United States Court of Appeals,
Fifth Circuit.
No. 93-9069.
GREAT PLAINS EQUIPMENT, INC., Plaintiff-Appellee,
v.
KOCH GATHERING SYSTEMS, INC., Defendant-Appellant.
GREAT PLAINS PIPELINE CONSTRUCTION, INC., Plaintiff-Counter
Defendant-Appellee,
v.
KOCH GATHERING SYSTEMS, INC., Defendant-Counter Plaintiff-
Appellant.
Feb. 27, 1995.
Appeal from the United States District Court for the Northern
District of Texas.
Before HIGGINBOTHAM, SMITH and PARKER, Circuit Judges.
ROBERT M. PARKER, Circuit Judge.
This case originated from two cases filed in Texas state
court. Appellee Great Plains Equipment (GPE) filed suit against
Appellant Koch Gathering Systems, Inc. (Koch) seeking damages for
the destruction of two pieces of construction equipment based on
theories of negligence. Appellee Great Plains Pipeline
Construction, Inc. (GPP) filed the other case against Koch seeking
damages for breach of contract. Koch removed both cases to federal
court based on the parties' diversity of citizenship, and filed a
counterclaim against GPP for liquidated damages for its failure to
complete the pipeline on time. The district court consolidated the
cases, which were then tried to a jury. The jury returned a
verdict in favor of GPE and GPP on all claims. The reformed
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judgment awarded $180,000 plus prejudgment interest of $11,094.75
to GPE for the equipment, $228,324.94 plus prejudgment interest of
$38,843.55 to GPP for the breach of contract, and attorney's fees
for both Appellees against Koch.
THE BATSON CLAIM
A party to a civil suit can challenge another party's use of
a peremptory strike that excludes a prospective juror on the basis
of that juror's race. Edmonson v. Leesville Concrete Co., 500 U.S.
614, 111 S.Ct. 2077, 114 L.Ed.2d 660 (1991); Batson v. Kentucky,
476 U.S. 79, 106 S.Ct. 1712, 90 L.Ed.2d 69 (1986). A party may
challenge another's peremptory strike regardless of the race of the
challenging party since the objection asserts the juror's equal
protection rights. Powers v. Ohio, 499 U.S. 400, 111 S.Ct. 1364,
113 L.Ed.2d 411 (1991). However, we will affirm the district
court's ruling on a Batson challenge unless it is clearly
erroneous, that is unless we are left with the definite and firm
conviction that a mistake was committed. United States v. Roberts,
913 F.2d 211, 214 (5th Cir.1990), cert. denied, 500 U.S. 955, 111
S.Ct. 2264, 114 L.Ed.2d 716 (1991).
This circuit has developed a three-step process for
evaluating Batson claims. First, the complaining party must make
a prima facie showing that opposing counsel has exercised a
peremptory challenge on the basis of race. Once this showing has
been made, the burden shifts to the striking party to articulate a
race-neutral explanation for the strike. Thereafter, the court
must determine whether the Batson claimant has proven purposeful
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discrimination. United States v. Bentley-Smith, 2 F.3d 1368, 1373
(5th Cir.1993).
Koch relies on three circumstances surrounding the challenged
strike to establish a prima facie Batson violation in this case.
First, appellees' counsel struck the only African-American juror on
the venire panel. Second, Koch contends that there was a complete
absence of any information developed during voir dire by either
party or the court about the juror in question that distinguished
him from any of the non-African-American jurors Appellees' counsel
did not strike. Third, Koch's trial counsel, N. Sue Allen, is an
African-American. Koch contends that Allen's race raises the
possibility that Appellees' counsel struck the juror on account of
his race, because he might have been more receptive to the
presentation of Koch's counsel. We will assume, without deciding,
that Koch established a prima facie Batson violation.
The burden then shifted to Appellees to proffer a reason for
the strike that is facially race neutral, clear, reasonably
specific, and related to the case to be tried. United States v.
Romero-Reyna, 867 F.2d 834, 837, aff'd on remand, 889 F.2d 559 (5th
Cir.1989), cert. denied, 494 U.S. 1084, 110 S.Ct. 1818, 108 L.Ed.2d
948 (1990); United States v. Clemons, 941 F.2d 321, 323 (5th
Cir.1991). Appellees' counsel responded to the Batson challenge by
telling the court:
We had information that the gentleman was not paying his
child support, and other information. We thought he might not
be a good juror for our particular case.
