WH Elliott & Sons Co. v. E. & F. KING & CO., 5467-5470.

• Decision Date: 27 April 1961
• Docket Number: No. 5467-5470.,5467-5470.
• Citation: 291 F.2d 79
• Parties: W. H. ELLIOTT & SONS CO., Inc., Plaintiff, Appellant, v. E. & F. KING & CO., Incorporated, et al., Defendants, Appellees. E. & F. KING & CO., Incorporated, Defendant, Appellant, v. W. H. ELLIOTT & SONS CO., Inc., Plaintiff, Appellee. E. & F. KING & CO., Incorporated, Cross-Claimant, Appellant, v. NUODEX PRODUCTS CO., Inc., Cross-Defendant, Appellee. NUODEX PRODUCTS CO., Inc., Cross-Defendant, Appellant, v. E. & F. KING & CO., Incorporated, Cross-Claimant, Appellee.
• Court: U.S. Court of Appeals — First Circuit

291 F.2d 79 (1961)

W. H. ELLIOTT & SONS CO., Inc., Plaintiff, Appellant, v. E. & F. KING & CO., Incorporated, et al., Defendants, Appellees.

E. & F. KING & CO., Incorporated, Defendant, Appellant, v. W. H. ELLIOTT & SONS CO., Inc., Plaintiff, Appellee.

E. & F. KING & CO., Incorporated, Cross-Claimant, Appellant, v. NUODEX PRODUCTS CO., Inc., Cross-Defendant, Appellee.

NUODEX PRODUCTS CO., Inc., Cross-Defendant, Appellant, v. E. & F. KING & CO., Incorporated, Cross-Claimant, Appellee.

Nos. 5467-5470.

United States Court of Appeals First Circuit.

Heard October 5, 1961.

Decided April 27, 1961.

Petitions for Rehearing Denied May 24, 1961.

Stanley M. Brown, Manchester, N. H., with whom G. Marshall Abbey and McLane, Carleton, Graf, Greene & Brown, Manchester, N. H., were on brief, for W. H. Elliott & Sons Co., Inc.

Robert W. Upton and John H. Sanders, Concord, N. H., with whom Upton, Sanders & Upton, Concord, N. H., was on brief, for E. & F. King & Co., Inc.

William S. Green, Manchester, N. H., with whom John J. Sheehan, Kimon S. Zachos and Sheehan, Phinney, Bass, Green & Bergevin, Manchester, N. H., were on brief, for Nuodex Products Co., Inc.

Before WOODBURY, Chief Judge, and HARTIGAN and ALDRICH, Circuit Judges.

Petitions for Rehearing Denied May 24, 1961, in Nos. 5467, 5468.

ALDRICH, Circuit Judge.

Nuodex Products Co., Inc., a New York corporation, manufactured a chemical compound known as Super Ad-It as an ingredient for paint to be used in locations such as greenhouses to keep the paint from mildewing. E. & F. King & Co., Inc., a Massachusetts corporation that manufactured greenhouse paint, introduced Super Ad-It into paint which it sold to W. H. Elliott & Sons Co., Inc., a New Hampshire corporation engaged in growing roses. Both Nuodex and King advertised the mildew-resistant character, and the stability, of their products. Elliott applied the paint to the inside of two greenhouses, where it prevented mildew well enough, but it also inhibited the normal development of the roses. Mercury, present in Super Ad-It in a combined form, is poisonous to roses. In the high temperatures of the greenhouse, the mercury compound broke down and, as a result, the paint emitted mercury vapors which then precipitated on the rose plants. Elliott sued King and Nuodex in the United States District Court for the District of New Hampshire in two counts, for negligence and breach of warranty, but subsequently withdrew its warranty claim against Nuodex, seemingly because New Hampshire law does not recognize a warranty between remote parties. King cross-claimed against Nuodex for negligence and breach of warranty. The cases were tried together to a jury, which returned verdicts on each count. Out of this relatively common situation has arisen a snarl of sizable proportions.

The first difficulty stems from the fact that the jury, in finding for King against Nuodex on both counts, awarded substantially smaller damages than it did in its finding for Elliott against King on both counts. Since King's demonstrable damages were no less¹ than the loss suffered as a result of the successful prosecution of Elliott's claim against it, this is inconsistency number one. Next, the court permitted a verdict for Nuodex to stand in Elliott's suit against it, while permitting Elliott to recover against King, and King to recover over against Nuodex. A verdict for Elliott against King, at least on the negligence count, required a finding that Elliott was free of contributory negligence. A verdict for King against Nuodex required that Nuodex be guilty of negligence. But if Nuodex was negligent as against King, it is difficult to understand why it was not negligent as against Elliott, the actual and anticipated consumer of the product, and, if Elliott was free of negligence, why Nuodex should not be liable to Elliott as well as to King.

