Jeffrey Burdick Sr., Wanda Burdick, and Jeffrey Burdick Jr. v. Interstate Power and Light Company ( 2017 )

IN THE COURT OF APPEALS OF IOWA
No. 16-0821
Filed October 25, 2017
JEFFREY BURDICK SR., WANDA BURDICK, and JEFFREY BURDICK JR.,
Plaintiffs-Appellants,
vs.
INTERSTATE POWER AND LIGHT COMPANY,
Defendant-Appellee.
________________________________________________________________
Appeal from the Iowa District Court for Kossuth County, Nancy L.
Whittenburg, Judge.
The plaintiffs appeal the district court’s orders granting the defendant’s
posttrial motion for judgment notwithstanding the verdict, or alternatively, a new
trial. REVERSED AND REMANDED.
David J. Siegrist of Siegrist & Jones, P.C., Britt, and Thomas W. Lipps of
Peterson & Lipps, Algona, for appellants.
Mark A. Roberts and Dawn M. Gibson of Simmons Perrine Moyer
Bergman PLC, Cedar Rapids, for appellee.
Heard by Vogel, P.J., and Potterfield and Mullins, JJ.
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VOGEL, Presiding Judge.
Jeffrey Burdick Sr., Wanda Burdick, and Jeffrey Burdick Jr. appeal the
district court’s posttrial order that vacated the jury’s verdict in favor of the
Burdicks. The district court granted Interstate Power & Light Company’s motion
for judgment notwithstanding the verdict or, alternatively, granted its motion for
new trial. The Burdicks assert the district court should not have granted the
motions because there was sufficient evidence introduced at trial to support the
jury’s award of damages. Because we agree there was sufficient evidence of
damages from which the jury could have approximated the Burdicks’ lost profits,
we reverse the district court’s ruling on Interstate’s posttrial motions.
I. Background Facts and Proceedings.
In October 2013, the Burdicks filed suit against Interstate alleging
Interstate’s electrical system caused damage to the Burdicks’ dairy operation.
The Burdicks alleged Interstate was negligent in its maintenance of the system,
which allowed stray voltage to come into contact with their dairy herd causing
decreased milk production and a reduction in breeding. The Burdicks also
asserted a nuisance claim. The case proceeded to an eight-day jury trial in
December 2015. The jury returned a verdict in favor of the Burdicks, concluding
Interstate was 80% negligent and assigning 20% fault to the Burdicks.1 The jury
awarded damages in the amount of $500,000. The court entered judgment
against Interstate for $400,000 ($500,000 x 80%) on the negligence claim.
1
The jury also found Interstate created a nuisance but concluded the Burdicks did not
prove they sustained damages as a result of the nuisance.
3
Thereafter, Interstate filed a posttrial motion for judgment notwithstanding
the verdict, or in the alternative, for a new trial. Interstate alleged the Burdicks
failed to offer evidence at trial from which the jury could calculate damages for
lost profits. Alternatively, Interstate asserted it was entitled to a new trial based
on its belief the verdict was the result of a jury compromise in light of the fact it
bore no relationship to the evidence presented at trial. The Burdicks resisted the
motion asserting the jury could have reasonably concluded they had no
expenses related to the lost milk production because the jury could have believed
the Burdicks had already absorbed all expenses. The district court granted
Interstate’s motion concluding:
Plaintiffs did not present significant evidence of their
anticipated revenues. Instead, they only presented an estimate of
lost milk and a published figure for the average price of milk per
year. There was no record introduced at trial to support the
estimated lost milk production. Plaintiffs provided no testimony or
exhibits which explained the calculation of the estimated lost milk or
average price of milk. Additionally, Jeffrey Burdick Sr., in testifying
on the loss in milk production, used a published average milk price,
but no actual lost production and no actual price that Plaintiffs were
being paid. There was no explanation as to how the estimated
average price of milk related to Plaintiffs’ actual price during the
years in question. Plaintiffs only alleged that they were supposed
to produce a certain quantity of milk, which quantity was not
achieved, that milk at the time of their injury was, in general, sold at
an average price. Such a presentation fails to provide the jury with
the resources necessary to determine, with a reasonable degree of
certainty, what Plaintiffs’ gross revenues were for the relevant time
period.
Perhaps a greater omission was Plaintiffs’ lack of foundation
or argument for the jury to determine what the variable expenses
were from the deprivation of milk production. No testimony or
exhibits were provided about the actual costs Plaintiffs incurred or
avoided due to the alleged change in production. In Plaintiffs’ Brief
in Resistance, Plaintiffs argue that it was possible they had no
avoided costs. However, such a contention goes against the
testimony by their own witness—Jeffrey Burdick Sr.—and the
typical operations of a business. If there is less production, costs
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associated with the profit from the sale of the produced goods are
typically affected in some way. But Plaintiffs presented no
evidence that would indicate these added or avoided costs existed.
