1

The Honorable Joseph F. Bataillon, United States District Judge for the

District of Nebraska.

United States Court of Appeals

FOR THE EIGHTH CIRCUIT

___________

No. 01-3052

___________

Arabian Agriculture Services *

Company, *

*

Appellee, * Appeal from the United States

* District Court for the

v. * District of Nebraska.

*

Chief Industries, Inc., *

*

Appellant. *

___________

Submitted: June 12, 2002

Filed: October 16, 2002

___________

Before WOLLMAN, RICHARD S. ARNOLD, and LOKEN, Circuit Judges.

___________

WOLLMAN, Circuit Judge.

In this diversity action, Chief Industries, Inc. (Chief) appeals the district

court’s1

 order granting judgment as a matter of law to Arabian Agriculture Services

Co. (ARASCO) on Chief’s affirmative defenses of misuse and comparative
2

ARASCO moved for a “directed verdict” pursuant to Federal Rule of Civil

Procedure 50. Rule 50, however, makes clear that “[a] motion for judgment as a

matter of law now encompasses all motions labeled as motions for judgment

notwithstanding the verdict or motions for a directed verdict.” Larson v. Miller, 76

F.3d 1446, 1452 n.3 (8th Cir. 1996) (en banc). Thus, we refer to ARASCO’s motion

using the current term, Rockport Pharmacy, Inc. v. Digital Simplistics, Inc., 53 F.3d

195, 197 n.1 (8th Cir. 1995), and “we will apply our cases discussing the standards

for reviewing and analyzing motions for a directed verdict or judgment

notwithstanding the verdict in analyzing this judgment as a matter of law.” Smith v.

World Ins. Co., 38 F.3d 1456, 1460 n.1 (8th Cir. 1994). 

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negligence.2

 Chief also appeals several other of the district court’s rulings, including

its order denying Chief’s motion for judgment as a matter of law. For the reasons

discussed below, we affirm.

I.

Between 1989 and 1992, ARASCO engaged in negotiations with Chief

Industries UK Ltd. (Chief UK), a wholly owned subsidiary of Chief, to purchase

sixteen 1,000 metric-ton hopper-bottom silos for ARASCO’s facility at the port of

Dammam, Saudi Arabia. These silos were to house grain for a period of thirty to

forty-five days before it was shipped from the port. Chief designed the structures and

supplied some of the silo components, including compression rings and steel support

structures. During negotiations, ARASCO learned that some silos designed and

manufactured by Chief had collapsed in Korea. Despite assurances from Chief that

the collapses were not due to design defects, ARASCO insisted upon an extended

warranty against product failure before continuing with the purchase. The parties

agreed upon a seven-year limited warranty, in which Chief guaranteed that the

components were free from defects in the composition of material, workmanship, and

design. In addition, the warranty stated that the sole and exclusive remedies available

in the case of problems with the silos were repair or replacement. The warranty

explicitly stated that Chief would not be liable for consequential damages.
3

Bridging refers to the solidification of previously free-flowing corn into

columns or arches within the silos. This solidification is caused by the deterioration

of the corn from heat damage and the growth of fungus.

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The silos were completed in 1993. They were arranged in two rows of eight

silos each and were immediately used to store corn that arrived at the Dammam port.

In early July 1995, a shipment of corn was unloaded into the silos and left there for

approximately 100 days, more than twice as long as previous shipments. On October

10, 1995, one of the silos collapsed. In a domino effect, 14 of the 15 other silos also

collapsed. In addition, a building housing electric controls was crushed.

ARASCO notified Chief of the collapse and requested a remedy under the

extended warranty. After some investigation, Chief denied responsibility, concluding

that the collapse was caused by clumping and bridging3

 of the corn after it was

allowed to deteriorate in the silos during its extended storage. Chief theorized that

the collapse was caused by the release of one such clump or bridge in silo 7.

ARASCO sued to recover for the damage, contending that the collapse was caused

by an inadequate and defective design.

