Court Opinion

ID: 1043724
Source: CourtListenerOpinion
Date Created: 2013-10-08 00:25:34.717678+00
Date Added: 2024-06-11T13:02:18.272990
License: Public Domain

2012 VT 18

Rathe Salvage, Inc. v. R. Brown &
Sons, Inc. and Brown (2010-356)
 
2012 VT 18
 
[Filed 23-Mar-2012]
 
NOTICE:  This opinion is subject to motions for
reargument under V.R.A.P. 40 as well as formal revision before publication in
the Vermont Reports.  Readers are requested to notify the Reporter of
Decisions, Vermont Supreme Court, 109 State Street, Montpelier, Vermont
05609-0801 of any errors in order that corrections may be made before this
opinion goes to press.
 
 

2012 VT 18 

 

No. 2010-356

 

Rathe Salvage, Inc.

Supreme Court

 

 

 

On Appeal from

     v.

Superior Court, Chittenden
   Unit,

 

Civil Division

 

 

R. Brown & Sons, Inc.,
  Robert E. Brown and
Stephanie A. Brown

March Term, 2011

 

 

 

 

Helen
  M. Toor, J.

 

Eric A. Poehlmann and Jennifer E. McDonald of Downs Rachlin
Martin PLLC, Burlington, for
  Plaintiff-Appellee/Cross-Appellant. 
 
Peter F. Langrock, Frank H. Langrock and Devin McLaughlin of
Langrock Sperry & Wool,
  LLP, Middlebury, for
Defendants-Appellants/Cross-Appellees.
 
 
PRESENT:  Reiber, C.J., Dooley, Johnson, Skoglund and
Burgess, JJ.
 
