[Note: Skip Walker presented this at the Western Trial Lawyers Association Seminar in Jackson Hole, Wyoming, March 2020.]

 

A woman walks into a corral….  Start of something great, huh?  Well, it wasn’t for this woman.  A mother cow took umbrage at her presence and rammed her into a fencepost, breaking eight of her ribs.  Three years later, a jury returned a verdict against the owner of the land on which the cow and corral were located in the amount of $2,450,000.

How, you might wonder, did this happen?  The answer lies not just in the magic of personal injury litigation where, theoretically at least, anything can happen, but also in the intricacies of corporate law, contract law, trusts law and the rules of civil procedure.         

The Undisputed Facts

A woman went to a ranch in Half Moon Bay, California, to buy feed for her horses.  The feed store was owned by a corporation, of which a father and son were the only officers.  The feed store was located on land that was owned by a trust, of which the same father and son were the trustees.

Dad, the corporate vice president and trustee, claimed he was just a good old boy who knew only about raising cattle and selling feed.  Son, the corporate president and co-trustee, was   sure he was both smart and sophisticated, but he knew no more about trusts and corporations then his father did.

When our client went to the corporation’s feed store she got into a conversation with the young woman who was working at the counter and the young woman suggested she go to the adjoining corral to see the two new calves that were there.  It remains disputed as to who led whom into the corral, but there is no dispute that both women were in the corral at the same time and that the woman who worked on the premises made it to the calves while the customer did not.  In fact, the customer’s journey ended half-way to her destination when the calves’ mama drove her into the fence post.

The Claim

The customer sued both the corporation and the trust.  Each of those entities was insured for $1,000,000 by a different insurance company and each of those companies hired its own counsel.

Plaintiff claimed negligence on the part of both corporation and trust and made basic claims of premises liability and dangerous animal liability.

The Defense

The corporation defended aggressively. The trust did not.  Both claimed that the young woman at the counter did not take the plaintiff into the corral; she merely told her about the calves and when she looked up and saw plaintiff going into the corral she followed after her.

The essential defense arguments were: it wasn’t our fault, plaintiff wasn’t hurt that badly, and, if there was any liability it lay with the other defendant.

Settlement Negotiations 

During expert depositions, the corporation offered $400,000.  Plaintiff took it.  The trust did not oppose the ensuing motion for good faith settlement, a factor that would weigh heavily on subsequent developments.  Instead, it offered $100,000 to settle.  Plaintiff said she would take $400,000 from the trust and hinted she would take $300,000.  The case proceeded to trial.

The Verdict

Things went well for the plaintiff.  The jury accepted plaintiff’s medical expert testimony that the reason plaintiff was still hurting three years after the incident was not because of the broken ribs, but because of the disrupted nerves running along and under the ribs – – creating a painful condition called intercostal neuralgia.  Curiously, plaintiff’s treating physicians had not been able to diagnose this, but the trial expert did.

The size of the verdict was so great that plaintiff did not even mind that the jury allotted 55% fault to her.

Of more significance to the court, however, was the fact that the jury found the corporation to have 0% liability.

Post-Trial

Defendant filed motions for JNOV and a new trial.  To our surprise, the court granted the motion for a new trial, saying it could not understand how there could be no responsibility on the part of the corporation that employed the young woman who worked in the feed store and who, at the very least, did nothing to prevent plaintiff from going into the corral with a nursing mother cow. 

The Benefits of Civil Procedure and How They Might Work for You

A.        The Availability of a Partial New Trial                               

Defendant’s motion for a new trial only addressed liability.  It never once mentioned damages.  The court’s tentative ruling, in turn, only addressed liability.  When it became clear at oral argument that the court was going to adhere to its tentative ruling, we pointed out that neither defendant’s motion nor the court’s tentative found anything wrong with the damage award and argued that if there was to be a new trial it should only be as to liability.

            To which the court said:

                        Can I do that?

Whereupon we handed the court a decision in a case called Liodas v. Sahadi (1977) 19 Cal 3d 278.

The motion was granted as to liability only, leaving intact the $2.45 million and, just as importantly, wiping out the finding of 55% comparative liability on plaintiff’s behalf.

B.        Amending to Conform to Proof

The parties duly appeared to commence the re-trial.  Plaintiff announced her intention to amend her complaint to conform to the matters that had been proven at the first trial, namely that there was no distinction between the operation of the trust and the operation of the corporation – – hence, plaintiff should be able to pursue a joint venture theory.

Joint venture, of course, means that the entities acted together.  (2 CACI 3712 (2019)) Under that theory, any action by the corporation would also be deemed to be an action by the trust.  Thus, even though the corporation had settled out, plaintiff could still put on evidence of the corporation’s fault (e.g., the negligence of the young woman working for the corporation, the unlocked corral gate, the keeping of a potentially dangerous mother cow and her calves right next to the walk areas used by customers of the feed store) because the two entities acted as one.  Thus, the joint-ventured trust would get nothing by pointing a finger at the corporation and would be entitled only to a set-off for the amount previously paid by the corporation.

Defendant, of course, went wild.  Among other things, it argued that it would have opposed the good faith settlement by the corporation if it had had any indication that plaintiff was going to claim joint venture and hold the trust accountable for what the corporation did.

The court found this to be a persuasive argument.  We contended, by contrast, that all we were doing was amending the cause of action in light of the facts that had been, to our surprise, established at the first trial when father and son were unable to provide any evidence of distinction between the operations of the trust and those of the corporation.

After 1½ days of argument over whether plaintiff could do this (it could: see Klipstock v. Superior Court (1941) 17 Cal 2d 13; see also Liberal Allowance of Amendment, 5 Witkin, Cal. Proc. 5^th Plead §1211 (2008) and cases cited therein), the case settled for almost all of the trust’s insurance policy limit – – a substantial improvement over the net that resulted from the court’s prior rulings when plaintiff was deemed 55% responsible.

Lessons

      1.  A new trial can be granted as to liability only;

      2.  A complaint can be amended even after a trial has been completed;        

And, oh yes:

     3.  Treating doctors may only be responding to symptoms, not looking for causes.

Amazing what can be found in a corral once you get beyond the cow patties.