Murphy v. Sentry Ins., 2014 VT 25
By Andrew Delaney
Plaintiff was handed a defeat snatched from the jaws of victory. After a jury trial, the jury found defendant insurance company liable for plaintiff’s husband’s workplace death. But the trial court vacated that verdict and entered judgment as a matter of law for defendant. Oof.
Let’s look at what happened.
Plaintiff’s husband worked for an RV dealership. He died from a forklift accident that occurred while he was using an unapproved forklift attachment to tow a fifth-wheel camper. Plaintiff sued the dealership’s general liability insurer, alleging that it was negligent in the inspection it had performed two years before the accident—that the insurer “failed to identify and warn of the dangers of using forklifts with unapproved towing attachments”—and that this negligence caused husband’s death.
By Andrew Delaney
Plaintiff was handed a defeat snatched from the jaws of victory. After a jury trial, the jury found defendant insurance company liable for plaintiff’s husband’s workplace death. But the trial court vacated that verdict and entered judgment as a matter of law for defendant. Oof.
Let’s look at what happened.
Plaintiff’s husband worked for an RV dealership. He died from a forklift accident that occurred while he was using an unapproved forklift attachment to tow a fifth-wheel camper. Plaintiff sued the dealership’s general liability insurer, alleging that it was negligent in the inspection it had performed two years before the accident—that the insurer “failed to identify and warn of the dangers of using forklifts with unapproved towing attachments”—and that this negligence caused husband’s death.
At trial, a senior safety consultant with the insurer testified that he met with one of the owners for an initial safety consultation. There’s a whole bunch of stuff about how this is a voluntary-as-opposed-to-mandatory program; it’s just a look-around thing; it’s just a consultation visit—you get the picture.
During the inspection (or quick-look-see or whatever you want to call it), the safety consultant figures he didn’t see any wild-n-wacky forklift attachments because there’s no mention of such things in his notes.
At the time of the inspection, there was in fact a Toyota forklift with an illegal one-of-the-owners-built-it tow attachment that might have or might not have been on the forklift during the inspection. Though the forklift is mentioned in the safety consultant’s report, the attachment is not.
After the inspection, the safety consultant followed up by letter, making five risk-reducing recommendations, none of which were “stop using homegrown forklift attachments.”
Two years after the inspection, the RV dealership got two new, smaller Yale forklifts. One of the owners, as before, built attachments so that the forklifts could move RVs. Two months later, one of these setups malfunctioned and the forklift landed on plaintiff’s husband, killing him.
After this tragic event, insurer inspected the RV dealership and sent a follow-up letter, urgently recommending that the dealership not use illegal and unapproved forklift attachments.
One of the owners testified that if insurer warned them about the forklift attachments’ dangers, they would have listened. On cross, he hedged a bit and said they would've at least started looking into alternatives. The other owner—the one who built the attachments—said they would’ve stopped using the attachments if insurer had said to do so.
In a nutshell, plaintiff’s theory of the case was that insurer should’ve discovered the attachment and warned the dealership of the dangers of using unapproved attachments.
At the end of the trial, insurer moved for judgment as a matter of law. The court denied the motion, and the case went to the jury. The jury went for plaintiff, and insurer renewed its motion for judgment as a matter of law.
The trial court granted the motion, reasoning that there was no evidence to show liability under the applicable liability-to-third-person-for-negligent-performance-of-undertaking restatement provision.
The underlying concept is sometimes referred to as the good-Samaritan doctrine; the basic idea is that if an actor “helps” someone into a worse position than that someone would be in without the “help,” then the actor is liable for resulting harm. Say you’re struggling swimming and I toss you a bunch of towels instead of a flotation device—that’d probably trigger liability.
In relation to third-party liability, there are three “triggers”: (1) an increase in the risk of harm; (2) when the actor undertakes a duty owed by the other to a third person; or (3) the other or the third person relies on the actor’s “help” and the harm is suffered because of it.
