MOORE, Judge.
MAT Systems, Inc., d/b/a Corporate Design Systems ("MAT") appeals from a judgment entered on a jury's verdict
In 1991, Atchison purchased property located at 1100 Dauphin Street in Mobile. Atchison, through its principal, Tony Atchison ("Tony"), acted as a general contractor and hired subcontractors to renovate the property. In connection with those renovations, Atchison hired a subcontractor to remove an old sprinkler system from the property. In preparing to have the sprinkler system removed, Tony contacted the Board of Water and Sewer Commissioners of the City of Mobile d/b/a Mobile Area Water and Sewer ("MAWSS") and requested that water service to the sprinkler system be discontinued. MAWSS responded to that request, and, according to Tony, he observed an employee of MAWSS access an underground valve located in the City's right-of-way and "turn off" the water service to the sprinkler system.
Believing the water supply to have been permanently terminated, Atchison's subcontractor removed most of the pipes to the old sprinkler system. Certain of the pipes, however, were left in the building. At least one of those pipes, six inches in diameter and visible to all who viewed the property, remained connected to the City's water supply, although the water supply had been turned off. That pipe was not permanently capped or equipped with a shut-off valve on the premises to prevent the flow of water into the pipe from the City's water line because, Tony stated, he believed that MAWSS had permanently terminated the water supply to the sprinkler system.
Atchison's renovations were completed and it began leasing the renovated property in the mid-1990s. In 1998, MAT became interested in leasing the renovated property. According to Tony McCain, one of MAT's principals, MAT was engaged in the business of selling "custom-manufactured" commercial office furniture, cubicles, architectural walls, and flooring. After inspecting the renovated property and having Atchison perform additional work on the renovated property to suit MAT's needs and design plans, MAT and Atchison entered into a commercial lease of the property (hereinafter referred to as "the leased premises").
On May 10, 2005, MAWSS undertook to replace an old fire hydrant in the vicinity of the leased premises. To replace the hydrant, MAWSS's employees were required to turn off the water servicing the hydrant. MAWSS replaced the hydrant and then restored the water service. In
MAWSS's employees immediately noticed water flowing from under the warehouse door and returned the valve to the off position. MAT was notified of the situation within minutes of the water intrusion. According to MAT's employees and Tony, water again entered the warehouse through that same pipe several days later.
After approximately seven weeks,
On June 1, 2006, MAT sued Atchison asserting claims of breach of the lease agreement, negligence, and trespass on the case.
On September 17, 2009, MAT moved, pursuant to Rule 59, Ala. R. Civ. P., for a new trial or, alternatively, to alter or amend the judgment. Although Atchison responded to MAT's postjudgment motion, Atchison did not seek postjudgment relief
On appeal, MAT challenges the propriety of the JML entered in favor of Atchison on MAT's request for replacement-cost damages; MAT argues that, as a result of that JML, MAT's request for damages based upon the replacement costs of the damaged products was improperly excluded from the jury's consideration. MAT also asserts that it was entitled to a new trial because, it argues, the jury awarded it insufficient damages to compensate it for the costs it incurred to clean the warehouse and to store the damaged products. Finally, MAT asserts that the trial court erred in admitting into evidence certain of Atchison's exhibits. In its cross-appeal, Atchison asserts that the trial court erred in denying its motion for a JML as to all the claims asserted against it.
We first address Atchison's cross-appeal, because the resolution of the cross-appeal is potentially dispositive of MAT's appeal. The trial court allowed MAT's claims for breach of the lease agreement, negligence, and trespass on the case to go the jury. In its preverdict motion for a JML, and again on appeal, Atchison argues that it was absolved of all liability by virtue of the exculpatory language included in the commercial lease executed by MAT and Atchison and that, as a result, none of MAT's claims should have gone to the jury.
We agree with MAT that, under applicable Alabama law, if substantial evidence was presented on the question whether Atchison, as the lessor, knew or had reason to know of the latent defect at issue and failed to disclose that defect to MAT, as the lessee, at the time the lease was executed, Atchison was not entitled to the protections afforded it by the exculpatory language in the lease. See, e.g., Taylor v. Leedy & Co., 412 So.2d 763, 764 (Ala.1982) ("Exculpatory clauses . . . exonerate the landlord from liability for his own future negligence, . . . not for concealment of a known latent defect which subsequently causes injury. . . . [A] latent defect is an exception to the coverage of an exculpatory clause.").
