Court Opinion

ID: 2709004
Source: CourtListenerOpinion
Date Created: 2014-08-05 15:09:30.40388+00
Date Added: 2024-06-11T10:01:23.381151
License: Public Domain

In the

    United States Court of Appeals
                For the Seventh Circuit
No. 13-2452

EMPIRE BUCKET, INC.,
                                                  Plaintiff-Appellee,

                                 v.

CONTRACTORS CARGO COMPANY,
                                               Defendant-Appellant.

        Appeal from the United States District Court for the
                  Western District of Wisconsin.
         No. 12-CV-233 — William M. Conley, Chief Judge.

  ARGUED OCTOBER 31, 2013 — DECIDED JANUARY 15, 2014

   Before BAUER, MANION, and ROVNER, Circuit Judges.
    MANION, Circuit Judge. Contractors Cargo Company
engaged Empire Bucket, Inc., to fabricate a steel railcar deck.
After the deck fractured, Contractors Cargo refused to pay the
full purchase price and Empire Bucket sued for breach of the
contract. Contractors Cargo countersued for breaches of the
contract, the implied warranty of merchantability, and the
implied warranty of fitness for a particular purpose. Prior to
trial, the district court granted Empire Bucket’s motion in
2                                                  No. 13-2452

limine to exclude any testimony concerning one of the tests
performed on the deck after it failed. The jury returned a
verdict for Empire Bucket. Contractors Cargo appeals. We
affirm.
                            I. Facts
    Contractors Cargo Company, a transportation business
engaged in heavy-haul operations throughout the United
States, commissioned Empire Bucket, Inc., to fabricate a steel
railcar deck to be used with Contractors Cargo’s Schnabel
railcar—a specialized railroad freight car for transporting
heavy and oversized loads. Contractors Cargo hired a third
party to design the deck. The designs specified that the deck be
fabricated from T-1 high-strength steel and that the welding be
performed pursuant to American Welding Society specifica-
tions. The deck was designed to attach to the Schnabel car and
to transport up to an 800,000-pound load. Empire Bucket
fabricated the deck, which passed inspection by an outside
agency and all nondestructive tests, and delivered it. Contrac-
tors Cargo connected the deck to its Schnabel railcar and
loaded it to approximately 820,000 pounds. The next morning,
an employee observed that the deck had dropped about three
inches overnight. Contractors Cargo attempted to raise the
deck with a hydraulic jacking system, but the deck fractured
during the attempt.
   Contractors Cargo hired a metallurgical engineer, Josh
Schwantes, to determine why the deck had fractured.
Schwantes determined that the deck contained an inclu-
sion—which in this case meant a portion of the weld was
composed of material with properties different from the
No. 13-2452                                                                  3

properties of the material in the rest of the weld. The inclusion
was approximately 1/10th of an inch in length at the location
where the crack originated. Schwantes also performed various
tests on the deck, including a “Charpy v-notch impact test.”
This test showed that the material around the inclusion had
low fracture toughness, which meant that the weld material
was more brittle than expected. The deck passed all other non-
destructive and destructive tests for the purposes of satisfying
American Welding Society specifications.1
     Based on this testing, Contractors Cargo concluded that the
deck failed because Empire Bucket did not properly fabricate
it. Thus, Contractors Cargo refused to pay Empire Bucket the
full purchase price. Empire Bucket sued in Wisconsin state
court for breach of contract. Contractors Cargo removed the
action to federal district court and filed various counterclaims,
including claims for breaches of the contract, the implied
warranty of merchantability, and the implied warranty of
fitness for a particular purpose.
    Prior to trial, Empire Bucket filed a number of motions in
limine, including a motion to exclude any testimony regarding
the Charpy impact test performed on the deck. American
Welding Society standards provide that if a project is to be
welded to Charpy toughness criteria, that criteria must be
specified in the contract documents. Thus, Empire Bucket
argued, the Charpy impact test was irrelevant because the
parties’ contract did not specify any Charpy toughness criteria.

1
  As the term suggests, destructive tests are carried out to the point that the
test subject fails. The Charpy impact test is a destructive test.
4                                                     No. 13-2452

