Elawyers Elawyers
Ohio| Change

Nebraska Plastics v. Holland Colors etal., 04-2035 (2005)

Court: Court of Appeals for the Eighth Circuit Number: 04-2035 Visitors: 21
Filed: May 13, 2005
Latest Update: Mar. 02, 2020
Summary: United States Court of Appeals FOR THE EIGHTH CIRCUIT _ Nos. 04-2035/2180 _ Nebraska Plastics, Inc., * * Appellant/Cross-Appellee, * * Appeal from the United States v. * District Court for the * District of Nebraska. Holland Colors Americas, Inc., * * Appellee/Cross-Appellant. * * _ Submitted: February 14, 2005 Filed: May 13, 2005 _ Before MORRIS SHEPPARD ARNOLD, BOWMAN, and GRUENDER, Circuit Judges. _ GRUENDER, Circuit Judge. A jury awarded Nebraska Plastics over $1,800,000 on its claims agains
More
                    United States Court of Appeals
                            FOR THE EIGHTH CIRCUIT
                                 ________________

                                 Nos. 04-2035/2180
                                 ________________

Nebraska Plastics, Inc.,                 *
                                         *
      Appellant/Cross-Appellee,          *
                                         *     Appeal from the United States
      v.                                 *     District Court for the
                                         *     District of Nebraska.
Holland Colors Americas, Inc.,           *
                                         *
      Appellee/Cross-Appellant.          *
                                         *

                                 ________________

                           Submitted: February 14, 2005
                               Filed: May 13, 2005
                               ________________

Before MORRIS SHEPPARD ARNOLD, BOWMAN, and GRUENDER, Circuit
Judges.
                       ________________

GRUENDER, Circuit Judge.

       A jury awarded Nebraska Plastics over $1,800,000 on its claims against
Holland Colors Americas (“HCA”) for breach of implied warranties, negligent
design, manufacture and supply, negligent misrepresentation and fraudulent
concealment. The jury also returned a verdict for HCA on its counterclaim for
approximately $50,000 in overdue payments. The district court1 granted HCA’s post-
verdict motions for judgment as a matter of law on the issue of future damages and
for a pro tanto settlement credit based on Nebraska Plastics’ settlement with another
defendant, reducing Nebraska Plastics’ award to under $300,000. Nebraska Plastics
appeals the district court’s grant of the motions and the entry of judgment for HCA
on its counterclaim, while HCA cross-appeals the submission of the negligent design,
manufacture and supply claim to the jury. For the reasons discussed below, we affirm
the rulings of the district court.

I.    BACKGROUND

      Nebraska Plastics is a producer of polyvinyl chloride (PVC) products,
including PVC fencing. In 1993, Nebraska Plastics decided to develop colored PVC
fencing. With no experience or expertise in producing outdoor colored PVC
products, Nebraska Plastics recognized that it needed assistance. Therefore,
Nebraska Plastics hired pigment supplier HCA to help develop the colored fencing,
based on HCA’s representation that it had the technical knowledge and resources to
help Nebraska Plastics develop a quality product. Nebraska Plastics gave HCA its
proprietary PVC formula to allow HCA to develop an appropriate pigmentation
technology. HCA sales agent Dick Bushart instructed Nebraska Plastics on the
equipment and procedures needed to add HCA’s pigment during the fencing
manufacturing process. Nebraska Plastics began producing colored fencing in 1996.

      In 1997, Nebraska Plastics’ customers and dealers began to complain that the
colored fencing was weathering abnormally. Nebraska Plastics was obligated by its
product warranty, and by a desire to maintain its good name in the market, to replace
fencing that weathered abnormally. Nebraska Plastics alerted HCA immediately


      1
      The Honorable Warren K. Urbom, United States District Judge for the District
of Nebraska.
                                         -2-
about the abnormal weathering, and HCA assembled a technical team to address the
problem.

