Minn. Stat. § 480A.08, subd. 3 (1996).
STATE OF MINNESOTA
IN COURT OF APPEALS
North Star Mutual Insurance Company,
Filed January 27, 1998
Beltrami County District Court
File No. C396411
Darrell Carter, 410 Minnesota Ave., P. O. Box 875, Bemidji, MN 56619 (for appellant)
Marcus J. Christianson, Daniel L. Giles, Christianson, Stoneberg, Giles & Stroup, P.A., 300 O'Connell St., Marshall, MN 56258 (for respondent)
Considered and decided by Harten, Presiding Judge, Huspeni, Judge, and Klaphake, Judge.
Appellant insured challenges the trial court's denial of her alternative motions for JNOV or a new trial. Because we conclude that competent evidence sustains the jury's verdict and that there was no abuse of discretion in instructing the jury, in denying a new trial on the basis of inadequate damages, or in denying appellant's motion to amend her complaint, we affirm.
Appellant Carmen Parks had a $140,000 insurance policy from respondent North Star Mutual Insurance Company in effect when her building in Blackduck, Minnesota, was damaged in a windstorm. The commercial building, a concrete block structure, had an assessed value of $56,000 to $58,000; the assessor had devalued it to 84%. Appellant had loans of $71,000 against the building.
Prior to trial, respondent paid appellant a total of $35,192 as a result of the storm. Eight checks were written: for $4,546 and $2,795 for damage to appellant's personal property; for $13,934 to repair the roof; for $440 for clean-up costs and debris removal; for $80 for electrical inspections; for $639 for water removal; for $4,082 to repair internal damage; and for $8,676 to repair insulation and a canopy. Appellant used money from the last two checks for other purposes, such as buying a truck and buying tools.
Appellant brought this action because respondent denied liability for cracks in the exterior concrete block walls of the building, claiming that the cracks predated the storm and that they were probably caused by soil shifting. Appellant argued that the cracks were the result of wind damage from the storm. Both sides presented testimony to support their positions.
In closing arguments, respondent's attorney said that little or none of the exterior damage was caused by the storm, proposed $5,000 as an amount sufficient to cover what exterior damage was caused by the storm, and argued that the amount respondent had already paid compensated appellant for damage to the interior. Appellant's attorney argued that the jury should award appellant $36,720 for the exterior damage and $47,121 for renovation of the interior.
The jury was presented with a special verdict form asking:
(1) if appellant's building suffered damage;
(2) if damage to the exterior blocks was caused by the storm and (3) if so, how much would compensate appellant for that damage;
(4) if damage to the interior was caused by the storm and (5) if so, how much would compensate appellant for that damage; and
(6) whether respondent should be credited for prior payments for repair of the building's interior and (7) if so, for how much should respondent be credited.
During deliberations, the jury twice addressed questions to the judge, who conferred with the attorneys by telephone and then replied. The jury first asked two questions: (1) was personal property damage included in interior damage, to which the judge replied no, that the personal property issues had been resolved and were not part of the case; and (2) could the jury request control over any sums awarded to appellant to ensure that they went for repair, to which the judge again replied no, that appellant would have control of any sums awarded to her.
Later, the jury addressed further questions to the judge, who responded by telling the jury to eliminate questions 6 and 7 and noting that in regard to question 2, appellant claimed the storm damaged the exterior, while respondent claimed it did not. The judge then told the jury:
So no money has been paid on the damage to the exterior at this point. * * * The thirty-five thousand * * * that's all gone for [the] interior * * *. [A]nything you award is beyond the thirty-five thousand.
The jury returned the special verdict form finding that (1) the building suffered damage; (2) the exterior block damage was caused by the storm; (3) $8,800 would compensate appellant for the exterior damage; (4) the interior was damaged by the storm; and (5) $0 would compensate appellant for the interior damage.
During trial, the court denied appellant's motion to amend her complaint to include a claim for $25,000 she alleged respondent owed her because the lawsuit had precluded her from proceeding with her application for a federal "matching grant" loan for $25,000 available for repairs of commercial buildings in Blackduck.
Appellant moved unsuccessfully for judgment notwithstanding the verdict (JNOV) or a new trial, challenging the sufficiency of the evidence, the court's answers to the jury's questions, the adequacy of the damages, and the denial of the amendment. This appeal followed.
In reviewing the facts in a case where a motion for judgment notwithstanding the verdict has been denied, we must affirm if there is any competent evidence reasonably tending to sustain the verdict.
Rettman v. City of Litchfield, 354 N.W.2d 426, 429 (Minn. 1984). The cost of completely repairing the exterior of appellant's building was $36,720. The jury found, however, that $8,800 would compensate appellant for exterior damage caused by the storm. Evidence was presented showing that many of the cracks in the building's exterior existed prior to the storm. A former tenant testified that cracks had developed the first spring that the building was occupied, that cracking was always a problem in the spring, and that plate glass windows had to be removed because of repeated cracking. Photographic evidence showed that some of the cracks had existed before the current paint was applied, well before the storm. The amount awarded by the jury covered touching up and repainting the exterior; i.e., returning it to its condition before the storm. There is evidence to support the jury's finding that $8,800 would compensate appellant for the storm's damage to the concrete block exterior.
The jury also found that, although the interior of the building had been damaged, appellant was entitled to no more money to repair it. Testimony showed that appellant had used at least some of the $12,758 she received for repairs for other purposes, that the estimated cost of renovating the interior included repairing defects not caused by the storm, and replacing items that could be cleaned and repaired. Competent evidence sustains the jury's verdict that the amount appellant had already received for repairs to the interior of the building was adequate compensation.
