Lesiak v. Cent. Valley AG Coop., Inc.

• Decision Date: 27 January 2012
• Docket Number: No. S–10–323.,S–10–323.
• Citation: 283 Neb. 103,808 N.W.2d 67
• Parties: Thomas LESIAK and Angeline Lesiak, husband and wife, et al., appellants and cross-appellees, v. CENTRAL VALLEY AG COOPERATIVE, INC., a cooperative corporation, appellee and cross-appellant.
• Court: Nebraska Supreme Court

283 Neb. 103

808 N.W.2d 67

Thomas LESIAK and Angeline Lesiak, husband and wife, et al., appellants and cross-appellees,

v.CENTRAL VALLEY AG COOPERATIVE, INC., a cooperative corporation, appellee and cross-appellant.

No. S–10–323.

Supreme Court of Nebraska.

Jan. 27, 2012.

Syllabus by the Court

1. Directed Verdict: Appeal and Error. In reviewing a trial court's ruling on a motion for directed verdict, an appellate court must treat the motion as an admission of the truth of all competent evidence submitted on behalf of the party against whom the motion is directed; such being the case, the party against whom the motion is directed is entitled to have every controverted fact resolved in its favor and to have the benefit of every inference which can reasonably be deduced from the evidence.

2. Summary Judgment. A court should grant summary judgment when the pleadings and evidence admitted show that no genuine issue exists regarding any material fact or the ultimate inferences that may be drawn from those facts and that the moving party is entitled to judgment as a matter of law.

3. Summary Judgment: Appeal and Error. In reviewing a summary judgment, an appellate court views the evidence in a light most favorable to the party against whom the judgment is granted and gives such party the benefit of all reasonable inferences deducible from the evidence.

4. Directed Verdict: Evidence. A directed verdict is proper only when reasonable minds cannot differ and can draw but one conclusion from the evidence, that is, when an issue should be decided as a matter of law.

5. Crops: Damages. Where a growing crop is injured but not rendered entirely worthless, the damage to it may be measured by the difference between the value at maturity of the probable crop, if there had been no injury, and the value of the actual crop, less the expense of fitting for market that portion of the probable crop which was prevented from maturing by the injury.

6. Courts: Juries: Damages. While it is the jury's duty to determine the amount of damages, it is the duty of the trial court to refrain from submitting the issue of damages to the jury where the evidence is such that a jury could not determine the issue without indulging in speculation or conjecture.

7. Damages: Evidence: Proof. Damages are not required to be proved with mathematical certainty, but the evidence must be sufficient to enable the trier of fact to estimate with a reasonable degree of certainty and exactness the actual damages.

8. Summary Judgment. A motion for summary judgment is a proper mechanism to dispose of individual legal theories.

9. Products Liability: Torts: Contracts: Negligence: Damages. Where a defective product causes economic loss and is unaccompanied by personal injury or damage to other property, the aggrieved party's remedy lies in contract law rather than tort law.

10. Products Liability: Torts: Contracts: Negligence: Breach of Contract. The economic loss doctrine precludes tort remedies only where the damages caused were limited to economic losses and where either (1) a defective product caused the damage or (2) the duty which was allegedly breached arose solely from the contractual relationship between the parties.

11. Damages: Words and Phrases. Economic losses are defined as commercial losses, unaccompanied by personal injury or other property damage.

12. Breach of Contract: Damages: Torts. Where only economic loss is suffered and the alleged breach is of only a contractual duty, then the action should be in contract rather than in tort.

13. Summary Judgment: Appeal and Error. The denial of a summary judgment motion is neither appealable nor reviewable.

David A. Domina, Omaha, Brian E. Jorde, and Anneliese Wright, of Domina Law Group, P.C., L.L.O., for appellants.

Jordan W. Adam and D. Steven Leininger, of Leininger, Smith, Johnson, Baack, Placzek & Allen, Grand Island, for appellee.

HEAVICAN, C.J., WRIGHT, CONNOLLY, GERRARD, STEPHAN, McCORMACK, and MILLER–LERMAN, JJ.

PER CURIAM.

Thomas Lesiak and Angeline Lesiak, husband and wife; Timothy Lesiak, their son; and Ronald Lesiak, Thomas Lesiak's brother, are Nebraska farmers who own land in Merrick and Nance Counties. The Lesiaks suffered a reduced corn yield in 2005, allegedly due to the overapplication of herbicide to their crops by Central Valley Ag Cooperative, Inc. (CVA). The main issues presented in this case are whether sufficient evidence existed to allow a jury to reasonably estimate the extent of the Lesiaks' damages and whether the economic loss doctrine precluded the Lesiaks from seeking relief under a negligence theory.

