Buckingham Trucking, Inc. v. Excel Manufacturing, Inc., and Excel Manufacturing, Inc., Third Party v. JWR, Inc., Third Party ( 2017 )

This opinion will be unpublished and
may not be cited except as provided by
Minn. Stat. § 480A.08, subd. 3 (2016).
STATE OF MINNESOTA
IN COURT OF APPEALS
A16-0390
Buckingham Trucking, Inc.,
Respondent,
vs.
Excel Manufacturing, Inc.,
Appellant,
and
Excel Manufacturing, Inc.,
Third Party Plaintiff,
vs.
JWR, Inc.,
Third Party Defendant.
Filed January 9, 2017
Affirmed
Hooten, Judge
Ramsey County District Court
File No. 62-CV-13-8333
Michael H. Streater, W. Knapp Fitzsimmons, Briggs and Morgan, P.A., Minneapolis,
Minnesota (for respondent Buckingham Trucking)
Patrick W. Michenfelder, Chad A. Throndset, Throndset Michenfelder, LLC, St. Michael,
Minnesota (for appellant Excel Manufacturing)
Considered and decided by Larkin, Presiding Judge; Hooten, Judge; and Jesson,
Judge.
UNPUBLISHED OPINION
HOOTEN, Judge
In this appeal from a judgment entered against appellant following a jury trial,
appellant argues that the district court committed multiple reversible evidentiary errors,
erred in failing to grant appellant’s motion for a judgment as a matter of law (JMOL), and
erred in failing to impose sanctions for respondent’s alleged evidence spoliation. We
affirm.
FACTS
Appellant Excel Manufacturing, Inc., manufactures industrial recycling equipment.
JWR, Inc., is a retailer of industrial recycling equipment, and was Excel’s distributor during
the relevant time period. Respondent Buckingham Trucking, Inc., is a commercial
recycler. This dispute stems from the purchase, installation, and removal of a prototype
single-stream recycling sorter (the machine), manufactured by Excel and sold by JWR to
Buckingham.
In November 2012, based on a written warranty that the machine would process 10
tons of recycling per hour, Buckingham agreed to purchase the machine from JWR. The
machine was to be installed in January 2013, but was delivered late, and was not installed
at Buckingham’s facility by JWR until mid-April 2013. For a few weeks after installation
the machine worked properly, but it soon began to have problems.
From early May 2013 until its ultimate shutdown in late June 2013, the machine
underwent several major repairs and did not operate for more than three days
consecutively. When the machine was broken down, Buckingham was forced to divert
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incoming materials to other facilities. After the machine was permanently shut down,
Buckingham manually sorted the incoming recycling using the conveyor belt on the
machine.
Once Excel determined that the machine was irreparable, Excel decided that it
would either remove the machine to repair it off-site or provide a new machine for
Buckingham. Neither of these remedies occurred, and as a result, Buckingham purchased
a replacement sorter from a competitor of Excel in the fall of 2013. To make room for the
new sorter, Buckingham needed to dissemble and remove the machine. The machine was
removed by JWR, and stored outside of Buckingham’s facility.
In the fall of 2013, Buckingham reached a settlement with JWR for all claims of
damages resulting from the purchase and use of the machine. In December 2013,
Buckingham sued Excel for breach of the November 2012 warranty. In its answer, Excel
impleaded JWR as a third-party defendant, but all claims between Excel and JWR were
settled before trial.
The case went to trial in September 2015, and the jury returned a special verdict,
finding that Buckingham suffered $346,400 in damages and that Excel was 100% at fault
for those damages. The district court entered judgment in accordance with the jury’s
verdict. Excel now appeals.
DECISION
I.
Before Buckingham’s claims were submitted to the jury, Excel moved for JMOL,
pursuant to Minn. R. Civ. P. 50.01, arguing that Buckingham’s case must fail because it
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did not produce the original warranty at trial. Excel argues that the district court erred in
failing to grant its motion for JMOL because Buckingham’s failure to offer the original
warranty at trial violated the “best evidence rule.” We disagree.
We review the denial of a rule 50 motion for JMOL de novo, applying the same
standard as used by the district court. Bahr v. Boise Cascade Corp., 766 N.W.2d 910, 919
(Minn. 2009). Under rule 50.01, a district court may grant JMOL if “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.”
