Court Opinion

ID: 4570673
Source: CourtListenerOpinion
Date Created: 2020-09-29 16:00:35.231138+00
Date Added: 2024-06-11T09:28:00.534658
License: Public Domain

FILED
                                                                      United States Court of Appeals
                      UNITED STATES COURT OF APPEALS                          Tenth Circuit

                            FOR THE TENTH CIRCUIT                          September 29, 2020
                        _________________________________
                                                                          Christopher M. Wolpert
                                                                              Clerk of Court
ANGIE DERRICK; RONNY DERRICK,
a married couple,

      Plaintiffs Counter Defendants -
      Appellants,

v.                                                          No. 19-2120
                                                (D.C. No. 2:17-CV-01245-RB-SMW)
STANDARD NUTRITION COMPANY,                                  (D. N.M.)
a Nebraska corporation, d/b/a A-C
Nutrition LP, a Texas limited partnership,

      Defendant Counterclaimant -
      Appellee.
                      _________________________________

                            ORDER AND JUDGMENT*
                        _________________________________

Before PHILLIPS, BALDOCK, and McHUGH, Circuit Judges.
                   _________________________________

      Angie Derrick and Ronny Derrick (“Derricks”) appeal the district court’s order

for summary judgment in favor of Standard Nutrition Company (“Standard

Nutrition”) on their claims for death and injury to their horses as a result of eating

feed that allegedly contained toxic concentrations of monensin—an antibiotic

      *
        After examining the briefs and appellate record, this panel has determined
unanimously that oral argument would not materially assist in the determination of
this appeal. See Fed. R. App. P. 34(a)(2); 10th Cir. R. 34.1(G). The case is therefore
ordered submitted without oral argument. This order and judgment is not binding
precedent, except under the doctrines of law of the case, res judicata, and collateral
estoppel. It may be cited, however, for its persuasive value consistent with
Fed. R. App. P. 32.1 and 10th Cir. R. 32.1.
sometimes used in cattle feed. Exercising jurisdiction under 28 U.S.C. § 1291, we

affirm.

                                   I. BACKGROUND

       On December 14, 2016, shortly after the Derricks began feeding the alleged

contaminated feed to their horses, they discovered two of their horses had died. The

Derricks called veterinarian Dr. Ronald Box, who came to their ranch the same day.

After Dr. Box ruled out snakebites or poisonous plants as the cause of death, he took

a sample of feed from the Derricks’ feed bin and tissue samples from the hearts and

organs of the dead horses and sent them to an independent laboratory for analysis.1

       On December 21, the laboratory determined that the horses had been dead too

long to yield any meaningful analysis from the tissue samples; however, it did

discover trace amounts of monensin in the feed sample at a level of 1.2 parts per

million. The laboratory’s veterinary toxicologist who tested the feed sample reported

that “[a]t a concentration of 1.2 [parts per million] in the feed, a 1000 lb. horse . . .

would have to consume more than its body weight in feed to get a lethal dose of

monensin.” Aplt. App., Vol I at 255.

       Dr. Box told the Derricks that there would “have [to] be fresh deaths in order

to learn any more than was learned from the first two, as autolysis destroyed the

       1
        Kevin Floyd, who sold the feed to the Derricks, also took samples from the
Derricks’ feed bin (top, middle, and bottom) and sent them to the same independent
laboratory who tested Dr. Box’s sample. The laboratory reported no detectable
monensin in any of Mr. Floyd’s samples.
                                             2
tissues quickly making lab analysis impossible.” Id. at 227. Dr. Box also provided

the Derricks a handwritten letter in which he explained his actions and observations.

       On 12-14-16 I posted [two] horses belonging to [the Derricks]. They were
       fed [two] days earlier and appeared fine. They were not seen for [two] days
       and probably died [one] day after being fed. On autopsy all I can truthfully
       say is there was no colic. The [two] horses were found near each other and
       did not appear to struggle. They were undergoing severe autolysis.
       I sent in heart [and] liver [tissue samples] from both horses. [The
       laboratory] was unable to do histopath[ology] because of the severe
       autolysis. I sent in stomach contents from both horses—neg[ative] for
       mone[n]sin. I caught a little screening of feed coming out of the overhead
       bulk tank. It was positive for mone[n]sin at 1.2 [parts per million].
       With the severe autolysis I cannot prove with the liver or heart that these
       horses died of mone[n]sin. The lab informed me that not finding
       mone[n]sin in the stomach contents could be because the drug had already
       cleared the stomach.
       I found mone[n]sin in the feed. Even though it is at a very low level I
       cannot testify [to] the concentration of the mone[n]sin of the feed that these
       horses ate.
       In my professional opinion[,] these horses died of mone[n]sin toxicity.
Id. at 257.

