Construction Associates, Inc. v. Fargo Water Equipment Co., 10154

CourtUnited States State Supreme Court of North Dakota
Writing for the CourtERICKSTAD; VANDE WALLE; VERNON R. PEDERSON, Surrogate Justice, sitting in place of LEVINE
Citation446 N.W.2d 237
Parties10 UCC Rep.Serv.2d 821 CONSTRUCTION ASSOCIATES, INC., a North Dakota corporation, Plaintiff and Appellee, v. FARGO WATER EQUIPMENT COMPANY, Defendant and Appellee, and Johns-Manville Sales Corporation, Defendant and Appellant. Civ.
Docket NumberNo. 10154,10154
Decision Date28 August 1989

Vogel, Brantner, Kelly, Knutson, Weir & Bye, Ltd., Fargo, for plaintiff and appellee; argued by John D. Kelly, Fargo.

Arvesen, Lundeen, Hoff, Svingen, Athens & Russell, Fergus Falls, for defendant and appellee; argued by Thomas C. Athens, Fergus Falls.

Larry D. Espel (argued), of Popham, Haik, Schnobrich, Kaufman & Doty, Minneapolis, and Stephen W. Plambeck (appearance), of Nilles, Hansen & Davies, Ltd., Fargo, for defendant and appellant.

ERICKSTAD, Chief Justice.

Johns-Manville Sales Corporation [J-M] appealed from a district court judgment entered upon a jury verdict finding it liable for $140,000 in damages for defective pipe. We affirm.

In 1977 Construction Associates, Inc., was the successful bidder to construct a water supply line for the city of Breckenridge, Minnesota. Construction Associates purchased from Fargo Water Equipment [Fargo Water] a large supply of polyvinyl chloride [PVC] pipe manufactured by J-M. The Breckenridge pipeline was completed during the summer of 1978.

The line eventually developed numerous leaks. J-M sent a technical field specialist to Breckenridge in August 1978. On his recommendation, the line was pumped to a high pressure using a fire engine in an attempt to set the rubber gaskets in the joints. This temporarily remedied the problem, but additional leaks soon occurred. Fargo Water recommended repairs using bell clamps, which Construction Associates attempted without success. 1 Finally, Construction Associates repaired the leaks as they were discovered by removing the defective joints and replacing them with stainless steel sleeves. At the time of trial in 1981, 2 seventy leaks had been discovered and repaired.

Construction Associates brought this action against J-M and Fargo Water, asserting that the pipe was defective and that the defects caused the leaks in the Breckenridge line. J-M asserted that the leaks were caused by stones and debris which had lodged in the pipe joints due to faulty installation by Construction Associates. The jury found that the pipe was defective and that the defects had caused the leaks. The jury awarded Construction Associates $140,000 for its expenses in repairing the line against J-M and Fargo Water. Fargo Water was given indemnification against J-M. The trial court denied the defendants' motions for judgment notwithstanding the verdict and for a new trial, and judgment was entered upon the jury verdict. J-M appealed.

The following issues are dispositive of the appeal:

(1) Is the jury verdict supported by substantial evidence?

(2) Did the trial court commit reversible error in its evidentiary rulings?

(3) Was the trial court's denial of J-M's motion for a continuance reversible error?

(4) Was the clause limiting remedies and excluding consequential damages unconscionable?


J-M asserts that the jury verdict finding its pipe defective is against the greater weight of the evidence and should be set aside. The essence of J-M's argument is that the opinion testimony of Construction Associates' expert witness, Marshall Moore, was speculative and not as scientifically accurate as the opinions of J-M's expert witnesses.

The record shows that Moore is a civil engineer experienced with municipal utility systems. He was familiar with the problems in the Breckenridge line and had inspected it. He also inspected and conducted tests upon many of the pipe joints which were removed because of leakage. Moore opined that the J-M pipe did not meet J-M's own product specifications, and that imperfections and deformities in the joints of the pipe caused the leaks in the Breckenridge line. J-M did not object to Moore's opinion testimony.

Not surprisingly, J-M's expert witnesses had a markedly different view of the cause of the leaks. J-M's primary expert, Herbert Vinson, testified that, in his opinion, the leaks were caused by the introduction of rocks and debris into the gasket area of the pipe joints at the time of construction. J-M's experts also testified about numerous tests conducted upon the pipe, which, J-M asserts, demonstrates scientifically that the pipe joints would not leak if properly assembled. 3

When the sufficiency of the evidence to support a jury verdict is challenged, we will not invade the province of the jury to weigh the evidence or to determine the credibility of witnesses. Matter of Estate of Knudsen, 342 N.W.2d 387, 392 (N.D.1984). Our review of questions of fact is limited to consideration of whether there is substantial evidence to sustain the jury's verdict. Johnson v. Northwestern Bell Telephone Co., 338 N.W.2d 622, 625 (N.D.1983). In making that determination, we view the evidence in the light most favorable to the verdict. Matter of Estate of Knudsen, supra, 342 N.W.2d at 392; Johnson v. Northwestern Bell Telephone Co., supra, 338 N.W.2d at 625.

