David Mouser v. Caterpillar

David Mouser ("Mouser") and Donald Green ("Green") (together "plaintiffs")
appeal from a final order entered in the United States District Court for the Eastern District of Missouri2 granting judgment as a matter of law ("JAML") in favor of
Caterpillar, Inc. ("defendant"), on plaintiffs' claims stemming from an industrial
accident and conditionally granting defendant's motion for a new trial. See Mouser
v. Caterpillar, Inc., No. 4:98CV744 (E.D. Mo. Mar. 5, 2002) (hereinafter "slip op.").
For reversal, plaintiffs argue that the district court erred in granting JAML in favor
of defendant because the rubber mixer that injured them was a dangerous chattel
instead of a fixture on defendant's real property. Plaintiffs argue that because the
district court improperly concluded that defendant permanently annexed the mixer to
its rubber manufacturing plant, the district court erred in holding that Missouri
premises liability law applied and that their recovery was limited to workers'
compensation benefits. Plaintiffs also argue that the district court erred in denying
their motion to amend their pleadings to conform to the evidence at trial and in
conditionally granting defendant's motion for a new trial. For the reasons discussed
below, we affirm the judgment of the district court.

Jurisdiction in the district court was proper based on 28 U.S.C. § 1332.
Jurisdiction in this court is proper based upon 28 U.S.C. § 1291. The notice of appeal
was timely filed pursuant to Fed. R. App. P. 4(a).

FACTS

The facts and procedural history are largely drawn from the order of the district
court. Plaintiffs were employees of Topeka Machinery Exchange ("TME"), an
independent contractor hired by defendant to repair a 3D Danbury rubber mixer at
defendant's rubber manufacturing plant in Booneville, Missouri. The mixer was
installed at the Booneville plant in 1992 as part of a rubber processing system which includes the mixer, the mill, and multi-level platforms and mezzanines where
operators access different levels of the mixing system. The mixer must be integrated
into the plant's gas, electric, water, and ventilation systems in order to function. It
is approximately twenty feet tall, or approximately fifty feet tall if the rubber mixing
"hoppers" are included, and weighs approximately twenty tons. On March 21, 1997,
plaintiffs were injured when the stop-pin holding a 900-pound floating weight inside
the mixer's main hopper came loose as the crew was reattaching it to the mixer. As
a result, the weight crushed Mouser's left hand and Green's right hand.

In 1998, plaintiffs filed a lawsuit in the Circuit Court for the City of St. Louis,
Missouri. Plaintiffs' action was later removed to the United States District Court for
the Eastern District of Missouri.3 Plaintiffs' original complaint brought products
liability claims alleging that the safety stop-pin was defective. In its answer,
defendant argued that plaintiffs' complaint failed to state a claim upon which relief
could be granted and that plaintiffs' remedy was limited to workers' compensation
benefits. On August 20, 1999, plaintiffs filed a second amended complaint, restating
their products liability claim against all defendants and asserting an additional,
independent tort claim against defendant captioned "Premises Liability."4 Plaintiffs'
premises liability claim alleged that the stop-pin assembly on the rubber mixer
constituted a dangerous condition, which created a duty for defendant to warn,
remove, or barricade the danger, and that defendant's failure to do so caused
plaintiffs' injuries. Defendant's answer to the second amended complaint adopted and incorporated the affirmative defenses asserted in its earlier answer. The case
proceeded through discovery.

On October 2, 2000, the district court granted defendant's motion for summary
judgment on plaintiffs' products liability claim. The district court, however, denied
defendant's motion for summary judgment as to plaintiffs' premises liability claim
and permitted plaintiffs to proceed to trial. In their trial brief, plaintiffs summarized
their claim against defendant as premises liability, arguing that the safety stop-pin
assembly constituted a dangerous condition on the land for which defendant owed a
duty to warn its invitees. In response, defendant argued that the stop-pin was not
unsafe, and that, even if it were, plaintiffs were aware that parts of the mixer might
not be functioning properly because they were on the premises to repair the mixer.
On October 27, 2000, the case was submitted to the jury, which was unable to reach
a verdict, and the district court declared a mistrial.