Plaintiffs entirely failed to address how their alleged loss of milk
production affected milking costs, feeding costs, transportation
costs, or the costs of veterinary services. While Plaintiffs now
contend the evidence presented at trial could be implied toward a
finding that all of these costs were already paid and therefore
unavoided, Plaintiffs testified they paid for the transportation of their
milk 100 miles to a dairy processing plant, bought some feed, and
used veterinary services but never testified to the specific dollar
costs of those expenses or how lack of milk production affected
those costs. The fact that Plaintiffs produced the majority of their
own feed and supplied their own land and labor does not provide a
basis for a jury to determine Plaintiffs already absorbed all costs
which would typically exist—and which they may have partially
avoided—in the production of milk on a dairy farm.
Plaintiffs seem to argue in their Resistance that they
provided a sufficient basis for a jury determination of damages
based on Jeffrey Burdick Sr.’s testimony of lost milk. However, as
discussed above, the determination of lost profits consists of the
subtraction of variable expenses from revenues. While lost milk
production does inform the determination of lost revenue, it does
not account for the entirety of the calculation of lost profits.
Plaintiffs failed to provide a sufficient evidentiary basis for the jury
to calculate with any degree of reasonable certainty the actual
amount of Plaintiffs’ lost profits resulting from Defendant’s alleged
negligence. In making the determination that Plaintiffs’ were
entitled to $500,000 in lost profits, the jury most likely confused lost
production with lost profits. Such a determination was contrary to
the jury instructions on damages under negligence; therefore,
Defendant’s Motion for JNOV should be sustained.
The district court also went on to conclude, alternatively, Interstate was entitled to
a new trial based on the fact the jury’s award lacked evidentiary support and
indicated “an unaided and uneducated guess at how much profit the dairy was
likely to realize out of their lost milk production revenue.” The court vacated the
judgment entered in favor of the Burdicks and instead entered a judgment in
favor of Interstate. The Burdicks appeal.
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II. Scope and Standard of Review.
We review the district court’s ruling on a motion for judgment
notwithstanding the verdict for correction of errors at law. Thornton v. Am.
Interstate Ins. Co., 897 N.W.2d 445, 460 (Iowa 2017).
“Our role is to decide whether there was sufficient evidence to
justify submitting the case to the jury when viewing the evidence in
the light most favorable to the nonmoving party.” To justify
submitting the case to the jury, substantial evidence must support
each element of the plaintiff’s claim. We will find evidence is
substantial if “reasonable minds would accept the evidence as
adequate to reach the same findings.”
Smith v. Iowa State Univ. of Sci. & Tech., 851 N.W.2d 1, 18 (Iowa 2014)
(citations omitted).
“The scope of our review of a district court’s ruling on a motion for new
trial depends on the grounds raised in the motion.” Channon v. United Parcel
Serv., Inc., 629 N.W.2d 835, 859 (Iowa 2001). If the motion is based on a
discretionary ground, “we review it for an abuse of discretion,” “[b]ut if the motion
is based on a legal question, our review is on error.” Id. (citation omitted). We
review the court’s ruling on a motion for a new trial based on the sufficiency of
the evidence supporting the jury verdict for abuse of discretion. Shepherd
Components, Inc. v. Brice Petrides-Donohue & Assocs., Inc., 473 N.W.2d 612,
618 (Iowa 1991).
III. Judgment Notwithstanding the Verdict.
The Burdicks assert the district court incorrectly concluded there was a
lack of evidence to support the jury’s verdict. The Burdicks claim the jury could
have determined the expenses based on the evidence submitted, particularly the
testimony provided by Interstate’s expert, Terry Smith. Smith submitted graphs
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showing the monthly gross revenue and testified as to the net income of the
Burdicks’ dairy operation, which the Burdicks assert the jury could have used to
calculate a profit/expense margin and then the jury could have used that margin
to arrive at an expense figure to deduct from the lost revenue number provided.
The Burdicks claim the district court erred in granting Interstate’s posttrial motion
because it failed to consider the evidence from Interstate’s expert.2
In defense of the district court’s posttrial ruling, Interstate notes the
calculations the Burdicks perform on appeal to arrive at the jury’s damages figure
were never proposed to the jury at trial as a way to reach a damages figure. The
only damage calculation provided to the jury was in the form of a jury instruction,
which told the jury to calculate the lost profits “by subtracting variable expenses
from revenues.” Interstate contends that while the Burdicks supplied the revenue
number ($860,000), they wholly failed to provide the jury with any variable
expense number. Interstate notes the only expense argument the Burdicks
made to the jury was during rebuttal closing argument when the Burdicks’
counsel implied there would have been no additional expenses to achieve this
additional revenue because all of the expenses had already been incurred and
paid by the Burdicks. Interstate maintains because the Burdicks did not provide
a variable expense number, submit evidence that the expense number was zero,
or provide the jury direction on how to arrive at the variable expense number, the
2
The Burdicks also assert the district court, in ruling on the posttrial motions, considered
deposition testimony of Jeffrey Burdick Sr. that was not admitted during the course of
trial. Upon our review of the district court’s decision, we note the district court quoted the
unadmitted deposition testimony but only in the portion of the ruling where the district
court was outlining the claims being made by the parties in their posttrial briefs. The
deposition testimony was not included in the analysis portion of the district court’s ruling.
