UNPUBLISHED

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

ERIKSEN CONSTRUCTION COMPANY,

INCORPORATED, a Nebraska

corporation,

Plaintiff-Appellee,

v.

No. 96-1491

NICHOLAS MOREY, JR., individually

and d/b/a Contractors Equipment

Company, d/b/a Contractors Quality

Cranes,

Defendant-Appellant.

Appeal from the United States District Court

for the Southern District of West Virginia, at Parkersburg.

Charles H. Haden II, Chief District Judge.

(CA-95-190-6)

Argued: May 6, 1997

Decided: November 19, 1997

Before MURNAGHAN and NIEMEYER, Circuit Judges, and

STAMP, Chief United States District Judge for the

Northern District of West Virginia, sitting by designation.

_________________________________________________________________

Affirmed by unpublished per curiam opinion.

_________________________________________________________________

COUNSEL

ARGUED: C. Page Hamrick, III, Charleston, West Virginia, for

Appellant. John Philip Melick, JACKSON & KELLY, Charleston,

West Virginia, for Appellees.
Unpublished opinions are not binding precedent in this circuit. See

Local Rule 36(c).

_________________________________________________________________

OPINION

PER CURIAM:

Defendant-appellant Nicholas Morey, Jr., individually and d/b/a

Contractors Equipment Company and Contractors Quality Cranes

("Morey"), seeks review of the district court's order denying his posttrial motions for judgment as a matter of law, for new trial, and to

amend judgment. On appeal, Morey alleges that the district court

erred in denying his motions for judgment as a matter of law on the

issues of fraud, punitive damages, express warranty, implied warranty

of merchantability and damages. Further, Morey alleges that the district court erred in giving the proposed jury instructions of plaintiffappellee Eriksen Construction Company, Incorporated ("Eriksen") on

the issues of fraud and punitive damages, by giving Eriksen's proposed jury instruction on the issue of express warranty, and by allowing the jury to consider theories of recovery other than that of implied

warranty of fitness of purpose. Because we find error neither in the

district court's denial of Morey's motions for judgment as a matter of

law nor in the district court's instruction of the jury, and because we

find no other errors in the trial, we affirm.

I.

Plaintiff-appellee Eriksen, a Nebraska corporation, is a general

contractor engaged in the business of building churches, schools and

sewage and wastewater treatment facilities. Defendant-appellant

Morey of Parkersburg, West Virginia is engaged in the business of

buying and selling used cranes and other heavy equipment. In 1994,

John Eriksen, the President of Eriksen Construction, contacted Morey

by telephone in response to a notice in a trade magazine, advertising

a large crawler crane which Morey had for sale. The crane which

Morey was offering for sale was a P&H 670 crane which Morey had

purchased from the Meade Paper Company in January 1994 and

which had been built in the late 1960s. The advertisement to which

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Mr. Eriksen referred when he contacted Morey indicated that sale of

the crane would include 150 feet of basic boom, a 50 foot jib section,

a Cummings engine and expandable tracks.

During their first telephone conversation, Morey told Mr. Eriksen

that he had available for purchase a crane built in the 1960s. Mr. Eriksen responded that he was interested only in a newer crane. Morey

responded, in return, that he had another crane, a P&H 670, which he

had recently purchased from Meade Paper Company and which had

been built in the 1970s. Mr. Eriksen arranged to have his mechanic,

Roger Ward, travel from Nebraska to West Virginia to inspect the

P&H 670 crane.

While at Morey's business, Ward attempted to inspect the P&H

670 crane. Ward testified that, at the time of his visit, the crane was

inoperable, because it had no cab and the radiator had been removed.

At trial, Morey testified that the P&H 670 crane did operate and that

Morey and Ward ran it and moved it several feet backwards and forwards. While in West Virginia, Ward also visited Morey's paint shop

to view the crane's boom and jib which were being sandblasted and

painted. After Ward's visit, Morey and Eriksen negotiated a price for

the crane as well as a price for a second crane which Eriksen was to

buy. As part of the negotiated agreement between Morey and Eriksen,

Morey agreed to fix, before delivery of the crane to Eriksen, those

items on the P&H 670 crane that were on a list created by Ward.

On April 28, 1994, Morey advised Eriksen in writing that the

cranes were ready for shipment and that all of the repair items to

which Ward and Morey had agreed had been completed. The following day, Eriksen paid the balance of the price of the crane to Morey

by wire transfer.* Upon receipt of full payment, Morey sent Eriksen

_________________________________________________________________

*Purchase of equipment between Eriksen and Morey also involved

another crane, a link belt HSP. Eriksen made no claims in regard to this

second crane. As part of the agreement between Morey and Eriksen,

Eriksen traded in a Grove crane for which it received $25,000.00 credit

towards the purchase of the link belt HSP and the P&H 670. Eriksen had

made a $10,000.00 down payment on April 12, 1994 and had paid the

balance due, $140,000.00, on April 29, 1994.

