Cheney v. Palos Verdes Inv. Corp.

Decision Date15 June 1983
Docket NumberNo. 14003,14003
Citation104 Idaho 897,665 P.2d 661
PartiesKyle CHENEY and Georgia Cheney, husband and wife, d/b/a 7V Feedlots, Plaintiffs-Respondents-Cross Appellants, v. PALOS VERDES INVESTMENT CORPORATION, a California corporation, d/b/a Bell Brand Ranches, Inc., and Ronald Florance, Defendants-Appellants-Cross Respondents. and PALOS VERDES INVESTMENT CORPORATION, a California corporation, d/b/a Bell Brand Ranches, Inc., and Ronald Florance, Defendants-Counter Claimants, v. Kyle CHENEY and Georgia Cheney, husband and wife, d/b/a 7V Feedlots, Plaintiffs-Counter Defendants. and PALOS VERDES INVESTMENT CORPORATION, a California corporation, d/b/a Bell Brand Ranches, Inc., and Ronald Florance, Defendants-Counter Claimants, v. JOHN DOES I THROUGH X, XYZ Corporations I Through X, Counter Defendants.
CourtIdaho Supreme Court

Jeffrey E. Rolig, of Hepworth, Nungester & Felton, John Hepworth, Hepworth, Nungester & Felton, Twin Falls, for defendants-appellants-cross respondents.

G. Lance Salladay, of Risch, Goss, Insinger & Salladay, Boise, for plaintiffs-respondents-cross appellants.

SHEPARD, Justice.

This is an appeal from a judgment in an action arising from an oral contract for the care and feeding of a herd of cattle. Appellants assert error in evidentiary rulings, jury instructions and the assessment of punitive damages. We affirm.

Defendants-appellants Florance and Palos Verdes Investment Corporation owned a cattle ranch in Nevada doing business as Bell Brand Ranches, Inc. In April 1979, the ranch manager Segull, because of an insufficiency of hay, contacted plaintiffs-respondents Cheney, seeking to place approximately 800 head of cattle on the Cheneys' feedlot in Gooding, Idaho. Cheney agreed to board the cattle and feed them a chopped hay and potato slurry ration, in return for which Bell Brand would reimburse Cheney the cost of the feed plus ten cents per head daily for boarding the cattle. Cheney was instructed not to vaccinate the cattle and, because the herd was not to be immunized, it was agreed that Cheney was not responsible for any death loss among the herd. 1

Pursuant to that oral contract, Bell Brand delivered 809 head of cattle to the Cheney feedlot in May 1979. At the delivery time, the cattle were ten to twelve months old and considerable testimony indicated that they were thin and weak for their age. The cattle were started on hay and then later given potatoes, and they appeared to gain weight. In the period from May 31--June 8, 29 of the animals died of a disease called red nose. Routine vaccination would have prevented the disease, which is a recognized danger to cattle under feedlot conditions. Other than among the animals of the defendants-appellants, the occurrence of red nose at the Cheney feedlot was not above that normally expected.

At the end of May, Cheney billed Bell Brand for the boarding and feeding of the cattle. Florance telephoned Cheney in early June to say that he had mailed a check pursuant to the billing and to direct Cheney to ship the cattle to Nevada. Relying upon Florance's assurance of payment in the mail, Cheney shipped the cattle to Nevada.

Cheney's bill for boarding and feeding the cattle was never paid. When Cheney contacted Florance, Florance refused to pay, allegedly stating that he had falsely indicated that the check was in the mail "so I could get the cattle out of your feedlot." Although Florance denies stating that the check was mailed, and denies lying for the purpose of defeating Cheney's possessory lien on the cattle without paying the feeding or boarding, Florance does not dispute that nevertheless Cheney's bill has never been paid.

Cheney filed this action for non-payment and for fraud, alleging that Florance's wilful and false misrepresentation was made for the purpose of depriving Cheneys of their lien and that the cattle would not have been released but for the fraud of Florance. Cheney sought the amount owed under the contract, together with interest and punitive damages, costs and attorneys' fees. Defendants-appellants counterclaimed that Cheneys were negligent in caring for the animals, which negligence had allegedly resulted in significant weight loss to the herd and in the death of 28 of the cattle. The jury returned a verdict for the plaintiffs for $27,571 compensatory damages and $25,000 punitive damages and found against the defendants on the counterclaim. Defendants' motions for judgment n.o.v. and for a new trial were denied.

Upon appeal, defendants-appellants assert error in the admission of plaintiffs' business records in evidence; the inquiry into defendant Florance's net worth; the verdict that plaintiffs were not negligent in their care of the cattle; the jury instructions relating to punitive damages; and the amount of punitive damages. Defendants-appellants also assert that plaintiffs were not the real party in interest and hence were not entitled to bring the action.