The case was set for retrial on July 30, 2001. On July 25, 2001, defendant filed
a supplemental trial brief arguing for the first time that plaintiffs could not recover
on their premises liability claim because landowners are not liable under Missouri law
to the employees of independent contractors for injuries sustained while working if
the employees are covered by workers' compensation insurance. The contract
between defendant and TME required TME to maintain workers' compensation
insurance for its employees. On July 30, 2001, plaintiffs filed a supplemental trial
brief which argued that defendant's newly raised defense was inapplicable because
their injuries were caused by defendant's negligent bailment of a dangerous chattel,
namely the mixer, without warning of the potentially dangerous condition. The case
proceeded to trial on July 30, 2001. On August 1, 2001, at the close of plaintiffs'
case, defendant moved for JAML, arguing that plaintiffs could not recover on their
premises liability claim because they were covered by workers' compensation
insurance. In response, plaintiffs argued that their claim for recovery was based upon the fact that the mixer was a dangerous chattel and defendant's premises liability
defenses were therefore inapplicable.

On August 2, 2001, at the close of all the evidence, defendant again moved for
JAML, and plaintiffs filed a motion for leave to amend their complaint to conform to
the evidence. The district court denied defendant's motion, and the case was
submitted to the jury. Plaintiffs' proposed verdict director for their premises liability
claim was modeled after Missouri Approved Instruction No. 22.03 – "Invitee
Injured." Plaintiffs did not submit any additional verdict directors. The jury returned
verdicts in favor of plaintiffs. Defendant then renewed its earlier motion for JAML
and in the alternative moved for a new trial.

On March 5, 2002, the district court issued an order granting defendant's
motion for JAML and conditionally granting a new trial. In its order, the district
court stated that the case turned on whether the rubber mixer and its components were
a fixture of the real estate, and thus part of the premises, or a chattel that defendant
turned over to plaintiffs for repairs. The district court noted that under Missouri law
"[a] fixture is an article of personal property which has been so annexed to the real
estate that it is regarded as part of the land." Slip op. at 10 (quoting In re Marla Jean,
Inc., 25 B.R. 282, 284 (Bankr. W.D. Mo. 1982) (Marla Jean) (additional citations
omitted)). The district court observed that three elements must be satisfied before an
item may be considered a fixture: (1) annexation to the realty; (2) adaptation to the
premises; and (3) the annexor's intent for the object to become a permanent accession
to the property. Id. at 11 (citing Sears, Roebuck & Co. v. Seven Palms Motor Inn,
Inc., 530 S.W.2d 695, 696-97 (Mo. banc 1975) (Sears)). Applying this test, the
district court found that the mixer was a fixture because it was constructed and installed in defendant's rubber mixing plant for the purpose of manufacturing rubber
parts for defendant's machines. Id. at 13-14. The district court noted that, under the
"integrated industrial plant rule," the mixer was considered constructively annexed
to the land because of its permanent use and necessary role in defendant's plant
operations. Although the mixer was bolted to the plant floor and its components, including the stop-pin assembly, could be removed for repairs, the district court
concluded that the mixer was nevertheless annexed to the land because the
components could not function independently and their removal rendered the mixer
inoperable. Id. (citing Sears, 530 S.W.2d at 698). The district court also concluded
that defendant's intent to permanently annex the mixer to the realty could be inferred
because it was a useful adjunct or convenient accessory to the plant. Id. (citing
Leawood Nat'l Bank v. City Nat'l Bank & Trust Co., 474 S.W.2d 641, 644 (Mo. Ct.
App. 1971) (Leawood) (holding that intent to permanently annex a chattel may be
inferred where the affixed chattel becomes a useful adjunct or convenient accessory
to the business conducted on the premises)). Based on the foregoing reasons, the
district court concluded that the mixer and its component parts were not "chattel," but
a fixture on the defendant's real estate and thus part and parcel of the premises. Id.
at 15. Therefore, the district court concluded that it was futile to permit plaintiffs to
amend their complaint to convert their premises liability claim to one for "dangerous chattel." Id.

