Were the two corporations involved in a joint venture and if so, should Sun-Diamond be held liable for Orosco’s injuries?

  1. Case Cite: 

Orosco v Sun-Diamond Corp. 51 Cal. App 4th 1659 (1997) Case #_, page ___.

  1. Facts:
    Joe Orosco was an employee of Sun-Maid Growers. He lost his arm in an industrial accident in a raisin elevator in 1991. His employer Sun-Maid was one of four members of a marketing coop, Sun-Diamond Corporation. According to the agreement between the corporations, Sun-Diamond was to provide certain management services to Sun-Maid. Joe sued Sun-Diamond and his employer, Sun-Maid, on the legal premise that both Sun-Diamond and Sun-Maid were involved in a joint venture that designed, built, tested and maintained the processing line on which Joe lost his arm.

 

  1. Issue for the court to decide:

Were the two corporations involved in a joint venture and if so, should Sun-Diamond be held liable for Orosco’s injuries?

(Note – it is in the form of a question, and is short and to the point)

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  1. Analysis of the case

A joint venture is an association of two or more parties that share profits and responsibilities related to a specific project. The legal test of whether a joint venture exists is found on page 402 in the text, and in the case of Fitchie v. Yurko, discussed on page 402-3 of the text. In that case, the court considered four elements: (1) was there an agreement to carry out an enterprise; (2) was there a demonstration of intent to be joint venturers; (3) was there a joint interest evidenced by a contribution of property, funds or effort by the parties; and (4) was there a provision for sharing profits and losses.

In the case involving Sun-Maid and Sun-Diamond, there was a construction of a process (the one that caused the loss of Joe’s arm). There can be a presumption that there was an agreement, and that each party contributed to the effort. The parties formed Sun-Diamond to further a joint interest. What is not known is whether there was an agreement for sharing profits and losses from the joint venture. Moreover, while the case notes that Sun-Diamond was to provide “certain management services”, there is no clarification of what those services are. If the services that are provided by Sun-Diamond do not relate to the cause of Joe’s loss of his arm, then Sun-Diamond may not be liable. However, for that to happen, the process that caused the injury would have to be solely under the control of Sun-Maid, with clear language in an agreement, and must be a process that Sun-Diamond has not managed.

 

  1. How to apply this case

This case illustrates the importance of clearly stating which party in a multiple-party activity is responsible for each activity related to the joint venture. If such clear delineation is not made, then any accident in any part of the JV could result in everyone being sued, when in fact only one party might be liable. Duties should be clearly defined, and boundaries clearly drawn. Right now, I’m involved in a team activity to revise a software process at work. We’ve divided the work among us, but we’ve not specifically clarified who is responsible for the outcome of each segment. I’ll work to get that specificity made clear, so that everyone knows who is responsible for what, not just what everyone is working on.

(Note that this “how to apply” is very personal to YOU – It is NOT a ‘lecture’ about how others should do it. It does not reference the case that I analyzed either – it is all related to how YOU will use what you learned in that case.)

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