First v. Rolling Plains Implement Co.

• Docket Number: 23-10635
• Decision Date: 11 July 2024
• Citation: First v. Rolling Plains Implement Co., 108 F.4th 262 (5th Cir. 2024)
• Parties: John Craig FIRST, Individually, also known as Craig First, Plaintiff—Appellant, v. ROLLING PLAINS IMPLEMENT COMPANY, INCORPORATED; AGCO Corporation; AGCO Finance, L.L.C.; AGCO Service, a Subsidiary of AGCO Corporation, Defendants—Appellees.
• Court: U.S. Court of Appeals — Fifth Circuit

108 F.4th 262

John Craig FIRST, Individually, also known as Craig First, Plaintiff—Appellant, v. ROLLING PLAINS IMPLEMENT COMPANY, INCORPORATED; AGCO Corporation;AGCO Finance, L.L.C.; AGCO Service, a Subsidiary of AGCO Corporation, Defendants—Appellees.

No. 23-10635

United States Court of Appeals, Fifth Circuit

FILED July 11, 2024

Appeal from the United States District Court for the Northern District of Texas, USDC No. 7:21-CV-6, Reed Charles O'Connor, U.S. District Judge

Samuel Hatfield Winston, Evan James Bergeron(argued), Jeigh Lynn Britton(argued), Winston Bergeron, L.L.P., New Orleans, LA, Kevin T. Bennett, Oklahoma City, OK, for Plaintiff—Appellant.

Brandon P. Wilson(argued), Christopher M. Murphy, Clinton D. Whitworth, Whitworth, Wilson & Evans P.L.L.C., Edmond, OK, Charles Dunham Biles, Esq., Biles Wilson, P.L.L.C., Heath, TX, for Defendant—AppelleeRolling Plains Implement Company, Incorporated.

Steven Jacob Carroll(argued), Nelson Mullins Riley & Scarborough, L.L.P., Atlanta, GA, Matthew David Anderson, Sherrill & Gibson, P.L.L.C., Wichita Falls, TX, for Defendants—AppelleesAGCO Corporation, AGCO Service.

James Vogt(argued), Reynolds, Lisa Robertson, Ridings, Vogt & McCart, P.L.L.C., Oklahoma City, OK, for Defendant—AppelleeAGCO Finance, L.L.C.

Before Higginbotham, Stewart, and Higginson, Circuit Judges.

Patrick E. Higginbotham, Circuit Judge:

Defendant Rolling Plains sold an agricultural combine manufactured by AGCO Corporation to John Craig First.Asserting that he was misled as to the combine's quality and condition, First filed suit.We VACATE and REMAND in part and AFFIRM in part.

I.

A.

DefendantAGCO Corporation manufactures agricultural combines used in hay and grain fields.In 2015Defendant Rolling Plains, an authorized reseller of AGCO Corporation products, approached First about purchasing a combine.Its employee Jack Handley told First that, as the Combine was part of AGCO Corporation's Certified Pre-Owned Program, it was "vigorously inspected" and "Darned Near Good As New," that the Combine had roughly 400 hours on it, and had "never been to the field."Unbeknownst to First, this was false—the Combine was not Certified Pre-Owned and had been used for over 1,200 hours.

Handley also told First the Combine was covered by a Protection Plan, provided by Defendant Wesco and administered by Defendant AMT, until April 13, 2017.The Protection Plan reiterated Handley's representations about the Combine; its first page stated that the Combine had 438 "current engine hours."Relying on Handley's representations, First purchased the Combine in the spring of 2016.Defendant AGCO Finance financed the purchase.

Almost immediately around Memorial Day weekend of 2016, First experienced problems with the Combine's computer, sieves, and rotor gearbox.Believing he bought a "lemon," First sought technical assistance from Rolling Plains.When the problems continued into 2019, First turned to Butler Machinery, a third-party repair shop.Butler informed First that the Combine had an extensive repair history and over 900 hours—far eclipsing what Handley had stated.First then turned to the courts.

B.

On September 17, 2020, First sued AGCO Corporation, AGCO Service, AGCO Finance, AmTrust, Wesco, AMT, and Rolling Plains in the District Court of Oklahoma County.Defendants removed to federal court in Oklahoma and filed motions to dismiss.On January 26, 2021, the federal district court granted the motions without prejudice and transferred the case to the Northern District of Texas.

After amending his complaint, First asserted state law claims of actual and constructive fraud, breach of the warranty of description, and failure of essential purpose.Defendants filed a consolidated motion to dismiss.The district court granted the motion in part and dismissed First's fraud claims against AGCO Corporation, AGCO Service, AmTrust, Wesco, and AMT for failing to allege fraud with particularity.

