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United States District Court, S.D. Indiana, Indianapolis Division

New Hampshire Ins. Co. v. Farmer Boy AG, Inc.
U.S.
Not Reported in F.Supp.2d, 2000 WL 33125128 (S.D.Ind.)

Case Details
Printable Version
Summary:   Lightning struck a hog breeding facility, which disabled the ventilation system and killed 188 pregnant sows. Plaintiff Insurance Company sued defendant for damages, claiming the improperly designed electrical system led to their deaths. The Court held that evidence of damages relating to the lost litters and subsequent generations was excluded because damages for future unborn litters are not recoverable when damages are recovered for the injury to or destruction of the pregnant sows.

Judge TINDER delivered the opinion of the court.


Opinion of the Court:

FN1. Though this entry is being made available to the public on the court's web site, it is not intended for publication either electronically or in paper form. Under the law of the case doctrine, it is presumed that the ruling or rulings in this entry will govern throughout the litigation before this court. See, e.g., Tr. of Pension, Welfare, & Vacation Fringe Benefit Funds of IBEW Local 701 v. Pyramid Elec., 223 F.3d 459, 468 n. 4 (7th Cir.2000); Avitia v. Metro. Club of Chicago, Inc., 49 F.3d 1219, 1227 (7th Cir.1995). It should be noted, however, that this district judge's decision has no precedential authority and, therefore, is not binding on other courts, other judges in this district, or even other cases before this district judge. See, e.g., Howard v. Wal-Mart Stores, Inc., 160 F.3d 358, 359 (7th Cir.1998) (“a district court's decision does not have precedential authority”); Malabarba v. Chicago Tribune Co., 149 F.3d 690, 697 (7th Cir.1998) (“district court opinions are of little or no authoritative value”); Old Republic Ins. Co. v. Chuhak & Tecson, P.C., 84 F.3d 998, 1003 (7th Cir.1996) (“decisions by district judges do not have the force of precedent”); Anderson v. Romero, 72 F.3d 518, 525 (7th Cir.1995) (“District court decisions have no weight as precedents, no authority.”).

 

TINDER.

*1 This matter comes before the court on the Motion for Summary Judgment and Motion to Strike filed by Defendant, Gregory Clark, individually and d/b/a Clark Electric Heating and Cooling (“Clark”). After reviewing the motions and the submissions of the parties, the court finds as follows.

I. Facts FN2

FN2. It must be noted that neither Clark nor New Hampshire Insurance strictly complied with Local Rule 56.1's requirements. Clark filed a document entitled, “Defendant, Gregory Clark, Individually And d/b/a Clark Electric Heating And Cooling's Statement Of Material Facts To Which There Is No Genuine Issue” (“Statement Of Material Facts”). This document has numbered sentences containing factual assertions, but no specific citations to record evidence. It therefore does not comply with S.D. Ind. L.R. 56.1(f)(2). “Defendant, Gregory Clark, Individually And d/b/a Clark Electric Heating And Cooling's Memorandum Of Law In Support Of Motion For Summary Judgment” contains a section entitled, “Statement Of Facts .” This section is written in narrative form and contains specific citation to record evidence. There is some overlap between Clark's Statement Of Material Facts and Statement Of Facts. Neither the Plaintiff's Response To Clark's Statement of Material Facts nor Plaintiff's Statement of Additional Material Facts complies with Rule 56.1(f). Specific citations to record evidence are not provided to substantiate denials of Clark's statements or Plaintiff's additional factual assertions. In its Reply To Statement Of Material Facts, Clark objects to only Statement of Additional Material Fact No. 32. The basis for the objection is that Plaintiff did not submit any evidence to support the factual assertion. Interestingly, though, Statement of Additional Material Fact Nos. 30 and 31, to which Clark has no objection, essentially make the same assertion as Fact No. 32.The court finds that the parties' failure to strictly comply with Local Rule 56.1 should be excused for the following reasons: the parties' factual statements are not numerous; the parties have filed evidence to support their assertions; Clark's statements in its memorandum and in its separate document when considered together substantially comply with Rule 56.1; and Clark makes no objection to all but one of Plaintiff's factual statements.

