The opinion of the court was delivered by: FOLLMER
This case was tried to a jury in June, 1965, on the narrow issue of liability that defendant had negligently furnished the plaintiff, Watsontown Brick Company (hereafter referred to as "Watsontown"), an incompetent servant to supervise, prepare, and set off a dynamite blast in Watsontown's quarry on September 24, 1959. The jury was unable to reach a verdict and was discharged. Defendant thereafter moved the Court, pursuant to Rule 50(b) of the Federal Rules of Civil Procedure, for judgment in accordance with its motion for a directed verdict at the close of all the evidence. This motion was denied by the Court in its opinion dated April 18, 1966.
Thereafter plaintiffs moved to amend their complaint by adding the word "inexperienced" in alleging that defendant was negligent in furnishing Watsontown an incompetent servant and to include a claim for detention damages in their demand for relief. Over defendant's objection, the motion to amend was granted, defendant filed an amended answer to the amended complaint, and the case was retried to a jury in June, 1966. The jury in the second trial returned a verdict in favor of the plaintiffs and against the defendant for $144,109.18, and by its Order dated June 28, 1966, the Court directed entry of judgment thereon.
Defendant, having moved for a directed verdict at the close of all the evidence and its motion having been denied, timely moved the Court for judgment n.o.v. pursuant to Rule 50(b) of the Federal Rules of Civil Procedure, or, in the alternative, for a new trial under Rules 50(b) and 59 of the Federal Rules of Civil Procedure. These last mentioned motions are now before the Court for disposition.
Defendant submits as the questions involved the following:
"2. Assuming there was sufficient evidence to justify the jury's finding that Parsons was incompetent and inexperienced, was there any legally sufficient evidence to support the jury's finding that the defendant knew or should have known that Parsons was incompetent and inexperienced?
"3. Was Parsons negligent and, if so, does that negligence become, as a matter of law, the contributory negligence of Watsontown Brick Company, barring recovery by all the plaintiffs?
"4. Do the indemnity provisions of the service agreement, defendant's Exhibit No. 2, bar the plaintiff, Watsontown Brick Company, from recovering anything from defendant and require Watsontown Brick Company to discharge that portion of the verdict awarded to the insurance company plaintiffs?
"5. Was there any evidence of fair market value of the buildings, machinery, and equipment immediately prior to the blast of September 24, 1959?
"6. Was there legally sufficient evidence to permit the jury to award the plaintiff, Watsontown Brick Company, any loss of profits for the fourth quarter in the year 1959?
"7. Was it proper for the Court to submit the question of detention damages to the jury?
"8. Should the prior testimony of John L. Romig have been admitted?"
To Question No. 5, plaintiffs would add:
"If the plaintiff proves the cost of repairs to damaged property, who has the burden of proof as to whether the cost of repairs exceeds the fair market value of the property before it was damaged?"
Plaintiffs offer the following as a counterstatement to Question No. 6:
"Was the evidence legally sufficient to permit the jury to determine the amount of profits lost by the plaintiff as a result of the blast of September 24, 1959?"
The sole liability issue which was tried to the jury in this case is: Was the defendant negligent in furnishing Watsontown an incompetent and inexperienced blaster when defendant knew or should have known that the blaster was incompetent to perform the task undertaken? See Oregon Portland Cement Co. v. E. I. Du Pont De Nemours & Co., 118 F. Supp. 603 (D.C.Ore.1953). The blaster was Charles R. Parsons.
In the consideration of the pending motions, having in mind that in this case the jury found for plaintiffs, the Court must assume as established all the facts that plaintiffs' testimony reasonably tends to prove, together with all inferences in plaintiffs' favor which may fairly be drawn therefrom. Wiggins v. City of Philadelphia, 331 F.2d 521, 523 (3d Cir. 1964); Van Sant v. American Express Co., 169 F.2d 355, 365 (3d Cir. 1948); Thomas v. Conemaugh Black Lick Railroad, 133 F. Supp. 533, 538 (W.D.Pa. 1955), aff'd. 234 F.2d 429 (3d Cir. 1956); Kowtko v. Delaware and Hudson Railroad Corporation, 131 F. Supp. 95, 98 (M.D.Pa.1955).