 
¶ 1.            
BURGESS, J.   Following a jury trial, defendants R.
Brown & Sons, Inc., a scrap metal hauling company, and its principal,
Robert Brown (both referred to as hauler), were found liable for breach of
contract, common law fraud, trespass, breach of the implied covenant of good
faith and fair dealing, and consumer fraud.  Each of these claims stemmed
from hauler’s commercial dealings with plaintiff Rathe Salvage, Inc., a scrap
metal salvage yard where hauler would crush cars and transport the scrap for
sale to steel mills.  Hauler was later granted judgment as a matter of law
by the trial court overturning the jury’s finding of a consumer fraud
violation.  Hauler now appeals, arguing that: (1) the trial court erred in
denying judgment in hauler’s favor on the remaining claims because the verdicts
were based on insufficient evidence; (2) it is entitled to a new trial because
Rathe Salvage’s attorney improperly argued to the jury that opposing counsel
was implicated in withholding evidence; and (3) the case should be remanded due
to the trial court’s refusal to conduct a Daubert hearing on the
admissibility of hauler’s polygraph, or lie detector, testing before excluding
such evidence from trial.  Rathe Salvage cross-appeals from the trial
court’s judgment in favor of hauler on the consumer fraud claim.  We
affirm the judgment of the trial court on all four issues.
¶ 2.            
The following facts are not in dispute.  Rathe Salvage is in the
business of acquiring old motor vehicles to sell for spare parts and scrap
metal.  For several decades Rathe Salvage did business with hauler, which
is in the business of crushing and transporting scrap metal for sale.  The
typical pattern of their transactions was that the parties would agree on the
price per ton of scrap metal, Rathe Salvage would identify the junked vehicles
to be sold, and hauler would crush the junks for transport to a Montreal steel
mill.  It was understood that each load would be weighed at the mill,
hauler would be paid by the mill, and Rathe Salvage would be paid by the hauler
at the previously agreed upon price per ton.  Rathe relied upon on
handwritten weigh slips presented by hauler to figure the tons for which their
price per ton was due. 
¶ 3.            
In late 2003, Rathe Salvage terminated this arrangement and contracted
with another trucking company.  Although the replacement company bought
and transported what Rathe Salvage contended were the same kinds of loads,
Rathe noticed that the typical load weights reported by the new trucker—and
thus, the typical payments received—were significantly higher than those
reported by defendant hauler.  Although hauler offered several reasons why
the replacement trucker’s loads were heavier, Rathe Salvage inferred from the
difference that hauler had been submitting fraudulent weigh slips, and it sued
for, for purposes of this appeal, breach of contract, fraud, and consumer
fraud, the last claim based on the allegation that Rathe was a consumer of
hauler’s services.
¶ 4.            
Early in the pretrial proceedings, Rathe Salvage moved to compel hauler
to produce copies of the steel mill’s weigh slip records.  Finding that
hauler failed to abide by this discovery request, the trial court sanctioned
hauler with a default judgment on the issue of liability.  This was
followed by a later judgment for damages.  On appeal, this Court reversed
the default judgment, agreeing that, while hauler produced copies of its
version of mill transactions in its possession, the steel mill’s own records
were not under hauler’s control, and that the court could not compel hauler to
produce the mill’s documentation.  Rathe Salvage, Inc. v. R. Brown
& Sons, Inc., 2008 VT 99, ¶ 18, 184 Vt. 355, 965 A.2d 460.
  The case was then remanded for further proceedings.
¶ 5.            
Before the subsequent trial, hauler filed a motion in limine to allow
testimony from a polygraph expert on the results of a polygraph examination of
Robert Brown, hauler’s principal.  The trial court denied this motion,
noting that this testimony would “invade the province of the jury,” and so was
inadmissible, per se, regardless of its purported reliability.  The court
thus declined, over hauler’s objection, to hear its proffered evidence of
polygraph reliability as a necessary precondition to admitting expert
testimony.  See V.R.E. 702 (allowing qualified experts to testify where
“scientific, technical, or other specialized knowledge will assist the trier of
fact to understand the evidence or to determine a fact in issue”).  
¶ 6.            
The jury did hear evidence, however, about discrepancies between the
tons of scrap as reported and paid for by hauler and tons of scrap actually
received and sold to the steel mill.  One of hauler’s former drivers
testified that a typical load from the salvage yard weighed significantly more
than the average weight reported by hauler.  In addition, the owner of another
salvage yard who had worked with hauler testified that hauler’s reported load
weights were much lower than loads transported by other carriers.  The
jury was told that, after Rathe Salvage ended its business with hauler, the
yard shipped several loads of scrap crushed and bundled at the yard by
hauler.  Upon delivery to the mill, Rathe Salvage discovered that these
loads averaged twenty tons, while hauler consistently reported loads averaging
fifteen tons.  The jury also heard that hauler directed the mill, with whom
it enjoyed a close working relationship, not to disclose its records.
¶ 7.            
At closing argument, Rathe Salvage highlighted the fact that hauler and
its counsel recently visited the steel mill in preparation for the trial, yet
failed to retrieve the mill’s weigh slips for hauler’s deliveries of scrap from
Rathe Salvage.  Objecting, hauler complained that the argument was “not in
the evidence,” and that it improperly accused hauler’s counsel of conspiring in
not getting the mill’s weight slips.  The court declined to give a
curative instruction as requested by hauler, noting that the same argument had
been made earlier in the trial and that the court inferred no untoward
accusation against counsel from the remarks.
¶ 8.            
After the jury’s verdict for Rathe Salvage on all claims at issue on
this appeal,[1]
hauler renewed its motions for judgment as a matter of law.  The trial
court granted judgment for hauler on the consumer fraud claim, but entered
judgment for Rathe on the rest of the verdict.  With respect to the
consumer fraud claim, the court found that the transaction was clearly a sale
of junked cars by Rathe Salvage and not a purchase of hauler’s transporting or
scrap processing services, opining that the only basis for Rathe’s claim at
trial was that hauler did not pay when it picked up the scrap, and that was
because there was no scale at the yard.  On that proof, the court reasoned,
there was no evidence that Rathe Salvage paid hauler for services. 
Because Rathe Salvage was not, then, a “consumer” as defined by the Consumer
Fraud Act, the corresponding verdict against hauler was vacated.
I.
 
