Cavalier Metal v. Johnson Controls ( 2002 )

IN THE COURT OF APPEALS OF TENNESSEE
AT JACKSON
SEPTEMBER 17, 2002 Session
CAVALIER METAL CORPORATION v. JOHNSON METAL CONTROLS
Direct Appeal from the Circuit Court for Henderson County
No. 97013 C. Creed McGinley, Judge
No. W2001-01057-COA-R3-CV - Filed May 28, 2003
Cavalier Metal Corporation sued Johnson Controls, Inc. for a breach of contract. A jury awarded
Cavalier $2,029,294.00 in damages. At its motion for new trial, Johnson Controls, Inc. presented
two juror affidavits alleging that another juror who had worked at Johnson Controls, Inc. imparted
to the jury her knowledge of the very facts and issues at dispute in the trial. JCI had challenged this
juror for cause during voir dire, but its motion had been denied. The trial court held the affidavits
inadmissable under Tennessee Rule of Evidence 606(b). For the following reasons, we reverse and
remand for a new trial.
Tenn. R. App. P. 3; Appeal as of Right; Judgment of the Circuit Court Reversed and
Remanded
ALAN E. HIGHERS, J., delivered the opinion of the court, in which W. FRANK CRAWFORD , P.J., W.S.,
and DAVID R. FARMER , J., joined.
Paul A. Alexis, Thor Y. Urness, Nashville, TN, for Appellant
Vicki H. Hoover, Paris, TN, for Appellee
OPINION
Facts and Procedural History
This is a breach of contract dispute. Johnson Controls, Inc. (JCI) entered into a contractual
relationship with Cavalier Metal Corporation (Cavalier) for the plating and finishing of metal parts.
The parts were returned to JCI for assembly into components that were sold to automobile
manufacturers. The parties first entered into a contract in January of 1990, followed by a November
1990 agreement and a March 1993 contract. The parties ended their relationship in December of
1994 when Cavalier stopped work and went out of business. Cavalier subsequently sued JCI alleging
various breaches of the parties’ contract. JCI claimed that only the 1993 contract was put into
dispute, while Cavalier claimed that JCI breached both the November 1990 contract and the 1993
contract. The trial court instructed the parties that the case would include any breaches of contract
after May 1990.
The November 1990 contract provided that Cavalier would perform all of JCI’s Lexington,
Tennessee plant’s requirements for plating and metal finishing. The 1993 agreement likewise
provided that Cavalier was to perform all of the plating required by JCI’s Lexington, Tennessee
plant. Cavalier also had an exclusive right to do any other plating and metal finishing required by
the Lexington plant if the parties could agree on the price. No fixed amount or quantity of parts was
specified. Cavalier had a right to request an annual increase to recover any increases in its cost. The
contract replaced the previous contract and had an integration clause requiring any modifications to
be made in writing.
Cavalier claimed that JCI breached the November 1990 and the 1993 contracts by sending
2.3 million dollars worth of plating business to DeWayne’s of Lexington from 1990 through March
of 1993. Cavalier also claimed that JCI began making modifications to the way in which the two
companies did business. JCI began to reject a substantial number of parts for quality reasons. JCI
later redefined the way in which parts were classified as defective, changing from a method where
individual parts were judged defective on the assembly line to a method where a sample was taken
from a container and if defective parts where found, the entire container was rejected. Cavalier
claimed that these changes and other demands substantially increased its costs and that JCI refused
Cavalier’s requests to recoup these costs. The increased costs eventually forced Cavalier to cancel
the contract, and, because JCI was Cavalier’s only customer, to go out of business. Cavalier blamed
the change in the relationship on its inquiry into whether the parts should have been put through a
costly process called “hydrogen embrittlement” which would relieve the stress on the metal caused
by the plating process making the parts less likely to fail. JCI defended its actions saying that
Cavalier’s performance under the contract was unacceptable as to quality, dependability, and
timeliness.
After a lengthy trial, a jury found that JCI had breached the contract and awarded Cavalier
$2,029,294.00 in damages. At a hearing on its motion for a new trial, JCI raised the issue of jury
misconduct involving juror Terri Ricketts (“Juror Ricketts” or “Ms. Ricketts”). Ms. Ricketts was an
employee of JCI during the time involved in the dispute. JCI had fired Ms. Ricketts for absenteeism.
