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Farm and Garden Center, L.L.C. v. Kennedy

Court of Appeals of Nebraska

November 20, 2018

Farm and Garden Center, L.L.C., appellee.
v.
Jim Kennedy, appellant.

          1. Expert Witnesses: Appeal and Error. The standard for reviewing the admissibility of expert testimony is abuse of discretion.

         2. Judgments: Words and Phrases. An abuse of discretion occurs when a trial court's decision is based upon reasons that are untenable or unreasonable or if its action is clearly against justice or conscience, reason, and evidence.

         3. Prejudgment Interest: Appeal and Error. Whether prejudgment interest should be awarded is reviewed de novo on appeal.

         4. Verdicts: Juries: Appeal and Error. A jury verdict may not be set aside unless clearly wrong, and a jury verdict is sufficient if there is competent evidence presented to the jury upon which it could find for the successful party.

         5. Damages: Appeal and Error. On appeal, the fact finder's determination of damages is given great deference.

         6. Motions for New Trial: Appeal and Error. A motion for new trial is addressed to the discretion of thetrial court, whose decision will be upheld in the absence of an abuse of that discretion.

         7. ___:___. A motion for new trial should be granted only where there is error prejudicial to the rights of the unsuccessful party.

         8. Rules of Evidence: Expert Witnesses. The admissibility of expert opinion testimony under the Nebraska rules of evidence should be determined based upon the standards first set forth in Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579, 113 S.Ct. 2786, 125 L.Ed.2d 469 (1993).

         9. Courts: Expert Witnesses. Under the Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579, 113 S.Ct. 2786, 125 L.Ed.2d 469 (1993), and Schafersman v. Agland Coop, 262 Neb. 215, 631 N.W.2d 862 (2001), framework, the trial court acts as a gatekeeper to ensure the evidentiary relevance and reliability of an expert's opinion.

         [26 Neb.App. 577] 10. Courts: Rules of Evidence: Expert Witnesses. Before admitting expert opinion testimony under Neb. Evid. R. 702, Neb. Rev. Stat. § 27-702 (Reissue 2016), a trial court must determine whether the expert's knowledge, skill, experience, training, and education qualify the witness as an expert. If the opinion involves scientific or specialized knowledge, trial courts must also determine whether the reasoning or methodology underlying the expert's opinion is scientifically valid.

         11. Courts: Expert Witnesses. Normally, after a court finds that an expert's methodology is valid, it must also determine whether the expert reliably applied the methodology.

         12.____:____. In determining the admissibility of an expert's opinion, the court must focus on the validity of the underlying principles and methodology-not the conclusions that they generate. Reasonable differences in scientific evaluation should not exclude an expert witness' opinion.

         13. Trial: Expert Witnesses: Proof. Once the validity of an expert witness' reasoning or methodology has been satisfactorily established, any remaining questions regarding the manner in which that methodology was applied in a particular case will generally go to the weight of such evidence; vigorous cross-examination, presentation of contrary evidence, and careful instruction on the burden of proof remain the traditional and appropriate means of attacking evidence that is admissible, but subject to debate.

         14. Courts: Expert Witnesses. An expert's opinion must be based on good grounds, not mere subjective belief or unsupported speculation.

         15. Statutes: Appeal and Error. Statutory language is to be given its plain and ordinary meaning, and an appellate court will not resort to interpretation to ascertain the meaning of words which are plain, direct, and unambiguous.

         16. Prejudgment Interest: Claims. When considering prejudgment interest under Neb. Rev. Stat. § 45-103.02(2) (Reissue 2010), a two-pronged inquiry is required to determine whether a claim is liquidated. There must be no dispute either as to the amount due or as to the plaintiff's right to recover.

         17. Prejudgment Interest. A claim for prejudgment interest must be fixed and determined or readily determinable; but it is sufficient for this purpose if it is ascertainable by computation or a recognized standard.

         18. Claims. One has a liquidated claim only when there is no reasonable controversy as to both the plaintiff's right to recover and the amount of such recovery.

         19. Jury Instructions: Appeal and Error. Jury instructions are subject to the harmless error rule, and an erroneous jury instruction requires reversal only if the error adversely affects the substantial rights of the complaining party.