First amended his complaint a third time and asserted, inter alia, claims of: (1) actual fraud against Rolling Plains; and (2) breach of warranty and failure of essential purpose against Rolling Plains and AGCO Finance.AGCO Finance filed a motion for summary judgment, arguing it made no warranties and was not liable for those made by Rolling Plains.The district court agreed and granted AGCO Finance's motion.Rolling Plains also filed a motion for summary judgment arguing that First's fraud claim was barred by Oklahoma's two-year statute of limitations as First knew or should have known of the alleged fraud by Memorial Day 2016 but did not file suit until September 17, 2020.¹The district court found that the limitations question presented a genuine dispute of material fact and denied summary judgment.

The case proceeded to trial on First's fraud, breach of warranty, and failure of essential purpose claims.Rolling Plains argued before the jury that these claims were barred by the statute of limitations as First knew or should have known of the alleged fraud by Memorial Day 2016 but did not initiate suit until September 17, 2020, over four years later.Rolling Plains requested that the jury identify when First knew or should have known of the fraud.First objected to a charge asking the jury to identify a specific accrual date as the record evidence spoke "in terms of relative time frames," such as the "harvest of 2017 or spring of 2018," instead of particular dates.The trial judge presented the question to the jury, asking on the special verdict form: "What is the date that Plaintiff knew or reasonably should have known of the fraud?"²

During deliberations, the jury asked the court: "What was the date that Mr. First found out from Butler that the engine really had 990 hours on it?"The court responded that First testified to having learned the Combine had over 990 hours in August 2019.Ultimately, the jury determined that First knew, or should have known, of Rolling Plains's fraud by April 13, 2017, over three years before First brought suit.It also returned a $96,000 verdict on both the fraud and failure of essential purpose claims against Rolling Plains, but found that Rolling Plains had not breached its warranty of description.

Rolling Plains moved for judgment as a matter of law, asserting First's claims were barred by the statute of limitations based on the April 13, 2017 date.The district court agreed with Rolling Plains, holding that sufficient evidence supported the jury's findings regarding the April 13, 2017 date and entered judgment in favor of Rolling Plains.

First now appeals three orders: (1) the order granting Rolling Plains's motion for judgment as a matter of law; (2)the district court's order granting AGCO Corporation, AGCO Service, and AGCO Finance's motion to dismiss the fraud claims with prejudice; and (3) the order granting summary judgment in favor of AGCO Finance on the breach of warranty and failure of essential purpose claims.We address these issues in order.

II.

As jurisdiction here rests on diversity of citizenship, we apply the choice of law rules of the forum state: Texas.³"Texas courts honor the 'party autonomy rule' that parties can agree to be governed by the law of another state."⁴Here, the parties agreed to be governed by Oklahoma law.⁵"When evaluating issues of state law, we look to the decisions of the state's highest court."⁶

III.

We turn first to the district court's grant of Rolling Plains's motion for judgment as a matter of law on Oklahoma's two-year statute of limitations.We find the verdict unsupported by the evidence, and accordingly vacate and remand for retrial on when First's cause of action accrued.

A.

"When a case has been tried by a jury, a motion for judgment as a matter of law is a challenge to the legal sufficiency of the evidence underlying the jury's verdict."⁷"The jury's findings of fact are reviewed on the whole record and are affirmed if supported by substantial evidence; a scintilla of evidence is insufficient to present a question for the jury . . . ."⁸This court should "consider all of the evidence, drawing all reasonable inferences and resolving all credibility determinations in the light most favorable to the non-moving party."⁹

B.

Oklahoma's two-year statute of limitations for fraud claims does not begin until the fraud is discovered, i.e., "when, in the exercise of reasonable diligence, it could have or should have been discovered."¹⁰To prove that First knew or should have known of the fraud by Memorial Day 2016, Rolling Plains presented the following evidence: (1) the Protection Plan expired on April 13, 2017; (2) testimony that the Combine malfunctioned around Memorial Day 2016; and (3) statements by First's employee, Virgil Berry, that the Combine had "gremlins" and "demons."Because First did not file suit until September 17, 2020, Rolling Plains maintained that First's fraud claim was barred by the limitations period.

C.

We find that the evidence presented was insufficient to support the jury's chosen date of April 13, 2017.As an initial matter, there is a disconnect between the trial evidence and the jury charge.Statutes of limitation are necessarily date-specific, but the trial evidence spoke in general terms.Witnesses referred to holiday weekends, seasons, and months when describing the malfunctions, but the jury was tasked with identifying a specific date that began the limitations period.The jury was asked to select a specific date without the evidentiary basis to do so.Its confusion is evident from its inquiry to the court, asking "the date that Mr. First found out from Butler that the engine really had 990 hours on it."The court's response ("August 2019") provided no further guidance on the specific date.

The jury chose the only date presented as a day, month, and year: the Protection Plan's expiration date.But the Protection Plan's expiration date cannot support the verdict because it is temporally unrelated to any pertinent fact that...