Ronald D. Dole v. USA Waste Services , 100 F.3d 1384 ( 1996 )

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No. 95-3777
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Ronald D. Dole, *
*
Plaintiff/Appellant, *
*
v. *
*
USA Waste Services, Inc., *
a corporation; *
*
Defendant/Appellee, * Appeal from the United States
* District Court for the
USA Of North Dakota, Inc.; * District of North Dakota.
*
Defendant, *
*
Donald Moorhead, an individual; *
Big Dipper Enterprises, Inc., *
a corporation; *
John R. Beardmore, an *
individual; *
*
Defendants/Appellees, *
*
Northern Waste Systems, Inc., *
a corporation, *
*
Defendant. *
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Submitted: October 24, 1996
Filed: November 19, 1996
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Before WOLLMAN, FLOYD R. GIBSON, and BEAM, Circuit Judges.
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BEAM, Circuit Judge.
Ronald D. Dole brought state law claims of deceit against various
defendants. The district court1 granted summary judgment
1
The Honorable Rodney S. Webb, Chief Judge, United States
District Court for the District of North Dakota.
for defendants USA Waste Services, Inc. ("USA Waste") and Donald Moorhead.
A jury returned a verdict for the remaining defendants. Dole appeals both
the grant of summary judgment and the verdict. We affirm.
I. BACKGROUND
In 1976, Dole acquired 320 acres of land near Gwinner, North Dakota.
Dole operated a landfill on portions of the property until 1978. At that
time, Dole sold thirty-two acres of the property, including the landfill
operation, to defendant John R. Beardmore. After the sale, Beardmore's
wholly owned company, Big Dipper Enterprises, Inc. ("Big Dipper"), operated
the landfill.
In 1990, Beardmore offered to buy Dole's remaining 288 acres.
Negotiations culminated in April of 1991 with a contract for sale in which
Big Dipper agreed to purchase Dole's land for $591,000. A side agreement
anticipated that Big Dipper would then sell all 320 acres and the landfill
operation to a third company. In such a case, Dole would be entitled to
further consideration, depending on the structure of the subsequent
transaction. The agreement did not, however, entitle Dole to participate
in any "back-end" stock transaction, by which Beardmore would receive
shares of an acquiring company as consideration for selling Big Dipper's
interest.2
During this time, Beardmore pursued contacts with several other waste
disposal companies, seeking to sell Big Dipper's interest in the operation.
Beardmore could not complete a deal, however, and was thus unable to meet
the original closing deadline and two extensions. In October of 1991, Dole
agreed to extend the
2
The record indicates that Dole's attorney sought to include
such a term in the agreement, but that Beardmore's attorney
rejected these proposals.
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closing deadline a third time. The October extension agreement also
contained a provision entitling Dole to further consideration in the event
of a subsequent sale of the landfill and a paragraph that provided that:
"Beardmore shall promptly furnish to Dole true copies of all proposals,
offers, contracts, and other documents showing any potential and actual
sales, transfers, and assignments (whole or partial) of the . . .
landfill."
In October of 1991, Beardmore finally secured a deal with a third
company, defendant USA Waste.3 Beardmore mortgaged all of his company's
interest in the land to USA Waste in exchange for a $600,000 loan. With
this cash from USA Waste, Beardmore was now able to pay for Dole's 288
acres, and completed the purchase. After acquiring Dole's land, Big Dipper
merged with a subsidiary of USA Waste. Under the merger, Big Dipper was
the surviving corporation and became a wholly owned subsidiary of USA
Waste. In return, Beardmore received 250,000 shares of USA Waste stock,
a "put" letter from USA Waste CEO Donald Moorhead and another USA Waste
shareholder that obligated them to buy Beardmore's shares at his option,
and a royalty agreement that entitled Beardmore to five percent of certain
revenues from the landfill.
Dole brought suit, claiming that he was not informed of the Big
Dipper-USA Waste deal as his October agreement with Beardmore required.
Specifically, Dole claims the defendants suppressed information about the
back-end stock payment to Beardmore, in which Dole was not entitled to
participate. As a result, Dole claims, he was not aware of the possibility
that a Big Dipper sale to a third company might include a back-end stock
deal, and was unable to
3
Dole had, in fact, introduced Beardmore to USA Waste's CEO,
Donald Moorhead, at some point in 1990. According to Dole, "[t]he
purpose of the contact was to determine if [Moorhead] would be
interested in buying the Gwinner landfill." Appellant's Brief at
8.
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protect himself from what he contends was inadequate consideration for his
288 acres.
The district court granted summary judgment in favor of USA Waste and
Moorhead. At trial, Dole elected to proceed against Beardmore and the
remaining defendants on a claim of deceit. See N.D. Cent. Code § 9-10-02
(1987). After a seven-day trial, a jury returned a verdict for the
remaining defendants. Dole appeals the grant of summary judgment and the
district court's denial of his motion for a new trial.
II. DISCUSSION
A. Summary Judgment for USA Waste
On appeal of a summary judgment order, we apply the same standard as
the district court, reviewing de novo. Bank of America Nat'l Trust & Sav.