¶ 9.            
Hauler contends that the evidence was insufficient to support the common
law fraud verdict.  On appeal, we apply the same standard as the trial
court, asking “whether, taking the evidence in the light most favorable to the
prevailing party and excluding any modifying evidence, there is any evidence
which fairly and reasonably tends to support the jury verdict.”  Turgeon
v. Schneider, 150 Vt. 268, 270, 553 A.2d 548, 550 (1988).  The
evidence presented by Rathe Salvage met this standard.
¶ 10.        
Hauler asserts that Rathe’s case rests entirely on inferences drawn from
the fact that the steel mill did not produce its weigh slips for hauler’s loads
of Rathe Salvage scrap.  This characterization, however, ignores the
totality of the evidence.  First, Rathe Salvage presented testimony from
several different drivers and carriers indicating that the weights reported by
hauler to Rathe were consistently short of the actual tons hauled.  For
example, one of hauler’s former drivers calculated that the nine bundles of
three scrapped cars each on every load, with each car weighing at least a ton
apiece, averaged over twenty-seven tons per load, while hauler’s comparative
weight slips claimed around fifteen to sixteen tons per load.  Hauler’s
own testimony concerning the origins of its weight receipts was that the
weights for Rathe’s scrap would be date-stamped by the Montreal mill’s
computerized weigh station on hauler’s letterhead.  According to hauler,
the weights were handwritten while the date stamps were converted, by the mill
pressing a button, to an American-style month-day-year format.  Rathe
Salvage’s contradicting evidence was that another carrier of its scrap to the
same Montreal mill received weight slips printed on mill letterhead by its
computer with the load weights straightforwardly stamped, rather than written,
on the receipt and the dates stamped as well, but in the European convention of
day-month-year.  There was an abundance of circumstantial evidence, some
of which is described above, that for years hauler generally represented his
loads as not exceeding fifteen tons, when comparable loads later proved to
weigh at least twenty tons.  The jury was free to consider inculpatory
hauler’s earlier instruction to the mill not to share its original transaction
records.  Taking the evidence in a light most favorable to the prevailing
party, the jury could have reasonably inferred deception on the part of hauler
as to tonnage and fabrication of its weight receipts.  
II.
¶ 11.        
Hauler next asserts that a curative instruction was required to offset
prejudice created by Rathe Salvage’s closing argument allegedly accusing
defense counsel of complicity in withholding the mill documentation. 
Specifically, hauler objected to the remark that its counsel accompanied hauler
to the mill to take photographs for trial, but inexplicably failed to return
with the mill’s actual weigh slips.  When a party is accused of improper
argument, this Court looks for prejudice warranting a new trial.  Keus
v. Brooks Drug, Inc., 163 Vt. 1, 7-8, 652 A.2d 475, 480 (1994).  Here,
we review the trial court’s determination that there was no prejudice, and its
consequent decision not to deliver a curative instruction, for abuse of
discretion.  See Debus v. Grand Union Stores of Vt., 159 Vt. 537,
545, 621 A.2d 1288, 1293 (1993) (using abuse of discretion standard to review
whether reference in closing argument to defendant’s corporate status created
prejudicial effect that would merit curative instruction); see also Pappas
v. Middle Earth Condo. Ass’n., 963 F.2d 534, 540 (2d Cir. 1992) (holding
that abuse of discretion standard is generally appropriate for determining
whether improper conduct caused prejudice).[2]  
¶ 12.        
In considering this claim, it is important to note that everything in
the contested portions of the closing argument was factually accurate and
supported by the record.  It is undisputed that hauler and defense counsel
travelled to the mill and did not retrieve the mill’s weigh slips.  Any
prejudice from this argument derives, not from hauler’s lawyer going with him
to the mill, but from hauler’s failure to obtain, without sufficient
explanation, the original scale slips that could corroborate the delivery
weights claimed and so resolve the case.  Given hauler’s admission on
cross-examination that he told the mill not to turn over his business records
to plaintiff in this case, the argument was fair comment.  There was
nothing facially improper about arguing the point.
¶ 13.        
As to whether the argument was open to improper inferences necessitating
a corrective instruction, we defer to the judgment of the trial court. 
The trial court enjoys a “superior vantage point when evaluating the possible
impact of the alleged prejudicial conduct,” Pappas, 963 F.2d at 540, and
the trial court in the case at bar found that “[n]othing in [the] argument
suggests wrongdoing by counsel.”  The trial court correctly noted the
possibility of alternative inferences equal to or more plausible than hauler’s
characterization of the argument as impugning the honesty of its counsel. 
Indeed, in context, Rathe Salvage’s reference to hauler’s counsel’s
accompaniment to the mill appears merely incidental to hauler’s opportunity,
but failure, to secure exculpatory evidence just prior to trial, and was not
designed to implicate counsel in any sort of misconduct.  The trial
court’s refusal to give a special instruction on this point was no abuse of
discretion.
III.
¶ 14.        
Appellant also argues that the trial court erred by refusing to admit
expert testimony about the results of a polygraph examination commissioned and
submitted to by hauler.  The court denied hauler’s motion to convene a Daubert
hearing, so called, for purposes of determining the underlying reliability of
polygraphy.  See Daubert v. Merrell Dow Pharmas., Inc., 509 U.S.
579 (1993) (requiring reliability screening by trial judges against indicia of
reliability of proffered scientific evidence as a precondition to admissibility
of expert testimony under Federal Rule of Evidence 702); State v. Brooks,
162 Vt. 26, 30 (1993) (adopting Daubert as the applicable standard for
admitting scientific evidence under V.R.E. 702); see also Reporter’s Notes,
V.R.E. 702 (incorporating Daubert into rule for admissibility of expert
testimony); 985 Assocs. Ltd. v. Daewoo Elecs. Am., Inc., 2008 VT 14, ¶
8, 183 Vt. 208. (reiterating the trial court’s gatekeeping function under Daubert
to “keep misleading ‘junk science’ propagated primarily for litigation purposes
out of the courtroom”).  Concerned that the point of hauler’s polygraph
examiner was to tell the jury “what and who should be believed,” the court here
ruled that even if polygraph results could satisfy Daubert admissibility
standards, it was nevertheless precluded as an impermissible infringement on
the jury’s province to determine credibility.  In support of its
conclusion, the court cited U.S. v. Sayavongsa, No. H-07-338-2, 2008 WL
2325622, at *4 (S.D. Tex., June 3, 2008), for the proposition that polygraph
evidence “emanates an inference of infallibility which improperly interferes
with this critical role of the finder of fact as the determiner of
credibility.”  
¶ 15.        
Endorsing a per se ban on the admissibility of polygraph results, the Sayavongsa
ruling relied also on Federal Rule of Evidence 403, which then provided for the
exclusion of relevant evidence if “its probative value is substantially
outweighed by the danger of unfair prejudice, confusion of the issues, . . . or
by consideration for undue delay, waste of time, or needless presentation of
cumulative evidence.”[3] 
Id.  The court recognized that “where [Rule 403] warrants exclusion
of polygraph evidence, district courts need not conduct a Daubert
hearing or detail a Rule 702 analysis,” and opined that “even if the tendered
polygraph evidence had ample reliability and relevance so as to be admissible
under Rule 702, it would be excluded under Rule 403.”  Id. 
Although not so explained explicitly below, the trial court’s exclusion of the
polygraph results is sustainable on per se grounds founded in Vermont Rule of
Evidence 403.  See Hudson v. Town of E. Montpelier, 161 Vt. 168,
170-71, 638 A.2d 561, 563 (1993) (explaining that this Court “need not adopt
the [trial] court’s rationale in affirming its conclusion”).
¶ 16.        
The admissibility of polygraph evidence is one of first impression in
Vermont.[4]  Both
parties posit, and we agree, that the ruling is appropriately analyzed under
Rule 403, which is the same in substance as the federal rule relied upon in Sayavongsa. 
Rule 403 admissibility determinations are usually based on a case-by-case
weighing of the evidence’s probative worth against its risk of unfair prejudice,
confusion, and the like, and are reviewed for abuse of discretion.  See State
v. Webster, 165 Vt. 54, 56, 675 A.2d 1330, 1332 (1996) (recognizing that
trial court has discretion in balancing such factors, and that its rulings will
not be disturbed “absent a showing of an abuse of that discretion”).  The
court here, however, adopting the Sayvongsa rationale, excluded the
polygraph evidence as per se inadmissible under Rule 403 as a matter of
law.  Accordingly, its ruling will be examined de novo.  See In re
Vill. Assocs. Act 250 Land Use Permit, 2010 VT 42A, ¶ 7, 188 Vt. 113, 998
A.2d 712 (reiterating that questions of law are reviewed de novo). 
Moreover, we approach the question of the polygraph’s Rule 403 admissibility in
the same position as the trial court by assuming, without deciding, that
polygraphy is sufficiently reliable for admissibility under Daubert. 

