Dietz v. Consolidated Oil & Gas, Inc.

• Decision Date: 27 April 1981
• Docket Number: No. 79-1627,79-1627
• Citation: 643 F.2d 1088
• Parties: 8 Fed. R. Evid. Serv. 219 Matthew W. DIETZ and T. J. Yancey, Plaintiffs-Appellees, v. CONSOLIDATED OIL & GAS, INC., Defendant-Appellant.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 1088

643 F.2d 1088

8 Fed. R. Evid. Serv. 219

Matthew W. DIETZ and T. J. Yancey, Plaintiffs-Appellees, v. CONSOLIDATED OIL & GAS, INC., Defendant-Appellant.

No. 79-1627.

United States Court of Appeals, Fifth Circuit.

April 27, 1981.

Rehearing Denied May 20, 1981.

J. G. Hornberger, R. J. Goodman, Laredo, Tex., for defendant-appellant.

Lawrence A. Mann, Laredo, Tex., for plaintiffs-appellees.

Appeal from the United States District Court for the Southern District of Texas.

Before TJOFLAT, POLITZ and HATCHETT, Circuit Judges.

TJOFLAT, Circuit Judge:

A jury rendered a verdict for plaintiffs in this diversity case. Defendant contends that the trial court erred in numerous evidentiary rulings, in its formulation of jury instructions, and in denying a motion for a directed verdict. We find no error and affirm.

I

Lasker O. Hereford owned a farm in Webb County, Texas. In 1967, she assigned the mineral rights in the farm to Consolidated Oil and Gas, Inc. (Consolidated). In 1972, she leased the surface rights to T. J. Yancey and Matthew Dietz. Yancey and Dietz are farmers.

For a time, Yancey and Dietz and Consolidated enjoyed their respective interests in the farmland without incident. Then, in September of 1975, two things happened: Yancey and Dietz began planting onions and melons, and Consolidated, in connection with a new well, built a road and sludge pit. The road was constructed on three acres on which onions were to be planted. Consolidated paid Hereford, the landowner, $3,000 for the use of these acres. Hereford, in turn, paid this money to Yancey and Dietz to compensate them for the anticipated reduction in crop yield.

By mid-October, the road had been constructed, the sludge pit excavated, and the crops' cultivation completed. In the early morning hours of October 29, 1975, an unusually heavy rainstorm occurred. Water from the rainstorm washed down the road, rushing onto the farmland and flooding fifty-nine acres of onion crop. The rainstorm also caused the sludge pit to overflow onto thirty additional acres of onions and fifteen acres set aside for honeydew melons.

Yancey and Dietz surveyed the flooded farmland a few days after the storm and, as they testified at trial, were unable to determine whether the flooded crops had been damaged. An examination three weeks later, however, led them to conclude that the onion crops had been damaged.

Believing Consolidated responsible for their loss, Yancey and Dietz consulted an attorney, who attempted to negotiate a settlement with Consolidated. In the meantime, they planted the honeydew melons on the previously flooded fifteen acres. These honeydews failed to mature and could not be marketed.

Yancey and Dietz were unable to negotiate a settlement with Consolidated, and, on November 15, 1977, filed suit in Texas state court. Thereafter, the case was removed to federal district court.

In its answer to the complaint, Consolidated alleged that the two-year statute of limitations tolled on October 29, 1975, and, therefore, that the suit was time-barred. Consolidated also alleged that it had violated no duty to Yancey and Dietz. Furthermore, Consolidated argued, even if it had, the violation was not the proximate cause of the injury to the crops. Finally, Consolidated alleged that Yancey and Dietz were contributorily negligent in proceeding to cultivate the honeydew crop on the flooded land.

In this appeal, Consolidated asks us to enter a judgment of no liability pursuant to its motions for directed verdict. Alternatively, Consolidated contends that the trial judge committed reversible error in failing to charge the jury in accordance with it requested instructions, and in making several evidentiary rulings. We consider these contentions, none of which has merit, in inverse order.

II Jury Instructions

A. Statute of Limitations

Consolidated first contends that the court incorrectly instructed the jury concerning the statute of limitations issue. In this diversity action, we must weigh Consolidated's argument under Texas law. Goodbody & Co., Inc. v. McDowell, 530 F.2d 1149, 1151 (5th Cir. 1976). The Texas Supreme Court has articulated the standard for determining when a cause of action for damages accrues:

When an act is in itself lawful as to the person who bases an action on injuries subsequently accruing from, and consequent upon, the act, it is held that the cause of action does not accrue until the injury is sustained.... If, however, the act of which the injury was the natural sequence was a legal injury, by which is meant an injury giving cause of action by reason of its being an invasion of a plaintiff's right then, be the damage however slight, limitation will run from the time the wrongful act was committed, and will bar an action for any damages resulting from the act, although these may not have been fully developed until within a period less than necessary to complete the bar.

