                    United States Court of Appeals
                          FOR THE EIGHTH CIRCUIT
                                 _________

                                  No. 04-3233
                                  ___________

Robert Reimer and Susan Reimer,           *
individually and as husband and wife,    *
                                         *
             Plaintiffs - Appellants,    *
                                         * Appeal from the United States
      v.                                 * District Court for the District
                                         * of Minnesota.
City of Crookston,                       *
                                         *
             Defendant - Appellee        *
                                         *
Crookston Public School District #593, *
Johnson Controls, Inc., Kriss Premium *
Products, Inc.,                          *
                                         *
             Defendants.                 *
                                    ___________

                            Submitted:
                                Filed: August 30, 2005
                                ___________

Before
                                  ___________

MELLOY, Circuit Judge.
       Robert Reimer, a boiler repairman, was severely injured by steam and scalding
water from a boiler. The boiler was in northern Minnesota at a pool jointly operated
by the City of Crookston (“City”) and Crookston Public School District #593
(“School District”). Following a trial, the jury apportioned fault to the School District
and Mr. Reimer, but apportioned no fault to the City. Mr. Reimer and his wife, Susan
Reimer, appeal, arguing that the district court improperly instructed the jury regarding
the issue of joint enterprise liability. The Reimers also argue that, under their
requested instruction, joint enterprise liability may be decided as a matter of law. We
agree, reverse, and direct entry of judgment against the City in favor of the plaintiffs.

                                           I.

      The School District owned and operated a swimming pool facility that included
a building and boiler. The School District found pool operations prohibitively
expensive and closed the pool. The City then approached the School District, and
entered into a Joint Powers Agreement under which the City and the School District
created a Joint Recreation and Education Board (the “Joint Board” or “Joint
Recreation Board”) to operate the pool. The Joint Recreation Board was a “joint
powers board” under Minn. Stat. § 471.59.

       The School District and the City also executed a related Financial
Responsibility Statement which provided, “The Joint Recreation and Education Board
is the governing structure designed to manage and oversee the operation of the
Crookston Swimming Pool. This facility is used primarily by Crookston area
residents for recreational swimming and secondarily by the public school for physical
education units on swimming.” The Statement clarified that the City and School
District would share the costs of pool operations on an equitable basis. The
Statement provided specifically that the School District would bear the cost of
building and grounds maintenance, including “routine maintenance and boiler



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checks,” and that the Joint Board would bear the costs of personnel, utilities, supplies,
chemicals, filters, and custodial services. Finally, the Statement provided that:

      Major capital expenses associated with maintenance, repair, and
      replacement of items such as lights, pumps, clocks, air circulation
      system, water filtration system, plumbing, pool tank surface, etc, is the
      responsibility of the joint board since the expense is caused by the
      ongoing, day-to-day operation of the facility which is shared jointly by
      Crookston residents and students.

       After the School District and City formed the Joint Board and operated the pool
jointly for a period of about ten years, the boiler at the pool needed to be repaired.
The School District contacted Mr. Reimer’s employer, and Mr. Reimer came to
Crookston to inspect the boiler. While positioning himself near the boiler, Mr.
Reimer accidentally struck and dislodged a corroded component, causing the boiler
to release steam and scalding water. He suffered serious burns over sixty-seven
percent of his body and incurred medical expenses that exceeded $700,000 as of the
time of trial. It is undisputed that the accident rendered Mr. Reimer unable to work.

       Mr. Reimer and his wife, Susan Reimer, sued the School District, the City, a
maintenance company, and a chemical supply company. The Reimers later moved
to add the Joint Board as a party. At a hearing to address the Reimers’ motion, the
parties entered into a written stipulation under which all parties agreed that the Joint
Board was not an indispensable party, no party could bring a motion to dismiss for
failure to name the Joint Board as an indispensable party, and “[t]he Joint Recreation
and Education Board’s liability in this action, if any, is the responsibility of either
Crookston Public School District No. 593, the City of Crookston, or both Crookston
Public School District No. 593 and the City of Crookston.”

     All defendants moved for summary judgment. There was evidence that certain
employees of the School District and maintenance service company had specific

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knowledge of the corroded component and had not warned Mr. Reimer of its
condition. The district court granted summary judgment, finding that none of the
defendants were obliged to warn Mr. Reimer because none of the defendants owed
Mr. Reimer a duty of care. The district court held in the alternative that the boiler
comprised an open and obvious danger and that Mr. Reimer assumed the risk of his
injuries.