¶ 17.        
As with its federal counterpart, Vermont Rule 403 calls for balancing
the probative value of polygraphy against its potential for undue prejudice,
confusion, and delay.  See V.R.E. 403 (providing for the exclusion of
relevant evidence “if its probative value is substantially outweighed by the
danger of unfair prejudice, confusion of the issues . . . or by considerations
of undue delay, waste of time, or needless presentation of cumulative
evidence”).  Hauler proffers that the polygraph evidence in this case
would be probative in “supporting Mr. Brown’s claim that he was telling the
truth when he said he did not defraud Mr. Rathe.”  Hauler also argues that
its polygraph evidence would not usurp the jury’s role in determining
credibility because it offers no opinion about the truthfulness of a
witness.  Rather, it would be the witness’s measurable physiological
reaction reflecting the presence, or not, of deceptive stress, that would be
introduced for the jury’s consideration in assessing the veracity of a
witness’s prior consistent statement.[5] 
Thus, maintains hauler, the expert was asked to opine not on hauler’s
truthfulness, but on nothing more than observable manifestations of his
physiological stress consistent, or not, with indicia of truthfulness.
¶ 18.        
Like the trial court, we find this a distinction without a practical
difference.  The probative value of the polygraph results, at least in
theory, rests on the expert’s ability to assess physiological responses of the
subject as consistent with either truthfulness or deception.  As explained
in hauler’s motion in limine, the expert would “give the jury a scientific
basis and specific information that might be of some help in determining
whether [hauler] told the truth on the stand.”  Although indirectly, the
polygraph results and the expert’s interpretation still purport to measure the
declarant’s veracity.  As observed by the United States Supreme Court in United
States v. Scheffer, 523 U.S. 303, 313 (1998), “a polygraph expert can
supply the jury only with another opinion . . .  about whether the witness
was telling the truth.”  
¶ 19.        
It is long settled that “the jury is the lie detector.”  Id. 
(quotation omitted).  This responsibility to determine the “weight and
credibility of witness testimony, therefore, has long been held to be the part
of every case [that] belongs to the jury, who are presumed to be fitted for it
by their natural intelligence and their practical knowledge of men and the ways
of men.”  Id. (quotation omitted).  That polygraphy, as here,
is offered to supplement what is already the jury’s unadorned core function
diminishes, rather than enhances, its probative value since it is redundant,
purporting to do only what the jury is already destined to determine.  If,
as we assume, polygraphy is generally accepted as accurate and reliable, the
polygraph cannot but usurp the jury’s lie detecting function.
¶ 20.        
Excluding polygraph results as per se intrusive upon the jury’s
prerogative, some courts further justify the exclusion in terms of avoiding
unfair prejudice, confusion, waste of time, and delay.  See id. at
314 (concluding that categorical ban of polygraph evidence was in part
justified by legitimate interest in avoiding inevitable collateral litigation
over the test administration, examiner qualifications, interpretation and
countermeasure distortion that would prolong criminal trials and “threaten[ ]
to distract the jury from its central function of determining guilt or
innocence”); Sayavongsa, 2008 WL 2325622, at *4.  In State v.
Porter, 698 A.2d 739 (Conn. 1997), the Connecticut Supreme Court declined
to abandon its traditional per se bar against polygraph evidence, even if
admissible under Daubert, due to “prejudice greatly exceed[ing] its
probative value,” id. at 758, and because of inevitable “regular and
immensely time consuming ‘battle of the experts,’ ” id. at
771.  The variables upon which polygraph accuracy depends were not
discussed below, but were acknowledged in the submissions supporting hauler’s
motion.  These include the relative skill of the examiner, the
conditioning of the subject, and the circumstances of the examination. 
See Nat’l Research Council of the Nat’l Acads., The Polygraph & Lie
Detection 121-53 (2003), available at
http://www.nap.edu/openbook.php?isbn=0309084369 [hereinafter NAS Report]
(discussing factors influencing polygraph accuracy).[6]
¶ 21.        
Skirmishes over these factors present inescapable opportunities for
litigation on collateral issues underlying Rule 403 balancing of probative
weight against distraction, delay and confusion.  Questions concerning the
polygraph’s reliability in a particular case would unavoidably invite
testimonial duels between experts over the tactics and circumstances of the
examination itself.  Hauler’s proffer concerning the relatively low
polygraph error rate is illustrative.  The motion in limine asserts
accuracy in excess of ninety-three to ninety-eight percent and posits that the
two to seven percent difference is simply fair game for
cross-examination.  Reiterating the same point on appeal, hauler
quotes further from the NAS Report:
[E]mpirical
data clearly indicate that for several populations of naive examinees not
trained in countermeasures, polygraph tests for event-specific
investigation detect deception at rates well above those expected from random
guessing. . . .  The studies report accuracy levels comparable to various
diagnostic tests used in medicine.  
 