The jury was presented with a classic battle of the experts. See, e.g., State v. Skjonsby, 417 N.W.2d 818, 821 (N.D.1987). It is well-settled that the credibility of expert witnesses, and the weight to be given their testimony, are matters to be determined by the trier of fact. E.g., State v. Skjonsby, supra, 417 N.W.2d at 821; Stillwell v. Cincinnati Inc., 336 N.W.2d 618, 621 (N.D.1983); Gardebring v. Rizzo, 269 N.W.2d 104, 109 (N.D.1978). The weakness or nonexistence of a basis for an expert's opinion goes to the expert's credibility, which is a matter for the trier of fact. Dodds v. North Dakota State Highway Commissioner, 354 N.W.2d 165, 170 (N.D.1984).

The jury in this case made a choice between two permissible views of the weight of the evidence. See State v. Skjonsby, supra, 417 N.W.2d at 821. Viewing the evidence in the light most favorable to the verdict, we conclude that there was substantial evidence to support the verdict.


J-M asserts that it was prejudiced by several erroneous evidentiary rulings by the court. J-M challenges the exclusion of opinion testimony from two of its witnesses, the admission of opinion testimony of the owner of Construction Associates, the admission of testimony regarding Construction Associates' reputation, and the admission of a piece of a competing manufacturer's pipe illustrative of other pipe which had been used in the Breckenridge line. A detailed discussion of each of these alleged errors would serve no purpose. We have reviewed the record and we conclude that the trial court did not commit reversible error in the challenged rulings.


J-M asserts that the trial court erred in denying its motion for a continuance made one week before trial. J-M argues that it was unable to adequately prepare its defense without the continuance because Construction Associates had been dilatory in responding to discovery requests, identifying its expert witnesses, and delineating its theory of liability. J-M also asserts a continuance was necessary because new leaks had developed in the Breckenridge line and more time was needed to investigate these new leaks.

A party's request for a continuance is a matter within the trial court's discretion, and we will not on appeal overturn its decision absent an abuse of discretion. Matter of Bo, 365 N.W.2d 847, 852 (N.D.1985). A trial court abuses its discretion when it acts in an arbitrary, unreasonable, or unconscionable manner. E.g., Ward v. Shipp, 340 N.W.2d 14, 17 (N.D.1983).

The trial court was in a much better position than we are to evaluate J-M's assertions of dilatory and obstructionary discovery tactics by Construction Associates' counsel. J-M points to no arbitrary, unreasonable, or unconscionable action by the court. We conclude that the court did not abuse its discretion in denying J-M's motion for a continuance.


J-M asserts that the trial court erred in concluding that a clause limiting the remedies available upon breach of its warranty and specifically excluding liability for consequential damages was unconscionable.

Construction Associates purchased the pipe from Fargo Water, and at the time of contracting had no direct contact with J-M. J-M shipped the pipe directly to the job site in Breckenridge. Included with each shipment of pipe was an installation guide, which expressly stated that it was "written especially for the installer and those who direct the actual handling and installation of Johns-Manville PVC Pressure Rated Pipe." On page three of the installation guide J-M expressly warranted the pipe to be free from defects in workmanship and materials. A limitation of liability clause was also included:

"Limitation of Liability

"It is expressly understood and agreed that the limit of J-M's liability shall be the resupply of a like quantity of nondefective Product and that J-M shall have no such liability except where the damage or claim results solely from breach of J-M's warranty. IT IS ALSO AGREED THAT J-M SHALL NOT BE LIABLE FOR ANY INCIDENTAL, CONSEQUENTIAL, OR OTHER DAMAGES FOR ANY ALLEGED NEGLIGENCE, BREACH OF WARRANTY, STRICT LIABILITY, OR ANY OTHER THEORY, OTHER THAN THE LIMITED LIABILITY SET FORTH ABOVE."

The first sentence of the clause is essentially a limitation of remedies. The second sentence is a specific exclusion of consequential or incidental damages. 4

J-M asserted the provisions of the clause as a defense, arguing that it could only be held liable for replacement of defective pipe. The trial court determined that the limitation of remedies and exclusion of damages were unconscionable and therefore unenforceable. 5 The court accordingly submitted the case to the jury allowing the full complement of damages available under Chapter 41-02, N.D.C.C., and the...

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