Dodson Livestock Co. v. United States

61 Fed. Cl. 480, 2004 U.S. Claims LEXIS 196, 2004 WL 1763220
CourtUnited States Court of Federal Claims
DecidedJuly 30, 2004
DocketNo. 05-771C
StatusPublished

This text of 61 Fed. Cl. 480 (Dodson Livestock Co. v. United States) is published on Counsel Stack Legal Research, covering United States Court of Federal Claims primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Dodson Livestock Co. v. United States, 61 Fed. Cl. 480, 2004 U.S. Claims LEXIS 196, 2004 WL 1763220 (uscfc 2004).

Opinion

OPINION

HORN, Judge.

BACKGROUND

Plaintiff Dodson Livestock Company, a Missouri corporation specializing in the production of sheep and goats, originally brought this action against the United States for an alleged breach of warranty regarding sheep purchased at the United States Meat Animal Research Center (MARC) annual auction in Clay Center, Nebraska. Company owner Dennis Dodson alleges that one ram, number 806173, which Mr. Dodson purchased at the auction, became infected with paratuberculosis despite a statement in the auction catalogue that “reliable tests” were used to screen the auction animals prior to sale. Mr. Dodson alleges that the possibility of contamination forced him to destroy his entire Texel flock, thus frustrating his plans to make Dodson Livestock a leader in the breeding of Texel sheep. The court granted defendant’s motion for summary judgment on the breach of warranty claim regarding ram number 806173. Dodson Livestock Co. v. United States, 48 Fed.Cl. 551, 556 (2001).1 The United States Court of Appeals for the Federal Circuit remanded the case to this court, finding that a genuine issue of material fact existed with regard to whether the government’s representation in the auction catalog was misleading. Dodson Livestock Co. v. United States, 30 Fed.Appx. 989, 993 (Fed.Cir.2002). The trial court subsequently held an evidentiary hearing and the parties submitted post-hearing briefs.

FINDINGS OF FACT

Dodson Livestock is a Missouri corporation specializing in the production of sheep and goats. In 1992, Dodson Livestock stated that it had a thriving cashmere goat business and had gained a reputation as a breeder of quality purebred sheep and goats. Company owner Dennis Dodson stated that he intended to develop a purebred Texel flock for sale to other breeders of both purebred and commercial flocks.

As a result of federal import restrictions, the only source of Texel sheep in the United States in 1992 was the United States Meat Animal Research Center (MARC) in Clay Center, Nebraska. On July 8, 1992, MARC published a flyer advertising the United States MARC Annual Surplus Breeding Sheep Sale auction to be held on August 14, 1992. The flyer stated: “[ejnclosed is performance or pedigree information for sale rams and Texel ewes. Full performance information will be available on all the sale ewes the day of the sale. All animals sold will be sound, healthy, guaranteed breeders.”

MARC used an independent testing laboratory, Allied Monitor, to screen the sale sheep for paratubereulosis, otherwise known as Johne’s disease, and other common maladies. Allied Monitor used an Enzyme-Linked Immunosorbent Assay (ELISA) test and an Agar Gel Immunodiffusion (AGID) test, both of which detect the presence of antibodies rather than the disease itself. The ELISA test scores range from 1.0 to 10.0. According to an Allied Monitor docu[482]*482ment titled “Guidelines: Interpretation and Use of Allied ELISA Test Results,” which is designed for cattle testing, a score of 1.0 to 1.4 is considered negative; a score of 1.5 to 2.0 is considered suspect; and a score of 2.1 to 10.0 is considered positive. Allied Monitor utilized the ELISA test as a pre-screening measure. Animals that scored positive on the ELISA test were subsequently tested with the AGID test for confirmation. Animals scoring suspect on the ELISA test were recommended to be retested in four to six months. In addition to the testing conducted by Allied Monitor, a MARC herd health veterinarian examined all animals to be offered for sale in the 1992 auction and verified that they were free of clinical signs of paratuberculosis. Any animal testing positive for paratuberculosis based on the AGID test, or manifesting clinical signs of the disease observed upon professional examination, was not offered for sale in the 1992 auction.

Potential buyers, including Dennis Dodson, the President of Dodson Livestock, were provided with a sale catalogue when they registered for the MARC auction. Copies of the catalogue also were distributed at the sale site for the buyers’ convenience. The catalogue contained detailed information for the individual sheep, such as identification number, date of birth, weight, and fertility rate. It also included a “REMARKS ” section setting out general sheep purchasing details, such as acceptable forms of payment, arrangement of subsequent transportation, and the health condition of the sheep at the time of auction. The following statement was located under the heading “Condition and Health ” in the “REMARKS ” section of the catalogue:

The MARC flocks harbor some level of Paratuberculosis (Johne’s) and Ovine Progressive Pneumonia (OPP) infections. Based on the availability of reliable tests, or observations, efforts have been made to screen sale animals against these and other maladies.

In addition, an auction supervisor read the “General ” and “Condition and Health ” sections of the sale catalogue verbatim to the buyers prior to beginning the sale. Although the buyers were not provided with the quantitative results of the screening tests, they were notified of which sheep had been withdrawn due to illness. The parties have stipulated that Dennis Dodson received the catalogue the night before the auction, but that he did not read the “REMARKS ” section.

At the auction, Dodson Livestock purchased eighteen purebred Texel sheep, including fifteen ewes and three rams. Mr. Dodson paid $83,650.00 for the sheep, including $15,500.00 for one ram identified as number 806173. Mr. Dodson was unaware that two of the eighteen sheep he purchased had tested positive on the ELISA test; however, their subsequent AGID tests had returned negative results. Ram number 806173 and five other sheep had tested “suspect” on the initial ELISA test in July, 1992, and therefore, according to the Allied Monitor protocol, were not given a confirmatory AGID test. Allied Monitor guidelines for cattle recommended that “suspect” animals be retested in four to six months. Ram number 806173 was sold to Mr. Dodson the next month after the July, 1992 test, on August 14, 1992. Therefore, at the time that Allied Monitor guidelines would have recommended retesting “suspect” cattle, the “suspect” ram already was in the possession of Mr. Dodson.

In September, 1993, approximately one year after the MARC auction, plaintiff stated that ram number 806173 began to display symptoms of an overall weakened condition that included weight loss, lack of appetite, and diarrhea. The plaintiff claims that a preliminary examination, conducted at the Department of Clinical Sciences, Veterinary Medical Teaching Hospital at Kansas State University, as well as a serology report introduced at the remand hearing, indicated that the ram suffered from paratuberculosis. After the preliminary examination, the treating veterinarian recommended that the ram be euthanized. Dodson Livestock consulted with sheep veterinarians concerning the effect that the contaminated ram may have had on other Texel sheep and cashmere goats with which it had come in contact, and, due to the risk of contamination, sold for slaughter both herds in their entirety. According to plaintiff, once an infected animal is discovered within a flock, the recommended course [483]*483of treatment is to destroy or to sell for slaughter the entire flock.

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Bluebook (online)
61 Fed. Cl. 480, 2004 U.S. Claims LEXIS 196, 2004 WL 1763220, Counsel Stack Legal Research, https://law.counselstack.com/opinion/dodson-livestock-co-v-united-states-uscfc-2004.