At trial, both parties moved for judgment as a matter of law. The district court

denied Chief’s motion and granted ARASCO’s motion with respect to Chief’s

affirmative defenses of misuse and comparative negligence. The jury then found for

ARASCO on its warranty, strict liability, and negligent design claims and awarded

a total of $1,466,507 in damages, of which some $88,000 represented consequential

damages. 

II.

Chief first argues that the district court erred in granting ARASCO’s motion

for judgment as a matter of law on Chief’s affirmative defenses of misuse and
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comparative negligence. We review the grant or denial of judgment as a matter of

law de novo, applying the same standards used by the district court. Phillips v.

Collings, 256 F.3d 843, 847 (8th Cir. 2001). According to Rule 50, judgment as a

matter of law should not be granted unless “a party has been fully heard on an issue

and there is no legally sufficient evidentiary basis for a reasonable jury to find for that

party on that issue.” Fed. R. Civ. P. 50(a)(1). In applying this standard, we must

“draw all reasonable inferences in favor of the nonmoving party without making

credibility assessments or weighing the evidence.” Phillips, 256 F.3d at 847

(citations omitted). “A reasonable inference is one ‘which may be drawn from the

evidence without resort to speculation.’” Fought v. Hayes Wheels Int’l, Inc., 101

F.3d 1275, 1277 (8th Cir. 1996) (quoting Sip-Top, Inc. v. Ekco Group, Inc., 86 F.3d

827, 830 (8th Cir. 1996)). Thus, judgment as a matter of law is appropriate “[w]hen

the record contains no proof beyond speculation to support [a] verdict.” Sip-Top,

Inc., 86 F.3d at 830 (citation omitted). 

Chief challenges the district court’s ruling, arguing that (1) the court erred in

excluding expert testimony concerning causation; and (2) even in the absence of such

testimony, the evidence presented at trial was sufficient to submit the issues of misuse

and contributory negligence to the jury. We disagree on both points.

Chief points out that its experts were prepared to testify as to the approximate

mass of bridged corn necessary to cause silo 7 to collapse. Because these calculations

were not disclosed until well into the trial, the district court excluded the testimony

as untimely. According to Chief, however, the delay was caused by ARASCO’s own

untimely disclosure of key evidence providing the foundation for the calculations.

This “key evidence,” a photograph of the inside of silo 7, was not turned over to

Chief until three days before the start of trial. Thus, Chief argues, it was “manifestly

unfair” to exclude the calculations.
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In rejecting this argument, the district court first noted that the photograph did

not show a mass of corn constituting a bridge or column, as Chief’s experts assumed

in making their calculations. The court then concluded that the calculations could

have been made earlier. The testimony indicated that Chief’s investigator had

observed and photographed the interior of silo 7 shortly after the collapse. Thus,

according to the district court, these photographs “should have allowed Chief’s

experts to arrive at the calculations” prior to trial. 

After reviewing the record, we cannot find that the district court abused its

discretion in reaching this conclusion. See Trost v. Trek Bicycle Corp., 162 F.3d

1004, 1008 (8th Cir. 1998) (standard of review). The calculations were not disclosed

in accordance with Federal Rule of Civil Procedure 26. Thus, the rules permitted the

court to exclude the untimely testimony “unless the failure to disclose was either

harmless or substantially justified.” Id.; Fed. R. Civ. P. 37(c)(1). In rejecting Chief’s

explanation for the delay, the court essentially found that Chief’s failure to disclose

the calculations until trial was not substantially justified. The court also implied that

the delay was not harmless. (See Trial Tr. at 1395:7-8 (indicating that admitting the

calculations would result in “trial by ambush”); id. at 1442:18-21 (finding that the

late disclosure was prejudicial to the plaintiff).) These conclusions are amply

supported by the record. See Trost, 162 F.3d at 1008 (noting that when we review

for an abuse of discretion, we will reverse only if the district court’s decision “was

based on ‘an erroneous view of the law or a clearly erroneous assessment of the

evidence’” (citation omitted)). Accordingly, we find that the district court acted well

within its discretion in excluding the untimely calculations. 

