Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca10-87-01073/USCOURTS-ca10-87-01073-0/pdf.json

Nature of Suit Code: 190
Nature of Suit: Other Contract Actions
Cause of Action: 

---

... 

FILED 

Ufliced Stat# Cout1 of Appeals 

UNITED STATES COURT OF APPEALS Tenth Circuit 

TENTH CIRCUIT 

E.A. MILLER & SONS PACKING CO., 

a Utah Corporation, and MISSION 

NATIONAL INSURANCE, a California 

Corporation, 

v. 

Plaintiffs-AppelleesCross Appellants, 

MIDLANDS MECHANICAL, INC., a 

Nebraska Corporation, 

) 

) 

) 

) 

) 

) 

) 

) 

) 

) 

) 

) 

Defendant-Cross Appellee, ) 

and 

OMECO-BOSS COMPANY, a Nebraska 

Corporation, 

Defendant-Appellant, 

) 

) 

) 

) 

) 

) 

) 

JU 13 1990 

R.OBERT L. HOECKER 

Clerk 

No. 87-1073 

No. 87-1079 

(D. Utah, No. 84-C-2039G) 

ORDER AND JUDGMENT* 

Before*~OORE, EBEL, Circuit Judges, and PHILLIPS, District 

Judge. 

Defendant Omeco-Boss Co. appeals from a judgment in favor of 

plaintiff E.A. Miller & Sons Packing Co., and E.A. Miller & Sons 

Packing Co. cross-appeals from a judgment in favor of defendant 

Midlands Mechanical, Inc. We affirm. 

* This order and judgment has no precedential value and shall not 

be cited, or used by any court within the Tenth Circuit, except 

for purposes of establishing the doctrines of the law of the case, 

res judicata, or collateral estoppel. 10th Cir. R. 36.3. 

** Honorable Layn R. Phillips, United States District Judge for 

the Western District of Oklahoma, sitting by designation. 

Appellate Case: 87-1073 Document: 010110036185 Date Filed: 06/13/1990 Page: 1 
FACTS 

Plaintiff E.A. Miller & Sons Packing Co. ("Miller") operates 

a slaughterhouse and meat packing plant in Hyrum, Utah. In 1984, 

Miller contemplated expanding the capabilities of its plant and 

entered into a contract with Omeco-Boss Co. ("Omeco"), which 

provided that Omeco was to design, manufacture, and/or supply 

specified equipment and materials for the Fabrication Floor 

Project, a machine designed to assist in the slaughtering of 

cattle. 1 The contract also provided that Omeco would be the 

"Project Manager." 

As Project Manager, Omeco was contractually obligated to 

select contractors to install the equipment and negotiate and 

draft written installation contracts. Pursuant to that 

obligation, Omeco selected Midlands Mechanical, In~. ("Midlands") 

to provide four new electric motors and four new hydraulic pumps, 

and to design and install a new hydraulic piping system. 

The final remodeling and change-over of the equipment was 

performed during the Labor Day weekend in September, 1984. 

Immediately after the equipment was installed, problems developed 

in the hydraulic system which destroyed both new and old hydraulic 

pumps and resulted in slow-downs and shut-downs at the Miller 

facility. 

To recover for damages and lost profits associated with the 

down-time, Miller filed contract and negligence claims against 

1 The fabrication floor project consisted largely of hydraulically 

powered conveyors. Electric motors remote from the fabrication 

floor turned hydraulic pumps which circulated hydraulic oil 

through a piping system to hydraulic motors on the conveyers. 

-2-

Appellate Case: 87-1073 Document: 010110036185 Date Filed: 06/13/1990 Page: 2 
Omeco and Midlands~ 2 In special interrogatories, the jury found 

Omeco liable for breach of contract and negligence. The jury also 

found that Miller was 49% negligent, and accordingly reduced the 

damage amount for negligence. The district court, however, did 

not reduce the damages award for breach of contract but instead 

awarded Miller the full amount. The jury found in favor of 

Midlands on both claims. 