Id.
at 149 (emphasis added).  The question of whether the examinee is naive
and untrained in countermeasures (assuming it could be determined that all
countermeasures are detectable in a subject trained in countermeasures) would
presumably spark its own inquiry which, in turn would call for more expert
explanation and rebuttal, all turning on credentials, experience, and facts
increasingly remote from the actual case at hand.  Avoiding such
diversions was one premise in support of per se exclusion in Scheffer, Sayavongsa,
and Porter even after assuming relevance under Daubert, while
hauler’s proffer invites the same kinds of distraction.  See also D. Kaye
et al., The New Wigmore: A Treatise of Evidence: Expert Evidence  §
1.5.1(c), at 29 (1st ed. 2004) (noting that polygraph evidence may offer no
less waste of time and jury confusion, in return for no greater probative
value, than disputed expert psychiatric assessments of credibility). 
¶ 22.        
  Per se exclusion is also supported by our holdings
against expert opinions on ultimate legal issues or credibility in
litigation.  See Reiss v. A.O. Smith Corp., 150 Vt. 527, 530-32,
556 A.2d 68, 70-72 (1988) (explaining that notwithstanding authority under
Vermont Rule of Evidence. 704 to present opinion evidence that “embraces an
ultimate issue to be decided by the trier of fact,” it was error to allow
testimony on ultimate questions of law equivalent to “should [defendant]
lose?”); Town of Brighton v. Griffin, 148 Vt. 264, 271, 532 A.2d 1292,
1296 (1987) (excluding witness opinions on questions of law).  Similarly,
Rule 702 is no license for expert opinion on the truthfulness of a witness or
guilt or innocence of a defendant.  See State v. Gokey, 154 Vt.
129, 139-40, 574 A.2d 766, 771 (1990) (reserving those issues for the
jury).  
¶ 23.        
The polygraph expert’s opinion in this case vouching for hauler’s denial
of fraud would amount to an opinion confirming hauler’s veracity and the legal
insufficiency of Rathe Salvage’s fraud claim against him.  Hauler asserts
that the jury would not be told his denials were truthful, but that his
physiological reactions at the time of a similar declaration were, in the
opinion of the expert, inconsistent with deception or consistent with
truth-telling.  Again, as noted by the trial court, the distinction
between the proffer and impermissibly certifying hauler’s veracity, and so
deciding the case, is difficult, if not impossible, to recognize.  Even if
treated as a strictly factual, rather than legal, opinion, the expert’s
testimony is practically inseparable from its legal implication: lack of
scientific indicia of deception infers a truthful denial of fraud which tells
the jury no fraud occurred.  As it was error in Reiss to admit an
opinion that a defendant was liable for negligence in its installation of a
propane tank regulator, so it would have been error to allow a polygraph expert
to testify, in effect if not explicitly, that a fraud defendant was innocent of
fraud.  
¶ 24.        
Hauler’s argument that the excluding rationale of Scheffer is
dated and not to be followed is unconvincing.  We hold that polygraph
examination results are redundant to, and an unnecessary influence, on a jury’s
responsibility to judge witness credibility or party liability, and that this
limited, if not absence of, probative value is substantially outweighed by
risks of confusion, delay, and time wasted on collateral issues related to
variables in administration of the polygraph.  There was no error in the
trial court’s per se exclusion of polygraph evidence under Rule 403. 
Because polygraphy is inadmissible under Rule 403, the trial court was not
required to conduct a Daubert hearing to assess its reliability under
Rule 702.  
IV.
¶ 25.        
Rathe Salvage’s cross-appeal—that the trial court erred in granting
hauler’s renewed motion for judgment as a matter of law on its consumer fraud
claim—is reviewed de novo.  Downtown Barre Dev. v. GU Mkts. of Barre,
2011 VT 45, ¶ 8, ___Vt. ___, 22 A.3d 1174 (mem.).  Accordingly, the claim
is evaluated by the same standard applied to hauler’s judgment as a matter of
law motion: “whether, taking the evidence in the light most favorable to the
prevailing party and excluding any modifying evidence, there is any evidence
which fairly and reasonably tends to support the jury verdict.”  Turgeon,
150 Vt. at 270, 553 A.2d at 550.  We affirm the trial court’s holding that
there is no such evidence.
¶ 26.        
In its complaint, Rathe Salvage claimed to be a consumer of services
purchased from hauler and that hauler’s misrepresentations of weight in
redeeming Rathe’s scrap metal was actionable under Vermont’s Consumer Fraud Act
(CFA).  The Act authorizes recovery of damages and attorneys’ fees for
“[a]ny consumer who contracts for goods or services in reliance upon false or
fraudulent representations or practices” made in commerce in violation of the
CFA.  9 V.S.A. § 2461(b).  Section 2451a of the act defines
“consumer,” in pertinent part, as anyone “who purchases, leases, contracts for,
or otherwise agrees to pay consideration for goods or services . . . in
connection with the operation of his or her business.”  Assuming
misrepresentation on the part of defendant, it remained incumbent on Rathe
Salvage to prove itself a “consumer” under the statute.
¶ 27.        
 Hauler contends that, notwithstanding the jury’s verdict in favor
of Rathe Salvage on this count, there was no evidence from which the jury could
find Rathe was a “consumer” as required for judgment under the Act. 
Hauler argues that the evidence showed that the scrap transactions were a one
way street: that it simply bought scrap metal by the ton from Rathe
Salvage.  Hauler asserts that the trial court was correct in ruling that
no evidence supported the claim that it sold anything—neither product nor
service—to the salvage yard.  
¶ 28.        
On the other hand, Rathe Salvage insists it had a brokerage arrangement
with hauler, by which hauler was hired to crush the cars for the salvage yard,
to procure buyers for the scrap, and then deliver the scrap to the purchasing
mills in return for some percentage of the mill’s payment.  In support,
Rathe points to hauler’s own testimony referring to himself as a “broker,” Rathe
as a “customer,” and describing periodic summaries of scrap weights hauled as
“invoices.”  Rathe cites this and his own testimony reflecting the same or
similar characterizations as evidence supporting the premise that Rathe Salvage
paid hauler for services and so was a consumer under the Act.  
¶ 29.        
What proves the parties’ actual buyer-seller relationship, however, is
not how they label their activities.  Rather, the proof of their relationship