The following facts are supported by proper citations to admissible evidence and are taken in the light most favorable to the New Hampshire Insurance, the non-moving party, with all reasonable inferences based on the facts drawn in its favor. This presentation is limited to those facts which are material to the ruling on Clark's summary judgment motion. On June 19, 1996, lightning struck a hog breeding facility owned by Heartland Pork Enterprises, Inc. (“Heartland”) in Bloomfield, Indiana. The lightning disabled the facility's ventilation system and resulted in the death of 188 pregnant sows. Plaintiff, New Hampshire Insurance Company (“Insurance Company”), as subrogee of Heartland, filed this action against Clark, alleging that Clark improperly designed the electrical system at the facility, which led to the failure of the ventilation system, thus causing the death of the 188 pregnant sows.

Heartland had remodeled its Nucleus # 2 Facility in which the sows were housed. By contract dated October 9, 1995, Heartland, doing business as Quality Ag Builders (“Quality Ag”), hired Defendant Clark to perform electrical contracting work upon the Nucleus # 2 Facility, in particular Barns A and B. FN3 More specifically, Clark was hired to install and custom fit ventilation systems and materials and to provide lighting, conduit, and necessary disconnects for the ventilation systems. Clark installed custom fit materials for the dimension of nonstandard buildings, Barm A and Barn B as part of the remodeling project.

FN3. Heartland was the general contractor on the remodeling project.

Quality Ag had merged into Heartland on August 12, 1994, and thereafter, Quality Ag was not a separate corporate entity but rather was a division of Heartland. After that date, Heartland did business as Quality Ag. In addition, all contracts entered into by Quality Ag were entered into by Heartland, doing business as Quality Ag, and all payments made to all contractors under contracts entered into by Quality Ag were made by Heartland, doing business as Quality Ag. Specifically, when Clark entered into the contract with Quality Ag, Quality Ag was operating as a division of Heartland.

II. Standard of Review

Summary judgment is appropriate where “the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(c); see also Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). The moving party has the initial burden of showing that the record presents no genuine issue of material fact, but if the nonmoving party bears the ultimate burden of proof on an issue, then that party can avoid summary judgment only by setting forth “specific facts showing that there is a genuine issue for trial.” Fed.R.Civ.P. 56(e); see Celotex, 477 U.S. at 324. The evidence is construed in the light most favorable to the non-moving party and all reasonable inferences are drawn in that party's favor. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986). A mere scintilla of evidence in support of the nonmovant's position is insufficient; the question is “whether the evidence presents a sufficient disagreement to require submission to a jury or whether it is so one-sided that one party must prevail as a matter of law.” Anderson, 477 U.S. at 251-52.

III. Discussion

*2 Insurance Company brings claims against Clark under four theories: strict product liability, negligence, breach of contract, and breach of warranty. Clark moves for summary judgment on all claims against it. It first contends that Insurance Company cannot recover under a theory of strict product liability because Clark supplied a service, rather than a product. Clark next contends that the theory of breach of warranty is duplicitous and has been superseded by the strict product liability theory. Third, Clark argues that it cannot be held liable under breach of contract, negligence or product liability theories because of a lack of privity of contract. Finally, Clark contends that it did not breach its contract. Clark moves in the alternative for partial summary judgment on damages allegedly resulting from unborn livestock and genetic damage to subsequent generations. Insurance Company opposes the motion.

A. Strict Product Liability

Clark moves for summary judgment as to the product liability theory, arguing that this case does not involve a “product.” To make a prima facie case under the Indiana Product Liability Act (“Act”), Ind.Code §§ 33-1-1.5-1 et seq., Insurance Company must show that there is a “product.” See Whitaker v. T.J. Snow Co., 151 F.3d 661, 664-66 (7th Cir.1998) (applying Indiana law); Sapp v. Morton Bldgs., Inc., 973 F.2d 539, 541 (7th Cir.1992) (applying Indiana law); Ind.Code § 33-1-1.5-2 (defining a “product” as “any item or good that is personalty at the time it is conveyed by the seller to another party. It does not apply to a transaction that, by its nature, involves wholly or predominately the sale of a service rather than a product.”).FN4

FN4. This provision was repealed by P.L. 1-1998, Sec. 221 and recodified at Ind.Code § 34-20-2-1 et seq. The court refers to the provision in effect at the time of the incident giving rise to this action.