ISSUES 

Omeco raises six issues on appeal: (1) whether the district 

court abused its discretion by incorporating Miller's breach of 

contract claim into the pretrial order; (2) whether there was 

sufficient evidence to support a finding of breach of contract; 

(3) whether the district court erred in failing to reduce Miller's 

contract award by 49%, the percentage representing Miller's 

contributory negligence; (4) whether there was sufficient evidence 

to support a jury verdict respecting lost profits; (5) whether 

Miller's award for lost profits was proper under the Utah 

Commercial Code; and (6) whether the judgment entered against 

Omeco should be reduced to reflect damages sustained by Miller as 

a result of a power outage not attributable to Omeco. 

On cross-appeal, Miller raises two issues: (1) whether the 

district court erred in failing to direct a verdict in favor of 

Miller against Midlands; and (2) whether Midlands should be 

2 Miller initiated this action in state court. Thereafter 

Midlands filed a removal petition, and the action was removed to 

the United States District Court for the District of Utah. 

Subsequently, Mission National Insurance Company (''Mission"), 

Miller's insurance carrier was joined as a real party in interest. 

-3-

Appellate Case: 87-1073 Document: 010110036185 Date Filed: 06/13/1990 Page: 3 
included in a new trial if this court . remands any of- the issues in 

Omeco's appeal against Miller. 

INCLUSION OF BREACH OF CONTRACT CLAIM 

IN PRETRIAL ORDER 

Omeco argues that the district court abused its discretion by 

including Miller's breach of contract claim in the pretrial order. 

A district court's inclusion of causes of action in the pretrial 

order, where such causes of action were not alleged in the 

complaint, will not be reversed absent a "gross abuse of 

discretion resulting in fundamental unfairness in the trial of the 

case.'' Smith v. Ford Motor Co., 626 F.2d 784, 794 (10th Cir. 

1980) (quoting Voegeli v. Lewis, 568 F.2d 89, 96 (8th Cir. 1977)), 

cert. denied, 450 U.S. 918 (1981). 

Here, Miller moved to amend its complaint after the discovery 

cut-off date. In its motion to amend, Miller argued that it was 

not adding a new claim, but merely clarifying the claims in the 

original complaint as illuminated by the discovery. 3 (Doc. 86, 

see also Vol. VII at 4.) The district court agreed that Miller 

was merely clarifying the original complaint and felt that the 

3 Miller's motion to amend provided in part: 

2. Plaintiffs seek to clarify claims which have 

already been revealed to and discussed with defendant's 

counsel during the lengthy discovery period; 

3. Plaintiffs seek to clarify the claims made in the 

complaint in light of the discovery in this case. 

(Doc. 86 at 2.) 

-4-

Appellate Case: 87-1073 Document: 010110036185 Date Filed: 06/13/1990 Page: 4 
clarification should appear in the pretrial order rather than in 

an amended complaint. (Vol. VII at 8.) 

Nevertheless, Omeco argues that it was prejudiced by the 

inclusion of the breach of contract claim after the end of the 

discovery period because it did not have sufficient notice, time, 

or opportunity properly to discover or present facts in defense of 

that claim. We disagree. Although the pretrial order was issued 

after discovery had ended, Omeco was well aware that Miller's 

claims, however denominated, arose out of the contract. Indeed, 

Omeco's own requests for admissions addressed the contract 

dispute: 

Admit that Omeco fully and capably performed all 

terms of the agreement attached as Exhibit A. 

If your answer to the preceding request for 

admission is anything other than an unqualified 

admitted, identify and describe each and every aspect of 

the agreement attached to Exhibit A which Omeco failed 

to perform. 

(Vol. VII at 4-5.) 

Miller's response to that request for admission, filed in 

June, 1985, 9 months before the discovery cut-off date and 16 

months before trial, further indicates that Omeco was on notice 

that it must defend against the breach of contract claim: 

Omeco failed to provide reasonable and necessary 

management and coordination services to Miller to assist 

in the orderly, timely and efficient installation and 

start-up of the project. 

Specifically, Omeco failed to timely review and 

analyze specific progress, failed to adequately inspect 

~he progress and quality of the work being performed by 

Midlands Mechanical, failed to coordinate and supervise 

the Mechanical Installation of hydraulic equipment, 

failed to perform adequate on-site management of the 

project during the changeover period, and failed to 

-5-

Appellate Case: 87-1073 Document: 010110036185 Date Filed: 06/13/1990 Page: 5 
~adequately perform an on-site coordination of the test 

and debug period. 