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a bill of sale, which specified that the sale was"as is, where is, with

all faults."

Eriksen accepted delivery of the crane on June 2, 1994 in

Nebraska. Upon delivery, several deficiencies immediately became

apparent. The crane could be removed from the delivery trailer only

with great difficulty and the arm of the crane would not swing. Further, the radiator which had been removed when Ward viewed the

crane in Parkersburg had been replaced with a radiator from a truck

and was installed by removing a portion of the crane's frame and

adding a length of hose. Upon discovery of these defects, Eriksen

contacted Morey and communicated the defects to him. As part of the

agreement between Eriksen and Morey, Eriksen was to use a crane

which it already owned as a trade in on the two cranes which it purchased from Morey. After noting the problems with the P&H 670

crane that had just been delivered, Eriksen was reluctant to release the

trade-in crane until the problems with the P&H 670 were remedied.

However, after Morey assured Eriksen that if Roger Ward was not

able to correct the problems with the P&H 670 Morey would come

personally to fix the P&H 670 crane, Eriksen released the trade-in

crane to Morey's delivery driver. On June 16, 1994, Eriksen advised

Morey in writing of the deficiencies in the P&H 670 crane. Some of

these deficiencies had already been corrected by Eriksen in an effort

to mitigate damages. In that same letter, Mr. Eriksen demanded that

Morey advise him by June 20, 1994 of plans to correct deficiencies

in the crane. Morey subsequently planned a trip to Nebraska but later

canceled the trip. Ultimately, Eriksen made the repairs to the P&H

670 crane and documented the cost of these repairs with receipts

totaling $60,487.20.

Following these events, Eriksen filed suit against Morey in the District Court of Washington County, Nebraska. Morey removed this

action to the United States District Court for the District of Nebraska

pursuant to 28 U.S.C. § 1332(a), diversity jurisdiction. In March

1995, this action was transferred from the United States District Court

for the District of Nebraska to the United States District Court for the

Southern District of West Virginia where a jury trial was held. At the

close of Eriksen's case, Morey moved for judgment as a matter of law

on the issues of breach of warranty, damages, fraud, and punitive

damages. All of these motions were denied by the district court.

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The jury returned a verdict for Eriksen and against Morey, awarding compensatory damages in the amount of $60,487.20 and punitive

damages in the amount of $66,000.00. The trial court also entered its

judgment on the special jury verdicts rendered by the jury. The defendant then filed a motion for judgment as a matter of law or in the

alternative for a new trial or in the alternative to amend judgment by

granting a decrease in damages. These motions were denied by the

trial court. The court then entered an order granting Eriksen's motion

for pre-judgment interest and its motion for attorney's fees and costs.

Similarly, the district court entered its amended judgment on special

jury verdicts granting judgment against defendant Morey and in favor

of plaintiff Eriksen.

II.

We turn first to Eriksen's argument that the district court erred in

denying its motion for judgment as a matter of law on the issues of

fraud and punitive damages. The district court's denial of a motion for

judgment as a matter of law is reviewed de novo . Brown v. CSX

Transportation, Inc., 18 F.3d 245, 248 (4th Cir. 1994). The district

court may grant a motion for judgment as a matter of law if "there is

no legally sufficient evidentiary basis for a reasonable jury to find for

[the opposing party] on that issue . . . ." F.R.C.P. 50(a). "To grant the

motion the district court must examine the evidence in the light most

favorable to the non-moving party and determine`whether a reasonable trier of fact could draw only one conclusion from the evidence.'"

GSM Dealer Servs., Inc. v. Chrysler Corp., 32 F.3d 139, 142 (4th Cir.

1994) (citing Townley v. Norfolk & W. Ry., 887 F.2d 498, 499 (4th

Cir. 1989)). In reviewing a district court's decision on a motion for

judgment as a matter of law, this court neither weighs the evidence

nor judges the credibility of the witnesses. Id. at 142.

Because this action is brought pursuant to federal diversity jurisdiction, the law of the forum state applies. Under West Virginia law, the

plaintiff must prove the following elements by clear and convincing

evidence to establish a cause of action for fraud:"(1) that the act

claimed to be fraudulent was the act of the defendant or induced by

him; (2) that [the act] was material and false; that the plaintiff relied

upon it and was justified under the circumstances in relying upon it;

and (3) that he was damaged because he relied upon it." Schultz v.

