John L. MARINO, d/b/a Wishbone Oil & Gas, Plaintiff-Appellant, Cross-Appellee v. OTIS ENGINEERING CORPORATION, Defendant-Appellee, Cross-Appellant.
Nos. 85-1800, 85-1957.
United States Court of Appeals, Tenth Circuit.
Feb. 23, 1988.
An attorney‘s trial decisions must be based on a proper exercise of judgment based on an adequate knowledge of the facts and be on correct legal grounds. The bank officials at trial had testified that nothing had been paid on the overdraft, This was repeated several times and not challenged by defendant‘s attorney. This was not correct as the facts before the court at trial showed the acceptance of the bottling plant for the overdraft and the apparent recovery on foreclosure of some, if not all, of the overdraft. The failure to investigate this use of the security was an obvious departure by defendant‘s attorney from acceptable standards and the prejudice resulting was apparent. It should also be observed as a comment on the bank records that the bank officials at trial testified several times, without a challenge, that the bank had lost $500,000 in the transactions. At the hearing on remand they testified instead that the bank had written off about $135,000 on the bank‘s accounts. This may or may not have been a loss. The wide variation on the dollar figures testified to by the bank officials must cast some doubt on the accounting by the bank and the reality of its position. To permit the gross exaggerations at trial was a particular or specific error by counsel to defendant‘s prejudice. We must conclude that an inadequacy of representation was demonstrated under Strickland with prejudice to defendant.
This case must be remanded to the trial court with directions to order a new trial.
IT IS SO ORDERED.
Robert D. Edinger (William R. Burkett and James W. Morris, III, with him on the briefs), of Linn & Helms, Oklahoma City, Okl., for plaintiff-appellant, cross-appellee.
Rodney J. Heggy of Cheek, Cheek & Cheek, Oklahoma City, Okl., for defendant-appellee, cross-appellant.
Before ANDERSON, TACHA and TIMBERS,* Circuit Judges.
John L. Marino d/b/a Wishbone Oil and Gas (“Marino“) sued Otis Engineering Corp. (“Otis“) in federal court, based on diversity of citizenship, alleging negligence in the manufacture and installation of a device known as a packer, which is installed in oil and gas wells to assist in the extraction of oil and gas. Marino sought damages of $1,985,146.00 resulting from the alleged failure of a packer installed by Otis in one of Marino‘s wells. Oklahoma law governs.
Following a jury verdict in favor of Otis, Marino‘s motion for a new trial was denied. Marino appeals that denial, essentially relying on two arguments: First, that the trial court erred by admitting evidence of contributory negligence by Marino when Otis had not pleaded that defense, and the district court had previously granted a motion
Otis cross-appeals. It contends that the district court erred in not awarding attorneys fees to Otis, as the prevailing party, pursuant to
Before a trial court‘s decision to deny a motion for a new trial will be reversed, it must have committed a clear abuse of discretion. See Ryder v. City of Topeka, 814 F.2d 1412, 1424 (10th Cir.1987); United States v. Latimer, 780 F.2d 868, 870 (10th Cir.1985). Because we find no such abuse here, we affirm the district court with the sole exception of its ruling denying attorneys fees to Otis. As to that issue, we are persuaded that the applicable Oklahoma statute requires an award in this case.
I.
The controversy in this case concerns an Otis manufactured and installed packer which became stuck in Marino‘s well located in Oklahoma. Because it became stuck, Marino had to mill it out. He claims that this operation destroyed the productivity of the well. Marino alleged that Otis was negligent in two respects, first, in installing the packer in the well with too many shear pins in it, so as to make it irretrievable, and second, in failing to clean sand from the top part of the packer assembly known as the tubing seal divider mandrel. Marino alleged that this sand caused the overshot tool, when it was sent to free the packer, to become stuck to the packer, making the whole assembly irretrievable.1
On the other hand, Otis introduced evidence at trial showing that Marino modified the overshot tool by cutting triangular notches in the skirt of the overshot. Otis suggested as one of its theories of defense that these notches were responsible for the binding of the packer to the overshot.