In addition, Omeco was responsible for procuring in 

writing the specific installation agreement between 

Miller and Midlands Mechanical. To the extent that the 

agreement between Miller and Midlands Mechanical does 

not ensure that Midlands would be responsible for any 

costs and delays associated with start-up, Omeco failed 

to properly perform its contractual obligation to 

procure an adequate agreement between Miller and 

Midlands Mechanical. 

(Vol. VII at 5.) 

Also indicative of Omeco's knowledge of the contract claim is 

Omeco's own defense to that claim argued in its motion for partial 

summary judgment on November 25, 1985. There, Omeco's counsel 

informed the court that "[t]he purpose for the motion is not to 

exculpate ourselves completely from the claim of breach or 

negligence, however[,] clearly the written document entered into 

between Omeco-Boss and Miller does provide some exculpatory 

language which we're seeking relief on here in this court today." 

(Vol. III at 3., emphasis added.) In response to the motion for 

partial summary judgment, Miller informed the court that Omeco 

"breached their contract, number one, and they acted negligently, 

number two, and that they did not provide adequate supervision for 

Midlands Mechanical and the work of Midlands Mechanical." (Vol. 

III at 14-15, emphasis added.) Even Midlands thought that 

Miller's claim against Omeco sounded in contract: "We also feel, 

Your Honor, that defendant, Omeco-Boss, certainly has a duty 

independent of the contract based on the claims being made against 

-6-

Appellate Case: 87-1073 Document: 010110036185 Date Filed: 06/13/1990 Page: 6 
it, . and I think that those were couched ~in terms of breach of 

contract." (Vol. III at 20, emphasis added.) 4 

In light of the foregoing, we hold that the district court 

did not abuse its discretion by including the breach of contract 

claim in the pretrial order and by allowing Miller to argue that 

claim at trial. 

SUFFICIENCY OF EVIDENCE 

TO SUPPORT FINDING OF BREACH OF CONTRACT 

Omeco argues that the evidence failed to establish a prima 

facie case of breach of contract because (1) the Miller-Omeco 

contract was never properly admitted into evidence, and (2) there 

was no evidence that Omeco had breached any of the terms of the 

agreement. We disagree. 

Although the Miller-Omeco contract was initially mistakenly 

introduced as the Midlands contract during examination of the 

president of Midlands, the district court later reopened the case 

to properly admit the Miller-Omeco contract. At no time has Omeco 

challenged the authenticity of the contract nor does Omeco argue 

that it was prejudiced by its proper admission at the end of the 

trial. Therefore, we find no merit in Omeco's argument that the 

4 In its reply brief, Omeco also argues that the district court 

erred in not requiring Miller to "elect" its remedy, pursuant to 

East River Steamship Corp. v. Transamerica Delaval, Inc., 476 U.S. 

858 (1986) (construing admiralty law). In East River, the Supreme 

Court held that "a manufacturer in a commercial relationship has 

no duty under either a negligence or strict products-liability 

theory to prevent a product from injuring itself." Id. at 871. 

East River is therefore distinguishable, and, in anyevent, there 

is nothing in East River that would mandate dismissal of the 

contract claim, which is the claim on appeal here. 

-7-

Appellate Case: 87-1073 Document: 010110036185 Date Filed: 06/13/1990 Page: 7 
district court ,committed reversible error in admitting the 

contract. 

Likewise, we find no merit to Omeco's contention that there 

was insufficient evidence to support the finding of breach of 

contract. The breach of contract issue primarily involved the 

scope of Omeco's duties as "Project Manager." Because the 

contract between Miller and Omeco is ambiguous in that regard, the 

district court allowed parol evidence to ascertain the intent of 

the parties. 

At trial, there was testimony that the project was a turnkey 

affair with Omeco supervising and overseeing all aspects of the 

changeover so that Miller could have a party to look to in the 

case of problems. 5 (~, Vol. XI at 1-37; Vol. XII at 2-53, 2-

102, 2-107, 2-110, 2-120, 2-128, 2-136.) There was also testimony 

that, due to the carelessness of some party, contaminants entered 

the hydraulic system that caused damage to equipment and 

precipitated slow-downs and shut-downs. (~, Vol. XI at 1-42.) 

