#25811, #25827-a-JKM

2011 S.D. 68

                             IN THE SUPREME COURT
                                     OF THE
                            STATE OF SOUTH DAKOTA

                                   * * * *

DONALD JACOBS,                               Plaintiff and Appellee,
     v.
DAKOTA, MINNESOTA & EASTERN
RAILROAD CORPORATION, A
DELAWARE CORPORATION,                        Defendant and Appellant.

                                * * * *
                   APPEAL FROM THE CIRCUIT COURT OF
                      THE THIRD JUDICIAL CIRCUIT
                   BROOKINGS COUNTY, SOUTH DAKOTA

                                * * * *
                       HONORABLE DAVID R. GIENAPP
                                 Judge

                                   * * * *

RONALD A. PARSONS, JR. of
Johnson, Heidepriem & Abdallah, LLP
Sioux Falls, South Dakota

RICK A. RIBSTEIN of
McCann, Ribstein, & McCarty, PC
Brookings, South Dakota

GREGORY T. YAEGER of
Yaeger, Jungbauer & Barczak, PLC
Saint Paul, Minnesota                        Attorneys for plaintiff
                                             and appellee.
BRIAN J. DONAHOE
ONNA B. HOUCK
WILLIAM D. SIMS of
Cutler & Donahoe LLP                         Attorneys for defendant
Sioux Falls, South Dakota                    and appellant.

                                   * * * *
                                             ARGUED ON MAY 25, 2011

                                             OPINION FILED 10/12/11
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MEIERHENRY, Retired Justice

[¶1.]           Donald Jacobs worked for Dakota, Minnesota, & Eastern Railroad

Corporation (DM&E). Jacobs was injured on the job when he fell on snow-covered

ice. Jacobs suffered severe injuries to his elbow and shoulder as a result. He

subsequently filed a personal injury claim under the Federal Employers’ Liability

Act (FELA), which permits suit against railroads for an employee’s injury that

“result[s] in whole or in part from [the railroad’s] negligence.” 45 U.S.C. § 51. After

a jury trial, the jury returned a verdict in Jacobs’s favor. The jury awarded

$300,000 in damages. DM&E appeals, raising several issues. Jacobs raises one

issue by notice of review.

[¶2.]           Jacobs’s injury occurred on January 7, 2007, while performing his

duties as a rail-car mechanic for DM&E in Huron, South Dakota. His duties took

him into the rail yard to check with the train crews for any mechanical problems.

He reached each crew by driving a vehicle over the graveled paths in the rail yard.

On the day of his injury, snow and ice had accumulated on the rail yard grounds.

Because of the snow and ice, Jacobs wore work-issued “ice cleats” over his boots.

Even with the ice cleats, he slipped and fell on a patch of snow-covered ice as he

returned to his vehicle after talking to one of the crews. The fall fractured his elbow

and ultimately caused an injury to his shoulder. Both his elbow and shoulder

required surgery. As a result of his injuries, Jacobs has permanent lifting

restrictions.

[¶3.]           Jacobs filed suit against DM&E under FELA. Jacobs alleged that

DM&E’s negligence caused his injuries. The jury ultimately awarded Jacobs


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$300,000. DM&E filed a motion for a judgment as a matter of law and alternatively

moved for a new trial. The trial court denied both motions and ordered that

interest be paid on the judgment, calculated from the day of the verdict. DM&E

also filed a motion for a set-off of $16,086.06 for wage-continuation payments made

to Jacobs as a form of short-term disability benefits. The trial court granted that

motion.

[¶4.]        DM&E raises the following issues on appeal:

             1.     Whether the trial court erred in allowing evidence of drainage
                    problems and, if that evidence was admissible, erred in failing to
                    enter a judgment as a matter of law.

             2.     Whether the trial court abused its discretion in denying DM&E’s
                    motion for a new trial.

             3.     Whether the trial court erred in ordering prejudgment interest
                    from the time of the verdict until the entry of judgment.