Nonetheless, in its answer to Marino‘s complaint which commenced this suit, Otis failed to assert any affirmative defenses. Although in discovery Otis stated that it would amend its answer to assert the defense of contributory negligence in the notching of the overshot component of the packer assembly, it failed to do so. Nor did either party prepare a pretrial order outlining the witnesses to be called and the issues to be tried.2 Thus, Otis did not assert any affirmative defenses by way of pretrial order. Accordingly, at the commencement of trial, Marino made a motion in limine to prevent Otis from introducing any evidence related to Marino‘s contributory negligence, since contributory negligence must be pleaded according to
In granting the motion the court noted:
“I think it‘s a good motion in that the defendant has alleged or pled no affirmative defense whatever, just a general denial. So we‘ll just have to wait and see if any evidence is tendered on behalf of the
defendant or attempted to [be] tendered by way of an affirmative defense. I‘m not going to allow it because you didn‘t plead any. The burden is still on the plaintiff to prove his case.”
R.Vol. VI at 119-20.
At trial, the court refused to permit Otis to enter into evidence Defendant‘s Exhibit Number Seven because it related to the modification by Marino of the overshot portion of the packer assembly. The court also refused to allow Otis‘s counsel to ask Marino‘s chief man at the rig, Bill Hicks, about his modifications to the overshot. R.Vol. VI at 142-50.
During later testimony, however, Otis introduced photographs taken by one of Marino‘s witnesses which showed the modification to the overshot. Over Marino‘s objections the exhibits were admitted by the court because since the pictures were taken by Marino‘s witness the court found “there could be no surprise.”4 Again, Marino objected when Otis introduced Defendant‘s Exhibits 61 and 62 which were also photographs of the overshot. The judge nonetheless admitted the exhibits for a limited purpose noting:
“The jury will be told again that the defendant herein has raised no defense. They have not pled any affirmative defense but they deny the plaintiff‘s claim, so they are entitled to try and disprove anything that the plaintiff has attempted to establish; and if it does tend to rebut or disprove any of the evidence that the plaintiff has offered, it will be received for that purpose; for no other.”
R.Vol. VI at 259.
Later in the trial, Otis attempted to amend its answer and provide the court with a pretrial order, so that it could raise the notching issue as contributory negligence. In denying this request the court stated:
“Now, I‘m not going to allow the evidence on the notching for any purpose other than it may tend to disprove your claim that the negligence of the defendant proximally (sic) caused the whole thing; and as far as I‘m concerned, you can get in almost as much evidence, the defendant can, as he could otherwise, except you‘re not going to be given any instructions on any affirmative defenses because you didn‘t plead any; but any evidence that might tend to show that it was not the defendant‘s negligence that caused this, is going to be received in evidence.”
R.Vol. VI at 395-96. After this clarification both sides referred to the notching of the overshot throughout the remainder of the trial.
The court‘s decision to permit evidence of Marino‘s modification to the overshot for purposes of disproving causation only, supports Marino‘s contention that the broad sweep of the ruling on the motion in limine was altered during trial. However, the court‘s decision to admit the contested evidence was not error unless the admission constituted a clear abuse of discretion. See Robinson v. Audi NSU Auto Union Aktiengesellschaft, 739 F.2d 1481, 1483 (10th Cir.1984); May v. Interstate Moving & Storage Co., 739 F.2d 521, 524 (10th Cir. 1984). “A ruling on the threshold of trial does not preclude the court changing its ruling based on other developments during trial.” Thweatt v. Ontko, 814 F.2d 1466, 1470 (10th Cir.1987) (quoting Zehner v. Post Oak Oil Co., 640 P.2d 991, 995 (Okla. Ct.App.1981)).