A fair inference can be drawn from that evidence that Omeco 

breached its contractual duties to oversee the entire project, and 

that its breach permitted errors and omissions to be made in the 

installation of the hydraulic system leading to damages. (See 

Vol. XI at 1-71; Vol. XII at 2-82, 2-83.) Therefore, we reject 

5 A "turnkey" contract is a "[t]erm used in building trade to 

-designate those contracts in which builder agrees to complete work 

of building and installation to point of readiness for occupancy. 

It ordinarily means that builder will complete work to certain 

specified point ... and that builder agrees to assume all risk." 

Black's Law Dictionary 1359 (5th ed. 1979). 

-8-

Appellate Case: 87-1073 Document: 010110036185 Date Filed: 06/13/1990 Page: 8 
Omeco '-s -argument- that there was ---no evidence to find breach of 

contract. 

COMPARATIVE FAULT 

AS A DEFENSE TO BREACH OF CONTRACT 

The jury found separately in special interrogatories that 

Omeco breached its contract with Miller and that Omeco was 

negligent. The jury also found that the damages from breach of 

contract were the same as the damages from Omeco's negligence. 

The jury further found that Miller was 49% contributorily 

negligent. Nevertheless, the district court awarded Miller the 

total amount of contract damages. 

Omeco argues that the damages for negligence, which were 

reduced by 49%, and the damages for breach of contract, which were 

not reduced, were inconsistent and that the district court should 

have reduced Miller's contract award by 49% to reflect Miller's 

contributory negligence. In support of that argument, Omeco cites 

Jacobsen Const. Co. v. Structo-Lite Engin., Inc., 619 P.2d 306 

(Utah 1980), wherein the Utah Supreme Court allowed the 

plaintiff's assumption of risk to reduce plaintiff's recovery 

under a breach of warranty claim. 

Although a cursory reading of Jacobsen leaves the impression 

that Utah might permit contributory negligence to reduce 

contractual damages, a closer look at the case shows that the 

issue of contributory negligence as a defense to breach of ---

contract was not decided by the court. 

- 9-

Appellate Case: 87-1073 Document: 010110036185 Date Filed: 06/13/1990 Page: 9 
In Jacobsen, the defendant installed -chemical storage tanks 

for the plaintiff. After one of the tanks exploded, the 

plaintiffs sued the defendant for negligence and breach of express 

warranty. The jury was instructed on both claims and was 

instructed that the damages from the breach of warranty were the 

same as the damages for negligence. There is no indication in the 

opinion that this instruction was challenged at the trial. The 

jury, in responding to a special interrogatory, found that the 

plaintiff had been contributorily negligent and had assumed the 

risk of the incurred damages. Without differentiating between the 

negligence and breach of contract claims, the jury then awarded a 

single damages amount. The defendant appealed on the grounds that 

the plaintiffs' assumption of risk should have been a complete bar 

to all recovery: 

This appeal by defendant is from a judgment 

awarding plaintiffs damages resulting from defendant's 

faulty construction of a fiberglass storage tank. 

Defendant's claim is that the jury's finding of 

assumption of risk entirely precludes a judgment for 

plaintiff under both of plaintiffs' theories of 

recovery: negligence and breach of express warranty. 

Id. at 307. 

The holding of the court was simply that assumption of risk, 

as an absolute defense to a negligence claim, has been abolished 

in Utah. In so ruling the court observed that the phrase 

"assumption of risk" is also used loosely in a contract setting 

but there it really means nothing more than "a contractual 

provision in which a party expressly-contracts not to sue for 

injury or loss which may thereafter be occasioned by the acts of 

another." Id. at 310 (emphasis added). The Utah Supreme Court 

-10-

Appellate Case: 87-1073 Document: 010110036185 Date Filed: 06/13/1990 Page: 10 
-made i b -.clear it was not el-iminating . assumption of risk in this 

express contractual sense. 

·Neither party apparently appealed the propriety of the 

reduction of breach of warranty damages for the plaintiff's 

contributory negligence, and thus the propriety of that action was 

not an issue before the court. Indeed, since the jury apparently 

was only asked to issue a single, unitary damage award for both 

the breach of warranty and negligence claims, that issue does not 

appear to have arisen even at the trial court. 