We turn next to Chief’s claim that, even in the absence of these calculations,

it had submitted sufficient evidence of misuse and contributory negligence to defeat

ARASCO’s motion for judgment as a matter of law. In granting this motion, the

district court determined that although Chief had presented sufficient evidence on the

issue of mismanagement, its experts had failed to demonstrate a plausible causal link
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between ARASCO’s alleged mishandling of the grain and the structural failure of silo

7. Thus, the court concluded, Chief had not presented a prima facie case of misuse,

and without misuse, there was no comparative negligence. After reviewing the

record, we agree with the district court that no reasonable jury could have found for

Chief on the issue of causation. See Fed. R. Civ. P. 50(a)(1). The evidence presented

by Chief indicated that corn could clump and that, theoretically, lateral forces from

a falling column of grain could cause a silo to tip. Chief’s experts did not, however,

connect the general theory of a clump-caused collapse to the Dammam site conditions

at the time of the actual collapse. In short, Chief’s evidence did not demonstrate that

the corn in silo 7 could clump in such a quantity to pull down the silo. Without such

evidence, the jury would have had to speculate as to whether ARASCO’s alleged

mismanagement caused silo 7 to fall. See Fought, 101 F.3d at 1277; see also Bauer

v. J.B. Hunt Transp., Inc., 150 F.3d 759, 765 (7th Cir. 1998) (“Without a framework

in which to evaluate [the possible contributing factors in an accident], the jury could

only have speculated as to the causal relationship between the factors that [the expert]

identified and the events at issue in the case.”). Accordingly, we affirm the district

court’s grant of judgment as a matter of law on Chief’s affirmative defenses of misuse

and comparative negligence.

III.

Chief also argues that the district court erred in denying its motion for

judgment as a matter of law on the issue of strict liability. As noted above, we review

this denial de novo. United Fire & Cas. Co. v. Historic Pres. Trust, 265 F.3d 722,

726-27 (8th Cir. 2001).

Citing Hilt Truck Line, Inc. v. Pullman, Inc., 382 N.W.2d 310 (Neb. 1986),

Chief first contends that because ARASCO failed to show that a “sudden, violent

event” caused the silos to fall, its strict liability claim cannot be sustained under

Nebraska law. In Hilt Truck Line, the plaintiffs alleged that the trailers they had
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purchased from the defendant had an inherent design defect, and they sought to

recover their repair costs on theories of strict liability and negligence. At trial,

however, the plaintiffs’ evidence demonstrated that the damage resulted not from a

violent occurrence, but from a gradual process of corrosion. Thus, the Nebraska

Supreme Court concluded that the plaintiffs’ strict liability claim failed as a matter

of law, noting that “[i]n Nebraska, in order to recover in strict liability for the cost of

repairs to the product, there must be proof that a sudden, violent event occurred which

aggravated the inherent defect or caused it to manifest itself.” Hilt Truck Line, 382

N.W.2d at 312 (citations omitted). 

Citing this language, Chief contends that under Nebraska law “[a] sudden,

violent event must cause the failure; the failure cannot itself be the sudden, violent

event.” We are not persuaded by Chief’s interpretation. According to the Nebraska

Supreme Court, it has, in essence, followed the “majority of courts that have

considered the applicability of strict liability to recover damages to the defective

product itself [and] have permitted use of the doctrine, at least where the damage

occurred as a result of a sudden, violent event and not as a result of an inherent defect

that reduced the property’s value without inflicting physical harm to the product.”

Nat’l Crane Co. v. Ohio Steel Tube Co., 332 N.W.2d 39, 43 (Neb. 1983) (citations

omitted). Here, ARASCO’s damages were not the result of a defect that merely

reduced the value of the silos. Instead, the collapse of the silos could certainly be

characterized as a “sudden, violent event” that inflicted “physical harm to the

product.” Id.; see also id. at 44 (rejecting plaintiff’s tort theories of recovery where

plaintiff’s damages resulted from “the purchase of defective or unsatisfactory

products,” as opposed to “physical harm caused by the defective product”). We

therefore conclude that because ARASCO presented sufficient evidence

demonstrating that its damages occurred as the result of a sudden, violent event, the

district court did not err in submitting the strict liability claim to the jury. We also

find that Chief’s remaining arguments relating to the strict liability issue are without

merit.
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IV.

