Matomco Oil Co. v. Arctic Mechanical, Inc.

796 P.2d 1336
CourtAlaska Supreme Court
DecidedAugust 30, 1990
DocketS-2773
StatusPublished
Cited by11 cases

This text of 796 P.2d 1336 (Matomco Oil Co. v. Arctic Mechanical, Inc.) is published on Counsel Stack Legal Research, covering Alaska Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Matomco Oil Co. v. Arctic Mechanical, Inc., 796 P.2d 1336 (Ala. 1990).

Opinion

RABINO WITZ, Justice.

OPINION

I. INTRODUCTION.

Matomco appeals the superior court’s judgment, based on a general jury verdict, in favor of Arctic Mechanical, Inc., George Wise, Alliance Insurance Company, and Underwriters at Lloyds. Matomco had employed an independent contractor (David Campbell) to repair Matomco’s fuel tanker. During the repair the tanker exploded, killing David Campbell and causing appellees’ damages. Appellees sued both Campbell’s estate and Matomco, but settled with the estate before trial. At trial, appellees claimed that Matomco was liable on multiple theories of negligence and absolute liability. The jury returned a verdict against Matomco, but did not specify which of the several theories of negligence and absolute liability it relied upon in imposing liability. Matomco contends that it cannot be held liable under any of the legal theories presented to the jury. Matomco also asserts that the superior court committed evidentiary errors that compel reversal; that appellees failed to prove their damages; and that the superior court erroneously refused to enter judgment in Matom-co’s favor. We reverse and remand for a new trial.

II. FACTS AND PROCEEDINGS.

This appeal arises out of the explosion of a fuel tanker owned by Matomco. The relevant preceding events are described by Matomco in its brief:

*1338 On October 8, 1983, Matomco Oil Company, Inc. (Matomco) delivered a 1975 Fruehauf multi-compartment trailer to C & S Welding for the repair of a crack on the right front side of the tanker. Previously, the tanker had been used by Ma-tomco in its fuel delivery business. Ma-tomco’s business included the delivery of diesel fuel, gasoline and JP4 aviation fuel. The crack which developed in the tanker was discovered while the tanker was being used to haul JP4 to Prudhoe Bay. After discovering the leak, the Ma-tomco driver transferred the jet fuel from the Matomco tanker into an empty southbound tanker owned by Big State Equipment. The Matomco driver then continued north with the Big State tanker, and the Big State driver brought the Matomco tanker back to Fairbanks and parked it in Big State’s yard, where [Ma-tomco’s] John Hendricks picked it up.
After inspecting the tanker, Hendricks took the tanker to C & S Welding.

The explosion occurred when David Campbell of C & S Welding (C & S) was buffing the tanker as a preparatory step to repairing the leak. At that time, the tanker was inside a building owned by George Wise. The building was occupied by two tenants: C & S, and Wise’s business, Arctic Mechanical, Inc. (Arctic). The explosion killed David Campbell and destroyed all of the building’s contents, including Arctic’s tools, equipment, and inventory, and a Peterbilt tractor owned by Clyde Sutton, which was located in C & S’s work area. Wise and Arctic had insured the building and Arctic’s inventory with Alliance Insurance Company (Alliance). Sutton's tractor was insured by Underwriters at Lloyds (Lloyds). Alliance paid Wise and Arctic $272,309 based on a proof of loss supplied by Wise. Lloyds paid Sutton $65,000 as compensation for the loss of the tractor.

Wise and Arctic filed suit against David Campbell and C & S, claiming damages in the amount of approximately $700,000. Numerous interpleader plaintiffs, including Alliance and Lloyds, joined suit. The complaint was subsequently amended to add Matomco as a defendant. Thereafter all plaintiffs submitted their claims to a court-appointed master empowered to settle claims against Campbell’s estate and C & S. The claims approved by the master totalled $900,168, but only $320,639 was available for payment from both C & S and Campbell’s estate. All plaintiffs settled with Campbell and C & S in return for their pro rata share of this amount. Wise and Arctic’s portion of this amount was $249,-817. Wise and Arctic sought to recover their remaining damages from Matomco in this action. Alliance and Lloyds proceeded to trial as subrogated insurers.

After a month-long trial in which Lloyds’ damages were stipulated, the jury returned two verdicts. In its first verdict the jury found that Matomco was liable to Wise and Arctic, that Wise and Arctic’s damages were $441,000, and that Wise and Arctic were not comparatively negligent. The second verdict found Matomco liable to Lloyds. The superior court subsequently entered separate final judgments for Wise and Arctic, Alliance and Lloyds. Matomco brings this appeal.

III. DISCUSSION.

A. Matomco’s Liability for Negligent Misrepresentation.

Although not clearly articulated, we read Matomco’s briefs as asserting that the superior court erred in not granting Matomco’s motion for a directed verdict as to appellees’ negligent misrepresentation claim. In reviewing the denial of a motion for directed verdict we must take that view of the evidence which is most favorable to appellees, and ask whether a reasonable jury might have reached the result the jury did in this case. 1 Given this standard of review, our analysis of the record leads us to conclude that the superior court did not err in denying the motion for a directed verdict.

When Matomco’s John Hendricks delivered the tanker to C & S, Hendricks informed both David and Donald Campbell *1339 (David’s father) that the tanker had last contained diesel. 2 In fact, the tanker’s last load had been JP-4. JP-4 is more volatile than, yet similar in appearance to, diesel. 3 Appellees assert that Hendricks’ statement constitutes negligent misrepresentation on the part of Matomco.

We agree. In these circumstances, Ma-tomco owed any person likely to be within Wise’s building a duty not to misinform David Campbell regarding the nature of Campbell’s danger. Matomco’s duty extended to appellee’s pecuniary interests insofar as property damage, like personal injury, could be foreseen. 4 We conclude that the jury may have reasonably determined that Matomco breached its duty to appellees (or their insureds), and that David Campbell’s reliance upon Matomco’s material misrepresentation was foreseeable, reasonable, and catastrophic.

B. Matomco’s Liability Under the Doctrine of Negligence Per Se for Allegedly Violating a Federal Regulation Concerning Placarding of Fuel Tankers.

Matomco argues that as a matter of law it cannot be held liable under the doctrine of negligence per se for violating 49 C.P.R. § 172.516. This federal regulation provides that a fuel tanker must display visible placards disclosing the contents of the tanker.

In Ferrell v. Baxter, 484 P.2d 250 (Alaska 1971), we adopted the four-part test found in § 286 of the Restatement (Second) of Torts to determine whether a statute or regulation may be used to determine the applicable standard of care.

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Bluebook (online)
796 P.2d 1336, Counsel Stack Legal Research, https://law.counselstack.com/opinion/matomco-oil-co-v-arctic-mechanical-inc-alaska-1990.