In this case, the trial court found that there was no action on insurer’s part that increased the risk of harm—it didn’t bless the attachment’s use, and it didn’t suggest danger-increasing changes (trigger #1). The trial court also concluded that the dealership didn’t change its position in reliance on the safety-survey-inspection-look-see-whatever-you-call-it thing (trigger # 3).
The stickiest issue for the trial court was whether the insurer had undertaken a duty owed by the dealership to its employees. The reasoning boiled down to the extent of the services offered—and whether that included providing a safe workplace. The trial court concluded that since insurer was a general liability insurer, not a workers’ compensation insurer, and that there did not appear to be any affirmative steps on insurer’s part to assume the dealership’s duty to its employees to provide a safe workplace, there was no such undertaking (trigger # 2). Thus, the trial court granted the motion for judgment as a matter of law.
Which kind of begs the question: Why send it to the jury at all? But that’s a matter for another day.
Following the judgment, insurer moved for costs. Plaintiff opposed the motion arguing that the only way a defendant can get costs is if the defendant wins a counterclaim. The trial court said, more or less, “Never heard of that . . .” and awarded insurer costs. Plaintiff appealed.
The SCOV’s standard of review on a judgment as a matter of law (or as some people have called it “J-MOL,” which coincidentally would be a good moniker for a hip-hop artist who raps about legal issues . . . but I’m getting way off-topic here) is the same as the trial court. “Judgment as a matter of law is appropriate where a party’s claims hold no legally sufficient evidentiary basis for a reasonable jury to find for the nonmoving party.” (My newly imagined friend J-Mol might put it thus: ♪ ‘Cause if you bringin’ claims without sufficient basis/ then you’ll get J-MOL up in your faces ♪). Evidence is viewed in the light most favorable to the nonmoving party.
First, plaintiff argues that the jury could have reasonably concluded that insurer’s negligent inspection increased the risk of harm—insurer’s failure to warn about the attachments’ danger resulted in continued use and eventually plaintiff’s husband’s death.
The SCOV says: “We reject plaintiff’s arguments.” The SCOV reasons that there must be some affirmatively negligent conduct to give rise to liability under this theory. In other words, insurer didn’t say that the attachment was a good idea—and may not have even seen it. The best quote in the analysis is “sins of commission rather than omission.” The bottom line is that insurer did not affirmatively increase the risk of harm by failing to identify a potential for harm.
The SCOV further reasons that even if the insurer had noticed the Toyota forklift attachment, there was no evidence that would allow the jury to conclude that attachments on smaller and more-unstable forklifts would follow. Thus, plaintiff cannot establish liability under trigger #1.
Plaintiff’s next argument is that the insurer, by its inspection, assumed a portion of the dealership’s duty to provide a safe workplace. The thrust of the argument is that insurer undertook inspection of the whole premises and that includes a duty to inspect and warn about the forklift attachment.
The SCOV remains unconvinced. It reasons that insurer was the general liability insurer, not the workers’ compensation insurer. Furthermore, insurer’s inspection was a “safety survey” and no evidence shows that insurer undertook a duty that the dealership owed to decedent. Likewise, the SCOV finds no basis to conclude that insurer undertook a duty to provide a safe workplace.
The SCOV then spends a fair amount of ink discussing a similar case against a workers’ compensation insurer in order to distinguish that case (in which a jury’s liability verdict was upheld) from this one. Long story short—general liability as opposed to workers’ comp; one “safety survey” as opposed to regular inspections; one set of recommendations as opposed to regular “plans of action.” And, well . . . you get the idea.
Despite plaintiff’s most-valiant efforts, the SCOV finds no basis to apply an undertaking-of-a-duty-the-insured-owed-to-decedent trigger for liability.
Plaintiff’s last argument on the liability issue is that people—including the employees and owners—relied on insurer’s safety survey to the extent that they all thought the forklifts and attachments were safe.
The SCOV throws up an “unavailing” in response to that argument and y’all know what that means. Yep. As the SCOV puts it, “Any reliance on the safety survey for the purposes cited by plaintiff would be unreasonable as a matter of law.” No reasonable employer could believe that insurer had identified and addressed all safety concerns. And on top of that, the forklift-con-attachment involved in the accident did not exist at the time of the inspection.