We thus conclude the district court did not improperly consider the unadmitted evidence
in ruling on the motions.
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district court correctly granted the judgment notwithstanding the verdict due to
the lack of evidence to support the jury’s damages number.
The Burdicks correctly note that we must consider all the evidence, not
just the evidence offered by the plaintiffs, when determining whether substantial
evidence supports the jury’s verdict. Lathrop v. Knight, 297 N.W. 291, 292 (Iowa
1941) (“In passing upon [defendant’s] motion for a directed verdict, it was the
duty of the trial court to consider the evidence in the light most favorable to the
[Plaintiff], and to consider all of the evidence, not merely that of the [defendant].”
(emphasis added)). In addition, “damages need not be shown with mathematical
certainty.” Data Documents, Inc. v. Pottawattamie Cty., 604 N.W.2d 611, 616–17
(Iowa 2000) (citations omitted). However, the “plaintiff must at least present
sufficient evidence to allow the factfinder to make an approximate estimate of the
loss.” Id. Lost profits are recoverable as damages “so long as the profits are not
based on conjecture and speculation.” Yost v. City of Council Bluffs, 471 N.W.2d
836, 840 (Iowa 1991).
There is a distinction between proof of the fact that damages
have been sustained and proof of the amount of those damages.
Damages are denied where the evidence is speculative and
uncertain whether damages have been sustained. But “[if] the
uncertainty lies only in the amount of damages, recovery may be
had if there is proof of a reasonable basis from which the amount
can be inferred or approximated.”
Olson v. Nieman’s, Ltd., 579 N.W.2d 299, 309 (Iowa 1998) (alteration in original)
(emphasis added) (citation omitted).
The instruction submitted by the court to the jury directed them how to
calculate the Burdicks’ damages. The Burdicks did not object to this instruction,
nor do they contend on appeal that it was an incorrect statement of the law. In
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order to calculate the loss sustained by the Burdicks, the jury had to subtract the
“variable expenses from revenues.” Jeffrey Burdick Sr. supplied a single number
for lost revenue over a five-year period: $860,000. But he also testified his lost
revenue number “did not have anything to do with my cost.”
The Burdicks’ counsel implied to the jury during rebuttal closing argument
that there were no variable expenses for the Burdicks to achieve this additional
revenue, but counsel’s argument is not evidence, and the evidence that was
offered at trial did not support the argument. Jeffrey Burdick Sr. admitted to
having to purchase additional feed for his cows because the land he farmed did
not produce sufficient crops during the relevant years. If the cows were going to
produce an additional $860,000 in revenue from milk sales during the relevant
years in the absence of stray voltage, it is logical to conclude from his testimony
the cows would have required additional food to produce that milk, food that
would have been purchased on the open market due to the lack of crops on the
Burdicks’ farm. In addition, Jeffrey Burdick Sr. testified there were costs involved
in shipping milk from his farm to the dairy. Specifically, he testified it “[c]osts a
little over a dollar a hundred [pounds] to ship milk” from his farm to the dairy 100
miles away. However, he did not testify how much milk, in terms of pounds, the
$860,000 lost revenue represented.
While the Burdicks did not submit evidence of an expense figure, the jury
could have arrived at an expense figure by using the graphs submitted by
Interstate’s expert, Smith. Royal Indem. Co. v. Factory Mut. Ins. Co., 786
N.W.2d 839, 845 (Iowa 2010) (“Even the weakest cases may gain strength
during the defendant’s presentation of the case.”). Smith explained his chart,
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exhibit 505, to the jury, describing the Y axis as “dollars of monthly milk revenue”
for the Burdicks from April 2009 until early 2014. He explained he calculated “the
amount of milk sold, times the prevailing milk price by month.” Smith went on to
tell the jury about the Burdicks’ costs for feed—as indicated on their tax returns—
and his calculation of their net income for 2010-2013, which was $55,000 each
year.
In support of their claim, the Burdicks assert one of the calculations the
jury could have done included adding up the monthly gross milk sales illustrated
on Smith’s bar graph by approximating the value represented by each monthly
column. Then the jury could have divided the net income figure supplied by
Smith by the annual gross sales from the bar graph. The Burdicks claim this
calculation would have represented the profit/expense ratio for the operation,
which the jury could have then multiplied by the $860,000 lost milk production
figure to arrive at a lost profits number. In addition, the Burdicks assert there was
also evidence in the record to support costs he incurred as a result of the stray
voltage including acquiring an additional 138 cows, priced at $2500 apiece,3
based on the Burdicks’ assertion the stray voltage affected breeding, in addition
to milk production.
