Lincoln Composites, Inc. Plaintiff- Appellee
Firetrace USA, LLC Defendant-Appellant
Submitted: November 19, 2015
from United States District Court for the District of
Nebraska - Lincoln
RILEY, Chief Judge, BEAM and KELLY, Circuit Judges.
USA, LLC (Firetrace) appeals the district
court's denial of its Federal Rule of Civil
Procedure 59 motion for new trial or remittitur, following a
jury verdict in favor of Lincoln Composites, Inc. (Lincoln).
Finding no error, we affirm.
manufactures composite tanks for the storage and transport of
natural gas in places where pipelines are unavailable.
Firetrace makes custom designed fire suppression systems that
detect and suppress fires. Through a series of transactions,
Lincoln purchased fire detection tubing from Firetrace, which
Lincoln then installed in its "Titan Module" tanks.
There is no dispute that through these transactions the
parties entered a contract for the purchase and delivery of
Firetrace's tubing, although the parties dispute the
terms and conditions of the contract. Some of the tubing was
defective and, despite Firetrace's repeated attempts to
fix the defect, the tubing failed, resulting in natural gas
being vented into the air when there was not a fire. After 18
months, Lincoln decided it could no longer use the Firetrace
tubing and demanded Firetrace refund the purchase price.
Firetrace refused, contending the contract was governed by
its terms and conditions, which limited remedies to repair or
replacement of the tubing. Lincoln claimed its terms and
conditions governed the contract between the parties, and
these terms and conditions did not limit its remedies.
then sued Firetrace in Nebraska state court for breach of
contract, breach of express warranty, breach of implied
warranty of merchantability, and breach of implied warranty
of fitness for a particular purpose. Firetrace removed the
case to federal court. Following an eight-day trial, a jury
returned a verdict in favor of Lincoln, finding Firetrace
breached an express warranty to Lincoln. The jury awarded
damages in the amount of $920, 227.76.
then filed a Rule 59 motion. Firetrace alleged Lincoln failed
to present sufficient evidence on several aspects of its
claim and that the district court made several errors in
instructing the jury. Prior to the district court ruling on
Firetrace's Rule 59 motion, Firetrace appealed from the
final judgment entered as well as from orders by the district
court denying Firetrace's motion for sanctions and
Firetrace's motion for summary judgment. The district
court ultimately denied the Rule 59 motion.
preliminary matter, Lincoln argues we do not have
jurisdiction over Firetrace's appeal because Firetrace
filed its notice of appeal while its Rule 59 motion was still
pending and never filed an amended notice of appeal. Under
Federal Rule of Appellate Procedure 4(a)(4)(B)(ii), once its
Rule 59 motion was denied, Firetrace was required to file an
amended notice of appeal. Lincoln contends Firetrace's
failure to file an amended notice of appeal deprives us of
jurisdiction. See Miles v. Gen. Motors Corp., 262
F.3d 720, 722–23 (8th Cir. 2001) (finding no
jurisdiction to review order denying new trial where no
amended notice of appeal filed).
concedes it did not file an amended notice of appeal but
asserts it filed the "functional equivalent."
Following the district court's denial of its Rule 59
motion, Firetrace filed an Amended Statement of Issues in our
court that included the issue "[w]hether the district
court erred by denying Firetrace's Motion for Remittitur
and for New Trial." Firetrace also filed an Amended
Designation of Record on Appeal that added both parties'
briefings related to the motion for new trial and the
district court's order denying the motion. Firetrace
points out it filed its Amended Statement of Issues within
the proper time and asks us to construe that as its Amended
Notice of Appeal.
"liberally construe the requirements of Rule 3" of
the Federal Rules of Appellate Procedure. Smith v.
Barry, 502 U.S. 244, 248 (1992). We have
"jurisdiction over [an] underlying order if the
appellant's intent to challenge it is clear, and the
adverse party will suffer no prejudice if review is
permitted." Hallquist v. United Home Loans,
Inc., 715 F.3d 1040, 1044 (8th Cir. 2013). Even when the
notice is "technically at variance with the letter of
[Rule 3], a court may nonetheless find that the litigant has
complied with the rule if the litigant's action is the
functional equivalent of what the rule requires."
Smith, 502 U.S. at 248 (quoting Torres v.
Oakland Scavenger Co., 487 U.S. 312, 316–317
(1988)). At oral argument, Lincoln was unable to explain how
Firetrace's filings differed from an amended notice of
appeal or how it was prejudiced. We conclude Firetrace made
its intent clear by filing its Amended Statement of Issues
and Amended Designation of the Record on Appeal and that
Lincoln will not be prejudiced if we allow review. We now
consider the issues raised on appeal.
Firetrace's Motion for Remittitur or New Trial
argues that it is entitled to a new trial on the merits based
on sufficiency of the evidence and faulty jury instructions
and either a new trial on or remittitur of damages.
"[T]he granting or denial of a new trial is a matter of
procedure governed by federal law." Bank of Am.,
N.A. v. J.B. Hanna, LLC, 766 F.3d 841, 851 (8th Cir.
2014) (alteration in original) (quoting Brown v.