Marino argues that the court did abuse its discretion because according to
In short, the court‘s modifications to its ruling on the motion in limine appear to represent its best effort to accommodate the preclusive effect of
Even if the evidence had been considered for purposes of establishing contributory negligence, the court did not abuse its discretion in admitting such testimony. The purpose behind rule 8(c), that of putting “plaintiff on notice well in advance of trial that defendant intends to present a defense in the nature of an avoidance,” State Distribs., Inc. v. Glenmore Distilleries Co., 738 F.2d 405, 410 (10th Cir.1984) (citing Hardin v. Manitowoc-Forsythe Corp., 691 F.2d 449, 458 (10th Cir.1982)), has been served in this case. Marino was advised at least three months prior to trial by Otis that it intended to raise the notching issue as an affirmative defense. See Deposition of Charles Roper, R.Vol. III at 594. And, the notching issue was repeatedly raised in the depositions before trial in some detail. See Deposition of William Hicks, Id. at 511-16; Deposition of John Harcourt, Id. at 521-28; Deposition of W.E. Goad, Id. at 671-73; Deposition of John L. Marino, id. at 687; Deposition of Alton Rex Jasper, Jr., Id. at 728-32. Thus, it would have been within the court‘s discretion, had it chosen to do so, to deny Marino‘s motion in limine and permit the amendment of Otis‘s answer allowing the notching to be considered not only to defeat causation but to affirmatively assert contributory negligence. “Allowance of amendments is discretionary but should be allowed if the opposing party fails to satisfy the court that the admission of such evidence would prejudice him in maintaining his ... [case] upon the merits.” Rio Rancho Estates, Inc. v. Beyerlein, 662 F.2d 700, 705 (10th Cir.1981) (quoting Monod v. Futura, Inc., 415 F.2d 1170, 1174 (10th Cir.1969)).
The trial court, nonetheless, granted Marino‘s motion and refused to permit evidence for purposes of establishing contributory negligence or to give an instruction thereon. Because Marino would not have been prejudiced had the court denied his motion entirely, he cannot claim prejudice when the trial court excluded the issue of contributory negligence. “Neither side should, consistent with the spirit of the rules, be allowed to sit back and fail to take obvious action to ascertain facts. To fail to do so suggests an attempt to use the rules for the object of developing an error.” Smith v. Ford Motor Co., 626 F.2d 784, 804 (10th Cir.1980) (Doyle, J., dissenting), cert. denied, 450 U.S. 918, 101 S.Ct. 1363, 67 L.Ed.2d 344 (1981). Thus, in this case, there was no trial by ambush, and
II.
Marino also moved at trial to prohibit expert testimony which Marino anticipated from John Harcourt, one of Otis‘s expert witnesses. Harcourt had completed tests
Marino now claims that the court allowed Harcourt to testify impermissibly in at least two respects. First Marino complains that the trial court allowed Harcourt to testify about the results of testing which he completed between deposition and trial, and, second, Marino alleges that Harcourt, to Marino‘s prejudice, was allowed to testify about theories which Harcourt did not reveal in his deposition or other discovery.
The first part of Harcourt‘s trial testimony, about which Marino now complains, was that the dirt that was present inside the packer assembly when it was pried apart indicated that the modified overshot had not succeeded in completely washing clean the tubing seal divider mandrel. Marino claims that this testimony was the result of the further testing undertaken by Otis between deposition and trial and was thus excluded by the court‘s order. We cannot agree.
At his deposition, Harcourt testified that the notches would have affected the circulation of the water sent down the hole to clean the top of the packer assembly. However, he was unable to give any specific approximation of the venturi effect which he indicated that the notches would create in the flow pattern. It was to obtain such an approximation that Harcourt conducted the testing between deposition and trial. But in none of the testimony which Harcourt presented at trial was such evidence presented. It is true that Harcourt testified at trial that “the modified tool did not adequately wash the sand out of the J-grooves so that when the overshot was placed over it and latched on, the sand became an ... impediment to the full engagement of the lugs into the J-slot,” R. Vol. VIII at 43, but Harcourt had offered similar testimony at his deposition,6 and he
THE WITNESS: Yes, sir.
THE COURT: All right. Within those parameters, you go right ahead. Go ahead counsel.
R.Vol. VIII at 41-42.
did not mention in his trial testimony any testing which he may have done between his deposition and trial to confirm his opinion. Therefore, such testimony was not prohibited by the court‘s previous order.
