Castles Auto v. Exxon Corporation ( 1997 )

UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
CASTLES AUTO AND TRUCK SERVICE,
INCORPORATED,
Plaintiff-Appellant,
v. No. 95-3183
EXXON CORPORATION, d/b/a Exxon
Company, USA,
Defendant-Appellee.
CASTLES AUTO AND TRUCK SERVICE,
INCORPORATED,
Plaintiff-Appellee,
v. No. 96-1117
EXXON CORPORATION, d/b/a Exxon
Company, USA,
Defendant-Appellant.
Appeals from the United States District Court
for the Western District of North Carolina, at Charlotte.
Graham C. Mullen, District Judge.
(CA-90-166-3-MU)
Argued: June 6, 1997
Decided: September 23, 1997
Before RUSSELL, WIDENER, and WILKINS, Circuit Judges.
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Reversed and remanded by unpublished per curiam opinion.
COUNSEL
ARGUED: Allen C. Brotherton, KNOX, KNOX, FREEMAN &
BROTHERTON, Charlotte, North Carolina, for Appellant. Richard
Edwin Morton, PETREE STOCKTON, Charlotte, North Carolina, for
Appellee. ON BRIEF: H. Edward Knox, KNOX, KNOX, FREE-
MAN & BROTHERTON, Charlotte, North Carolina; Bryant T.
Aldridge, BRETZMANN, BRUNER & ALDRIDGE, High Point,
North Carolina; Rodney Shelton Toth, Charlotte, North Caroina, for
Appellant. Richard C. Gaskins, Jr., PETREE STOCKTON, Charlotte,
North Carolina; William J. Stack, Joseph P. Perez, Legal Department,
EXXON COMPANY, UNITED STATES ATTORNEY, Houston,
Texas, for Appellee.
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Unpublished opinions are not binding precedent in this circuit. See
Local Rule 36(c).
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OPINION
PER CURIAM:
Castles Auto and Truck Service, Incorporated brought this action
against Exxon Corporation, asserting various claims arising from
Exxon's alleged contamination of Castles' property. Castles appeals
the decision of the district court setting aside the jury verdict for
$500,000 in response to Exxon's renewed motion for judgment as a
matter of law on Castles' legal claims. See Fed. R. Civ. P. 50. Exxon
cross appeals, principally asserting various evidentiary errors. We
reverse and remand to the district court.
I.
Castles operated an automobile repair business adjacent to an
Exxon petroleum storage facility on property Castles purchased from
Exxon in 1981. In April 1989, Exxon discovered a discharge of petro-
leum into the soil at its facility and began efforts to clean up the leak
2
and monitor its effects. Subsequently, it was determined that Castles'
property also was contaminated with a petroleum product.
Castles brought this action against Exxon, claiming that its prop-
erty had been contaminated by the discharge of petroleum at Exxon's
facility and alleging negligence, fraudulent misrepresentation, tres-
pass, nuisance, and statutory strict liability pursuant to the North Car-
olina Oil Pollution and Hazardous Substances Control Act
(OPHSCA) of 1978, see N.C. Gen. Stat. §§ 143-215.75 to -215.104
(1996). Exxon defended by asserting that Castles had contaminated its
own property.
At the conclusion of the trial of Castles' legal claims,1 the district
court submitted a special verdict form, on which the jury indicated the
following: (1) Exxon negligently stored or handled petroleum prod-
ucts on its property, and its negligence proximately caused damage to
Castles; (2) Castles discharged petroleum or hazardous products onto
its own property, but was not negligent in so doing; (3) Exxon did not
commit a wrongful trespass on Castles' property; (4) Exxon did not
create a nuisance; and (5) Castles was entitled to recover $500,000 in
compensatory damages.
The district court subsequently granted Exxon's motion for judg-
ment as a matter of law and set aside the jury verdict on two grounds.
First, the court held that the findings of the jury that Exxon had nei-
ther committed a wrongful trespass on Castles' property nor created
a nuisance compelled the conclusion that none of the contamination
entered onto or physically affected Castles' property. The court there-
fore concluded that the jury must have found that the only injury suf-
fered by Castles was a reduction in the market value of its property,
which would not support the recovery under North Carolina law. The
district court also determined that because Castles had presented no
evidence that would have allowed the jury reasonably to distinguish
between the damage caused by Exxon's leaks and Castles' discharge
of hazardous substances, the award of $500,000 was speculative.
Finally, the district court found for Exxon on Castles' nonjury claims.
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1 The district court heard the OPHSCA claims as nonjury matters
simultaneously with the jury trial of the legal claims.
3
II.
Castles first maintains that the district court erred in granting judg-
ment as a matter of law, setting aside the jury verdict in Castles' favor
on its negligence cause of action. We review the grant of judgment
as a matter of law to determine whether the evidence presented at
trial, viewed in the light most favorable to Castles, would have
allowed a jury to render a verdict in Castles' favor. See Price v. City
of Charlotte, N.C., 93 F.3d 1241, 1249 (4th Cir. 1996), cert. denied,
117 S. Ct. 1246 (1997). Because the Seventh Amendment does not
allow federal courts to review jury verdicts directly, Exxon "bears a
hefty burden in establishing that the evidence is not sufficient to sup-
port the award." Id. Recognizing that we may neither substitute our
judgment for that of the jury nor make credibility determinations, we
must conclude that judgment as a matter of law was granted errone-
ously if there is any evidence on which a reasonable jury could have
returned a verdict in Castles' favor. See id. at 1249-50. We review the
decision of the district court granting judgment as a matter of law de
novo. See Trandes Corp. v. Guy F. Atkinson Co. , 996 F.2d 655, 661
(4th Cir. 1993).
