|||UNITED STATES COURT OF APPEALS FOR THE TENTH CIRCUIT
720 F.2d 1178
|||November 7, 1983
|||WILLIAM MICHAEL AVERITT, PLAINTIFF-APPELLEE,
SOUTHLAND MOTOR INN OF OKLAHOMA, D/B/A SHERATON INN-SKYLINE EAST HOTEL AND SHERATON INNS, INC., A DELAWARE CORPORATION, DEFENDANTS-APPELLANTS
|||Appeal from the United States District Court For the Northern District
|||Richard Gary Thomas, (Lawrence R. Maxwell, Jr., also of Maxwell, Godwin,
Bennett, Thomas, Carlton & Maxwell, Dallas, Texas, and Don L. Dees,
Tulsa, Oklahoma), for Plaintiff-Appellee.
|||Roy C. Breedlove of Jones, Givens, Gotcher, Doyle & Bogan, Tulsa,
Oklahoma, for Defendant-Appellant Southland Motor Inn Corporation of Oklahoma.
|||Burck Bailey (Margaret McMorrow-Love, also of Fellers, Snider, Blankenship,
Bailey & Tippens), Oklahoma City, Oklahoma, for Defendant-Appellant
Sheraton Inns, Inc.
|||Holloway, Barrett, and Logan, Circuit Judges.
|||LOGAN, Circuit Judge.
|||Defendants Sheraton Inns, Inc. and Southland Motor Inn Corporation of
Oklahoma d/b/a Sheraton Inn-Skyline East Hotel (Southland) appeal from a
judgment awarding punitive damages to plaintiff William Michael Averitt.
Averitt brought this diversity suit against the defendants after he contracted
shigella from eating at the Sheraton Inn-Skyline East Hotel in Tulsa, Oklahoma.
|||On March 28, 1978, Averitt stayed at the Southland and dined at the hotel
restaurant. Averitt became ill the next day. After he returned home to Dallas,
his condition worsened. On April 5, after suffering from diarrhea for several
days, he was admitted to a hospital. He was diagnosed as having ulcerative
colitis, a chronic disease of the colon. On April 4, 1978, the manager of
Southland was notified of an outbreak of food poisoning among guests of
the hotel. That day the Tulsa City-County Health Department secured stool
cultures from the hotel's employees. These cultures indicated that a hotel
employee involved in food preparation had shigella. Although there was local
publicity about the shigella outbreak, the hotel made no attempt to notify
Averitt or other hotel guests that they had been exposed to shigella. Averitt
did not learn of his exposure until a return trip to Tulsa some time later.
|||Averitt brought suit against Southland on theories of negligence, strict
liability, and breach of warranty, alleging that Southland sold Averitt
food contaminated with shigella. Averitt also sued Sheraton Inns, Inc. on
the theory that Southland was Sheraton's agent and that Sheraton was therefore
responsible for Southland's torts. During trial, the plaintiff introduced
into evidence health department inspection reports covering the period from
January 8, 1974, to May 19, 1978. The reports indicated that Southland had
committed numerous health and sanitary violations. The jury found against
Sheraton and Southland and awarded the plaintiff $375,000 compensatory damages
and $500,000 punitive damages. The defendants moved for a new trial challenging
both the compensatory and punitive damages but then agreed with the plaintiff
to pay compensatory damages and to "forego their argument on their
Motion for New Trial as to compensatory damages only, and their right to
appeal as to only the amount of compensatory damages." The defendants
filed their notice of appeal, which provided:
|||"Pursuant to Rule
of the Federal Rules of Appellate Procedure, notice is hereby given that
Sheraton Inn-Skyline East Hotel and Sheraton Inns, a Delaware Corporation,
defendants named above, hereby appeal to the United States Court of Appeals
for the Tenth Circuit from the final judgment entered in this action on
the 13th day of March, 1981, insofar as that judgment relates to punitive
|||Sheraton subsequently attempted to amend its notice of appeal to appeal
from the entire judgment, but that motion was denied. Sheraton has not challenged
the denial of its motion to amend the notice of appeal.
|||Both defendants contend that the district court erred in admitting into
evidence the health department inspection reports, that the evidence did
not support an award of punitive damages, and that insufficient evidence
of negligence existed to support any award. Sheraton asserts that the trial
court erred in submitting the issue of agency or apparent agency to the
jury and that Sheraton was thus wrongly held vicariously liable for the
torts of Southland.