[¶5.]        By notice of review, Jacobs raises the following issue on appeal:

             4.     Whether DM&E was entitled to a set-off on the judgment.

                               Analysis and Decision

[¶6.]        1.     Whether the trial court erred in allowing evidence of
                    drainage problems and, if that evidence was admissible,
                    erred in failing to enter a judgment as a matter of law.

[¶7.]        DM&E presents two arguments under this issue. First, DM&E claims

that the trial court erred by admitting photographs and testimony concerning water

pooling and drainage in the rail yard. The photographs, which were taken months

after Jacobs’s accident, showed the area of his fall and other areas of the rail yard.

Jacobs offered the photographs and accompanying testimony to show that the rail

yard’s poor drainage caused ice to form. DM&E claims that Jacobs unfairly used


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the evidence to show that the poor drainage was “known to DM&E and caused ice to

form, which was the basis for concluding that ice accumulation was foreseeable.”

DM&E questions the relevancy of the evidence and asserts that the “admission of

this evidence was improper and unfairly prejudicial far beyond any probative

value.” 1

[¶8.]         We review evidentiary rulings under the abuse of discretion standard.

Stockwell v. Stockwell, 2010 S.D. 79, ¶ 42, 790 N.W.2d 52, 66. An abuse of

discretion occurs when the trial court’s ruling is “clearly against reason and

evidence.” DFA Dairy Fin. Servs., L.P. v. Lawson Special Trust, 2010 S.D. 34, ¶ 17,

781 N.W.2d 664, 669 (citation omitted). Here, the photographs and testimony were

relevant to show the rail yard’s alleged drainage problems. Even though DM&E

may not agree with the evidence, it was able to cross examine and rebut it. We find

no abuse of discretion in admitting the photographs and testimony.

[¶9.]         As to the second argument under this issue, DM&E argues that it is

entitled to a judgment as a matter of law on the issue of foreseeability. Both parties

agree that for Jacobs to prevail on his claim, DM&E must have foreseen the hazard

that ice accumulation presented. See CSX Transp., Inc. v. McBride, __ U.S. __, 131

S. Ct. 2630, 2634, 180 L. Ed. 2d 637 (5-4 decision) (citing Gallick v. Baltimore &

Ohio. R.R. Co., 372 U.S. 108, 117, 83 S. Ct. 659, 665, 9 L. Ed. 2d 618 (1963) (stating



1.      DM&E also argues that Jacobs’s expert witness misinterpreted deposition
        testimony on which he based his conclusions. DM&E contends that it
        objected to those misinterpreted portions of the deposition testimony. But, by
        DM&E’s own admissions, those objections were sustained. Therefore it is
        unclear what relief DM&E seeks on appeal.


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that “reasonable foreseeability of harm is an essential ingredient of [FELA]

negligence”)). DM&E contends that the trial court should have granted its motion

for a judgment as a matter of law because Jacobs presented “no evidence” that it

was foreseeable that ice would accumulate in the area of his accident. This Court

reviews the denial of a motion for a judgment as a matter of law for an abuse of

discretion. See Cooper v. Rang, 2011 S.D. 6, ¶ 4 n.1, 794 N.W.2d 757, 758 n.1.

Further, this Court “view[s] the evidence and testimony in a light most favorable to

the verdict.” Id.

[¶10.]         In its brief, DM&E argues that foreseeability is a prerequisite to

concluding that an employer’s negligence proximately caused an employee’s injury.

The United States Supreme Court recently addressed what an employee needs to

prove under FELA to satisfy the proximate cause standard. See McBride, __ U.S.