Chief raises several additional objections, all of which we reject. As an initial

matter, we cannot find that the district court abused its discretion in ordering the jury

to disregard evidence of “grain clumping, bridging or other grain storage or handling

issues,” when determining Chief’s potential liability. See Sherbert v. Alcan

Aluminum Corp., 66 F.3d 965, 968 (8th Cir. 1995) (standard of review). This

instruction was consistent with the court’s rulings on Chief’s affirmative defenses of

misuse and contributory negligence, and other instructions made it clear that

ARASCO bore the burden of proof on the issue of proximate cause. See id. (“Upon

review, we must determine ‘whether the instructions, taken as a whole and viewed in

light of the evidence and applicable law, fairly and adequately submitted the issues

in the case to the jury.’” (citation omitted)). Thus, despite Chief’s assertions to the

contrary, excluding this evidence from the jury’s consideration on the issue of

liability did not improperly shift the burden of proof on proximate cause.

Nor did the district court err in refusing to give a limiting instruction regarding

evidence relating to the collapse of silos in Korea. According to Chief, such evidence

was irrelevant and “unduly prejudicial.” Thus, Chief argues, the jury should have

been specifically informed to disregard it. 

The decision whether to admit “similar-incident” evidence is committed to the

sound discretion of the district court. Novak v. Navistar Int’l Transp. Corp., 46 F.3d

844, 851 (8th Cir. 1995). A district court’s refusal to give a limiting instruction on

prior similar incidents is also reviewed under the abuse of discretion standard. See

Kehm v. Procter & Gamble Mfg. Co., 724 F.2d 613, 621 (8th Cir. 1983). We have

stated that in products liability actions, “[e]vidence of similar incidents may be

relevant to prove the defendant’s notice of defects, the defendant’s ability to correct

known defects, the magnitude of the danger, the product’s lack of safety for intended

uses, or causation.” Lovett v. Union Pacific R.R. Co., 201 F.3d 1074, 1081 (8th Cir.
4

The Korean incidents involved events at the Dae Je site and Dang Jin site. In

responding to Chief’s motion in limine, ARASCO contended that evidence regarding

the Dae Je incident was relevant to Chief’s bridging defense. The evidence indicated

that the soy meal stored in the silos at Dae Je bridged and the bridges fell, but the

silos themselves did not collapse. Thus, ARASCO sought to use this evidence to

demonstrate, inter alia, that (1) silos are damaged by bridging only when the product

stored is soy meal, and (2) even then, such bridging has not been known to cause the

collapse of a silo. It therefore appears that Chief has improperly characterized the

Dae Je evidence as “similar-incident” evidence.

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2000) (citation omitted). After reviewing the record, we cannot find that the district

court abused its discretion in concluding that the prior collapse of silos in Korea

occurred under circumstances substantially similar to those in this case. See J.B.

Hunt Transp., Inc. v. General Motors Corp., 243 F.3d 441, 445 (8th Cir. 2001)

(“[T]he party seeking admission of the [similar-incident] evidence must demonstrate

that the circumstances between the two incidents are substantially similar.” (citation

omitted)).4

 Thus, we cannot find that the court abused its discretion in rejecting

Chief’s proposed jury instruction. Furthermore, we note that Chief was afforded the

opportunity to examine and cross-examine witnesses extensively regarding the

Korean incidents. We therefore agree with the district court that even if it erred in

refusing to give a limiting instruction, Chief has failed to demonstrate that the error

was prejudicial. See Lovett, 201 F.3d at 1081 (“We will not grant a new trial or set

aside a verdict based on an incorrect evidentiary ruling absent a clear and prejudicial

abuse of discretion.” (citation omitted)). 