The second part of Harcourt‘s trial testimony about which Marino complains, concerns the various theories which Harcourt offered to indicate how the notches or other causes might further have caused the packer to become stuck. For example, Harcourt testified that the notches might have caused the packer assembly to bind up because the notching of the overshot skirt made a space between the overshot and the well casing capable of catching frac balls and other well debris and causing the sections of the overshot in between the notches to deflect in upon the tubing seal divider mandrel as the overshot was forced down on top of it; he also testified that the notches themselves might catch debris causing the overshot to become inappropriately wedged on top of the mandrel, and frustrating the release of the packer. Finally, he testified that the string shot explosions used by Marino in attempting to jar the packer loose, distorted the packer‘s shape causing it to become irremovable. Marino argues that this testimony was a prejudicial expansion of Harcourt‘s deposition testimony in that it incorporated theories of how the notches caused the overshot to stick to the mandrel which were not revealed at deposition or other discovery. Again, we disagree.
The relatively brief extracts of Harcourt‘s deposition which are in the record do not support Marino‘s contention. By studying the thirteen pages of Harcourt‘s deposition which appear as exhibits to various motions in the record, we can gather that Harcourt indicated in his deposition a number of causes explaining the binding up of the overshot to the tubing seal divider. Because the record does not contain a complete copy of Harcourt‘s deposition, we cannot tell whether Harcourt believed whether these causes were independent or interrelated. Nonetheless they include: (1) the presence of sand already in the overshot when it connected with the J-slot; (2) sand falling on top of the packer assembly from the well formation; (3) the possibility of this notching causing a change in the turbulation of the water sent to clean the overshot leaving sand on top of the assembly; (4) the possibility that a frac ball or other well debris caught in the notches of the overshot could then be redeposited on top of the J-slot only to be caught in the attempted latch up;7 (5) the possibility that
The possible discrepancies which exist between Harcourt‘s deposition, as provided, and his trial testimony are not of such a scope that we can say that the judge prejudicially affected Marino‘s substantial rights in admitting Harcourt‘s testimony. See Motive Parts Warehouse v. Facet Enterprises, 774 F.2d 380, 396 (10th Cir.1985); K-B Trucking Co. v. Riss Int‘l Corp., 763 F.2d 1148, 1155-56 (10th Cir.1985). As the trial court instructed counsel, the possible discrepancies, at least in this case, go to the weight which should have been afforded Harcourt‘s testimony, not to its admissibility.10 And on several occasions Marino used what he presumed to be such discrepancies in impeaching Harcourt on cross-examination.11
In any case, Marino never objected to the admission of any evidence on the basis of surprise, nor did he ask for a continuance. Our cases show that when a party requests a new trial on the basis of surprise testimony it must be able to show surprise, prejudice, and an attempt to cure the prejudice such as a motion for a continuance. Assuming arguendo, that Marino has shown surprise and prejudice,12 he did not move for a continuance or take other steps “to cure the alleged prejudice.”13 Such a failure results in the waiver of surprise as a basis for appeal in these
“Although counsel ... objected and alleged surprise when [defendant‘s witness changed his testimony at trial] there has been a failure to establish that [the witness‘s] testimony was prejudicial. [Plaintiffs] did not move for a continuance nor have they displayed the manner in which [the witness‘s] observation prejudiced them or what steps they may have pursued to cure the alleged prejudice.”
See also Id. at 698 (McKay, J., concurring) (trial court acted within discretion in admitting evidence that had not been revealed in the pretrial order or other discovery responses when the plaintiffs failed to seek a continuance or other remedy); 6A J. Moore, Moore‘s Federal Practice ¶ 59.08[2] (2d ed. 1986).
Marino has received his day in court, and although his trial may not have been error free, it was sufficiently proper in all respects to afford his case a fair hearing before a jury. He presents no error sufficient to merit a new trial.
III.
As the prevailing party at trial, Otis moved pursuant to
“In any civil action to recover damages for the negligent or willful injury to property and any other incidental costs related to such action, the prevailing party shall be allowed reasonable attorney‘s fees, court costs and interest to be set by the court and to be taxed and collected as other costs of the action.”
(emphasis added). The court ruled that there was no entitlement to attorney‘s fees in this case. R. Vol. X at 5. Otis argues that the judge erred because the plain terms of the statute entitle Otis to recover its attorney‘s fees. Otis argues that this suit was brought for the negligent destruction of property, that it successfully defended the suit, and that the Oklahoma statute at issue makes the award of attorney‘s fees mandatory in cases such as these. See Clark v. Miller, 631 P.2d 1343, 1345 (Okla.Ct.App.1981).