The district court also held that, because plaintiffs' claim was governed by
premises liability law, their damages recovery was limited to workers' compensation
benefits. The district court noted that, under Missouri law, where an employee of an
independent contractor is injured on a landowner's property during the course of
working for the independent contractor, the landowner cannot be liable to the injured
employee if the independent contractor is required to carry workers' compensation
insurance. Id. at 16. (citing Matteuzzi v. Columbus P'ship, L.P., 866 S.W.2d 128,
132 (Mo. banc 1993) (Matteuzzi)). Because TME was an employer required by
Missouri law to provide workers' compensation benefits, plaintiffs were precluded
from any recovery from defendant on a premises liability claim. Id. at 18-19.
Therefore, the district court granted defendant's motion for JAML. Id. at 19.

The district court also conditionally granted defendant's alternative motion for
a new trial pursuant to Fed. R. Civ. P. 50(c)(1) because defendant would have been
entitled to a new trial if the mixer were found to be a chattel. Id. at 20. The district court noted that the claim was submitted to the jury with instructions modeled after
Missouri Approved Instruction No. 22.03, "Invitee Injured."5 Id. These instructions
differed from Missouri Approved Instruction No. 25.10(A), "Negligently Supplying
a Dangerous Instrumentality," which requires additional elements of proof.6 Id. at 21.
Therefore, the district court concluded that, if the mixer were a chattel, defendant was
prejudiced by the submission of the premises liability instruction because plaintiffs
bore a lesser burden under that instruction. Id. at 21-22. Because the instructional
error would have had a prejudicial effect on the merits of the case, the district court
held that defendant would have been entitled to a new trial. Id. at 22.

This appeal followed.

DISCUSSION

We review the district court's decision to grant JAML de novo, applying the
same standards as the district court. Hunt ex rel. Hunt v. Lincoln County Mem'l
Hosp., 317 F.3d 891, 893 (8th Cir. 2003) (quoting Sip-Top, Inc. v. Ekco Group, Inc.,
86 F.3d 827, 830 (8th Cir. 1996)). "‘A motion for a judgment as a matter of law
should be granted when all the evidence points one way and is susceptible of no
reasonable inferences sustaining the position of the nonmoving party.'" Id. (quoting
Neely v. Am. Family Mut. Life Ins. Co., 123 F.3d 1127, 1129 (8th Cir. 1997)
(additional citations omitted)).

I.

We first address whether the district court correctly found that the mixer was
a fixture of defendant's real estate as opposed to a chattel as argued by plaintiffs.
Plaintiffs contend that the district court incorrectly held that the mixer was annexed
to defendant's plant. As noted by the district court, under Missouri law, annexation
requires a showing of: (1) annexation to the realty; (2) adaptation to the use to which
the realty is devoted; and (3) the intent of the annexor that the object becomes a
permanent accession to the land. Sears, 530 S.W.2d at 696-97. Plaintiffs argue that
the district court's findings of intent and adaptation are not supported by the record.
Instead, plaintiffs argue that the evidence supports a reasonable inference that
defendant did not intend to permanently annex the rubber mixer. Plaintiffs note that
a presumption of intent not to permanently annex may be created where a chattel may
be easily removed without any "material injury to the freehold." Marla Jean, 25 B.R.
at 285. In this case, the mixer was bolted to the floor and could be removed and disassembled for repairs. Moreover, plaintiffs argue that the record shows that the
rubber mixer was bolted to the floor to prevent movement during operation, not as a
mode of permanent annexation. Defendant also chose not to install floor pits to accommodate the mixer's height, as was suggested in a sales proposal, further
supporting the inference that defendant did not intend to permanently annex the mixer
to its property. Therefore, plaintiffs argue that, based on the record, the only
reasonable conclusion was that defendant never considered the mixer permanently
annexed to the plant.

Plaintiffs similarly contend that the district court erred in holding that the mixer
was adapted to the use to which the realty was devoted. Plaintiffs argue that
defendant failed to meet the adaptation element of the Sears test because the mixer
was not peculiarly adapted to defendant's rubber making facility. Plaintiffs note that
in another annexation case, Rothermich v. Union Planters Nat'l Bank, 10 S.W.3d 610,
617 (Mo. Ct. App. 2000) (Rothermich), the court held that bowling pin-setting
machines were not fixtures in a bowling alley because they were removed and
reinstalled in another location, and were not therefore peculiarly adapted to the realty.
Id. (noting "[a]n item usable at other locations is not peculiarly adapted for use on
the land in question"). Similarly, plaintiffs maintain that defendant's rubber mixer
had been used at a different premises and then rebuilt at defendant's plant. Moreover,
defendant had another Danbury mixer at its Mossville Hose Plant that could be used
as a replacement. These facts, plaintiffs argue, defeat defendant's claims of
adaptation because they demonstrate that the mixer was not peculiarly adapted to the realty so as to constitute a fixture.