(Id.) Ms. Ricketts was placed on the jury apparently after JCI had exhausted its preemptory
challenges. JCI challenged Ms. Ricketts for cause but the motion was denied. JCI then requested that
Juror Ricketts be questioned outside the presence of the other jurors, but that request was also
denied. JCI provided affidavits of two jurors who say that during deliberations, Ms. Ricketts
informed them during a “smoking break” that she worked for JCI during the time period involved
in the suit. Ms. Ricketts told the other jurors that she saw parts coming in from Cavalier to JCI and
that they were of no worse quality than parts from other suppliers. She also told the other jurors that
she knew that JCI had breached the contract first by sending parts out to other companies for plating.
JCI’s motion for a new trial was denied. JCI timely filed an appeal to this Court and presents the
following issues for our review:
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I. Whether the trial court erred by failing to grant a new trial where a juror who
worked for the appellant during the period in question presented extraneous
prejudicial information regarding her observations of the facts at issue during
the jury’s deliberations, the appellant’s challenge for cause of such juror
being denied.
II. Whether the trial court erred by providing supplemental instructions to the jury in
response to questions from the jury which were not disclosed to the parties until the
jury rendered its verdict and where one of the instructions was substantively
erroneous.
III. Whether the trial court erred by permitting the plaintiff to seek damages not directly
related to the parties’ 1993 contract, by permitting the plaintiff to claim damages for
the value of the plaintiff’s business (or lost share or enterprise value) where lost
profits was the proper measure of damages, by failing to perform its judicial task of
interpreting the parties’ 1993 contract, by permitting the plaintiff to seek “lost
profits” that were not identified to any specific alleged breach and which were
duplicative of other claims, and by failing to use a special verdict form submitted by
the appellant which would have prevented the jury’s award of such improper
damages.
IV. Whether the trial court erred by admitting highly prejudicial and irrelevant evidence
regarding “hydrogen embrittlement,” including expert testimony which did not meet
the standards for admissibility set forth in McDaniel v. CSX Transportation, where
the plaintiff admitted that it had suffered no damages related to hydrogen
embrittlement and the trial court ultimately recognized that hydrogen embrittlement
was “not relevant” to this breach of contract case.
V. Whether the trial court abused its discretion by awarding the plaintiff prejudgment
interest in the amount of $912,356.77, where, inter alia, the plaintiff omitted a claim
for prejudgment interest from its complaint and the plaintiff was dilatory in pursuing
this action.
Law and Analysis
Juror Misconduct
JCI presented two juror affidavits at the hearing on its motion for new trial. In regard to
Juror Ricketts, Juror Diane Grissom stated the following:
One of the jurors, Ms. Ricketts, told us during our deliberations that she worked for
Johnson Controls during that time period, referring to the events the trial was about.
She also said she saw the parts going to and coming from Cavalier and that she knew
what condition everything was in at Johnson Controls and that Johnson Controls was
in violation of the contract first. Ms. Rickets had mentioned this information to me
during a smoking break on the second day of our deliberations. I asked her to tell the
rest of the jury about this information during our deliberations shortly after this break
was over and we were back in deliberations, which she did. Ms. Ricketts also told
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me during the smoking break that she knew - because she worked at Johnson
Controls - that Johnson Controls was sending parts to platers other than Cavalier.
Juror Patsie Ann Schantz, in her affidavit, gave a similar account:
One of the jurors, Ms. Ricketts, said to me and one or two other jurors during a
smoking break that she had worked at Johnson Controls in a position where she saw
incoming parts from Cavalier and others during that time, referring to the events the
trial was about, and that Cavalier’s quality was really no worse than anyone else’s
quality. Later during deliberations someone asked Ms. Ricketts if she had worked
at Johnson Controls, when she worked there and how she viewed Cavalier’s quality.
Ms. Ricketts said in response that yes, she had worked at Johnson Controls, that she
had worked there during the time period covered in the lawsuit, and repeated that she
thought Cavalier’s quality was no worse than anyone else’s quality.
Both jurors stated in their affidavits that they were influenced by Juror Ricketts’ information and felt
that other jurors were as well.
It is unclear from the record exactly what the trial judge ruled on the admissibility of the
above portions of the juror’s affidavits. The judge at one point stated from the bench that “the
affidavits, by far and away the majority if not all of the that material, is inadmissible under that rule
[Rule 606(b)] because there are clearly statements in that rule that – such as the jury was at a certain
point. Matters such as this are absolutely inadmissible.” The trial judge stated he had subpoenaed
the jury foreman on his own motion and then called the foreman of the jury to the stand where the
following exchange took place:
The Court: I’ve asked you to join us by means of subpoena. This will not be an
interrogation. I will be addressing you, and my questions will be
quite limited as to whether or not the jury followed their oath that I
gave them, that they were to try this case and base – and render a fair
and impartial verdict based upon the evidence presented and the law.