The SCOV concludes, therefore, that the trial court got it right when it granted insurer judgment as a matter of law.
The next issue is relatively interesting. Plaintiff argues that unless a party “wins” a case—that is a claim or a counterclaim—then recovery of costs are prohibited. The trial court called this reasoning tortured, and while the SCOV doesn’t come right out and say it that way, you know it referred to the trial court’s reasoning on purpose.
There’s an interesting discussion regarding the common-law and statutory lineage of Vermont’s allowance-of-costs rule, and its relationship to Maine (where we stole—uh, borrowed—our rule from) and federal law. What it all boils down to is that the trial courts have discretion to award almost all costs (other than attorney’s fees) to a prevailing party. And the definition of prevailing party certainly includes a defendant in a negligence action who is found not liable as a matter of law.
During the inspection (or quick-look-see or whatever you want to call it), the safety consultant figures he didn’t see any wild-n-wacky forklift attachments because there’s no mention of such things in his notes.
At the time of the inspection, there was in fact a Toyota forklift with an illegal one-of-the-owners-built-it tow attachment that might have or might not have been on the forklift during the inspection. Though the forklift is mentioned in the safety consultant’s report, the attachment is not.
After the inspection, the safety consultant followed up by letter, making five risk-reducing recommendations, none of which were “stop using homegrown forklift attachments.”
Two years after the inspection, the RV dealership got two new, smaller Yale forklifts. One of the owners, as before, built attachments so that the forklifts could move RVs. Two months later, one of these setups malfunctioned and the forklift landed on plaintiff’s husband, killing him.
After this tragic event, insurer inspected the RV dealership and sent a follow-up letter, urgently recommending that the dealership not use illegal and unapproved forklift attachments.
One of the owners testified that if insurer warned them about the forklift attachments’ dangers, they would have listened. On cross, he hedged a bit and said they would've at least started looking into alternatives. The other owner—the one who built the attachments—said they would’ve stopped using the attachments if insurer had said to do so.
In a nutshell, plaintiff’s theory of the case was that insurer should’ve discovered the attachment and warned the dealership of the dangers of using unapproved attachments.
At the end of the trial, insurer moved for judgment as a matter of law. The court denied the motion, and the case went to the jury. The jury went for plaintiff, and insurer renewed its motion for judgment as a matter of law.
The trial court granted the motion, reasoning that there was no evidence to show liability under the applicable liability-to-third-person-for-negligent-performance-of-undertaking restatement provision.
The underlying concept is sometimes referred to as the good-Samaritan doctrine; the basic idea is that if an actor “helps” someone into a worse position than that someone would be in without the “help,” then the actor is liable for resulting harm. Say you’re struggling swimming and I toss you a bunch of towels instead of a flotation device—that’d probably trigger liability.
In relation to third-party liability, there are three “triggers”: (1) an increase in the risk of harm; (2) when the actor undertakes a duty owed by the other to a third person; or (3) the other or the third person relies on the actor’s “help” and the harm is suffered because of it.
In this case, the trial court found that there was no action on insurer’s part that increased the risk of harm—it didn’t bless the attachment’s use, and it didn’t suggest danger-increasing changes (trigger #1). The trial court also concluded that the dealership didn’t change its position in reliance on the safety-survey-inspection-look-see-whatever-you-call-it thing (trigger # 3).
The stickiest issue for the trial court was whether the insurer had undertaken a duty owed by the dealership to its employees. The reasoning boiled down to the extent of the services offered—and whether that included providing a safe workplace. The trial court concluded that since insurer was a general liability insurer, not a workers’ compensation insurer, and that there did not appear to be any affirmative steps on insurer’s part to assume the dealership’s duty to its employees to provide a safe workplace, there was no such undertaking (trigger # 2). Thus, the trial court granted the motion for judgment as a matter of law.
Which kind of begs the question: Why send it to the jury at all? But that’s a matter for another day.