I. BUSINESS RECORDS EVIDENCE.

At trial, Cheneys' bookkeeper testified that the potatoes and hay fed to the cattle were weighed and loaded on trucks and that the weights were recorded for defendants' account on a daily feed sheet. It was regular procedure to determine at month end the total weight of potatoes and hay fed to defendants' cattle, which total was then charged at the same rate paid to suppliers of the feed. To that sum was added the "yardage" or boarding fee of ten cents per head per day. Both the daily feed sheets and the end of month summaries were prepared by the bookkeeper. At trial, only the end of month summaries were offered and admitted, since the daily feed sheets had been destroyed.

Defendants-appellants argue that the records were erroneous since, as presented, they reflected the costs of feeding the admittedly dead animals. However, we deem the error to be, at most, inconsequential and affecting only the weight to be given the evidence by the jury. Defendants-appellants also assert that the monthly billings constitute hearsay and do not fall within the business records exception to the general prohibition of out of court statements. We disagree.

The trial court has broad discretion as to the admission of evidence, including business records, and the exercise of that discretion will not be overturned absent the clear showing of abuse. Jensen v. Seigel Mobile Homes, 104 Idaho ---, --- P.2d ---- (1983); Curiel v. Mingo, 100 Idaho 303, 597 P.2d 26 (1979); Daniel v. Moss, 93 Idaho 612, 469 P.2d 50 (1970). I.C. § 9-414 codifies the business record exception to the hearsay rule, stating:

"A record of an act, condition or event, shall, insofar as relevant, be competent evidence if the custodian or other qualified witness testifies to the identity and the mode of its preparation, and if it was made in the regular course of business, at or near the time of the act, condition or event, and if, in the opinion of the court, the sources of information, method and time of preparation were such as to justify its admission."

The legislative intent requires that the business record exception be broadly construed. Curiel v. Mingo, supra; Daniel v. Moss, supra; John Snowcroft & Sons Co. v. Roselle, 77 Idaho 142, 289 P.2d 621 (1955); Henderson v. Allis-Chalmers, 65 Idaho 570, 149 P.2d 133 (1944).

It was held in Kelson v. Ahlborn, 87 Idaho 519, 393 P.2d 578 (1964), that business records possessing a reasonable degree of necessity and trustworthiness ought to be received in evidence, unless the trial court, after examining them and hearing their manner of preparation, has serious doubt as to their reliability. Accord Hammond v Hammond, 92 Idaho 623, 448 P.2d 237 (1968).

In Curiel v. Mingo, supra, a ledger sheet indicating the use of fuel was admitted, although it was not the original source, but rather an accountant's summary, of statements provided regularly by a fuel company. See also Daniel v. Moss, supra; Hammond v. Hammond, supra. The account records here were made in the ordinary course of plaintiffs' business and not in preparation for trial and we hold that the trial court did not err in admitting those records.

We note, in passing, the evidence offered as to whether the cattle could have consumed as much feed as is reflected in the records, given the herd's alleged meager weight gain and poor condition upon shipping from the feedlot. That testimony was conflicting. A resolution thereof was for the jury and we find no error in the jury's determination of that conflict.

II. NEGLIGENCE OF PLAINTIFFS.

It was defendants' contention at trial that Cheneys, as bailees for hire, had the burden of proving their freedom from negligence when they failed to return the bailed property (the animals which had died) to the owner. Compton v. Daniels, 98 Idaho 915, 575 P.2d 1303 (1978); Lowe v. Park Price Co., 95 Idaho 91, 503 P.2d 291 (1972). The trial judge, over the argument of Cheneys, agreed, and he instructed the jury that under such circumstances a presumption of negligence existed. The defendants-appellants argue here that the record does not support a finding that plaintiffs met that burden of proof. We disagree. Negligence or the lack thereof is a matter for determination of a jury, Nelson v. Hawkes, 104 Idaho 185, 657 P.2d 482 (1983); Robinson v. Westover, 101 Idaho 766, 620 P.2d 1096 (1980), and the record demonstrates ample evidence from which the jury could determine that Cheneys were not negligent.

Cheneys offered sufficient and indeed compelling testimony that cattle in feedlots are more susceptible to disease, specifically to red nose, and that the standard and prudent precaution taken by cattle owners is to vaccinate cattle upon entry into a feedlot. It is not disputed, and indeed Segull, the ranch manager of Bell Brand, testified, that Segull instructed Cheney not to vaccinate the cattle and that the agreement between Cheney and Segull provided that Cheney would not "stand any death loss," because of the greatly increased risk...

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