|||In their briefs the defendants attack actions and findings of the district
court that involve questions of ordinary negligence and causation, and Sheraton
attacks the jury's finding that Southland was its agent or apparent agent
under circumstances sufficient to impose liability on Sheraton for Southland's
tort. We do not think these issues are properly before this Court. Federal
Rule of Appellate Procedure
specifies that the notice of appeal "shall designate the judgment,
order or part thereof appealed from." This requirement is mandatory;
an appellate court has jurisdiction to review only the judgment or part
of the judgment designated in the notice of appeal. Perington Wholesale,
Inc. v. Burger King Corp.,
631 F.2d 1369,
1379 (10th Cir. 1979) (supplemental opinion on reh'g); Scaramucci v. Dresser
427 F.2d 1309,
1318 (10th Cir. 1970). Although we construe notices of appeal liberally
in order to avoid denying review of issues that the parties clearly intended
to appeal, Perington Wholesale,
631 F.2d at 1379;
Wright v. American Home Assurance Co.,
488 F.2d 361,
363 (10th Cir. 1973), we may not "disregard the plain requirements
of the rule and read into the notice something that is not there."
Long v. Union Pacific Railroad Co.,
206 F.2d 829,
830 (10th Cir. 1953).
|||The notice of appeal clearly states that the defendants appeal the judgment
against them only "insofar as that judgment relates to punitive damages."
The agreement between the parties by which the defendants agreed not to
appeal the issues relating to compensatory damages is further evidence of
their intent to appeal only issues dealing with punitive damages. This is
not a case in which the defendants are precluded from seeking review of
certain issues on the basis of a "mere technicality" or a "wooden
interpretation" of the notice of appeal, Wright,
488 F.2d at 363;
631 F.2d at 1379.
Here the defendants intentionally appealed only a portion of the judgment
and are now attempting to appeal the entire judgment. This they cannot do.
See Bach v. Coughlin,
508 F.2d 303,
307 (7th Cir. 1974).
|||The jury verdict on the issue of compensatory damages represents a determination
that the defendants breached a duty of care they owed to the plaintiff,
that the breach caused the plaintiff's injury, and that Sheraton was liable
for the torts of Southland because of an agency relationship. See generally
Chavez v. Sears, Roebuck & Co.,
525 F.2d 827,
831 (10th Cir. 1975). In failing to appeal the award of compensatory damages,
the defendants have left these determinations unchallenged.*fn1
We therefore address only whether the district court properly admitted into
evidence the health department inspection reports on the issue of punitive
damages, and whether Southland's actions or omissions justify an award of
punitive damages under Oklahoma law.
|||The defendants contend that the health department inspection reports were
irrelevant and therefore inadmissible. The defendants argue that the reports
are irrelevant because many of the violations in the reports concerned conditions
unrelated to the transmission of shigella and because many of the reports
were remote in time from the incident at issue in this. They also contend
that even if the reports were relevant, the prejudicial impact of the reports
outweighed their probative value.
|||Evidence is relevant if it has "any tendency to make the existence
of any fact that is of consequence to the determination of the action more
probable or less probable than it would be without the evidence." Fed.
R. Evid. 401. Relevant evidence is admissible unless specifically made inadmissible,
Fed. R. Evid. 402, and the federal rules favor admission of evidence if
the evidence has any probative value at all. United States v. Carranco,
551 F.2d 1197,
1200 (10th Cir. 1977). The question of relevancy is a matter of discretion
for the trial court. Texas Eastern Transmission Corp. v. Marine Office-Appleton
& Cox Corp.,
579 F.2d 561,
566 (10th Cir. 1978).
|||While it is true that the violations in the reports did not directly relate
to the transmission of shigella, there was testimony at trial that unsanitary
conditions generally can contribute to the transmission of diseases through
food. There was also testimony that when the management of a hotel or restaurant
pays little attention to sanitation, the employees will have little incentive
to maintain sanitary conditions. Since an employee with poor personal hygiene
probably transmitted the disease, the reports, which indicated a pattern
of unsanitary conditions in the hotel restaurant, had probative value on
issues in this case. Perhaps more important, the information in the reports
indicates that the management of Southland had notice of the unsanitary
conditions in the restaurant. Reports of previous complaints to a defendant
are relevant in a negligence action to show the defendant's knowledge of
a condition. See McGrath v. Wallace Murray Corp.,
496 F.2d 299,
304 (10th Cir. 1974); Julander v. Ford Motor Co.,
488 F.2d 839,
846 (10th Cir. 1973).
|||We also find no merit in the defendants' contention that the reports were
too remote in time to be relevant. They claim that some of the inspections
occurred before Sheraton and Southland entered into an agency relationship.