While the parties have made various attempts to discount or explain away these apparent inconsistencies, their alternative attempt is to obtain their resolution. Naturally, in this regard they offer different solutions, but essentially each endeavors to save certain verdicts and resolve the inconsistencies by amending the other judgments to conform thereto. But before we can consider such lengthening of the bed to fit the man, or shortening the man to fit the bed, we must determine whether any one of these verdicts, entirely apart from inconsistencies with another, is subject to direct attack. We start with the finding of $145,500 in favor of Elliott in its suit against King.²

The effect of the mercury poisoning was to damage, but not kill, many plants, particularly those known as Better Times. This resulted first in a substantial decline in the number of merchantable roses produced, and allegedly for a long time thereafter in the growth of roses of inferior color and with stems which were shorter or weaker, all important market considerations. From the beginning Elliott was faced with the problem of whether to replace the damaged plants entirely, and when to do so. It could not be predicted with certainty whether, on the one hand, a damaged plant would recover, or, on the other, for how long the paint would continnue to be noxious so that no replacements could safely be made in any event. In this industry even undamaged plants are replaced with some frequency, every three to five years, normally four, and sometimes sooner if there is a change in the market. Elliott operates on a rotation basis. Hence the mercury damage struck plants of various ages, that is to say, demonstrably depreciated. Some plants Elliott concluded to replace early; many others, even though damaged, it did not replace until later when they had reached, or approached their normal retirement age.

Passing issues of whether Elliott was reasonable in its decisions (the defendants raise some question of whether it adequately mitigated damages), its loss fell into two principal categories. In the case of plants replaced before normal retirement, there was the cost of early replacement. Secondly, to the extent that damaged plants were not replaced, there was a loss of profits due to worthless and inferior production. Ample evidence was introduced on this latter score.³ Elliott's approach to these dual channels of recovery was anything but niggardly. In presenting evidence of replacement costs, no adjustments were indicated for the attained ages of the plants. The reason for this was that Elliott recognized no obligation to make any deduction.⁴ Nor did the court, which thereafter denied a perhaps not too carefully phrased instruction requested by King on this phase of Elliott's damage. In addition Elliott sought recovery for all loss of profits. It should be obvious that to award the full cost of replanting, without adjustment, on the assumption that the injured plants had been brand new, and on the further assumption that replacement had been made at once, and then to add damages for lost production over a period of years because the plants had not been replaced, involved duplication. Yet Elliott introduced, over objection, an exhibit showing the calculated cost of replacing immediately, without depreciation ($70,523), having previously introduced one showing the original cost ($66,154). It then introduced the cost of all replacements when in fact made, again without adjustment ($73,772), and a further exhibit of loss of profits due to decrease of sales value of the product ($95,825). Incomprehensibly, it seemed to feel that much of this was a cumulative, rather than an alternative, way of showing loss.⁵

In the face of Elliott's cumulation of damage evidence and theories, the court gave the jury no assistance whatever. We cannot imagine a charge more barren in a case so demanding of particularization. In the absence of instructions, it is not to be assumed that damage evidence improperly before the jury will be disregarded, see Washington Gas Light Co. v. Lansden, 1899, 172 U.S. 534, 554, 19 S.Ct. 296, 43 L.Ed. 543, or that by happenstance the jury will reach the right result. The assessment of damages cannot be permitted to stand.

Recapitulating, for the purposes of the new trial, irrespective of the theory by which one approaches damages in this case, and excluding questions of the duty to mitigate by making reasonable decisions there are two central, well-defined elements to be considered — the shortening of the useful lives of the individual plants, and the diminution during their lives of their producing capacity, in quality or quantity. With respect to the latter, the measure of damages is the difference between the worth of what the injured plants actually produced until replaced by new producers, and the worth of what they normally could have been expected to produce up to that time. But with respect to the former, the recoverable amount is only the proportion of the value of the plants lost as a result of the premature termination of their lives. This would seem best measured by the cost of replacement depreciated according to the ages of the plants at the time of replacement. If, for instance, a particular plant was replaced, because of its injuries, for $4 in March 1956 when it had produced for three years, and it would normally have produced for four, the damage is $1.

We are satisfied that apart from the damage issue the several verdicts, taken individually, are free from error. However, we will postpone decision as to whether the new trial should be on damages only until we have considered the verdicts in the light of their alleged inconsistencies. There is no doubt that we have discretion to grant a partial or complete new trial in each of the several actions depending on our view of what, in the circumstances, will be fair and just to the parties. See, e. g., Washington Gas Light Co. v. Lansden, supra, 172 U.S. at pages 555-556, 19 S.Ct. at page 304; Constitution Publishing Co. v. Dale, 5 Cir., 1947, 164 F.2d 210, 213.

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