Marino, on the other hand, argues that the judge ruled correctly because an oil and gas lease is not in itself property but rather a property right which does not fall under the terms of the statute. He argues that his oil and gas lease is merely the right to obtain what oil and gas he can from his lease and that this oil and gas does not constitute property until it has been reduced to possession. Accordingly he argues, he was not suing for damage to property, but for damage to a property right not covered under
Marino‘s attempt to distinguish property from property rights in this case must fail. His lease has been devalued, if at all, because of the physical damage caused to the lease properties in milling out the packer from the well itself. Marino himself alleges that “Marino sought compensation for damages to geological formations which would have yielded oil and gas had Otis not ruined the well.” Reply and Response Brief of Appellant at 25. Such allegations center around the physical injury to proper
On appeal, Otis also requests that it be awarded reasonable attorneys fees necessitated by the present appeal. The Oklahoma Supreme Court has interpreted
It is thus ordered that the district court‘s judgment be AFFIRMED IN PART, REVERSED IN PART, AND REMANDED.
TIMBERS, Circuit Judge, dissenting:
I regret that I am unable to join in the majority‘s comprehensive, innovative opinion. Since I believe that the cumulative effect of the two errors committed at trial — admission in evidence of an unpled defense and admission in evidence of surprise expert testimony — unjustly prejudiced appellant, I would reverse the judgment entered on the jury verdict and remand the case for a new trial.
(A) Evidence of Contributory Negligence of Appellant.
Rule 8(c) of the Federal Rules of Civil Procedure provides:
“(c) Affirmative Defenses. In pleading to a preceding pleading, a party shall set forth affirmatively accord and satisfaction, arbitration and award, assumption of risk, contributory negligence, discharge in bankruptcy, duress, estoppel, failure of consideration, fraud, illegality, injury by fellow servant, laches, license, payment, release, res judicata, statute of frauds, statute of limitations, waiver, and any other matter constituting an avoidance or affirmative defense. When a party has mistakenly designated a defense as a counterclaim or a counterclaim as a defense, the court on terms, if justice so requires, shall treat the pleading as if there had been a proper designation.”
“If such defenses are not affirmatively pleaded, asserted with a motion under Rule 12(b) or tried by the express or implied consent of the parties, such defenses are deemed to have been waived and may not thereafter be considered as triable issues in the case.” Radio Corporation of America v. Radio Station KYFM, Inc., 424 F.2d 14, 17 (10th Cir.1970). The Supreme Court strictly enforces the rules it has prescribed. See Taylor v. Illinois, 484 U.S. 400, 108 S.Ct. 646 (1988) (upholding sanction precluding witness from testifying where counsel had failed to comply with discovery rules).
In the instant case I would hold that the defense of appellant‘s contributory negligence was waived and, accordingly, no evidence should have been admitted on the issue. The defense was never affirmatively pleaded nor was it asserted with a motion under
Notwithstanding the ruling, however, the court permitted evidence of appellant‘s contributory negligence in notching the packer
(B) The Surprise Expert Testimony.
Rule 26(e) of the Federal Rules of Civil Procedure expressly imposes a continuing duty on a person who responds to a discovery request to make seasonable supplemental responses with respect to, among other facts, “the identity of each person expected to be called as an expert witness at trial, the subject matter on which the person is expected to testify, and the substance of the person‘s testimony.”
Two weeks prior to trial appellant took the deposition of appellee‘s expert, John Harcourt. At that time, when questioned regarding the possible impact of notching on the packer, Harcourt responded that he had not reached any conclusions on notching and therefore could not quantify the effect, if any. He stated that sand which had been trapped in the packer “would be enough by itself” to cause the packer to become stuck. This was precisely the conclusion appellant had reached and, in fact, was the basis of its lawsuit.
Shortly after Harcourt‘s deposition, he performed a series of experiments which allegedly demonstrated that the notching of the packer created three conditions which caused the packer to malfunction. At no time prior to the eve of trial, however, did Harcourt amend his deposition testimony to enable appellant to be put on notice of Harcourt‘s findings. As soon as appellant was advised that Harcourt might testify in contradiction to his deposition testimony, appellant moved, as part of its motion in limine, to exclude such testimony. As stated above, that motion was granted. The court said:
“I‘m going to sustain any objection to further testimony that might tend to enlarge upon the testimony that this witness gave at deposition, the result of any test taken since then for the reasons that you didn‘t supply the other side with the results of the test or whatever, and the rules are clear that you have a continuing obligation to update the answers to interrogatories or the demand for production or whatever as new evidence that may come to light, and apparently didn‘t do it in this case.”
