Peerless Corporatoin v. U.S., 98-3552

• Decision Date: 17 June 1999
• Docket Number: No. 98-3552,98-3552
• Citation: 185 F.3d 922
• Parties: (8th Cir. 1999) PEERLESS CORPORATION, APPELLANT, v. UNITED STATES OF AMERICA, APPELLEE. Submitted:
• Court: U.S. Court of Appeals — Eighth Circuit

Page 922

185 F.3d 922 (8th Cir. 1999)

PEERLESS CORPORATION, APPELLANT, v. UNITED STATES OF AMERICA, APPELLEE.

No. 98-3552

UNITED STATES COURT OF APPEALS FOR THE EIGHTH CIRCUIT

Submitted: June 17, 1999

Decided August 30, 1999

Appeal from the United States District Court for the Eastern District of Arkansas. [Copyrighted Material Omitted] Before Bowman and Heaney, Circuit Judges, and LONGSTAFF,¹ District Judge.

Bowman, Circuit Judge.

Peerless Corporation, a manufacturer of self-unloading "live-floor" truck trailers, appeals from the denial by the District Court² of Peerless's motion in limine to exclude certain evidence from trial, and from the denial of Peerless's motion for judgment as a matter of law and alternative motion for a new trial challenging a jury verdict that Peerless's trailers are not exempt from the federal excise tax imposed under Internal Revenue Code § 4051. See 26 U.S.C. § 4051 (1994).³

Peerless manufactures specialty truck trailers, including trailers fitted with a hydraulic "live-floor" mechanism that automatically unloads cargo. From July 1, 1993, through June 30, 1995, the time relevant to this appeal, Peerless sold 125 live-floor trailers to retail customers. Peerless paid the federal excise tax under § 4051 on only the portion of the sales price attributable to the trailer chassis, claiming that the live-floor trailer body qualified for the tax exemption provided by Internal Revenue Code § 4053(2). See 26 U.S.C. § 4053(2) (1994).⁴ Peerless apparently relied for its position on an IRS private letter ruling issued to another taxpayer stating that the live-floor trailer bodies manufactured by that taxpayer were "primarily designed for the exempt purposes set forth in the [Internal Revenue] Code.... [and] are exempt from tax under section 4053(2)(B) of the Code," while the "chassis components of such semitrailers are subject to the tax imposed by section 4051." IRS Priv. Ltr. Rul. 8907008, at 2 (Nov. 14, 1988). The private letter ruling further provides, in accordance with Internal Revenue Code § 6110(j)(3), that "[t]his ruling is directed only to the taxpayer who requested it." Id.; see also 26 U.S.C. § 6110(j)(3) (1994) (providing that private letter rulings, determination letters, and technical advice memoranda issued by the IRS "may not be used or cited as precedent").

In mid-1995, the IRS audited Peerless's tax returns for the period from July 1, 1993, to June 30, 1995, and questioned the basis upon which Peerless had claimed the § 4053(2) tax exemption on its live-floor trailer bodies. The IRS thereafter issued a technical advice memorandum stating that Peerless's trailer bodies were not exempt under § 4053. The IRS assessed approximately $430,000 in additional excise tax and interest against Peerless to compensate for the difference between the tax Peerless paid on the trailer chassis and the tax that Peerless should have paid on the entire trailer, both chassis and body, assuming the trailer body was not exempt under § 4053(2). Peerless paid the assessed tax and interest, but filed for a refund. When the IRS denied the refund, Peerless instigated this suit against the United States to recover the $430,000 in tax and interest assessed against Peerless by the IRS.

Prior to trial, Peerless moved in limine to exclude any evidence regarding "subsequent actual uses" to which its live-floor trailers are put by retail purchasers, claiming that the § 4053(2) exemption turns on the purpose for which the trailer bodies are "primarily designed," not on their actual uses. The District Court denied the motion, determining that "evidence of use of Peerless's [trailers] equipped with the live floor mechanism is admissible for the limited purpose of determining the primary purpose for which the mechanism is designed." Peerless Corp. v. United States, No. J-C-97-195, slip op. at 4 (E.D. Ark. Mar. 4, 1998) (order denying motion in limine). At the Conclusion of all the evidence, the District Court instructed the jury to "consider the actual uses to which these trailers have been put by their retail purchasers only for the limited purpose of determining the primary purpose for which this trailer with the 'live floor mechanism' was designed." Jury Instruction No. 18.

Peerless did not initially move for judgment as a matter of law until after the case was submitted to the jury. The District Court denied the motion. The jury returned a verdict finding that Peerless's live-floor trailers were not primarily designed to haul and unload feed, seed, or fertilizer to and on farms and, therefore, were not exempt under § 4053(2). The District Court entered judgment on the jury's verdict. Peerless renewed its motion for judgment as a matter of law and filed an alternative motion requesting a new trial, both of which were denied by the District Court. Peerless now appeals to this Court.

