730 F.2d 1197 (8th Cir. 1984), 82-2221, Lackawanna Leather Co. v. Martin & Stewart, Ltd.

Docket Nº:82-2221, 82-2264.
Citation:730 F.2d 1197
Party Name:The LACKAWANNA LEATHER COMPANY, Plaintiff-Appellee-Cross Appellant, v. MARTIN & STEWART, LTD., Defendant-Appellant-Cross Appellee.
Case Date:March 30, 1984
Court:United States Courts of Appeals, Court of Appeals for the Eighth Circuit

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730 F.2d 1197 (8th Cir. 1984)

The LACKAWANNA LEATHER COMPANY, Plaintiff-Appellee-Cross Appellant,


MARTIN & STEWART, LTD., Defendant-Appellant-Cross Appellee.

Nos. 82-2221, 82-2264.

United States Court of Appeals, Eighth Circuit

March 30, 1984

Submitted Oct. 10, 1983.

Rehearing Denied May 2, 1984.

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[Copyrighted Material Omitted]

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Robert L. Berry, Kennedy, Holland, DeLacy & Svoboda, Omaha, Neb., for plaintiff-appellee-cross appellant.

William L. Edmonds, Carter, Sar & Edmonds, Sioux City, Iowa, for defendant-appellant-cross appellee.

Before BRIGHT, JOHN R. GIBSON and FAGG, Circuit Judges.

JOHN R. GIBSON, Circuit Judge.

Martin & Stewart, Ltd., appeals from a judgment in favor of Lackawanna Leather Company resulting from damaged cattle hides purchased by Lackawanna from Martin & Stewart. Martin & Stewart allege that the verdict was not supported by sufficient evidence and that the trial court erroneously instructed the jury. Lackawanna cross-appeals from the district court's order denying it prejudgment interest. We affirm the judgment of the district court. 1

Lackawanna, a manufacturer of upholstery leather, purchased two truckloads of cattle hides from Great Plains Processing, a hide supplier partly owned by Martin & Stewart. The first truckload, containing 973 hides, was delivered on August 1, 1979, and was stored in the Lackawanna plant. The second, containing 930 hides, was delivered on August 9 and was stored in a separate tin warehouse. Upon delivery, a small number of the hides were visually inspected by Lackawanna employees for excessive water, dirtiness, foul odor or "anything crawling." No such damage was discovered. Lackawanna paid Martin & Stewart $95,212.31 for the hides plus freight charges.

Lackawanna began processing the hides on September 26. Four hundred hides from the August 1 shipment first had the salt and hair chemically removed. They were then sorted and split. This splitting process revealed the hide damage. Of the one hundred forty-four hides that were split, ninety-four were found to have grain damage. Subsequent inspection revealed that about two-thirds of the entire August 1 shipment was found to have similar damage. Lackawanna and Martin & Stewart personnel initially concluded that the damage was due to excessive water in the hides, and the second truckload was returned to Great Plains on October 2 to be rebrined. On October 9, two shipments of hides received by Lackawanna from Iowa Beef Processors (IBP) were rejected because hide beetles were discovered. Shortly after the IBP delivery, beetles were discovered for the first time in Lackawanna's tin warehouse. At the same time, Lackawanna received a laboratory report stating that the hide damage resulted not from water but from beetles. On October 16,

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one hundred thirty-five of the rebrined hides were returned to Lackawanna from Great Plains. Upon removal of the hair, the same type and extent of damage previously detected was discovered. On October 24, Lackawanna formally notified Martin & Stewart that the hides were defective due to hide beetle damage. The damaged hides were ultimately resold to Martin & Stewart for $20,000.00.

Lackawanna brought this action against Martin & Stewart in January, 1980. The chief issue at trial was whether the hide damage existed at the time of delivery or occurred while the hides were stored at the Lackawanna facility. The case was tried to a jury on the alternative theories of revocation of acceptance and breach of warranties. After the jury returned a verdict in favor of Lackawanna, the district court denied Martin & Stewart's motion for a judgment notwithstanding the verdict or, in the alternative, for a new trial.


Martin & Stewart first argue that the verdict was not supported by legally sufficient evidence of revocation of acceptance or breach of warranties. It claims that Lackawanna produced no direct evidence of beetle infestation at the time the hides were delivered, and therefore relied exclusively on circumstantial evidence to infer the existence of predelivery damage. Martin & Stewart assert that when circumstantial evidence forms the sole basis for the verdict, Nebraska law requires that the circumstances be such that the conclusion reached by the jury is the only one that can fairly and reasonably be drawn. As it believes that the inference of post-delivery damage to be equally plausible, Martin & Stewart argue that the evidence was insufficient to support the verdict.

Martin & Stewart characterize the verdict as one based on circumstantial evidence. It argues that the evidence directly proved a number of facts, but still required the jury to infer the ultimate issue--whether the hides were damaged before receipt. However, expert witnesses testified that the hides were damaged before receipt. This was opinion evidence on the ultimate issue, and the test for circumstantial evidence was therefore inapplicable. Freemont Farmers Union Coop. Ass'n v. City of Freemont, 179 Neb. 576, 139 N.W.2d 369 (1966). 2 The essence of Martin & Stewart's argument concerns the probative value of Lackawanna's expert testimony, the assessment of which is the jury's function. McKnelly v. Sperry Corp., 642 F.2d 1101 (8th Cir.1981); Doyle v. Union Ins. Co., 202 Neb. 599, 277 N.W.2d 36 (1979). We therefore apply the general test governing our review of the sufficiency of the evidence.

An appeal from a motion for judgment notwithstanding the verdict is reviewed under the same standard as a directed verdict. Compton v. United States, 377 F.2d 408, 411...

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