         [26 Neb.App. 578] 20. Jury Instructions: Presumptions. It is presumed a jury followed the instructions given in arriving at its verdict, and unless it affirmatively appears to the contrary, it cannot be said that such instructions were disregarded.

         21. Damages: Appeal and Error. The amount of damages to be awarded is a determination solely for the fact finder, and its action in this respect will not be disturbed on appeal if it is supported by the evidence and bears a reasonable relationship to the elements of the damages proved.

          Appeal from the District Court for Madison County: James G. Kube, Judge. Affirmed.

          George H. Moyer and Jack W. Lafleur, of Moyer & Moyer, for appellant.

          Sean A. Minahan, of Lamson, Dugan & Murray, L.L.P., and Frederick T. Bartell, of Fitzgerald, Vetter, Temple & Bartell, for appellee.

          Moore, Chief Judge, and Bishop and Arterburn, Judges.

          Bishop, Judge.

         I. INTRODUCTION

         Farm and Garden Center, L.L.C. (Farm & Garden), brought an action against Jim Kennedy on an unpaid balance for goods and services provided to him. Kennedy filed a counterclaim against Farm & Garden for damages based on "lost forage/ bales for the 2012 crop season," which he claimed was the result of an improper application of chemicals and fertilizers by Farm & Garden. A jury returned a verdict of $104, 180.27 in favor of Farm & Garden and a verdict of $7, 511.20 in favor of Kennedy on his counterclaim. Kennedy filed a motion for new trial on his counterclaim, and Farm & Garden filed a motion for prejudgment interest. The trial court denied Kennedy's motion for new trial and ordered Kennedy to pay Farm & Garden an additional $46, 089.27 in prejudgment interest.

         On appeal, Kennedy challenges the admission of Farm & Garden's expert's opinion, the award of prejudgment interest, [26 Neb.App. 579] the jury's verdict on his counterclaim, and the denial of his motion for new trial. We affirm.

         II. BACKGROUND

         In 2012, Kennedy, a farmer at the time, resided on land he referred to as his "home place" (Home Place). That year, he also rented land from the "Leuthold family" (collectively, the Leuthold Fields, or separately, Leuthold North or Leuthold South). Leuthold North (130 acres) was located directly west of the Home Place; Leuthold South (26.32 acres and 53 acres) was directly south of Leuthold North. The Leuthold Fields and the Home Place are located in Stanton County, Nebraska. During 2011, the Leuthold Fields were part of the Conservation Reserve Program (CRP), meaning it was not in row crop production. According to Farm & Garden's owner (at the time), Delwin Herbolsheimer, ground that has been in CRP "has been neglected for ten plus years, so it's going to be dead," and will need fertilizer and preemergent herbicide after the ground has been prepared for planting. A Farm & Garden employee said the Leuthold Fields were "in CRP for a reason . . . [i]t was poor ground."

         Kennedy brought the Leuthold Fields back into row crop production by "using an implement to cut up residue or disk the soil." This was done multiple times and in multiple directions, between four and five times prior to planting in 2012. A Farm & Garden manager visited Kennedy's farm to discuss the type of fertilizer and chemical program to be applied to the Leuthold Fields and the Home Place, and the manager made recommendations regarding both the fertilizer and chemical program. Farm & Garden agreed to sell goods and services on account to Kennedy for the agricultural property he actively farmed. The services consisted of applying liquid and dry fertilizer and chemicals.

         In 2012, Kennedy farmed 870 acres of row crops in Stanton County, of which 460 acres were planted to corn. Farm & Garden applied fertilizers and pesticides to all of the acres [26 Neb.App. 580] Kennedy farmed. As relevant here, Kennedy planted corn on 209.32 acres of the Leuthold Fields and on 75.89 acres of the Home Place. In April, a Farm & Garden employee contacted Kennedy to notify him that dry fertilizer was applied to an incorrect field. Farm & Garden subsequently applied fertilizer and pesticides to all the acres of row crops that Kennedy farmed that year. Farm & Garden sent Kennedy 39 invoices with dates ranging from March through July, documenting the sale of chemicals and fertilizer and the application charges for Kennedy's purchases. Farm & Garden issued a credit for the application to the incorrect field that Kennedy did not order.

