ELCA Enterprises, Inc. v. Sisco Equipment Rental & Sales, Inc.

• Decision Date: 17 April 1995
• Docket Number: 94-2709,Nos. 94-2556,s. 94-2556
• Citation: 53 F.3d 186
• Parties: ELCA ENTERPRISES, INC., Appellant, v. SISCO EQUIPMENT RENTAL & SALES, INC., Appellee. SISCO EQUIPMENT RENTAL & SALES, INC., Third-Party Plaintiff, v. SULLAIR CORPORATION, Third-Party Defendant-Appellee. ELCA ENTERPRISES, INC., Appellee, v. SISCO EQUIPMENT RENTAL & SALES, INC., Defendant. SISCO EQUIPMENT RENTAL & SALES, INC., Third-Party Plaintiff, v. SULLAIR CORPORATION, Third-Party Defendant-Appellant.
• Court: U.S. Court of Appeals — Eighth Circuit

Page 186

53 F.3d 186

32 Fed.R.Serv.3d 420

ELCA ENTERPRISES, INC., Appellant, v. SISCO EQUIPMENT RENTAL & SALES, INC., Appellee.

SISCO EQUIPMENT RENTAL & SALES, INC., Third-Party Plaintiff, v. SULLAIR CORPORATION, Third-Party Defendant-Appellee.

ELCA ENTERPRISES, INC., Appellee, v. SISCO EQUIPMENT RENTAL & SALES, INC., Defendant.

SISCO EQUIPMENT RENTAL & SALES, INC., Third-Party Plaintiff, v. SULLAIR CORPORATION, Third-Party Defendant-Appellant.

Nos. 94-2556, 94-2709.

United States Court of Appeals,

Eighth Circuit.

Submitted Jan. 11, 1995.

Decided April 17, 1995.

J. Bradley Pace, Kansas City, MO, argued (John W. McClelland and Richard D. Ralls, on the brief), for appellant.

Teresa M. Schuele, Kansas City, MO and Mark D. Anstoetter, Wichita, KS, argued (Elaine Drodge Koch and Charles P. Efflandt, on the brief), for appellee.

Before BEAM, Circuit Judge, FLOYD R. GIBSON, Senior Circuit Judge, and WILL, ^* Senior District Judge.

BEAM, Circuit Judge.

ELCA Enterprises ("ELCA") alleges that two of its former tenants, Sisco Equipment Rental and Sales, Inc. ("Sisco") and Sullair Corporation ("Sullair"), caused petroleum contamination to occur on ELCA's property. The district court granted the defendants' motion for summary judgment on procedural grounds but denied Sullair's motion for attorney's fees. We affirm in part and reverse in part.

I. BACKGROUND

ELCA owned property located at 2603 N.E. Industrial Drive in North Kansas City, Missouri. Defendants Sisco and Sullair separately rented the property from ELCA at various times between 1979 and 1991. Subsequently, ELCA brought this diversity action against the defendants, alleging that they caused petroleum contamination on the property. ELCA's theories of recovery include breach of contract, statutory waste, common law waste and temporary nuisance.

Throughout the discovery process, ELCA repeatedly refused to answer questions relating to the fair market value (or permanent diminution in value) of the Industrial Drive property. However, shortly before the close of discovery, ELCA sought permission to have an expert testify regarding the property's value and potential diminution in value. The district court denied that motion, and issued an order excluding all evidence relating to diminution in value.

During the litigation, ELCA transferred the Industrial Drive property to ELCA Properties, Inc. ("ELCA Properties"), a separate and distinct corporate entity. In conjunction with this transfer, the parties signed an indemnification agreement which provided that ELCA Properties would indemnify ELCA for any adverse consequences ELCA might suffer relating to the Industrial Drive property. Because ELCA had transferred all of its interest in the property to ELCA Properties, ELCA then moved to substitute ELCA Properties as the plaintiff in this action, or alternatively, to continue as a plaintiff itself. See Fed.R.Civ.P. 25(c). The defendants moved for summary judgment on the grounds that ELCA no longer had a viable cause of action against them.

When reviewing these motions, the district court first reviewed ELCA's claims against the defendants. Because it had previously excluded all diminution in value evidence, the court determined that ELCA presently asserted only remediation damages. The court then found that these claims for future clean-up costs were extinguished when ELCA transferred the property, and that no viable claims against the defendants currently existed. Reasoning that a viable action was a necessary precursor to a substitution of parties, the district court denied ELCA's substitution motion. Using the same rationale, the district court also held that ELCA did not have standing to recover for remediation costs because: (1) ELCA had not previously incurred, and so could not recover for, any pre-transfer remediation costs; and (2) any claims for post-transfer remediation costs were extinguished by the transfer of property. The district court granted the defendants' motion for summary judgment and dismissed the action.

Sullair filed a motion for an award of attorney's fees based on the lease provision providing that the prevailing party "shall receive attorney's fees." The district court denied the motion. ELCA appeals and Sullair cross-appeals.