Assoc. v. Shirley, 96 F.3d 1108, 1111 (8th Cir. 1996). Summary judgment
is appropriate if the record shows no material facts in dispute and that
one party is entitled to judgment as a matter of law. Id.; Fed. R. Civ.
P. 56(c).
Dole's claim against USA Waste and Moorhead is premised on section 9-
10-02(3) of the North Dakota statutes. Under section 9-10-02(3), one form
of deceit is "[t]he suppression of a fact by one who is bound to disclose
it, or who gives information of other facts which are likely to mislead for
want of communication of that fact." Actions for deceit under the statute
"clearly require that the defendant have a duty to disclose as a
prerequisite to liability." Hellman v. Thiele, 413 N.W.2d 321, 328 (N.D.
1987). We agree with the district court that Dole has produced no evidence
that indicates USA Waste or Moorhead owed him any duty of disclosure.
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Dole first argues that USA Waste and Moorhead were "sufficiently
involved in the process by which Mr. Dole was relieved of his acreage to
face liability . . . directly." Appellant's Brief at 28. USA Waste and
Moorhead were, of course, actively negotiating to acquire Beardmore's and
Big Dipper's interests in the land after Big Dipper completed its purchase
of Dole's 288 acres. Dole fails to show, however, that the USA Waste-Big
Dipper negotiations gave rise to any duty owed by USA Waste to him. He
produced no evidence, and indeed does not argue, that USA Waste or Moorhead
were directly or substantially involved in the Dole-Big Dipper
negotiations.
This case is distinguishable from four North Dakota cases cited by
Dole for the proposition that "non-parties to a business transaction [may
be] liable for deceit for having suppressed relevant information."
Appellant's Brief at 30 (citing Dewey v. Lutz, 462 N.W.2d 435 (N.D. 1990);
West v. Carlson, 454 N.W.2d 307 (N.D. 1990); Ostlund Chem. Co. v. Norwest
Bank, 417 N.W.2d 833 (N.D. 1988); and Holcomb v. Zinke, 365 N.W.2d 507
(N.D. 1985)). Contrary to Dole's assertion, West and Holcomb both involved
parties dealing directly with each other in land transactions. In Ostlund
Chemical, the court held that a bank assumed a duty of disclosure only
after it voluntarily responded to a request for information from a
customer's creditor. 417 N.W.2d at 836. And in Dewey, two defendants
negotiated directly with the plaintiffs to further a scheme to defraud the
plaintiffs to the benefit of a third defendant. Dewey, 462 N.W.2d at 437-
38. None of these cases are analogous to the role and conduct of USA Waste
with respect to the Gwinner landfill negotiations. The district court
properly concluded that Dole failed, as a matter of law, to establish a
duty of disclosure by USA Waste or Moorhead.
Dole alternatively argues that USA Waste and Moorhead are
derivatively responsible for Beardmore's and Big Dipper's conduct because
USA Waste and Big Dipper were joint venturers. Any
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possible derivative liability by USA Waste and Moorhead is vitiated,
however, by the jury's finding that Dole did not prove deceit by Beardmore
and Big Dipper. At any rate, Dole's joint venture theory is unpersuasive.
Under North Dakota law, a joint venture has four elements:
(1) contribution by the parties of money, property, time, or
skill in some common undertaking . . . ; (2) a proprietary
interest and right of mutual control over the engaged property;
(3) an express or implied agreement for the sharing of profits,
and usually, but not necessarily, of losses; and (4) an express
or implied contract showing a joint venture was formed.
Thompson v. Danner, 507 N.W.2d 550, 556 (N.D. 1993) (citations omitted).
Dole argues that Big Dipper and USA Waste engaged in a joint venture by
pooling money and effort in the "common undertaking" of acquiring Dole's
288 acres. Other than conclusory assertions, Dole points to no evidence
in the record of a proprietary interest and right of mutual control between
USA Waste and Big Dipper, an agreement for the sharing of profits and
losses, or an express or implied contract showing a joint venture.
Further, we are not impressed with Dole's assertion that USA Waste's
negotiations to acquire Big Dipper's interests show a "common undertaking"
to acquire Dole's acreage, rather than a garden variety, arm's-length
transaction between independent companies. There is no support in the
record for Dole's claim of a joint venture, and the district court properly
granted summary judgment for USA Waste and Moorhead.
B. Motion for a New Trial
Dole moved for a new trial pursuant to Federal Rule of Civil
Procedure 59 on the ground that defense counsel's misconduct unfairly
prejudiced the trial. In this diversity action, we review the district
court's denial of Dole's new trial motion for abuse of
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discretion. Gray v. Bicknell, 86 F.3d 1472, 1480-81 (8th Cir. 1996).