The court affirmed the jury's verdict in favor of plaintiffs. 

Id. at 312. More relevant to our case, the court explicitly left 

open to another day the following question: 

Nevertheless, it has been argued that principles of 

comparative fault should be extended to breach of 

warranty cases. Pursuant to that theory damages would 

be reduced to the extent of plaintiff's contribution to 

the fault. But no such proposal is before the Court, 

and we refrain from reappraising the status of the law 

as to assumption of risk as a defense to breach of 

express warranty. 

Id. at 312 (emphasis added). Indeed, if anything, this language 

suggests that Utah does not recognize contributory fault as a 

defense or reduction in a breach of contracts setting because it 

spoke of such a proposal as an "exten[sion]" of the law and it 

declined to "reapprais[e]'' the law to recognize assumption of risk 

as a defense to a breach of express warranty. 

We hold that Utah would follow the majority rule that does 

not recognize contributory negligence as a defense to a breach of 

contract claim. See, e.g., Haysville U.S.D. No. 261 v. GAF Corp., 

666 P.2d 192, 200 (Kan. 1983); Fortier v. Dona Anna Plaza 

Partners, 747 F.2d 1324, 1337 (10th Cir. 1984) (applying New 

-11-

Appellate Case: 87-1073 Document: 010110036185 Date Filed: 06/13/1990 Page: 11 
----Mexico., law)-; Hale v.: .. Groce,- 744 P--.2d 1.289, 1290 -(Or. 1-987); 88 

C.J.S. Contracts§ 525(1) at 1018 (1963); but see O'Malley v. 

·Putnam Safe Deposit Vaults, Inc., -458 N.E.2d 752, 760 (Mass. App. 

1983) (comparative fault applies to contract claim where 

negligence is underlying theory of complaint). 6 

SUFFICIENCY OF THE EVIDENCE 

TO SUPPORT LOST PROFITS 

Omeco argues that there was insufficient evidence to support 

a jury verdict in favor of Miller against Omeco for lost profits. 

We disagree. 

Omeco aggrandizes the fact that Miller's expert witness, a 

CPA, who testified about the losses Miller incurred as a result of 

the shut-down, said that he could not calculate loss of net 

profits without doing additional work. (Vol. XII at 2-187.) 

However, Omeco fails to mention the context of that statement. 

The expert witness had just gone through a detailed explanation of 

why lost net profits would not adequately compensate a party who 

had experienced a net loss but could not prove that any of that 

loss stemmed from lost net profits: 

Q. Now turning to the sticky point of wording. Does 

repayment of loss of net profits put a person who is 

injured back in the same economic shape as he would have 

been had the injury or damage not occurred? 

A. The answer is no, it would not. If you only paid 

the person the net profit it would not begin to 

compensate them for all the other costs that they 

incurred during that pe~iod that would now be incurred. 

6 Further, it does not appear that Omeco objected to the jury 

instruction on breach of contract damages when given and thus 

Omeco has probably waived this issue. 

-12-

Appellate Case: 87-1073 Document: 010110036185 Date Filed: 06/13/1990 Page: 12 
Q. And do those costs not go into the real loss 

column? 

A. Yes, as a result of outgoing expenses. Now what 

would happen, the business would go from normally making 

a profit to having a loss and what you have to do is 

compensate the person enough to get them back from the 

loss position back to their normal profit position. 

Q. So both items have to be considered? 

A. Absolutely. 

Q. And you did so in your computation? 

A. Yes. 

(Vol. XII at 2-183-84.) The expert witness' testimony makes it 

clear that he did consider lost net profits as well as other 

factors that should be considered in placing Miller in as good a 

position as it would have been had the breach not occurred. 

also Vol. XII at 2-149.) 

(See 

Moreover, the district court instructed the jury that they 

were to consider what amount of damages would adequately 

compensate Miller for his loss. 7 That award of damages is 

perfectly acceptable under Utah law. See Young Elec. Sign Co. v. 

