Watsontown Brick Company et al., Appellants in 16591, v. Hercules Powder Company (changed to Hercules Incorporated), Appellant in 16592, 387 F.2d 99 (3d Cir. 1968)

Plaintiff Watsontown Brick Company ("Watsontown") instituted this diversity action in the District Court against defendant Hercules, Incorporated ("Hercules"), a manufacturer and seller of explosives, to recover property damages and loss of profits it allegedly sustained as a result of a dynamite explosion occurring at its shale quarry on September 24, 1959. Hercules had sold the dynamite to Watsontown and, in connection with the sale, had also furnished it with the services of Charles R. Parsons, a licensed blaster, to assist in the performance of the blasting operations. Twenty insurance companies which paid part of Watsontown's loss were joined as co-plaintiffs by stipulation of the parties.

Plaintiffs' amended complaint advanced three theories of recovery: (1) Parsons was negligent and reckless in supervising, preparing and detonating the explosion and that his misconduct was chargeable to Hercules; (2) Parsons did not have sufficient competence or experience to properly supervise, prepare and set-off the explosion and accordingly Hercules was negligent and reckless in furnishing Watsontown with such an individual; and (3) there was a breach of implied warranty of fitness for a particular purpose arising from the sale of the explosives.

As a complete defense to plaintiffs' claim, Hercules pleaded its "Form No. 2", reproduced in the margin,¹  which was a "service agreement" or "save harmless agreement" executed on behalf of Watsontown on June 10, 1952. Hercules also alleged that it was not guilty of any misconduct with respect to the explosion and that no breach of implied warranty occurred in connection with the sale of the explosives.

A non-jury trial was first held in the District Court limited to the question of whether the service agreement was "* * * a full, partial or no defense to plaintiff's action." The Court found that the agreement was a complete defense to any action based on the imputation to Hercules of Parsons' alleged misconduct and to any action based on breach of implied warranty, but that the agreement did not bar plaintiffs from recovering on the theory that Hercules was negligent or reckless in furnishing Watsontown an incompetent servant.²  A Judgment to that effect was entered on April 29, 1964. Plaintiffs appealed the portion of that Judgment adverse to it to this Court which dismissed the appeal, without prejudice, for want of jurisdiction on the ground that the Judgment was not final.

The case was then tried to a jury solely on the issue of whether Hercules was negligent in furnishing Watsontown an incompetent and inexperienced employee. The jury could not reach a verdict and was discharged. Hercules' subsequent motion for a directed verdict was denied.³ 

At a second trial, the jury returned a verdict in plaintiffs' favor, upon which Judgment was entered on June 28, 1966. Hercules' subsequent motions for a new trial or judgment N.O.V. were denied on March 10, 1967.⁴  This appeal followed.

At Appeal No. 16592, Hercules appeals the District Court's entry of Judgment on June 28, 1966 pursuant to the jury's verdict, and also appeals that portion of the District Court's Judgment of April 29, 1964 holding that the service agreement did not bar plaintiffs from recovery on the ground that Hercules was negligent or reckless in furnishing an incompetent servant to Watsontown.

At Appeal No. 16591, plaintiffs cross-appeal from that part of the District Court's Judgment of April 29, 1964 which ruled that the service agreement was a defense to any action based on breach of implied warranty or on the imputation of Parsons' alleged misconduct to Hercules.

At Appeal No. 16592 Hercules contends that the District Court erred in denying its motions for judgment N.O.V. or a new trial, after the second jury trial, because in its view (1) there was no evidence of Parsons' incompetence or inexperience; (2) there was no evidence that it knew or should have known of Parsons' incompetence or inexperience; (3) the plaintiffs' proof of the dollar value of damage to Watsontown's buildings, machinery and equipment did not meet the "required standards"; (4) Watsontown's claim for loss of profits was "highly speculative" and should not have been submitted to the jury; (5) the jury should not have been permitted to consider plaintiffs' claim for delay and detention damages; and (6) the Court should not have permitted the testimony of an "expert" witness who testified at the first jury trial to be read to the jury at the second. Hercules also contends that the indemnity and hold harmless provisions of its service agreement are a bar to plaintiffs' claim that it negligently furnished Watsontown an incompetent or inexperienced servant and that the District Court erred in ruling to the contrary.

On review of the record we are of the opinion that Hercules' contentions are without merit and that the District Court did not err in entering the Judgments involved at Appeal No. 16592. This disposition renders moot the questions raised by plaintiffs at Appeal No. 16591.

The District Court's Judgments entered on April 29, 1964 and June 28, 1966 will be affirmed.