Arabian Agri. Servs. Co. v. Chief Indus., Inc.

• Citation: 309 F.3d 479
• Decision Date: 16 October 2002
• Docket Number: No. 01-3052.,01-3052.
• Parties: ARABIAN AGRICULTURE SERVICES COMPANY, Appellee, v. CHIEF INDUSTRIES, INC., Appellant.
• Court: United States Courts of Appeals. United States Court of Appeals (8th Circuit)

309 F.3d 479

ARABIAN AGRICULTURE SERVICES COMPANY, Appellee, v. CHIEF INDUSTRIES, INC., Appellant.

No. 01-3052.

United States Court of Appeals, Eighth Circuit.

Submitted: June 12, 2002.

Filed: October 16, 2002.

Rehearing and Rehearing En Banc Denied: December 23, 2002.^*

Daniel E. Klaus, argued, Lincoln, NE (Jane F. Langan, Lincoln, NE, on the brief), for appellant.

James S. Simonson, argued, Minneapolis, MN (Charles K. Maier, Minneapolis, MN, on the brief), for appellee.

Before WOLLMAN, RICHARD S. ARNOLD, and LOKEN, Circuit Judges.

WOLLMAN, Circuit Judge.

In this diversity action, Chief Industries, Inc. (Chief) appeals the district court's¹ order granting judgment as a matter of law to Arabian Agriculture Services Co. (ARASCO) on Chief's affirmative defenses of misuse and comparative negligence.² Chief also appeals several other of the district court's rulings, including its order denying Chief's motion for judgment as a matter of law. For the reasons discussed below, we affirm.

I.

Between 1989 and 1992, ARASCO engaged in negotiations with Chief Industries UK Ltd. (Chief UK), a wholly owned subsidiary of Chief, to purchase sixteen 1,000 metric-ton hopper-bottom silos for ARASCO's facility at the port of Dammam, Saudi Arabia. These silos were to house grain for a period of thirty to forty-five days before it was shipped from the port. Chief designed the structures and supplied some of the silo components, including compression rings and steel support structures. During negotiations, ARASCO learned that some silos designed and manufactured by Chief had collapsed in Korea. Despite assurances from Chief that the collapses were not due to design defects, ARASCO insisted upon an extended warranty against product failure before continuing with the purchase. The parties agreed upon a seven-year limited warranty, in which Chief guaranteed that the components were free from defects in the composition of material, workmanship, and design. In addition, the warranty stated that the sole and exclusive remedies available in the case of problems with the silos were repair or replacement. The warranty explicitly stated that Chief would not be liable for consequential damages.

The silos were completed in 1993. They were arranged in two rows of eight silos each and were immediately used to store corn that arrived at the Dammam port. In early July 1995, a shipment of corn was unloaded into the silos and left there for approximately 100 days, more than twice as long as previous shipments. On October 10, 1995, one of the silos collapsed. In a domino effect, 14 of the 15 other silos also collapsed. In addition, a building housing electric controls was crushed.

ARASCO notified Chief of the collapse and requested a remedy under the extended warranty. After some investigation, Chief denied responsibility, concluding that the collapse was caused by clumping and bridging³ of the corn after it was allowed to deteriorate in the silos during its extended storage. Chief theorized that the collapse was caused by the release of one such clump or bridge in silo 7. ARASCO sued to recover for the damage, contending that the collapse was caused by an inadequate and defective design.

At trial, both parties moved for judgment as a matter of law. The district court denied Chief's motion and granted ARASCO's motion with respect to Chief's affirmative defenses of misuse and comparative negligence. The jury then found for ARASCO on its warranty, strict liability, and negligent design claims and awarded a total of $1,466,507 in damages, of which some $88,000 represented consequential damages.

II.

Chief first argues that the district court erred in granting ARASCO's motion for judgment as a matter of law on Chief's affirmative defenses of misuse and comparative negligence. We review the grant or denial of judgment as a matter of law de novo, applying the same standards used by the district court. Phillips v. Collings, 256 F.3d 843, 847 (8th Cir.2001). According to Rule 50, judgment as a matter of law should not be granted unless "a party has been fully heard on an issue and there is no legally sufficient evidentiary basis for a reasonable jury to find for that party on that issue." Fed.R.Civ.P. 50(a)(1). In applying this standard, we must "draw all reasonable inferences in favor of the nonmoving party without making credibility assessments or weighing the evidence." Phillips, 256 F.3d at 847 (citations omitted). "A reasonable inference is one `which may be drawn from the evidence without resort to speculation.'" Fought v. Hayes Wheels Int'l, Inc., 101 F.3d 1275, 1277 (8th Cir.1996) (quoting Sip-Top, Inc. v. Ekco Group, Inc., 86 F.3d 827, 830 (8th Cir.1996)). Thus, judgment as a matter of law is appropriate "[w]hen the record contains no proof beyond speculation to support [a] verdict." Sip-Top, Inc., 86 F.3d at 830 (citation omitted).