is in the testimony about how their transactions were carried out in fact and
comparing those facts to the CFA’s definition of “consumer.”  From the
testimony about how the sales and purchases were actually conducted, the court
concluded that the evidence proved only that hauler bought scrap from the
salvage yard at an agreed-upon price per ton, and that the salvage yard
purchased no goods or services from hauler.  Having purchased nothing,
explained the court, Rathe Salvage was no “consumer” under the Act. 
¶ 30.        
Looking to the undisputed facts as testified to by both Rathe and
hauler, the court was correct. According to Rathe, hauler’s “primary business”
was going to salvage yards to “crush their steel, pay them for the—whatever
steel he crushed, and . . . [he] made his profit doing that.”  Rathe
recounted that the salvage yard would ask hauler for the current price,
“because the prices fluctuate, markets fluctuate” and they would “come to a
consensus as to what [hauler is] paying per ton.”   Upon Rathe’s
agreement on the price, hauler would crush the cars at the salvage yard and
“would pay us forty dollars a ton, and whatever it weighed, you multiply it,
that’s what we got paid.”  Rathe reiterated, more than once, that after
hauler “crushed the cars, he’d give us a price so much per ton, and pay us for
the weight that he took out.”  Thus, Rathe’s evidence was that hauler
bought the yard’s scrap for an agreed upon price.  Hauler’s testimony was
essentially the same—that it bought the scrap at the yard for an accepted price
and paid after delivering the metal to the mills.[7]  Consistent with this evidence, and
absent any competing version of their transactions, the court determined
post-trial that hauler bought the scrapped cars, owned the scrap, and paid
Rathe for the scrap, according to its purported weight.  
¶ 31.        
That hauler referred to itself as a “broker,” Rathe as a “customer,” and
its delivery summaries as “invoices” neither disproved Rathe’s factual history
of their business nor undermined the court’s conclusion.  Hauler testified
to no facts, as opposed to characterizations, that contradicted Rathe’s
description of events.  As the court found, there was no evidence that
hauler actually facilitated, or “brokered,” any business between the salvage
yard and the mill.  Indeed, there was no evidence of any business
relationship evident between Rathe and the mill.  Hauler’s misuse of the
term “customer” was acknowledged by Rathe Salvage on the record.[8]    Similarly, hauler’s
reference to its mill delivery summaries as “invoices” did not convert the
summaries into actual invoices for services where the evidence showed no
services were offered or purchased.  Terminology aside, hauler’s testimony
corroborated Rathe Salvage’s testimony that hauler always bought the scrap by
the ton, thus leaving Rathe’s bald claim that hauler was paid on a percentage
basis wholly unsupported by its own testimony.   
¶ 32.        
Nor should the fact, emphasized by the salvage yard, that hauler paid
nothing in advance of crushing and transporting the scrap alter the court’s
conclusion.  The court concluded that title to the junked cars passed to
the hauler when turned over by Rathe upon their agreement on price.  This
is supported by Vermont’s Uniform Commercial Code (UCC), 9A V.S.A. article 2,
which applies to contracts for the sale of goods “movable at the time of
identification to the contract for sale,” 9A V.S.A. § 2-105(1), §2-401(2),
which provides that title passes to buyer when “seller completes his
performance with reference to physical delivery of the goods.” 
¶ 33.        
In this regard, the parties accepted the court’s instruction, consistent
with Section 2-401(2), in response to a jury question about when “ownership” of
the steel changed, that:  “Unless the parties have a different agreement,
ownership of the property changes when a seller completes delivery of the property
to a buyer.”  As already set forth, the evidence supports only that the
salvage yard completed delivery to hauler in return for the agreed upon
price.  Notwithstanding the parties’ labeling their relationship as one of
“middleman,” “broker,” or “customer,” there was no evidence of any arrangement
other than the yard selling scrap to hauler at a price established between
them.  
¶ 34.        
Rathe’s argument that the scrap remained salvage yard property until
turned over to the mill is unsupported and unpersuasive.  There was no
evidence that delivery to hauler was conditional or contingent.  The only
evidence of their deal was that hauler offered a price for scrap, the salvage
yard agreed, and that hauler then crushed the cars and picked up the
scrap.  At that point there was nothing more for Rathe Salvage to do “with
reference to the physical delivery of the goods,” and its delivery was
complete.  9A V.S.A. § 2-401(2).  As the court commented, hauler was
figuratively free to dump the scrapped cars into a lake if it chose—its only
obligation was to pay the yard the agreed-upon price per ton.
¶ 35.        
 Hauler points to 3Com Corp. v. Electronic Recovery Specialists,
Inc., 104 F. Supp. 2d 932 (N.D. Ill. 2000), relied on by the trial court,
where the court rejected a salvage yard’s argument that a hauler was a seller
of services to the yard when it agreed to pick up scrap, sell it to third
parties, and pay the yard seventy percent of the realized price.  Id.
at 935.  The 3Com court concluded that the yard’s claimed posture
as a buyer of services, instead of a seller of scrap, was a “tortured
description of a relatively straightforward business relationship. . . . [T]he
agreement . . . was a contract for sale of goods and not for rendition of
services.  [Defendant hauler] purchased scrap from [plaintiff yard],
paying [plaintiff] 70% of the scrap’s resale value.  Plaintiff cannot be
considered the consumer in this relationship.”  Id. at 939.  
¶ 36.        
Rathe’s efforts to distinguish its situation from 3Com are
unavailing.  Rathe Salvage notes, correctly, that unlike Vermont’s CFA,
the Illinois statute expressly addressed the purchase of merchandise, rather
than services.  See id. at 939 (outlining Illinois consumer fraud
statute).  Nevertheless, the 3Com court analyzed the case in terms
of whether the hauler sold “services” as claimed by the salvage yard, and held
that hauling and selling scrap for thirty percent of its realized value was not
a sale of services to the scrap yard, but a “sale of goods” to hauler.  In
any event, the instant case presents a simple sale of scrap metal with no
arrangement for a split percentage or shared proceeds where the evidence was
only that hauler purchased scrap from the yard at a stated price per ton. 
   