The district court directed Contractors Cargo to proffer its
proposed testimony regarding the Charpy impact test and its
relevance to Contractors Cargo’s claims.
    Contractors Cargo explained that it did not intend to offer
testimony regarding the Charpy impact test performed on the
deck for the purpose of demonstrating that the parties’ contract
required the deck to pass such testing. (Indeed, Contractors
Cargo stipulated that the contract did not require the deck to
satisfy any Charpy toughness criteria.) Rather, Contractors
Cargo stated that it intended to offer testimony concerning the
Charpy impact testing to establish that the weld material at the
location of the inclusion had low fracture toughness (that is,
that it was unusually brittle). And the test indicating brittleness
supported Contractors Cargo’s experts’ conclusion that the
weld containing the inclusion was the cause and origin of the
deck’s failure, which in turn supported the implied warranty
claims.
    In ruling on Empire Bucket’s motion in limine, the district
court focused almost entirely upon Contractors Cargo’s breach
of contract claim. The district court remarked that there “may
be a better case for admitting … testimony about the cause of
the deck failure for the purposes of discussing a breach of
implied warranty theory, as the actual performance of the deck
might then be relevant to whether it was adequate for the
general or specific purposes for which it was built.” Nonethe-
less, the district court observed that “the liability question at
issue in this case is not whether or why the deck failed, but
whether the deck satisfied the terms of the contract.” The
district court concluded that the testimony regarding the
Charpy impact test was irrelevant and granted Empire
No. 13-2452                                                              5

Bucket’s motion in limine to bar testimony regarding that test
at the liability phase of the trial.
     However, at trial the district court clarified that only
specific references to the Charpy impact test were barred.
General references to the weld material’s “brittleness” or
“toughness” were otherwise admissible. Consequently,
Contractors Cargo’s experts were permitted to testify regard-
ing the low fracture toughness (that is, brittleness) of the
material at the location of the inclusion in the weld. For
instance, Duane Gilbert, an experienced welder who qualified
as an expert in the areas of welding, fitting, and quality
assurance and control, testified that a weld can become brittle
if “the heat input is too high.” He testified further that the deck
failed at the inclusion because it had a “brittle fracture.”
Specifically, Gilbert explained, the crack in the deck originated
at the inclusion because it was the weak point in the brittle
weld material. Similarly, Schwantes, who qualified as an
expert in metallurgical failure analysis and static, dynamic, and
fatigue mechanical testing, testified that the deck suffered from
a “brittle fracture,” which he defined as “a fracture that occurs
below the yield strength of the material.”2 He explained that
his testimony was drawn from initial observations that were
confirmed “[b]ased on the analysis we had performed, based
on metallography and some of the other test results.”
Schwantes concluded that the inclusion was the “primary
factor” in the deck’s failure, and that the deck’s fracture was
similar to “a textbook case for a brittle fracture.” Nonetheless,

2
   Schwantes explained that “brittleness” is the opposite of “ductility” or
the “measure of a material’s, let’s say, elastic or capacity to form.”
6                                                               No. 13-2452

the jury returned a verdict for Empire Bucket. Contractors
Cargo appeals.
                              II. Discussion
    On appeal, Contractors Cargo argues that the district court
erred in excluding as irrelevant specific references to the
Charpy impact test performed on the deck. Evidence is
relevant if it has any tendency to make a fact more or less
probable than it would be without the evidence, and the fact is
of consequence in determining the action. Fed. R. Evid. 401.
Where a district court grants a motion in limine and excludes
evidence under Rule 401, we review the district court’s ruling
under an abuse of discretion standard. Thompson v. City of
Chicago, 472 F.3d 444, 453 (7th Cir. 2006).3
    Contractors Cargo contends that the district court abused
its discretion in excluding as irrelevant specific references to
the Charpy impact test performed on the deck because the test
was relevant to Contractors Cargo’s claims for breaches of the
implied warranty of merchantability and the implied warranty
of fitness for a particular purpose. Under Wisconsin law,

3
  Contractors Cargo argues that the district court abused its discretion by
merely considering Empire Bucket’s motion in limine because the motion
was filed nine days after the first submission deadline. This argument is
without merit. A motion in limine is merely a “pretrial request that certain
inadmissible evidence not be referred to or offered at trial.” Black’s Law
Dictionary 1109 (9th ed. 2009). The district court retains the power to make
evidentiary rulings throughout the trial. Indeed, a district court may even
adjust its disposition of a motion in limine during the course of a trial.
Farfaras v. Citizens Bank & Trust of Chicago, 433 F.3d 558, 565 (7th Cir. 2006).
Furthermore, Contractors Cargo does not contend that it was unfairly
disadvantaged by the slight tardiness of Empire Bucket’s motion in limine.
No. 13-2452                                                               7