“The . . . ‘best-evidence’ rule is merely a name for a rule which requires the contents
of a writing to be proved by the writing itself if it is available.” Buffalo Ins. Co. v. United
Parking Stations, Inc., 277 Minn. 134, 138, 152 N.W.2d 81, 84 (1967). Minnesota has
codified the “best evidence rule” in Minn. R. Evid. 1002 & 1003. Rule 1002 states that
“[t]o prove the content of a writing, recording, or photograph, the original writing,
recording, or photograph is required, except as otherwise provided in these rules or by
Legislative Act.” Rule 1003 provides, in pertinent part, that “[a] duplicate is admissible to
the same extent as an original unless . . . a genuine question is raised as to the authenticity
of the original.” During trial, Excel objected to the introduction of a photocopy of the
warranty, arguing that the best evidence rule requires the true original to be introduced.
We conclude that the best evidence rule does not apply here. During the relevant
discovery period, Buckingham did not have custody of the true original. The true original
was in the custody of JWR, through its attorney, until it was released to Buckingham days
before the trial. The copy entered into evidence was a photocopy of the warranty document
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that was kept in the regular course of business by Buckingham. Photocopies kept in the
regular course of business are considered by statute to be originals for purposes of
evidence. Minn. Stat. § 600.135 (2016).
As it provides that a photocopy kept in the regular course of business is “as
admissible in evidence as the original itself,” section 600.135 clearly fits within the
Legislative Act exception in rule 1002. By the plain language of rule 1002 and section
600.135, Buckingham introduced an original, not a duplicate, of the warranty document
that was provided and kept during the regular course of business.
Further, while Excel objected to the photocopy being admitted based on a challenge
to the authenticity of the signature on the warranty, this is not the type of authenticity
challenge contemplated by rule 1003. As the committee comment to rule 1003 makes
clear, the rule seeks to prohibit introduction of copies that are not exact duplicates of the
original. Minn. R. Evid. 1003 cmt. (“With the development of accurate and convenient
reproducing systems much of the concern about the admission of duplicates is eliminated.
. . . [W]here the accuracy of a duplicate is not contested it makes little sense to prohibit the
introduction of a duplicate.”). Excel has not made any claim that the signature on the copy
produced by Buckingham is not identical to the signature on the true original. Therefore,
rule 1003 does not apply here, and the district court properly concluded that Excel was not
entitled to JMOL.
II.
In a related argument, Excel asserts that the district court erred by not granting Excel
a continuance to test the ink on the original warranty. We disagree.
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Excel made an emergency motion for a continuance on Friday, September 18, 2015
when trial was scheduled to begin on the morning of Monday, September 21, 2015. The
district court denied Excel’s motion. “The granting of a continuance is a matter within the
discretion of the trial court and its ruling will not be reversed absent a showing of clear
abuse of discretion.” Dunshee v. Douglas, 255 N.W.2d 42, 45 (Minn. 1977).
Excel argued to the district court that it was “absolutely blind-sided” by an email
from Buckingham’s attorney on Wednesday, September 16, 2015, informing Excel that
Buckingham was now in possession of the true original warranty. 1 The district court denied
Excel’s motion based on evidence that Excel had knowledge of the location of the true
original warranty 17 months before the date of trial and failed to serve a request under
Minn. R. Civ. P. 34 for the true original warranty when Buckingham produced a
photocopy.2
The record contains evidence that Excel knew of the location of the true original
warranty as of February 2014. Excel never specifically requested that Buckingham
produce the true original warranty, instead relying on its belief that because of the “best
evidence rule,” Buckingham had the burden of producing the true original instead of a
photocopy kept in the regular course of business. As discussed above, this is an erroneous
understanding of the admissibility of photocopies under Minnesota law, because a
1
The true original had been in possession of JWR until that point.
2
It is also noteworthy that the district court, when considering this motion for a
continuance, observed that if Excel’s theory of the case was that the warranty was a forgery,
that theory could be proved just as effectively with a photocopy of the warranty as with the
true original.
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photocopy kept in the regular course of business is admissible in evidence as an original.
