Metro. Gov't of Nashville & Davidson Cnty. v. BFI Waste Servs., LLC

• Decision Date: 22 March 2012
• Docket Number: No. M2011-00586-COA-R3-CV,M2011-00586-COA-R3-CV
• Parties: METROPOLITAN GOVERNMENT OF NASHVILLE AND DAVIDSON COUNTY, ET AL. v. BFI WASTE SERVICES, LLC, ET AL.
• Court: Tennessee Court of Appeals

METROPOLITAN GOVERNMENT OF NASHVILLE AND DAVIDSON COUNTY, ET AL.

v.BFI WASTE SERVICES, LLC, ET AL.

No. M2011-00586-COA-R3-CV

COURT OF APPEALS OF TENNESSEE AT NASHVILLE

Filed March 22, 2012

December 13, 2011 Session

Direct Appeal from the Circuit Court for Davidson County

No. 05C-390Joe Binkley, Jr., Judge

After Metro's waste-to-energy facility was damaged/destroyed by fire, Metro and the facility's insurer filed suit against Defendants.Prior to trial, Defendants' expert was precluded from testifying regarding the facility's value, its condition prior to the fire, and the alleged pre-fire plans to discontinue its operation.A jury returned a verdict in favor of Plaintiffs, and Defendants appeal.On appeal, Defendants challenge the exclusion of certain evidence, the jury charge regarding damages, and an adverse inference jury instruction given as a sanction against Defendants.Additionally, Plaintiffs challenge the denial of prejudgment interest.We affirm the trial court in all respects.

Tenn. R. App. P. 3; Appeal as of Right; Judgment of the Circuit Court Affirmed

ALAN E. HIGHERS, P.J., W.S., delivered the opinion of the Court, in which DAVID R. FARMER, J., and HOLLY M. KIRBY, J., joined.

Linda J. Hamilton Mowles, Knoxville, Tennessee, for the appellants, BFI Waste Services, LLC and Allied Waste North America, Inc.

Donald Capparella, Nashville, Tennessee; James L. Warren, III, Alexandra F. Markov, Jackson, Mississippi, for the appellees, Metropolitan Government of Nashville and Davidson County and Travelers Property Casualty of America

OPINION

I.FACTS & PROCEDURAL HISTORY

The Nashville Thermal Transfer Corporation("NTTC")¹ waste-to-energy facility (the "Facility") owned by the Metropolitan Government of Nashville and Davidson County("Metro") provided steam and chiller water to certain downtown Nashville buildings for heating and cooling.On May 23, 2002, the Facility was damaged/destroyed by fire.Travelers Property Casualty Company of America ("Travelers"), which insured the Facility, and Metro (collectively "Plaintiffs") filed suit, in the Davidson County Circuit Court, against multiple defendants including BFI Waste Services, LLC("BFI") and Allied Waste North America, Inc.("Allied")(collectively "Defendants"), alleging negligence, gross negligence, professional negligence, breach of contract, breach of warranties and negligent misrepresentation.Defendants answered, denying the allegations against them and asserting the comparative negligence of Metro.

On August 26, 2010, Plaintiffs filed a motion in limine to exclude, among other things, any references at trial to (1) Metro's alleged pre-fire plan to discontinue waste-to-energy operations at the Facility; or to (2) the Facility's alleged negligible or negative value at the time of the fire.Specifically, Plaintiffs sought to exclude the testimony of Defendants' expert Jonathon C. Held, who provided the following opinion in an April 12, 2010 report:

The building was a special purpose property which was substantially obsolete at the date of the loss, and as such, only had utility for a limited period of time, and thus has negligible value.

Because the plant had limited utility and a finite life at the time of the loss, the loss can be no more than the amount expended under the extra expense portion of the adjusted loss by Travelers in the amount of $1,694,274.00.

Plaintiffs argued that Mr. Held's opinion should be excluded because he did not conduct an appraisal of the Facility either before or after the fire, and furthermore, that he was not qualified to do so as he is not a licensed real estate appraiser.As a sanction for Defendants alleged repeated failure to reply to discovery requests, the Plaintiffs further sought both an order prohibiting Defendants from introducing, as part of their defense, evidence regarding their policies or procedures as well as an adverse inference jury instruction.

Following a hearing on September 20, 2010, the trial court issued an order precluding Mr. Held from testifying about the Facility's value "because this constitutes an appraisal opinion, which he is not qualified to give."It further precluded him from testifying regarding the future plans for the Facility or his opinion regarding its obsolescence, finding such testimony irrelevant, and even if relevant, concluding that "the probative value of the evidence, if any, is outweighed by its prejudicial effect."Without competent proof of the Facility's value, the trial court found that the appropriate measure of damages was confined to the reasonable cost of repair.Because it found Metro's pre-fire plans for the Facility and the pre-fire condition of the Facility irrelevant to reasonable repair costs, the trial court further excluded evidence regarding such.Similarly, the trial court found irrelevant, and therefore inadmissible, Metro employee Harvey Gershman's testimony regarding the estimated demolition costs of the Facility prior to the fire.Finally, the trial court granted Plaintiffs' motion for an adverse inference jury instruction for Defendants' failure to comply with Plaintiffs' discovery requests and the court's orders instructing it to do so.