After counsel proffered his reasons, the court responded,
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"Very well." Koch's attorney replied, "Thank you, Judge." And the
trial went forward.
The challenging party then had the burden to show that the
reason given was pretextual or otherwise inadequate. Koch made no
attempt to attack the validity of the proffered reason at trial.
On appeal, Koch maintains that the proffered reason was inadequate
because it was based on information not in the record, and
therefore might have been based on inaccurate information or even
appellees' counsel's mendacity. Koch also argues that the trial
court failed to rule on the challenge.
We find that, in fact, the court ruled against Koch on the
Batson issue and that the court's ruling was not clearly erroneous.
First, Koch did not carry its burden of establishing that the
proffered reason was inadequate or pretextual in the trial court.
Koch did not raise these issues at all.
Second, there is no authority for the proposition that we
should uphold the district court's credibility assessment only if
it is supported by evidence in the record. In fact we have
specifically declined to adopt such a requirement, United States v.
Cobb, 975 F.2d 152, 155 n. 3 (5th Cir.1992), cert. denied, --- U.S.
----, 113 S.Ct. 1596, 123 L.Ed.2d 160 (1993), because peremptory
challenges can be based on anything except illegal discriminatory
bias. Batson, 476 U.S. at 89-90, 106 S.Ct. at 1719.
THE RECORD
Koch urges two points of error on appeal that require this
Court to review the sufficiency of the evidence. However, the
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record on appeal is incomplete. Much of the testimony at trial was
read into the record from depositions of witnesses who did not
appear in person. The depositions themselves are part of the
record on appeal. However, there is nothing in the record that
indicates which portions of the depositions the jury heard. The
transcription of the trial merely states, "Whereupon, deposition
excerpts were read in open court," each time a witness was called
by deposition, without any reference to the pages or lines read.
This court cannot speculate as to what was or was not done or said
in the court below. Sitting as a reviewing court, we may not go
behind the record. Smith v. United States, 343 F.2d 539, 541 (5th
Cir.), cert. denied, 382 U.S. 861, 86 S.Ct. 122, 15 L.Ed.2d 99
(1965). Koch had the responsibility to provide all portions of the
proceedings that bear on its points of error attacking the
sufficiency of the evidence. FED.R.APP.P. 10(b)(2) provides:
If the appellant intends to urge on appeal that a finding or
conclusion is unsupported by the evidence or is contrary to
the evidence, the appellant shall include in the record a
transcript of all evidence relevant to such finding or
conclusion.
We have determined that there was sufficient evidence in the
transcription of the proceedings to allow a reasonable factfinder
to return the verdicts reached by the jury. If testimony in the
untranscribed portions of the proceedings calls that conclusion
into question, it cannot form the basis of reversal.
It is impossible for us to determine from the record why the
reporter failed to include in the transcript the deposition
portions offered or even references to line and page. We invite
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the district judge to review the procedures used in this case so as
to avoid similar problems occurring in the future.
THE CONTRACT CLAIM
a. Sufficiency of the evidence.
GPP's claim arose out of a contract with Koch for the
construction of an 81-mile segment of a crude oil pipeline. GPP
and Koch entered into a contract on July 3, 1990 that required GPP
to complete the pipeline by August 25, 1990. The contract
obligated Koch to secure all necessary rights-of-way for the
construction.
Construction began about July 16, 1990. On July 23, 1990
Witten, a Texas state inspector, shut down the work because GPP did
not have a "right to be on the State's right-of-way." Koch
contended that the necessary right-of-way permit had been secured,
but Witten shut down the work either because there had been no
pre-bid meeting, which was an unreasonable interpretation of the
Texas rules, or in the alternative, because GPP violated Texas
state rules concerning keeping the adjacent highway free of mud,
and limiting the amount of ditch that was open at any one time. A
different state inspector had been on the job site the week before
and had not mentioned a right-of-way problem.