       The Reimers appealed. On appeal, we held that material questions of fact
precluded a finding as to whether the City and/or School District owed Mr. Reimer
a duty of care. Reimer v. City of Crookston, 326 F.3d 957, 965 (8th Cir. 2003). We
also held that material questions of fact precluded a finding that Mr. Reimer had
accepted the risk of his injuries. Id. at 969-70. We affirmed the district court’s
dismissal of the maintenance service and chemical supply companies based on the
finding that these two companies owed no duty to Mr. Reimer. Id. at 965-66.

       The case then proceeded to trial. Because the School District owned the boiler,
and, in fact, exercised control over the boiler, the City’s only potential liability was
vicarious liability that arose by virtue of its participation in a joint enterprise with the
School District. The Reimers requested a special interrogatory that would have asked
the jury to decide whether a joint enterprise existed to operate the pool. The district
court did not use the Reimers’ requested instruction. The City requested—and over
the Reimers’ objection, the district court adopted—a special interrogatory that asked
the jury to decide whether a joint enterprise existed specifically for the purpose of
operating the boiler. The City’s requested interrogatory read as follows, “Is the
overall and routine maintenance, inspection or repair of the boiler at the swimming
pool a joint enterprise between the City of Crookston and Crookston Public School
District # 593?” The jury answered “No.”

       In addition to finding that no joint enterprise existed relating specifically to the
boiler, the jury found the School District 77% at fault and Mr. Reimer 23% at fault.

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The jury found that Mr. and Mrs. Reimer together were entitled to damages of over
$12 million.

       By statute, certain governmental entities in Minnesota enjoy the protection of
a $300,000 liability cap on damages in tort cases. Minn. Stat. § 466.04. The School
District and the City both qualify for protection under this statutory section.
Accordingly, although the jury awarded the Reimers over $12 million in damages, the
School District is only liable for $300,000. Given the severity of Mr. Reimer’s
injuries, the City stipulated at an earlier stage of these proceedings that, if found
liable, it would pay the statutory maximum of $300,000.

       On appeal, the Reimers do not argue that the City itself was negligent or in any
manner directly responsible for Mr. Reimer’s injuries. They argue only that the City
and the School District, as collaborators in a joint enterprise to operate the pool, are
jointly liable for damages arising out of the joint enterprise. They characterize the
district court’s limitation of the joint enterprise special interrogatory (to reference
only the boiler and not the entire pool operation) as an abuse of discretion. The
Reimers also characterize joint enterprise liability under Minnesota law as sufficiently
broad in scope to make enterprise participants liable for one another’s acts even if the
enterprise delegated responsibility for the injury-causing acts or devices to only one
of the participants.

       The City argues that the jury instruction was proper because the evidence at
trial and the Reimers’ theory of the case all focused on knowledge, operation, and
control of the boiler. The City also argues that joint enterprise liability under
Minnesota law is not as expansive as urged by the Reimers. In this regard, the City
argues that it cannot be held accountable for liability that arises from a task delegated
specifically to the School District. As a result, the City argues that the limited
instruction was appropriate both as to Minnesota law and as to the facts that the
parties presented to the jury at trial.

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        In the alternative, the City argues that the Reimers waived the option of seeking
damages from the City based on a theory of joint enterprise liability when they agreed
not to bring the Joint Board into the suit as a party. The City argues that this was a
tactical decision by the Reimers so that they could seek two separate statutory liability
caps, one from the School District and one from the City, rather than one statutory
liability cap from the Joint Board. This argument rests on two theories. The first is
that damages arising from activities by a statutory Joint Powers Board under Minn.
Stat. § 471.59, are subject to one liability cap applied to a Joint Powers Board as a
distinct governmental entity entitled to protection under the statute. The second
theory is that a single statutory liability cap for a Joint Powers Board acts as an
umbrella for all liability arising under the joint enterprise such that member entities
are not exposed to their respective, individual liability cap limits. We address the jury
instruction issue and the application of Minnesota’s statutory liability cap below.

                                           II.