For its first issue on appeal, Peerless claims that the District Court erred in denying Peerless's motion in limine. Peerless argues that the § 4053(2) exemption refers only to the purpose for which the trailers primarily were designed and, therefore, that evidence regarding the actual use of the trailers by purchasers should have been excluded. Peerless, however, failed to object at trial to the admission of the evidence regarding the actual uses of the trailers and, moreover, introduced its own evidence on that subject. As we explained in Huff v. Heckendorn Manufacturing Co., "[W]hen a motion to exclude evidence is made in limine and is overruled, if the evidence is thereafter admitted at trial without objection,'the error if any, has not been preserved for review.'" 991 F.2d 464, 466 (8th Cir. 1993) (quoting Starr v. J. Hacker Co., 688 F.2d 78, 81 (8th Cir. 1982)); see also Hale v. Firestone Tire & Rubber Co., 756 F.2d 1322, 1333-34 (8th Cir. 1985).

Even if Peerless had preserved the issue for appeal, the evidence of actual use properly was admitted for the limited purpose of determining the primary function for which the trailer bodies were designed. See Hagan v. United States, 74-2 U.S. Tax Cas. (CCH) 16,166 (D. Me. Sept. 11, 1974) (instructing jury to consider, among other things, uses to which truck body has been put by manufacturer's customers to ascertain whether truck body was primary designed to unload feed, seed, or fertilizer to and on farms, for purposes of federal excise tax exemption); cf. Woodward v. United States, 442 F.2d 333, 334-35 (10th Cir. 1971) (noting testimony of camper manufacturers that campers are "primarily used for living purposes," and determining that an abundance of evidence existed to support the district court's finding that campers fall within 26 U.S.C. § 4063(a)(1) exemption for "articles designed... to be used primarily as living quarters").

Peerless next claims that the District Court erred in denying Peerless's motion for judgment as a matter of law. We review de novo the denial of a motion for judgment as a matter of law using the same standard as that applied by the District Court. See Browning v. Liberty Mut. Ins. Co., 178 F.3d 1043, 1047 (8th Cir. 1999). Judgment as a matter of law should be granted if insufficient evidence exists to support the jury verdict and no reasonable juror could have returned a verdict for the non-moving party. See Buckles v. First Data Resources, Inc., 176 F.3d 1098, 1100 (8th Cir. 1999).

In its motion to the District Court, Peerless claimed that "[t]he evidentiary record ... is devoid of any... evidence by which the jury could have reasonably determined that Peerless Corporation's specialty trailers... were'primarily designed' for anything other than the hauling of cattle feed to farms and the unloading of such cattle feed on farms." Plaintiff's Motion for Judgment as a Matter of Law, at 1. The court, after taking briefs on the issue, found that Peerless failed initially to move for judgment as a matter of law before the case was submitted to the jury, and therefore denied Peerless's renewed motion as untimely under Federal Rule of Civil Procedure 50. Rule 50 states that "[m]otions for judgment as a matter of law may be made at any time before submission of the case to the jury," Fed. R. Civ. P. 50(a)(2), and that if the "court does not grant a motion for judgment as a matter of law made at the close of all the evidence.... [t]he movant may renew its request for judgment as a matter of law by filing a motion no later than 10 days after entry of judgment," Fed. R. Civ. P. 50(b); see also Pulla v. Amoco Oil Co., 72 F.3d 648, 655 (8th Cir. 1995) (White, J.) (" Under Rule 50(b), a litigant who fails to move for judgment as a matter of law at the close of the evidence cannot later argue either in a post-trial Rule 50 motion or on appeal that the verdict was supported by insufficient evidence.").

Peerless concedes that it first moved for judgment as a matter of law shortly after the case went to the jury, and thereby failed to conform to Rule 50, but argues that we should hear the merits of its motion under any one of several recognized exceptions to the Rule 50 timeliness requirement. In particular, Peerless cites BE & K Construction Co. v. United Brotherhood of Carpenters & Joiners of America, in which we found an exception to Rule 50 where "[o]nly a short time elapsed between [the movant's] motion and the close of all the evidence, only two witnesses were called who had not already testified, no additional evidence was put in by [the non-moving party], and the trial Judge deferred ruling on part of the motion." 90 F.3d 1318, 1325 (8th Cir. 1996). Peerless also points out that in Pulla we recognized that:

"litigants can challenge a jury verdict without moving for judgment as a matter of law at the close of the evidence if their earlier Rule 50 motion (1) closely preceded the close of all of the evidence; and (2) the court somehow indicated that the movant need not renew its motion in order to preserve its right to challenge the verdict.

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