Wheeling Pittsburgh Steel v. Beelman River Terminals

• Decision Date: 13 December 1999
• Docket Number: No. 99-1340,99-1340
• Citation: 254 F.3d 706
• Parties: (8th Cir. 2001) WHEELING PITTSBURGH STEEL CORP., APPELLANT, v. BEELMAN RIVER TERMINALS, INC., APPELLEE. Submitted:
• Court: U.S. Court of Appeals — Eighth Circuit

Page 706

254 F.3d 706 (8th Cir. 2001)

WHEELING PITTSBURGH STEEL CORP., APPELLANT, v. BEELMAN RIVER TERMINALS, INC., APPELLEE.

No. 99-1340

UNITED STATES COURT OF APPEALS FOR THE EIGHTH CIRCUIT

Submitted: December 13, 1999

Filed: June 20, 2001

Appeal from the United States District Court for the Eastern District of Missouri. [Copyrighted Material Omitted]

[Copyrighted Material Omitted]

Before Beam, Heaney, and Hansen, Circuit Judges.

Hansen, Circuit Judge.

In this breach of a bailment contract action brought by Wheeling Pittsburgh Steel Corporation (a manufacturer of steel coils and sheet steel) (Wheeling) against Beelman River Terminals, Inc., (a warehouseman) (Beelman) for damages to approximately 3,000 tons of Wheeling's steel held in Beelman's warehouse during the Mississippi River flood of 1993, the jury returned a verdict in favor of Beelman. Wheeling argues on appeal that the district court submitted erroneous instructions to the jury, erred in several of its evidentiary rulings, and erred in excluding evidence of certain damages.

For the reasons stated below, we agree with several of Wheeling's allegations of error and therefore reverse and remand the case to the district court for a new trial.

I. Background

The underlying issue in dispute is whether Beelman is legally responsible for the damage to Wheeling's steel stored in Beelman's warehouse, which was inundated by flood waters during the great Mississippi River flood in the summer of 1993.

The steel, consisting of both steel coils and sheet steel, had arrived in St. Louis by barge. It was destined either to be trucked by Beelman to Wheeling's customers as and when sold, or to Wheeling's corrugating plant in Lenexa, Kansas, for further processing into corrugated steel products for sale to other Wheeling customers.

On June 26, 1993, the Mississippi River reached its flood stage of 30 feet near Beelman's warehouses in St. Louis, Missouri. Prior to 1993, the highest recorded river level at this point on the Mississippi was 43 feet in the spring of 1973. The floor elevation of the warehouse holding Wheeling's steel was 42 feet, and the steel was further protected by a 4-foot high concrete warehouse wall. St. Louis's city floodwall protects the city up to a river level of approximately 50 feet, and the city controls the closing of the three flood gates providing access to Beelman's warehouses, which are located between the floodwall and the river's normal edge. The three floodgates are at elevations of 37 feet, 38 feet, and 41 feet. As long as the floodgates remained open, it would have taken about 24 to 36 hours for Beelman, with its own substantial trucking resources, to move all of Wheeling's steel to a safer location.

By July 1, the river had risen to 32 feet with a prediction of a further increase of 7 to 7.5 feet by July 7. By July 2, the river had risen to 32.5 feet and the crest prediction had risen to 40 feet by July 7. The city closed the first floodgate on the afternoon of July 2. On that same day, Sam Beelman, the president of Beelman, faxed a memo to Wheeling saying its steel was safe. He also talked to a Wheeling representative on the phone and declined Wheeling's offer of assistance, saying it was unnecessary at that point. In addition, Sam Beelman left town on July 2 for the holiday weekend and the only other experienced warehouseman at Beelman was on vacation as well.

By July 3, the river was at a level of 34.5 feet; by July 5, it had risen to 37.1 feet necessitating the closure of the second floodgate (Sam Beelman had returned by this time); and by July 7, the river was at 38.6 feet. On that day, Beelman learned that the last floodgate would be closed soon and at that point contacted Wheeling about the potential threat to its steel. Wheeling took immediate steps to remove the steel but could only remove a small portion before the last floodgate providing access to the warehouse was closed. Beelman continued to work to protect the steel--by sandbagging, sealing the warehouse where the steel was located, and installing pumps-- but by July 17 the river had risen to over 45 feet and it became too dangerous to continue efforts to protect the steel. The river ultimately rose to a level of approximately 49 feet, and at some time during the river's rise from 45 to 49 feet the warehouse was flooded with water and the steel was damaged. The steel sat under muddy water for weeks.

