Reichhold Chemicals, Inc. v. Puremco Mfg. Co.
| Decision Date | 05 May 1993 |
| Docket Number | No. 10-91-209-CV,10-91-209-CV |
| Citation | 854 S.W.2d 240 |
| Parties | REICHHOLD CHEMICALS, INC., Appellant, v. PUREMCO MANUFACTURING COMPANY, Appellee. |
| Court | Texas Court of Appeals |
Patrick Zummo, Ronald D. Kurtz, Baker & Botts, L.L.P., Houston, LaNelle L. McNamara, McNamara & McNamara, Waco, for appellant.
Michael G. Cosby, John E. Burleson, Jr., Pakis, Giotes, Beard & Page, Waco, for appellee.
Before THOMAS, C.J., and CUMMINGS and VANCE, JJ.
Appellant's and Appellee's motions for rehearing are denied. Our opinion and judgment dated April 7, 1993, are withdrawn, and the opinion and judgment dated May 5, 1993, are substituted therefor.
In this suit brought under the Deceptive Trade Practices Act (DTPA), we determine that the court erred in admitting testimony from an expert witness after responses to discovery were not properly supplemented. Accordingly, we will reverse the judgment.
Puremco Manufacturing Company makes and sells dominos. It purchased part of the resin that it uses as a raw material for plastic dominos from Reichhold Chemicals, Inc. In September 1989, Puremco experienced an abnormal hardening of resin in the domino molds on its production line. It claims that this abnormal hardening led to damages to its property and to a loss of profits.
Puremco sued Reichhold asserting claims based on breaches of warranty, violations of the Deceptive Trade Practices Act, negligent misrepresentation, and ordinary negligence.
Puremco asserted that Reichhold delivered 38,300 pounds of resin to Puremco in June 1989; that the resin would not cure properly and was not consistent when cured; that the domino molds were ruined; that production capacity was severely curtailed just prior to its busiest season; that Puremco ordered an additional 37,000 pounds of resin, which Reichhold delivered in fifty-five gallon drums; that it experienced similar problems with the additional resin; that the resin required an unreasonably long time to cure resulting in increased costs of production; and that Reichhold violated the DTPA by representing that the resin had sponsorship, approval, characteristics, ingredients, uses, benefits, or qualities that it did not have, by representing that the resin was of a particular standard, quality, or grade when it was of another, by failing to disclose information that, if known to Puremco, would have caused Puremco not to purchase the resin, by breaching express and implied warranties, and by engaging in an unconscionable course of action.
Puremco asserted that Reichhold breached the implied warranty that the resin was merchantable and that it was suitable for the purpose of making dominos; that Reichhold knew that Puremco was relying on its skill or judgment to select suitable resin; and that the breaches were a cause of its damages.
Alternatively, Puremco asserted that Reichhold's agents, Michael Mulvihill and David Brazell, represented to Puremco that the resin would meet its requirements for the manufacture of dominos, that the agents either knew that the representations were false or did not make reasonable inquiries about the truth of their representations, that Puremco relied on the representations to its detriment, and that the agents knew or should have known that Puremco would rely on the representations. Puremco sought recovery for damages proximately caused by the false representations.
Finally, Puremco asserted that Reichhold negligently breached its duty to supply resin that was appropriate for Puremco's needs and its duty to "assure and advise [Puremco] with respect to whether its storage facilities were adequate for handling the storage" of the resin, resulting in its damages.
Puremco sought $1,189,723 for past and future lost profits, $69,690 for increased production costs, $2,415 for "custom orders cancelled," $6,977 for "wholesale orders cancelled," $9,525 to replace a storage tank, $3,074 for retooling new mold cavities, $1,759 for "credit card charge-back fees", and attorneys fees.
Reichhold's answer asserted as affirmative defenses: Puremco's failure to give notice under the DTPA, an express disclaimer of all warranties, the express conditions of the sale limited damages to replacement of non-conforming goods, contributory negligence, failure to mitigate damages, sole proximate and producing cause by third parties, new and independent cause by third parties, comparative responsibility, changes and alterations in the goods after delivery, misuse of the goods, and offset. Reichhold asserted a counterclaim in contract or quantum meruit for non-payment by Puremco of $25,278 for resin delivered in July 1989 and $23,943.04 for resin delivered in September 1989 and interest on each sum.