__, 131 S. Ct. at 2636-37.

[¶11.]         McBride’s central holding reaffirmed the proximate cause standard

pronounced in Rogers v. Mo. Pac. R.R. Co., 352 U.S. 500, 77 S. Ct. 443, 1 L. Ed. 2d

493 (1957). In Rogers, the Court held that an employer was liable under FELA if

the employer’s “negligence . . . played any part at all” in bringing about the

employee’s injury. McBride, __ U.S. __, 131 S. Ct. at 2638 (citing Rogers, 352 U.S.

at 508, 77 S. Ct. at 443) (emphasis added). 2 In addressing Rogers’ “any part”

standard, the McBride Court defined proximate cause:




2.       In reaffirming the “any part” standard from Rogers, the McBride Court relied
         on the “statutory history and precedent on which Rogers drew”:

                                                                    (continued . . .)
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               The term “proximate cause” is shorthand for a concept: Injuries
               have countless causes, and not all should give rise to legal
               liability. See W. Keeton, D. Dobbs, R. Keeton, & D. Owen,
               Prosser and Keeton on Law of Torts § 42, p. 273 (5th ed. 1984)
               (hereinafter Prosser and Keeton). “What we . . . mean by the
               word ‘proximate,’” one noted jurist has explained, is simply this:
               “[B]ecause of convenience, of public policy, of a rough sense of
               justice, the law arbitrarily declines to trace a series of events
               beyond a certain point.” Palsgraf v. Long Island R.R. Co., 248
               N.Y. 339, 352, 162 N.E. 99, 103 (1928) (Andrews, J., dissenting).

McBride, __ U.S. __, 131 S. Ct. at 2637 (citations original).

[¶12.]         Regarding foreseeability, the McBride Court stated that juries must

initially be asked in FELA cases whether the railroad “‘fail[ed] to observe that

degree of care which people of ordinary prudence and sagacity would use under the




_________________________
(. . . continued)
               Before FELA was enacted, the “harsh and technical” rules of
               state common law had “made recovery difficult or even
               impossible” for injured railroad workers. Trainmen v. Virginia
               ex rel. Virginia State Bar, 377 U.S. 1, 3, 84 S. Ct. 1113, 12 L. Ed.
               2d 89 (1964). “[D]issatisfied with the [railroad’s] common-law
               duty,” Congress sought to “supplan[t] that duty with [FELA’s]
               far more drastic duty of paying damages for injury or death at
               work due in whole or in part to the employer’s negligence.”
               Rogers, 352 U.S. at 507, 77 S. Ct. 443. Yet, Rogers observed, the
               Missouri court and other lower courts continued to ignore
               FELA’s “significan[t]” departures from the “ordinary common-
               law negligence” scheme, to reinsert common-law formulations of
               causation involving “probabilities,” and consequently to “deprive
               litigants of their right to a jury determination.” Id., at 507, 509–
               510, 77 S. Ct. 443. Aiming to end lower court disregard of
               congressional purpose, the Rogers Court repeatedly called the
               “any part” test the “single” inquiry determining causation in
               FELA cases. Id., at 507, 508, 77 S. Ct. 443 (emphasis added).

         McBride, __ U.S. __, 131 S. Ct. at 2638-39 (citations original). Thus, the
         Court recognized the distinction between the common law proximate-cause
         standard and the FELA proximate-cause standard.

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same or similar circumstances?’” McBride, __ U.S. __, 131 S. Ct. at 2643 (quoting

Gallick, 372 U.S. at 118, 83 S. Ct. at 665). The Court went on to note that “the jury

may be told that ‘[the railroad’s] duties are measured by what is reasonably

foreseeable under like circumstances.’” Id. (quoting Gallick, 372 U.S. at 118, 83 S.

Ct. at 665).

[¶13.]         In this case, the trial court instructed the jury on foreseeability under

FELA as “requir[ing] Defendant to guard against those risks of dangers of which it

knew or by the exercise of due care should have known. In other words Defendant’s

duty is measured by what a reasonably prudent person would anticipate or foresee

resulting from particular circumstances.” The trial court further instructed that

               because the amount of care exercised by a reasonably prudent
               person varies in proportion to the danger known to be involved
               in what is being done, it follows that the amount of caution
               required in the use of ordinary care will vary with the nature of
               what is being done, and all the surrounding circumstances
               shown by the evidence in the case. As the danger that should
               reasonably be foreseen increases, so the amount of care required
               by law also increases.