We review the district court's interpretation of Missouri law de novo. Hammer
v. City of Osage Beach, 318 F.3d 832, 841 (8th Cir. 2003) (Hammer) (citing Toney
v. WCCO Television, Midwest Cable & Satellite, Inc., 85 F.3d 383, 386 (8th Cir.
1996)). Based on the record, we agree with the district court that the rubber mixer in
defendant's plant was a fixture because all three elements of the Sears test were
satisfied. As noted by the district court, Missouri has adopted the doctrine of
"constructive annexation" whereby a particular article, although not permanently
attached to the land, "may be so adapted to the use to which the land is put that it may
be considered an integral part of the land and constructively annexed thereto." Sears, 530 S.W.2d at 697 (citations omitted). When this doctrine applies to machinery in
an industrial setting, it is sometimes referred to as the "integrated industrial plant
rule." Id. at 698. We agree with the district court that, under the integrated industrial
plant rule, the mixer and all of its components, including the stop-pin mechanism,
were an integral part of the rubber mixing system, and therefore constructively
annexed to defendant's plant. Similarly, the most important elements in determining
whether the mixer was a fixture, intent and adaptation, were both satisfied by the way
the mixer was incorporated into the plant's operations. See id. at 697 (citing Crane
v. Epworth Hotel Constr. & Real Estate Co., 121 Mo. App. 209 (1906) (slight
annexation will not prevent an article from becoming a fixture where it is adapted to
the realty's proper use and the owner intended it to constitute part of the object for
which the realty was constructed)). Although the mixer and its components could be
removed without "material injury to the freehold," defendant's intent to permanently
annex the mixer may be inferred because the mixer was a useful adjunct or convenient accessory to the plant. Leawood, 474 S.W.2d at 644. Similarly, despite
plaintiffs' claims that the mixer was not "peculiarly adapted" to the realty, we agree
with the district court that the mixer was constructed and installed in defendant's
plant for the purpose of manufacturing rubber parts specifically for Caterpillar
products.7 See Heidegger v. Milling Co.,16 Mo. App. 327, 1884 WL 9343, at *2 (1884) (Heidegger) (holding that "everything put into and forming part of the
building or machinery for manufacturing purposes, and essential to the manufactory,
is part of the freehold") (citations omitted). Thus, we agree with the district court that
the rubber mixer and the stop-pin were fixtures of the real estate and therefore part
and parcel of Caterpillar's real property. Slip op. at 15 (citing Heidegger, 16 Mo.
App. 327).

II.

Plaintiffs also argue that the district court improperly applied Missouri law
regarding premises liability. Plaintiffs note that the principal case relied on by the
district court, Matteuzzi, and its progeny all involve construction or renovation of a
building. See, e.g., Matteuzzi, 866 S.W.2d at 129 (plaintiff injured during renovation
of a rowhouse); Smart v. Chrysler Corp., 991 S.W.2d 737, 739 (Mo. Ct. App. 1999)
(plaintiff injured during construction of a steel platform for renovations in an
automotive plant paint shop); Gillespie v. St. Joseph Light & Power Co., 937 S.W.2d
373, 374 (Mo. Ct. App. 1996) (Gillespie) (plaintiff injured during the installation of
computer cable on top of structural beams). In this case, plaintiffs argue that the
rubber mixer was a removable chattel and that they were injured while performing
service and maintenance to the machine. Plaintiffs note that, had the mixer been
removed from defendant's plant and shipped to another location for repair, an offsite
worker would have a claim for negligence against defendant for failure to warn of a
dangerous condition. See Gilpin v. Pitman, 577 S.W.2d 72 (Mo. Ct. App. 1978). In addition, plaintiffs argue that the district court erred in determining that their action
was for premises liability instead of one for a dangerous chattel. Plaintiffs argue that the district court improperly relied on the caption of their pleadings, which contained
the phrase "premises liability." Instead, plaintiffs argue that it is clear from the
pleadings that their claim was related to the stop-pin on the rubber mixer, not for a
defect on the premises.

