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

• Court: Court of Appeals of Minnesota
• Decided: January 9, 2017
• Docket: A16-390
• Status: Unpublished

Opinion

This opinion will be unpublished and may not be cited except as provided by Minn.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,

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 UNPUBLISHED OPINION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

2 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

3 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

4 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.

5 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.

6 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.

7 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.

8 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

9 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

10 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

11 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.