In order for Castles' negligence claim to survive Exxon's motion
for judgment as a matter of law, Castles was obligated to present evi-
dence at trial that Exxon owed Castles a duty of care, that Exxon's
conduct breached that duty, that the breach was the actual and proxi-
mate cause of Castles' injury, and that damages resulted from the
injury. See Lamm v. Bissette Realty, Inc., 395 S.E.2d 112, 115 (N.C.
1990). The duty that Exxon owed Castles is clearly established under
North Carolina law: "The law imposes upon every person who enters
upon an active course of conduct the positive duty to exercise ordi-
nary care to protect others from harm, and calls a violation of that
duty negligence." Council v. Dickerson's, Inc., 64 S.E.2d 551, 553
(N.C. 1951).2
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2 We do not agree with Exxon's contention that Castles was required
to submit evidence of a specialized standard of care. See Norris v. Rowan
Mem'l Hosp., 205 S.E.2d 345, 348 (N.C. Ct. App. 1974) (holding that
because the "alleged breach of duty did not involve the rendering or fail-
ure to render professional nursing or medical services requiring special
4
In the light most favorable to Castles, the evidence at trial estab-
lished the following facts: (1) Exxon was aware of holes in the bottom
of one of its tanks, yet continued to use it after merely "button[ing it]
up," J.A. 770; (2) petroleum product leaked from the tank until it was
taken out of service in 1989; (3) Exxon did not use any method to
monitor petroleum product loss from its underground pipes to its
loading rack; (4) there was a leak in at least one of those lines contin-
uing as late as 1989 or 1990; (5) by the time Exxon's contractor was
informed of the leak by Exxon, there had been a release of a substan-
tial quantity of petroleum product; (6) contamination from the leaking
tank and the leaking line moved through the subsurface and ground-
water, resulting in contamination of Castles' property;3 and (7)
remediation of the Castles property would cost at least $500,000.
Because the evidence presented by Castles was adequate to support
a conclusion by a reasonable jury that Exxon's negligent discharge of
petroleum contaminated its property, and that remediation of the con-
tamination would cost at least $500,000, the district court erred in
granting judgment as a matter of law to Exxon.4
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skills, expert testimony on behalf of [injured hospital patient] as to the
standard of due care prevailing among hospitals in like situations [was]
not necessary to develop a case of negligence";"jury was fully capable
without aid of expert opinion to apply the standard of the reasonably pru-
dent man").
3 Exxon argues the district court abused its discretion by failing to hold
hearings pursuant to Daubert v. Merrell Dow Pharmaceuticals, Inc., 509
U.S. 579 (1993), to determine the admissibility of Castles' expert testi-
mony. We disagree. See id. at 592 ("Faced with a proffer of expert scien-
tific testimony, then, the trial judge must determine at the outset,
pursuant to Rule 104(a), whether the expert is proposing to testify to (1)
scientific knowledge that (2) will assist the trier of fact to understand or
determine a fact in issue." (emphasis added) (footnote omitted)); Hopkins
v. Dow Corning Corp., 33 F.3d 1116, 1124 (9th Cir. 1994) (holding that
a formal hearing is not required for a district court to make a determina-
tion as to the admissibility of proposed expert testimony). We further
find the district court was within its discretion in admitting Castles'
expert testimony. See Benedi v. McNeil-P.P.C., Inc., 66 F.3d 1378, 1383-
85 (4th Cir. 1995) (holding that abuse of discretion standard applied to
determinations made by the district court concerning Daubert test).
4 Exxon also argues the district court should have entered judgment in
its favor on the basis of a ten-year statute of repose. See N.C. Gen. Stat.
5
III.
Although we conclude that the district court erred in granting judg-
ment as a matter of law, we recognize that the concern driving the
decision of the district court to set aside the verdict was the apparent
inconsistency between the verdicts in Castles' favor on the negligence
claim and in Exxon's favor on the trespass and nuisance claims. The
proper remedy for inconsistent verdicts, however, is a new trial, not
judgment as a matter of law. See Atlas Food Sys. & Servs., Inc. v.
Crane Nat'l Vendors, Inc., 99 F.3d 587, 598 (4th Cir. 1996); see also
Fed. R. Civ. P. 49(b) ("When the answers [to interrogatories] are
inconsistent with each other and one or more is likewise inconsistent
with the general verdict, judgment shall not be entered, but the court
shall return the jury for further consideration of its answers and ver-
dict or shall order a new trial."). Consequently, we remand to permit
the district court to determine whether a new trial is warranted. See
Neely v. Martin K. Eby Constr. Co., 386 U.S. 317, 329 (1967) (noting
that the court of appeals may refer the question of the appropriateness
of a new trial to the district court when it reverses the grant of judg-
ment notwithstanding the verdict).5
REVERSED AND REMANDED
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§ 1-52(16) (1996). We disagree. Although a ten-year statute of repose
applies to Castles' legal claims, reviewing the evidence in the light most
favorable to Castles, and drawing all reasonable inferences therefrom,
the evidence provided was adequate to support a conclusion that the
release from the damaged tank continued until 1989 and the leak at the
loading rack was not stopped until late 1989 or early 1990. The evidence
further is ample to show that both of these leaks damaged Castles' prop-
erty. The district court therefore correctly concluded that Exxon was not
entitled to judgment as a matter of law on that ground.
5 Because Castles has conceded that the damages it sought on its
OPHSCA claims were identical to those it was awarded on its negligence
claim and that its contention that it was improperly denied a jury trial on
its OPHSCA claims "arises only if this Court does not reinstate judgment
for [Castles] on the negligence claim," Brief of Appellant at 26, we need
not address that issue.
6