Burke v. Harman

• Decision Date: 06 January 1998
• Docket Number: No. A-96-846,A-96-846
• Citation: 574 N.W.2d 156,6 Neb.App. 309
• Parties: John BURKE, Appellant and Cross-Appellee, v. Kenneth HARMAN, Appellee and Cross-Appellant.
• Court: Nebraska Court of Appeals

Page 156

574 N.W.2d 156

6 Neb.App. 309

John BURKE, Appellant and Cross-Appellee, v. Kenneth HARMAN, Appellee and Cross-Appellant.

No. A-96-846.

Court of Appeals of Nebraska.

Jan. 6, 1998.

Syllabus by the Court

1. Jury Instructions: Proof: Appeal and Error. To establish reversible error from a court's failure to give a requested instruction, an appellant has the burden of showing that (1) the tendered instruction is a correct statement of the law, (2) the tendered instruction is warranted by the evidence, and (3) the appellant was prejudiced by the court's failure to give the tendered instruction.

2. Rules of Evidence: Trial: Witnesses. Unavailability is defined in part by Neb.Rev.Stat. § 27-804(1)(e) (Reissue 1995) as including situations when the declarant is absent from the hearing and the proponent of his statement has been unable to procure his attendance by process or other reasonable means.

3. Rules of the Supreme Court: Pretrial Procedure: Witnesses: Depositions. Under Neb.Ct.R. of Discovery 32(a)(3)(B) (rev. 1996), unavailability is defined as the witness is at a greater distance than 100 miles from the place of trial or hearing, or out of the state, or beyond the subpoena power of the court, unless it appears that the absence of the witness was procured by the party offering the deposition.

4. Witnesses: Testimony. A witness' failure to answer questions on cross-examination may require striking all or part of his testimony, depending upon how closely connected 5. Witnesses: Testimony. A distinction must be drawn between cases in which unanswered questions merely preclude inquiry into collateral matters which bear only on the credibility of the witness and those cases in which the unanswered questions prevent inquiry into matters about which the witness testified on direct examination.

to the issues in the case the questions are or whether the questions relate to collateral matters concerning credibility.

6. Witnesses: Testimony: Contempt. A witness' reason for refusing to answer is crucial in determining whether to hold the witness in contempt, but it plays no role in considering whether the cross-examination was frustrated.

7. Witnesses. The right to present witnesses is obviously not unlimited, but the rule distinguishing between collateral and direct issues properly limits it.

8. Witnesses: Testimony: Appeal and Error. When the object of cross-examination is to collaterally ascertain the accuracy or credibility of a witness, some latitude should be permitted; the scope of such latitude is ordinarily subject to the discretion of the trial judge, and unless abused, such exercise is not reversible error.

9. Evidence: Witnesses: Impeachment. Evidence which does not tend to impeach a witness on a material point and which is not substantive proof of a fact relevant to an issue is properly excluded as collateral evidence.

10. Witnesses: Testimony. The test of whether a fact inquired of in cross-examination is collateral is whether the cross-examining party would be entitled to prove it as part of his case.

11. Witnesses: Impeachment. A witness may not be impeached by producing extrinsic evidence of collateral facts to contradict the witness' assertions.

12. Negligence: Fraud: Liability. Liability for negligent misrepresentation is based upon the failure of the actor to exercise reasonable care or competence in supplying correct information.

13. Fraud: Liability. One who, in the course of his business, profession, or employment, or in any other transaction in which he has a pecuniary interest, supplies false information for the guidance of others in their business transactions, is subject to liability for pecuniary loss caused to them by their justifiable reliance upon the information, if he fails to exercise reasonable care or competence in obtaining or communicating the information.

14. Negligence: Fraud: Damages: Value of Goods. According to the Restatement (Second) of Torts § 552B (1977), the damages recoverable for a negligent misrepresentation are those necessary to compensate the plaintiff for the pecuniary loss to him of which the misrepresentation is a legal cause, including the difference between the value of what he has received in the transaction and its purchase price or other value given for it and pecuniary loss suffered otherwise as a consequence of the plaintiff's reliance upon the misrepresentation.

15. Contracts: Negligence: Fraud: Damages. In an action for negligent misrepresentation, damages are excluded for the benefit of the plaintiff's contract with the defendant.

16. Negligence: Fraud: Damages: Value of Goods. The out-of-pocket rule looks to the loss which a plaintiff has suffered in a transaction and gives him the difference between the value of what he has parted with and the value of what he has received.

