Johnson v. Buskohl Constr. Inc.

• Citation: 871 N.W.2d 459
• Decision Date: 01 December 2015
• Docket Number: No. 20150006.,20150006.
• Parties: Zachary JOHNSON and Margie Johnson, Plaintiffs and Appellees v. BUSKOHL CONSTRUCTION INC. and John Buskohl, Defendants and Appellants.
• Court: North Dakota Supreme Court

871 N.W.2d 459

Zachary JOHNSON and Margie Johnson, Plaintiffs and Appellees

v.BUSKOHL CONSTRUCTION INC. and John Buskohl, Defendants and Appellants.

No. 20150006.

Supreme Court of North Dakota.

Dec. 1, 2015.

Steven J. Lies (on brief) and Brittany L. Hatting (argued), Wahpeton, ND, for plaintiffs and appellees.

Kraig A. Wilson (argued), Grand Forks, ND, for defendants and appellants.

McEVERS, Justice.

[¶ 1] John Buskohl and Buskohl Construction Inc. (collectively "Buskohl") appeal from a district court's judgment entered on a jury verdict and from an amended order denying a motion for a new trial. We conclude the district court erred in admitting hearsay evidence that did not fall within an exclusion or exception. We reverse the district court's judgment and remand for a new trial, because the district court's error affected Buskohl's substantial right to a fair trial.

I

[¶ 2] Zachary Johnson and Margie Johnson contracted with Buskohl Construction Inc. as a general contractor to oversee the construction of their new house. John Buskohl is the sole shareholder, officer, and director of Buskohl Construction Inc. Due to a deteriorating relationship with the Johnsons, Buskohl walked off the job before construction was complete, leaving various "odds-and-ends" unfinished on the house. The Johnsons repaired some of the alleged deficiencies themselves and solicited bids from various contractors to fix the remaining issues.

[¶ 3] The Johnsons sued Buskohl alleging Buskohl negligently constructed the house, breached the contract, and breached the warranty to construct the house in a workmanlike manner. After the initial scheduling order, the parties agreed to extend the disclosure deadline for expert witnesses to April 11, 2014. Buskohl disclosed DuWayne Ternes as an expert witness before the disclosure deadline passed. Buskohl disclosed Kurt Sandman as an expert witness on July 21, 2014.

[¶ 4] At trial, Buskohl informed the district court he intended to call Sandman as an expert witness the next day. The Johnsons objected, among other grounds, because Buskohl did not timely disclose Sandman as an expert witness. The district court sustained the Johnsons' objection and did not permit Sandman to testify. Buskohl did not request a continuance and did not call Ternes to testify as an expert witness.

[¶ 5] Prior to opening statements, Buskohl argued the jury should not be allowed to hear anything about an exhibit regarding an estimate from Deckmasters, Inc. because it lacked foundation and was hearsay. The Johnsons responded they did not intend to use the estimate. No reference to the Deckmasters estimate was made in opening statements by either party. During trial, the Johnsons introduced the estimate by Deckmasters to fix their deck for $30,100 through testimony of Zachary Johnson. The estimate was unsigned and indicated it was prepared "based off of site-unseen deck," followed by the disclaimer, "[c]ould result in change orders and additional costs." The Johnsons did not subpoena or call a representative of Deckmasters to testify at trial.

[¶ 6] Buskohl objected to admission of the estimate on the grounds of hearsay and lack of foundation. After a sidebar, off the record, the district court overruled Buskohl's objections, received the estimate into evidence, and allowed Zachary Johnson to testify as to the contents of the estimate. The district court did not state on the record the rule of evidence under which the estimate was admissible. Outside the hearing of the jury, the district court stated, "I think ... there's no reason to believe that [the estimate] is not ... legitimate.... Beyond that I think the objection goes to weight rather than the admissibility of the document. It's received. My ruling stands on that issue."

[¶ 7] When the parties and the district court were reviewing jury instructions, Buskohl proposed a second amended special verdict form to require the jury to make special findings on damages and that damages be categorically itemized by (1) sheet rock/taping; (2) decking; (3) porch/Tyvek; and (4) miscellaneous house issues. The district court rejected Buskohl's proposed special verdict form and submitted a special verdict form that did not itemize damages.

[¶ 8] During closing argument, the Johnsons stated Buskohl failed to "call the inspector that was sent out on behalf of Mr. Buskohl to look at the windows.... [T]hey failed to call a witness who would have been qualified as an expert to refute stuff." After the jury retired for deliberations, Buskohl objected to the statement as being unduly prejudicial and moved for a mistrial. The district court overruled the objection as untimely because a curative instruction could have been given in the presence of the jury. The district court also said it heard the Johnsons refer to Buskohl failing to call an "inspector" not an "expert."

