Babson Bros. Co. v. Tipstar Corp.

• Decision Date: 07 March 1983
• Docket Number: No. 4-282A34,4-282A34
• Citation: 446 N.E.2d 11
• Parties: BABSON BROS. CO., Appellant (Defendant Below), v. TIPSTAR CORPORATION, Appellee (Plaintiff Below).
• Court: Indiana Appellate Court

Page 11

446 N.E.2d 11

BABSON BROS. CO., Appellant (Defendant Below), v. TIPSTAR CORPORATION, Appellee (Plaintiff Below).

No. 4-282A34.

Court of Appeals of Indiana First District.

March 7, 1983.

Rehearing Denied April 12, 1983.

Christopher Kirages, Charles T. Jennings, Gary P. Price, Dutton, Kappes & Overman, Indianapolis, for appellant.

John P. Price, Jon D. Krahulik, Marshall S. Hanley, Bingham, Summers, Welsh & Spilman, Indianapolis, for appellee.

ROBERTSON, Presiding Judge.

Babson Bros. Co. (Babson) appeals the jury verdict of $581,200.00 plus costs rendered in favor of Tipstar Corporation (Tipstar). Tipstar maintained a dairy operation and recovered damages for the negligent installation of a milking parlor that Babson sold Tipstar. ¹

We affirm.

The Babson milking parlor was installed on Tipstar's farm on June 10, 1975. Leon Tippin (Tippin), the president of Tipstar, was told that the Babson device would increase production of the cattle by 1000 to 2000 pounds of milk per year per cow. He was also told that the parlor could be operated by one person.

Tippin complained to Babson that he had not received proper training to operate the parlor. Babson sent a field engineer to the Tipstar farm in October, 1975, who analyzed that the "prep stall" which automatically washed the cows' udders prior to milking was spraying cold water rather than warm water. The engineer also concluded that the voltage and vacuum settings on the milkers were improperly set. The engineer returned in November, 1975, and found that the vacuum settings were improperly set again. After repairing the vacuum, the engineer instructed Tipstar's personnel on the proper operation of the equipment.

Tipstar continued to encounter problems with its milking operation, including very high bacteria counts and mastitis. In January, 1976, automatic randels were delivered and installed on the Tipstar operation. In exchange for the randels, Tipstar executed a release. Tipstar continued to experience difficulty in its milking operations.

Tipstar attempted many solutions to correct its difficulties, including the addition of three herds which Tipstar purchased. Although production with the new herds initially improved, production again began to dwindle in early 1978. Outside experts were utilized. An inspector for the State Board of Health concluded that the problem was with the herds and not the parlor. Tipstar also employed feed specialists who changed its feeding program, but this had no effect. In April, 1978, Tipstar consulted a veterinarian and a feed expert, both from Purdue, as well as employees from Babson. The veterinarian concluded that there was no evidence the animals were being injured by the equipment in the parlor.

In March, 1979, an electrician discovered stray voltage within the parlor and properly grounded the parlor. Babson's agent, who had examined the parlor many times, testified that he had presumed that the parlor had been grounded. The record also revealed that ten different employees of Babson had visited the Tipstar Dairy and attempted to assist it prior to the proper grounding of the parlor.

Babson argues on appeal that the trial court erred by denying its motion for summary judgment and its motion for a judgment on the evidence, which both contend that Tipstar's claim was barred by the statute of limitations. Babson also alleges the trial court erred by permitting the jury to consider evidence of Tipstar's economic losses; by allowing testimony concerning Tipstar's lost profits; by denying Babson's motions for summary judgment and judgment on the evidence based upon the Tipstar's signing of the release in January, 1976; by denying Babson's motion for a judgment notwithstanding the verdict because it alleges that Tipstar was contributorily negligent as a matter of law; and that the trial court erred in giving an instruction regarding proximate cause.

Babson argues that the trial court erred by denying its motions for summary judgment and judgment on the evidence because it alleges that Tipstar commenced this action beyond the statute of limitations. The statute of limitations for injuries to personal property is contained in Ind.Code 34-1-2-2, which requires the action be commenced within two years. Our statute is an accrual statute, such that a cause of action accrues at the time injury is produced by wrongful acts for which the law allows damages susceptible of ascertainment. The statute of limitations begins to run at the time a complete cause of action accrues or arises or when a person becomes liable to an action. Scates v. State, (1978) 178 Ind.App. 624, 383 N.E.2d 491.

Tipstar filed its complaint on June 4, 1979. Babson argues that the action was well beyond the two year limitation because Tipstar encountered problems with the milking parlor shortly after installation and certainly was aware of the problems by January, 1976, because Tippin's testimony characterized the operation as being "in chaos".

The trial court submitted this issue to the jury and the propriety of this action or instructions regarding this issue have not been challenged. Moreover, the question of when a cause of action accrues usually requires a determination by the factfinder. See, Montgomery v. Crum, (1928) 199 Ind. 660, 161 N.E. 251, Rees v. Heyser, (1980) Ind.App., 404 N.E.2d 1183.

The evidence established that Tipstar encountered problems with the milking parlor shortly after installation, but the jury was presented with evidence that the first time Tipstar could have reasonably ascertained that Babson was negligent was in March, 1979, when the lack of proper grounding was determined to be the source of the problem. Babson correctly points out that damages need not be fully ascertainable to start the statute of limitations running. Shideler v. Dwyer, (1981) Ind., 417 N.E.2d 281. However, the evidence established that experts, provided by Babson and Tipstar, could not determine the nature of the problem and suggested a number of ineffective solutions which were extrinsic to the milking parlor operations. The statute of limitations begins to run at the time when a complete cause of action accrues or arises or when a person becomes liable to an action, Scates v. State, supra. We cannot conclude as a matter of law that the jury erred in making its factual determination.

The second issue that Babson raises on appeal is whether the trial court erred by permitting the jury to consider Tipstar's evidence of economic losses. Babson alleges that the jury could not have considered the express warranties it gave Tipstar or Tipstar's potential benefit of the bargain because this case was tried on the theory of tort liability. ² Babson also alleges the trial court erred in giving an instruction regarding damages.

This court agrees with the general proposition forwarded by Babson that contractual damages, such as the reliance interest or benefit of the bargain, are generally not recoverable in a tort action. See, Moorman Mfg. Co. v. National Tank Co., (1982) 91 Ill.2d 69, 61 Ill.Dec. 746, 435 N.E.2d 443. Tipstar conceded this point during oral argument, but argues that the jury's award was well within the scope of consequential damages.

A plaintiff in a negligence action is entitled to damages for the injuries proximately caused by the breach of the defendant's duty. Rondinelli v. Bowden, (1973) 155 Ind.App. 582, 293 N.E.2d 812. However, Indiana recognizes recovery of lost profits in a tort action. See, Indiana Bell Co., Inc. v. O'Bryan, (1980) Ind.App., 408 N.E.2d 178, Kroger Co. v. Haun, (1978) 177 Ind.App. 403, 379 N.E.2d 1004. Babson conceded during oral argument that an economic loss can be characterized as a consequential damages in certain situations.

While we agree with Babson's proposition that Tipstar would not be entitled to recover damages based upon the express warranties for increased production that Babson made, we must nevertheless uphold the jury's verdict because there is sufficient evidence to support the amount as a measure of compensatory damages. Tipstar presented evidence demonstrating its loss of profits due to Babson's negligent installation of the milking parlor. In reviewing an award for damages,...