Appellant argues that she is entitled to a new trial because the court misinstructed or misinformed the jurors when it answered their questions. The decision to grant a new trial lies within the sound discretion of the trial court and will not be disturbed absent an abuse of that discretion. Halla Nursery, Inc. v. Baumann-Furrie & Co., 454 N.W.2d 905, 910 (Minn. 1990). "The trial court has broad discretion both in writing jury instructions and in framing special verdict questions." Dang v. St. Paul Ramsey Medical Ctr. Inc., 490 N.W.2d 653, 658 (Minn. App. 1992), review denied (Minn. Dec. 15, 1992). Minn. R. Civ. P. 61 provides that courts must disregard any error or defect that does not affect the substantial rights of the parties. "This harmless error rule applies to jury instructions." Minnesota Mut. Life Ins. Co. v. Wright, 312 F. 2d 655, 661 (8th Cir. 1963), cited in Hahn v. Tri-Line Farmers Co-op, 478 N.W.2d 515, 524 (Minn. App. 1991), review denied (Minn. Jan. 27, 1992); see also Seivert v. Bass, 288 Minn. 457, 467, 181 N.W.2d 888, 894 (1970) (affirming denial of a motion for a new trial on the basis of jury instructions and holding that "[i]t is unnecessary that every possible opportunity for [a jury's] misapprehension be guarded against.").
The trial court correctly told the jury that respondent did not believe it was liable for defects on the exterior and that nothing had been paid for damage to the exterior, but incorrectly said that the amount respondent paid "had all gone for the interior" when in fact some had gone for the roof and some for personal property. The issue is not whether this was a misstatement, but whether the misstatement was harmless error.
Appellant cites Minn. R. Civ. P. 59.01(a), providing that a new trial may be granted for irregularity in the proceedings of the court whereby the moving party was deprived of a fair trial. However, irregularity in proceedings must be prejudicial in order for a new trial to be granted. Danielson v. Hanford, 352 N.W.2d 758, 762 (Minn. App. 1984).
Appellant does not show that any prejudice resulted from the misstatement. The jurors had seen all the checks respondent wrote appellant, had heard both parties' testimony as to the purpose of each check and what actually happened to the funds, and had heard both attorneys discuss the subject in their closing arguments. It is unlikely that they were misled by the trial court's remark that all of the amount paid had gone for the interior. The context of the remark, i.e., clarification that none of the money had gone for repair of the exterior blocks because respondent did not admit liability for that repair, further reduces the likelihood of prejudice. Finally, the fact that the jury asked whether the amount paid for personal property damages was included in the calculation of the amount paid for interior repair demonstrates the jury's accurate understanding of the amounts respondent paid appellant. The trial court's misstatement had no prejudicial effect.
3. Inadequate Damages
Appellant also cites Minn. R. Civ. P. 59.01(e), providing for a new trial in cases of excessive or insufficient damages that appear to have been awarded under the influence of passion or prejudice. Whether damages are adequate is addressed to the discretion of the trial court, whose decision will not be reversed absent most "unusual circumstances." Fitzer v. Bloom, 253 N.W.2d 395, 404 (Minn. 1977). A new trial is not warranted due to inadequate damages where the jury determines that the defendant is not liable and that determination is supported by credible evidence. Hernandez v. Renville Public School Dist. No. 654, 542 N.W.2d 671, 674-75 (Minn. App. 1996), review denied (Minn. Mar. 28, 1996). Here, evidence supported the jury's verdict that respondent was not liable for more than $8,800 worth of damage to the exterior and that respondent had already paid as much as it was liable for in damage to the interior. The trial court did not abuse its discretion in failing to grant a new trial on the basis of inadequate damages.
4. Refusal to Amend
"Whether to allow an amendment is committed to the trial court's discretion." Utecht v. Shopko Dep't Store, 324 N.W.2d 652, 654 (Minn. 1982). The director of the grant program testified that whether appellant would have received a grant was speculative because no workup had been done. The trial court ruled not to allow the claim for the loss of grant money because the claim was speculative. "[A] jury may not base an award of substantial damages on speculation and conjecture." Ahrenholz v. Hennepin County, 295 N.W.2d 645, 649 (Minn. 1980).
To be entitled to $25,000 in damages for lost federal grant money, appellant would have had to show both that she could have borrowed the "matching" $25,000, and that she would have received the grant. The program's director testified that appellant would have had to place $25,000 in escrow, that the director had no idea how appellant planned to obtain the $25,000, that it was impossible to say how much appellant would have been granted, and that giving a figure would be entirely speculation. Appellant testified that there were already loans against the building for more than its value, but said she could have raised $25,000 by borrowing from her mother, who would have had to obtain a mortgage to fund the loan, or by borrowing on her credit cards. No evidence was presented showing that appellant had made any arrangements to borrow $25,000. Absent such evidence, the trial court's denial of appellant's claim as speculative was not an abuse of discretion.
The trial court also gave as a reason for denying the motion to amend that the claim was a tort claim and would be improperly brought in a contract case. The parties agree that the trial court mischaracterized appellant's claim as a tort claim when it was actually a claim for consequential damages. However, an error must be prejudicial to serve as the basis for a new trial. Danielson, 352 N.W.2d at 762. Because the trial court already had an adequate basis for denying the motion to amend, its mischaracterization of the claim was not prejudicial.
Competent evidence sustains the jury's verdict; we therefore affirm the denial of appellant's motion for JNOV. Because we see no abuse of discretion in instructing the jury, in accepting the special verdict damages, or in denying the motion to amend the complaint, we also affirm the denial of her motion for a new trial.
 The record does not include these questions, but it can be inferred from the judge's answers that the jury asked whether the $35,000 that appellant had already received from respondent was to be considered part of the award and whether it was payment for interior or exterior damages.