       By April 1998, HCA had determined the source of the problem. Nebraska
Plastics’ PVC formula for fencing included calcium carbonate, supplied by OMYA,
Inc. (“OMYA”). Calcium carbonate is a common ingredient in white PVC products.
However, it was known in the industry that calcium carbonate is an unsuitable
ingredient for outdoor colored PVC products. PVC reacts with sunlight to form
water-soluble material. The calcium carbonate in the PVC attracts moisture to the
water-soluble material, causing it to wash away in rain. After the water-soluble
material washes away, only a white surface remains, resulting in a faded or chalky
appearance for the colored PVC.

       HCA chose not to inform Nebraska Plastics that calcium carbonate was causing
the abnormal weathering. Bushart knew that if Nebraska Plastics altered its PVC
formula to remove calcium carbonate, it would also remove another ingredient that
Bushart sold, and Bushart did not want to lose his sales commissions on that
ingredient. Instead, at the urging of Bushart, HCA’s technical team told Nebraska
Plastics that expensive changes in Nebraska Plastics’ equipment and manufacturing
process would solve the problem. HCA was fully aware that, even if Nebraska
Plastics implemented the changes, the abnormal weathering would continue as long
as calcium carbonate was included in Nebraska Plastics’ PVC formula.

       Naturally, even after making the changes recommended by HCA, Nebraska
Plastics continued to receive warranty claims from fading and “chalking” of the
colored fencing. Nebraska Plastics sought information from other consultants and
learned that calcium carbonate was causing the problem. In August 2000, Nebraska
Plastics reduced the calcium carbonate in its formula from eight parts per hundred to
three; five months later, they completely eliminated calcium carbonate from the
formula. Nebraska Plastics has yet to receive a complaint of abnormal weathering

                                         -3-
related to fencing manufactured after the reformulation. Nebraska Plastics sold a total
of 9,893,437 pounds of defective fencing between 1996 and 2001.

       When Nebraska Plastics questioned HCA about the new information Nebraska
Plastics had received regarding calcium carbonate, HCA initially was evasive. In
February 2001, visiting HCA technical personnel finally “hinted” to Nebraska
Plastics that calcium carbonate was indeed the source of the problem. Those HCA
personnel were rebuked by Bushart.

      Nebraska Plastics brought suit against HCA and OMYA, the calcium carbonate
supplier, in October 2001 for breach of express and implied warranties, negligent
design, manufacture and supply, negligent misrepresentation and fraudulent
concealment. HCA brought a counterclaim against Nebraska Plastics to recover
payment for deliveries of pigment between March and June of 2001. The district
court granted summary judgment to OMYA on the implied warranty of
merchantability and negligent design, manufacture and supply claims. The remaining
claims proceeded to jury trial.

       In the early stages of trial, OMYA settled the remaining claims against it. The
jury returned a verdict for Nebraska Plastics on all of its claims against HCA, except
for breach of express warranty, and awarded damages totaling $1,811,590. Of that
amount, $1,042,492 was awarded for colored fence warranty claims expected to be
incurred in the future. The jury also returned a verdict for HCA on its counterclaim.

       Following the jury verdict, the district court granted HCA’s motion for
judgment as a matter of law (“JAML”) on the issue of future damages. In addition,
the district court granted HCA’s motion for a pro tanto settlement credit, reducing the
damages against HCA by the amount Nebraska Plastics received in the OMYA
settlement. As a result, the judgment against HCA was reduced to $269,098. Finally,



                                          -4-
the district court entered judgment on HCA’s counterclaim against Nebraska Plastics
for $50,722.

       Nebraska Plastics appeals the exclusion of the testimony of its expert on future
damages, the grant of JAML to HCA on future damages, the grant of a pro tanto
settlement credit to HCA and the entry of judgment for HCA on its counterclaim.
HCA cross-appeals the submission of the negligent design, manufacture and supply
claim to the jury.