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Consolidation Coal Co., 475 S.E.2d 467, 471 (W. Va. 1996). Morey

contends that Eriksen's entire fraud theory of recovery was based on

the testimony of a Nebraska banker who was to provide financing for

Eriksen's purchase of the crane. At trial, the banker testified that a

representative of Contractors Equipment Company (Morey's business) told him that the serial number of the crane in question was

35008, while at trial the parties stipulated that the serial number of the

crane was 30003. Morey contends that because this misrepresentation

occurred after the sale of the crane in question, it cannot constitute

fraud because Eriksen could not have relied on that information in

entering into the contract. In contrast, Eriksen contends that at trial it

presented ample evidence that Morey committed fraud before, during

and after the formation of the contract for the sale of the P&H 670

crane. Eriksen presented evidence that Morey told Eriksen that the

crane would be in excellent condition before it was shipped, but, that

when it arrived, the crane was nearly inoperable. Further, Eriksen

presented evidence that Morey convinced Mr. Eriksen to send the

trade-in crane back with Morey's delivery person before the deficiencies in the P&H 670 were corrected and subsequently failed to remedy these deficiencies.

Reviewing the evidence in the light most favorable to Eriksen, we

find that Eriksen did present sufficient evidence for a reasonable jury

to find for Eriksen on the issue of fraud. Thus, we find no error in the

district court's denial of the motion for judgment as a matter of law

on the issue of fraud.

As noted above, Morey also moved for judgment as a matter of law

on the issue of punitive damages. Morey argues that because, as he

alleges, Eriksen failed to prove fraud, an award of punitive damages

is precluded. Thus, Morey contends that he was entitled to judgment

as a matter of law on the issue of punitive damages. However, the

same evidence which we have found to be legally sufficient for a reasonable jury to find for Eriksen on the issue of fraud is also sufficient

to support the district court's submission of the question of whether

to award punitive damages to the jury. See Winant v. Bostic, 5 F.3d

767 (4th Cir. 1993); Vandevender v. Sheetz, Inc. , No. 23463, 1997

WL 384655, at *9 (W. Va. July 11, 1997) ("[W]here gross fraud . . .

appear[s] . . . the jury may assess exemplary, punitive, or vindictive

damages; these terms being synonymous.") (citations omitted). Thus,

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we find no error in the district court's denial of Morey's motion for

judgment as a matter of law on the issue of punitive damages.

In addition to the error which Morey assigns to the district court's

denial of his motions for judgment as a matter of law on the issues

of fraud and punitive damages, he contends that the district court

erred in giving Eriksen's proposed instructions 13 through 21 on these

issues. Morey contends first that it was error for the district court to

instruct the jury on the issues of fraud and punitive damages for Eriksen's failure to make out a prima facie case on these issues. This

argument is rendered moot by our decision on the motions for judgment as a matter of law on these issues above. In addition, Morey

contends, more specifically, that the district court erred in giving

Eriksen's instructions numbered 14, 17, 19 and 21. Morey argues that

Eriksen's instruction 14, which provided that "if a person induces

someone to enter into a contract by false representations which he

knows or should know are untrue, the statements are considered

fraudulent, and the defrauded person may pursue damages for any

losses sustained," improperly shifted the burden of proof on the issue

of fraud from Eriksen to Morey. Morey contends that Eriksen's

instruction number 17, which refers to "concealed or latent conditions" is inaccurate in that it refers to "conditions" and not to "defects"

and also that it fails to instruct that these latent defects must be material and substantial. As to Eriksen's instruction number 19, Morey

contends that the district court erred in giving that instruction because

Eriksen failed to present evidence that its alleged damages arose from

any specific and material misrepresentation of Morey. Finally, as to

Eriksen's instruction number 21, Morey repeats his argument that

Eriksen should not have been entitled to an instruction on punitive

damages for his failure to present a prima facie case on the same.

Generally, we will reverse an erroneous instruction only if the error

was prejudicial, when viewed in light of the record as a whole.

Hartsell v. Duplex Products, Inc., No. 97-1114, 1997 WL 501220

(4th Cir. August 25, 1997) (citing Ross v. St. Augustine's College, 103

F.3d 338, 344 (4th Cir. 1996)). When considered under this standard,

Morey's challenges to the adequacy and appropriateness of the jury

charge are without merit. Accordingly, we reject Morey's challenges

to the jury instructions on the issues of fraud and punitive damages

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and find no error in the district court's inclusion of the challenged

instructions.

III.