Thus, in ruling on Atchison's motion for a JML, i.e., in determining whether Atchison was entitled to the protection of the exculpatory language contained in the lease, the trial court first had to determine
In Cook's Pest Control, Inc. v. Rebar, 28 So.3d 716 (Ala.2009), our supreme court stated:
28 So.3d at 722 (quoting King Mines Resort, Inc. v. Malachi Mining & Minerals, Inc., 518 So.2d 714, 716 (Ala.1987)).
Atchison failed to file a renewed motion for a JML after the jury returned its verdict. The record contains no postjudgment motion filed by Atchison and no indication that, after the jury returned its verdict, Atchison ever requested that the trial court revisit its ruling on the sufficiency-of-the-evidence issue. Without the filing of a renewed motion for a JML on that issue, Atchison has failed to properly preserve for appellate review the issue whether the trial court erred in denying its motion for a JML as to all claims. We, therefore, cannot reach the merits of that issue, and, as to Atchison's cross-appeal, the trial court's judgment is affirmed.
We address MAT's issues out of order. MAT asserts that Atchison's exhibits 6 and 7, which were printouts of the results of Internet searches on the issue of "used office furniture," were admitted into evidence in violation of the Alabama Rules of Evidence. Generally, rulings on the admissibility of evidence are within the sound discretion of the trial judge and will not be disturbed on appeal absent an abuse of that discretion. Bama's Best Party Sales, Inc. v. Tupperware, U.S., Inc., 723 So.2d 29, 32 (Ala.1998).
We need not, however, consider the merits of MAT's evidentiary challenges because, as explained below, any error resulting from the admission into evidence of Atchison's exhibits was harmless. At the trial, Harvey McCain, one of the principals of MAT, was questioned extensively about the information contained on those exhibits; that questioning, which was detailed and specific, occurred without objection. Atchison's counsel then offered the exhibits into evidence, and MAT's counsel objected, asserting various evidentiary objections. Thus, at the time MAT's counsel lodged those objections, the jury had already heard McCain's testimony on those issues and that testimony had already been made a part of the record. Thus, any error resulting from the trial court's discretionary ruling to admit the exhibits into
MAT next asserts that the trial court erred in excluding from the jury's consideration MAT's request for $227,000 in damages "predicated upon the replacement cost of the bailed property in the [warehouse] that was damaged or destroyed on May 10, 2005." MAT asserts that a "bailee may recover damages to bailed property notwithstanding the absence of a claim for such damages by the bailor and may use replacement costs as the measure of damages where no market exists for the bailed property." MAT also asserts that, because the property stored in the warehouse was "custom-manufactured" for its customers, that property was unique and no market for that property existed. Thus, MAT argues, as the bailee of the property, it was entitled to recover damages based upon the costs to replace the damaged products.
In support of its argument, MAT relies on Ala.Code 1975, § 6-5-263, which provides:
In view of § 6-5-263, we agree with MAT that, unless limited by the terms of the bailment contract, a trespass to the rights of a bailee gives rise to a right of action in the bailee for interference with the bailee's special property rights.
Atchison challenges on appeal whether MAT's interest in the bailed property was sufficient to entitle it to seek an award of damages for the loss of that property. Atchison asserts that MAT obtained no property rights in the bailed property, that ownership of the property in the warehouse remained with MAT's customers, and that MAT's employees admitted that they had no way of documenting which of the products belonged to which of MAT's customers. MAT responds that its customers need not have asserted any claim for their damaged property as a prerequisite to MAT's cause of action against Atchison.
We need not resolve this dispute because, even when such a right of action is found to exist in the bailee, a bailee, as any other plaintiff, must still provide a reasonable basis for the calculation of its claimed damages in order to recover.
Systrends, Inc. v. Group 8760, LLC, 959 So.2d 1052, 1075-76 (Ala.2006).
In determining the proper measure of damages when personal property has been damaged,
Lary v. Gardener, 908 So.2d 955, 959 (Ala. Civ.App.2005).
Gardener, 908 So.2d at 959-60.
When no market for the property at issue exists, Alabama courts have recognized that the cost to repair or replace the property is "an evidentiary factor" that may be considered in determining the value of the property before and after the injury.
At trial, Harvey McCain testified that MAT exclusively sold "custom-manufactured office system components." Testimony at trial established that the products stored in the warehouse consisted of, among other things, desks, work stations, wall panels, flooring, and floor coverings. Other testimony established that basic office equipment, such as desk chairs and task lights, was also stored in the warehouse on May 10, 2005.
Although MAT's employees repeatedly testified that they knew of no market for used "custom-manufactured office components," the evidence established that dealers of used office furniture exist in the Mobile area and throughout the United States; the evidence presented established that those dealers offer, among other things, used work stations, used cubicles, used offices chairs, and used office desks for sale. Additionally, on cross-examination, Pam Maurin, a MAT employee, admitted that the products in MAT's warehouse certainly had value before the May 10, 2005, water intrusion but that she did not know how to value the products because she had no experience in the used-furniture industry.
