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Damage award over $20 million upheld

What the court held

Case: Staskal v. Symons Corp., No. 2004AP663.

Issue: Was an OSHA report properly excluded from evidence, notwithstanding Rule 908.03(8)?

Is a compensatory damage award that included $7.5 million for pain and suffering excessive?

Does a punitive damage award of $15 million violate due process?

Holding: Yes. Where the report was based on an indisputably incorrect fact, and the citations resulting from the report were significantly reduced, the report’s trustworthiness was undermined and it was properly excluded.

No. Where a worker was trapped underneath rubble from the collapse of a floor for hours, and suffered permanent damage, the award is not excessive.

No. Where the defendant risked the lives of the construction workers on a project, and the ratio of punitive to compensatory damages was less than 2:1, the award does not violate due process.

Counsel: James T. Ferrini, Chicago, Ill.; Edward M. Kay, Chicago, Ill.; Lori M. Lubinsky, Madison; Barbara I. Michaelides, Chicago, Ill.; John W. Patton Jr., Chicago, Ill., for appellant; Eric A. Farnsworth, Madison; Daniel W. Hildebrand, Madison; Joseph A. Ranney III, Madison, for respondent.

The Wisconsin Court of Appeals on Sept. 1 affirmed a jury verdict awarding, among other damages, $7.5 million in pain and suffering, and $15 million in punitive damages.

Symons Corporation manufactures concrete forming systems, consisting of aluminum trusses supported by adjustable legs. Plywood and forms provided by the contractor are placed on top of the trusses to make a table upon which concrete is poured to form the floors.

Symons provides contractors with plans for the assembly and use of the system. Each floor is poured in sections between concrete columns that are cast before the floors are poured. After the concrete is hardened it becomes the foundation for the next floor.

Kraemer Brothers, LLC was the general contractor for a new pharmacy building at the University of Wisconsin, and Terry Skaskal is a construction worker employed by Kraemer.

A section of the fourth floor collapsed while cement was being poured, and Staskal was pinned under the rubble for three-and-a-quarter hours before being extricated. He sustained severe physical injuries and suffered post-traumatic stress syndrome.

The Occupational Safety and Health Administration (OSHA) investigated the collapse, and the investigator cited Kraemer with four "serious" violations. Kraemer contested the citations and entered into a settlement agreement that eliminated two violations, reduced the penalties for the other two, and reclassified one from "serious" to "other than serious."

The settlement also stated, "The … Form System, which was not designed by [Kraemer] was not capable of supporting the maximum load…"

OSHA also notified Symons of hazards, and recommended correction, but did not issue any citations.

Staskal brought suit against Symons, seeking compensatory and punitive damages. Staskal’s expert witness testified that the collapse occurred because Symons’ system was inadequate to carry the load.

Symons’ expert witness agreed that the legs were not adequately braced to support the load, but did not agree that this caused the collapse, testifying that the collapse was caused by changes Kraemer made in the configuration of the legs. The court held the OSHA report inadmissible.

The court also issued a tentative holding that evidence of Symons having insurance coverage for punitive damages would be admissible on rebuttal, if Symons suggested to the jury that it lacked ability to pay. Symons refrained from presenting such evidence, and no final ruling was made on the issue.

The jury apportioned 80 percent of the negligence to Symons, and awarded almost $9 million in compensatory damages, including $1.5 million for past pain and suffering, and $6 million in future pain and suffering. The jury also awarded $500,000 to Staskal’s wife for loss of consortium, and $15 million in punitive damages.

Symons sought a new trial, but Dane County Circuit Court Judge Diane M. Nicks denied the motion.

Symons appealed, but the court of appeals affirmed in a decision by Judge Margaret J. Vergeront.

OSHA Report

The court first held that the OSHA report was properly excluded from evidence.

The circuit court had excluded the report for three reasons: the conclusions were based on an erroneous factual assumption; the amendments in the settlement agreement undermined its trustworthiness; and no one from OSHA would be available at trial to answer questions about these uncertainties.

The court also found that, because OSHA was investigating only Kraemer, and not Symons, any relevance of the report was outweighed by the danger of confusion and unfair prejudice, and that the report was cumulative because both parties had experts who were going to testify about causation and negligence.

The court of appeals affirmed, reasoning, "the court’s reading of the settlement agreement — that it could mean that OSHA had changed its position on causation to include a problem with the two-piece leg system — is a reasonable one. It is not necessarily the only reasonable one, but the circuit court did not conclude that it was. Rather, the court reasonably vi
ewed the settlement agreement as raising questions about the reliability of the conclusions in the report, and it took those questions into account in evaluating the trustworthiness of the report, along with the inability to ask the investigator these questions."

The court cited with approval, Hines v. Brandon Steel Decks, Inc., 886 F.2d 299, 303-04 (11th Cir. 1989), in which the court held that the inability to call an OSHA investigator as a witness to cross-examine him — pursuant to 29 C.F.R. secs. 2.20-2.25 — was a proper factor to take into account in excluding the report. The court reasoned, "That factor cannot alone make a report untrustworthy, because the rule contemplates the unavailability of the declarant, but it is nonetheless proper to consider in deciding trustworthiness."

The court also agreed with the circuit court that the OSHA report would be cumulative, because expert witnesses had testified for each side.

Compensatory Damages

The court also upheld the award of compensatory damages, reasoning, "the circuit court is in a better position than this court to decide if the challenged awards are unreasonably high given the evidence when viewed most favorably to the verdict. Essentially, as the court observed, the evidence concerning Staskal’s injuries, his past and future pain, suffering and disability and the impact on his wife was not disputed: in the court’s words, the jury ‘was faced with uncontested evidence of a horrendous accident, a horrendous experience, a terribly difficult recovery, and a future with no hope of full recovery, and the only prospect being one of deterioration.’ The difficult task of the jury was to arrive at dollar amounts to fully compensate for these injuries and losses. We see no basis for reversing the circuit court’s conclusion that the amounts the jury arrived at are reasonable based on the evidence."

Punitive Damages

After upholding the amount of the punitive damage award, the court held there was no error on the circuit court’s part in leaving open the possibility that Staskal could present evidence of Symons having insurance for such damages.

Prior to trial, Symons had moved to preclude evidence of liability insurance coverage, arguing that, pursuant to City of West Allis v. Wis. Elec. Power Co., 2001 WI App 226, 248 Wis.2d 10, 635 N.W.2d 873, such evidence is not admissible to show its wealth.

The circuit court held that, while such evidence is generally not admissible, it may permit the evidence to be admitted on rebuttal, if Staskal argued that a punitive damage award would financially imperil the company.

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Case Analysis

Symons had intended to present evidence that it had been forced to lay off employees, close distribution centers, and could not fund its pension obligations the previous year. Because of the ruling, however, it did not present the evidence.

The court of appeals concluded that Symons waived any claim of error by not actually presenting the evidence, however, reasoning, "In order to properly preserve a claim of evidentiary error for appeal, a litigant must raise the issue in a manner that gives the circuit court opportunity to make a ruling. State v. Kuntz, 2003 WI App 205, par. 27, 267 Wis. 2d 531, 671 N.W.2d 660. If a court does not make a definitive pretrial ruling on an issue raised by a party, the party must raise the issue during trial in order to preserve it for appeal. Id., at par. 30. If the party does not do so, the issue is waived and we do not address it on appeal. Id., at par. 31.

Because Symons never asked the circuit court to allow it to present Benka’s testimony but not allow evidence of its insurance in rebuttal, Symons has waived the issue."

Accordingly, the court affirmed.

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David Ziemer can be reached by email.

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