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Johnson v. Buskohl Constr. Inc.

Supreme Court of North Dakota

December 1, 2015

Zachary Johnson and Margie Johnson, Plaintiffs and Appellees
v.
Buskohl Construction Inc. and John Buskohl, Defendants and Appellants

Page 460

Appeal from the District Court of Sargent County, Southeast Judicial District, the Honorable Daniel D. Narum, Judge.

Steven J. Lies (on brief) and Brittany L. Hatting (argued), Wahpeton, ND, for plaintiffs and appellees.

Kraig A. Wilson (argued), Grand Forks, ND, for defendants and appellants.

Lisa Fair McEvers, Carol Ronning Kapsner, Dale V. Sandstrom, Daniel J. Crothers, Gerald W. VandeWalle, C.J.

OPINION

Lisa Fair McEvers, Justice.

Page 461

[¶1] John Buskohl and Buskohl Construction Inc. (collectively " Buskohl" ) appeal from a district court's judgment entered on a jury verdict and from an amended order denying a motion for a new trial. We conclude the district court erred in admitting hearsay evidence that did not fall within an exclusion or exception. We reverse the district court's judgment and remand for a new trial, because the district court's error affected Buskohl's substantial right to a fair trial.

I

[¶2] Zachary Johnson and Margie Johnson contracted with Buskohl Construction Inc. as a general contractor to oversee the construction of their new house. John Buskohl is the sole shareholder, officer, and director of Buskohl Construction Inc. Due to a deteriorating relationship with the Johnsons, Buskohl walked off the job before construction was complete, leaving various " odds-and-ends" unfinished on the house. The Johnsons repaired some of the alleged deficiencies themselves and solicited bids from various contractors to fix the remaining issues.

[¶3] The Johnsons sued Buskohl alleging Buskohl negligently constructed the house, breached the contract, and breached the warranty to construct the house in a workmanlike manner. After the initial scheduling order, the parties agreed to extend the disclosure deadline for expert witnesses to April 11, 2014. Buskohl disclosed DuWayne Ternes as an expert witness before the disclosure deadline passed. Buskohl disclosed Kurt Sandman as an expert witness on July 21, 2014.

[¶4] At trial, Buskohl informed the district court he intended to call Sandman as an expert witness the next day. The Johnsons objected, among other grounds, because Buskohl did not timely disclose Sandman as an expert witness. The district court sustained the Johnsons' objection and did not permit Sandman to testify. Buskohl did not request a continuance and did not call Ternes to testify as an expert witness.

[¶5] Prior to opening statements, Buskohl argued the jury should not be allowed

Page 462

to hear anything about an exhibit regarding an estimate from Deckmasters, Inc. because it lacked foundation and was hearsay. The Johnsons responded they did not intend to use the estimate. No reference to the Deckmasters estimate was made in opening statements by either party. During trial, the Johnsons introduced the estimate by Deckmasters to fix their deck for $30,100 through testimony of Zachary Johnson. The estimate was unsigned and indicated it was prepared " based off of site-unseen deck," followed by the disclaimer, " [c]ould result in change orders and additional costs." The Johnsons did not subpoena or call a representative of Deckmasters to testify at trial.

[¶6] Buskohl objected to admission of the estimate on the grounds of hearsay and lack of foundation. After a sidebar, off the record, the district court overruled Buskohl's objections, received the estimate into evidence, and allowed Zachary Johnson to testify as to the contents of the estimate. The district court did not state on the record the rule of evidence under which the estimate was admissible. Outside the hearing of the jury, the district court stated, " I think . . . there's no reason to believe that [the estimate] is not . . . legitimate . . . . Beyond that I think the objection goes to weight rather than the admissibility of the document. It's received. My ruling stands on that issue."

[¶7] When the parties and the district court were reviewing jury instructions, Buskohl proposed a second amended special verdict form to require the jury to make special findings on damages and that damages be categorically itemized by (1) sheet rock/taping; (2) decking; (3) porch/Tyvek; and (4) miscellaneous house issues. The district court rejected Buskohl's proposed special verdict form and submitted a special verdict form that did not itemize damages.

[¶8] During closing argument, the Johnsons stated Buskohl failed to " call the inspector that was sent out on behalf of Mr. Buskohl to look at the windows. . . . [T]hey failed to call a witness who would have been qualified as an expert to refute stuff." After the jury retired for deliberations, Buskohl objected to the statement as being unduly prejudicial and moved for a mistrial. The district court overruled the objection as untimely because a curative instruction could have been given in the presence of the jury. The district court also said it heard the Johnsons refer to Buskohl failing to call an " inspector" not an " expert."

[¶9] The jury returned a verdict in favor of the Johnsons. The jury found Buskohl Construction Inc. is the alter ego of John Buskohl, and Buskohl was negligent, breached the contract, and breached the warranty. The jury awarded the Johnsons $55,000 in damages.

[¶10] Buskohl moved for a new trial under N.D.R.Civ.P. 59(b), arguing irregularities in the proceedings prevented him from receiving a fair trial. The ...


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