A woman injured in a collision at an intersection where a tree obscured the cross-traffic stop sign sued the other driver for negligence. The defendant named the city as a nonparty, claiming the city's negligence in allowing the tree to remain in front of the sign caused the crash. When the trial court found for the defendant, the injured woman filed four issues for review by the Court of Appeals of Indiana. The appeals court affirmed the lower court's decision, finding (1) the city work order offered by the defendant was admissible in supporting his nonparty defense, (2) the verdict forms and instructions submitted to the trial jury were proper, (3) the jury's decision that the city had constructive notice of a dangerous condition was appropriate, and (4) testimony about the work order was admissible to show the city had notice of the dangerous condition.

THE COLLISION

Sharon Utley drove south on Munchoff Street in Mt. Vernon, Indiana on September 30, 1990. Simultaneously, Daniel Healy drove east on Fifth Street. Both drivers approached the intersection of Munchoff and Fifth Streets. A warehouse restricted sight distance at the intersection, and a tree blocked visibility of the stop sign on Fifth for eastbound traffic.

Moving at 30 to 35 miles per hour, Healy's car entered the intersection and collided with Utley's car. Utley's injuries resulted in more than $5000 in medical expenses, and the crash damaged her car's passenger side.

TRIAL COURT DECISION

Sharon and Thomas Utley filed a negligence complaint against Healy in the Posey Circuit Court on September 29, 1992. Healy named the City of Mt. Vernon (City) as a nonparty for negligently allowing the tree to obstruct the stop sign. Healy claimed this negligence was the proximate cause of the crash. Healy died of natural causes before the trial and without being deposed.

The Utleys moved for judgment, claiming Healy failed to prove the City had actual or constructive notice of the obstruction. The court denied the Utleys' motion. The jury decided in Healy's favor on December 14, 1994.

The Utleys then filed a motion to correct errors. The motion was overruled.

APPEALS COURT DECISION

The Utleys submitted four issues to the Court of Appeals of Indiana:

The first issue was whether the trial court's admission of a work order over the Utleys' hearsay objection was improper. This work order from the City street department specified that a tree was blocking the southwest corner stop sign at Munchoff and Fifth and designated this blockage as a "problem."

The Utleys argued the work order was improperly entered into evidence, since it contained "an assertion made by an unknown declarant and . . . was offered for the truth of the matter asserted, namely, that a tree obscured Healy's view of the stop sign." Healy maintained this work order was not hearsay; he offered it to prove the sign was under the city's control, not to prove the tree blocked the view of the sign.

The appeals court noted that to successfully satisfy his burden of establishing a nonparty defense, Healy had to prove the City had control over the stop sign. (See Ind.Code § 15 34-4-33-10(b).) Healy also had to show the City "breached a duty of care owed to the Utleys which proximately caused the injuries. McDonald v. Maxwell, 655 N.E.2d 1249, 1250 (Ind.Ct.App.1995), reh'g denied." The court concluded, "Once these elements were established, the city became liable, as a nonparty, to the Utleys for Sharon's injuries. I.C. § 15 34-4-33-2(a)(2)."

Citing Spier by Spier v. City of Plymouth (593 N.E.2d 1255, 1258 (Ind.Ct.App.1992), reh'g denied, trans. denied, see Miller v. State Highway Dep't, 507 N.E.2d 1009, 1012 (Ind.Ct.App.1987), reh'g 514 N.E.2d 93), the court emphasized the state's duty to maintain roads within its control. This duty includes maintenance and repair of stop signs. "However," the court cautioned, "the duty does not attach unless the city has actual or constructive notice of a dangerous condition. (Spier, 593 N.E.2d at 1258.)"

The appellate court found the trial court properly admitted the work order in establishing the City had notice of a dangerous condition. Such notice was necessary to show that the City had a duty to maintain the sign and that the City had breached this duty. "Therefore," concluded the court, "we must affirm on this theory which is consistent with the evidence presented in this case. See Taylor v. State, 615 N.E.2d 912 (Ind.Ct.App.1993)." Because the work order was properly admitted, the appeals court had no need to address the dispute about the hearsay rule.

The appeal second issue involved jury instructions on the comparative fault law and whether the jury received appropriate verdict forms. The Utleys pointed out the trial court instructed the jury not to calculate the percentage of fault "if it found either that Healy was not at fault or if the Utleys failed to meet their burden of proof." The plaintiffs claimed statute violations because the jury had no requirement to first allocate the percentages of fault.

Dismissing the Utleys' citations as distinguishable from the case under review, the appeals court concluded it would have wasted the jury's time to require it to allocate percentages of fault when it found Healy not negligent. Referring to Indiana Pattern Jury Instructions--Civil Instruction No. 6.03 (Supp.1994), the court quoted:

The Utleys also contended that giving the jury two verdict forms in favor of a defendant's verdict and one verdict form for a plaintiff's verdict was unfair. They claimed this ". . . was unnecessarily suggestive and increased the likelihood of a defendant's verdict." The appeals court held the jury received correct instructions and followed the instructions as they were given; therefore, the Utleys' verdict form argument lacked merit.

The appeals court disagreed with the Utleys on the third issue of whether the trial court erred in denying their motion for judgment on the evidence regarding the nonparty defense. The Utleys argued, "The evidence showed unequivocally that the City had no notice that foliage on a tree obscured a stop sign, even if the stop sign was obscured." The Utleys maintained the city's immunity from liability should have caused the court to grant their motion for judgment.

The court responded that ". . . a municipality has a duty to care for the maintenance and repair of roads and traffic signals within their control. Miller, 507 N.E.2d at 1012; Spier, 593 N.E.2d at 1258." "Before liability may be imposed, however," the court contended, "the municipality must have actual or constructive knowledge of a dangerous condition. Spier, 593 N.E.2d at 1258." Finally, the court reasoned, "A municipality may be charged with constructive notice when the condition is of such a nature that a city or its agents could, in the exercise of reasonable diligence, have discovered and corrected it. Bodnar v. City of Gary, 629 N.E.2d 278, 280 (Ind.Ct.App. 1994), reh'g denied."

In reference to Bodnar, which both parties cited, the appeals court explained that the Utleys did not present evidence of the city's "actual or constructive knowledge" of a visibility problem. "Since liability may not be imposed against the city until it has actual or constructive notice," the court explained, "we held that the trial court properly granted defendant's motion for judgment on the evidence."

Healy's evidence did demonstrate, however, that the tree obscured the view of the stop sign; the evidence suggested this view had been blocked for enough time to give the City constructive notice. The appeals court found this evidence sufficient for the jury to decide the City had constructive notice of the visibility problem. Therefore, the court found no error in the trial court's denial of the Utley's motion. The court continued:

The fourth issue under review was whether admitting testimony listing the terms of the work order violated Evid.R. 407, which states:

The Utleys argued that admitting the work order violated Evid.R. 407, because "taking the report is the first step in the subsequent remedial measure of clearing the branches. Appellant's brief, p. 35." The appeals court maintained that Evid.R. 407 allowed the work order as evidence because it was not offered in proving negligence. The court found ". . . the work order was offered to demonstrate notice to the city of a dangerous condition in an effort to establish a breach of the duty of care owed to the Utleys." According to the court, "[s]ince the evidence was relevant to issues other than negligence or culpable conduct, it was properly admitted. See Evid.R. 402."

Finding no errors in the trial court's proceedings, the Court of Appeals of Indiana affirmed the lower court's decision on March 29, 1996.