Jennie-O Foods, Inc. v. Safe-Glo Products Corp.
| Decision Date | 11 August 1998 |
| Docket Number | JENNIE-O,No. C5-97-2321,SAFE-GLO,C5-97-2321 |
| Citation | 582 N.W.2d 576 |
| Court | Minnesota Court of Appeals |
| Parties | 36 UCC Rep.Serv.2d 363, Prod.Liab.Rep. (CCH) P 15,318 FOODS, INC., Respondent, v.PRODUCTS CORP., Defendant, Gillis Agricultural Systems, Appellant. |
Syllabus by the Court
1. A corporation that purchases heaters for use in its business of raising and selling turkeys is not a merchant of heaters within the meaning of Minn.Stat. § 604.10(a).
2. A jury verdict will not be overturned when the evidence can be reconciled with the verdict.
3. In a trial on liability for the causation of a fire, the trial court does not abuse its discretion in admitting expert testimony on causation of a fire or in excluding evidence of prior and subsequent fires.
4. When a party accurately states the law in its closing argument, the trial court does not abuse its discretion in denying a motion for a new trial on the ground that the law was misstated.
L. Wayne Larson, Jon C. Saunders, Anderson Larson Hanson & Saunders, P.L.L.P., Willmar, for appellant.
Eric J. Magnuson, Stanley E. Siegel, Jr., Kristin J. Allard, Rider, Bennett, Egan & Arundel, LLP, Minneapolis, for respondent.
Considered and decided by WILLIS, P.J., HUSPENI and SCHULTZ, JJ. *
Appellant moved unsuccessfully for summary judgment on the ground that respondent was precluded from recovering in tort by the economic loss doctrine set out in Minn.Stat. § 604.10(a). A jury then determined that appellant was liable for fire damage to respondent's property. Appellant challenges the denial of summary judgment, the sufficiency of the evidence on causation, certain of the trial court's evidentiary decisions, and the denial of appellant's motion for a new trial. We conclude that respondent is not a merchant of heaters within the meaning of Minn.Stat. § 604.10(a), that the verdict is supported by the evidence, and that there was no abuse of discretion in the evidentiary decisions or in the denial of the motion for a new trial.
Respondent Jennie-O Foods, Inc., operates turkey farms that include brooder barns. The floors of these barns are covered with wood shavings as bedding for young turkeys. Before use, the barns are heated to 80 or 90 degrees by heaters suspended from the rafters to about 20 inches above the floor. Two barns were destroyed by fire during this heating process; one in May 1993 and one in September 1993.
Believing that the fires were caused by pieces of hot metal falling from the heaters into the wood shavings on the barn floors, Jennie-O sued the heater manufacturers, Sibley Engineering and Sibley Industries (Sibley), and the heater distributor, appellant Gillis Agricultural Systems. 1
Sibley and Gillis moved for summary judgment, arguing, inter alia, that the Uniform Commercial Code (U.C.C.) precludes tort remedies. The motion on U.C.C. issues was renewed after the release of Regents of the University of Minnesota v. Chief Industries, Inc., 106 F.3d 1409 (8th Cir.1997), and again denied.
Sibley settled with a Pierringer release prior to trial. 2 The jury found Gillis 85% liable for the first fire and 60% liable for the second, and awarded damages of $257,419.34. Gillis's motion for judgment notwithstanding the verdict or a new trial was denied.
1. Is Jennie-O a merchant within the meaning of Minn.Stat. § 604.10(a)?
2. Is there a theory of the evidence reconcilable with the jury verdicts on causation of the fires and liability for the second fire?
3. Did the trial court abuse its discretion in admitting the testimony of Jennie-O's expert and in excluding evidence of prior and subsequent fires?
4. Did the trial court abuse its discretion in denying Gillis's motion for a new trial on the ground that counsel for Jennie-O misstated the law in closing argument?
The construction of a statute is a question of law and thus fully reviewable by an appellate court. Hibbing Educ. Ass'n v. Public Employment Relations Bd., 369 N.W.2d 527, 529 (Minn.1985).
Minn.Stat. § 604.10(a) (1996) provides that:
Economic loss that arises from a sale of goods that is due to damage to tangible property other than the goods sold may be recovered in tort as well as in contract, but economic loss that arises from a sale of goods between parties who are each merchants in goods of the kind is not recoverable in tort.