II.   DISCUSSION

      A. Excluded Expert Testimony

        Nebraska Plastics expert William Cheese offered future damages testimony in
which he attempted to estimate the cost to Nebraska Plastics of customer warranty
claims expected to be received in the future for defective colored fencing. After a
pre-trial hearing, the district court excluded Cheese’s opinions because they did not
fit the facts of the case. “Decisions concerning the admission of expert testimony lie
within the broad discretion of the trial court, and these decisions will not be disturbed
on appeal absent an abuse of that discretion.” Anderson v. Raymond Corp., 
340 F.3d 520
, 523 (8th Cir. 2003) (quoting Peitzmeier v. Hennessy Indus., Inc., 
97 F.3d 293
,
296 (8th Cir. 1996)). We evaluate the district court’s understanding of the evidence
at the time the district court made the ruling. See Old Chief v. United States, 
519 U.S. 172
, 182 n.6 (1997) (“It is important that a reviewing court evaluate the trial court’s
decision from its perspective when it had to rule and not indulge in review by
hindsight.”).




                                           -5-
       Cheese calculated future damages by assuming that every pound of colored
fence produced between 1996 and 2001 would be subject to a warranty claim.2 The
district court did not abuse its discretion in concluding that Cheese’s assumption was
invalid in view of the facts of the case. Specifically, the district court noted that,
while Nebraska Plastics’ evidence did show that all colored fencing with calcium
carbonate would eventually fade, it did not demonstrate that every pound of fencing
would fade to the point of being subject to a valid warranty claim. In fact, at the time
of the district court’s order excluding Cheese’s testimony in November 2003,
warranty claims had been filed on only 3.5% of the total colored fencing produced
with calcium carbonate. Other evidence suggested that the rate of chalking would
vary with regional climate differences and that the chalking would be more noticeable
with some fence colors than with others. Cheese’s estimate of future damages
addressed none of these relevant facts.3



      2
        Some of the defective fencing was covered by a ten-year warranty, and some
of it was covered by a twenty-year warranty. All warranties were limited to the
original purchaser. Cheese used census data for the average length of ownership of
non-commercial real estate, nine years, as an estimate of how long the original
purchaser would retain the fencing. As a result, Cheese reduced his estimate of the
amount of defective fencing that would be eligible for replacement under a twenty-
year warranty to 9/20, or 45%. However, as the district court noted, the 45%
assumption for warranty coverage also did not fit the facts of the case because it was
derived from the assumption that all fencing would fade to the point of being subject
to a warranty claim. In addition, not all fencing was purchased for non-commercial
real estate and there was no reason to assume that all fencing was purchased at the
beginning of the proposed nine-year average period of ownership.
      3
       Nebraska Plastics did not proffer an “historical warranty claim analysis” to
determine how those facts would affect the expected number of future warranty
claims. An “historical warranty claim analysis” uses statistical methods to predict,
with a demonstrable degree of confidence, the amount of product expected to be the
subject of future warranty claims, based on data from existing warranty claims and
the overall sales distribution of defective product.
                                          -6-
        We agree with Nebraska Plastics that “[a]s a general rule, the factual basis of
an expert opinion goes to the credibility of the testimony, not the admissibility, and
it is up to the opposing party to examine the factual basis for the opinion in cross-
examination.” Hartley v. Dillard’s, Inc., 
310 F.3d 1054
, 1061 (8th Cir. 2002)
(quoting Bonner v. ISP Tech., Inc., 
259 F.3d 924
, 929 (8th Cir. 2001)). However, it
also is true that if the expert’s opinion is so fundamentally unsupported that it can
offer no assistance to the jury, it must be excluded. 
Id. An expert
opinion that fails
to consider the relevant facts of the case is fundamentally unsupported:

      If a party believes that an expert opinion has not considered all of the
      relevant facts, an objection to its admission is appropriate. Even a
      theory that might meet certain Daubert factors, such as peer review and
      publication, testing, known or potential error rate, and general
      acceptance, should not be admitted if it does not apply to the specific
      facts of the case.

Concord Boat Corp. v. Brunswick Corp., 
207 F.3d 1039
, 1056 (8th Cir. 2000)
(citations and footnote omitted).

