Court Opinion

ID: 3023058
Source: CourtListenerOpinion
Date Created: 2015-10-13 22:28:14.531603+00
Date Added: 2024-06-11T11:47:35.983039
License: Public Domain

United States Court of Appeals
                        FOR THE EIGHTH CIRCUIT
                                 ___________

                                 No. 98-3289
                                 ___________

Ford Motor Credit Company,              *
a Delaware corporation,                 *
                                        *
             Appellee,                  *
                                        *
      v.                                *
                                        *
Wintz Companies, a Minnesota            * Appeal from the United States
corporation; Dedicated Logistics, Inc., * District Court for the
a Minnesota corporation; Summit         * District of Minnesota.
Transportation, Inc., a Minnesota       *
corporation,                            *
                                        *
             Defendants,                *
                                        *
George L. Wintz,                        *
                                        *
             Appellant.                 *
                                   ___________

                           Submitted: May 14, 1999
                               Filed: July 19, 1999
                                ___________

Before RICHARD S. ARNOLD, JOHN R. GIBSON, and BOWMAN, Circuit Judges.
                            ___________

BOWMAN, Circuit Judge.
       George L. Wintz appeals from the judgment of the District Court1 entered on a
jury verdict in this diversity case awarding Ford Motor Credit Company (FMCC) over
one million dollars in damages for the deficiency on a defaulted loan that was
personally guarantied by Wintz. We affirm.

       Between 1993 and 1995, Wintz Companies, Inc., purchased from Boyer Ford
150 heavy trucks manufactured by Ford Motor Company. FMCC financed the
purchase, and George Wintz signed a personal guaranty to secure the obligation. In
addition, FMCC had a loss-sharing agreement with its parent, Ford Motor Company,
under the terms of which Ford Motor would assume responsibility for losses that
resulted from default by FMCC's fleet borrowers, such as Wintz Companies, in an
amount not to exceed four percent of FMCC's accounts receivable. When Wintz
Companies defaulted on the loan in 1996, FMCC repossessed and resold most of the
trucks and applied the proceeds to the debt. FMCC then sought to recover the
deficiency on the loan that remained after the resale.

        After this suit was filed, Wintz Companies was forced into bankruptcy by some
of its creditors, and the District Court therefore stayed FMCC's litigation against Wintz
Companies (and two affiliated companies that also had been named as defendants).
The case proceeded against Wintz individually. Wintz conceded liability, so the jury
was left to decide only the amount of the deficiency, if any. After hearing the evidence
and determining, inter alia, that FMCC's resale of the trucks was commercially
reasonable, the jury awarded damages to FMCC in the amount of $1,391,565.12.
Wintz then sought to have the damages reduced to zero, arguing that FMCC suffered
no injury because Ford Motor would be reimbursing (or had reimbursed) FMCC for all
of the losses it sustained on the transaction, according to the terms of the loss-sharing
agreement. The court denied Wintz's post-trial motion without a hearing, and also

      1
      The Honorable John R. Tunheim, United States District Judge for the District
of Minnesota.
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ordered Wintz to pay the costs and attorney fees FMCC had incurred in connection
with the repossession and resale. Wintz appeals.

       Wintz's arguments focus primarily on whether the Minnesota collateral source
rule applies to this contract case. "The collateral source rule provides in general that
compensation received from a third party will not diminish recovery against a
wrongdoer," regardless of whether the victim is overcompensated as a result. Hubbard
Broad., Inc. v. Loescher, 291 N.W.2d 216, 222 (Minn. 1980). Wintz contends that the
collateral source rule is not properly invoked here, as it is applicable only to tort cases
and not to cases in which the injury results from a breach of contract. We do not
decide this question of state law, however, because we see no clear error in the District
Court's finding that FMCC will not be overcompensated by Wintz's payment of the
judgment. The uncontroverted affidavit of R.D. Burke, Administrative Services
Coordinator for the Commercial Lending Office of FMCC, establishes that "[a]ll Wintz
Companies deficiency monies recovered by Ford Credit, after deducting costs and legal
expense, will be paid by Ford Credit to Ford Motor Co." Affidavit of R.D. Burke (Apr.
2, 1998) ¶ 4. Even if the collateral source rule does not apply to this case, that is, even
if double recovery is prohibited, no reduction in the amount of damages is required
because there is no double recovery. Wintz's payment of the judgment against him will
do no more than make FMCC whole. We therefore affirm the District Court on Wintz's
first point on appeal and hold that the court did not err in denying Wintz's post-trial
motion to reduce the damages award by the amount Ford Motor paid FMCC pursuant
to their loss-sharing agreement.2

