Philippine Nat. Oil Co. v. Garrett Corp., s. 82-5451
| Decision Date | 24 January 1984 |
| Docket Number | 82-5480,Nos. 82-5451,s. 82-5451 |
| Citation | 724 F.2d 803 |
| Parties | 38 UCC Rep.Serv. 509 PHILIPPINE NATIONAL OIL COMPANY, Plaintiff-Counterdefendant-Appellant, v. The GARRETT CORPORATION, Defendant-Counterclaimant-Appellee. The GARRETT CORPORATION, Counterclaimant-Appellant, v. PHILIPPINE NATIONAL OIL COMPANY, and Geronimo Z. Velasco, Counterdefendants-Appellees. |
| Court | U.S. Court of Appeals — Ninth Circuit |
Don A. Proudfoot, Jr., Los Angeles, Cal., for Philippine Nat. Oil Co.
J. Michael Crowe, Ziskin, Rubenstein, Kaplan & Crowe, Los Angeles, Cal., for Garrett Corp.
Appeal from the United States District Court for the Central District of California.
Before GOODWIN and TANG, Circuit Judges, and AGUILAR *, District Judge.
The Philippine National Oil Company (PNOC) appeals from the district court's refusal to grant a new trial after the jury found for PNOC but failed to award damages. PNOC also asserts error in the jury instructions. Garrett cross-appeals from the district court's denial of its counterclaim, but asks us to consider its cross-appeal only if we grant PNOC some relief. We affirm with respect to PNOC, and thus do not reach Garrett's cross-appeal.
FACTS:
Continental Telephone Company entered into a contract with Garrett, the appellee, under which Garrett would modify a JetStar airplane owned by Continental. The modification involved, among other things, replacing the plane's engines with new T731 engines. Continental subsequently sold the JetStar and its rights under the modification agreement to the Philippine government. At a later date, the Philippine government transferred the plane to appellant Philippine National Oil Company.
Garrett modified the airplane and PNOC took possession. A series of mishaps followed. The plane's fuel computers malfunctioned on several occasions and one of the engines repeatedly developed oil leaks. Garrett undertook to repair the engine on each occasion. However, PNOC complains that one repair was delayed by lack of suitable repair facilities in Singapore, where the plane was grounded, and that during another breakdown the plane was useless because Garrett would supply a loaner engine only if PNOC put up a substantial deposit, which PNOC refused to do. Eventually PNOC sold the airplane. One month later, Garrett finally solved the engine's persistent oil leak problem. Garrett contends that some of the airplane's problems were caused by PNOC's failure to maintain the craft properly and to stock adequate spare parts.
PNOC sued Garrett, alleging breach of warranty, fraud, negligent misrepresentation, negligence, and tortious breach of sales contract. Garrett counterclaimed, alleging that several press releases commissioned by PNOC which reported on the pending suit were libelous.
The district court granted summary judgment in Garrett's favor on the tortious breach of contract claim. The remainder of PNOC's claims went to trial before a jury, but Garrett's counterclaim was tried to the judge sitting without a jury. The jury found in favor of PNOC and against Garrett on the negligent misrepresentation counts, but awarded PNOC no damages. On the other counts, the jury found against PNOC and in favor of Garrett. The district judge ruled in PNOC's favor on Garrett's counterclaim. After its motion for a new trial was denied, PNOC appealed, and Garrett cross-appealed. We have jurisdiction under 28 U.S.C. Sec. 1291.
DISCUSSION:
I. The "no damages" verdict in favor of PNOC.
A motion for a new trial is confided to the discretion of the district court, and its decision will be overturned on appeal only for abuse of discretion. Ruiz v. Hamburg-American Line, 478 F.2d 29 (9th Cir.1973).
The jury was asked to respond to both a general verdict and interrogatives. In response to the interrogatives, the jury stated that it found for PNOC on only the negligent misrepresentation cause of action, that it awarded PNOC no damages for that claim, and that it found against PNOC on all other causes of action. The jury then filled out a general verdict form stating that it found for PNOC and that it was awarding PNOC no damages.
PNOC argues that this no damages verdict shows that the jury was confused, failed to follow instructions, or engaged in an improper compromise. The jury was instructed that one of the elements of the tort of negligent misrepresentation consists of sustaining damage as a result of reliance on the truth of defendant's representations. Therefore, PNOC argues, the jury necessarily found that PNOC sustained damage when it found in favor of PNOC on the misrepresentation claim. Since the jury did not award it any damages, PNOC concludes that the jury was confused or that it improperly compromised.
We find PNOC's arguments unpersuasive. First, PNOC waived its claim of jury confusion or compromise when it failed to raise it at the time the verdict was read. Garrett supports its argument that PNOC waived its objection to the verdict by citing cases decided under Fed.R.Civ.P. 49(b), involving inconsistencies between responses to interrogatories and the general verdict. PNOC replies that it is not complaining of an inconsistency between responses to the interrogatories and the general verdict, so Garrett's cases are not in point.
We accept for the sake of argument PNOC's contention that the interrogatories are consistent with the general verdict. However, putting the interrogatories to one side, the waiver argument is still valid. What PNOC complains of is a jury verdict in its favor that fails to award damages. In Lyons v. Rainier Mfg. Co., Inc., 594 F.2d 1236 (9th Cir.1979), this court stated in dictum that a party that failed to object to a no damages verdict at the time it was read waived any future objections to the form of the verdict. In Lyons, counsel for the parties were not present when the questioned verdict was read. Because counsel had had no opportunity to object to the verdict, the case was remanded for a new trial. The court stated, however, that if counsel had been present at the reading of the verdict and failed to object, the right to future objections would have been waived. The dictum in Lyons is supported by holdings from other courts. Joseph v. Rowlen, 425 F.2d 1010 (7th Cir.1970); Fischer v. Howard, 201 Or. 426, 271 P.2d 1059, 1073 (1954); see Northern Pacific Railroad v. Urlin, 158 U.S. 271, 277, 15 S.Ct. 840, 842, 39 L.Ed. 977 (1895) (dictum). We hold that PNOC waived its right to object to the verdict by failing to object when the verdict was read.
Even if we did not find that PNOC had waived its right to object to the verdict, we would still uphold the verdict. Although state court cases are mixed, the federal rule is that failure to award damages does not by itself render a verdict invalid. Spears v. Hough, 458 F.2d 529 (8th Cir.), cert. denied, 409 U.S. 878, 93 S.Ct. 130, 34 L.Ed.2d 131 (1972); Joseph v. Rowlen, supra; Wingerter v. Maryland Casualty Company, 313 F.2d 754 (5th Cir.1963); see Lyons v. Rainier Mfg., supra, (dictum). See also Annos. 49 A.L.R.2d 1328; 116 A.L.R. 828. In this case, the evidence about the damages that PNOC sustained from Garrett's misrepresentations was in conflict. The jury could have found that PNOC sustained no damage from any misrepresentations. The district court did not abuse its discretion in upholding the verdict.
II. Tortious Breach of the Implied Covenant of Good Faith and Fair Dealing.
PNOC abandoned its contentions on this point at oral argument, bowing to the authority of Consol. Data Term. v. Applied Digital Data Systems, 708 F.2d 385 (9th Cir.1983).
III. Jury Instructions on Limited Warranty.
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