      Cheese’s calculation of future damages failed to take into account a plethora
of specific facts tending to show limits on the amount of defective fencing that would
be the subject of future warranty claims. Therefore, we conclude that the district
court did not abuse its discretion in excluding Cheese’s testimony.

      B. JAML on Future Damages

       At the close of evidence in the jury trial, HCA moved for JAML on the issue
of future damages. The district court reserved ruling on the motion until after the
verdict. The jury returned a verdict against HCA which included $1,042,492 in future
damages. After additional briefing by the parties, the district court granted HCA’s
motion for JAML, concluding that there was not sufficient evidence from which the

                                          -7-
jury could have calculated Nebraska Plastics’ future damages with reasonable
certainty.

       We review the grant of JAML de novo, applying the same standards used by
the district court. Arabian Agric. Servs. v. Chief Indus., 
309 F.3d 479
, 482 (8th Cir.
2002). “[J]udgment as a matter of law should not be granted unless ‘a party has been
fully heard on an issue and there is no legally sufficient evidentiary basis for a
reasonable jury to find for that party on that issue.’” 
Id. (quoting Fed.
R. Civ. P.
50(a)(1)). “In applying this standard, we must ‘draw all reasonable inferences in
favor of the nonmoving party without making credibility assessments or weighing the
evidence.’” 
Id. (quoting Phillips
v. Collings, 
256 F.3d 843
, 847 (8th Cir. 2001)). “A
reasonable inference is one which may be drawn from the evidence without resort to
speculation. Thus, judgment as a matter of law is appropriate when the record
contains no proof beyond speculation to support a verdict.” 
Id. (citations omitted).
      The parties agreed in their briefs to the district court that the issue of future
damages is governed by Nebraska law as set forth in Pribil v. Koinzan, 
665 N.W.2d 567
(Neb. 2003). The relevant language from Pribil is as follows:

      [T]he initial question of law for the trial court is whether the evidence
      of damages provides a basis for determining damages with reasonable
      certainty, i.e., the evidence of damages is not speculative or conjectural.
      If the evidence does provide such a basis, the issue of damages can be
      submitted to the jury.

Pribil, 665 N.W.2d at 573
. In other words, under Nebraska law, “a plaintiff’s
evidence of damages may not be speculative or conjectural and must provide a
reasonably certain basis for calculating damages.” 
Id. at 572.
We agree with the
district court’s conclusion that several missing pieces of evidence prevented a
reasonably certain computation of the expected amount of future warranty claims.



                                          -8-
       First, there was insufficient evidence to allow the jury to determine the
temporal limits of the warranty coverage of the defective fencing. For example, the
jury had no means to determine what proportion of the defective fencing was covered
by a ten-year warranty as opposed to a twenty-year warranty. Nebraska Plastics
represented that only the fencing produced in 1996 was subject to the shorter
warranty, representing 6.4% of the total defective fencing sold. However, Nebraska
Plastics also introduced a warranty-claim letter from a customer who purchased
fencing in 1999 which refers to the customer’s “ten-year warranty.”

       Second, the warranty also limited coverage to the original purchaser, but
Nebraska Plastics presented insufficient evidence to assist the jury in determining
how long the original purchaser would be expected to own the fencing. The non-
transferability of the warranty would presumably limit the effective period for
warranty coverage in many cases, but the jury was not provided with any evidence
that would enable a reasonable estimate of the effective coverage period.

       Third, the rate of “chalking” of the fencing was unquantified. Nebraska
Plastics’ evidence indicated the rate of chalking would vary with regional climate, but
no evidence was presented to help the jury quantify those regional variations. Even
if adequate evidence regarding the duration of warranty coverage had been
introduced, the jury had no basis for a reasonable estimate of what proportion of the
defective fencing would fade to the point of creating a valid warranty claim before
termination of the warranty.