Given McBride’s recent statement of the law concerning FELA cases, we conclude

that these instructions accurately advised the jury on the issue of foreseeability.

[¶14.]         Furthermore, there was a factual basis in the record for the jury to

conclude that DM&E could foresee that a hazard could exist from ice accumulation

on the rail yard. Jacobs points out, as a practical matter, that ice accumulation in

South Dakota, especially in January, is foreseeable. Moreover, DM&E employee

Kevin Walton, who worked on the rail yard the day before Jacobs’s accident,

testified that the rail yard was as slippery the day before Jacobs’s accident as it was

on the day of the actual accident. And Jacobs presented expert testimony through

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Raymond Doffany, who opined that DM&E should have known that ice could

accumulate on its Huron rail yard given the location and weather conditions. In

fact, DM&E had certain safety precautions to prevent accidents like Jacobs’s,

which, according to Jacobs, indicated that DM&E actually knew of the dangers of

ice accumulation. These precautions included clearing ice and snow from the rail

yard, issuing “ice cleats” to employees, and salting and sanding slippery sections of

ground.

[¶15.]       Collectively, these facts sufficiently demonstrate that DM&E could

foresee that ice could accumulate on its rail yard thereby creating a hazard. See

Ferguson v. Moore-McCormack Lines, Inc., 352 U.S. 521, 523, 77 S. Ct. 457, 458, 1

L. Ed. 2d 511 (1957). It was, therefore, appropriately left to the jury to decide

whether DM&E “fail[ed] to observe that degree of care which people of ordinary

prudence and sagacity would use under the same or similar circumstances.” See

McBride, __ U.S. __, 131 S. Ct. at 2634 (quoting Gallick, 372 U.S. at 118, 83 S. Ct.

at 665). Consequently, the trial court did not abuse its discretion in denying

DM&E’s motion for a judgment as a matter of law on foreseeability.

[¶16.]       2.     Whether the trial court abused its discretion in denying
                    DM&E’s motion for a new trial.

[¶17.]       DM&E’s argument under this issue is related to the appropriateness of

the jury instruction given on loss of earning capacity. The trial court instructed the

jury on loss of earning capacity as follows:

             Loss of future earning capacity is the reduction in the ability to
             work and earn money generally, rather than a reduction in the
             ability to work and earn money in a particular job. In
             determining loss of future earning capacity, you may award


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             Plaintiff damages for those earnings he is reasonably certain to
             lose in the future due to DM&E’s conduct.

             In considering this element of damages, you should consider the
             Plaintiff’s age, health, skill, training, experience, work habits,
             and whether the loss of earning capacity is temporary or
             permanent . . . .

DM&E did not object to this instruction at trial or propose an alternative

instruction when settling jury instructions at the close of trial. Yet DM&E now

proposes that a new instruction be given on remand that “reflect[s] the current

regulatory environment and employment realities” after the adoption of the

Americans with Disabilities Act of 1990 and ADA Amendments Act of 2008.

Because DM&E did not appropriately preserve this issue, we decline to address it.

See Alvine Family Ltd. P’ship v. Hagemann, 2010 S.D. 28, ¶ 20, 780 N.W.2d 507,

514 (stating that an objection to jury instructions must be made clearly on the

record to preserve the issue for appeal) (citations omitted); Knudson v. Hess, 1996

S.D. 137, ¶ 12, 556 N.W.2d 73, 77 (“Having never raised the issue . . . at the trial

level and having made no objection to the jury instruction on these grounds,

[Plaintiff] cannot now assert that the trial court erred on matters it was never

asked to determine.”) (citations omitted).

