Hagert v. Hatton Commodities, Inc.

• Decision Date: 19 March 1986
• Docket Number: No. 10983,10983
• Citation: 384 N.W.2d 654
• Parties: Curtis HAGERT, Sr., Curtis Hagert, Jr., and David Hagert, all d/b/a Hagert Farms, Plaintiffs, Appellees and Cross-Appellants, v. HATTON COMMODITIES, INC., and Greeley Trading Co., Defendants, and Powell Bean Growers Association, Defendant, Appellant and Cross-Appellee. Civ.
• Court: North Dakota Supreme Court

Page 654

384 N.W.2d 654

Curtis HAGERT, Sr., Curtis Hagert, Jr., and David Hagert all d/b/a Hagert Farms, Plaintiffs, Appellees and Cross-Appellants, v. HATTON COMMODITIES, INC., and Greeley Trading Co. Defendants and Powell Bean Growers Association, Defendant, Appellant and Cross-Appellee.

Civ. No. 10983.

Supreme Court of North Dakota.

March 19, 1986.

McConn, Fisher & Thune, Grand Forks, for plaintiffs, appellees and cross-appellants; argued by Patrick W. Fisher.

Degnan, McElroy, Lamb, Camrud, Maddock & Olson, Grand Forks, for defendant appellant and cross-appellee; argued by Marjorie M. Young.

ERICKSTAD, Chief Justice.

Powell Bean Growers Association (Powell) appeals from a district court judgment granting a motion by Curtis Hagert, Sr., Curtis Hagert, Jr., and David Hagert, doing business as Hagert Farms (Hagert Farms), for judgment not withstanding the verdict or, in the alternative, for a new trial, and Hagert Farms cross-appeals from the judgment. We reverse in part, affirm in part, and remand for a new trial.

Hagert Farms purchased certified Wyoming 166 pinto bean seeds from Hatton Commodities, Inc. (Hatton Commodities) for the 1980 growing season. Hatton Commodities had purchased the seed from Greeley Trading Company (Greeley), which in turn had purchased it from Powell. Hagert Farms planted the seeds on a 70 acre field on May 15, 1980, and on a 130 acre field on May 29 and 30, 1980. Before planting, each field had been fertilized to the extent necessary to produce an anticipated yield of 2,750 pounds of pinto beans per acre, and the 70 acre field had been irrigated with an overhead center pivot irrigation system. The irrigation system in the 130 acre field was not operative at the time of planting. After planting, the 70 acre field was irrigated with the overhead center pivot irrigation system.

Hagert Farms employed a private agricultural consultant to advise it on matters relative to growing a crop on irrigated land, and, on June 6, 1980, the agricultural consultant observed what he believed to be halo blight on the plants in the 70 acre field. At that time, the plants in the 70 acre field were about six inches high and the plants in the 130 acre field had germinated and begun to appear above the soil. Further inspections and tests verified that the plants in the 70 acre field were infected with halo blight; however, no halo blight was detected in the smaller plants in the 130 acre field. Based on the agricultural consultant's advice, Hagert Farms destroyed the plants in both fields and reseeded which resulted in a delayed growing season and an alleged reduction in anticipated yield.

Hagert Farms asserted that the pinto bean seeds were contaminated with halo blight bacteria and sued Hatton Commodities alleging negligence, breach of warranty, and strict liability in tort. Hagert Farms sought damages for the additional replanting expenses and for loss of profit due to a reduction in anticipated yield. Hatton Commodities filed a third-party claim against Greeley and Powell. Greeley filed a counterclaim against Hatton Commodities and a cross-claim against Powell. Powell filed a cross-claim against Greeley and a counterclaim against Hatton Commodities.

The claims were consolidated for trial, and the case was submitted to a jury on the breach of warranty and strict liability in tort theories. That jury returned a special verdict ultimately imposing liability against Powell ¹ and, in an earlier appeal from a judgment entered as a result of that jury verdict, we reversed and remanded for a new trial. Hagert v. Hatton Commodities, Inc., 350 N.W.2d 591 (N.D.1984). We concluded that economic loss, as distinguished from injury to property, may be recovered under the Uniform Commercial Code's express and implied warranty provisions but not under strict liability in tort, and to the extent that an undistinguishable part of Hagert Farms recovery was for loss of profit ordinarily only recoverable under a contract theory, Powell was entitled to a new trial. Hagert v. Hatton Commodities, Inc., supra, 350 N.W.2d at 594-595.

On remand, the trial court permitted Hagert Farms to amend its complaint to proceed directly against Greeley and Powell. The case was submitted to a jury on express warranty and implied warranty of merchantability theories, and the jury returned a verdict in the following form:

"We, the jury, unanimously find the following answers to the following questions submitted by the Court:

"1. Did the defendants breach

expressed or implied

warranties?