Finally, Chief argues that the district court erred in concluding that the

warranty failed of its essential purpose and that ARASCO therefore was not limited

to the repair or replacement remedies provided under the warranty. Section 2-719(1)

of Nebraska’s Uniform Commercial Code (U.C.C.) permits contracting parties to

restrict the measure of damages recoverable by, for example, limiting the buyer’s

remedies to repair or replacement. Neb. Rev. Stat. U.C.C. § 2-719(1); see John Deere

Co. v. Hand, 319 N.W.2d 434, 437 (Neb. 1982). Such limitations, however, are
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subject to § 2-719(2), which states that “[w]here circumstances cause an exclusive or

limited remedy to fail of its essential purpose, remedy may be had as provided in the

Uniform Commercial Code.” Neb. Rev. Stat. U.C.C. § 2-719(2). As we have

explained in a case involving an essentially identical provision of the Minnesota

U.C.C., the rationale underlying § 2-719(2) is as follows:

“This Court would be in an untenable position if it allowed the

defendant to shelter itself behind one segment of the warranty when it

has allegedly repudiated and ignored its very limited obligations under

another segment of the same warranty, which alleged repudiation has

caused the very need for relief which the defendant is attempting to

avoid.”

Soo Line R.R. Co. v. Fruehauf Corp., 547 F.2d 1365, 1370 (8th Cir. 1977) (quoting

Jones & McKnight Corp. v. Birdsboro Corp., 320 F. Supp. 39, 43-44 (N.D. Ill.

1970)).

In this case, it is undisputed that Chief refused to repair or replace the silos.

According to Chief, however, its denial of coverage under the warranty “is akin to an

insurer’s good-faith denial of a liability claim after reasonable investigation.” Thus,

Chief argues, because its investigation revealed a reasonable basis for denying the

claim (i.e., that ARASCO’s poor grain management practices caused the collapse),

its obligations under the warranty were not triggered until a defect was proven. We

are not persuaded by Chief’s analogy. As the Nebraska Supreme Court explained,

“[t]he purpose of an exclusive remedy of ‘repair or replacement’ from a buyer’s

viewpoint is to give him goods which conform to the contract within a reasonable

time after a defect is discovered.” John Deere, 319 N.W.2d at 437. The alleged

defect in this case was discovered shortly after the silos collapsed, not, as Chief

argues, when the jury came back with a verdict for ARASCO. To find otherwise

would, in our opinion, undermine the protections afforded to parties under § 2-719(2)
5

In McDermott, Inc. v. Clyde Iron, a case cited by Chief, the warrantor replaced

the allegedly defective product, but then asserted a counterclaim for the cost of the

replacement product in the warrantee’s lawsuit for property damage. 979 F.2d 1068,

1070, 1073 (5th Cir. 1992), rev’d on other grounds, 511 U.S. 202 (1994). The Fifth

Circuit concluded that the limited warranty provision had not failed in its essential

purpose, noting the following: “[The warrantee] received a new [product] and at no

cost. [The warrantor] never denied its obligation to replace a defective [product]. It

only denied that the [product] was defective. It lost that argument and honored its

obligation.” Id. at 1073. Here, Chief argues that it, too, has simply denied that the

silos were defective. What Chief fails to recognize, however, is that the warrantor in

McDermott did replace the allegedly defective product. It did not wait until the

conclusion of extensive civil litigation to honor its obligation. Thus, by choosing to

proceed in this fashion, Chief bore the risk of losing on the issue of its warranty

defenses and essentially forfeiting the protections of the limited remedy provision.

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and deprive ARASCO “of the substantial value of the bargain.”5

 Neb. Rev. Stat.

U.C.C. § 2-719 cmt. 1. Thus, given Chief’s undisputed failure to perform its

obligations under the warranty, we agree that the warranty’s limited remedy provision

failed in its essential purpose. We therefore conclude that Chief’s refusal to honor

its obligations under the warranty prevents it from now sheltering itself behind the

warranty’s recovery limitations. See John Deere, 319 N.W.2d at 437 (stating that

when an exclusive remedy fails of its essential purpose, the aggrieved buyer may

“invoke any remedies available under the Uniform Commercial Code,” including

“provable consequential damages, even though specifically excluded by the written

warranty” (citations omitted)).

The judgment is affirmed.
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A true copy.

Attest:

CLERK, U.S. COURT OF APPEALS, EIGHTH CIRCUIT.