And as a result of that, I’m not going into a whole lot of auxiliary
matters because I think they’re inadmissible and they’re improper,
and it’s an improper invasion upon the province of that jury and their
internal discussions. Are you following me?
Mr. Franklin: Yes, sir.
The Court: My first question to you, sir, is: In this particular case, the verdict that
was returned, Cavalier Metals vs. Johnson Controls Corporation, was
that verdict, in fact, based upon the evidence that was presented
during the case?
Mr. Franklin: Yes, sir.
The Court: Was it also based upon the law that was presented to the jury that was
both read to you and a written copy went to the jury room?
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Mr. Franklin: Yes, sir.
The Court: Were there any outside influences that affected the jury’s decision in
this case?
Mr. Franklin: No.
The Court: And is it your testimony today under oath that that verdict was based
upon the evidence and the law that was presented in this case and no
outside prejudicial information?
Mr. Franklin: Yes, sir.
The Court: Thank you very much. You can step down and you may be excused.
The trial court, in a later written order denying the motion for new trial, found that the verdict
was based on the evidence and law presented at the trial and was not based on a quotient or gambling
verdict.
When a party alleges jury misconduct requiring a new trial, it must have admissible evidence
to support its allegation. Caldararo v. Vanderbilt Univ., 794 S.W.2d 738, 741 (Tenn. Ct. App.
1990). The admissibility of juror affidavits such as the ones presented in this case is governed by
Tennessee Rue of Evidence 606(b). See id. at n.2. This rule states:
(b) Inquiry Into Validity of Verdict or Indictment. Upon an inquiry into the validity
of a verdict or indictment, a juror may not testify as to any matter or statement
occurring during the course of the jury's deliberations or to the effect of anything
upon any juror's mind or emotions as influencing that juror to assent to or dissent
from the verdict or indictment or concerning the juror's mental processes, except that
a juror may testify on the question of whether extraneous prejudicial information was
improperly brought to the jury's attention, whether any outside influence was
improperly brought to bear upon any juror, or whether the jurors agreed in advance
to be bound by a quotient or gambling verdict without further discussion; nor may
a juror's affidavit or evidence of any statement by the juror concerning a matter about
which the juror would be precluded from testifying be received for these purposes.
(emphasis added).
The emphasized portion of the above quoted rule delineates the three circumstances in which
evidence from a juror may be admitted to impeach a verdict, namely when there has been “(1)
extraneous prejudicial information, (2) outside influence, or (3) antecedent agreements to be
bound by a quotient or majority result.” Caldararo, 794 S.W.2d at 742. By limiting inquiry to
these areas, the rule not only “precludes inquiries into the jury’s deliberative process,” it also
“ensures that jurors will not be guarded in their deliberations for fear of later scrutiny by others”
and prevents jurors with minority views from later recanting their vote. Id. Tennessee courts
have furthered these policies by drawing a “distinction between extrinsic and intrinsic influence”
on the jury. Id. Extrinsic influences such as “exposure to news items[,] . . . consideration of
facts not admitted in evidence[,] . . . and communications with non-jurors about the case” are
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influences that, if found prejudicial, warrant a new trial. Id. (citations omitted). Intrinsic
influences such as “discussion among jurors[,] . . . intimidation or harassment of one juror by
another[,] . . a juror’s personal experiences not directly related to the litigation, and . . . a juror’s
subjective thoughts, fears, and emotions” are not reason enough for a new trial. Id. (citations
omitted). The Caldararo court continued:
Jurors must render their verdict based on the evidence introduced at trial.
....
It is virtually impossible to shield jurors from every contact or influence that
might theoretically affect their vote. Thus, it would be unreasonable, and perhaps
unwise, to expect juries to be completely sterilized and free of any external
influences. The jurors various attitudes, philosophies, experiences and
backgrounds are the “very human elements that constitute one of the strengths of
the jury system.
Accordingly, jurors are not required to be completely ignorant about a case, and a
verdict will not be overturned because of jurors’ generalized knowledge of the
parties or of some other aspect of the case. A juror’s personal experiences
unrelated to the litigation are not external information. However, a juror’s
personal experiences directly relating to the parties or events directly in the
litigation may be.