      Fourth, even if the jury had been able to estimate the number of potential
warranty claims, the jury was given no guidance to estimate the proportion of
customers with timely potential warranty claims who would actually choose to pursue
those claims. Nebraska Plastics’ evidence showed that some customers with
abnormally weathered fences had chosen not to make warranty claims against



                                          -9-
Nebraska Plastics. Nebraska Plastics presented no statistical analysis regarding what
proportion of customers would be expected to pursue a timely claim if they had one.

       Nebraska Plastics argues that Exhibit 330, when combined with the jurors’
personal knowledge and common sense, contains all the purportedly “missing”
information. Exhibit 330 is a list of thirty-three existing warranty claims and four
potential warranty claims. For each claim, Exhibit 330 lists the fencing manufacture
date, warranty claim date, fence color and fence location. Nebraska Plastics believes
that in choosing a dollar figure for future damages, the jury must have extrapolated
those 37 raw data points into “reasonably certain” statistical data to determine what
proportion of the defective fencing would eventually become the subject of a
warranty claim. However, Nebraska Plastics failed to establish that those 37 fences
constituted a statistically meaningful sample of the almost ten million pounds of
defective fencing sold.

       Furthermore, Nebraska Plastics’ evidence provided the jury no guidance on
extrapolating the data on existing claims in Exhibit 330 to the overall amount of
fencing sold.4 Without such guidance, the jury had no reasonably certain factual basis
for computation of the probable loss. In Racicky v. Farmland Indus., Inc., 
328 F.3d 389
, 400 (8th Cir. 2003), this Court, applying Nebraska law, reversed a jury award
of future damages because “[t]he financial data presented, though voluminous, was
not accompanied by testimony explaining its significance.” The Court stated, “We
are at a loss to know how the jury here calculated the damages award.” 
Id. at 398.



      4
       As the district court observed in its order excluding Cheese’s expert opinion,
an “historical warranty claim analysis” accounting for relevant factors such as
expected duration of ownership, rate of chalking, regional variations in rate of
chalking and likelihood that a customer would assert a potential warranty claim
would have been useful to the jury in this context. See supra note 3.
                                         -10-
      Here, as in Racicky, we are at a loss to know how the jury calculated the
damages award. The jury’s choice of $1,042,492 as the value of the future warranty
claims had to result from sheer guesswork about the effective warranty coverage
period, the speed of the weathering process, and the likelihood that a given customer
with a timely potential warranty claim would actually pursue the claim against
Nebraska Plastics.

      We conclude that, because the jury had no reasonably certain factual basis for
computation of the value of future warranty claims, the district court did not err in
granting JAML to HCA on the issue of future damages.

      C. Settlement Credit

       The district court granted HCA’s motion to reduce the damages awarded
against it dollar-for-dollar by the amount Nebraska Plastics received in the settlement
with OMYA. Nebraska Plastics argues that HCA was not entitled to this pro tanto
settlement credit under Nebraska law. We review the district court’s interpretation
of state law de novo. Kolb v. Paul Revere Life Ins. Co., 
355 F.3d 1132
, 1134 (8th Cir.
2004).

     The Nebraska Supreme Court explained Nebraska law on settlement credits in
Vowers & Sons v. Strasheim, 
576 N.W.2d 817
(Neb. 1998):

      In a breach of contract case, the ultimate objective of a damages award
      is to put the injured party in the same position he would have occupied
      if the contract had been performed, that is, to make the injured party
      whole. As a general rule, a party may not have double recovery for a
      single injury, or be made “more than whole” by compensation which
      exceeds the actual damages sustained. Where several claims are
      asserted against several parties for redress of the same injury, only one
      satisfaction can be had.


                                         -11-

Id. at 825
(citations omitted).