Morey next argues that the district court erred in denying his

motion for judgment as a matter of law on the issues of express warranty and implied warranty of merchantability. Morey argues that the

only evidence presented by Eriksen of an express warranty was the

list of items created by Eriksen's employee, Roger Ward, which

delineated the items to be remedied on the P&H 670 crane prior to

its delivery to Eriksen. Morey contends that these items of repair were

merely "maintenance items" and not inconsistent with the age of the

crane. However, as Eriksen points out in its brief, under West Virginia law "[w]here a seller promises to pay for repairs to goods delivered to the buyer in a defective condition and the buyer accepts the

defective goods in reliance upon the promise to repair, such promises

of the seller constitute express warranties." Mountaineer Contractors,

Inc. v. Mountain State Mack, Inc., 268 S.E.2d 886, 892 (W. Va.

1980). Here, substantial evidence was presented as to the list of

repairs to be made to the P&H 670 crane, the condition in which the

crane was delivered to Eriksen and Eriksen's reliance on the promises

made by Morey's delivery person and by Morey as to the remedy for

these defects to suggest that Morey had made an express warranty in

the sale of the P&H 670 crane. Thus, when viewed in the light most

favorable to Eriksen, it was reasonable for a jury to determine that an

express warranty had been made as to the sale of the P&H 670 crane.

Therefore, we find no error in the district court's denial of Morey's

motion for judgment as a matter of law on the issue of express warranty.

Morey further contends that the district court erred in denying his

motion for judgment as a matter of law on the issue of implied warranty of merchantability. In support of this contention, Morey argues

that Eriksen presented evidence only on the issue of implied warranty

of fitness of purpose and not on the issue of implied warranty of merchantability. As Eriksen points out, however, Morey's admission that

he was a crane "merchant" triggers W. Va. Code§ 46-2-314 which

provides for an implied warranty of merchantability which, in turn,

requires that goods sold be "fit for the ordinary purposes for which

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such goods are used." W. Va. Code § 46-2-314(2)(c) (1993 Repl.

Vol.). At trial, substantial evidence was presented on the issue of the

deficiencies of the P&H 670 crane at the time of its delivery to Eriksen. When viewed in the light most favorable to Eriksen, a reasonable

jury could find for Eriksen on the theory of implied warranty of merchantability. Thus, the district court did not err in denying Morey's

motion for judgment as a matter of law on the issue of implied warranty.

Morey further contends that the district court erred in permitting

the jury to consider any theory of recovery other than that of implied

warranty of fitness of purpose. This argument is moot by virtue of our

decisions as to Morey's motions for judgment as a matter of law on

the issues of express warranty and implied warranty of merchantability.

Finally, Morey contends that the district court erred in giving Eriksen's proposed instruction number 7. Morey contends that this

instruction incorrectly instructed the jury that any statements made by

Morey to Eriksen which related to the P&H 670 crane created an

express warranty. However, Eriksen's instruction number 7 also provided that the promise or factual assertion made by Morey must

become "a basis for their bargain." The inclusion of this language is

consistent with the language of W. Va. Code § 46-2-313(b) which

provides that "[a]ny description of the goods which is made part of

the basis of the bargain creates an express warranty. . . ." W. Va.

Code § 46-2-313(b) (1993 Repl. Vol.). When reviewed in light of the

record in this matter as a whole, we conclude that the inclusion of

Eriksen's instruction number 7 was not prejudicial to Morey and that

the district court did not err in including that instruction in its jury

charge.

IV.

Finally, Morey argues that the district court erred in denying his

motion for judgment as a matter of law on the issue of damages.

Morey contends that Eriksen failed to present evidence as to the specific costs of the allegedly missing twenty feet of boom or car body

jacks, the decrease in fair market value of the crane due to the missing

twenty feet of boom or car body jacks or costs incurred by Eriksen

 9
for the missing boom or car body jacks. Eriksen countered this argument by obtaining quotes for the same from established dealers. As

Eriksen points out, W. Va. Code § 46-2-714(1) provides that damages

resulting from a seller's breach may be "determined in any manner

which is reasonable." We find that the manner in which Eriksen determined the damages for the missing portion of boom and car body

jacks was reasonable within the meaning of the statute. Thus, when

viewed in the light most favorable to Eriksen, we find that a reasonable jury could find for Eriksen on the issue of damages on the basis

of the evidence which Eriksen presented. Therefore, the district court

did not err in denying Morey's motion for judgment as a matter of

law on the issue of damages.

Accordingly, we find that the district court did not err in denying

Morey's motions for judgment as a matter of law. We also conclude

that the district court did not err in instructing the jury.

AFFIRMED

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