         In the 2012 crop season, Stanton County experienced a drought. Kennedy testified that the corn crop on the Home Place rose to an even height and was a "healthy green" color. However, on the Leuthold Fields, there were strips of corn that were shorter compared to other strips of corn in the same field and some rows were yellow. According to Kennedy, there was "[b]arely any green to them." This effect was described by witnesses as "striping" or "streaking" in the corn.

         After making observations of the fields in mid- to late May 2012, Kennedy contacted Farm & Garden, stating there was a problem with the variance in the height and coloration of crops on the Leuthold Fields. Herbolsheimer visited with Kennedy after looking at the Leuthold Fields and acknowledged there was a problem. Although Kennedy thought it was too late, Herbolsheimer planned to get more fertilizer and "top-dress" it on the Leuthold Fields. Kennedy called a Farm & Garden employee who said he thought applying more product would not be useful unless it rained, but Kennedy replied that Farm & Garden had to follow the steps Herbolsheimer ordered. Herbolsheimer sent someone with product to attempt to remediate the condition of the Leuthold Fields on June 26. According to Kennedy, he never agreed to the further application of fertilizer on the Leuthold Fields. Farm & Garden sent an invoice billing Kennedy a total of $7, 511.20 for the [26 Neb.App. 581] remedial application of fertilizer on the Leuthold Fields; this invoice was received as exhibit 75 at trial.

         In the last few days of July 2012, Kennedy started to cut and lay down the cornstalks on the Leuthold Fields into a "windrow," with plans to use it for cattlefeed. He left some strips for checking the yield, and these were later harvested with a combine. He had windrowed 41.51 acres on the Home Place in mid-July; the other 34.38 Home Place acres were chopped for silage, and some strips were left for checking the yield (also later harvested). Kennedy let the windrowed corn material dry to approximately 20-percent moisture before baling; Kennedy had purchased a new baler "for the specific purpose of baling this type of material." He baled the corn material, making 6-foot diameter "cornstalk bales," and each bale "should have weighed a minimum of 1400 pounds." (The terms "cornstalk bales" and "stover bales" were used interchangeably at trial; however, Kennedy viewed "stover" as "what is left over after you've harvested a corn crop.") Brandon Nathan, Kennedy's full-time farmhand at the time, recorded in a notepad that he gathered 156 cornstalk bales on the Home Place and 153 bales on the Leuthold Fields; however, Nathan could not remember whether Kennedy baled Leuthold South in 2012, he could not remember pulling any bales off of Leuthold South, nor could he remember noticing any of the striping effect on Leuthold South. Kennedy testified that the electronic bale counter on his equipment produced the same counts as Nathan's recorded counts. Kennedy sold approximately 65 stover bales at $150 each, and he kept some bales to feed his livestock.

         According to Herbolsheimer, the products sold to Kennedy were "on account" and the sale of chemicals, fertilizer, and application services were invoiced from May 4 through July 16, 2012. Statements which show the balance of the account indicate the new balance is due on the "10th of each month" and that a finance charge is computed "at the rate of 1.33 percent per month which is an annual percentage of 16 percent applied to the previous balance end of the month." The [26 Neb.App. 582] total invoice amount for all chemicals, fertilizers, and application costs, excluding finance charges reflected in individual invoices, was $104, 180.27. The district court received exhibit 83 showing this total invoice amount.

         Despite receiving statements which included finance charges on overdue balances from Farm & Garden in October and November 2012, Kennedy did not make payments on his past due account until he made two separate payments of $2, 500 in April 2013. These were the only payments made by Kennedy. Farm & Garden sent Kennedy a statement of the balance due on May 1 totaling $120, 892.23.