I. BACKGROUND

In early 2005, the Lesiaks began preparing for the upcoming farming season. The Lesiaks were planning on farming 20 different fields, encompassing approximately 2,000 acres of farmland. Randy Zmek, an employee for CVA, called on Thomas (Tom) Lesiak in an effort to earn more of the Lesiaks' business. In the past, the Lesiaks had purchased fertilizer and other chemicals from CVA. But, for the 2005 crop year, the Lesiaks took all of their business to CVA, purchasing a “complete package.” This package included diesel fuels, chemicals, fertilizer, and seed. The package also included CVA's general farming knowledge and expertise. As a result of this transaction, CVA conducted soil tests on the Lesiaks' land in order to determine the soil composition and texture. CVA recommended which fertilizers, seed corn, pesticides, and herbicides to use. CVA then sold all of these products to the Lesiaks.

The Lesiaks began to plant their corn in the spring. Following CVA's recommendation, the Lesiaks had purchased approximately 947 gallons of Guardsman Max, a herbicide, from CVA and Guardsman Max was applied to 16 of their 20 fields that year. Once the Lesiaks finished planting a field, they would notify CVA, who would then spray the field with Guardsman Max.

Guardsman Max is designed to kill a broad number of weeds in a cornfield without damaging the corn crop. In order to be effective, however, Guardsman Max must be applied at a specific rate based on a number of conditions; particularly important are the soil textures and organic content of the fields to be sprayed. The coarser the soil of the field, the less Guardsman Max was required. Also, if the field contained less than 3 percent organic matter, then less Guardsman Max was needed.

All of the Lesiaks' fields contained less than 3 percent organic matter, with the exception of a small portion of one of their fields. The record indicates that roughly 68 percent of the land consisted of coarse-textured soils and that 32 percent of the land consisted of medium-textured soils. All but one of the Lesiaks' fields contained some medium-textured soils. For coarse-textured soils with less than 3 percent organic matter, the Guardsman Max label suggested an application rate of 2.5 to 3.0 pints per acre. And for medium-textured soils with less than 3 percent organic matter, the label suggested an application rate of 3.0 to 4.0 pints per acre. It is undisputed that CVA applied Guardsman Max at a uniform rate of 4.0 pints per acre across all of the Lesiaks' fields.

On June 2, 2005, Tom Lesiak called Zmek and advised Zmek that the Lesiaks' corn crop was stunted and that he suspected chemical damage. Zmek came out to inspect the crops the day after receiving Tom Lesiak's telephone call, and he initially found nothing wrong. But, after being shown to a specific area of the field, Zmek admitted to there being chemical damage, though he did not specifically reference Guardsman Max. After Zmek's inspection in June, the Lesiaks continued to notice problems with their crop throughout the summer and reported those problems to CVA. CVA allegedly did nothing until October, when the Lesiaks began reporting their yields to CVA. At that point, CVA inspected the Lesiaks' fields, but denied any damage resulting from its application of Guardsman Max.

The Lesiaks filed this action against CVA. The Lesiaks alleged that CVA's improper application of Guardsman Max caused damage to their corn crop, decreasing their total yield. The Lesiaks asserted multiple theories of recovery, including, as relevant to this appeal, negligence, breach of implied warranty of merchantability, and breach of implied warranty of services. CVA moved for summary judgment, which the district court granted on both the implied warranty of services and negligence claims. The court found that Nebraska law did not recognize the claim of implied warranty of services outside of the building and construction context. Additionally, the court found that the Lesiaks' negligence claim was precluded by the economic loss doctrine. This left the Lesiaks with only their claim for breach of implied warranty of merchantability.

Following the Lesiaks' presentation of their case, CVA moved for a directed verdict, asserting that the Lesiaks had failed to prove the measure of the damage, if any, which resulted from the alleged overapplication of Guardsman Max to their cornfields. The court granted the motion for a directed verdict, explaining that the evidence was insufficient to allow the fact finder to determine what damage was attributable to Guardsman Max and what was attributable to a lack of irrigation. The Lesiaks appeal.

II. ASSIGNMENTS OF ERROR

The Lesiaks assign, restated and renumbered, that the district court erred in (1) directing a verdict for CVA on the basis that the Lesiaks' proof of damages was not sufficiently definite for submission to the jury, (2) allowing a motion for summary judgment to be used to dismiss individual theories of relief, (3) granting partial summary judgment on the Lesiaks' breach of implied warranty of services claim, and (4) granting partial summary judgment on the Lesiaks' negligence theory based on the economic loss doctrine.

On cross-appeal, CVA assigns, restated, that the district court erred in failing to grant CVA summary judgment on all...