Tennessee Gas Transmission Co. v. Fromme, 153 Tex. 352, 353-355, 269 S.W.2d 336, 337-338 (Tex.1954), quoting Houston Water Works Co. v. Kennedy, 70 Tex. 233, 235, 8 S.W. 36, 37 (1888).

According to Consolidated, the above-quoted passage's application to this case requires dismissal if plaintiffs were aware or should have been aware of any damage, however slight, that took place more than two years prior to November 15, 1977, the day suit was filed. Consolidated offered as proposed special interrogatories to the jury the following:

Do you find from a preponderance of the evidence that actual damage, however, (sic) slight, to the crops and land in question was sustained by the plaintiffs prior to November 15, 1975?

Do you find from a preponderance of the evidence that the plaintiffs or either of them knew or in the exercise of reasonable diligence should have known on or before November 15, 1975, that their crops and land had sustained damage, however slight?

Record Excerpts at 6.

The court rejected these interrogatories, and, instead, submitted the following:

Do you find from a preponderance of the evidence that the plaintiffs or either of them knew or in the exercise of reasonable diligence should have known on or before November 15, 1975, that their crops had sustained damage?

Record Excerpts at 16. The jury answered, "we do not." Id. It is Consolidated's position that the court's failure to ask the jury to determine if plaintiffs were aware of any damage, however slight, was prejudicial error.

We cannot agree. In the first place, we think the court's question to the jury that the jury ascertain whether Yancey and Dietz knew or should have known there was any damage before November 15 embraced all damages, even if only slight. In any event, Consolidated misinterprets the Tennessee Gas Transmission case. We think the Texas Supreme Court was simply saying that in certain tort cases, the defendant's actions themselves are a legal injury and the question of when economic injury occurred is irrelevant to when the cause of action arose. This case may or may not have involved such a tort, but since Consolidated failed to argue that it did either here or in the court below we do not consider the issue.

B. Damages

Consolidated next contends that the court erred in formulating its special interrogatories concerning the measure of damages. Again, we turn to Texas law, this time to determine what damages are available to a farmer whose growing crops are destroyed before harvest. Brooks Transportation Co. v. McCutcheon, 154 F.2d 841, 843 (D.C.Cir.1946).

In Texas, "(t)here is no question but that ... where a partial injury to a growing crop is involved, the measure of damages is the difference between the value of the crop immediately before and immediately after the injury." Shultz v. Harless, 271 S.W.2d 696, 697 (Tex.Civ.App.1954). Texas courts have determined such value by subtracting the costs of bringing a crop to market from the probable value of a matured crop. See Phillips Petroleum Co. v. Arrington, 318 S.W.2d 694, 697-698 (Tex.Civ.App.1958).

The district court gave the jury the following special interrogatory concerning the damage to both the destroyed onion and honeydew acreage: "What sum of money, if any, if paid now in cash, do you find from a preponderance of the evidence would reasonably compensate the plaintiffs for the damages (to the crops)?" Record Excerpts at 15-16. The court instructed the jury to approach this damages question as follows The proper measure of damage for the wrongful destruction of a growing crop is the value of the crop as it stood on the ground at the time and place of its destruction. The stage of growth of a crop is a factor to be considered in determining the amount which will compensate the injured parties for the loss suffered by the destruction of the crop. The jury should consider the probable yield of the crop under proper cultivation, the value of the yield when matured and ready for sale, the amounts expended on the crop before the destruction and the amount which probably would have been expended thereafter in cultivating, harvesting, and marketing the crop in determining the value thereof at the time of its destruction.

Supp. Record, vol. II at 405.

Consolidated contends that this charge is in error because it permits the jury to consider evidence other than that pertaining to the probable yield, the value of a mature crop, and the costs, actual or potential, of cultivation, harvesting and marketing. In particular, the court's charge allowed the jury to consider testimony probative of what a purchaser of crops in the ground would have paid for the crops the moment before destruction. According to Consolidated, the jury could not consider such testimony in arriving at damages, but instead should have been required to adhere to the mathematical formula of potential yield multiplied by estimated value per unit of yield less costs of marketing, cultivation and harvesting.

The Texas Supreme Court has stated,...