Despite the "custom-manufactured" nature of the products, evidence was presented to indicate that the used products were not limited in value and usefulness to only the location for which they had been ordered. Pam Maurin explained that MAT's customers might store previously purchased products with MAT while reconfiguring their facilities until they decided
MAT's evidence also failed to establish that its customers intended to reclaim the property stored in the warehouse. It was undisputed at trial that, even before the May 10, 2005, incident, at least some of MAT's customers had stored products in MAT's warehouse but had never sought the return of those products. Wayne Maurin, who was also the owner of SCI, the company responsible for installing and moving furniture for MAT, admitted that, in the past, customers had not reclaimed their stored products and MAT had simply discarded the products.
MAT's evidence also failed to establish with any degree of certainty the identity of the owners of the products in the warehouse, the age of the products in the warehouse, the condition of the products as they were accepted for storage by MAT, i.e., before the water entered the warehouse, or whether the products had any salvage value after the May 10, 2005, water intrusion. Wayne Maurin acknowledged that neither he, nor MAT, nor SCI had any way of knowing what products were in the warehouse, which customer owned which particular item, how long the customer had owned it, or the condition of the products at the time they were originally delivered to the warehouse. Pam Maurin further admitted that the items in the warehouse could have been anywhere from one to six years old and that she had no records to establish whether a product in the warehouse had been returned to MAT because of previous damage, poor condition, or because the customer had intended to reuse it. Additionally, Jenny Smith, a MAT employee, testified that some of the products removed from the warehouse had been stored there for years, that some of the products had been damaged before the May 10, 2005, water intrusion, and that, upon the removal of each box from the warehouse in July 2005, neither she nor Pam Maurin had opened the contents of each box to determine the condition of the contents of the box.
Further, MAT offered only scant evidence indicating a value that could be assigned to its damages. Pam Maurin testified that she had determined that it would cost MAT $227,000 to replace the products that had been stored in MAT's warehouse. In arriving at that value, Pam acknowledged that her valuation of those products had been based solely on the replacement cost of those items. Pam admitted that neither she nor anyone else affiliated with MAT had attempted to determine whether the products stored in MAT's warehouse had had any market value either before or after the water intrusion. Additionally, although Pam testified that MAT had incurred costs to replace products belonging to one of its customers, the Veterans Administration ("the VA"), that had been damaged by the May 10, 2005, water intrusion into the warehouse, she could not specifically identify the items she claimed had been replaced for the VA.
Based on the foregoing, we conclude that the evidence established that the used office furniture had value on the secondary market. "Ordinarily, where property has a market value that can be shown, such value is the criterion by which actual damages for its destruction or loss may be fixed." Southern Express Co. v. Owens, 146 Ala. 412, 426, 41 So. 752, 755 (1906). Although the evidence indicated that a market value existed and could have been determined for the damages products, the only evidence offered by MAT related to the costs to replace those products with new products. Evidence of replacement costs, standing alone, was insufficient to allow the jury to establish a reasonable and fair-market value for the products both before the damage and after the damage. See SouthTrust Bank v. Donely, 925 So.2d 934, 943 (Ala.2005) ("It is the plaintiff's burden to produce competent evidence establishing the existence of and amount of damages."); and Johnson v. Harrison, 404 So.2d 337, 340 (Ala.1981) ("[T]he plaintiff has the burden of offering evidence tending to show to the required degree, the amount of damages allegedly suffered."). Without competent evidence of its claimed damages, the trial court properly excluded MAT's request for damages based solely upon the costs to replace the products that had been in the warehouse on May 10, 2005.
MAT next asserts that the trial court erred in denying its motion for a new trial, which, it argues, should have been granted because the jury awarded MAT insufficient damages to compensate it for the costs it incurred in cleaning the warehouse after the water intrusion and in storing the products damaged by the water intrusion. "A jury's verdict is presumed correct and will not be disturbed unless it is plainly erroneous or manifestly unjust." Crown Life Ins. Co. v. Smith, 657 So.2d 821, 822 (Ala.1994). "[T]hat presumption is strengthened when the trial court has denied a motion for a new trial." South-Trust Bank v. Donely, 925 So.2d at 943 (citing First Alabama Bank of South Baldwin v. Prudential Life Ins. Co. of America, 619 So.2d 1313 (Ala.1993)). A judgment based upon a jury verdict and sustained by the denial of a postjudgment motion for a new trial will not be reversed unless it is plainly and palpably wrong. National Sec. Ins. Co. v. Donaldson, 664 So.2d 871 (Ala.1995).