[¶18.]       DM&E further argues that under the “reasonably certain” standard,

Jacobs failed to produce sufficient evidence of his future loss of earning capacity.

DM&E claims that the evidence Jacobs used to establish loss of future earning

capacity was deficient because it was based on speculation.

[¶19.]       Generally, to recover for loss of earning capacity, the loss must be

“reasonably certain” to occur. Marnette v. Morgan, 485 N.W.2d 595, 598 (S.D.


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1992); Martinez v. Union Pac. R.R. Co., 82 F.3d 223, 227-28 (8th Cir. 1996).

Testimony was given comparing Jacobs’s ability to perform certain jobs before and

after his injury. This testimony established that Jacobs’s injury left him with

significant work limitations that have affected his ability to perform his duties as a

rail-car mechanic. Further, a vocational rehabilitation expert testified that Jacobs’s

earning capacity has been negatively affected, which has reduced his wage

expectation considerably.

[¶20.]       DM&E does not dispute these facts on appeal. Rather, DM&E argues

that there was no “evidence [presented] at trial that [Jacobs] was reasonably certain

to lose his job with DM&E.” Notably, after his accident, DM&E continued to

employ Jacobs in a position that accommodated his work limitations. But DM&E

has not guaranteed Jacobs continued employment. Furthermore, there were

sufficient facts making it reasonably certain that Jacobs would suffer a loss of

earning capacity. The jury had before it evidence that Jacobs suffered a severe and

debilitating injury that limited his ability to perform basic tasks as a rail-car

mechanic. As a result, if Jacobs were forced to find work outside of the

accommodating position DM&E created for him, Jacobs’s expectation for pay would

be reduced. Thus, the record contained evidence that it was reasonably certain that

Jacobs would suffer a loss of earning capacity. Consequently, the trial court did not

abuse its discretion in denying DM&E’s motion for a new trial on this issue.

[¶21.]       DM&E also argues under this issue that “the trial court erred in

failing to give a special verdict form with interrogatories so that the issue of

potentially speculative loss of earning capacity damages could be assessed.” This


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Court has cautioned “trial courts to use special interrogatories in order to avoid

confusion” in some cases but has also stated that “it [is] not an abuse of discretion to

use . . . general verdict form[s].” Zahn v. Musick, 2000 S.D. 26, ¶ 42-43, 605

N.W.2d 823, 832. We have also stated that “[t]rial courts would be well advised in

cases such as this to submit special interrogatories to the jury regarding the amount

awarded for each element of damages. Such a practice would eliminate confusion

over what part of the award, if any, was for such services, and aid in meaningful

appellate review.” Id. ¶ 42 (quoting Stormo v. Strong, 469 N.W.2d 816, 825 (S.D.

1991)). Here, we reaffirm that even though special interrogatories are preferable in

cases like this, the trial court did not abuse its discretion in deciding not to give

them.

[¶22.]         3.    Whether the trial court erred in ordering prejudgment
                     interest from the time of the verdict until the entry of
                     judgment.

[¶23.]         DM&E argues that the trial court erred when it ordered DM&E to pay

prejudgment interest from the date of the verdict because “prejudgment interest is

not allowed under FELA.” This issue arose at trial after DM&E moved for a stay of

execution of judgment under SDCL 15-6-62(b) 3 until all post-trial motions were



3.       SDCL 15-6-62(b) provides:

               In its discretion and on such conditions for the security of the
               adverse party as are proper, the court may stay the execution of
               or any proceedings to enforce a judgment pending the
               disposition of a motion for a new trial made pursuant to § 15-6-
               59, or of a motion for relief from a judgment or order made
               pursuant to § 15-6-60, or of a motion for judgment in accordance
               with a motion for a directed verdict made pursuant to § 15-6-50.