Before trial, Dole moved in limine to exclude evidence of a prior
felony conviction. In its ruling on the motion, the court stated that
"[t]he court reserves ultimate ruling on the matters contained in the
motion in limine as it is not now in a position to know the context in
which each issue will be raised at trial." Dole v. USA Waste Servs., Inc.,
No. A3-94-25, slip op. at 2 (D.N.D. filed May 19, 1995). Nonetheless, the
court decided as its "preliminary disposition" that evidence of the prior
felony would be excluded. Id.
At trial, Dole's counsel called as a witness Harlan Klefstad, a local
banker. During redirect examination by Dole's counsel, the following
exchange occurred:
Q. So tell the jury, please, in your opinion is Mr. Dole an
honorable person?
A. He's been honorable with us, definitely.
Dole's counsel: Thank you. We pass.
Defense counsel: Your honor, I believe that opens the
door to make an examination about what he knows about
this individual's history.
The Court: Concerning reputation for being honorable,
yes.
Trial Tr. Vol. V, at 112. Defense counsel then proceeded with re-cross
examination:
Q. Has Mr. Dole been convicted of a felony to your
knowledge?
Dole's counsel: Your honor, I object. That is a harpoon
of major proportions and totally unfair.
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The Court: Sustained. The question will be stricken.
The jury is instructed to disregard. You will take no
knowledge of the question and the answer that may have
been suggested that has just been made. You're strongly
instructed to disregard. Counsel, different subject.
Not that subject.
Defense counsel: No further questions.
Id. at 113.
Dole claims that this "blatant violation" of the district court's
order in limine was sufficiently prejudicial to justify a new trial.
Misconduct by counsel may be so prejudicial as to require a new trial.
Sanders-El v. Wencewicz, 987 F.2d 483, 485 (8th Cir. 1993). We are not
persuaded, however, that counsel's questioning in this case was in fact
misconduct, nor do we believe that it was sufficiently prejudicial to
warrant a new trial.
As the district court noted in denying the new trial motion, its
order in limine was "preliminary" in nature, and left open the possibility
that the issue of Dole's prior conviction might be reconsidered at trial.
Further, Dole's lawyer arguably opened the door to this inquiry by
questioning the witness about Dole's reputation for honesty. Before
inquiring about the witness's knowledge of Dole's conviction, defense
counsel asked the court whether this permitted him to question the witness
"about what he knows about [Dole's] history." The defense counsel's
conduct in these circumstances simply does not rise to the level of
misconduct.
Further, Dole has failed to show that this single question was
prejudicial. The question was immediately stricken, and defense counsel
made no further inquiries. The district court immediately gave a curative
instruction, and concluded that the effect of the question was minimal and
that the curative instruction was sufficient to allay any possible
prejudice. We are also
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unpersuaded that this one question rendered the trial unfair. The trial
court did not abuse its discretion in rejecting Dole's motion on this
basis.
Dole also argues that defense counsel made inflammatory and
prejudicial remarks during closing arguments. During closing, defense
counsel repeatedly drew the jury's attention to Dole's background, asking
"Who is Ron Dole?" and comparing his history to Beardmore's. Dole now
contends that the defendants impermissibly sought to prejudice the North
Dakota jury against Dole, who is from Indiana, by comparing him to
Beardmore, who is from North Dakota. Dole argues that this was a form of
the "Golden Rule" argument, by which a local party improperly urges the
jury to "depart from neutrality and to decide the case on the basis of
personal interest and bias rather than on the evidence." Rojas v.
Richardson, 703 F.2d 186, 191 (5th Cir. 1983) (citations omitted).
Dole's position, however, is fatally undermined because his counsel
failed to object to any of these statements at trial. A party is entitled
to a new trial on the basis of misconduct not objected to at trial only if
that misconduct rises to the level of plain error. Manning v. Lunda
Constr. Co., 953 F.2d 1090, 1092 (8th Cir. 1992). Plain error is generally
applicable only in "``extraordinary situations, [when] the error is so
prejudicial as to cause a miscarriage of justice.'" Id. at 1092-93
(quoting Thomure v. Truck Ins. Exch., 781 F.2d 141, 143 (8th Cir. 1986)).
This is not such an extraordinary situation. We agree with the district
court that while counsel's comments may have been "somewhat inflammatory
and exhibited poor taste," they are not plain error requiring reversal.
Further, Dole's reliance on Rojas is misplaced, as he fails to mention that
the court in that case reversed itself on rehearing. Rojas v. Richardson,
713 F.2d 116, 118 (5th Cir. 1983). On rehearing, the court held that the
plaintiff's failure to object to a "Golden Rule" argument was not
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plain error. Id. The district court in the present case properly
concluded that Dole was not entitled to a new trial.
C. Dole's Other Claims
Dole raises other arguments, including a challenge to the sufficiency
of the evidence to support the verdict, and a challenge to certain jury
instructions given by the district court. We have examined these claims
and find them to be without merit.
III. CONCLUSION
For the foregoing reasons, we affirm the district court's grant of
summary judgment to defendants USA Waste and Donald Moorhead and its denial
of Dole's motion for a new trial.
A true copy.
Attest:
CLERK, U. S. COURT OF APPEALS, EIGHTH CIRCUIT.
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