         In June 2013, Farm & Garden filed a complaint against Kennedy to recover $120, 892.23, the amount claimed as Kennedy's unpaid account for goods and services provided during the 2012 crop year, plus interest, as of May 1. It stated that "the account accrues interest at the rate of 1.33% per month pursuant to contract and Neb. Rev. Stat. §45-101.04," and prayed for a judgment of $120, 892.23 as of May 1, "together with interest thereafter." Kennedy asserted in his amended answer that Farm & Garden negligently and carelessly applied fertilizer to his farm ground and therefore breached the implied warranty of good workmanship. As a result, Kennedy claimed Farm & Garden "conferred no benefit upon [Kennedy] in the 2012 crop season and wasted the fertilizer that was applied," and therefore its complaint should be dismissed. Kennedy's amended answer included a counterclaim, which alleged that Farm & Garden breached its agreement to apply chemical and fertilizer in a workmanlike manner and that by failing to do so, this caused an irregular growth pattern of the corn crop planted. Kennedy claimed damages of $99, 990 for "lost forage/bales for the 2012 crop season" and $7, 600 to subsequently plant rye seed as a "cover crop," which also either did not grow "in any capacity" or grew "in an irregular pattern." Additionally, Kennedy alleged that Farm & Garden applied chemical and fertilizer to "32 acres of standing CRP" without his authorization and that such charges should be deducted from Farm & [26 Neb.App. 583] Garden's claimed damages. Kennedy also asserted that Farm & Garden's failure to apply the fertilizer and chemical in a proper and workmanlike manner would cause carryover losses for the 2013 crop (this claim was not pursued at trial). Further amended pleadings were filed, but none of the amendments materially impact the issues on appeal.

         At trial, Kennedy and his farmhand, Nathan, testified about the striping on the Leuthold Fields and claimed that those 209.32 acres produced only 153 bales of stover. On the other hand, they claimed the acres baled on the Home Place (which had no striping) produced 156 bales of stover. The number of acres baled on the Home Place was alleged to be 39 acres during some testimony and 41.51 acres in other testimony; the difference is insignificant to any issue on appeal. The explanation for the alleged disparity in stover bales produced per acre between the Leuthold Fields and the Home Place was the primary point of contention between the agronomy experts that Kennedy and Farm & Garden each had testify.

         Kennedy's expert, Regan Kucera, opined that the cause of striping on the Leuthold Fields was due to the phosphorous application being inaccurately applied. Kucera concluded that 68 percent of the field was underapplied and that 32 percent of the field was overapplied. As to the 41.51 acres on the Home Place which Kennedy claimed produced 156 bales of stover at 1, 400 pounds per bale, Kucera calculated that would be 3.76 bales per acre. Kucera compared this to the 209.32 acres on the Leuthold Fields, where the production of 153 bales of stover calculated to only .73 bales per acre. Kucera testified that environmental factors such as lack of moisture or too much heat could keep a corn plant from reaching full maturity, as well as "[m]an-made or man-managed factors" such as "inappropriate fertility, poor soil structure or just lack of nutrients applied."

         Farm & Garden's expert, Michael Goedeken, agreed the fertilizer was not applied correctly; Goedeken said this was because the "spinner was not throwing the fertilizer" the correct [26 Neb.App. 584] distance, which resulted in a striping effect. Goedeken testified the misapplication was noted on the invoice dated April 23, 2012, found in exhibit 71. However, Goedeken stated that the lesser amount of residue produced on the Leuthold Fields in comparison to the Home Place might be attributable to the increased drying out of the Leuthold Fields when Kennedy disked it three to four times (before planting). According to Goedeken, "the USDA states that each tillage pass takes out .25 inches of water" and "[i]n 2012 in this area, we were . . . [s]even to ten inches below normal rainfall . . . during the growing season." Goedeken stated that taking another "three-quarter to an inch away from that, we're going to cause some damage to those plants for lack of moisture when we're already in a deficit situation."

         Goedeken also opined that the number of stover bales per acre reportedly harvested on either the Leuthold Fields or the Home Place was misstated. Farm & Garden called an appraiser to testify about yield estimates. The appraiser said many appraisals were done in 2012 "because it was such a dry year" and "[m]any people either abandoned fields or chopped fields. . . . that was a very common occurrence." The appraiser performed a yield estimate on Kennedy's corn crop in 2012. The appraiser estimated 4.3 bushels per acre on a 57-acre portion of Leuthold South and 5.7 bushels per acre on a 3.3-acre area also in Leuthold South. The appraiser testified that 19 acres on Leuthold South were harvested by a combine for grain. The appraiser also performed estimates on "Section 34" which was composed of Leuthold North and the Home Place. He estimated 1.7 bushels per acre for Leuthold North and 2.6 bushels per acre for ...


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