No matter how the jury arrived at the verdict award here, the evidence is
clearly sufficient in the record that the Burdicks sustained damages. “While it
may be hard to ascertain such a loss with preciseness and certainty, the
wronged parties should not be penalized because of that difficulty. Difficulty in
3
Interstate’s expert testified dairy cows could range in price from $2000 to $2500 each,
while Jeffrey Burdick Sr. testified they cost approximately $1750.
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ascertaining the amount of damages does not alone constitute a reason for
denying recovery . . . .” Bangert v. Osceola Cty., 456 N.W.2d 183, 190 (Iowa
1990). In addition, the data supplied by Smith provided a basis from which the
jury could have approximated Burdick’s lost profits. See Olson, 579 N.W.2d at
309 (“[If] the uncertainty lies only in the amount of damages, recovery may be
had if there is proof of a reasonable basis from which the amount can be inferred
or approximated.” (emphasis added)). We find this evidence “sufficient to
remove the issue of damages from the realm of speculation.” Bushman v.
Cuckler Bldg. Sys., a Div. of Lear Siegler, Inc., 421 N.W.2d 145, 148 (Iowa Ct.
App. 1988) (noting when “factual data [is] presented which furnish[es] a basis for
compilation of probable loss of profits, evidence of future profits should be
admitted and its weight, if any, should be left to the jury”), vacated on other
grounds by Chiafos v. Mun. Fire & Police Ret. Sys. of Iowa, 591 N.W.2d 199, 203
(Iowa 1999); see also Lund v. McEnerney, 495 N.W.2d 730, 733 (Iowa 1993)
(“The proceedings in the jury room and the manner in which the jury reaches its
verdict, in the absence of misconduct or fraud, inhere in the verdict.” (citation
omitted)).
We disagree with the district court there was not substantial evidence to
support the damages awarded by the jury, and we reverse the district court’s
grant of Interstate’s motion for judgment notwithstanding the verdict.
IV. Motion for New Trial.
The district court, alternatively, granted Interstate a new trial based on its
determination that the damages evidence was insufficient. In granting the new
trial, the district court stated:
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Here, for the reasons stated above, the jury did not have an
adequate basis with which to perform a reasonably certain
calculation of damages. Plaintiffs only provided the jury with an
estimated amount of lost milk production revenue totaling
$860,000. The jury, however, awarded Plaintiffs $500,000. No
other applicable evidence was provided to the jury to warrant
lowering the amount of lost production revenue by $360,000. . . .
The jury’s award of $500,000, therefore, lacks evidentiary support
and indicates an unaided and uneducated guess at how much profit
the dairy was likely to realize out of their lost milk production
revenue. Because of such an unsupported verdict award, the court
SUSTAINS defendant’s alternative motion for a new trial.
The Burdicks assert all of the reasons the district court was wrong to grant
Interstate’s judgment notwithstanding the verdict also apply to their claim the
district court should not have granted Interstate a new trial. They note
Interstate’s expert, Smith, provided the necessary data from which the jury could
have calculated the variable expenses associated with their estimated lost
revenue. The Burdicks claim the question of how the jury arrived at the $500,000
damage award improperly delves into the jury’s deliberative process. See
Weatherwax v. Koontz, 545 N.W.2d 522, 524 (Iowa 1996) (ruling juror affidavits
and testimony regarding how the jury reached the damages figure cannot be
admitted into evidence “to show the jury’s thinking processes were incorrect”
because such “deliberative matters” “inhere in the verdict”).
As noted above, we review the district court’s grant of a new trial in this
case for an abuse of discretion. Shepherd Components, 473 N.W.2d at 618.
“[T]he granting of a new trial will not be interfered with on appeal except in a clear
case of abuse of discretion.” Burke v. Reiter, 42 N.W.2d 907, 913 (Iowa 1950).
“[W]e are slower to interfere with the grant of a new trial than with its denial.”
Winchester v. Strottman, 535 N.W.2d 480, 481 (Iowa Ct. App. 1995). But “when
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the evidence amply supports the verdict, a trial court abuses its discretion by
granting a new trial on the ground that it would have reached a different result.
Id. As we noted above, there was sufficient evidence the Burdicks sustained
damages in this case, and there was evidence from which the jury could have
approximated the Burdicks’ lost profits. We thus conclude the district court
abused its discretion in granting Interstate’s alternate motion for a new trial. We
reverse the district court’s decision and remand for the entry of judgment in favor
of the Burdicks consistent with the jury’s verdict.
REVERSED AND REMANDED.