McDonald v. North America Specialty Insurance Co.

224 F. App'x 761
CourtCourt of Appeals for the Tenth Circuit
DecidedMarch 23, 2007
Docket19-3168
StatusUnpublished
Cited by3 cases

This text of 224 F. App'x 761 (McDonald v. North America Specialty Insurance Co.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Tenth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
McDonald v. North America Specialty Insurance Co., 224 F. App'x 761 (10th Cir. 2007).

Opinion

ORDER AND JUDGMENT *

MICHAEL R. MURPHY, Circuit Judge.

In this diversity subrogation action, Defendant Farrell Cooper Mining Company appeals from a district court order that denied its post-trial motion for judgment as a matter of law. We have jurisdiction under 28 U.S.C. § 1291, and we affirm.

Background

In 2005, Jerry and Nikki McDonald sued their insurer, North American Specialty Insurance Company, in federal court in Oklahoma for failing to pay benefits after their two poultry houses were damaged. North American impleaded Farrell Cooper, alleging that its mining activities had caused the damage. After North American paid the policy limits to the Mc-Donalds and the McDonalds dismissed their claims, North American sought subrogation against Farrell Cooper.

In the pretrial order, the parties agreed on several issues, including whether Farrell Cooper’s blasting had damaged the McDonalds’ poultry houses. North American attempted to identify as an issue whether “Farrell Cooper [is] responsible on a theory of ultrahazardous activity.” ApltApp., Vol. 1 at 80. Farrell Cooper objected, however, stating that North American had pled only negligence. Additionally, North American and Farrell Cooper stipulated that North American’s payment of $205,000 “was reasonable for the damages incurred” to the houses and for the McDonalds’ lost income, and “that the costs to re-build both poultry houses [exceeded] the sum of $275,000.00.” Id. at 79. The parties also noted that the fair market value of the poultry houses remained an issue for trial. After empaneling a jury, the district court announced the parties’ monetary stipulation.

During North American’s case-in-chief, Mr. McDonald testified that the poultry houses were on his 120-acre farm, together with a residence, an old barn, and two “out buildings.” Id., Vol. 2 at 278. One of the poultry houses was insured for $90,000 and the other for $80,000, as recommended by insurance agent Jerry Pitchford, who procured an insurance policy from North American after inspecting the poultry houses.

Before Farrell Cooper began blasting near the farm, it had White Industrial Seismology, Inc. (WIS) inspect for any preexisting property damage. WIS reported no significant damage to the poultry houses. Additionally, the Britt/Paulk Insurance Agency inspected the poultry houses before Farrell Cooper’s blasting and reported that the superstructures’ columns were plumb, had good base contact, and were not buckling, corroded, or missing bolts. Both Mr. McDonald and Mr. Pitchford testified that prior to blasting, the poultry houses’ walls and columns were not leaning.

Farrell Cooper began blasting in June or July 2003, roughly two to three hundred *764 feet from the poultry houses. After it stopped blasting in October 2003, Mr. McDonald noticed that the poultry houses were leaning and he became concerned that they would collapse. He contacted Mr. Pitchford, who observed that the houses were now leaning away from the blast cite. In a “Property Loss Notice,” Mr. Pitch-ford wrote, “Blasting from a Local mine has caused the poultry barns to basically fall in on themselves.” Aplee. Supp.App. at 12.

Civil structural engineer John Lawrence testified as an expert for North American. He opined that the damage to the poultry houses was most likely caused by Farrell Cooper’s blasting. Farrell Cooper’s mining superintendent testified that the blasting was accomplished using a total of 1,300 tons of ammonium nitrate, which was roughly 600 times more ammonium nitrate than was used in the 1995 bombing attack on the Alfred P. Murrah Federal Building.

After North American rested, Farrell Cooper moved for judgment as a matter of law, arguing, among other things, that (1) there was no evidence of negligence, causation, or the poultry houses’ fair market value; and (2) Lawrence did not rule out possible alternative causes of the damage, such as wind. The district court denied the motion.

Farrell Cooper then offered the testimony of a certified blaster, who indicated that there were “forty-five or more actual blasts,” generating “different waves of vibration” instead of “one huge wave,” Aplt. App., Vol. 2 at 538, and that an open pit on the farm reduced the amount of ground vibration, id. at 542. Farrell Cooper also offered the testimony of a professional engineer, who concluded that “vibration from the blasting had nothing at all to do with the damage,” id. at 561, and that if “they are leaning to the south, they were built that way,” id. at 566. He conceded on cross-examination, however, that he did not see any significant damage associated with wind, and that the blasting shook the McDonalds’ residence with such force that it knocked pictures off the walls.

At the close of the evidence, Farrell Cooper again requested judgment as a matter of law. Additionally, North American sought “to proceed on the theory of ultra hazardous activity” instead of negligence, and requested a corresponding jury instruction. Id. at 591. The district court denied both motions, ruling that North American had presented sufficient evidence to take the case to the jury, but that the jury would be instructed only on negligence because North American had failed to plead an ultrahazardous-activity theory.

The jury returned a verdict in favor of North American for $170,000, which was the amount North American had paid for the damage to the poultry houses. Farrell Cooper then filed a renewed motion for judgment as a matter of law, arguing that (1) there was no evidence of the poultry houses’ fair market value; (2) there was no evidence of the standard of care for a blast-mining operation or of any breach of that standard; and (3) there was insufficient evidence that blasting had caused the damage. The district court denied the motion, and Farrell Cooper appealed.

Discussion

I. Standards of Review

“We review the district court’s denial of judgment as a matter of law de novo, using the same standard employed by the district court.” Crumpacker v. Kansas, Dep’t of Human Res., 474 F.3d 747, 751 (10th Cir.2007). “A party is entitled to judgment as a matter of law only if the evidence points but one way and is susceptible to no reasonable inferences which may support the opposing party’s position.” *765 EEOC v. Heartway Corp., 466 F.3d 1156, 1160 (10th Cir.2006). In conducting our review, “we will not weigh evidence, judge witness credibility, or challenge the factual conclusions of the jury.” Id. at 1161.

Because this is a diversity case, the substantive law of the forum state, Oklahoma, governs. Clark v. State Farm Mut. Auto. Ins. Co., 433 F.3d 703

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224 F. App'x 761, Counsel Stack Legal Research, https://law.counselstack.com/opinion/mcdonald-v-north-america-specialty-insurance-co-ca10-2007.