Notwithstanding this ruling, however, appellee nevertheless was permitted to elicit testimony regarding the experiment‘s results. Harcourt — having given deposition testimony which supported appellant‘s case — was permitted to testify at trial that the notching caused the failure of the packer. The prejudice which redounded to appellant from this surprise testimony, for which it was unprepared, simply could not be overcome. It cast a reversible pall over the entire trial.
To summarize:
Appellant was unjustly prejudiced by the cumulative effect of the two errors in the admission of evidence regarding the notching of the packer. First, in view of appellee‘s total failure ever to articulate an affirmative defense based on notching of the
I respectfully dissent.
Robert T. Keel, Keel and Kulmacz, Oklahoma City, Okl., for plaintiffs/appellants.
Cary E. Hiltgen, Law Offices of B.J. Cooper, Oklahoma City, Okl., for defendants/appellees.
Before LOGAN and ANDERSON, Circuit Judges, and CONWAY,* District Judge.
Notes
THE COURT: All right.... I‘ll take your word for it. In other words, the ruling of the Court is intended to allow all the evidence that was known at the time that deposition was taken. I made that clear. Everybody understands that, and you were here and understood it.
THE WITNESS: Yes, sir.
THE COURT: So you go ahead.
THE WITNESS: Yes, sir.
THE COURT: The Court intended to and does exclude any testimony surrounding tests or studies or whatever made since your deposition was taken because it was not furnished to the other side.
A. Well, first, I guess, let me kind of start from the beginning and then wrap it around to the beginning — Start with the end.
The end is after the components are removed from the well where the milling has taken place over the overshot, gone down, these particular tools are cut off from the packer and retrieved from the hole, removed from the hole, and that section longitudinally cut and opened up where we see stuck overshot into this tubing seal assembly and from that, I have information that there was a considerable amount of sand and what have you in the mechanism that would certainly have prevented a proper latch up — unlatching of the tool.
...
[T]here may have been no circulation at the time that the overshot was set down on the tubing seal assembly, simply because the frac balls had plugged the-in the Chiksan.... so we certainly have the possibility that as we latched on, we did not have the material circulating
Something that complicated that is the notching of the bottom of the overshot where the — maybe the proper turbulent flow that circulates in picking up frac balls, sand and debris just could not be accomplished with the — with the degree of cleanliness that must take place. Basically the notches created a three point, a venturi affect, so that we did not create the proper turbulence to be clean, if we were real close to the tubing divider.
And there, I think — therein, I think lies the problem.
R.Vol. III at 595-96. Harcourt further testified at deposition that:
Q. Well now, you say if you circulated long enough you might be able to get the sand?
A. It might come clean and on the other hand, I‘m saying I don‘t know the answer. On the other hand, you might get some backstreaming so that the sand would pull up higher than it would — than you would think. Instead of finally sweeping it clean, it may just create a pile there, kind of a false feeling. You thought, “Well, I‘ve circulated long enough, now.” but because its created this backstream, here, you set down on it, you would move right into a nice pile of sand.
Q. Well, in that case, what you‘re saying is you‘ll be getting for instance, some clean flow returns at the top and what you‘re saying is that may not indicate that you‘re really clean, then?
A. That‘s right.
R.Vol III at 523-24.
Are there any other areas — areas that are problem areas that you have discovered that may have caused this overshot to become stuck to the tubing seal divider?
A. The other area is the possibility that large objects whether it be a frac ball or pieces of steel or whatever material it could be in the debris of the fracing or whatever, could be caught in those [notches] and redeposited.
R.Vol. III at 599.
Deposition of John Harcourt, R.Vol. III at 683.
THE COURT: Well, that goes to the weight of the testimony, though, rather than the admissibility of it. Overruled. Go ahead.
R.Vol. VIII at 46-47.