Yauch v. Southern Pacific Transportation Co.

10 P.3d 1181, 198 Ariz. 394, 316 Ariz. Adv. Rep. 48, 2000 Ariz. App. LEXIS 34
CourtCourt of Appeals of Arizona
DecidedFebruary 29, 2000
DocketNo. 2 CA-CV 99-0086
StatusPublished
Cited by49 cases

This text of 10 P.3d 1181 (Yauch v. Southern Pacific Transportation Co.) is published on Counsel Stack Legal Research, covering Court of Appeals of Arizona primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Yauch v. Southern Pacific Transportation Co., 10 P.3d 1181, 198 Ariz. 394, 316 Ariz. Adv. Rep. 48, 2000 Ariz. App. LEXIS 34 (Ark. Ct. App. 2000).

Opinion

PELANDER, Presiding Judge.

¶ 1 In this personal injury action filed under the Federal Employers’ Liability Act (FELA), 45 U.S.C. §§ 51 through 60, defendant/appellant Southern Pacific Transportation Company (SP) appeals from a judgment entered on a jury verdict in favor of plaintiff/appellee Dennis Yauch. The ease presents issues of first impression in Arizona as to whether the “sheltered employment” doctrine recognized in Arizona’s workers’ compensation case law applies to FELA actions and whether, based on that doctrine, the trial court properly excluded evidence relating to SP’s mitigation-of-damage defense. We conclude that the court erred in applying that doctrine to exclude evidence of a “Disability Management and Internal Placement Program” (the Program)1 and of SP’s offer to return Yauch to his job with accommodations. We further conclude that the court erroneously admitted evidence of certain post-accident conduct by SP. Accordingly, we reverse the judgment and remand the case for a new trial.

BACKGROUND

¶ 2 Yauch began working for SP in 1979. In March 1995, Yauch injured his back while in the course and scope of his employment as an SP locomotive engineer when his seat back broke and caused him to fall backward. The injury resulted in several herniated lumbar and thoracic discs. SP admitted liability for any damages proximately caused by the incident. After undergoing back surgery in September 1995, Yauch briefly attempted to work as a yard service engineer for SP in early 1996, but stopped on the advice of his neurosurgeon, Dr. Goldfarb, because it had caused new and additional symptoms. Gold-farb ultimately released Yauch to work in August 1996, with various restrictions. According to Goldfarb, those restrictions “permanently disabled [Yauch] from his job as an engineer.”

¶ 3 Yauch was not gainfully employed from early 1996 through the time of trial in January 1999, but instead, returned to school to obtain a degree and to develop marketable skills. Yauch’s labor market consultant, Lisa Goldman, testified that he had no transferable skills and could earn only minimum wage with his present education and training. [398]*398She further testified that, if Yauch were to obtain a four-year degree, he could earn approximately $25,000 a year. Based on that information, Yauch’s expert economist, John Buehler, Ph.D., testified that the present value of Yauch’s future lost earnings ranged from $1.2 to $1.4 million, depending on whether Yauch obtained a degree. The jury awarded Yauch $1,750,448 in damages.

DISCUSSION

I. Exclusion of Evidence Relating to SP’s Mitigation of Damage Defense

¶ 4 In its answer, SP affirmatively alleged that Yauch had failed to mitigate his damages. In support of that defense, SP disclosed its intent to introduce evidence relating to the Program and Yauch’s alleged failure to take advantage of it. Based on SP’s discovery disclosures and the pretrial depositions of its former director of disability management, its manager of vocational rehabilitation, and its outside vocational rehabilitation expert, SP contended the Program would have assisted Yauch in obtaining vocational retraining, if necessary, and alternative employment either with or outside the railroad, consistent with Goldfarb’s restrictions. SP’s evidence suggested that, through the Program, Yauch potentially could have earned significantly more future income than the range Goldman testified to and Buehler adopted. According to SP, Yauch failed to mitigate his future wage loss by failing to participate in the Program.

¶ 5 In their depositions, the SP witnesses testified extensively about how the Program worked, its objectives, its benefits and effectiveness, and various jobs within SP for which Yauch could have qualified and possibly obtained had he expressed an interest in and applied for them. In addition, SP proffered a number of letters it had sent to Yauch or his representative between February 1997 and April 1998, informing Yauch of the availability of rehabilitation services and specific job openings within SP that were deemed suitable for him and for which he could have applied through the Program. The annual salaries of those jobs ranged from approximately $28,000 to $48,000. Yauch testified in his deposition that he had not pursued SP’s offered services or explored the Program’s internal placement opportunities.

¶ 6 SP also offered evidence to demonstrate the relative success of the Program, which commenced in 1989. As of July 1998, 216 injured employees had been placed in alternative positions through the Program. Of that number, 178 employees were still active and fifty-three had been promoted. Of the thirty-eight inactive employees, only eight had been discharged or disqualified. SP’s vocational rehabilitation expert testified in deposition that he had placed twenty to twenty-five people through the Program and that SP had kept all its promises to his clients. Similarly, SP’s director of disability management testified in deposition that most injured employees who want to continue working for the railroad and who participate in the Program will “be placed within the [SP] system for all practical purposes.” SP also offered affidavits from three of its employees who had successfully participated in the Program.

¶ 7 In July 1998, Yauch’s immediate supervisor testified in deposition that he could accommodate Goldfarb’s restrictions. In a letter to Yauch dated August 13, 1998, the day before the deadline for supplementing disclosure, SP offered him the opportunity to return to work as an engineer with appropriate accommodations based on his physical restrictions. That letter signified a distinct change in SP’s position, in that SP previously had instructed Yauch to return to work with no restrictions.

¶ 8 In September 1998, approximately four months before the case was tried, Yauch moved in limine to exclude all evidence relating to the Program and to SP’s offer to return Yauch to work as an engineer with accommodations. Yauch argued then, as he does now, that the evidence was irrelevant because any jobs allegedly available under the Program constituted “sheltered employment,” an impermissible basis for evaluating loss of earning capacity (LEC) under Arizona workers’ compensation law; that the evidence lacked foundation; and that the evi[399]*399dence should be excluded under Rule 403, Ariz. R. Evid., 17A A.R.S. The trial court granted Yauch’s motion, ruling that the Program constituted sheltered employment under Allen v. Industrial Commission, 87 Ariz. 56, 347 P.2d 710 (1959), and Doles v. Industrial Commission, 167 Ariz. 604, 810 P.2d 602 (App.1990), and that “Arizona law concerning the measure of loss of earning capacity is not inconsistent with federal substantive law interpreting the FELA.” The trial court also precluded any evidence of SP’s willingness to have Yauch return to work as an engineer with accommodations.

¶ 9 SP contends the trial court “committed legal error” by “inject[ing] state law workers’ compensation principles into this FELA case” to determine “whether evidence of the Program was admissible on the affirmative defense of Yauch’s failure to mitigate damages.” According to SP, Arizona workers’ compensation law on sheltered employment does not apply to FELA cases such as this and is inconsistent with federal law that applies to such cases.

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Bluebook (online)
10 P.3d 1181, 198 Ariz. 394, 316 Ariz. Adv. Rep. 48, 2000 Ariz. App. LEXIS 34, Counsel Stack Legal Research, https://law.counselstack.com/opinion/yauch-v-southern-pacific-transportation-co-arizctapp-2000.