Gurnsey v. Conklin Co., Inc.

751 P.2d 151, 230 Mont. 42
CourtMontana Supreme Court
DecidedMarch 31, 1988
Docket87-70
StatusPublished
Cited by15 cases

This text of 751 P.2d 151 (Gurnsey v. Conklin Co., Inc.) is published on Counsel Stack Legal Research, covering Montana Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Gurnsey v. Conklin Co., Inc., 751 P.2d 151, 230 Mont. 42 (Mo. 1988).

Opinions

MR. JUSTICE WEBER

delivered the Opinion of the Court.

The plaintiffs brought this multi-count action to recover damages for a partial crop loss. The action was tried by jury in the District Court for the Eighth Judicial District, Cascade County. Plaintiffs obtained a judgment including $132,500 in compensatory damages and $1,000,200 in punitive damages. We reverse and remand for retrial.

Defendant Conklin Company, Inc. (Conklin) has raised thirteen issues on appeal. We restate them as follows:

[45]*451. Did the District Court err by not granting a mistrial as a result of the prejudicial testimony of John Gurnsey concerning the death of his wife?

2. Did the District Court err by allowing the introduction of evidence concerning insurance?

3. Did the District Court err by allowing the introduction of testimony and exhibits concerning post-transaction activity in violation of the order granting severance?

4. Did the District Court err in allowing testimony which contained hearsay statements attributed to non-party independent distributors?

5. Did the District Court err by giving a special verdict form which 1) omitted the requirement that the jury find “legal cause”; 2) did not require the jury to make a finding of gross negligence, recklessness, or malice as a prerequisite to an award of punitive damages; 3) did not allow separate consideration of the theories of actual fraud and constructive fraud and failed to instruct the jury properly as to constructive fraud?

6. Did the District Court err by not allowing the jury to compare like conduct?

7. Did the District Court err in its instructions on emotional distress?

8. Did the District Court err in its instructions on liability for the negligent selection of an independent contractor?

9. Did the plaintiff's fail in their burden of proof of punitive damages, and was the punitive damage award the result of passion, prejudice, or other error?

10. Did the District Court err by excluding evidence offered by Conklin?

The plaintiffs are Montana grain farmers. Quentin Mang is John Gurnsey’s father-in-law. At the time this action arose, the plaintiffs both farmed small tracts west of Great Falls, Montana.

The plaintiffs brought a five-count complaint against defendants for partial failure of their 1983 wheat and barley crops. Plaintiffs’ complaint states that defendants Clyde Iverson and Robert Place, acting as agents for defendant Conklin, sold them liquid fertilizer (FEAST), misrepresenting it as a “complete” fertilizer which would greatly increase crop yields. The complaint alleges that the plaintiffs were unlawfully induced to join the FEAST distribution scheme and were wrongly instructed on how to use and apply FEAST. Plaintiffs claim they suffered crop loss and other monetary damages as the [46]*46result of defendants’ breach of contract of sale, breach of implied warranties of fitness and merchantability, and breach of express warranties. Counts two and three of the complaint allege that in selling FEAST, the distributors made fraudulent and negligent misrepresentations. Count four alleges that defendants violated their duty of good faith and fair dealing, and count five alleges that defendants negligently instructed plaintiffs how to use and apply FEAST.

The court severed the bad faith claim from the other claims. At the two-and-one-half week jury trial on the remaining claims, the parties presented conflicting evidence on the contested facts. The defense was based on plaintiffs’ failure to read or follow written and laboratory instructions on use of the fertilizer. Also, Conklin’s position is that its distributors are independent contractors, so that it is not liable for their wrongs. The jury returned a verdict in favor of plaintiffs. They found Quentin Mang 38% negligent and awarded him compensatory damages of $82,500 and punitive damages of $500,100. They found John Gurnsey 30% negligent and awarded him compensatory damages of $50,000 and punitive damages of $500,100.

I

Did the District Court err by not granting a mistrial as a result of the prejudicial testimony of John Gurnsey concerning the death of his wife?

John Gurnsey’s wife died during preparation of this matter for trial. There is no claim that her death was caused in any way by the defendants.

The offending testimony came while plaintiff John Gurnsey was on the stand. He had testified that he was 49 years of age and had daughters ages 7 and 10. He had then testified at length about the events of 1982-83 during his purchase and use of FEAST. His attorney then asked:

“Q When you lose a year’s crop, does it just affect you, John?
“A It affected me, yes.
“Q Does it affect the people that rely on you?
“A It certainly has. I lost my wife.”

The defense objected on the basis of relevance and prejudice and the court admonished the jury to disregard the statement. Apparently to allow Mr. Gurnsey time to compose himself, the court then [47]*47recessed early for lunch. Conklin’s motion for a mistrial, made in chambers, was denied.

Conklin argues that this episode was highly prejudicial and that, considering the amount of punitive damages awarded, its prejudicial effect cannot be ruled out. We agree. Although the trial court has a great deal of discretion in ruling on a motion for mistrial, it may be reversed if there is a showing of abuse of discretion. Morehouse v. Ylvisaker (1968), 152 Mont. 57, 446 P.2d 432. The emotionally-charged nature of this exchange can be sensed even in the transcript. We hold that the District Court erred in failing to grant a mistrial.

II

Did the District Court err by allowing the introduction of evidence concerning insurance?

As part of count one, plaintiffs’ complaint alleged that defendants misrepresented that they carried “hundreds of thousands of dollars in insurance” which would protect plaintiffs from losses if FEAST did not perform as represented. Defendant Conklin moved to strike the reference to insurance prior to trial, but the court ruled that the issue of insurance was relevant to the material issue of defendants’ misrepresentations to plaintiffs. At the time of that ruling, the claim that Conklin breached its contract was still alive. Quentin Mang testified at trial that Clyde Iverson made the statement about insurance during their first meeting in order to induce him to purchase FEAST.

While jury instructions were being settled, plaintiffs’ counsel informed the court they would no longer proceed under the breach of contract theory. Conklin argues that this was a calculated course embarked upon by plaintiffs to wrongfully get into evidence the statement that Conklin was insured. Conklin points out there has been no allegation that the statement was untrue and contends that the statement is not admissible. Plaintiffs argue that the statement was part of a fraudulent scheme to get them to buy FEAST, and is therefore relevant.

Rule 403, M.R.Evid. provides:

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Gurnsey v. Conklin Co., Inc.
751 P.2d 151 (Montana Supreme Court, 1988)

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Bluebook (online)
751 P.2d 151, 230 Mont. 42, Counsel Stack Legal Research, https://law.counselstack.com/opinion/gurnsey-v-conklin-co-inc-mont-1988.