       The Nebraska Supreme Court also applied the Vowers & Sons pro tanto
settlement credit rule in Jameson v. Liquid Controls Corp., 
618 N.W.2d 637
(Neb.
2000), a product liability case:

      [The plaintiffs] did not allege separate acts leading to separate injuries.
      Instead, they sought an unspecified amount of damages against these
      two defendants as redress for the injuries Richard suffered in the
      accident. The jury determined that as a result of the injuries which
      Richard had suffered in the accident, he was entitled to a total of $5
      million in damages. Since the jury found that $5 million is Richard’s
      total award of damages for the injuries which he sustained in the July 16
      accident, to the extent he received satisfaction from [the settling
      defendant] for those same injuries, [the remaining defendant] is entitled
      to a pro tanto reduction of the judgment.

Id. at 644-45.
      In its claims against OMYA and HCA, Nebraska Plastics asserted a single
injury—customer warranty claims arising from the sale of defective colored PVC
fencing. Nebraska Plastics made no attempt to prove “separate acts leading to
separate injuries.” 
Id. Therefore, in
the absence of any conflicting considerations,
Nebraska’s pro tanto settlement credit rule should apply in this case.

       Nebraska Plastics argues that other equitable considerations should trump the
Nebraska pro tanto settlement credit rule in this case. HCA was guilty of fraudulent
concealment, an intentional tort. In some states, statutes governing contribution
among tortfeasors or general principles of equity have been held to deny intentional
tortfeasors the benefit of settlement credits. See Evans v. Dean Witter Reynolds, Inc.,
5 P.3d 1043
, 1050 (Nev. 2000) (collecting cases). Other states, however, “have
concluded that the potential for double recovery by the claimant mandates that


                                         -12-
[settlement credit] offsets be imposed,” even if the party seeking relief is an
intentional tortfeasor. 
Id. Because no
Nebraska statute or decision has addressed the
issue of settlement credits for intentional tortfeasors, our task is to predict how the
highest court in Nebraska would decide the issue. Ehlis v. Shire Richwood, Inc., 
367 F.3d 1013
, 1016 (8th Cir. 2004).

       We conclude that the Nebraska Supreme Court would apply the pro tanto
settlement credit rule in this case. It is true that Nebraska recognizes the general
principle that a party with unclean hands may not obtain equitable relief, see Olsen
v. Olsen, 
657 N.W.2d 1
, 4 (Neb. 2003), and that Nebraska does not allow intentional
tortfeasors to seek contribution from joint tortfeasors, see Royal Indem. Co. v. Aetna
Casualty & Surety Co., 
229 N.W.2d 183
, 189 (Neb. 1975). However, Nebraska law
on settlement credits has been predicated firmly on the principle of denying double
recoveries to plaintiffs, not on the defendants’ relative positions in equity. See
Vowers & 
Sons, 576 N.W.2d at 825
; 
Jameson, 618 N.W.2d at 644-45
. As the district
court noted, this is an action by a claimant seeking to be made whole for an injury,
not an action for contribution by one tortfeasor against another. Therefore, we predict
that in this case the Nebraska Supreme Court would apply the pro tanto settlement
credit rule, based on Nebraska’s well-settled policy of denying a double recovery to
the claimant.

       Nebraska Plastics also notes that some amount of the OMYA settlement
payment was paid in exchange for Nebraska Plastics’ waiver of its right to appeal the
partial summary judgment entered in favor of OMYA and for a confidentiality
agreement. Nebraska Plastics contends that this amount, which was not identified in
the settlement, should not be included in the settlement credit because it was not paid
in compensation for Nebraska Plastics’ injuries. However, the Nebraska courts did
not reduce the settlement credits by those peripheral settlement amounts in similar
situations in Jameson and Vowers & Sons, and there is no reason to anticipate a
change of Nebraska law on this point.

                                         -13-
       Finally, Nebraska Plastics argues that the portion of the OMYA settlement paid
to settle anticipated future damages should not be included in the settlement credit.
Because we have denied the award for future damages against HCA, Nebraska
Plastics contends that the future damages portion of the OMYA settlement is not
duplicative of any part of the judgment against HCA and would not result in a double
recovery. The settlement agreement does not identify the amount paid specifically
for anticipated future damages.