      2
         Wintz relied on Minnesota Statutes § 548.36 in his post-trial motion to reduce
the damages to zero. That statute provides that a court, upon post-trial motion by a
party, shall reduce a damages award by the amount of proved collateral sources, as
such sources are defined by the statute. The statute also provides, however, that the
jury is not to be informed of collateral sources. On appeal, Wintz concedes that section
548.36 applies only to personal injury cases. See Schmuckler v. Creurer, 585 N.W.2d
425, 428 (Minn. Ct. App. 1998). He nevertheless seems to be arguing that the court
                                            -3-
       Wintz also challenges the District Court's decision to exclude evidence of the
loss-sharing agreement between FMCC and Ford Motor. In a pretrial ruling, the court
prohibited Wintz from presenting testimony on the agreement and permitted certain
documents that were admitted in evidence to be redacted so that the jury would not be
exposed to any references to the arrangement. We review the court's decision for abuse
of discretion. See Porous Media Corp. v. Pall Corp., 173 F.3d 1109, 1117 (8th Cir.
1999).

       Wintz argues that, given his contention that the common-law collateral source
rule does not apply to this case, the evidence in question should have been allowed.3
Again, we do not decide the question of Minnesota state law because we conclude that
the court did not abuse its discretion under the rules of evidence. The District Court
made its ruling based on the court's understanding that it could reduce an award of
damages post-trial as equity required, so that the only question for the jury was how
much of a deficiency, if any, remained on the debt. The court found that the evidence
of the loss-sharing agreement was "irrelevant" to the jury's charge and that excluding
such evidence would result in a "cleaner trial." Partial Transcript of Trial (Court's

relied on the statute to exclude evidence of the loss-sharing agreement (our discussion
of the evidentiary issue follows), so therefore the court should have reduced the
damages according to the procedure set forth in the statute. Wintz is mistaken for two
readily apparent reasons: (1) the statute does not apply to this contract case, and that
fact cannot be altered even if the court improperly relied on the statute in deciding to
exclude evidence of the loss-sharing agreement, and (2) in any event, the court denied
Wintz's motion to reduce the award because it found there would be no windfall to
FMCC when Wintz pays the judgment, not because it applied or failed to apply either
Minnesota's common-law collateral source rule or the state's collateral source statute.
      3
        To the extent Wintz is arguing that the court erred because it excluded the
evidence on the basis of the Minnesota Collateral Source Payments statute, which is
inapplicable to this case (see supra note 2), he is mistaken. Our reading of the record
does not support the factual contention underlying that argument; the court at no time
indicated it was applying the statute in making the evidentiary ruling.
                                          -4-
Further Rulings on Pretrial Motions) (Feb. 26, 1998) at 6, 10. The court noted, too,
that some part of any money FMCC recovered from Wintz "may have to be turned over
to Ford Motor Company." Id. at 5. Evidence that Ford Motor would be responsible
for some of FMCC's losses to the extent the deficiencies could not be recovered from
those who had assumed responsibility for payment of the debt would have been wholly
irrelevant to the jury's task of determining the amount of the deficiency. To allow such
evidence would only have muddied the waters for the jury, and the District Court did
not abuse its discretion in ruling as it did. See Porous Media Corp., 173 F.3d at 1117
(noting that "discretion is broad where . . . the district court must balance the evidence's
probative value against the danger of unfair prejudice, confusion of the issues, or
misleading the jury").

       The challenges Wintz makes to the court's consideration of Burke's affidavit and
to the court's failure to hold a hearing on his post-trial motion are without merit.

       The judgment of the District Court is affirmed.

       A true copy.

              Attest:

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

                                            -5-