The Minnesota Supreme Court and the eighth circuit diverge in their interpretations of this statute. Lloyd F. Smith Co., Inc. v. Den-Tal-Ez, Inc., 491 N.W.2d 11 (Minn.1992), concluded that a dentist was not a merchant in goods of the kind with respect to a dental chair and could therefore recover damages from a fire caused by the chair. In Regents of the University of Minnesota v. Chief Industries, Inc., 106 F.3d 1409 (8th Cir.1997), the court concluded that the University of Minnesota was a merchant in goods of the kind in respect to grain dryers and therefore could not recover damages from a fire caused by the grain dryer.
Regents attempted to distinguish Den-Tal-Ez by resort to and application of the U.C.C. definition of "merchant." Minn.Stat. § 336.2-104(1) (1996) provides:
A party is thus a "merchant" of goods for purposes of the U.C.C. either: (1) by dealing in those goods; or (2) by way of specialized knowledge of the goods.
The Regents court prefaced its application of this statutory definition by observing:
[W]hile * * * Den-Tal-Ez indicated that a dealer in a commercial transaction involving its normal stock-in-trade was a merchant for purposes of the economic loss doctrine, it did not indicate that the rule applies only to dealers. Rather, the court was more concerned with * * * the plaintiff's sophistication, knowledge, and bargaining power with respect to a particular product * * *. A plaintiff who regularly buys and sells goods of the kind will in all likelihood have such knowledge and sophistication, but so may a similarly knowledgeable party who is not a dealer.
Id. at 1412. Regents then concluded that because the University had purchased a number of grain dryers over the years, it had specialized knowledge of grain dryers and fit within the U.C.C. definition of "merchant." Therefore, reasoned the Regents court, the University was a "merchant in goods of the kind" within the meaning of Minn.Stat. § 604.10(a) and could not recover in tort. Id. at 1412.
We find persuasive, however, the well-reasoned dissent in Regents. Urging that the majority opinion contravened Den-Tal-Ez and was an incorrect statement of Minnesota law, Judge Lay noted:
When [the legislature] enacted § 604.10(a) in 1991, had it so desired, [it] could have chosen the broad term "merchant" as generally defined by § 336.2-104(1) instead of "merchants in goods of the kind." The legislature's choice instead to incorporate the limiting language manifests its intent to narrow application of the economic loss doctrine.
Id. at 1413, (Lay, J., dissenting). In accord with Den-Tal-Ez and the Regents dissent, and based upon our independent conclusion that Minn.Stat. § 604.10(a) does not include within its provisions the broad definition of "merchant" contained in Minn.Stat. § 336.2-104(1), we hold that Jennie-O was not a merchant in goods of the kind with respect to heaters and is not barred from recovering in tort.
On review, answers to special verdict questions will not be set aside unless they are perverse and palpably contrary to the evidence or where the evidence is so clear to leave no room for differences among reasonable people. The evidence must be viewed in a light most favorable to the jury verdict. If the jury's special verdict finding can be reconciled on any theory, the verdict will not be disturbed.
Hanks v. Hubbard Broadcasting, Inc., 493 N.W.2d 302, 309 (Minn.App.1992) (citations omitted), review denied (Minn. Feb. 12, 1993).
The jury's finding that the design of the heaters caused the fires was based on the testimony of Jennie-O's expert, who has been a full-time fire investigator for 13 years and has investigated "close to a thousand" fires. The expert testified that he located the area where the fire started and that in that area he found two heaters with parts of their venturi tubes missing. He also testified that in a barn identical with the one that burned, he fired up the heaters to see how they operated.
We looked at numerous heaters and saw varying degrees of damage to that venturi tube. And while we were examining the heaters, we witnessed red-hot particles of metal falling off of this heater, and that is one of the things that I witnessed personally * * *.
When asked if he had an opinion within a reasonable degree of scientific certainty whether a piece of metal could have fallen off one of the heaters and into the wood shavings 20 inches below them, the expert answered, "Yes." When asked the basis for that opinion, he replied, "I observed it myself."
The expert also testified that he located the area of origin of the second fire, where he again found two heaters with parts missing.
The opinion [on causation] is the same thing, that I feel that the metal is dropping out of the venturi tubes into the wood shavings directly beneath them.
The expert testified that he did less preliminary investigation of the second fire and took fewer steps to eliminate other possible causes of that fire because his experience with the first fire led him to believe the heaters probably caused the second fire.
Testimony of Jennie-O's expert provides more than sufficient basis for upholding the jury's verdict.
Gillis cites Gerster v. Estate of Wedin, 294 Minn. 155, 199 N.W.2d 633 (1972), to argue that the evidence was insufficient to establish causation because all other possible causes of the fire were not eliminated. Appellant's reliance on Gerster is misplaced. In that case, the jury's...
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