Car Wash Consultants, Inc. v. N/S Corporation
15-1372
| Iowa Ct. App. | Oct 12, 2016Background
- CWC (Car Wash Consultants) installed an N/S-manufactured car wash for Martinez that proved defective; litigation followed between N/S and CWC.
- Earlier appeal held the district court should have instructed the jury it could award consequential damages for breach of the implied warranty of merchantability; remanded for trial on consequential damages.
- At retrial the sole contested issue was whether CWC proved consequential damages (lost sale of a second wash to Martinez) caused by N/S’s breach.
- The jury found for N/S on consequential damages; district court denied CWC’s motion for new trial.
- CWC also challenged (1) admission of questions about CWC’s other litigation with a different manufacturer and (2) submission of a spoliation jury instruction regarding CWC’s missing financial records.
- The court affirms: verdict supported by substantial evidence; evidentiary questions and spoliation instruction did not require reversal.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether CWC proved consequential damages causally linked to N/S’s breach | CWC: Martinez’s refusal to buy from CWC a second system was caused by N/S’s defective product and related conduct | N/S: Martinez bought another N/S system from a different distributor, so loss was not caused by product defect; other reasons (bid, relationship) explain loss | Held: No causal proof; jury could infer loss resulted from other factors or N/S’s interference (not an implied-warranty breach) |
| Whether district court erred in denying new trial for insufficiency of evidence/failure to administer substantial justice | CWC: Verdict unsupported by substantial evidence; damages were foreseeable and provable | N/S: Evidence viewed favorably to verdict supports sufficiency; multiple alternate explanations exist | Held: Reviewed de novo for sufficiency; verdict supported by substantial evidence and denial of new trial not an abuse of discretion |
| Whether questions about CWC’s unrelated litigation were admissible | CWC: Such evidence was irrelevant and prejudicial; should be excluded | N/S: Relevant for impeachment/spoliation theory | Held: Admission was erroneous but not prejudicial given brevity, single-issue trial, and limited bearing on damages; no reversal |
| Whether giving a spoliation instruction was erroneous/prejudicial | CWC: No intentional destruction; instruction unnecessary and prejudicial | N/S: CWC failed to preserve financial records and delayed production, justifying spoliation inference instruction | Held: Instruction justified by record (notice to preserve, late production); even if erroneous, any effect was not prejudicial |
Key Cases Cited
- Trs. of the Iowa Laborers Dist. Council Health & Welfare Tr. v. Ankeny Cmty. Sch. Dist., 865 N.W.2d 270 (Iowa Ct. App. 2014) (law on consequential damages and foreseeability for breach of implied warranty)
- NevadaCare, Inc. v. Dep’t of Human Servs., 783 N.W.2d 459 (Iowa 2010) (requirement that breach cause consequential damages)
- Mohammed v. Otoadese, 738 N.W.2d 628 (Iowa 2007) (standard for admissibility and prejudice for erroneously admitted evidence)
- State v. Hartsfield, 681 N.W.2d 626 (Iowa 2004) (elements required to justify spoliation instruction)