But the record contradicts this contention. The first inspection report
admitted into evidence was dated January 8, 1974; Southland and Sheraton
executed a licensing agreement on December 4, 1972. Even if the management
of the hotel changed during the period covered by the reports, it does not
relieve Southland of liability for the conditions in the hotel. The issue
of remoteness of evidence is within the discretion of the trial judge. Keyes
v. School District No. 1,
521 F.2d 465,
473 (10th Cir. 1975), cert. denied,
423 U.S. 1066,
46 L. Ed. 2d 657,
96 S. Ct. 806
(1976). We find no abuse of discretion in the district court's admission
of the evidence.
|||The trial court did not abuse its discretion in concluding that the probative
value of the evidence outweighed its potential for unfair prejudice. See
Texas Eastern Transmission Corp.,
579 F.2d at 567.
The defendants produced no evidence that admission of the reports inflamed
the jury's passions or diverted the jury's attention from the true issue
in the case -- the negligence of the defendants with respect to the transmission
of shigella. We noted in Rigby v. Beech Aircraft Co.,
548 F.2d 288,
293 (10th Cir. 1977):
|||"The task of balancing the probative value of evidence against danger
of confusion of the issues is one for which the trial judge, because of
his familiarity with the full array of evidence in the case, is particularly
|||Finally, we note that the evidence was not inadmissible under Federal
Rule of Evidence 404(b), which restricts the admissibility of evidence of
other acts to prove character. The evidence was not admitted to show that
the defendants acted in conformity with their character; the evidence was
admitted to show that the defendant Southland knew of the conditions in
the restaurant. See McGrath,
496 F.2d at 304;
488 F.2d at 846.
|||Punitive damages are recoverable under Oklahoma law "in any action
for the breach of an obligation not arising from contract, where the defendant
has been guilty of oppression, fraud or malice, actual or presumed."
Okla. Stat. tit. 23, § 9. Punitive damages are also recoverable when a defendant
has been guilty of gross negligence that indicates a reckless disregard
for the rights of others. Sunray DX Oil Co. v. Brown, 477 P.2d 67, 70 (Okla.
1970); Taxicab Drivers' Local Union No. 889 v. Pittman, 322 P.2d 159, 168
(Okla. 1957); White v. B.K. Trucking Co., Inc.,
405 F. Supp. 1068,
1070 (W.D. Okla. 1975). Whether punitive damages should be awarded is a
question for the jury. "Only where there is no evidence whatsoever
that would give rise to an inference of actual malice or conduct deemed
equivalent to actual malice may a trial court refuse to submit an exemplary
damage instruction to the jury." Sopkin v. Premier Pontiac, Inc., 539
P.2d 1393, 1397 (Okla. Ct. App. 1975); accord Chavez v. Sears, Roebuck &
525 F.2d 827,
829-30 (10th Cir. 1975); Amoco Pipeline Co. v. Montgomery,
487 F. Supp. 1268,
1272 (W.D. Okla. 1980).
|||The defendants contend that the plaintiff introduced insufficient evidence
that Southland was grossly negligent to justify submitting the question
of punitive damages to the jury. We disagree. The plaintiff introduced evidence
that Southland had repeatedly violated health department regulations by
permitting unsanitary conditions to exist in the restaurant. The plaintiff
also introduced evidence that Southland took no steps to notify guests of
the hotel that they had been exposed to shigella, apparently because Southland
feared that the publicity would hurt its business. We believe that this
evidence justifies submitting the issue to the jury and that the jury could
have found that Southland acted in reckless and conscious disregard for
the rights of the plaintiff.
|||*fn1 Even if these issues are properly
before us, we conclude that the record provides sufficient evidence to support
the jury's conclusions. The law is settled in Oklahoma that a principal
can be held liable for punitive damages based on the conduct of its agent.
See Taxicab Drivers' Local Union No. 889 v. Pittman, 322 P.2d 159, 168 (Okla.
1957); Kurn v. Radencic, 193 Okla. 126, 141 P.2d 580, 581 (1943); Schuman
v. Chatman, 184 Okla. 224, 86 P.2d 615, 618 (1938). We are satisfied that
sufficient evidence supports the jury's verdict against Sheraton under the
general agency principles set out in the trial court's order denying a new
trial. See Restatement (2d) of Agency § 267 (1958). We are also satisfied
that the record sufficiently supports the jury's verdict on the issues of
negligence and causation.
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