       After receiving Dr. Box’s letter, the Derricks informed Standard Nutrition that

they would seek compensation for the dead horses. In December 2017, a month after

the Derricks filed suit, there were two “fresh deaths”; however, the Derricks did not

enlist Dr. Box or anyone else to harvest tissue samples for testing.

                      II. DISTRICT COURT PROCEEDINGS

       The Derricks filed suit in New Mexico state court in November 2017, in which

they asserted claims for: (1) negligence; (2) negligence per se; (3) strict products

liability; (4) unfair trade practices; (5) fraud; (6) negligent misrepresentation;

                                             3
(7) cruelty to animals; (8) breach of contract; (9) negligent infliction of emotional

distress; and (10) breach of implied warranty of merchantability. Standard Nutrition

removed the suit to federal court.

      During discovery, Standard Nutrition timely disclosed Dr. Jeffrey Hall, an

animal toxicology specialist, as an expert witness. Dr. Hall opined that for the first

two horses to have died from monensin toxicity in the timeframe outlined by

Dr. Box, they would have needed to consume feed with a monensin concentration of

approximately 700 parts per million. Dr. Hall further opined that there were

numerous possibilities for what killed the horses; however, he definitively ruled out

the possibility of monensin toxicity based on the independent laboratory’s analysis,

which showed a maximum of 1.2 parts per million of monensin in the feed samples—

a nontoxic concentration.

      For their part, the Derricks built their case around a theory that the alleged

contaminated feed contained “hot spots,” i.e., “powdery monensin often is not

distributed evenly in the feed, including the fines, and . . . damaging or lethal ‘hot

spots’ are common.” Aplt. Opening Br. at 6. Despite the fact that the Derricks never

took any additional samples of the feed from their own feed bin before feeding it to

their cattle, they asked for sanctions against Standard Nutrition on the grounds that it

reused or disposed of (spoliated) 1180 pounds of fines from the Derricks’ feed, which

in turn prevented testing the fines for “hot spots.” They also sought sanctions for

Standard Nutrition’s alleged failure to disclose records concerning its inventory of

                                            4
monensin. On April 12, 2019, the magistrate judge issued a memorandum opinion

and order denying the motion for sanctions.

      On May 8, the district court issued a memorandum opinion and order on

summary judgment in which it determined that Dr. Box’s testimony would be limited

to his observations and actions on the day he examined the two dead horses in

December 2016. The ruling meant that the Derricks could not prove the element of

causation required for their claims of negligence, negligence per se, strict products

liability, breach of contract, and breach of implied warranty of merchantability

claims, and the court entered summary judgment for Standard Nutrition on those

claims. The court, however, found disputed issues of material fact on the claims for

fraud, negligent misrepresentation, and unfair trade practices and denied summary

judgment.2

      On June 6, the Derricks filed a motion for reconsideration, which the district

court denied. The Derricks then voluntarily dismissed their claims for unfair trade

practices, fraud, and negligent misrepresentation and stipulated to the remand of

Standard Nutrition’s counterclaims for breach of contract (failure to pay for the feed)

and malicious abuse of process to state court. This appeal followed.

      2
         The district court also granted summary judgment for Standard Nutrition on
the Derricks’ claims for cruelty to animals and negligent infliction of emotional
distress. The Derricks assign no error to the court’s disposition of these claims.
                                           5
                                  III. DISCUSSION

   A. Summary Judgment

       1. Background

      The parties agree that under New Mexico law, which applies in this diversity

case, the Derricks cannot prove their claims for negligence, negligence per se, strict

products liability, breach of contract, or breach of implied warranty of

merchantability without evidence of causation. As such, unless the district court

erred in limiting the scope of Dr. Box’s testimony, summary judgment was proper.

      Before ruling on summary judgment, the district court ordered the parties to

explain their respective positions on the proper scope of Dr. Box’s testimony. The

Derricks argued that Dr. Box was timely disclosed as an expert witness and could

therefore offer his opinion that the horses died from monensin toxicity. The court

rejected this argument, noting the magistrate judge’s ruling that the Derricks failed to

properly disclose Dr. Box as an expert witness.

      The district court then considered the proper scope of Dr. Box’s testimony as a

lay witness. In this regard, the court considered Fed. R. Evid. 701, which provides

that a lay witness may only testify to opinions that are “(a) rationally based on the

witness’s perception; (b) helpful to clearly understanding the witness’s testimony or

to determining a fact in issue; and (c) not based on scientific, technical, or other

specialized knowledge.” Id. (emphasis added). As the court explained, because “[a]

diagnosis of monensin poisoning is . . . complex . . . [and] outside the realm of

                                            6
common experience,” Aplt. App., Vol. II at 374, “Dr. Box may not offer an opinion

on causation or diagnosis,” id. at 366.

