicks, giving his age at that time as twenty-two years. If he had been born in 1904, as his testimony at the trial disclosed, he would have been but sixteen at the time of his marriage in 1920. It is a matter of common knowledge that he would not have been permitted to enlist in the navy at the age of thirteen, and would not have been permitted to marry in this state at the age of sixteen without his parents' consent. He may have misrepresented his age in both instances, but in this case he does not say so. He makes no denial of any of this evidence, insists that the court should disregard it though true in every detail, and argues that the affidavits showing these matters were technically insufficient because the affidavits did not affirmatively state that defendants had used due diligence in an endeavor to discover the evidence prior to the trial. The defendants showed that, since plaintiff's discharge from the navy, he had used eleven different names and aliases, and that he had sued under a name different from those which he used when he had enlisted in the navy, when he was married, and when he had been employed by the Associated Oil Company. These facts alone excused an earlier discovery and showed proper diligence on the part of the defendants. It was not necessary to repeat them in each of the affidavits filed. The defendants refer to numerous passages in the record where the age of the plaintiff and his prospect of earning eight dollars a day for seventeen years were impressed upon the jury. The instructions which directed the jury to take these factors into consideration leave no doubt as to the prejudice arising, and this alone may account for the excessive verdict.

We are not impressed with the argument of plaintiff that the defendants are bound by their stipulation as to plaintiff's age. The circumstances upon which this claim is based are not unusual. Counsel for defendants was examining the plaintiff as to his employment and earning capacity prior to the accident when the following colloquy occurred:

“Q. So, from July, 1924, until you went to work for Adams in September, 1935, you were in the employ either as the operator of a gasoline station or as a truck salesman for the Associated Oil Company, weren't you? A. Yes.

“Q. Now, you received as a salary, as Class C operator, when you were first employed in the Associated Oil Company, of $130, didn't you, approximately? A. I don't know.

“Mr. Johnson: Before counsel asks any such questions, inasmuch as he is doing the testifying now and not the witness, I think it would be fair for him to tell us the dates.

“The Court: Yes, I think so.

“Mr. Erskine: All right, I will say the date from July 10, 1924, until—

“Mr. Johnson: Some thirteen years ago, since the man was twenty years old.

“Mr. Erskine: That was on July 10, 1924—

“Mr. Johnson: Will you stipulate he was twenty years old—

“Mr. Erskine: All right, we will stipulate he was twenty years old.”

When counsel for either party states as a fact a matter presumably within his knowledge, but not within the knowledge of his adversary, the latter may assume that the fact is correctly stated. In this instance it was the duty of plaintiff, in fairness to the court and his own counsel, to correct the error.

The defendants assign as prejudicial and leading to the excessive verdict the frequent references to plaintiff's employment as a shovel operator at a daily wage of eight dollars. The jury was told that he had an actual annual income of $2,500, based on an uninterrupted employment for 312 days of the year. The only credible evidence was that his employment for many years was that his employment for many years was that of a truck driver at four dollars a day, and that he had been employed at the higher wage by a member of his family for a few weeks prior to the accident. The evidence discloses that throughout the trial the plaintiff misrepresented to the jury his earnings, his earning capacity, both before and after the injury, and the extent and nature of his injury. It also discloses a deliberate and continued endeavor to aggravate and exaggerate the injury.

Defendants argue that they suffered serious prejudice in the minds of the jurors in the ruling of the trial court denying them the privilege of meeting the charge that their failure to carry compensation insurance was deliberate and wilful. In the opening statement to the jury, and throughout the trial, plaintiff endeavored to prejudice the minds of the jury by references to the operations of the railroad company designed to escape liability “so that any workman or anyone else who might be injured would never be able to collect”, and that this was done with full knowledge of the defendants that they were not insured. To offset the prejudice thus created the defendants attempted to prove that they were covered by insurance until 4:00 p.m. of the day before the accident and had been assured by their broker that they would be fully covered by a new policy. In sustaining the plaintiff's objection the trial court erred. Of course, the evidence was not admissible as an excuse for non-insurance, or as a bar to the action. The statute permits the action whenever an employer “fails to secure the payment of compensation”. It does not require that such failure shall be wilful or deliberate, or designed to prevent recovery by an employee. But, being a penalty, intention is an essential element. And when the jury is asked to supplement the damages for personal injuries by a verdict in the nature of a penalty for wilful and deliberate misconduct—a verdict for punitive damages so to speak—the intention and good faith of the defendants become material. To the precise point presented here the answer is that, when counsel states to the jury facts as facts presumably within his own knowledge, and these facts are highly prejudicial to the other side, he cannot fairly object to proof that those facts are not true on the sole ground that such facts are not material to the case.

From our review of the voluminous record the conclusion follows that the verdict is excessive and that it resulted both from the prejudice of the jury as hereinbefore indicated, and by the wilful and deliberate misrepresentations of material facts by the plaintiff. We are not unmindful of the cases cited by plaintiff, holding that the question of false swearing is one for the jury alone. We do not need to approve or disapprove the reasoning of those cases. The ruling here needs no authority to support it. When a party deliberately and wilfully misrepresents material facts, and such misrepresentations result in an excessive verdict in his favor, and, when confronted by the truth, he does not deny, a court would be impotent if it should agree with him that no remedy could be found.

For the reasons given, a new trial should not be had on the question of defendants' liability for damages. The new trial should be confined to the question of damages alone. Each party should bear its own costs of this appeal.

The judgment is reversed with directions for a new trial on the matter of damages alone.

NOURSE, Presiding Justice.

I concur: STURTEVANT, J.