        Nebraska Plastics’ argument that the purported “future damages” portion of the
OMYA settlement is not duplicative fails. Nebraska Plastics brought an action
against OMYA and HCA for the redress of a single injury. OMYA paid a lump sum
to settle all potential liability before the extent of the injury was proved. We have
now determined that future damages were not part of the actual damages proved by
Nebraska Plastics. Because Nebraska Plastics only proved actual damages of
approximately $770,000, any recovery beyond that amount would constitute a double
recovery, regardless of the potential categories of damages covered in the OMYA
settlement. Nebraska Plastics correctly states that because OMYA anticipated a
future damages award in its settlement, OMYA ultimately may have paid more than
its fair share of the actual damages. See Stephens, Inc. v. Geldermann, Inc., 
962 F.2d 808
, 817 n.5 (8th Cir. 1992) (“As with any settlement, . . . the parties take the risk that
the jury’s verdict would have been more favorable.”). This fact, however, does not
allow Nebraska Plastics to avoid the Nebraska rule that the plaintiff may not “be
made ‘more than whole’ by compensation which exceeds the actual damages
sustained.” Vowers & 
Sons, 576 N.W.2d at 825
.

       We conclude that the district court did not err in granting HCA’s motion to
reduce the damages awarded against it dollar-for-dollar by the amount Nebraska
Plastics received in its settlement with OMYA.




                                           -14-
      D. HCA’s Counterclaim

        HCA counterclaimed against Nebraska Plastics to recover payment for pigment
it delivered to Nebraska Plastics between March and June 2001. The jury found for
HCA on that claim and awarded $50,722 to HCA.

       Nebraska Plastics argues that the jury verdict on HCA’s counterclaim was not
supported by sufficient evidence and that it was inconsistent with the jury verdicts on
Nebraska Plastics’ claims against HCA. Nebraska Plastics concedes that it did not
raise the necessary objections to preserve these arguments below.

        A party waives a claim of inconsistent verdicts by failing to object to the
inconsistency before judgment is entered. Dairy Farmers of Am., Inc. v. Travelers
Ins. Co., 
391 F.3d 936
, 945 (8th Cir. 2004). Nebraska Plastics did not object below
to the jury verdict on the counterclaim as being inconsistent with the jury verdicts on
Nebraska Plastics’ claims against HCA. Therefore, to the extent Nebraska Plastics
bases its argument on inconsistency of the verdicts, it has waived its argument.

       To the extent Nebraska Plastics argues insufficiency of the evidence on the
counterclaim, Nebraska Plastics concedes that the district court’s entry of judgment
may be reviewed only for plain error. “Plain error review is narrow and confined to
the exceptional case where error has seriously affected the fairness, integrity, or
public reputation of the judicial proceedings,” and “[t]he verdict should be reversed
only if the error prejudices the substantial rights of a party and would result in a
miscarriage of justice if left uncorrected.” Chem-Trend, Inc. v. Newport Indus., 
279 F.3d 625
, 629 (8th Cir. 2002) (quotations omitted).

      Nebraska Plastics has made no showing that the verdict for HCA on the
counterclaim prejudiced its substantial rights. The claim was for the price of pigment
delivered between March and June 2001, after Nebraska Plastics had discovered the

                                         -15-
problem and ceased the use of calcium carbonate in its colored fencing. Because the
pigment that was the subject of the counterclaim did not contribute to any defective
fencing, Nebraska Plastics’ rights were not substantially prejudiced by a verdict that
forced Nebraska Plastics to pay for that pigment.

      We conclude that the district court’s entry of judgment for HCA on its
counterclaim does not constitute reversible error.