                                 A. Jury Instructions

       We review jury instructions, including special interrogatories, for abuse of
discretion. Wilson v. Brinker Int’l, Inc., 382 F.3d 765, 771 (8th Cir. 2004); Lampkins
v. Thompson, 337 F.3d 1009, 1015 (8th Cir. 2003). “In reviewing a substantive
challenge to jury instructions, the pertinent query is whether the instructions, taken
as a whole and viewed in light of the evidence and applicable law, fairly and
adequately submitted the issues in the case to the jury.” Horstmyer v. Black &
Decker (U.S.), Inc., 151 F.3d 765, 771 (8th Cir. 1998) (internal quotation marks
omitted). Jury instructions should be “supported by competent evidence in the
record,” and jury instructions are not required “to instruct on issues that do not find
support in the record.” Brown v. Sandals Resorts Int’l, 284 F.3d 949, 953 (8th Cir.
2002).



                                          -6-
       We believe that the Reimers’ requested instruction accurately and fairly
characterized Minnesota law and that the defendants’ requested instruction imposed
limits not supported by Minnesota law. The issue to be decided in this case was
whether a joint enterprise existed through which liability could be imputed to the
City. See Beehner v. Cragun Corp., 636 N.W.2d 821, 832 (Minn. Ct. App. 2001)
(“Courts apply the joint venture or joint enterprise doctrine ‘when necessary to impute
negligence between two entities that otherwise have no legal relationship.’”) (quoting
Stelling v. Hanson Silo, Co., 563 N.W.2d 286, 290 (Minn. Ct. App. 1997)). Under
the applicable Minnesota law, parties to a joint enterprise or joint venture remain
jointly liable for the acts of coventurers even though the enterprise or venture
allocates responsibility and control over the device that caused harm to only one of
the participants. See Walton v. Fujita Tourist Enters., 380 N.W.2d 198, 202 (Minn.
Ct. App. 1986) (finding joint liability where a joint enterprise had delegated
responsibility to one participant, and stating, “For the same reasons that led them to
become joint venturers, Pacific Delight and Northwest delegated control of specific
aspects of the tours to each other. This division of responsibilities does not operate
to negate the existence of a joint venture.”) (emphasis added).

       This is the rule because the right of control rather than the exercise of actual
control determines liability. See Krengel v. Midwest Auto. Photo, Inc., 203 N.W.2d
841, 846-47 (Minn. 1973) (“In a joint adventure, the individual defendants are jointly
liable as a unit because of their mutual undertaking for a common purpose and their
right of direction and control over the enterprise, even though there is no actual
physical control or such control was never exercised.”) (emphasis added); Rehnberg
v. Minnesota Homes, Inc., 252 N.W.2d 454, 457 (Minn. 1952) (“Joint proprietorship
and control—there must be a proprietary interest and right of mutual control over the
subject matter of the property engaged therein”) (emphasis added). Minnesota’s
courts have stated that when parties to a joint enterprise delegate authority over a
particular device or action, the fact of delegation proves that the joint enterprise had
the necessary right of control. Roberts v. Donaldson, 149 N.W.2d 401, 407 (Minn.

                                          -7-
1967) (“Patently, the right must exist before it can be delegated or surrendered.”).
Here, the City argues that control over the boiler was delegated to the School District.
Under Roberts, rather than proving that the City is absolved of liability, the fact of
this delegation demonstrates that the Joint Board, in fact, had the necessary right of
control.

       Walton provides valuable guidance for resolution of the present case. In
Walton, the parties to a joint enterprise specifically delegated certain duties to one
another, yet the joint adventurers shared liability for damages arising from one party’s
execution of a delegated duty. Walton, 380 N.W.2d at 203. The purpose of the
enterprise was to conduct travel tours. Id. at 200. One party was responsible for air
travel, and the other was responsible for on-the-ground arrangements. Id.
Notwithstanding this clear delegation of duties, the Minnesota Court of Appeals held
both members of the joint enterprise liable after a traveler was injured on the ground
during a tour. Id. at 202-03. The court described the effect of a delegation of
responsibility as follows:

      This does not mean that Northwest was expected to inspect every hotel
      and tourist attraction that tour members would visit; that duty was
      primarily delegated to Pacific Delight and its agent, Fujita Tourist
      Enterprises. When a coventurer breaches its delegated duty, however,
      liability incurred by the breach is the joint responsibility of all the
      coventurers.