The questions involved as to which both plaintiffs and defendant are in substantial agreement will be considered seriatim.
"Was there any evidence of Parsons' incompetence and inexperience legally sufficient to permit a jury to pass on that question?"
In its brief, defendant states as follows: "That Parsons did not properly calculate the burden and use the proper powder factor in loading cannot be denied by the Defendant." Defendant then states: "This, however, on the basis of this Record amounted at the most to evidence of Parsons' negligence and not of his lack of competence and experience."
Parsons had been employed by Hercules as a blaster for thirteen years and during that time he never handled a shot which caused either personal injuries or property damage. Defendant's four experts testified that Parsons had the competence and experience to qualify him to properly plan and execute the September 24, 1959 shot. Plaintiffs' witness, Wilson, testified that Parsons was both competent and had the experience that was necessary to handle the blast at Watsontown.
On the other hand, Parsons frankly admitted that he had never detonated any dynamite in shale quarries using angle holes six and a quarter inch in diameter in a sloping face and not in conjunction with verticle holes. This was confirmed by Wilson. The testimony very clearly showed that Parsons simply did not know how to set off the type of blast that caused the Watsontown damage. He could not have established a reputation because he had never done this sort of thing.
Wilson, who as Hercules' employee selected Parsons to do the Watsontown blast, testified that to his knowledge Parsons had never done a primary blast in brick shale up to July, 1959. (Vol. II, N.T. pp. 99-100). Wilson further testified as follows: "[At] that time I did not make any inquiry of Parsons as to whether or not he was qualified or otherwise because I already had that knowledge." (Vol. II, N.T. p. 109.) He did not state where he got that knowledge and Parsons frankly admitted he had never had any experiences in this particular situation. Wilson further stated: "I felt there was no reason to inquire as to his special qualifications." (Vol. II N.T. p. 115.)
As we said in the April 18, 1966, Memorandum denying defendant's motion for a directed verdict:
"The general rules governing this type of situation are well stated in the Comment to the Restatement, Second, Torts § 411, which section deals with the negligence of an employer in the selection of a contractor. The black-letter rule is as follows:
"'An employer is subject to liability for physical harm to third persons caused by his failure to exercise reasonable care to employ a competent and careful contractor (a) to do work which will involve a risk of physical harm unless it is skillfully and carefully done, or (b) to perform any duty which the employer owes to third persons.'
"Although the case bar did not involve physical injuries to people, but injuries to personalty of Watsontown, the reasoning behind the rule, as outlined in the Comment, is applicable here. In Comment (b) of § 411, it is stated that:
"' In order that the employer may be subject to liability it is, therefore, necessary that harm shall result from some quality in the contractor which made it negligent for the employer to entrust the work to him. Thus, if the incompetence of the contractor consists in his lack of skill and experience or of adequate equipment but not in any previous lack of attention or diligence in applying such experience and skill or using such equipment as he possesses, the employer is subject to liability for any harm caused by the contractor's lack of skill, experience, or equipment, but not for any harm caused solely by the contractor's inattention or negligence.'
"When the above facts are considered in light of the amount of care that should be exercised in selecting a person to engage in this type of activity, it is clear that this Court cannot grant Hercules' motion on this ground. The standard of care varies, naturally, as the circumstances vary. In Comment (c) to § 411 of the Restatement, it is stated that:
"'Certain factors are important: (1) the danger to which others will be exposed if the contractor's work is not properly done; (2) the character of the work to be done - whether the work lies within the competence of the average man or is work which can be properly done only by persons possessing special skill and training; and (3) the existence of a relation between the parties which imposes upon the one a peculiar duty of protecting the other.'
"In Pennsylvania, blasting is an ultrahazardous activity. McSparran v. Hanigan, 225 F. Supp. 628, 638 (E.D.Pa.1963). Thus when Comment (c) goes on to say that '* * * the general principle (is) that the amount of care which should be used is proportionate to the danger involved in failing to use it * * *', it is quite evident that a very great degree of care should have been exercised by Hercules in selecting a blaster. In fact, the lack of experience here with this type of a shot, coupled with the fact that this was an ultrahazardous activity with which the employer had considerable knowledge and experience indicates that perhaps Hercules should have actually ascertained Parsons' competence in ...