Beelman argued at trial that the Mississippi River flood in the summer of 1993 was so extraordinary and unprecedented that no reasonable person would have expected it to rise as high as it did, and that Beelman acted diligently and reasonably in protecting Wheeling's steel. Sam Beelman testified that he thought he could protect the steel up to a river level of 45 feet by sandbagging, which he did, and that he had no idea the river would rise to a higher level until it was too late to move the steel. Wheeling countered by arguing that Beelman, as a prudent warehouseman, should have warned Wheeling earlier about the potential danger and that Beelman should have moved the steel--and had the time and resources to do so--once the city began closing the floodgates and it became evident that the flood of 1993 was not a typical flood. Based on the evidence presented at trial, the jury returned a verdict in favor of Beelman. In this appeal, Wheeling argues that the trial court erred by submitting erroneous instructions to the jury regarding the burden of proof and the proper standard of care, erred in admitting testimony from an expert hydrologist that exceeded the scope of his expertise, erred in excluding admissions of responsibility for the damage made by Sam Beelman after the flood and an admission of concern as early as July 1 for the safety of the steel, and erred by ruling that damages were limited to the replacement cost of the steel.

II. Analysis

A. Jury Instructions

The standard for reviewing alleged errors in jury instructions is

whether the instructions, taken as a whole and viewed in the light of the evidence and applicable law, fairly and adequately submitted the issues in the case to the jury. The form and language of jury instructions are committed to the sound discretion of the district court so long as the jury is correctly instructed on the substantive issues in the case. We will reverse on the basis of instructional error only if we find that the error affected the substantial rights of the parties.

White v. Honeywell, Inc., 141 F.3d 1270, 1278 (8th Cir. 1998) (internal citations and quotations omitted). "In diversity cases the substance of jury instructions is a matter governed by the applicable state law." Fox v. Dannenberg, 906 F.2d 1253, 1258 (8th Cir. 1990). Accordingly, the jury instructions, when read as a whole, must fairly and adequately present the relevant state law. See Walton Gen. Contractors, Inc. v. Chicago Forming, Inc., 111 F.3d 1376, 1382 (8th Cir. 1997).

Relying on Federal Rule of Civil Procedure 51, Beelman argues that this court is limited to plain error review of Wheeling's instructional error claim because Wheeling did not object properly to the instructions. We disagree. The transcript of the instruction conference convinces us that Wheeling's claim of instructional error has been properly preserved for appeal. (See Trial Tr., Vol. IV at 103-117.) Beelman relies upon Rolscreen Co. v. Pella Prods. of St. Louis, Inc., 64 F.3d 1202, 1211 (8th Cir. 1995) (finding that objecting party merely submitted a proposed alternative instruction, made one weak specific objection, and did not sufficiently bring into focus the nature of the precise alleged error) to support its contention that Wheeling did not properly object to the proposed instructions. Beelman's reliance on Rolscreen is misplaced, however, due to factual differences between the two cases in the nature of the objections raised with respect to the jury instructions, as shown by the respective trial transcripts. In the present case, Wheeling made its objections known numerous times, the district court had the opportunity to correct the alleged error, and we are confident the experienced district court understood the basis for Wheeling's continued objections. See Meitz v. Garrison, 413 F.2d 895, 899 (8th Cir. 1969) (finding trial court's full understanding of the nature of the objections to the jury instructions overcame any failure to literally comply with Fed. R. Civ. P. 51); Cone v. Beneficial Standard Life Ins. Co., 388 F.2d 456, 462-63 (8th Cir. 1968) (holding that failure to follow Fed. R. Civ. P. 51 formalities does not bar appellate review of instructional error claims when the parties specifically discussed the alleged error during an instructions conference and the trial judge recognized the conflict between the alleged error and the actual instructions given to the jury).

Turning to the underlying merits of Wheeling's instructional error claim, Wheeling specifically contends that the trial court erred by rejecting its proposed jury instruction No. 13a, which reads as follows:

Because the parties have stipulated that plaintiff's property was delivered to Defendant in good condition and returned in damaged condition, your verdict must be for plaintiff unless you find one or more of the following facts have been proved: First, that defendant used ordinary care for the protection of plaintiff's property while that property was in the possession of defendant or; Second, plaintiff's damages were not a direct result of the failure of defendant to use ordinary care.

(Appellant's Supp. App. at BA-246.) Instead, the district court submitted the following instructions, No. 7 and No. 8, respectively, to the jury:

No. 7

Your verdict must be for plaintiff if you find: First, defendant failed safely to store plaintiff's steel, and [s]econd, because of such failure, defendant's contract obligations were not performed, and [t]hird, plaintiff was thereby damaged....