Id. at 203 (emphasis added).

       Based on Krengel and Walton, then, it was not necessary as a matter of
Minnesota law for the jury in the present case to find a joint enterprise specific to the
boiler. It was only necessary for the jury to find a joint enterprise sufficient in scope
to include a right of control over the boiler by the joint enterprise. Accordingly, the
use of an instruction that limited the scope of the joint enterprise to focus only on the

                                          -8-
device that caused harm rather than the broader subject of the parties’ agreement did
not “fairly and adequately [submit] the issues in the case to the jury.” Horstmyer, 151
F.3d at 771.

       Regarding a relationship between the Reimers’ proposed instructions and the
facts and arguments presented to the jury at trial, we also believe that the instruction
should have addressed a joint enterprise concerning the pool and not just the boiler.
It was and is undisputed that the School District and City entered a joint enterprise
to operate the pool. There is no allegation that there was a separate agreement to
form some other joint enterprise. The agreement to form the Joint Board was before
the jury. The related Financial Responsibility Statement was also before the jury.
These documents unambiguously addressed operation of the pool and allocated
responsibility over the boiler to the School District. As a practical consideration, it
is beyond dispute that a swimming pool in northern Minnesota is largely decorative
for a large portion of the year if not provided with some form of heat. It is therefore
disingenuous for the defendants to argue that all the facts at trial related solely to the
boiler and that none of the facts before the jury related to operation of the pool.
Accordingly, the facts before the jury, as well as Minnesota law regarding joint
enterprise liability, demanded an instruction as to a joint enterprise aimed broadly at
the operation of the pool.

       Because the existence of a joint enterprise to operate the pool is not genuinely
in dispute, we need not remand for a jury finding under the Reimers’ requested
instruction. See Krengel, 203 N.W.2d at 846 (holding that although the question of
whether a joint venture existed should have been submitted to the jury, undisputed
facts permitted a finding of a joint venture as a matter of law).1 Rather, we hold as

      1
       Minnesota cases characterize the existence of a joint enterprise as both a
question of law, and as a question of fact. Compare Beehner, 636 N.W.2d at 832
(“Whether a joint venture or a joint enterprise exists is a question of law.”) with
Hansen v. St. Paul Metro Treatment Ctr., Inc., 609 N.W.2d 625, 627 (Minn. Ct. App.

                                           -9-
a matter of law that a joint enterprise existed and that the School District and City, as
members to that joint enterprise, bear joint responsibility for the damages allocated
by the jury to the School District.

                             B. Statutory Liability Caps

       Turning to the application of Minnesota’s statutory liability caps, the City
argues that the Board was a separate municipal entity under Minnesota law and that
the Reimers cannot obtain two statutory liability caps under a theory of joint
enterprise liability because the joint enterprise itself is only liable for one cap. We
reject these arguments.

       First, Greater Morrison Sanitary Landfill, SW-15, 435 N.W.2d 92, 96-97
(Minn. Ct. App. 1989), makes clear that Minnesota law is unsettled regarding the
nature of joint powers boards created under the Joint Exercise of Powers Act, Minn.
Stat. § 471.59. In Greater Morrison Sanitary Landfill, certain towns and cities had
formed a joint powers board under Minn. Stat. § 471.59 to operate a landfill. Some
of the members withdrew from the board before a landfill operated by the board
incurred closing costs. The member cities that had withdrawn from the board
attempted to avoid liability for the closing costs. Minnesota’s own courts identified,
but avoided deciding the issue of how precisely to characterize a joint powers board
for the purpose of imputing liability to its members:




2000) (“Whether a joint venture exists has been described as a question for the fact-
finder to determine.”). We need not attempt to resolve this matter of state law
because, even if the existence of a joint enterprise is a question of fact, there is no
material dispute in this case regarding the existence of an enterprise to operate the
pool. Accordingly, on the facts of this case, we may decide the issue as matter of law.


                                          -10-
      It is not clear whether a separate legal entity is created when
      governmental units act pursuant to the Joint Exercise of Powers Act,
      Minn. Stat. § 471.59. Neither is it clear, if an entity indeed is created,
      whether that entity has the attributes of a corporation or partnership, or
      is simply an agent acting on behalf of the principal member
      governmental units.