See Minn. Stat. § 600.135.
In sum, Excel knew the exact location of the original warranty and had well over a
year to request that Buckingham produce it. Even though Excel claims that the true original
warranty was the “critical document” to their defense, Excel consciously chose not to
specifically request that document, instead relying on a belief that Buckingham had a duty
to produce the true original, a belief based on an erroneous understanding of the rules of
evidence. Accordingly, we conclude that the district court’s denial of Excel’s motion for
a continuance was not a clear abuse of discretion.
III.
Excel next challenges two evidentiary rulings. Generally, a district court has “broad
discretion over the admission and exclusion of evidence and the [district] court’s rulings
should not be disturbed by a reviewing court unless the rulings constitute a clear abuse of
discretion or are based on an erroneous view of the law.” Bergh & Misson Farms, Inc. v.
Great Lakes Transmission Co., 565 N.W.2d 23, 26 (Minn. 1997). Further, for a new trial
to be granted as a result of erroneous evidentiary rulings, a party must demonstrate that it
was prejudiced by that error. Kroning v. State Farm Auto. Ins. Co., 567 N.W.2d 42, 46
(Minn. 1997).
a. Evidence of Misuse of the Machine
First, Excel argues that the district court erred by refusing to allow Excel to offer
testimony relating to Buckingham’s possible misuse of the machine. We disagree.
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In July 2015, as a sanction for repeated discovery violations, the district court
precluded Excel from offering expert testimony as to the design and manufacture of the
machine, pursuant to Minn. R. Civ. P. 37.02(b). Rule 37.02(b) provides, in relevant part:
If a party . . . fails to obey an order to provide or permit
discovery . . . the court in which the action is pending may
make such orders in regard to the failure as are just, and among
others the following:
....
(2) An order refusing to allow the disobedient party to support
or oppose designated claims or defenses, or prohibiting that
party from introducing designated matters in evidence;
We consider five factors in evaluating whether a district court abused its discretion in
imposing discovery sanctions: (1) whether the district court set a definitive deadline; (2)
whether the district court gave warnings for non-compliance; (3) whether the discovery
violation was an isolated event or part of a larger pattern of conduct; (4) whether the
violation was willful or without justification; and (5) whether the opposing party has
demonstrated prejudice. Frontier Ins. Co. v. Frontline Processing Corp., 788 N.W.2d 917,
923 (Minn. App. 2010), review denied (Minn. Dec. 14, 2010).
These sanctions stem from Excel’s repeated failures to meaningfully respond to
Buckingham’s request for production of the design specifications of the machine. Excel’s
response to this request was first due in November 2014. In January 2015, Buckingham
filed a motion to compel, which was granted, along with sanctions. Given that Excel had
already been sanctioned, it cannot argue that it was not on notice that the district court
could impose additional sanctions.
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Excel was given until seven days after the entry of a protective order that the parties
agreed to submit to produce the design specifications of the machine. After Excel’s
“unreasonable delay” in submitting a protective-order stipulation, the district court issued
a second order, ordering Excel to produce the design specifications by February 19, 2015,
with or without the protective order. Excel produced some drawings on February 19, 2015,
but none of the drawings were of the quality necessary for proper design analysis by
potential expert witnesses. Instead, the district court noted that the drawings Excel did
produce “have more in common with a middle school geometry problem than with the
[computer-aided design] files common in warranty and products cases.” Thus, the first
two factors, a definitive deadline and warnings for non-compliance, weigh in favor of the
appropriateness of a discovery sanction.
The record is replete with evidence that this discovery violation was not an isolated
incident. Excel was ordered to pay the costs that Buckingham or JWR incurred in bringing
motions to compel discovery no less than three times during the course of this litigation.
The district court considered this trend in its decision to authorize sanctions, concluding
that “Excel has repeatedly and without justification obstructed discovery in this case. Such
obstruction, at this stage, has now surpassed the [c]ourt’s ability to remedy with a sanction
less severe than that sought by Buckingham.” This evidence demonstrates that the third
and fourth factors, pattern of conduct and violations that are willful or without justification,
weigh in favor of the appropriateness of a discovery sanction.
