Powers v. Martinson

• Decision Date: 22 December 1981
• Docket Number: No. 10005,10005
• Citation: 313 N.W.2d 720
• Parties: James W. POWERS, Plaintiff and Appellee, v. Gary A. MARTINSON and Linda A. Martinson, husband and wife, and GM Enterprises, Inc., Defendants and Appellants. Civ.
• Court: North Dakota Supreme Court

Page 720

313 N.W.2d 720

James W. POWERS, Plaintiff and Appellee, v. Gary A. MARTINSON and Linda A. Martinson, husband and wife and GM Enterprises, Inc., Defendants and Appellants.

Civ. No. 10005.

Supreme Court of North Dakota.

Dec. 22, 1981.

Tenneson, Serkland, Lundberg, Erickson & Marcil, Fargo, for plaintiff and appellee; argued by Armond G. Erickson, Fargo, appearance by Roger Minch, Fargo.

Aarestad & Briggs, Fargo, for defendants and appellants; argued by Wayne G. Aarestad, Fargo, appearance by Loren Jones, a third-year law student.

ERICKSTAD, Chief Justice.

This case involves the sale of a 12-plex apartment building located in Wahpeton, North Dakota, to James W. Powers in 1977. The building was constructed by GM Enterprises, Inc., and owned by Gary A. Martinson, Linda A. Martinson, and another couple. The sale was negotiated between Gary Martinson and James Powers. After the sale, James Powers encountered difficulties with water seepage in the walls and ceilings of the apartment building. Along with the water seepage, several other problems surfaced and, therefore, Powers commenced an action in Cass County District Court against Gary A. Martinson, Linda A. Martinson, GM Enterprises, Inc., and Realty Corporation, alleging fraud, deceit, breach of implied warranties, and breach of express warranties. Subsequently, Realty Corporation was dismissed from the action. The action was tried before a jury of six beginning on March 24, 1981. The jury returned a verdict awarding $30,431.31 compensatory damages against all the defendants, $5,000 punitive damages against Gary A. Martinson and $5,000 punitive damages against GM Enterprises, Inc., plus interest. Judgment was entered on April 1, 1981. The defendants appeal from that judgment. We affirm.

Martinson and Powers have both limited their arguments to the following issues:

1. Did the trial court err by denying defendants' motion for a continuance?

2. Did the trial court err in applying the law of implied warranties to the facts of this case?

3. Did James Powers carry his burden of proving fraud and was it proper for the trial court to deny the defendants' motion for a directed verdict?

4. Were punitive damages properly awarded by the jury?

5. Were rulings made by the trial court during the course of the trial an abuse of discretion?

We will discuss each of the questions separately.

1. Did the trial court err by denying defendants' motion for a continuance?

Martinson contends that the trial court should have granted his motion for a continuance because he was misled by the trial court into believing that the issue of breach of implied warranties would not be at issue in the trial. Martinson argues that the issue of breach of implied warranties had been eliminated from the case. In support of that contention, he points to his brief in support of his motion for summary judgment in which he argued that such warranties were not recognized in North Dakota. He contends that because Powers did not respond to that argument in his brief in resistance to defendants' motion for more definite statement, motion to amend answer, and motion for summary judgment, that Powers conceded breach of implied warranties was not at issue. We conclude that the trial court did not err in denying Martinson's motion for a continuance.

Powers' complaint against Martinson alleged that "... Gary A. Martinson and Linda A. Martinson and G.M. Enterprises, Inc. expressly and impliedly represented and warranted that said apartment building was well constructed with generally accepted building practices ..." and that such express and implied warranties were breached. Additionally, the complaint alleged that Martinson failed to disclose what was known to him and that failure to disclose constitutes fraud. Powers complaint, therefore, alleged breach of express and implied warranties, and fraud.

Though the complaint so alleges, Martinson contends that during the December 10 hearing on his motion for a more definite statement, motion to amend his answer, and motion for summary judgment, the theory of recovery based on breach of implied warranty was eliminated. He argues that the issue of implied warranties was inserted into the action again when Judge John O. Garaas received the case from Judge Michael O. McGuire sometime between the December 10 hearing and the March 24, 1981, trial date. Martinson argues that the expansion of issues to include implied warranties prejudiced him by not allowing him an opportunity to prepare to meet the implied warranties issue.