“[u]nless excluded or modified …, a warranty that the goods
shall be merchantable is implied in a contract for their sale if
the seller is a merchant with respect to goods of that kind.”
Wis. Stat. § 402.314. The goods, inter alia, must be “fit for the
ordinary purposes for which such goods are used.” Id. Wiscon-
sin law also provides that “[w]here the seller at the time of
contracting has reason to know any particular purpose for
which the goods are required and that the buyer is relying on
the seller’s skill or judgment to select or furnish suitable goods,
there is unless excluded or modified … an implied warranty
that the goods shall be fit for such purpose.” Wis. Stat.
§ 402.315.
    In opposing Empire Bucket’s motion in limine, Contractors
Cargo explained that it intended to offer testimony concerning
the Charpy impact testing to establish that the weld material
used at the location of the inclusion had low fracture toughness
(that is, that it was unusually brittle). According to Contractors
Cargo’s experts, the finding that the weld material at the
location of the inclusion was brittle supported their conclusion
that the weld containing the inclusion was the cause and origin
of the deck’s failure. In turn, this conclusion supported the
inference that Empire Bucket failed to fabricate the deck such
that it was “fit for the ordinary purposes for which such” decks
are used or fit for the “particular purpose for which” Contrac-
tors Cargo ordered the deck.4 Consequently, Contractors Cargo

4
  On appeal, Contractors Cargo does not explicitly articulate the “ordinary
purpose” or known “particular purpose” that the deck allegedly failed to
achieve. But we think the purpose fairly obvious—namely, that the deck
                                                              (continued...)
8                                                        No. 13-2452

argues, the results of the Charpy impact test performed on the
deck make it more probable that Empire Bucket breached the
implied warranty of merchantability or the implied warranty
of fitness for a particular purpose. However, we need not—and
do not—decide whether the district court abused its discretion
when it excluded specific references to the Charpy impact test
because any error would be harmless.
    An error is harmless if it does not affect the complaining
party’s substantial rights. Fed. R. Civ. P. 61; Whitehead v. Bond,
680 F.3d 919, 930 (7th Cir. 2012). We would not find that
Contractors Cargo’s substantial rights were affected unless
there was a significant chance that the exclusion of specific
references to the Charpy impact test affected the outcome of
the trial. Whitehead, 680 F.3d at 930.
    There is no significant chance that the exclusion of specific
references to the Charpy impact test affected the outcome of
the trial. As discussed above, the Charpy impact test per-
formed on the deck was relevant to Contractors Cargo’s
implied warranty claims only to the extent the results showed
that the material in the location of the inclusion had low
toughness (that is, that it was unusually brittle). But at trial,
Contractors Cargo’s experts testified repeatedly that the
material in the location of the inclusion was brittle. Moreover,
Schwantes testified that the experts knew the material near the
inclusion was brittle based on observations from the initial
inspection of the deck and the “analysis we had performed,

4
 (...continued)
would transport up to an 800,000-pound load without failing.
No. 13-2452                                                              9

based on metallography and some of the other test results[.]”5
Contractors Cargo’s experts only were barred from specifically
identifying the Charpy impact test. This is not the exclusion of
scientific evidence but of a scientific label. Cf. Falana v. Kent
State Univ., 669 F.3d 1349, 1356 (Fed. Cir. 2012) (finding
exclusion of exhibits to be harmless error where the relevant
substance of the exhibits was otherwise admitted); Cook v.
Navistar Int’l Transp. Corp., 940 F.2d 207, 213 (7th Cir. 1991)
(finding exclusion of industry publications to be harmless error
where “the substance of” the publications was otherwise
admitted).
    Contractors Cargo points out that its experts were also
barred from testifying about the precise fracture toughness
values of the material at the location of the inclusion generated
by the Charpy impact test. However, while the precise values
of the material’s toughness would be important for establish-
ing that the deck failed to satisfy particular Charpy toughness
criteria (a theory Contractors Cargo expressly disclaims), in
this case the Charpy impact test performed on the deck is only
relevant to Contractors Cargo’s implied warranty claims to the
extent the test shows that the material at the location of the
inclusion was brittle. No dispute about the specific degree of
brittleness was presented to the jury. Indeed, Contractors
Cargo’s proffer does not include any attempt to show that the

5
      Schwantes’ testimony, that the conclusions about the material’s
brittleness were based on metallographic analysis and other testing, belies
Contractors Cargo’s argument that its experts were deprived of the “badge
of science” when testifying that the material around the inclusion was
brittle. Moreover, Schwantes and Gilbert’s extensive qualifications were
described to the jury prior to the experts’ respective testimony.
10                                                     No. 13-2452

precise fracture toughness values of the material at the location
meant that the deck would only be able to support a particular
weight limit that fell below the weight limit the deck was
designed to handle. Rather, Contractors Cargo’s experts merely
testified that the brittleness of the material at the location of the
inclusion supported the conclusion that the weld containing
the inclusion was the cause and origin of the deck’s failure.
Consequently, there is no significant chance that the minor
evidentiary limitation imposed by the district court affected the
outcome of the trial.
                         III. Conclusion
     In light of the testimony admitted at trial, the excluded
evidence regarding the Charpy impact test would have added
little to Contractors Cargo’s case for its implied warranty
claims. Because any error would be harmless, we AFFIRM the
judgment of the district court.