[¶ 9] The jury returned a verdict in favor of the Johnsons. The jury found Buskohl Construction Inc. is the alter ego of John Buskohl, and Buskohl was negligent, breached the contract, and breached the warranty. The jury awarded the Johnsons $55,000 in damages.

[¶ 10] Buskohl moved for a new trial under N.D.R.Civ.P. 59(b), arguing irregularities in the proceedings prevented him from receiving a fair trial. The district court denied the motion.

II

[¶ 11] On appeal, Buskohl argues the district court abused its discretion by denying a new trial because the district court erred in (1) failing to provide a special verdict form that categorically itemized damages; (2) allowing hearsay into evidence; (3) excluding Buskohl's expert from testifying; and (4) denying Buskohl's motion for mistrial based on improper closing argument.

[¶ 12] Rule 59(b)(1), N.D.R.Civ.P., provides:

(b) Grounds for New Trial. The court may, on motion of an aggrieved party, vacate the former verdict or decision and grant a new trial on any of the following grounds materially affecting the substantial rights of the party:

(1) irregularity in the proceedings of the court, jury, or adverse party, or any court order or abuse of discretion that prevented a party from having a fair trial.

"Irregularity" in the proceeding is "non-conformance to a rule or a law, or failure to follow the requirement of the law." Felix v. Lehman, 74 N.D. 125, 20 N.W.2d 82, 84 (1945). " ‘[A] decision on a motion under N.D.R.Civ.P. 59 is within the sound discretion of the trial court, and denial of a motion under N.D.R.Civ.P. 59 will not be reversed, absent a manifest abuse of discretion.’ " MayPort Farmers Co–Op v. St. Hilaire Seed Co., Inc., 2012 ND 257, ¶ 8, 825 N.W.2d 883 (quoting Jarvis v. Jarvis, 1998 ND 163, ¶ 8, 584 N.W.2d 84 ). "A court abuses its discretion if it acts in an arbitrary, unreasonable, or unconscionable manner, its decision is not the product of a rational mental process leading to a reasoned determination, or it misinterprets or misapplies the law." MayPort, at ¶ 8. "The party seeking relief has the burden to affirmatively establish an abuse of discretion." Sollin v. Wangler, 2001 ND 96, ¶ 8, 627 N.W.2d 159. "The standard for reviewing an order denying a motion for a new trial is, after viewing the evidence in the light most favorable to the verdict, whether there is sufficient evidence to justify the verdict." Braunberger v. Interstate Engineering, Inc., 2000 ND 45, ¶ 7, 607 N.W.2d 904.

A

[¶ 13] Buskohl argues the district court abused its discretion in failing to categorically itemize damages in the special verdict form submitted to the jury. We disagree.

[¶ 14] "Special verdict forms are governed by N.D.R.Civ.P. 49(a), and a trial court has broad discretion over the nature and scope of written questions submitted to the jury." Moen v. Thomas, 2004 ND 132, ¶ 14, 682 N.W.2d 738. Rule 49(a), N.D.R.Civ.P., provides:

(a) Special Verdict.

(1) In General. The court may require a jury to return only a special verdict in the form of a special written finding on each issue of fact. The court may do so by:

(A) submitting written questions susceptible of a categorical or other brief answer;

(B) submitting written forms of the special findings that might properly be made under the pleadings and evidence; or

(C) using any other method that the court considers appropriate.

(Emphasis added). Whether to require the jury to make a special finding upon each issue of fact is within the sound discretion of the trial court. North Am. Pump Corp. v. Clay Equip. Corp., 199 N.W.2d 888, 898 (N.D.1972). In reviewing a trial court's use of a special verdict, we consider whether the trial court abused its discretion, based on the evidence presented and the issues involved in the case. Moen, 2004 ND 132, ¶ 14, 682 N.W.2d 738. "A district court abuses its discretion when it acts in an arbitrary, unreasonable, or unconscionable manner, or when it misinterprets or misapplies the law." Estate of Cashmore, 2010 ND 159, ¶ 21, 787 N.W.2d 261.

[¶ 15] Here, Buskohl submitted a special verdict form requesting the jury make special findings in calculating damages based on four areas: (1) sheet rock/taping; (2) decking; (3) porch/Tyvek; and (4) miscellaneous house issues. Buskohl argued the itemization would be helpful to another pending action, stating "I think the reason we need to separate it out that way is so that for the declaratory judgment action the jury, a jury, has already made that determination as to what damages they find to be awarded and the amounts and then that takes care of it for the deck [sic] action." Buskohl provided no legal authority to support his argument that simplifying a parallel declaratory judgment action required the requested itemization of damages. The district court did not require the jury to make special findings itemizing the calculation of damages. Instead, the district court submitted a special verdict form that asked: "What amount of money will fairly and adequately compensate the plaintiffs for all the detriment proximately caused by the negligence, breach of contract, or breach of...