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Titan Mach., Inc. v. Patterson Enters., Inc.

Supreme Court of North Dakota

January 21, 2016

Titan Machinery, Inc., Plaintiff, Appellee, and Cross-Appellant
Patterson Enterprises, Inc., and Josh Patterson, Defendants Patterson Enterprises, Inc., Defendant, Appellant, and Cross-Appellee

Editorial Note:

The opinion cannot be considered final until disposition of such petition for rehearing by the court or expiration of 14 days from filing date.

Appeal from the District Court of Cass County, East Central Judicial District, the Honorable John Charles Irby, Judge.

Jon R. Brakke (argued) and Neil J. Roesler (on brief), Fargo, N.D., for plaintiff, appellee, and cross-appellant.

Sean T. Foss, Fargo, N.D., for defendant, appellant, and cross-appellee.

Daniel J. Crothers, Lisa Fair McEvers, Dale V. Sandstrom, Bruce B. Haskell, D.J. Opinion of the Court by Crothers, Justice. Gerald W. VandeWalle, C.J., concurred in the result. The Honorable Bruce B. Haskell, D.J., sitting in place of Kapsner, J., disqualified.


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Crothers, Justice.

[¶1] Patterson Enterprises, Inc., appeals and Titan Machinery, Inc., cross-appeals from a judgment and an order denying their post-judgment motions after the district court ordered Patterson to pay Titan $88,707.75 due under several oral equipment leases. Patterson argues the district court erred in admitting into evidence an exhibit summarizing amounts Patterson owed Titan under the oral leases, the court erred in awarding Titan $5,617.63 for finance charges and the court erred in finding the equipment did not breach an implied warranty of merchantability. In its cross-appeal, Titan argues the court clearly erred in calculating the

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amount Patterson owed Titan for three items of leased equipment. We affirm in part, reverse in part and remand for further proceedings.


[¶2] Patterson is a Montana corporation headquartered in Missoula, which uses heavy equipment in the construction industry. Titan is an equipment rental company with several locations in the United States, including Missoula and Williston, North Dakota. In 2011, Patterson contracted for construction work in northwestern North Dakota and leased several items of heavy equipment from Titan. Patterson also leased several items of equipment from Titan for work on a remote dam project in Montana. The equipment leases were oral and were entered into by Don Hinricher, Titan's rental account manager in Missoula, and Adam Pummill, Patterson's general manager of operations in northwestern North Dakota. Disagreements arose between the parties concerning delinquent lease payments, damage to leased equipment, the operational condition of the leased equipment, and credits Patterson claimed for downtime and repairs to make the leased equipment operable.

[¶3] Titan sued Patterson, alleging Patterson failed to pay $164,958.71 for delinquent lease payments and equipment damages, plus $19,675.40 in accrued finance charges. Patterson answered and counterclaimed for damages, disputing the amounts owed under the leases and alleging Titan failed to provide Patterson equipment conforming to the leases, which resulted in Patterson's inability to perform substantial work for third parties.

[¶4] After a bench trial, the district court found Patterson owed Titan $73,852.31 for delinquent lease payments and damages to leased equipment. The court decided Titan's equipment did not breach an express warranty, an implied warranty of fitness for a particular purpose or an implied warranty of merchantability. The court found the parties impliedly agreed the leased equipment needed to be in working order when Patterson took possession and awarded Patterson $839.90 in costs incurred to put two items of leased equipment in working order. However, the court found Patterson failed to establish it was entitled to additional costs to fix the leased equipment. The court also found Patterson was not entitled to recover consequential damages for " wages paid to employees who sat idle when the equipment they were to operate did not work, cost of using substitute equipment that could have been working elsewhere, and other lost opportunities," because those claims were speculative and unforeseeable. The court denied Titan's post-judgment motion to amend the findings, to make additional findings or amend the judgment and for a new trial. Patterson's post-judgment motion to amend the findings, make additional findings and for amendment of the judgment also was denied.


[¶5] Patterson argues the district court erred by admitting, under N.D.R.Ev. 1006, an exhibit summarizing Patterson's claimed debt to Titan. Patterson claims Titan emailed the exhibit after 9 p.m. the night before trial and did not make the information underlying debt summary available for inspection at a reasonable time and place before trial. Patterson also argues Titan did not establish the underlying information was admissible, and asserts the erroneous admission of the summary affected Patterson's substantial rights.

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[¶6] Titan initially argues Patterson waived its argument on the admissibility of the debt summary because it did not raise the issue in its post-judgment " motion for reconsideration." Titan alternatively argues the district court did not abuse its discretion in admitting the debt summary into evidence and the admission of the summary was not prejudicial.

[¶7] Patterson's post-judgment motion was for amended findings, additional findings and for an amended judgment. We have not otherwise extended our jurisprudence about the necessity of preserving issues in a motion for new trial to other post-judgment motions. See Andrews v. O'Hearn, 387 N.W.2d 716, 728-29 (N.D. 1986) (waiver of appellate review of issues not raised in motion for new trial). Patterson did not make a motion for a new trial, and we conclude it has not waived appellate review of its argument about the admissibility of the debt summary.

[¶8] We review a district court's decision on the admissibility of evidence under the abuse-of-discretion standard. In re R.L.-P., 2014 ND 28, ¶ 37, 842 N.W.2d 889. A district court abuses its discretion when its decision is arbitrary, capricious, or unreasonable, is a misapplication or misinterpretation of the law or is not the product of a rational mental process leading to a reasoned decision. Community Homes of Bismarck, Inc. v. Main, 2011 ND 27, ¶ 11, 794 N.W.2d 204. We also have described a district court's role in ruling on evidentiary issues in a court trial:

" We have said a trial judge in a nonjury case should ordinarily admit all evidence which is not clearly inadmissible because a judge, when deliberating the ultimate decision, is capable of distinguishing between admissible and inadmissible evidence. Entry of incompetent evidence in a nonjury trial will rarely be reversible error while exclusion of competent evidence will cause reversal when justice requires. We presume a court in a bench trial considered only competent evidence. Consequently, it is not reversible error to admit incompetent evidence in a bench trial unless it induced an improper finding."

In re R.L.-P., at P 37 (quoting McKechnie v. Berg, 2003 ND 136, ¶ 7, 667 N.W.2d 628).

[¶9] During the March 2014 trial in this case, N.D.R.Ev. 1006,[1] provided:

" The proponent may use a summary, chart, or calculation to prove the content of voluminous writings, recordings, or photographs that cannot be conveniently examined in court. The proponent must make the originals or duplicates available for examination or copying, or both, by other parties at a reasonable time and place. The court may order the proponent to produce them in court."

[¶10] Rule 1006, N.D.R.Ev., authorizes a proponent to introduce a summary, chart or calculation to prove the content of voluminous writings, recordings or photographs that cannot be conveniently examined in court. The explanatory note to N.D.R.Ev. 1006 states a " condition precedent to the invocation of the rule that the component parts of the summary be made available for examination or copying . . . is . . . to give the party against ...

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