Id. at 743-44 (citations omitted) (emphasis added).
In the case sub judice, we are presented with a juror with personal knowledge about the
specific facts at issue in the trial. We must first decide whether the information was “extraneous”
information for the purposes of Rule 606(b). The information that Juror Ricketts imparted to the
other jurors does not neatly fit into the categories outlined by the Caldararo court. It is not an
“extrinsic influence” such as a newspaper article or third-party contact with a juror. However, under
facts different from the ones at hand, it might be considered as “facts not admitted in evidence,” but
as Cavalier argues, the information imparted to the jury by Juror Ricketts outside of the courtroom
was presented in the courtroom by witnesses on the stand, as was contradictory information. The
information given to the jury by Juror Ricketts also does not fit neatly into the category of “intrinsic
influence” because, although it was a “discussion among jurors,” it was directly related to the
litigation. It also was not “intimidation or harrassment” or a “juror’s subjective thoughts, fears, or
emotions.”
As stated above, the Caldararo court acknowledged that “a juror’s personal experiences
directly relating to the parties or events in the litigation may be” external or extraneous information.
As one commentator stated regarding this portion of the Caldararo opinion, “the use of [juror
provided] information could be inquired into if the data related to the specific facts of the case.” Neil
P. Cohen, et al., TENNESSEE LAW OF EVIDENCE § 6.06[3] (4th ed. 2000). This is in accord with other
jurisdictions who have considered this narrow issue. The case cited by the Caldararo court for the
above proposition states “if a juror’s past experiences were directly related to the litigation, as the
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affidavits filed in the district court claimed, the discussion of those experiences would constitute
extraneous information that could be used to impeach a jury’s verdict.” Hard v. Burlington Northern
Railroad Company, 870 F.2d 1454, 1462 (9th Cir. 1989). The Sixth Circuit has stated “an
extraneous influence on a juror is one derived from specific knowledge about or a relationship with
either the parties or their witnesses. This knowledge is such that it taints the deliberations with
information not subject to a trial’s procedural safeguards.” United States v. Herndon, 156 F.3d 629,
636 (6th Cir. 1998). Most recently, the Ninth Circuit has held that “[a] juror’s personal knowledge
of specific information concerning the defendant or the defendant’s alleged crime constitutes
impermissible extrinsic evidence.” See Mancuso v. Olivarez, 292 F.3d 939, 950 (9th Cir. 2002).
The Alaska Supreme Court1, after a review of the polices underlying Rule 606(b) and case law from
other jurisdictions stated “[w]e agree with the majority view that pre-existing knowledge about the
case or the defendant can constitute extraneous prejudicial information under Rule 606(b).” Titus,
963 P.2d at 262. The Tennessee Court of Criminal Appeals has held that “[e]xtraneous information
includes a juror’s personal knowledge of an accused’s prior criminal record or arrest.” State v.
Dunlap, No. 02C01-9801-CC-00009, 1998 Tenn. Crim. App. LEXIS 985, at *5-6 (Tenn. Ct. Crim.
App. Sept. 21, 1998) ; But see State v. Crenshaw, 64 S.W.3d 374, 393-94 (holding that, absent
evidence to the contrary, defendant having accepted jurors with pre-existing knowledge of prior
record and reputation at voir dire could not claim such information was extraneous2). We think that
the reasoning and policies underlying these decisions are sound. Where, as here, a juror has first-
hand knowledge of the facts and issues in dispute, we find that the injection of this knowledge into
jury deliberations constitutes extraneous information for the purposes of Rule 606(b).
When a juror brings personal knowledge of the very facts at issue in the trial into the jury’s
deliberations, the problems that arise are obvious. The juror is in essence becoming an unsworn
witness whose testimony is not subject to the safeguards provided by the adversarial system to assess
its trustworthiness. See Olivarez, 292 F.3d at 950 (“potential for prejudice is heightened when a
juror interjects into the deliberations ‘objective extrinsic facts’ regarding the accused because that
1
Alaska ’s Rule o f Evidence 606 (b) is sub stantially similar to T ennessee R ule of E vidence 60 6(b). Alaska’s
rule reads as follows:
(b) Inquiry Into Validity of Verdict or Indictment. -- Upon an inquiry into the validity of a verdict or
indictment, a juror may not be questioned as to any matter or statement occurring d uring the course
of the jury's deliberations or to the effect of any matter or statement upon that or any other juror's mind
or emotions as influencing the juror to assent to or dissent from the verdict or indictment or concerning
the juror's mental processes in connection therewith, except that a juror may testify on the question
whether extraneous prejudicial information was improperly brought to the jury's attention or whether
any outside influence was imp roperly bro ught to bear upon any juror. Nor may a juror's affidavit or
evidence of any statement by the juror concerning a matter about which the juror would be precluded
from testifying be received for these p urpo ses.