United Standard West, Inc., 755 P.2d 162, 164 (Utah 1988) ("In 

general, contractual damages are measured by the lost benefit of 

the bargain, i.e., by the amount necessary to place the 

nonbreaching party in as good a position as if the contract had 

been performed.") (quotations omitted). We have reviewed the 

7 The special interrogatory likewise asked: "What sum of money 

would fairly and adequately compensate plaintiffs for the damages 

they sustained which were reasonably expected or to be foreseen by 

defendant Omeco-Boss?" (Doc. 138 at 3.) 

-13-

Appellate Case: 87-1073 Document: 010110036185 Date Filed: 06/13/1990 Page: 13 
- damage -evidence - and, although there is· conflicting evidence, we 

find sufficient evidence here to support the verdict. 

Omeco also argues that Miller cannot collect prejudgment 

interest on the lost profits because they were unliquidated 

damages. However, Utah courts have expressly rejected this 

liquidated-unliquidated distinction. See Golden West Const. Co. 

v . United States, 304 F.2d 753, 757 (10th Cir. 1962) ("The 

applicable Utah law is that the right to interest is not to be 

determined by whether the damages are liquidated or unliquidated, 

but whether the injury and consequent damages are complete.") 

(quotations omitted); see also Jorgensen v. John Clay & Co., 660 

P.2d 229, 233 (Utah 1983) (prejudgment interest was awarded on 

damages for the failure of a buyer to purchase and pay for sheep, 

even though the damages, which were based on a disputed measure of 

the weight of the sheep, were not calculated until trial.); PriceOrem v. Rollins, Brown & Gunnell, 784 P.2d 475 (Utah App. 1989). 

We agree with the district court that the damages sustained by 

Miller were sufficiently calculable to support prejudgment 

interest. 

LOST PROFITS UNDER O.C.C. 

Omeco argues that Miller's award for lost profits was not 

proper under the Utah Uniform Commercial Code, which Omeco argues, 

governs the entire contract. 8 It is generally true that where 

8 Utah Code Ann. § 70A-2-719(l)(b) provides that if a sales 

contract states that a remedy for breach shall be exclusive, "it 

is the sole remedy." Here, the Miller-Omeco contract limited 

remedies to repair and replacement of materials and prohibited the 

recovery of consequential damages. 

-14-

Appellate Case: 87-1073 Document: 010110036185 Date Filed: 06/13/1990 Page: 14 
.. the-- main . thrust of - a .contract is _for the sale. of goods, the U. C. C. 

applies. However, some courts have held, and the district court 

implicitly adopted the view, that where a ·contract involves 

separate consideration for services and goods, and the complaint 

relates solely to the services, the u.c.c. does not apply. See H. 

Hirschfield & Sons Co. v. Colt Indust. Operating Corp., 309 N.W.2d 

714 (Mich. Ct. App. 1981); Dixie Lime & Stone Co. v. Wiggins Scale 

Co., 240 S.E.2d 323 (1977). We agree with the district court that 

Utah would follow that view. 

Here, at least the sum of $22,747 was separately contracted 

for payment of services. (Miller-Omeco Contract§ 4.3.) 

Moreover, Miller expressly negotiated the contract to require 

Omeco to act as Project Manager, which imposed greater duties than 

would otherwise exist in a mere installation contract. 9 Miller's 

9 The deposition of George Abbott, who was employed by Omeco and 

was involved in the negotiations with Miller, reveals that Omeco 

assumed more duties than they had assumed in previous installation 

contracts with other parties: 

Q. Okay. How was -- how was paragraph number 4.3 

changed other than that one change that you mentioned 

earlier from your standard agreement that -- that you 

talked about? 

A. Okay. Normally, the standard Omeco contract didn't 

have a specific paragraph that delineated the items of 

project management. It was just kind of a loosely 

defined statement that we would do certain things. Thus 

we got very specific as to what we would do in the 

project management. 

Q. Okay. So this was drafted specifically for this 

project? 

A. That's right, yeah. 

Q. Yeah, as opposed to boiler plate -- the standard 

form? 

[cont'd on next page ... ] 

-15-

Appellate Case: 87-1073 Document: 010110036185 Date Filed: 06/13/1990 Page: 15 
-c -laim .against Omeco -related to ,Omeco' s breach ,.-of. ·the .services 

portion of the contract, not for dissatisfaction with the goods 

provided by Omeco. Therefore, we believe that the district court 

properly disregarded the limitations in the warranty terms which 

related to the goods and materials and applied general contract 

remedies for the breach of the services promised under the 

contract. 

