Lincoln Composites, Inc. v. Firetrace USA, LLC
825 F.3d 453
8th Cir.2016Background
- Lincoln Composites purchased fire-detection tubing from Firetrace and installed it in its Titan Module natural-gas tanks; tubing repeatedly failed and vented gas, and Firetrace’s repair/replacement efforts over ~18 months were unsuccessful.
- Parties exchanged purchase orders; each side asserted its own standard terms and conditions controlled (Firetrace’s limited remedies = repair/replace; Lincoln’s terms contained no remedy cap).
- Lincoln sued in Nebraska state court for breach of contract and warranties; Firetrace removed to federal court; after an eight-day jury trial verdict favored Lincoln for breach of express warranty and awarded $920,227.76.
- Firetrace moved under Fed. R. Civ. P. 59 for new trial or remittitur; district court denied the motion; Firetrace appealed, raising jurisdictional and numerous merits arguments.
- The Eighth Circuit considered whether it had jurisdiction despite Firetrace not filing a formal amended notice of appeal, and reviewed denial of new trial/remittitur for abuse of discretion under federal law applying Nebraska substantive law.
Issues
| Issue | Plaintiff's Argument (Lincoln) | Defendant's Argument (Firetrace) | Held |
|---|---|---|---|
| Appellate jurisdiction (failure to file amended notice after Rule 59 denial) | Firetrace’s amended statement of issues and designation of record manifest intent to appeal the Rule 59 denial | Failure to file an amended notice deprives the court of jurisdiction | Eighth Circuit had jurisdiction; Firetrace’s filings were the functional equivalent and Lincoln showed no prejudice — review permitted |
| Sufficiency re: express-warranty breach (whose terms governed) | Jury could find Lincoln’s terms controlled (allowing damages), or that Firetrace’s repair/replace remedy failed of essential purpose | No reasonable evidence that Lincoln’s terms were on its website and no basis to find Firetrace’s remedy failed | Denial of new trial affirmed: sufficient evidence supported either that Lincoln’s terms applied or that Firetrace’s limited remedy failed its essential purpose |
| Jury instructions — failure to give Firetrace’s proposed ‘‘failure of essential purpose’’ instruction | Court’s instruction adequately and accurately stated Nebraska law and left factual determinations to jury | Firetrace’s proffered wording was required and materially different | No plain error; the court’s instruction correctly stated the law and was adequate |
| Jury instructions — adverse inference for alleged spoliation | Jury should decide spoliation; adverse-inference instruction warranted | No explicit findings of intentional destruction or prejudice; magistrate/district court found no evidence to support sanctions | No plain error: adverse inference requires explicit findings of intent and prejudice and Firetrace did not preserve or obtain those findings |
| Jury instructions — product misuse instruction (and omission) | Misuse instruction should have been given; misuse was a defense supported by evidence | Lincoln’s evidence showed foreseeability; instruction not supported or was harmless because defense was argued without that specific instruction | Removal of misuse instruction was not an abuse of discretion; any error was harmless |
| Remittitur/new trial on damages (direct and consequential) | Damages proved by evidence of diminished value (tubing worthless) and estimated replacement costs for future consequential damages | Evidence insufficient to show tubing had zero value or that future replacement costs were provable; some modules out of warranty | Denial affirmed: evidence (testimony and expert opinion) gave a reasonable basis for jury to find tubing had no value and to estimate consequential costs; not a miscarriage of justice or shockingly excessive |
Key Cases Cited
- Miles v. Gen. Motors Corp., 262 F.3d 720 (8th Cir. 2001) (failure to file amended notice after postjudgment motion can defeat appellate jurisdiction)
- Smith v. Barry, 502 U.S. 244 (U.S. 1992) (Rule 3 requirements are liberally construed; functional-equivalent filings may suffice)
- Hallquist v. United Home Loans, Inc., 715 F.3d 1040 (8th Cir. 2013) (appellate review permitted where intent to challenge is clear and no prejudice)
- John Deere Co. v. Hand, 319 N.W.2d 434 (Neb. 1982) (Nebraska recognizes limited exclusive remedies and that a repair/replace remedy fails of its essential purpose if seller given reasonable chance but product still fails)
- Bennett v. Riceland Foods, Inc., 721 F.3d 546 (8th Cir. 2013) (standard for remittitur and new trial review: verdict must be against weight of evidence or shock judicial conscience)
- Hallmark Cards, Inc. v. Murley, 703 F.3d 456 (8th Cir. 2013) (adverse-inference instruction for spoliation requires explicit findings of intent and prejudice)
- Burris v. Gulf Underwriters Ins. Co., 787 F.3d 875 (8th Cir. 2015) (reiterating two-part requirement for adverse-inference instruction)