II. ANALYSIS

A. SUMMARY JUDGMENT

We review the district court's grant of summary judgment de novo. Landreth v. First Nat'l Bank, 45 F.3d 267, 268 (8th Cir.1995). Summary judgment is appropriate only when there are no genuine issues of material fact and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c). This appeal involves no genuine issues of material fact. Rather, ELCA contends that as a matter of law, the district court's grant of summary judgment was improper. ELCA makes three arguments: (1) diminution in value evidence should not have been excluded; (2) ELCA Properties, the new owner of the Industrial Drive property, should have been permitted to be substituted for ELCA as the party plaintiff in this action; and (3) ELCA itself should have been permitted to continue as the plaintiff in this action.

1. EXCLUSION OF EVIDENCE

a. Jurisdiction

As a threshold matter, Sisco and Sullair assert that we do not have jurisdiction to address the evidentiary issue because ELCA's notice of appeal referenced only the substitution and summary judgment order, and did not specifically state that ELCA was appealing the evidentiary order. ELCA admits that it did not specifically list the district court's evidentiary order in its notice of appeal, but argues that we have jurisdiction because it listed the evidentiary issue in its Appeal Information Form (Form A). ¹

Federal Rule of Appellate Procedure 3(c) requires appellants to provide a notice of appeal which "designate[s] the judgment, order, or part thereof appealed from." We have recently reiterated that Rule 3(c) is more than a mere technicality, and that deficiencies therein may create a jurisdictional bar to an appeal. Klaudt v. U.S. Dept. of Interior, 990 F.2d 409, 411 (8th Cir.1993). Rule 3(c) does not, however, need to be applied in an overly formalistic manner. ELCA listed the evidentiary issue on Form A, and filed it within the thirty days permitted for notice of an appeal. See Fed.R.App.P. 4. Admittedly, Form A is not itself jurisdictional, and cannot independently provide this court with jurisdiction. If Form A is filed within the thirty days permitted for the notice of appeal, however, we find that it can adequately supplement or amend the notice of appeal so as to vest this court with jurisdiction to address a particular order. See, e.g., Piekarski v. Home Owners Savings Bank, 956 F.2d 1484, 1486 n. 1 (8th Cir.) (minor procedural default in notice of appeal remedied by inclusion in Form A), cert. denied, --- U.S. ----, 113 S.Ct. 206, 121 L.Ed.2d 147 (1992).

b. Merits

During the discovery process, Sisco served ELCA with interrogatories which asked for information regarding the fair market value of the Industrial Drive property. ELCA refused to answer those questions, finding them irrelevant because ELCA was not presently asserting a claim for permanent diminution in value. ² Although Sisco pressed the issue, ELCA repeatedly confirmed (over a period of six months) that it was not seeking permanent diminution damages. Shortly before the close of discovery, but well after the trial court's deadline for submitting expert witness affidavits, ELCA had an apparent change of heart. At that time, ELCA sought permission to have an expert testify regarding the fair market value and potential diminution in value of the Industrial Drive property.

The district court denied the motion, finding that the defendants would be unduly prejudiced if, at this late stage of the proceedings, ELCA could present evidence regarding diminution of value. ³ ELCA contends that exclusion was improper because ELCA's discovery responses left open the option to pursue a claim for temporary, rather than permanent diminution in value, and that excluding the evidence substantially prejudices them.

ELCA's arguments are without merit. First, we reject ELCA's argument that its answers reserved the right to pursue temporary diminution damages. ELCA's initial, evasive responses to discovery did not make such a distinction. Furthermore, the substance of ELCA's alleged temporary diminution damages (as deduced from ELCA's brief) most resembles a claim for remediation costs. The district court's exclusion of diminution value evidence does not foreclose remediation damages.

Next, we reject ELCA's contention that the permanent diminution evidence should not have been excluded because its exclusion substantially prejudices ELCA. Exclusion of evidence is a harsh penalty, and should be used sparingly. However, in light of ELCA's behavior here, the district court did not abuse its discretion in excluding the evidence. For litigation to function efficiently, parties must provide clear and accurate responses to discovery requests. Parties are "entitled to accept answers to previous interrogatories as true, and to refrain from seeking additional discovery directed to the same issue." Averbach v. Rival Mfg. Co., 879 F.2d 1196, 1201 (3d Cir.1989), cert. denied, 493 U.S. 1023, 110 S.Ct. 726, 107 L.Ed.2d 745 (1990). ELCA did not candidly respond to the defendants' questions. Instead, after misleading the defendants for several months, ELCA made an eleventh-hour attempt to switch the basis for its alleged damages. We will not validate such lack of candor, and so affirm this portion of the district court's decision.

2. RULE 25(c) SUBSTITUTION

ELCA also contends that the district court erred in granting summary judgment because it denied ELCA's motion for substitution under Rule 25. The Rule 25 issue arises from ELCA's transfer of the Industrial Drive property to ELCA Properties during this litigation. Apparently, ELCA's attorneys did not know that ELCA had transferred its interest...