In addition to the delays caused by the disputes on the state
right-of-way, GPP's crews were shut down toward the end of the
project because some private right-of-way permits were not timely
secured. About 19 miles from the end of the pipeline, a 8500 foot
section in Frio County, Texas lacked a private right-of-way permit
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until August 13, 1990. Testimony also established that GPP did not
receive some private right-of-way permits until August 29, four
days after the deadline for completion under the terms of the
contract.
At the close of GPP's case, Koch made a motion for judgment
pursuant to FED.R.CIV.P. 50, arguing that the evidence was
overwhelming that Koch was not responsible for the delays
experienced by GPP in the construction of the pipeline. The
district court denied Koch's motion and the jury returned a verdict
for GPP on the breach of contract claim.
Koch argues on appeal that there was insufficient evidence to
create a fact question for the jury on the issue of whether GPP's
delays were caused by Koch. After viewing the evidence in the
light most favorable to GPP and drawing all reasonable inferences
in its favor, we must determine whether the facts and inferences
point so strongly in favor of Koch that no reasonable jury could
return a verdict for GPP. Stockstill v. Shell Oil Co., 3 F.3d 868,
870 (5th Cir.1993), cert. denied, --- U.S. ----, 114 S.Ct. 1307,
127 L.Ed.2d 658 (1994).
Question number 5 on the verdict form asked:
Did Koch Gathering Systems, Inc. fail to timely provide to
Great Plains Pipeline Construction, Inc. the right-of-ways on
the state highway or private property necessary to construct
the pipeline in question?
The jury answered, "Yes." The evidence strongly supports that
answer. The next question asked:
What sum of money, if any, if paid now in cash, would fairly
and reasonably compensate Great Plains Pipeline Construction,
Inc. for the additional costs it incurred, if any, resulting
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from such failure, if any, on the part of Koch Gathering
Systems, Inc.?
The jury answered, "$228,324.94." This answer appears to
include compensation for delays which resulted from the shut downs
on both the state and private rights-of-way. Under Texas law,
which controls this diversity case, in order for a contractor to
recover damages for losses due to delay of its work under a
contract, it must prove that the defendant "was responsible for the
act or omission which caused the delay or hindrance." Shintech
Inc. v. Group Constructors, Inc., 688 S.W.2d 144, 148
(Tex.Civ.App.1985). Koch argues that it was not responsible for
the delay on the state right-of-way, and thus for the portion of
the damages attributable to that delay. Koch asks us to hold, as
a matter of law, that the shut down was caused by GPP's violations
of state regulations, such as allowing mud to accumulate on the
highway and opening too much ditch at one time. Koch argues in the
alternative that if Witten shut down the work based on the failure
to have a pre-bid meeting, that failure did not amount to a breach
of Koch's contractual duty to secure rights-of-way. The contract
language in question provides:
[Koch] shall secure necessary permits from proper regulating
bodies for the laying of the line to be constructed
hereunder[.]
Koch does not dispute that it had a contractual duty to secure
the necessary rights-of-way. Koch also acknowledges that there was
a conflict in the evidence as to what motivated the state's shut
downs, and that the jury could have reasonably believed that the
state shut construction down because there was no pre-bid meeting.
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However, Koch contends that, having received what it refers to as
a right-of-way permit from the state, it fulfilled its contractual
obligation, and failure to participate in a pre-bid meeting was not
a breach of the contract. Koch's theory of the case was that
Witten's pre-bid meeting requirement was not part of the ordinary
permit process but a capricious and unreasonable requirement that
he was not empowered to impose under state regulation.
The record does not conclusively support Koch's view of the
evidence. From the limited and conflicting testimony in the
record, a reasonable jury could have concluded that Koch failed to
secure a "necessary permit[ ] from [a] regulating body," and that
that breach resulted in the shut down on the state right-of-way.
We therefore reject Koch's contention that there was insufficient
evidence on this point.
b. Parol evidence.