Again, we review the district court's interpretation of Missouri law de novo.
Hammer, 318 F.3d at 841. Under Missouri law, the general rule is that a landowner
is not liable for injuries to the employees of independent contractors for work done
on the premises if the employees are covered by the independent contractor's
workers' compensation insurance.8 Matteuzzi, 866 S.W.2d at 131-32; Zueck v.
Oppenheimer Gateway Properties, Inc., 809 S.W.2d 384, 388-89 (Mo. banc 1991)
(Zueck). This is true even in cases where the landowner was directly negligent.
Gillespie, 937 S.W.2d at 379. Missouri courts adopted this rule to reflect the
"economic reality" of the workers' compensation system. Id. at 376 (citing Zueck,
809 S.W.2d at 389). "Where a contractor's employees are covered by workers'
compensation, the amount that the contractor charges the landowner includes the cost
of the contractor's workers' compensation insurance." Id. To make a landowner liable for the injuries suffered by the independent contractors' employees would, in
effect, force the landowner to pay for the same injury twice. Id. The key issue is
whether the independent contractor was subject to workers' compensation laws and
therefore liable thereunder, not whether the injured employee actually recovered
workers' compensation benefits.9 See Scott v. Edwards Transp. Co., 889 S.W.2d 144,
146 (Mo. Ct. App. 1994). Here, there is no dispute that plaintiffs were covered by
workers' compensation. TME was required to provide workers' compensation
insurance by statute10 and through its contract with defendant. Therefore, we
conclude that the district court correctly found that plaintiffs were precluded from
recovery on their premises liability claim and properly granted defendant's motion
for JAML. See Belk v. City of Eldon, 228 F.3d 872, 878 (8th Cir. 2000) (noting
"post-verdict judgment as a matter of law is appropriate only where the evidence is
entirely insufficient to support the verdict").

III.

Plaintiffs next argue that the district court erred in denying their motion to
amend their pleadings to conform to the evidence presented at trial. Plaintiffs
maintain that the district court erred in holding that such an amendment would be
"futile" because the mixer was a fixture of the real property. Plaintiffs note that the
district court previously stated in response to defendant's oral objection to plaintiffs'
motion to amend that, even if such a motion was not previously submitted formally, "it was done de facto by virtue of the instructions that were submitted to the jury [at
the close of the first trial]." Trial Transcript Vol. VI at 36. Plaintiffs therefore argue
that, because the district court recognized that the pleadings were previously amended
de facto, and because the district court's conclusion that the rubber mixer was a
fixture was erroneous, the district court abused its discretion in denying the motion
to amend.

We review the district court's denial of leave to amend for abuse of discretion.
Grandson v. Univ. of Minn., 272 F.3d 568, 575 (8th Cir. 2001) (Grandson).

When issues not raised by the pleadings are tried by express or implied
consent of the parties, they shall be treated in all respects as if they had
been raised in the pleadings. Such amendment to the pleadings as may
be necessary to cause them to conform to the evidence and to raise these
issues may be made upon motion of any party at any time, even after
judgment.

Fed. R. Civ. Proc. 15(b). Amendments under Rule 15(b) are to be liberally granted
"where necessary to bring about the furtherance of justice and where the adverse
party will not be prejudiced." McLaurin v. F.C. Prater, 30 F.3d 982, 985 (8th Cir.
1994) (quoting Corsica Livestock Sales v. Sumitomo Bank, 726 F.2d 374, 377 (8th
Cir. 1983)). The decision to permit or deny an amendment remains within the
discretion of the district court. Id. Because we agree that the mixer that injured
plaintiffs was a fixture on defendant's real property, we hold that the district court did
not abuse its discretion in denying plaintiffs' motion to amend their pleadings to
conform to the evidence because the proposed amendment would have been futile.
Grandson, 272 F.3d at 575 (noting a court may deny leave to amend if the proposed
amended pleading is futile). Thus, we uphold the district court's denial of plaintiffs'
motion to amend their complaint.

IV.

Because we uphold the district court's grant of JAML and denial of plaintiffs'
leave to amend, we decline to address the district court's grant of a conditional new
trial.

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