A review of the transcript of the December 10 hearing discloses that the issue of implied warranties was not eliminated from the case. In fact, several times throughout the hearing the court and Powers' attorney indicated that Powers' complaint against Martinson included both express and implied warranties. In ruling on Martinson's motion for summary judgment, the court said:

"The Court does find that there is a question of fact as to the fraud issue and as to whether the defects exist or not. That is certainly a factual question for the jury. Whether they could have been discovered or not by the Plaintiff in just a cursory examination would be a question of fact for the jury. Whether the Defendant made express warranties, and it's indicated that he made express or implied warranties, whether he did or not, or in some other manner indicated warranties, this Court-or is for the jury." (Emphasis added.)

As neither counsel nor the court misled Martinson into believing that the issue of implied warranties was not in this case, Martinson was not prejudiced.

2. Did the trial court err in applying the law of implied warranties to the facts of this case.

Martinson contends that the trial court erred in applying the law of implied warranties to the facts of this case. Powers contends that the jury's award of punitive damages to the plaintiff makes moot the issue of whether or not the judge erred in instructing the jury on implied warranties in the sale of real estate. He asserts that because the jury awarded punitive damages to him they must have found fraud because they were instructed that fraud is the only theory of recovery that would support an award of punitive damages. We agree with Powers.

The jurors were instructed that punitive damages could not be allowed unless the defendants committed fraud or deceit. Further, the jurors were advised that although they were the sole judges of questions of fact, it was their duty to accept the law as given by the court, and to apply the law to the facts determined by them. We must assume, without acceptable proof to the contrary, that the jury followed the instructions given by the judge.

This court has held that errors in instruction as to one theory of a case cannot be held to be harmless if it is impossible to determine upon which of two theories the jury based its verdict. Barta v. Hondl, 118 N.W.2d 732 (N.D.1962). In Barta we said:

"A general verdict of the jury returned under a proper and an erroneous instruction cannot be upheld. The jury's verdict may have been founded on either of the two theories. If it was founded on the correct theory, the instruction on the erroneous theory would, of course, be harmless. But if the verdict is founded on the erroneous theory, it was clearly error. The general verdict of the jury makes it impossible for us to determine upon which theory the jury's verdict is based. The jury may have founded it upon the issue to which the erroneous instruction related, and that instruction may have been controlling in the jury's determination of the issues of this case.

"Therefore, the erroneous submission to the jury of one of several issues is ground for granting a new trial where the jury renders a general verdict and it is impossible for the appellate court to determine upon which of the issues the verdict is based." Id. at 736.

In the instant case, although the jury verdict was a general verdict, we are able to determine that the jury decided this case on a fraud theory. That determination is possible because the jury returned a verdict which included punitive damages. As we said, the jurors were instructed that punitive damages could be awarded only if they found that Martinson committed fraud or deceit.

Additionally, a party cannot assign as error that which is not prejudicial to him. Holten v. Amsden, 161 N.W.2d 478, 485 (N.D.1968). We do not find that Martinson was prejudiced in any way by the court's instructions on implied warranties. Although we do not express an opinion as to the law of implied warranties in relation to the sale of real estate in North Dakota, we conclude that the evidence of water problems in the apartment house and the evidence of code violations was admissible under a fraud theory of recovery of damages. ¹

As Martinson has not been prejudiced, we conclude that his contention that the trial court erred in giving the instruction on implied warranties in the sale of real estate is without merit.

3. Did James Powers carry his burden of proving fraud and was it proper for the trial court to deny the defendants' motion for a directed verdict?

Martinson contends that it was error for the trial court to deny his motion for directed verdict. The motion was made at the close of the plaintiff's case and again at the close of the defendants' case on the grounds that the plaintiff had failed to meet his burden of proof and had not produced sufficient evidence to warrant sending the case to the jury. Martinson argues that Powers had to prove the existence of fraud with "clear and convincing" evidence. He asserts that Powers failed to meet that burden of proof and had not produced sufficient evidence to warrant sending the case to the jury.

Martinson's motion for directed verdict was based on the following facts:

"... Mr. Powers was aware of the delamination of the siding, even before he entered into purchase money agreement; that ...