      Nonetheless, the court determined that Dr. Box, as a lay witness could testify

      about his observations from the day he actually saw the horses, but he may
      not provide testimony beyond what he perceived or did. In other words,
      Dr. Box may not testify about monensin—what it is, its effect on horses,
      whether feed for horses may [properly] contain monensin, et cetera. [And]
      [i]f he testifies at trial, Dr. Box may . . . read the results of the lab reports
      [the Derricks] received as a result of the samples he took in December
      2016. Beyond reading those results, Dr. Box may not testify further about
      monensin or speculate about the meaning of the lab results.
Id. at 364 (brackets, citation, and internal quotation marks omitted).

       2. Standard of Review

      “We review a district court’s determination regarding the admissibility of

evidence under an abuse of discretion standard.” James River Ins. Co. v. Rapid

Funding, LLC, 658 F.3d 1207, 1212 (10th Cir. 2011) (internal quotation marks

omitted). “A district court abuses its discretion when its decision is arbitrary,

capricious, whimsical, or manifestly unreasonable.” United States v. Marquez,

898 F.3d 1036, 1049 (10th Cir. 2018) (brackets and internal quotation marks

omitted).

      3. Analysis

      “[Fed. R. Evid.] 701 does not permit a lay witness to express an opinion as to

matters which are beyond the realm of common experience and which require the

special skill and knowledge of an expert witness.” James River, 658 F.3d at 1214

(emphasis added) (internal quotation marks omitted). Stated otherwise, “Rule 701

                                              7
allows lay witnesses to offer observations that are common enough and require a

limited amount of expertise, if any.” Id. (emphasis added) (brackets, ellipsis, and

internal quotation marks omitted).

       The Derricks cite no authority for the proposition that a diagnosis of monensin

poisoning does not require specialized knowledge. Therefore, the court did not abuse

its discretion regarding the scope of Dr. Box’s testimony.

B. Motion to Reconsider

       1. The New Evidence and Dr. Box’s Testimony

              a. Background

       In their motion for reconsideration filed in June 2019, the Derricks produced

for the first time an April 8, 2019 histopathology report from the necropsy of a horse

they euthanized on March 29, in which the examiner found a lesion in the heart tissue

that “has been associated with ionophores, particularly monensin.” Aplt. App., Vol.

II at 400 (internal quotation marks and emphasis omitted). Based on this “new”

evidence, the Derricks urged the court to reverse its summary judgment order and

permit Dr. Box to read the report to the jury at the trial set to begin in July.

Separately, they asked the court to reconsider its order relating to the scope of Dr.

Box’s testimony.3

       3
         The district court acknowledged its authority under Fed. R. Civ. P. 54(b) to
review the order prior to entry of a final judgment and looked to Fed. R. Civ. P. 59(e)
for the standard of review. Under Rule 59(e), the court may amend or correct a
judgment on the grounds of “(1) an intervening change in the controlling law,
(2) [when] new evidence previously [was] unavailable, and (3) the need to correct
                                             8
       Regarding the untimely disclosure, the Derricks argued, and the district court

agreed, that the factors in Woodworker’s Supply, Inc. v. Principal Mutual Life

Insurance Co., 170 F.3d 985, 993 (10th Cir. 1999), should guide the court’s decision.

In Woodworker’s, this court held that the court should consider four factors in the

exercise of its “broad discretion” to determine whether the failure to timely disclose

the evidence is “justified or harmless.” Id. (internal quotation marks omitted). The

four factors to be considered are: “(1) the prejudice or surprise to the party against

whom the testimony is offered; (2) the ability of the party to cure the prejudice;

(3) the extent to which introducing such testimony would disrupt the trial; and (4) the

moving party’s bad faith or willfulness.” Id.

        In exercising its broad discretion, the district court reviewed the four factors

and determined the late disclosure was neither justified nor harmless. First, in its

thorough and comprehensive order, the court outlined in detail the prejudice to

Standard Nutrition and found that the first factor “heavily leans in favor of excluding

both Dr. Box’s expert testimony and the new evidence.” Aplt. App., Vol. II at 441.

Second, the court explained that “there is now little time to cure the prejudice . . . as

trial is set for next month.” Id. Next, because the trial was imminent, the court

determined that the admission of the new evidence would “significantly disrupt the

trial.” Id. at 442. Last, while the court said it “hesitates to find that [the Derricks]

acted in bad faith . . . the Court cannot find that [they] acted in good faith.” Id. In

clear error or prevent manifest injustice.” Servants of Paraclete v. Does, 204 F.3d
1005, 1012 (10th Cir. 2000).