The final factor, prejudice to Buckingham, was examined at length by the district
court. The district court determined that if the designer of the machine were permitted to
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testify on behalf of Excel without providing Buckingham with proper design specifics,
Buckingham could not challenge Excel’s claim that the machine was designed and
manufactured properly and that any issue with the machine was due to Buckingham’s
misuse, thus giving Excel “favorable, but unrebuttable, expert opinions.” Allowing
favorable but unrebuttable expert testimony would clearly prejudice Buckingham and
JWR.
We agree with the district court that all five factors weigh in favor of discovery
sanctions, and we conclude that the district court did not abuse its discretion in prohibiting
Excel from entering evidence on possible misuse of the machine by Buckingham.
b. Delay Damages
Next, Excel argues that the district court erred by allowing Buckingham to introduce
evidence of damages related to delay in delivery when Buckingham only pleaded a breach-
of-warranty claim. Excel asserts that a breach-of-warranty claim does not contemplate
these damages. Because Excel cannot demonstrate prejudice, we need not address this
argument.
Buckingham presented evidence of its calculations of its lost revenues and
incremental costs due to the machine failure. This evidence was broken out by month, and
included calculations for January to April 2013, the four months between the time Excel
allegedly agreed to deliver the machine and the ultimate delivery date. Buckingham sought
$9,400 in incidental damages for this four-month period and $96,400 for the remaining
relevant period. The jury found Buckingham had sustained $96,400 in incidental damages.
Buckingham sought approximately $390,000 in consequential damages for the time period
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after the machine was delivered, and the jury found total consequential damages of
$250,000.
By finding that Buckingham had incurred incidental damages in an amount that
matched Buckingham’s post-delivery claim to the dollar and finding consequential
damages in an amount less than Buckingham’s post-delivery total, the jury apparently
rejected Buckingham’s claim that it had suffered delay-related damages. Accordingly, any
error in allowing Buckingham to present evidence of delay-related damages was harmless,
and Buckingham is not entitled to a new trial. See Minn. R. Civ. P. 61 (requiring reviewing
court to “disregard any error or defect in the proceeding which does not affect the
substantial rights of the parties.”).
IV.
Before trial, Excel moved for sanctions due to Buckingham’s and JWR’s alleged
destruction of the machine. In October 2014, the district court held an evidentiary hearing
to determine if sanctions were appropriate for Buckingham’s removal and outdoor storage
of the machine. The district court determined sanctions were not appropriate because Excel
offered insufficient expert testimony to show spoliation of the machine as evidence. Excel
argues this denial was reversible error. We disagree.
We review a district court’s decision to impose sanctions for an abuse of discretion.
Patton v. Newmar Corp., 538 N.W.2d 116, 119 (Minn. 1995).
At Buckingham’s request, JWR removed the machine by disassembling it in reverse
order of the manner in which it was constructed. The owner of JWR testified that JWR
used special equipment to remove the machine, and any damage done by its disassembly
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was superficial. Although the machine was stored outside over a full winter, JWR was
able to inspect the machine the next spring, and start each of the motors with an
independent generator. Finally, and most importantly, the forensic engineer Excel
introduced as an expert witness at the evidentiary hearing had not yet inspected the
machine, despite having four months between the time of the district court order giving
Excel complete access to the machine and the evidentiary hearing. As a result, Excel could
only offer conjecture as to the consequences of the disassembly and storage.
Because the record contains facts indicating that Buckingham did not engage in any
spoliation of evidence relating to the machine, we conclude that the district court did not
abuse its discretion in declining to impose sanctions against Buckingham.
V.
Finally, Excel argues the district court erred in denying Excel’s motion for a new
trial based on the prejudicial effect of cumulative trial errors. “In regards to a motion for
a new trial, [appellate courts] will not set aside a jury verdict on an appeal from a district
court’s denial of a motion for a new trial “unless it is manifestly and palpably contrary to
the evidence viewed as a whole and in the light most favorable to the verdict.” Navarre v.
S. Washington Cty. Sch., 652 N.W.2d 9, 21 (Minn. 2002) (quotations omitted). As we have
found no merit in any of Excel’s claims of error, we accordingly conclude that the district
court did not err in denying Excel’s motion for a new trial.
Affirmed.
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