In Sapp, the court affirmed a directed verdict that the remodeling of a barn into a stable “was a transaction involving predominately the sale of a service, rather than a product.” Sapp, 973 F.2d at 541. Similarly, Clark argues that its installation of a custom-fit electrical system involved “wholly or predominately the sale of a service rather than a product.” (Clark's Mem.Supp.Mot.Summ. J. at 6-7.) The court agrees.FN5 Summary judgment should be granted Clark on the claim under the strict product liability theory.

FN5. Insurance Company does not dispute this portion of Clark's summary judgment motion.

B. Negligence and Breach of Contract

Clark argues that it cannot be held liable under negligence and breach of contract theories. The foundation of this argument is the claimed lack of privity of contract between Clark and Heartland. The undisputed evidence, however, establishes that Quality Ag was operating as a division of Heartland when it entered into a contract with Clark for the performance of electrical work upon the Nucleus # 2 Facility. The undisputed evidence further establishes that before the contract with Clark was made, Quality Ag had merged into Heartland and Quality Ag was not a separate corporate entity. Thus, the evidence establishes privity of contract. Therefore, Insurance Company's summary judgment motion on this ground should be denied.

*3 Clark contends that it did not breach the contract with Quality Ag because it fulfilled the contract according to the specifications provided by Quality Ag and Quality Ag accepted its performance. Insurance Company, however, has produced evidence sufficient to create a genuine factual dispute as to whether Clark breached the contract. ( See Wald Dep. at 49, 58-59 (claiming lack of grounding and improper installation of back-up fan supply and contactor)). Therefore, summary judgment on this basis is inappropriate.

C. Breach of Implied Warranty

Clark argues that it should be granted summary judgment on the breach of warranty claim. The theory of breach of implied warranty in tort is a theory of strict liability in tort and, therefore, has been superseded by the theory of strict liability. See, e.g., Condon v. Carl J. Reinke & Sons, Inc., 575 N.E.2d 17, 18 (Ind.Ct.App.1991) (citations omitted). To the extent that Insurance Company brought a claim for breach of implied warranty in tort, Clark would be entitled to summary judgment on that claim. The evidence, however, establishes a contract between Clark and Heartland doing business as Quality Ag. Thus, it appears that Insurance Company's breach of implied warranty claim is in contract rather than in tort.

Clark also contends that there can be no breach of implied warranty because it provided a service rather than equipment. The court disagrees. “ ‘In a contract for work, there is an implied duty to do the work skillfully, carefully, and in a workmanlike manner.’ “ Hagerman Constr., Inc. v. Copeland, 697 N.E.2d 948, 958 (Ind.Ct.App.1998) (quoting St. Paul Fire & Marine Ins. Co. v. Pearson Constr. Co., 547 N.E.2d 853, 857 (Ind.Ct.App.1989)), opinion amended on reh'g (Oct 06, 1998), trans. denied. Accordingly, Clark's motion for summary judgment on the breach of implied warranty claim should be denied.

D. Damages

Clark contends that it is entitled to partial summary judgment on damages. It argues that Indiana law does not permit recovery of damages for the loss of litters and subsequent generations of the 188 sows destroyed in the fire. Though made as part of Clark's summary judgment motion, the court treats this as a motion in limine to exclude evidence of damages relating to the lost litters and subsequent generations.

Clark cites to two cases to support its contention: Indiana & Michigan Electric v. Terre Haute Industry, 507 N.E.2d 588, 601 (Ind.Ct.App.1988), and Greives v. Greenwood, D.V.M., 550 N.E.2d 334 (Ind.Ct.App.1990). The former is cited for the basic proposition that damages may not be awarded based on speculation or guess. See Ind. & Mich. Elec., 507 N.E.2d at 601 (citation omitted). Rather, damages “must be ascertainable with reasonable certainty.” Id. (citation omitted).

Clark relies principally upon Greives in which the Indiana appellate court held that cattle breeders could not recover damages for lost profits from unborn and future unborn calves. The Greives breeded purebred Hereford cattle. Two of the cattle were negligently injected with a Brucellosis vaccine by defendant Greenwood, a veterinarian. As a result, the cattle were quarantined, thus postponing their sale from the spring to the fall. When they were able to be sold, many cattle either did not sell or were sold at less than fair market value. See Greives, 500 N.E.2d at 336. The Greives sued Greenwood, seeking damages for, inter alia, lost profits from the unborn and future unborn calves. The trial court granted partial summary judgment on such damages. See id. at 336, 337. The court started its analysis by noting the basic rule that damages may not be based on mere speculation. See id. at 337. It then held that when damages are recovered for injury to cows, damages cannot be recovered for the loss of their unborn calves. Its reasoning was three-fold: unborn calves have no market value; a damages award for unborn calves would constitute double damages; and such an award would be based on speculation. See id. at 338.

