Fahrbach v. Diamond Shamrock, Inc.

928 P.2d 269, 122 N.M. 543
CourtNew Mexico Supreme Court
DecidedOctober 25, 1996
Docket22276
StatusPublished
Cited by34 cases

This text of 928 P.2d 269 (Fahrbach v. Diamond Shamrock, Inc.) is published on Counsel Stack Legal Research, covering New Mexico Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Fahrbach v. Diamond Shamrock, Inc., 928 P.2d 269, 122 N.M. 543 (N.M. 1996).

Opinion

OPINION

MINZNER, Justice.

Plaintiffs Ruth Fahrbach, Stewart Foreman, and Brett Michael Foreman (collectively “Plaintiffs”) appeal from a defense verdict in a personal injury action. Plaintiffs had sued several defendants in tort and breach of warranty arising from a gas explosion at the Thunderbird Lodge in the Taos Ski Valley in 1992 and had settled with three defendants prior to trial. On appeal Plaintiffs contend that the trial court erred in instructing the jury because (1) the trial court informed the jury that a settlement had been reached prior to trial; and (2) the trial court instructed the jury to consider the fault of a nonparty not listed in the pretrial order. We hold that the trial court may inform the jury of the fact of settlement if the court has reason to believe (a) that it should do so in order to assist the jurors in understanding their responsibilities, and (b) that it can do so without prejudice to any party. We review the trial court’s decision to instruct the jury on the fact of settlement for abuse of discretion, and we hold that in this case no abuse occurred. We also conclude that, on the facts of this case, Plaintiffs were not on sufficient notice of the nonparty’s potential liability, and the trial court erred in instructing the jury to consider that party’s fault. However, we conclude that the error was harmless. We therefore affirm the judgment of the trial court.

I. FACTS

Plaintiffs were injured when leaking gas from a line servicing a neighboring business, Terry Sports, Inc., drifted downhill into the Thunderbird Lodge, causing an explosion. The propane gas line was found to be exposed several inches above the ground for a span of some ten feet, despite gas industry regulations and New Mexico law requiring propane gas lines to be buried. Plaintiffs sued Petrolane Gas Services (“Petrolane”), the supplier of propane to Terry Sports; Terry Sports, Inc.; New Mexico Propane/Heritage; the Thunderbird Lodge, Inc.; Diamond Shamrock, Inc., the purchaser of the ethyl mercaptan (a substance used to odorize propane), who injected it into the propane sold to Petrolane; and Phillips Petroleum Company, the manufacturer of the ethyl mercaptan.

Prior to trial, Plaintiffs settled with New Mexico Propane/Heritage, Terry Sports, and the Thunderbird Lodge. During a pretrial hearing in this case, the trial court indicated its intention to inform the jury that three former co-defendants had settled with Plaintiffs. The trial court explained that jurors find it confusing to be asked to allocate liability among tortfeasors when, without explanation, some of the tortfeasors are not present in court.

THE COURT: [T]he last trial that I did ... ended up being one where there were great debates about whether or not to inform the jury that other parties had settled out, about not to consider that, because they are going to get to assess their own fault. And I think it was confusing to the jury not to tell them — not the specifics of what went on, but some of how this ease started and where it stood now.

Accordingly, prior to voir dire, the trial court informed the jury that Plaintiffs had originally sued three additional parties and that these parties had settled with Plaintiffs prior to trial. The court stated as follows:

I’ll also advise you that in addition to the Defendants present in the courtroom today, the Plaintiffs originally sued New Mexico Propane of Taos, Incorporated, the Thunderbird Lodge, and Terry Sports. Those parties have settled the Plaintiffs’ claims and they will not be participating in this action, although you will hear evidence concerning their conduct and you will have an opportunity, if selected as a juror, to assess fault concerning some or all of those parties.

The trial proceeded with the three remaining defendants, Phillips Petroleum Company, Diamond Shamrock, and Petrolane Gas Services (collectively “Defendants”). During trial Plaintiffs argued, among other things, that Petrolane was negligent in adequately warning its own employees concerning the possibility of odor fade, odor confusion, and other characteristics of propane odorized with ethyl mercaptan in conjunction with propane line maintenance. Plaintiffs presented two witnesses to testify, respectively, about the scope of instruction and Petrolane’s alleged failure to warn its local district managers of the hazards inherent in maintaining propane gas lines. The two witnesses were David Archuleta, Petrolane’s Taos district manager, and James Myers, an employee of Suburban Propane. The testimony of these witnesses indicated that Suburban Propane had trained Petrolane employees in propane line maintenance. Other testimony revealed that Suburban Propane or one of its parent corporations formerly owned Petrolane.

Plaintiffs had not named Suburban Propane in their complaint. None of the defendants specifically pleaded Suburban Propane’s liability in their answers, although the liability of “others” was asserted as a general defense. Additionally, the pretrial order did not list Suburban Propane as being potentially hable.

After presentation of the evidence, at a hearing to finalize the jury instructions, Defendants asked the court to instruct the jury to consider whether Plaintiffs’ injuries were caused by Suburban Propane’s negligence in failing to properly train Petrolane employees. Plaintiffs objected, contending that Suburban Propane and Petrolane were not separate entities. The trial court overruled the objection and instructed the jury on several theories of liability, including the theory that Suburban Propane had failed to adequately train Petrolane employees. The special verdict form first asked, “Question No. 1: was any defendant, Diamond Shamrock Refining and Marketing Company, Phillips Petroleum Company or Petrolane negligent?” If the jury answered affirmatively, it was instructed to answer several questions about the allocation of fault. Suburban Propane was subsequently listed as one of the parties to whom the jury was authorized to allocate fault, but only if the jury determined any of the three named defendants had been negligent and that the negligence of a named defendant contributed to Plaintiffs’ injuries.

During deliberation the jury posed the following question to the court: “Is Suburban included with Petrolane on question # 1 [regarding Petrolane’s liability for Plaintiffs’ injuries]? If not, how do we separate them?” The court responded: “Suburban is not included on question # 1. Please follow the instructions on the Special Verdict Form.”

The jury ultimately returned the verdict form with an answer to the first question indicating that none of the three named defendants had been negligent. The jury also found that the product at issue was not defective. Following the verdict, Plaintiffs moved for a new trial alleging that (1) the trial court erred in informing the jury that three defendants named in the complaint had settled with Plaintiffs prior to trial; and (2) the trial court abused its discretion in instructing the jury regarding Suburban Propane’s fault, a defense which had not been included in the pretrial order.

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Cite This Page — Counsel Stack

Bluebook (online)
928 P.2d 269, 122 N.M. 543, Counsel Stack Legal Research, https://law.counselstack.com/opinion/fahrbach-v-diamond-shamrock-inc-nm-1996.