¶ 37.        
The same undisputed facts fail to support Rathe’s argument that UCC
Article 2, governing sales and transfers of title to goods, does not apply
where the “predominant purpose” of the parties’ transaction was for the
purchase of services, such as crushing and hauling, instead of selling goods
like scrap metal.  See Lamell Lumber Corp. v. Newstress Int’l, Inc.,
2007 VT 83, ¶ 13, 182 Vt. 282, 938 A.2d 1215 (explaining that where “a
transaction contains elements of both sales and service, application of the UCC
. . . turns on whether the transaction predominantly, or essentially, relates
to good or services” (quotation omitted)).  There were no evident services
supplied by hauler or purchased by Rathe Salvage.  According to the
evidence, the sale of scrap metal goods was not only predominant, it was the
only element of the parties’ transactions.  
¶ 38.        
Rathe Salvage’s reliance on Allied Erecting & Dismantling v. Auto
Baling Co., 591 N.E.2d 259 (Ohio Ct. App. 1990), is also misplaced. 
In that case, the appellant scrap handler was contracted to process appellee’s
junk metal, store it, and procure buyers for it.  Despite appellant’s
assertion that the contract was for the sale of that metal, the court held that
it was predominantly a service agreement, noting that “[o]nly when a buyer was
found did appellant forward payment to appellee and confirm the sale.”  Id.
at 263.  Here, in contrast, hauler and the salvage yard agreed in advance
on the price to be paid by hauler, not by the mill, before the scrap was delivered
to hauler.  Rathe Salvage’s contention that hauler was retained to procure
buyers in return for a percentage or cut over and above the rate per ton agreed
to, and the jury’s verdict that the salvage yard was a consumer of hauler’s
services, find no support in the record.
Affirmed.

