Hines v. A.O. Smith Harvestore Products, Inc., 88-2484

• Decision Date: 26 July 1989
• Docket Number: No. 88-2484,88-2484
• Citation: 880 F.2d 995
• Parties: Floyd HINES and Mildred Hines, Appellants, v. A.O. SMITH HARVESTORE PRODUCTS, INC., et al., Appellees.
• Court: U.S. Court of Appeals — Eighth Circuit

Page 995

880 F.2d 995

Floyd HINES and Mildred Hines, Appellants, v. A.O. SMITH HARVESTORE PRODUCTS, INC., et al., Appellees.

No. 88-2484.

United States Court of Appeals Eighth Circuit.

Submitted June 16, 1989.

Decided July 26, 1989.

Brock R. Snyder, Topeka, Kan., for appellants.

John C. Dods, Kansas City, Mo., for appellees.

Before JOHN R. GIBSON, Circuit Judge, FLOYD R. GIBSON, Senior Circuit Judge, and WOLLMAN, Circuit Judge.

FLOYD R. GIBSON, Senior Circuit Judge.

Floyd and Mildred Hines appeal from an order of the district court granting A.O. Smith Corporation and A.O. Smith Harvestore Products, Inc.'s joint motion for summary judgment and Agristore Credit Corporation's motion for summary judgment. The district court concluded that the Hineses' breach of contract and fraud claims were barred by the applicable statute of limitations. For the reasons that follow we reverse and remand.

I. BACKGROUND

Because this is an appeal from a grant of summary judgment, we will relate the facts in the light most favorable to the appellants Floyd and Mildred Hines. This is a diversity case brought by the Hineses against A.O. Smith Corporation, A.O. Smith Harvestore Products, Inc., and Agristor Credit Corporation (collectively referred to as Harvestore). ¹ The Hineses are farmers who purchased Harvestore grain silos for their farming operation in southwest Missouri. The Hineses purchased two silos and related equipment, one in September 1976 and one in October 1976. These silos were purchased based on numerous oral and written representations and warranties made by the Harvestore salesmen and contained in promotional pamphlets and videos prepared by Harvestore.

The two Harvestore silos were installed on the Hineses' property in September and October of 1976. The Hineses agreed to purchase the silos only after repeated solicitations by the local Harvestore dealer and a Harvestore salesman. Various representations were made to Floyd Hines to induce him to purchase one or more Harvestore silos. He also attended large meetings which were held to promote the sale of the Harvestore silos. The representations concerning the performance of Harvestore silos were made orally by Harvestore dealers and salesmen, and through pamphlets, brochures, books, and fliers. In addition, the Hineses were persuaded by Harvestore dealers and salesmen to visit other Missouri farms to see the Harvestore silos in operation.

The Harvestores were represented to be the state of the art in feed storage systems. The Harvestores were described as "oxygen free" and/or "oxygen limiting" structures which sealed out oxygen and thus enhanced the nutritional value of the grain stored in the silo. This enhancement of the nutritional value of the silage was accomplished through the process of fermentation.

The Hineses were told that they would be able to extend their feed supply because the Harvestores would prevent spoilage. Because the Harvestores would enhance the silage stored within them, Mr. Hines was told that he would no longer have to supplement the silage with protein supplements, thereby reducing the costs of feeding cattle out of the silos. The Harvestore representatives also prepared profit projections for the Hineses' farm which projected a yearly cash income of $127,000 if the Hineses implemented the "Harvestore system" of farming. It was also represented to the Hineses that the unloaders on the silos would unload the silage at a rate that would reduce the amount of time required to feed the Hineses' cattle. Mr. Hines was skeptical of these claims until he read the promotional literature and a university study provided by the Harvestore representatives.

Within the first year that the Hineses' used the Harvestore silos Mr. Hines noticed that the feed stored within them was moldy and spoiled. He contacted the Harvestore representative and was told that this was normal and to be expected. Mr. Hines was told that the mold was penicillin and was good for his cattle. The mold and spoilage persisted and after inspecting the silo, the Harvestore dealer resealed the seams of the silo.

By the summer of 1978 the mold and spoilage problems cropped up again after the silos were refilled. The Harvestore dealer and manufacturer reinspected the silos and detected over 100 leaks in the seams. A resealing was proposed to remedy the problems and Mr. Hines agreed to the resealing. From 1978 thru 1981, Mr. Hines continued to use the silos and, although some of the grain stored within them was moldy and wet, the grain appeared to be better.

In the spring of 1982 Mr. Hines began to have trouble getting stored feed out of one of his silos. In addition, he noticed that the mold in the stored grain was different from the mold to which he had become accustomed. The mold he was told was good for his cattle was white in color, whereas the mold he now noticed was green and red in color. Mr. Hines again complained to Harvestore representatives.

Up to this point, the problems Mr. Hines was experiencing were manifesting themselves in the first silo he purchased which was installed in September 1976. The Harvestore representatives inspected both silos and recommended that both of them be resealed. Mr. Hines was told that Harvestore had a brand new resealing program which actually made the resealed silos superior to a new silo. Because of these representations, Mr. Hines agreed to the resealing of his silos. In May or June 1983, Mr. Hines noted that the new sealer had cracked and water was getting into his silos. In the early summer of 1984 the silos filled up with water after a wet spell. Mr. Hines once again contacted Harvestore representatives who recommended another attempt to reseal the silos. Mr. Hines was hesitant and after viewing several silos on other farms that had been resealed he rejected the latest offer to reseal his silos.

II. DISCUSSION

The standard of review when considering the appropriateness of a district court's grant of summary judgment is, of course, well settled. "Summary judgment is appropriate only when there is no genuine issue of material fact, so that the dispute may be decided on purely legal grounds." AgriStor Leasing v. Farrow, 826 F.2d at 734 (emphasis in original, citations omitted). The district judge's function, and ours when reviewing a grant of summary judgment, "is not to weigh the evidence, but rather is to determine as a matter of law whether there are genuine factual conflicts." Id. "In making this determination, the court is required to view the evidence in the light most favorable to the non-moving party and to give that party the benefit of all reasonable inferences to be drawn from the underlying facts." Id.

The district court determined that summary judgment disposition of the instant case was appropriate because it concluded that the applicable Missouri statute of limitations had run. The parties agree that...