In Wells v. Mohammad, 879 So.2d 1188 (Ala.Civ.App.2003), this court addressed at length the considerations applicable to our review of a trial court's ruling on a motion for a new trial on the ground on inadequate damages:
"Helena Chem. Co. v. Ahern, 496 So.2d at 14." Wells v. Mohammad, 879 So.2d at 1193-94 (emphasis in Wells removed).
In this case, the jury was instructed that, if it found in favor of MAT, it could award damages in an amount to "fairly and reasonably compensate" MAT for its costs in cleaning the warehouse and in storing the damaged products. On the issue of MAT's expenses, the jury heard evidence that MAT had hired SCI, a company owned and operated by Wayne Maurin, one of MAT's three employees, to clean the warehouse and to store the products removed from the warehouse. Wayne acknowledged that the wet products had remained in MAT's warehouse "for a while" after May 10, 2005; other evidence indicated that MAT had allowed the products to remain in the warehouse until the first week of July 2005, some seven weeks after the water intrusion had occurred. Wayne admitted that MAT could have moved the products out of the warehouse immediately had it wished to do so; Pam Maurin also acknowledged that the damage to the items in the warehouse had probably worsened because of the length of time those items remained in the warehouse after sustaining water damage.
Wayne testified that, in order to clean out the warehouse, SCI had brought in a dumpster and a truck and, for those items not disposed of immediately, SCI had moved them to its warehouse and into additional space that it had rented for that purpose. Although SCI's total bill was more than $70,000, Wayne testified that SCI had accepted $31,116 from MAT in settlement of its bill. According to Wayne, SCI's bill had included $10,716 representing "billable hours for men to work," $10,800 for storage services for dates "May 2005 through January 2006"; and $9,600 for storage services for February 2006 through January 2007.
Cross-examination of MAT's witnesses established that, although MAT acknowledged that it had not emptied its warehouse until July 2005, SCI's bill sought storage fees for the damaged products as
Atchison also presented its own evidence establishing that it had offered free warehouse space to MAT for the purpose of storing the damaged products. Pam Maurin acknowledged that Atchison had offered MAT the use of warehouse space free of charge but that MAT had declined to use that space, opting instead to hire SCI.
Based on the evidence presented at trial, we conclude that whether MAT's claimed expenses were reasonable and necessary as a result of the May 10, 2005, water intrusion was a controverted issue and was for the jury to resolve.
Wells, 879 So.2d at 1193-94.
Based on its award of only $880 in damages, the jury obviously decided that the majority of MAT's claimed expenses was not reasonable or necessary. As in Wells, supra, the jury in this case was not obligated to award MAT damages for its claimed expenses simply because evidence of those expenses was presented. Atchison challenged those expenses on crossexamination, and that cross-examination exposed certain conflicts and weaknesses in the testimony and evidence offered in support of those expenses. We cannot say that the jury's award of damages was "`so opposed to the clear and convincing weight of the evidence'" as to be clearly incorrect because "the damages award is one that
Regarding Atchison's cross-appeal, we affirm the trial court's denial of Atchison's motion for a JML as to all claims. Regarding MAT's appeal, we affirm the trial court's evidentiary rulings as to Atchison's exhibits nos. 6 and 7, the JML entered in favor of Atchison as to MAT's request for replacement-cost damages, and the denial of MAT's motion for a new trial.
AFFIRMED.
PITTMAN, BRYAN, and THOMAS, JJ., concur.
THOMPSON, P.J., concurs in part and dissents in part, with writing.
THOMPSON, Presiding Judge, Concurring in part and dissenting in part.
It is certainly within the province of the jury to find that the costs of cleaning and storage as presented by MAT Systems, Inc., d/b/a Corporate Design Systems ("MAT") were inflated. However, it is undisputed that, after the water incursion, MAT was required to empty its warehouse and have it cleaned. Even if the costs of storage were removed from the total costs of $31,116 that MAT claimed it paid relating to the cleaning of the warehouse, it is unreasonable to believe that only $880 was expended in the manpower and materials needed to empty the warehouse and clean it. Furthermore, nothing in the record supports a finding of expenses of only $880. I do not believe that the jury's award of damages is fair and reasonable.
Because I would reverse that portion of the trial court's judgment denying MAT's motion for a new trial based upon the insufficiency of the damages awarded, I must respectfully dissent from that aspect of the main opinion. Otherwise, I concur in the main opinion.