 

 
 

FOR THE COURT:

 

 

 

 

 

 

 

 

 

 

 

 

                                                                       
   Associate Justice

[1] 
The jury did find Rathe liable on hauler’s counterclaims for conversion and
trespass, but these claims are not directly related to the matters before this
Court, and the associated jury award amounted to a small fraction of the total
sum awarded to salvage yard.

[2] 
Hauler cites Pappas for the proposition that unusual circumstances can
necessitate a stricter standard of review.  In Pappas, however, the
circuit court strayed from an abuse-of-discretion standard because the lower
court did not correct counsel’s blatant appeal to regional bias—a primary
concern of federal courts hearing cases under diversity jurisdiction.  963
F.2d at 539-40.  No such concern arises here.  

[3] 
Since the court’s decision, the language of Federal Rule of Evidence 403 has
changed slightly, but remains the same in substance.
 

[4] 
This Court had the opportunity to rule on the admissibility of polygraph
evidence in State v. Hamlin, 146 Vt. 97, 109-10, 499 A.2d 45, 54 (1985),
but declined to do so, noting only that most jurisdictions exclude it.  
 

[5] 
Other apparently related evidentiary issues, such as the admissibility of
hearsay and a prior consistent statement, were not raised on appeal, and we do
not consider these questions here.

[6] While
we assume polygraphy is scientifically relevant to truth detecting, it is
noteworthy that the full NAS Report cautions that “[t]est performance is far
below perfection and highly variable across situations,” and qualifies its more
general statements about polygraph accuracy with the acknowledgement that
“[e]xisting polygraph field studies have used research designs highly
vulnerable to biases, most of which exaggerate polygraph accuracy.”  Id.
at 149.

[7] This
was further supported, and never disputed, whenever Rathe described the
particulars of their dealing.  He agreed that he “sold scrap” to hauler
and that the “price” offered in return was “fair” compared to prices offered by
others.  Rathe said that hauler “paid me for scrap cars, yes, and tin,”
but paid late for a while, prompting Rathe to demand, when hauler crushed cars,
“payment in thirty days.”
 

[8]
In its closing argument, Rathe Salvage pointed out that hauler mistakenly
analogized to a clothing store being its “customer” when hauler would buy a
suit there.