17. Negligence: Fraud: Damages: Value of Goods. The loss for the out-of-pocket rule is usually measured as the difference between what the plaintiff parted with and what the plaintiff received.

18. Pretrial Procedure: Rules of the Supreme Court. Sanctions under Neb.Ct.R. of Discovery 37 (rev.1996) exist to punish a litigant or counsel who might be inclined or tend to frustrate the discovery process, and under the rule, the appropriate sanction is to be determined from the factual context of the particular case and is left to the discretion of the trial court.

19. Pretrial Procedure. The purpose of the discovery process is to enable preparation for trial without the element of an opponent's Charles H. Wagner and Maureen Freeman-Caddy, of Edstrom, Bromm, Lindahl, Wagner & Miller, Wahoo, for appellant.

tactical surprise, a circumstance leading to results based on counsel's legal maneuvering more than on the merits.

Terry R. Wittler, of Cline, Williams, Wright, Johnson & Oldfather, Lincoln, for appellee.

MILLER-LERMAN, C.J., and SIEVERS and MUES, JJ.

SIEVERS, Judge.

A Navajo chief's blanket, first phase, Ute style, is a rare and beautiful object because of its historical and ethnographic significance, as well as its art; all of which add to the blanket's great value. Such blankets were handwoven by Navajo women before 1850. The plaintiff, John Burke, acquired such a blanket by purchase for $115 from an antique mall in Lincoln. He sold the blanket to the defendant, Kenneth Harman, for $1,000. Harman sold the blanket to an individual in New York for $290,000. Burke has sued Harman for $289,000, claiming that Harman falsely or negligently misrepresented the blanket as a substantially less valuable Mexican weaving.

FACTUAL BACKGROUND

John Burke resides in Ithaca, Nebraska, and his work is primarily wood carvings of Native Americans, mountainmen, early American historical figures, Civil War figures, and the like. In order to lend authenticity to his work, Burke engages in some collecting of historical artifacts involving his subject matter, which he studies and then typically sells or trades when he is finished with them. Burke teaches his wood-carving art throughout the United States and has published several how-to books on the subject.

Kenneth Harman holds a bachelor of arts degree in education and has taught first grade at Arnold Elementary School in Lincoln for over 23 years. Harman says that he has been a collector since he was 10 years old. Initially, he collected toys, and he eventually completed a collection of high quality Lehmann toys made in Germany, which is now on display in Nuremberg, Germany. In the late 1980's, Harman began collecting Indian baskets. He has also collected advertising signs and comic strip toys. Prior to the transaction at issue here, Harman had owned a total of 12 weavings, which he believed to be Native American. All of those weavings were rugs rather than blankets, and the most expensive was purchased from Daphne Deeds for $4,250. Harman tried to sell that rug in New Mexico without success and ultimately traded it for an Indian basket from the Morning Star Gallery. Three of the other weavings which he acquired turned out to be Mexican rather than Indian, which he returned to the sellers. Mexican weavers have done, and continue to do, imitations of the Navajo weavings, and these imitations are much less valuable than the Navajo weavings. One of the first guideposts in determining the value of a Southwestern weaving is to determine whether the weaving is Indian or a Mexican "knock-off." Harman estimated that of the eight weavings he owned at the time of the transaction in question with Burke, he had paid $1,200 to $1,400 for all of them.

Harman has a reference library of some consequence in his home dealing with collecting and collectibles. His library included at least two reference books which displayed pictures of Navajo chief's blankets, first phase, Ute style. The books are entitled "Weaving of the Southwest," by Marian Rodee, and "The Navajo Weaving Tradition 1650 to the Present," by Alice Kaufman and Christopher Selser. He also had copies of American Indian Art magazine, which reported on the sale of several chief's blankets. Prior to the transaction at issue, Harman had sent one of the other weavings he had acquired to Sara Alexanian of Albuquerque, New Mexico, who works with her husband in the cleaning, buying, and selling of rugs and blankets, including Navajo textiles, but she returned the weaving to Harman because it was Mexican and therefore not worth her time or his money. Alexanian explained that the Navajo blankets were much more finely The story of the particular Navajo chief's blanket involved in this case began before 1850, when it was handwoven in the Ute style by a Navajo woman. The Ute Indians, with whom the Navajos traded, preferred the ivory, chocolate brown (natural colors from the wool), and indigo (naturally dyed) stripe pattern seen on this blanket--hence the name "Ute style." The name indicates a particular and recognizable style of chief's blanket. According to Alexanian, the term ...