DAMAGES CAUSED BY POWER OUTAGE 

Omeco argues that it is entitled to remittitur for the 

damages caused by a power outage for which Omeco was not 

responsible. Omeco presented evidence that it was not responsible 

for at least one hour of the shut-down. Omeco does not say that 

it objected to any of the jury instructions, but now argues that 

we should remand so the jury can determine what amount of lost 

profits resulted from the one hour power outage. Because Omeco 

cont'd from previous page] 

A. Yeah. We had, as you'll see when you go through my 

notes so I assume it's permissible to talk about it now 

-- we had -- the time we were doing this project, having 

come off the Excel project, none of our contracts 

covered the type of contract we got into at Excel which 

was a turnkey type system. 

Q. Uh-huh. 

A. So we had -- before we got into the Miller contract 

we went back to our attorneys, Harding and Nelson --

- Nelson and Harding -- I never remember which way they go 

-- and asked them to redraft our standard contract into 

a contract that took into account this turnkey system 

type project that we were getting into .... 

(Vol. XII at 2-102.) 

-16-

Appellate Case: 87-1073 Document: 010110036185 Date Filed: 06/13/1990 Page: 16 
failed .. to obje-ct to .. -the jury, inst-ructions, it. waived that issue on 

appeal. See Fed. R. Civ. P. 51 ("No party may assign as error the 

giving or the failure to give an instruction unless that party 

objects thereto before the jury retires to consider its verdict, 

stating distinctly the matter objected to and the grounds of the 

objection."). 

MILLER-MIDLANDS CONTRACT 

The district court found as a matter of law that the MillerMidlands contract, which was negotiated by Omeco on behalf of 

Miller, was ambiguous as a matter of law, and consequently 

permitted the introduction of extrinsic evidence. 1° From the 

extrinsic evidence, the jury concluded that Midlands was not 

responsible for the damage. Miller argues that the district court 

erred in failing to direct a verdict in favor of Miller against 

Midlands because, as a matter of law, the contract was 

unambiguous. We disagree. 

The contract provided that Midlands would provide "any and 

all labor, materials, skill, tools, supplies, equipment and 

services" necessary to install the hydraulic equipment. A later 

portion of the contract under "Work by Others" stated: "Any work 

in connection with an oil flush of hydraulic system, if required 

by Owner." The district court found the word "flush" ambiguous 

because it refers to two distinct processes and is often confused 

10 Whether an ambiguity exists is a question of law to be 

decided by the court. Gomez v. American Elec. Power Serv. Corp., 

726 F.2d 649, 651 (10th Cir. 1984) (applying Utah law). As such, 

it is subject to de novo review. 

-17-

Appellate Case: 87-1073 Document: 010110036185 Date Filed: 06/13/1990 Page: 17 
· .with '!.ci.rculat.ion. !.!... _ Thus, i.t was .-.unclear whether flushing or 

circulating was excluded from Midlands' contractual obligations. 

Consequently, the district court allowed evidence concerning who 

was responsible for flushing and circulating. There was 

conflicting evidence presented at trial on that issue. 

XI at 22, 30, 62, 74.) Therefore, it would have been 

(See Vol. 

inappropriate for the district court to direct a verdict in 

Miller's favor. 

RETRIAL OF ALL CLAIMS AND OTHER ISSUES 

Miller argues without citing authority that if this court 

remands any of the issues in Omeco's appeal, "the case should be 

remanded for a full and complete trial involving both defendants, 

with directions to the district court that Midlands had a 

contractual obligation to properly circulate the hydraulic system 

to remove contamination." (Reply Brief of Miller, p. 17). 

Because we affirm the judgment against Omeco, we need not address 

this novel theory. We have reviewed all other and related issues 

on appeal and in all regards affirm the district court. 

CONCLUSIONS 

For the foregoing reasons, we AFFIRM the judgment below. 

Entered for the Court 

David M. Ebel 

Circuit Judge 

-18-

Appellate Case: 87-1073 Document: 010110036185 Date Filed: 06/13/1990 Page: 18