Following the judgment, insurer moved for costs. Plaintiff opposed the motion arguing that the only way a defendant can get costs is if the defendant wins a counterclaim. The trial court said, more or less, “Never heard of that . . .” and awarded insurer costs. Plaintiff appealed.
The SCOV’s standard of review on a judgment as a matter of law (or as some people have called it “J-MOL,” which coincidentally would be a good moniker for a hip-hop artist who raps about legal issues . . . but I’m getting way off-topic here) is the same as the trial court. “Judgment as a matter of law is appropriate where a party’s claims hold no legally sufficient evidentiary basis for a reasonable jury to find for the nonmoving party.” (My newly imagined friend J-Mol might put it thus: ♪ ‘Cause if you bringin’ claims without sufficient basis/ then you’ll get J-MOL up in your faces ♪). Evidence is viewed in the light most favorable to the nonmoving party.
First, plaintiff argues that the jury could have reasonably concluded that insurer’s negligent inspection increased the risk of harm—insurer’s failure to warn about the attachments’ danger resulted in continued use and eventually plaintiff’s husband’s death.
The SCOV says: “We reject plaintiff’s arguments.” The SCOV reasons that there must be some affirmatively negligent conduct to give rise to liability under this theory. In other words, insurer didn’t say that the attachment was a good idea—and may not have even seen it. The best quote in the analysis is “sins of commission rather than omission.” The bottom line is that insurer did not affirmatively increase the risk of harm by failing to identify a potential for harm.
The SCOV further reasons that even if the insurer had noticed the Toyota forklift attachment, there was no evidence that would allow the jury to conclude that attachments on smaller and more-unstable forklifts would follow. Thus, plaintiff cannot establish liability under trigger #1.
Plaintiff’s next argument is that the insurer, by its inspection, assumed a portion of the dealership’s duty to provide a safe workplace. The thrust of the argument is that insurer undertook inspection of the whole premises and that includes a duty to inspect and warn about the forklift attachment.
The SCOV remains unconvinced. It reasons that insurer was the general liability insurer, not the workers’ compensation insurer. Furthermore, insurer’s inspection was a “safety survey” and no evidence shows that insurer undertook a duty that the dealership owed to decedent. Likewise, the SCOV finds no basis to conclude that insurer undertook a duty to provide a safe workplace.
The SCOV then spends a fair amount of ink discussing a similar case against a workers’ compensation insurer in order to distinguish that case (in which a jury’s liability verdict was upheld) from this one. Long story short—general liability as opposed to workers’ comp; one “safety survey” as opposed to regular inspections; one set of recommendations as opposed to regular “plans of action.” And, well . . . you get the idea.
Despite plaintiff’s most-valiant efforts, the SCOV finds no basis to apply an undertaking-of-a-duty-the-insured-owed-to-decedent trigger for liability.
Plaintiff’s last argument on the liability issue is that people—including the employees and owners—relied on insurer’s safety survey to the extent that they all thought the forklifts and attachments were safe.
The SCOV throws up an “unavailing” in response to that argument and y’all know what that means. Yep. As the SCOV puts it, “Any reliance on the safety survey for the purposes cited by plaintiff would be unreasonable as a matter of law.” No reasonable employer could believe that insurer had identified and addressed all safety concerns. And on top of that, the forklift-con-attachment involved in the accident did not exist at the time of the inspection.
The SCOV concludes, therefore, that the trial court got it right when it granted insurer judgment as a matter of law.
The next issue is relatively interesting. Plaintiff argues that unless a party “wins” a case—that is a claim or a counterclaim—then recovery of costs are prohibited. The trial court called this reasoning tortured, and while the SCOV doesn’t come right out and say it that way, you know it referred to the trial court’s reasoning on purpose.
There’s an interesting discussion regarding the common-law and statutory lineage of Vermont’s allowance-of-costs rule, and its relationship to Maine (where we stole—uh, borrowed—our rule from) and federal law. What it all boils down to is that the trial courts have discretion to award almost all costs (other than attorney’s fees) to a prevailing party. And the definition of prevailing party certainly includes a defendant in a negligence action who is found not liable as a matter of law.
The trial court's rulings are affirmed.
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