*4 Insurance Company urges that the Greives decision is not binding on this court. When state substantive law governs a case, a federal court must attempt to predict how the state's highest court would decide the case. See Klunk v. County of St. Joseph, 170 F .3d 772, 777 (7th Cir.1999); McGeshick v. Choucair, 72 F.3d 62, 65 (7th Cir.1995). The Indiana Supreme Court has not directly addressed the issue of whether damages are recoverable for the loss of an animal's unborn when damages are recovered for injury to or destruction of the animal. Thus, this federal court should look to the decisions of the lower Indiana courts. See, e.g., Klunk, 170 F.3d at 777; King v. Damiron Corp., 113 F.3d 93, 95 (7th Cir .1997). “[D]ecisions of the intermediate appellate court or courts of that state constitute the next best indicia of what state law is and normally should be followed by a federal court sitting in that state.” 19 Charles A. Wright, Arthur R. Miller & Edward H. Cooper, Federal Practice And Procedure: Jurisdiction 2d § 4507, p. 150-51 (2d ed.1996); Rekhi v. Wildwood Indus., Inc., 61 F.3d 1313, 1319 (7th Cir.1995). Decisions of the lower appellate courts “may be disregarded if the federal court is convinced by other persuasive data that the highest court of the forum state would decide the matter in a different fashion.” Federal Practice And Procedure: Jurisdiction 2d § 4507, p. 150-51 at 157; Eljer Mfg., Inc. v. Liberty Mut. Ins. Co., 972 F.2d 805, 814 (7th Cir.1992).

The court is not convinced that the Indiana Supreme Court would reach a decision different than that reached in Greives. The Indiana Supreme Court has held that the measure of damages for loss of domestic cattle is the animal's market value immediately before the alleged wrongful act. See Reed v. Central Soya Co., Inc., 621 N.E.2d 1069, 1075 (Ind.1993), opinion modified on reh'g in other part by 644 N.E.2d 84 (Ind.1994). The Reed plaintiffs operated a dairy farm for breeding pure-bred dairy cows and producing milk. They alleged their cattle were damaged after eating contaminated feed. See id. at 1071. They claimed the following damages resulting from the contaminated feed: reduced milk production, aborted calves, stillborn calves, cows that would not breed, and cows which could not be used to harvest embryos for sale. See id. at 1075. The Indiana Supreme Court did not squarely hold that damages were not recoverable for the aborted and stillborn calves; however, citing Greives, it said that “the basic measure of damages for loss of cows is the market value of the animal, if there is a market value, immediately prior to the wrongful act.” Reed, 621 N.E.2d at 1075 (citing Greives, 550 N.E.2d at 338).

The court recognizes that some jurisdictions have allowed damages awards for lost profits resulting from injury to or destruction of animals. See McPherson v. Schlemmer, 749 P.2d 51, 53-54 (Mont.1988); Mills v. Guthrie County Rural Elec. Coop. Ass'n, 454 N.W.2d 846, 851-52 (Iowa 1990); Missouri Farmers Ass'n v. Kempker, 726 S.W.2d 723, 725-26 (Mo.1987); Park v. Moore Mfg. Co ., 241 P.2d 914, 921-22 (Utah 1952). Still other jurisdictions have held that damages for unborn animals are not recoverable as a matter of law. See Winingham v. Anheuser-Busch, Inc., 859 F.Supp. 1019, 1021-22 (N.D.Tex.1994) (applying Texas law); Rosche v. Wayne Feed Div. Continental Grain Co., 447 N.W.2d 94, 96 (Wis.Ct.App.1989); Pagel v. Yates, 471 N.E.2d 946, 952-53 (Ill.App.Ct.1984); Nationwide Horse Carriers, Inc. v. Johston, 519 S.W.2d 163, 168-69 (Tex.App.1974). Thus, what Insurance Company advocates is not the majority rule. In the end, the Reed decision along with the clear holding in Greives-“the next best indicia of what state law is”-are strong indications that when faced with the issue, the Indiana Supreme Court would hold that damages for future unborn litters are not recoverable when damages are recovered for the injury to or destruction of the pregnant sows.