On September 27, 2010, a six-day trial commenced.On October 5, 2010, the jury returned a $7,200,000.00 verdict for Plaintiffs based upon Defendants' negligence and breach of contract.Plaintiffs then moved for pre-judgment and post-judgment interest.On December 3, 2010, the trial court entered judgment against Defendants in the amount of $6,850,000.00 representing a $350,000.00 deduction for prior settlement proceeds.The trial court granted Plaintiffs' request for post-judgment interest, but it denied their request for pre-judgment interest.

On January 3, 2011, Defendants filed a "Motion for Judgment Notwithstanding the Verdict, Motion for New Trial, and Motion for Suggestion of Remittitur."The trial court denied all requested relief, finding that, among other things, credible material evidence existed to support the jury's verdict, the evidence preponderated in favor of the jury's verdict, and the jury's verdict "was within the range of reasonableness in light of the evidence and testimony presented."

Defendants filed a notice of appeal to this Court on March 9, 2011.On June 7, 2011, Defendants filed a "Motion to Stay Further Appellate Proceedings and to Remand Jurisdiction to the Circuit Court for Davidson County, Tennessee for Consideration of Newly Rendered Relevant Precedent" based upon the decision of City of Pulaski v. Morris, No. M2010-00047-COA-R3-CV, 2010 WL 3732161(Tenn. Ct. App.Sept. 23, 2010), which this Court denied.

II.ISSUES PRESENTED

Defendants BFI and Allied present the following issues for review, as summarized:

1.Whether the trial court erred in excluding evidence regarding: (1) the value of the Facility at the time of the fire; (2) the Facility's pre-fire condition; and (3) the future plans for the Facility;

2.Whether the trial court allowed all properly preserved offers of proof;

3.Whether the trial court erred in charging only the reasonable cost to repair as damages; and

4.Whether the trial court erred in ordering an adverse inference jury instruction sanction.

Additionally Plaintiffs Metro and Travelers present the following issues, as summarized:

1.Whether Defendants waived appellate consideration of the trial court's exclusion of Facility value opinions from Mr. Held; and

2.Whether the trial court abused its discretion in denying prejudgment interest.

For the following reasons, we affirm the trial court in all respects.

III.STANDARD OF REVIEW

The standard of review of a jury verdict is set forth in Tennessee Rule of Appellate Procedure 13(d), which provides that "[f]indings of fact by a jury in civil actions shall be set aside only if there is no material evidence to support the verdict."Evidentiary rulings, including decisions regarding the admissibility of expert testimony, however, are reviewed under the abuse of discretion standard.McDaniel v. CSX Transp., Inc., 955 S.W.2d 257, 263(Tenn.1997)(citingState v. Ballard, 855 S.W.2d 556, 562(Tenn.1993));Danny L. Davis Contractors, Inc. v. Hobbs, 157 S.W.3d 414, 418-19(Tenn. Ct. App.2004)(citingOtis v. Cambridge Mut. Fire Ins. Co., 850 S.W.2d 439, 442(Tenn.1992))."'The abuse of discretion standard requires us to consider: (1) whether the decision has a sufficient evidentiary foundation; (2) whether the trial court correctly identified and properly applied the appropriate legal principles; and (3) whether the decision is within the range of acceptable alternatives.'"Danny L. Davis Contractors, 157 S.W.3d at 419(quotingCrowe v. First Am. Nat'l Bank, No. W2001-00800-COA-R3-CV, 2001 WL 1683710, at *9(Tenn.Ct. App.Dec. 10, 2001)).Under the abuse of discretion standard, "we will not substitute our judgment for that of the trial court merely because we might have chosen another alternative."Id.

Once an abuse of discretion in the admission or exclusion of evidence is shown, the party claiming error must also show that the erroneous admission or exclusion "more probably than not affected the verdict."Seeid. at *8(citingTenn. R. App. P. 36(b)("A final judgment from which relief is available and otherwise appropriate shall not be set aside unless, considering the whole record, error involving a substantial right more probably than not affected the judgment or would result in prejudice to the judicial process.")).

We review a trial court's conclusions of law, including the construction of a statute, under a de novo standard upon the record with no presumption of correctness.Union Carbide Corp. v. Huddleston, 854 S.W.2d 87, 91(Tenn.1993)(citingEstate of Adkins v. White Consol. Indus., Inc., 788 S.W.2d 815, 817(Tenn. Ct. App.1989));Robinson v. LeCorps, 83 S.W.3d 718, 722-23(Tenn.2002)(citingIvey v. Trans Global Gas & Oil, 3 S.W.3d 441, 446(Tenn.1999)).

IV.DISCUSSION

A.Exclusion of Evidence

As stated above, prior to...