2
We note that such is not the case here. JCI moved to strike Juror Ricketts for cause, and was denied. JCI
app arently had no peremp tory challenges left at this stage of jury selection. JCI also moved for further questioning of
Juror Ricketts outside the presence of the other jurors, and was denied. We do not think it can be said that JCI accepted
Juror Ricketts, and thus must distinguish the Crenshaw decisio n based on the facts before us.
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juror becomes an unsworn witness not subject to either confrontation or cross examination.”); Titus,
963 P.2d at 261 (“Concerns about the accuracy and fairness of verdicts are implicated when the jury
considers evidence that has not been presented in open court and thus has not passed the test of
adversarial challenge.”). This idea is not new to Tennessee Jurisprudence.3 This lack of testing
through the adversarial process leaves the other jurors presented with the extraneous evidence to deal
with the information on their own and as the Alaska Supreme Court stated:
juror knowledge about the specific facts of the alleged crime itself is more likely than
general knowledge to lead to inaccurate verdicts because it is unlikely to be tested by
other jurors during deliberations. See Wright & Gold, supra, § 6075, at 452.
Because not all jurors will have access to specific facts about the crime and the
defendant’s connection thereto, those who purport to have such information may be
believed without debate, even if their information is inaccurate.
Id. at 263.
Having decided that the information presented by Juror Ricketts to the other jurors is
extraneous information for the purposes of Rule 606(b), we must next decide whether such
information was prejudicial and, if so, whether it had an influence on the jury. See Patton v. Rose,
892 S.W.2d 410, 414 (Tenn. Ct. App. 1994) (finding that while newspaper article about topic related
to trial was “clearly” extraneous information, the information was not prejudicial to the plaintiff and
that there was no evidence that it affected the jurors in their deliberations). We find the nature of
the information provided by Juror Ricketts is prejudicial. There was testimony from the stand from
both sides about the very same matters Juror Ricketts commented about, but we think that Juror
Ricketts’ comments had the effect of putting a thumb on the scale in favor of Cavalier. The
likelihood that the other jurors would place great weight on the knowledge of one of their own is
high. Furthermore, both of the affidavits submitted in this case state that those two jurors were
influenced by the comments and that they felt the other jurors were as well. We find the information
was both prejudicial and that it influenced the jury.
“Pursuant to Rule 606(b) a juror may testify on the question of whether extraneous
prejudicial information was improperly brought to the jury’s attention without doing violence to the
importance of the inviolate nature of their deliberations because litigants are absolutely entitled to
verdicts free of extraneous prejudicial information.” Terry v. Plateau Electric Cooperative, 825
S.W.2d 418, 423 (Tenn. Ct. App. 1991). We are mindful of the “inviolate nature” of jury
deliberations, but the particular facts of this case before us show a juror with pre-existing knowledge
3
See e.g., Booby v. State, 12 Tenn. 111 (Tenn. 1833). In Booby, a new trial was granted to a criminal
defendant charged with receiving stolen pro perty after two ju rors p resented affidavits stating that another juror had told
them during deliberations tha t the de fendant had previously stolen a ho g. Id. at 113. The affida vits stated that this
information influence d the jury’s guilty verd ict. Id. at 114. The Tennessee Supreme Court stated “[t]his verdict is too
palpably vicious to require the citing authorities to prove that it ought not to stand. W hat the juror knew of the defendant
ought to have been proposed and offered in court, and if admissible, there rendered, to be observed up on by the
defendant’s counsel.” Id. at 115.
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of the facts and issues at the heart of trial relating this knowledge to other jurors. This information
that JCI violated the contract first, and that Cavalier’s quality was no different than any of JCI’s other
suppliers is extraneous, prejudicial information. As stated above, JCI is absolutely entitled to a
verdict free of such information, and, thus, we must remand for a new trial.
Conclusion
For the reasons stated above, we reverse and remand this case for a new trial. All other
issues are pretermitted. Costs are taxed to Cavalier Metal Corporation and its surety, for which
execution may issue if necessary.
___________________________________
ALAN E. HIGHERS, JUDGE
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