*5 Insurance Company argues that the prohibition on recovery of damages for future litters is inapplicable in this case because the pregnant sows were unique and had no separate value other than as breeding animals to Heartland. But the cattle in Greives were purebred cattle and were bred for sale as well as milk production. Thus, Insurance Company's argument does not persuade the court that the Indiana Supreme Court would reach a different conclusion.

The court therefore finds that Clark's motion in limine to exclude evidence of damages relating to the lost litters and subsequent generations should be GRANTED. This ruling is definitive, that is, the issue is preserved for appellate review without the need for objection at trial. See Wilson v. Williams, 182 F.3d 562, 564 (7th Cir.1999). The parties, counsel, and their witnesses may not refer in the presence of the jurors or prospective jurors to evidence of damages relating to the lost litters and subsequent generations; such evidence is inadmissible. Counsel are DIRECTED to so inform the parties and their witnesses. Counsel are ADVISED that any requests for reconsideration of a ruling on a motion in limine must be made outside the presence and hearing of the jury.

E. Motion to Strike

Clark moves to strike certain documents designated by Insurance Company in opposition to Clark's summary judgment motion. These documents are: the curriculum vitae of Stan Williams, Kenneth J. Boehm, David A. Schlader and John W. Mabry; a Campos & Stratus Report, dated January 6, 1997; Stan Williams' Memorandum, dated July 24, 1996; and the Report of John Mabry, dated April 8, 1997. Clark argues these documents fail to satisfy the requirements of Rule 56 of the Federal Rules of Civil Procedure. This argument is right on the mark.

As stated in the oft cited treatise on federal practice and procedure:

To be admissible, documents must be authenticated by and attached to an affidavit that meets the requirements of Rule 56(e) and the affiant must be a person through whom the exhibits could be admitted into evidence. Thus, a letter submitted for consideration under Rule 56(e) must be attached to an affidavit and authenticated by its author in the affidavit or a deposition.

10A Charles A. Wright, Arthur R. Miller & Mary Kay Kane, Federal Practice and Procedure § 2722 (3d. ed.1998) (footnotes omitted). None of these documents are authenticated or incorporated into any affidavits. They therefore cannot be considered on Clark's summary judgment motion. See, e.g., Macklin v. Butler, 553 F.2d 525, 527 n. 1 (7th Cir.1977); accord Cuddy v. Wal-Mart Super Ctr., Inc., 993 F.Supp. 962, 967 (W.D.Va.1998). The same applies to the unsworn commentary of counsel in Insurance Company's memorandum of law. Furthermore, the reports appear to contain hearsay which is inadmissible on summary judgment. See, e.g., Eisenstadt v. Centel Corp., 113 F.3d 738, 742-43 (7th Cir.1997) (“hearsay is inadmissible in summary judgment proceedings to the same extent that it is inadmissible in a trial”) (citing cases).

*6 Insurance Company latches on to a statement in Winskunas v. Birnbaum, 23 F.3d 1264, 1268 (7th Cir.1994), that evidence need not be admissible in form but must be admissible in content. But in context, that statement only refers to affidavits. See id. The statement in Winskunas does not turn Rule 56 and long-standing summary judgment practice on its head. The motion to strike should be GRANTED.

IV. Conclusion

The Motion for Summary Judgment is GRANTED IN PART and DENIED IN PART as set forth above. The Motion to Strike is DENIED AS MOOT. The motion for enlargement of time to file summary judgment has been withdrawn and, therefore, is DENIED AS MOOT.

The Motion for Summary Judgment with respect to evidence of damages relating to the lost litters and subsequent generations damages is TREATED as a motion in limine and is GRANTED. This ruling is definitive. The parties, counsel, and their witnesses may not refer in the presence of the jurors or prospective jurors to evidence of damages relating to the lost litters and subsequent generations; such evidence is inadmissible.

The following claims remain for trial: negligence and breach of contract.

A telephonic pretrial conference for purposes of scheduling a trial date will be set under separate order.

ALL OF WHICH IS ORDERED this 19th day of December 2000.

 

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