      We believe that the entity, if any, created through the joint exercise of
      powers is in the nature of hybrid, potentially possessing attributes of all
      the aforementioned legal relationships. The precise nature of any one
      such entity, however, must be determined on a case by case basis upon
      a thorough analysis of the purpose for and responsibilities of the entity.
             ...
      We decline to determine whether the relationship between [the
      withdrawn board members] and the board is more aptly characterized as
      one of principal-agent or partnership. Suffice to say, under either
      characterization, [the withdrawn Board members] are not necessarily
      absolved of liability. If the Landfill Board is merely an agent, [the
      members’] liability, as principals, cannot be disputed. If there is a
      partnership, then [the members] are individually liable for all debts and
      obligations incurred prior to dissolution.

Id., 435 N.W.2d at 96-97.

        The City not only fails to acknowledge this case, but actually declares the
opposite to be true, citing only Section 471.59 and claiming that the Board in this
case is a separate entity, like a corporation, that can limit the underlying members’
liability. If, following Greater Morrison Sanitary Landfill, members of a Section
471.59 joint powers board can be held jointly responsible for liabilities incurred by
the activities of the board, then a joint powers board is to be treated like any other
joint enterprise or joint venture under Minnesota law. As suggested in Greater
Morrison Sanitary Landfill, this treatment is akin to a principal-agent or partnership
relationship. Under such models, the Joint Board in the present case is not a separate,
limited liability entity entitled to its own, separate liability cap. Beehner, 636 N.W.2d


                                          -11-
at 832 (“Courts apply the joint venture or joint enterprise doctrine ‘when necessary
to impute negligence between two entities that otherwise have no legal
relationship.’”) (quoting Stelling, 563 N.W.2d at 290).

       Under a theory of partnership or agency, without the protection of a separate,
limited liability entity, we believe that the liability caps to apply should be the
respective liability caps of the underlying principals or partners. This result makes
sense because regardless of whether a municipal entity incurs liability through its
individual acts or through the acts of its partners or agents, it should still be entitled
to limit its own liability by virtue of its own liability cap. See Minn. Stat. § 466.04.
Further, we find no suggestion in the text or history of the statute to suggest that
Minnesota’s legislature intended to extend the benefit of Section 466.04 to a broader
class of entities simply because those entities are comprised of, or choose to enter into
ventures with, protected entities. Greater Morrison Sanitary Landfill does not answer
this exact question, and, in fact, it deals with an arguably unique situation involving
lingering liability for environmental clean-ups. However, it strongly suggests that the
Joint Board itself is not entitled to recognition as a limited liability entity and that the
Reimers should be able to demand two statutory liability caps (one from each
“partner” or “principal”).

       Another Minnesota case, Dang v. St. Paul Ramsey Medical Ctr., Inc., 490
N.W.2d 653 (Minn. Ct. App. 1992), also supports this result. Dang involved a
judgment against a hospital and a group of physicians. The hospital was a municipal
entity subject to the maximum liability cap of Section 466.04. The court determined
that a joint enterprise existed between the hospital and the physicians, but that the
joint enterprise itself and its member physicians were not subject to the protection of
Section 466.04. Dang, 490 N.W.2d at 658. Accordingly, the hospital and the
physicians were jointly liable for the damages, but the hospital and only the hospital
was entitled to limit its contribution by virtue of the statutory cap. Id. Although the
joint enterprise in Dang was not a joint powers board under Minn. Stat. § 471.59,

                                           -12-
Dang is instructive on the nature of the liability caps—they are personal to the parties
being asked to satisfy the judgment, not general umbrellas that lie over the top of an
enterprise in which a protected party chooses to participate.

       Finally, the City argues that the Reimers waived their right to seek the full
amount of the statutory liability caps from more than one entity when they entered the
stipulation and elected not to demand joinder of the Joint Board as a party. We find
this argument to be without merit. The stipulation expressly stated that the Board was
not an indispensable party and that any liability would be the responsibility of the
City, the School Board, or both. Our current holding imposes liability on both, as
clearly permitted under the parties’ stipulation.

       Because we hold that the City shares in the liability apportioned to the School
District, because damages far exceed the statutory liability caps, and because the City
earlier stipulated that it would pay the full liability cap if found at all liable, we
remand for entry of judgment against the City.
                        ______________________________




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