907 F. 2d 155 - Thompson v. Southern Pacific Transportation Company

MEMORANDUM**

The plaintiff appeals from an order of the district court granting the defendant's motion for partial summary judgment on the issue of punitive damages in this diversity case where Arizona law controls.

Robert Thompson brought this suit as personal representative of his deceased son, Tracy Adams Thompson, who was electrocuted by wires installed on the property of Southern Pacific Transportation Company. At a much earlier date the defendant had installed poles supporting harmless low voltage wires making up a signal system along the right-of-way of its railroad tracks. At some undetermined time, the defendant strung on the existing poles two 110-volt wires, which hung less than five feet from the ground at the place where Tracy Thompson died. The proof showed that the property of the defendant on which these high voltage wires were strung was accessible to the public and that the defendant, through its agents, had knowledge of the fact that members of the public frequently traversed the right-of-way. There was also proof that employees of the defendant had notified their superiors that low-hanging wires, either in the particular location where Thompson was electrocuted or more generally along this section of right-of-way, constituted a danger. Furthermore, the court received testimony that an employee of an adjacent landowner had specifically notified a security officer of the defendant that the low-hanging wires posed a lethal danger.

In recent years Arizona has formulated an extremely rigorous test for allowance of punitive damages in tort cases. Both parties agree that one of the most recent and clearest statements of the present Arizona rule is found in Rawlings v. Apodaca, 151 Ariz. 149, 726 P.2d 565 (Ariz.1986). In Rawlings, 151 Ariz. at 162, 726 P.2d at 578, the court stated:

[T]o obtain punitive damages, plaintiff must prove that defendant's evil hand was guided by an evil mind. The evil mind which would justify the imposition of punitive damages may be manifested in either of two ways. It may be found where defendant intended to injure the plaintiff. It may also be found where, although not intending to cause injury, defendant consciously pursued a course of conduct knowing that it created a substantial risk of significant harm to others.... [P]unitive damages will be awarded on proof from which the jury may find that the defendant was "aware of and consciously disregard[ed] a substantial and unjustifiable risk that" significant harm would occur. [Citation omitted].

Arizona does not require a plaintiff to prove that the defendant has spite, malice or ill will directed toward the plaintiff. It is sufficient to establish that the defendant acted improperly to serve its own interests and consciously disregarded a substantial risk of significant harm to others. Bradshaw v. State Farm Mut. Auto. Co., 157 Ariz. 411, 422-23, 758 P.2d 1313, 1324-25 (Ariz.1988). The "evil mind" requirement need not be established by direct evidence; it may be inferred when a defendant acts to serve its own interests, consciously disregarding a substantial risk of significant harm to others. Ranburger v. Southern Pac. Trans. Co., 157 Ariz. 551, ----, 760 P.2d 551, 553 (Ariz.1988).

Southern Pacific places principal reliance on Volz v. Coleman Co., 155 Ariz. 567, 748 P.2d 1191 (Ariz.1987). Volz was tried before a jury and resulted in a verdict for the plaintiff, including an award of punitive damages. The Supreme Court of Arizona, sitting "In Banc," set aside the award of punitive damages. The defendant presented a large amount of evidence to the effect that Coleman only had knowledge of the possibility that a vent-hole filler cap on its camp stove might spray fuel when the cap was unscrewed. The injured plaintiff's father testified that he had not unscrewed the cap at the time it ejected gasoline that severely burned his daughter. Rather, he testified, he had not unscrewed the cap; that the fuel was released "spontaneously." 155 Ariz. at ----, 758 P.2d at 1194. The in banc court in Volz concluded, on the basis of the entire trial record, that there was insufficient evidence to support an award of punitive damages under either the former burden of proof of preponderance of the evidence or the new burden of proof of clear and convincing evidence set forth in Linthicum v. Nationwide Life Ins. Co., 150 Ariz. 326, ----, 723 P.2d 675, 681 (Ariz.1986).

Summary judgment may be granted only when there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c). Volz, decided after a jury trial, does not support the district court's decision to grant partial summary judgment here. We decide this appeal on the state of the record at the time the motion for summary judgment was submitted viewing all the evidence in a light most favorable to the plaintiff. In view of the evidence produced by the plaintiff that (1) the public had access to and used the defendant's property in the vicinity of the low-hanging wires; (2) the defendant had knowledge of that access and use; and (3) the defendant took no steps to remedy the situation despite its consciousness of the danger posed by the wires and the fact that they served the defendant's interests, we are unable to agree with the district court that there was no genuine issue of material fact.

The judgment of the district court is REVERSED and the case is REMANDED for further proceedings consistent with this opinion.