      E. Submission of the Negligent Design, Manufacture and Supply Claim
         to the Jury

       In its cross-appeal, HCA argues that the district court erred in submitting
Nebraska Plastics’ negligent design, manufacture and supply claim to the jury
because there was no “product” upon which to base the claim. HCA contends that
the pigment it provided was not defective and its participation in the design of the
fencing was not a “product.” HCA argues further that even if its participation in the
design of the fencing was a product, recovery on a negligent design theory for its
“bad advice” would duplicate the recovery under the negligent misrepresentation and
fraudulent concealment claims.5


      5
        In its reply brief, HCA introduced the argument that the tort-based negligent
design, manufacture and supply claim was precluded by the contract-based warranty
claims under the “economic loss” doctrine. See Nat’l Crane Corp. v. Ohio Steel Tube
Co., 
332 N.W.2d 39
, 44 (Neb. 1983) (holding that “the purchaser of a product
pursuant to contract cannot recover economic losses from the seller manufacturer on
claims in tort based on negligent manufacture or strict liability in the absence of
physical harm to persons or property caused by the defective product”). This
argument was not raised by HCA in its opening brief, and Nebraska Plastics did not
have a chance to respond to it. This Court does not consider issues first raised in a
reply brief unless the appellant gives some reason for failing to raise and brief the
issue in his opening brief. Martin v. Am. Airlines, Inc., 
390 F.3d 601
, 608 n.4 (8th
Cir. 2004). Therefore, HCA has waived its argument that the recovery of purely
                                         -16-
        Because HCA did not object with specificity to the relevant instructions, its
arguments were not preserved below. HCA objected to the jury instruction for the
negligent design, manufacture and supply claim only on the ground that there was “no
evidence sufficient to warrant that instruction to the jury.” HCA did not object to the
jury instruction defining HCA’s participation in the design process as a “product” or
to the instruction for the negligent design, manufacture and supply claim as being
“duplicative” of other claims. See, e.g., Cross v. Cleaver, 
142 F.3d 1059
, 1068 (8th
Cir. 1998) (“[A] general objection is insufficient to preserve the specific objections
to the instruction that the appellant may subsequently seek to raise on appeal.”)
(quotation omitted). Therefore, these arguments must be evaluated under the plain
error standard of review. 
Id. The verdict
will be reversed “‘only if the error
prejudices the substantial rights of a party and would result in a miscarriage of justice
if left uncorrected.’” 
Chem-Trend, 279 F.3d at 629
(quoting Rush v. Smith, 
56 F.3d 918
, 922 (8th Cir. 1995)).

       The district court’s submission of the negligent design, manufacture and supply
claim to the jury does not merit reversal under plain-error review. Nebraska Plastics
hired HCA to provide pigment for its colored fencing based on HCA’s representation
that HCA would lend its expertise to the design process to create a quality final
colored PVC product. Because HCA participated in the design of the colored
fencing, the defectively designed fencing can serve as the predicate product for the
negligent design claim. Furthermore, negligence in designing the colored fencing
would not necessarily duplicate “bad advice” in negligently or intentionally failing
to inform Nebraska Plastics of the calcium carbonate problem. For example, HCA
performed weathering tests of the colored Nebraska Plastics fencing before sales
commenced; these tests apparently failed to reveal any weathering problem. This
would support a negligent design, manufacture and supply claim independent of the


economic damages under the negligent design, manufacture and supply claim was
improper.
                                          -17-
“bad advice” claims. On these facts, we cannot say that the submission of the
negligent design, manufacture and supply claim to the jury would result in a
miscarriage of justice if left uncorrected.

     We conclude that the district court’s submission of the negligent design,
manufacture and supply claim to the jury does not constitute reversible error.

III.   CONCLUSION

       We conclude that the district court did not err in excluding the testimony of
Nebraska Plastics’ expert on future damages, granting judgment as a matter of law to
HCA on future damages, granting HCA’s motion for a pro tanto settlement credit,
entering judgment for HCA on its counterclaim and submitting Nebraska Plastics’
negligent design, manufacture and supply claim to the jury. Therefore, we affirm the
judgment as entered by the district court.
                      ______________________________




                                        -18-

Source:  CourtListener

Can't find what you're looking for?

Post a free question on our public forum.
Ask a Question
Search for lawyers by practice areas.
Find a Lawyer