Royalty, 535 F.2d 1024, 1027 (8th Cir. 1976)). We review
the denial of a motion for new trial for an abuse of
discretion. Weitz v. MH Washington, 631 F.3d 510,
523 (8th Cir. 2011). A district court abuses its discretion
in denying a motion for new trial based on sufficiency of the
evidence "if the verdict is against the weight of the
evidence and allowing it to stand would result in a
miscarriage of justice." Bennett v. Riceland Foods,
Inc., 721 F.3d 546, 552–53 (8th Cir. 2013)
(quoting The Shaw Grp., Inc. v. Marcum, 516 F.3d
1061, 1067 (8th Cir. 2008). "Remittitur is appropriate
where the verdict is so grossly excessive as to shock the
judicial conscience." Id. at 553. A new trial
or remittitur is not appropriate "merely because we may
have arrived at a different amount from the jury's
Motion for New Trial Based on Sufficiency of the
first asserts it is entitled to a new trial because the
jury's finding that it breached an express warranty to
Lincoln is against the weight of the evidence. "When the
basis of the motion for a new trial is that the jury's
verdict is against the weight of the evidence, the district
court's denial of the motion is virtually unassailable on
appeal." Children's Broad. Corp. v. Walt Disney
Co., 357 F.3d 860, 867 (8th Cir. 2004) (quoting
Jones v. Swanson, 341 F.3d 723, 732 (8th Cir.
2003)). In making this determination, the district court
"can rely on its own reading of the evidence-it can
'weigh the evidence, disbelieve witnesses, and grant a
new trial even where there is substantial evidence to sustain
the verdict.'" White v. Pence, 961 F.2d
776, 780 (8th Cir. 1992) (quoting Ryan v. McDonough Power
Equip., 734 F.2d 385, 387 (8th Cir. 1984)). Because this
is a diversity action, we apply the substantive law of the
forum state, in this case, Nebraska. Bank of Am.,
766 F.3d at 851–52. Under Nebraska law, "the
existence and scope of an express warranty is one of
fact." Peterson v. N. Am. Plant Breeders, 354
N.W.2d 625, 629 (Neb. 1984).
parties agree they entered into a contract for the sale of
tubing but dispute some of the terms of the contract, with
each party insisting the contract was governed by its own
terms and conditions. Both parties' terms provided an
express warranty. The terms differed, however, in one key
respect: Upon a breach of the express warranty,
Firetrace's terms limited Lincoln's remedies to
repair or replacement of any defective tubing; Lincoln's
terms had no limitation on remedies.
reach a verdict, the jury had to decide whose terms and
conditions governed the contract. Because there was no
special verdict, we do not know specifically how the jury
reached its verdict. Nonetheless, the parties agree that by
finding that Firetrace breached an express warranty to
Lincoln and awarding damages to Lincoln, the jury
must have decided the case in one of two ways. The jury could
have decided that Firetrace's terms and conditions
governed, which would mean it concluded that the exclusive
repair or replace remedy failed of its essential purpose,
making a remedy of damages available. Or, the jury could have
decided that Lincoln's terms and conditions governed,
which allowed for a remedy of damages as awarded. Firetrace
argues the evidence does not support either conclusion, so we
examine each in turn.
argues that, if the jury found that Firetrace's terms
governed, it nevertheless erroneously concluded that
Firetrace's limited remedy of repair or replace failed of
its essential purpose. Nebraska law allows a seller to
establish exclusive limited warranties, as well as to limit
the availability of damages. John Deere Co. v. Hand,
319 N.W.2d 434, 437 (Neb. 1982) (citing Neb. U.C.C. §
2-719). But, "[w]here circumstances cause an exclusive
or limited remedy to fail of its essential purpose, remedy
may be had as provided in this act." Id.
(quoting Neb. U.C.C. § 2-719(2)). As explained in the
comments to § 2-719, "where an apparently fair and
reasonable clause because of circumstances fails in its
purpose or operates to deprive either party of the
substantial value of the bargain, it must give way to the
general remedy provisions of this article." Id.
(quoting Neb. U.C.C. § 2-719 cmt. 1). "Where a
seller is given a reasonable chance to correct defects and
the equipment still fails to function properly, the limited
remedy of repair or replacement of defective products fails
of its essential purpose." Id. If this happens,
the buyer may invoke any remedies available under the U.C.C.,
including damages. Id.
district court concluded a reasonable jury could find that
Firetrace's limited remedy of repair or replacement
failed of its essential purpose when Firetrace was not able
to repair the tubing properly within a reasonable time. Don
Baldwin, Lincoln's engineering director, testified he
worked on the Titan Modules beginning in 2008. Baldwin
described the repeated failures of the tubing, and
Firetrace's multiple, unsuccessful attempts, over the
course of a year and a half, to provide tubing that did not
fail. Dr. Paul Gramann, an expert in engineering and
plastics, testified about how and why the tubing failed. He
testified the failures were the result of manufacturing
defects. Gramann predicted that the Firetrace tubing still in
Titan Modules out in the field also would fail at some point.
Whether Lincoln was deprived of the substantial value of its
contract by Firetrace's limited remedy of repairing and
replacing the tubing was a question for the jury. John
Deere Co., 319 ...