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addressed. The trial court granted DM&E’s motion. Jacobs responded to DM&E’s

post-trial motions and requested that the trial court clarify whether its order

staying execution also stayed interest. Jacobs specifically contended that

prejudgment interest was not at issue here. Instead, Jacobs argued that post-

judgment interest was what he was pursuing. Jacobs further argued that a stay of

execution generally does not stay interest. The trial court ultimately concluded that

awarding interest in this case was appropriate because South Dakota’s post-

judgment interest statute and FELA do not conflict.

[¶24.]       SDCL 15-16-3 provides that “[w]hen a judgment is for the recovery of

money, interest from the time of the verdict or decision until judgment be finally

entered must be added to the judgment of the party entitled thereto.” For cases

involving FELA, prejudgment interest is a matter of federal law and is prohibited.

Monessen Sw. Ry. Co. v. Morgan, 486 U.S. 330, 335-36, 108 S. Ct. 1837, 1842-43,

100 L. Ed. 2d 349 (1988). Prejudgment interest has been defined as interest from

the date of judicial demand until the verdict. See La. & Ark. Ry. Co. v. Pratt, 142

F.2d 847, 849 (5th Cir. 1944). FELA, however, only supersedes state statutes to the

extent that they conflict. Id.

[¶25.]       The interest permitted in this case was not prejudgment interest

because it was not calculated from the date of judicial demand until the verdict. See

id. Rather, the interest was calculated and permitted from “the time of the verdict”

under SDCL 15-16-3. Consequently, FELA and SDCL 15-16-3 do not conflict with

respect to post-judgment interest. Because they do not conflict, the trial court did




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not err in permitting Jacobs to receive post-judgment interest from the date of the

verdict under SDCL 15-16-3.

                              Notice of Review #25827

[¶26.]        1.     Whether DM&E was entitled to a set-off on
                     the judgment.

[¶27.]        Jacobs filed a notice of review challenging the trial court’s set-off of

$16,086.06 from the judgment against DM&E. The trial court granted this set-off

because DM&E paid Jacobs wage-continuation benefits after his injury. Jacobs

admits DM&E paid him the $16,086.06, but argues it may not have been included

in the jury’s verdict.

[¶28.]        Whether a set-off was appropriate is reviewed under the abuse of

discretion standard. See 20 Am. Jur. 2d Counterclaim, Recoupment, Etc. § 11

(noting that “[t]he right of setoff itself is essentially an equitable right, which courts

may enforce at their discretion”) (citing Newbery Corp. v. Fireman’s Fund Ins. Co.,

95 F.3d 1392 (9th Cir. 1996); Mynatt v. Collis, 274 Kan. 850, 57 P.3d 513 (2002);

Junak v. John, 420 N.W.2d 668 (Minn. Ct. App. 1988); Reisman v. Indep. Realty

Corp., 89 N.Y.S.2d 763 (N.Y. App. Div. 1949); Lake Mary Ltd. P’ship v. Johnston,

145 N.C. App. 525, 551 S.E.2d 546 (2001)). Under 45 U.S.C. § 55 of FELA, DM&E

is entitled to a set-off because it continued to pay Jacobs’ wages. The law provides

as follows:

              Any contract, rule, regulation, or device whatsoever, the purpose
              or intent of which shall be to enable any common carrier to
              exempt itself from any liability created by this chapter, shall to
              that extent be void: Provided, That in any action brought
              against any such common carrier under or by virtue of any of
              the provisions of this chapter, such common carrier may set off
              therein any sum it has contributed or paid to any insurance,

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               relief benefit, or indemnity that may have been paid to the
               injured employee or the person entitled thereto on account of the
               injury or death for which said action was brought.

Id.

Based on the record, we find the trial court did not abuse its discretion by granting

the set-off.

[¶29.]         Affirmed.

[¶30.]         GILBERTSON, Chief Justice, and KONENKAMP, ZINTER, and

SEVERSON, Justices, concur.

[¶31.]         WILBUR, Justice, not having been a member of the Court at the time

this action was submitted to the Court, did not participate.




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