"ANSWER: 'Yes' or 'No'. Yes

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"2. If you answered 'Yes' to

question No. 1, was the

defendants' breach of

expressed or implied

warranties a proximate cause

of damages sustained by the

plaintiffs?

"ANSWER: 'Yes' or 'No'. No

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"3. Regardless of your answers

to questions No. 1 and No. 2,

in what sums do you find the

plaintiff's damages for:

"(a) Lost crops $12,995.49

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"(b) Incidental expenses $ 2,590.73

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"4. In what percentage do you

award plaintiffs interest on

damages for lost crop from

October 15, 1980?

"ANSWER: 6%

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"5. In what percentage do you

award plaintiff's interest on

damages for incidental

expenses from June 15, 1980?

"ANSWER: 6%"

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Hagert Farms moved for judgment notwithstanding the verdict or, in the alternative, for a new trial. The district court determined, as a matter of law, that Powell's breach of warranty was the proximate cause of Hagert Farms' injuries ² and granted Hagert Farms' motion for a judgment notwithstanding the verdict and also conditionally granted the motion for a new trial. Judgment was entered in favor of Hagert Farms in the amount of $12,995.49 for the lost crop, and $2,590.73 for incidental expenses, plus prejudgment interest at the rate of six percent. ³ Powell appealed, and Hagert Farms cross-appealed.

Powell contends that the district court erred in granting Hagert Farms' motion for judgment notwithstanding the verdict because the question of proximate cause is a question of fact for the jury and there was sufficient evidence to support the jury's determination that Powell's breach of warranty was not the proximate cause of Hagert Farms' damages. Powell also contends that the special verdict form was not misleading or confusing, and the jury's answers were consistent.

Hagert Farms asserts that the trial court properly granted the motion for judgment notwithstanding the verdict to correct an obvious jury error and that, as a matter of law, the contaminated bean seed was the proximate cause of its damages.

A party alleging a breach of warranty has the burden of establishing the existence of a warranty, a breach of warranty, and that the breach of warranty proximately caused the damages alleged. Northwestern Equipment, Inc. v. Cudmore, 312 N.W.2d 347 (N.D.1981); see also Section 41-02-31, N.D.C.C. [Uniform Commercial Code Sec. 2-314 Comment 13]. Ordinarily the determination of whether or not damages were proximately caused by a breach of warranty is a question of fact. A.T.S. Laboratories, Inc. v. Cessna Aircraft Co., 59 Ohio App.2d 15, 391 N.E.2d 1041 (Ohio Ct.App.1978); General Supply and Equipment Co., Inc. v. Phillips, 490 S.W.2d 913 (Tex.Civ.App.1972); Cf. Linington v. McLean County, 161 N.W.2d 487 (N.D.1968) [proximate cause in negligence action was question of fact unless evidence was such that reasonable men could draw but one conclusion therefrom].

Whether or not the evidence is sufficient to create a question of fact for the trier of fact is a question of law to be decided by the trial court. Okken v. Okken, 325 N.W.2d 264 (N.D.1982). If the trial court determines that the evidence does not present a question of fact for the jury, the party moving for a judgment notwithstanding the verdict is entitled to a judgment on the merits as a matter of law and only then should a motion for a judgment notwithstanding the verdict be granted. Okken v. Okken, supra.

In Okken v. Okken, supra, 325 N.W.2d at 267, we set out the following standard to be used by this Court and trial courts for determining whether the granting of a judgment notwithstanding the verdict is appropriate:

"In determining if the evidence is sufficient to create an issue of fact, and hence in determining if judgment n.o.v. should be granted, the trial court must employ a rigorous standard with a view toward preserving verdicts. Riebe v. Riebe, 252 N.W.2d 175 (N.D.1977). The test is whether or not the evidence, when viewed in the light most favorable to the party against whom the motion is made, leads to but one conclusion as to the verdict about which there can be no reasonable difference of opinion. Staiger v. Gaarder, 258 N.W.2d 641 (N.D.1977). In employing this standard, the trial judge is not free to consider the weight of the evidence or to judge the credibility of witnesses; on the contrary, he is required to accept the truth of the evidence presented by the party opposing the motion and the truth of all reasonable inferences from that evidence which support the jury verdict. Riebe, supra, 252 N.W.2d at 177; 9 Wright & Miller, Federal Practice and Procedure, Civil 2524. The trial court must give proper deference to the jury's evaluation of the evidence and its judgment of the credibility of witnesses under a motion for judgment n.o.v." [Emphasis in original.]

Initially, we do not believe that the jury's answers to the special verdict form necessarily indicates a misconception of proximate cause. Question number three of the special verdict form specifically required the jury to find the amount of Hagert Farms' damages for lost crops and incidental expenses regardless of whether or not the jury found a breach of express or implied warranty and regardless of whether or not the jury found the breach of warranty was a proximate cause of Hagert Farms' damages. The jury's answers in this respect were precisely what the special verdict...