Koch next complains that the district court permitted
testimony, over Koch's objection, that prior to entering the
written contract Koch promised that there would be no special
restrictions on GPP in working on the state right-of-way. Koch
argues that since this alleged prior oral agreement was not made
part of the contract, introduction of it violated the parol
evidence rule. Koch, as the party asserting error, has the burden
of proving that its substantial right was affected by an erroneous
ruling. Smith v. Wal-Mart Stores, 891 F.2d 1177, 1180 (5th
Cir.1990). The jury specifically found that the GPP's damages were
the result of Koch's failure to provide rights-of-way necessary to
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construct the pipeline. Evidence that Koch promised "no special
restrictions" and then breached that promise, while inadmissible,
did not affect Koch's substantial right, as it was irrelevant to
the issue that the jury was called on to decide.
PROPERTY DAMAGE CLAIM
Two pieces of construction equipment which were owned by GPE
and rented to GPP for use in the pipeline project were destroyed in
a fire on one of Koch's facilities. Koch does not contest
liability for the damages. It also concedes that the value of the
equipment after the fire was $-0-, and the market value of one
item, a small ditcher referred to as a J-40, was $20,000. The
dispute on appeal centers on the market value of the large trencher
("the 247") before the fire.
The evidence established that approximately two months before
the fire, GPE located the 247 in question on the yard of a company
that had gone out of business. The machine was in like-new
condition with only 300 hours on it; it still had factory paint on
the buckets indicative of minimal use. GPE was able to make an
extremely advantageous purchase of the equipment by paying only
$45,000 for it. The Koch job accounted for approximately 300
additional hours on the 247. The advantageous purchase by GPE is
further evidenced by the fact that Koch's expert witness on values
opined that it had a reasonable cash value at the time of the fire
of $85,000.
The president of GPE, Clark Besack, also testified regarding
value of the 247. An owner of property under Texas law may express
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an opinion on the value of the property. However, Mr. Besack was
better positioned to provide credible opinion evidence to the jury
than one who simply was the owner of a piece of equipment. In the
eight years he served as president of GPE, he had purchased over
$6,000,000 worth of such equipment. Mr. Besack's testimony
referenced two other pieces of equipment, one that he characterized
as "pretty equivalent" was priced at $250,000, and one that was
"comparable" to the 247 was $165,000. He arrived at his opinion of
comparability by balancing the fact that it was a little bit
heavier but had more hours on it. Comparables may be used as a
basis for opinions on fair market value. What one happened to pay
for a replacement piece of equipment may not, since the replacement
may or may not be comparable to the equipment being replaced.
Koch contends first, that the district court erred in
admitting evidence of the replacement cost of the property and
second, that there was no evidence to support the jury's verdict
awarding GPE $180,000 for the total property damage claim.
Whether Koch preserved the point of error regarding
admissibility is a close question. A relevancy objection was
overruled to the question inquiring about what Mr. Besack did to
replace the equipment. Mr. Besack then recited what he looked at,
the efforts he made to locate other equipment, what he considered
and how he finally found a piece that he considered to be
comparable. When the question was asked whether he had an opinion
as to the value of the ditcher he lost in the fire, there was no
objection to either question or answer.
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Koch asserts here that Mr. Besack's opinion that the 247 was
worth $165,000 was actually an opinion relating to replacement
value as opposed to cash market value and under the holding in
Blackmon v. Mixson, 755 S.W.2d 179 (Tex.App.—Dallas 1988), was
inadmissible and amounts to no evidence. We disagree. Blackmon
holds that while an owner can testify about the market value of his
property, his testimony concerning the replacement value of his
property is not evidence of market value. Therefore, if
replacement value of the property is the only evidence in the
record, there is no evidence of market value. Id. at 182.
Blackmon does not hold that evidence of replacement value is
inadmissible, or that admission of such evidence requires reversal.
Finally, Koch made no motion for judgment as a matter of law
on the property damage question. Where a party has failed to
preserve the issue of sufficiency of the evidence for appellate
review by moving for judgment as a matter of law (formerly directed
verdict) in the trial court, our inquiry is limited to whether
there was any evidence to support the jury's verdict, irrespective
of its sufficiency. Wellborn v. Sears, Roebuck & Co., 970 F.2d
1420, 1424 (5th Cir.1992). There was ample evidence in the record
on which the jury could base its decision that the value of the
lost equipment was $180,000 by assigning $20,000 for the J-40 and
$160,000 for the 247.
CONCLUSION
For the foregoing reasons, we AFFIRM the district court's
judgment in all respects.
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