Chief challenges the district court's ruling, arguing that (1) the court erred in excluding expert testimony concerning causation; and (2) even in the absence of such testimony, the evidence presented at trial was sufficient to submit the issues of misuse and contributory negligence to the jury. We disagree on both points.

Chief points out that its experts were prepared to testify as to the approximate mass of bridged corn necessary to cause silo 7 to collapse. Because these calculations were not disclosed until well into the trial, the district court excluded the testimony as untimely. According to Chief, however, the delay was caused by ARASCO's own untimely disclosure of key evidence providing the foundation for the calculations. This "key evidence," a photograph of the inside of silo 7, was not turned over to Chief until three days before the start of trial. Thus, Chief argues, it was "manifestly unfair" to exclude the calculations.

In rejecting this argument, the district court first noted that the photograph did not show a mass of corn constituting a bridge or column, as Chief's experts assumed in making their calculations. The court then concluded that the calculations could have been made earlier. The testimony indicated that Chief's investigator had observed and photographed the interior of silo 7 shortly after the collapse. Thus, according to the district court, these photographs "should have allowed Chief's experts to arrive at the calculations" prior to trial.

After reviewing the record, we cannot find that the district court abused its discretion in reaching this conclusion. See Trost v. Trek Bicycle Corp., 162 F.3d 1004, 1008 (8th Cir.1998) (standard of review). The calculations were not disclosed in accordance with Federal Rule of Civil Procedure 26. Thus, the rules permitted the court to exclude the untimely testimony "unless the failure to disclose was either harmless or substantially justified." Id.; Fed.R.Civ.P. 37(c)(1). In rejecting Chief's explanation for the delay, the court essentially found that Chief's failure to disclose the calculations until trial was not substantially justified. The court also implied that the delay was not harmless. (See Trial Tr. at 1395:7-8 (indicating that admitting the calculations would result in "trial by ambush"); id. at 1442:18-21 (finding that the late disclosure was prejudicial to the plaintiff).) These conclusions are amply supported by the record. See Trost, 162 F.3d at 1008 (noting that when we review for an abuse of discretion, we will reverse only if the district court's decision "was based on `an erroneous view of the law or a clearly erroneous assessment of the evidence'" (citation omitted)). Accordingly, we find that the district court acted well within its discretion in excluding the untimely calculations.

We turn next to Chief's claim that, even in the absence of these calculations, it had submitted sufficient evidence of misuse and contributory negligence to defeat ARASCO's motion for judgment as a matter of law. In granting this motion, the district court determined that although Chief had presented sufficient evidence on the issue of mismanagement, its experts had failed to demonstrate a plausible causal link between ARASCO's alleged mishandling of the grain and the structural failure of silo 7. Thus, the court concluded, Chief had not presented a prima facie case of misuse, and without misuse, there was no comparative negligence. After reviewing the record, we agree with the district court that no reasonable jury could have found for Chief on the issue of causation. See Fed.R.Civ.P. 50(a)(1). The evidence presented by Chief indicated that corn could clump and that, theoretically, lateral forces from a falling column of grain could cause a silo to tip. Chief's experts did not, however, connect the general theory of a clump-caused collapse to the Dammam site conditions at the time of the actual collapse. In short, Chief's evidence did not demonstrate that the corn in silo 7 could clump in such a quantity to pull down the silo. Without such evidence, the jury would have had to speculate as to whether ARASCO's alleged mismanagement caused silo 7 to fall. See Fought, 101 F.3d at 1277; see also Bauer v. J.B. Hunt Transp., Inc., 150 F.3d 759, 765 (7th Cir. 1998) ("Without a framework in which to evaluate [the possible contributing factors in an accident], the jury could only have speculated as to the causal relationship between the factors that [the expert] identified and the events at issue in the case."). Accordingly, we affirm the district court's grant of judgment as a matter of law on Chief's affirmative defenses of misuse and comparative negligence.

III.

Chief also argues that the district court erred in denying its motion for judgment as a matter of law on the issue of strict liability. As noted above, we review this denial de novo. United Fire & Cas. Co. v. Historic Preservation Trust, 265 F.3d 722, 726-27 (8th Cir.2001).

Citing Hilt Truck Line, Inc. v. Pullman, Inc., 222 Neb. 65, 382 N.W.2d 310 (1986), Chief first contends...