The jury answered in the affirmative to questions inquiring:
Did Reichhold engage in a false, misleading, or deceptive act or practice that was the producing cause of damage to Puremco?;
Did Reichhold engage in an unconscionable action or course of action that was a producing cause of damage to Puremco?;
Did Reichhold's negligence proximately cause the occurrence in question?;
Did Puremco's negligence proximately cause the occurrence in question?;
Did Puremco accept the resin delivered pursuant to the July invoice?; and
Did Reichhold furnish compensable materials to Puremco?
The jury answered in the negative to questions inquiring:
Did Mulvihill or Brazell engage in a false, misleading, or deceptive act or practice that was the producing cause of damage to Puremco? and
Was the failure of Reichhold to comply with a warranty a producing cause of damages to Puremco?
The jury apportioned the negligence fifty percent to Reichhold and fifty percent to Puremco and awarded $235,482 for "lost mail order profits," $19,616 for "lost profits from mall operations," $7,500 for increased production costs, $4,762 for replacement of a storage tank, $3,038 for tooling and replacement of mold cavities, and $110,000 for attorney's fees for trial and appeals through the Supreme Court. The jury further found that $25,278 would fairly compensate Reichhold for Puremco's failure to pay the July invoice and that $11,972 was the reasonable value of the compensable materials furnished to Puremco.
Reichhold asked the court to disregard the jury's DTPA findings and the finding that Reichhold furnished Puremco $11,972 in compensable materials and to enter judgment for Reichhold for the full amount of its counterclaim. Reichhold asserted that Puremco is not entitled to lost profits as a matter of law; that there was no evidence of any representations by its agents, of a failure by its agents to disclose any information about its resin, or of any intent by its agents to withhold information; that no evidence existed that its conduct was unconscionable; that there was no evidence to support any of Puremco's complaints about its damages; that the jury's finding of a deceptive trade practice conflicted with its failure to find that Reichhold's agents committed a deceptive trade practice, with its failure to find a breach of warranty, and with its finding that Puremco accepted the resin delivered on the July invoice; and that Puremco failed to segregate its attorney's fees between the different claims and defendants.
The court entered judgment in favor of Puremco for $342,980.59, which was the net difference between (a) the damages found by the jury with prejudgment interest on certain items of damage, $2,000 as additional damages under the DTPA, and attorney's fees for the trial and appeals to the Supreme Court and (b) $59,209.61 plus prejudgment interest which the jury found to be Reichhold's damages for non-payment.
Part A of point three complains that the court improperly allowed Puremco's expert witness to testify, and point four complains that the court improperly excluded the testimony of Reichhold's expert witnesses. We will address these points first because our disposition of them will determine how we address the remaining points.
In discovery Reichhold asked Puremco:
Please state the manner including all calculations, assumptions, actual market prices, and projections by which you estimated the alleged loss incurred as a result of lost profits on lost sales to be $611,758.27.
Puremco answered the interrogatory on September 14, 1990:
Objection. The damage figures set out in this interrogatory are apparently derived from the DTPA letter forwarded to Defendants as a legal prerequisite to filing a DTPA claim, which is forthcoming in an amended pleading. The letter, as required by statute, is for settlement purposes only. The exact amount of Puremco's damage is still being assessed, and while the amounts set forth in the DTPA letter, dated May 1, 1990, would have been accepted at that time, no response was ever received from Defendants. Puremco will assess and calculate its damages as accurately as it can and, with appropriate discovery requests, will set out the manner in which it calculates those damages once they are more firmly established.
The parties do not agree about the substance or effect of this answer. Puremco contends that the answer is an objection on which Reichhold failed to seek a hearing and thus no duty arose to supplement its answer to the interrogatory. Reichhold, on the other hand, contends that Puremco undertook to partially answer the interrogatory and, having done so, must answer fully by supplementing the incomplete answer. Alternatively, Reichhold says that, whether Puremco was obligated to provide a supplemental answer or not, when it did answer it was obligated to do so fully and completely. We agree with Reichhold that when Puremco undertook a supplemental response...
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