                                             9
this regard, the court cited the Derricks’ “decision[] to wait until months after the

discovery deadline to obtain [the report], [their] fail[ure] to submit the new evidence

to the Court for approximately two months after obtaining it and only after the Court

ruled on dispositive motions, and [their] continuous[] disregard [of] deadlines, the

scheduling order, and the Local Rules.” Id. at 442-43.

      The district court further declined to reconsider its order regarding the scope

of Dr. Box’s testimony. In this regard, the Derricks argued that the court mistakenly

relied on medical malpractice cases and cited for the first time two products liability

cases they maintained dictated a different outcome. The court squarely rejected their

argument for two reasons. First, the court noted that “[a] motion to reconsider is not

a second chance for the losing party to make its strongest case or to dress up

arguments that previously failed.” Id. at 445 (internal quotation marks omitted).

Second, the new authorities did not change the outcome. In particular, the court

explained that in any type of case, a lay witness cannot offer opinion testimony on a

topic such as monensin poisoning, which requires the special skill and knowledge of

an expert witness. See James River, 658 F.3d at 1214.

             b. Standard of Review

      “We review [the] district court’s decision denying [an interlocutory] motion

for reconsideration for abuse of discretion.” Spring Creek Expl. & Prod. Co. v. Hess

Bakken Inv., II, LLC, 887 F.3d 1003, 1024 (10th Cir. 2018). “Under an abuse of

discretion standard, a trial court’s decision will not be disturbed unless the appellate

court has a definite and firm conviction that the lower court made a clear error of

                                           10
judgment or exceeded the bounds of permissible choice in the circumstances.” Id.

(internal quotation marks omitted). “That is to say, we will not alter a trial court’s

decision unless it can be shown that the court’s decision was an arbitrary, capricious,

whimsical, or manifestly unreasonable judgment.” Id. (internal quotation marks

omitted).

             c. Analysis

      On appeal, the Derricks repeat the same arguments they made in the district

court and argue for a different outcome. In other words, they ignore that the standard

of review on appeal is for abuse of discretion, i.e.. whether the decision was

arbitrary, capricious, whimsical, or manifestly unreasonable. Nonetheless, we have

carefully examined the court’s thorough and comprehensive order, which is firmly

anchored to the law and facts, and find no abuse of discretion.

      2. Sanctions

      In their motion for reconsideration, filed nearly two months after the

magistrate judge issued a memorandum opinion and order denying their motion for

sanctions, the Derricks asked the district court to “reconsider” the order. Relevant

here, the court denied the motion as untimely under Fed. R. Civ. P. 72(a), which

provides that a party who opposes a magistrate judge’s non-dispositive order may file

objections with the district court within 14 days of service of the order; otherwise,

absent timely objections, “[a] party may not assign as error a defect in the order.” Id.

Despite the fact that the Derricks failed to file timely objections they argue that “the

                                           11
Magistrate Court was mistaken in denying sanctions for spoliation.” Aplt. Opening

Br. at 34.

       This court has “adopted a firm waiver rule that provides that the failure to

make timely objections to the magistrate[] [judge’s] findings or recommendations

waives appellate review of both factual and legal questions.” United States v. One

Parcel of Real Prop., 73 F.3d 1057, 1059 (10th Cir. 1996) (internal quotation marks

omitted); see also Hutchinson v. Pfeil, 105 F.3d 562, 566 (10th Cir. 1997) (“Properly

filed objections resolved by the district court are a prerequisite to our review of a

magistrate judge’s order [regarding non-dispositive matters].”).

       We have recognized two exceptions to the firm waiver rule. We do not apply

the rule “when (1) a pro se litigant has not been informed of the time period for

objecting and the consequences of failing to object, or when (2) the interests of

justice require review.” Morales-Fernandez v. INS, 418 F.3d 1116, 1119 (10th Cir.

2005) (internal quotation marks omitted). The first exception does not apply because

the Derricks were represented by counsel in the district court. See Allman v. Colvin,

813 F.3d 1326, 1330 (10th Cir. 2016) (holding the first exception was inapplicable

because the appellant was represented by counsel).

       And the second exception does not apply either. The interests-of-justice

exception applies to a counseled party “only in the rare circumstance in which a

represented party did not receive a copy of the magistrate[] [judge’s decision.]” Vega

v. Suthers, 195 F.3d 573, 580 (10th Cir. 1999).

                                           12
                          III. CONCLUSION

The judgment of the district court is affirmed.

                                     Entered for the Court

                                     Carolyn B. McHugh
                                     Circuit Judge

                                   13