F I L E D
United States Court of Appeals
Tenth Circuit
PUBLISH
March 7, 2007
UNITED STATES COURT OF APPEALS Elisabeth A. Shumaker
Clerk of Court
TENTH CIRCUIT
OCI WYOMING, L.P., A Delaware
Limited Partnership,
Plaintiff-Appellant,
v. No. 06-8026
PACIFICORP, An Oregon Corporation,
Defendant-Appellee.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF WYOMING
(D.C. No. 03-CV-259-B)
Phillip Trainer, Jr. of Ashby & Geddes, Wilmington, Delaware, (James McC. Geddes and
Richard L. Renck of Ashby & Geddes, Wilmington, Delaware; Ford T. Bussart of
Bussart, West & Tyler, P.C., Rock Springs, Wyoming, of counsel, with him on the
briefs), for Plaintiff-Appellant.
Stuart R. Day, (P. Craig Silva, with him on the brief), of Williams, Porter, Day & Neville,
P.C., Casper, Wyoming, for Defendant-Appellee.
Before BRISCOE, EBEL, and GORSUCH, Circuit Judges.
BRISCOE, Circuit Judge.
OCI Wyoming, L.P. (“OCI”) filed this diversity action against PacifiCorp alleging
PacifiCorp had breached its Master Electric Service Agreement with OCI by failing to
provide a reliable supply of electricity to OCI’s mine and refinery in Wyoming.
Although both parties waived their right to a jury trial, the district court announced at the
final pretrial conference its intention to impanel an advisory jury. After a nine-day trial,
the advisory jury determined that PacifiCorp had breached the agreement. The advisory
jury also determined OCI had suffered damages from three of nine outages and calculated
OCI’s damages at $377,742, which was significantly less than the $6 million in damages
that OCI had alleged. The district court subsequently denied OCI’s motion to set aside
the advisory jury verdict, treating it as a motion to amend the judgment under Federal
Rule of Civil Procedure 52(b) and concluding that “substantial evidence” supported the
advisory jury’s verdict. The district court subsequently entered judgment “in accordance
with the verdict of the advisory jury” and in the same amount as the advisory jury’s
verdict.
OCI appeals from the judgment and seeks a new trial. Exercising jurisdiction
under 28 U.S.C. § 1291, we vacate the judgment and remand with instructions that the
district court review the evidence previously presented and reach its own judgment,
setting forth sufficient findings of fact and conclusions of law without giving deference to
the advisory jury’s verdict.
I.
OCI operates a mining facility west of Green River, Wyoming where it mines and
refines trona ore to produce soda ash which is used in the manufacture of glass,
chemicals, and detergents. The mine and refinery operate twenty-four hours a day, seven
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days a week. During the period at issue, OCI relied exclusively on PacifiCorp for power
generation. After years of what OCI considered to be unsatisfactory service, PacifiCorp
and OCI negotiated a new contract in 1997 (the Master Electric Service Agreement),
whereby the parties agreed to continue their business relationship and to share the costs of
constructing a new power substation.
After completion of the new substation, the electricity service to OCI improved.
Then in early 2001, OCI alleges a series of intermittent power outages began which
persisted for nearly three years. On December 30, 2003, OCI filed this diversity action
against PacifiCorp for breach of contract.1 Although OCI initially demanded a jury trial,
the parties subsequently filed a joint motion seeking a trial to the court. The district court
granted the motion and ordered that the case be tried to the court, sitting without a jury.
About two weeks later, during the final pretrial conference, the district court, sua
sponte, announced that it would impanel an advisory jury. The pretrial order directed the
parties to submit proposed jury instructions “[d]ue to the [i]mpaneling of an advisory
jury” and scheduled the case “for trial with an advisory jury on April 25, 2005. . . .” Aplt.
App. at 120-21. The case was tried before an advisory jury for nine days.
After the parties rested, the advisory jury concluded that PacifiCorp had breached
its contract with OCI. As regards the damages arising from that breach, the advisory jury
determined that OCI suffered damages from outages that occurred on April 21, 2001,
1
OCI also alleged that PacifiCorp negligently failed to maintain its equipment and
that PacifiCorp failed to obey certain Wyoming state regulations concerning power
supply. At trial, OCI dropped these claims.
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November 8-9, 2002, and March 26, 2003, but not from outages that occurred on January
25, 2001, March 7, 2001, November 13, 2002, February 3, 2003, June 26, 2003, and
December 22, 2003. The advisory jury determined OCI was entitled to $377,742 in
damages and, at the close of trial, the district court entered the advisory jury’s verdict.
OCI filed a motion to set aside the advisory jury’s verdict and for leave to file
post-trial briefing “to assist the Court in issuing written findings of fact and conclusions
of law.” Id. at 553. In its motion, OCI reminded the court that although the court could
consider the advisory jury’s findings of fact in reaching its own, “ultimately the Court
[wa]s the finder of fact and [was required to] reach its own findings and conclusions of
law.” Id. at 554-55. In support of this reminder, OCI quoted Rule 52(a) and cited related
case law. Id. at 555. The district court granted OCI’s motion for leave to file post-trial
briefing and stated that the filing of proposed findings and conclusions “would be useful
in drafting and promulgating the findings of fact and conclusions of law.” Id. at 599-600.
The district court reserved its ruling on OCI’s motion to set aside the advisory jury’s
verdict. Id. at 600.
The district court held a hearing after the receipt of the post-trial briefing. At that
hearing, the district court explained its view of the role of an advisory jury:
Well, I regard an advisory jury as a jury, and the fact that it is advisory
means that it is a jury and we called on our good citizens to come in here
and spend some time and decide these issues. And I have never yet turned
down an advisory jury verdict.
Id. at 715-16. Later the district court elaborated on the deference it gives to advisory jury
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verdicts: “Well, I just wanted to make the point that whether it is advisory or, in fact, is
the given decider is a distinction that I have never really depended on much.” Id. at 728.
OCI expressed its objection to the district court’s reliance upon the advisory jury verdict:
“I understand that, Your Honor. And I would respectfully suggest that this case
particularly calls for that distinction being made. I don’t think either side was particularly
convinced that this was a great matter for a jury.” Id. PacifiCorp indicated it agreed with
the district court’s view of the advisory jury’s verdict: “We feel very strongly, as I think
you do, Judge, that this was a jury trial. The fact issues are now decided. The fact issues
are now behind us, and this verdict should be affirmed.” Id. at 739 (emphasis added).
In its subsequent order, the district court treated OCI’s motion to set aside the
verdict as a motion to amend the judgment under Rule 52(b) and denied it. Id. at 779.
The district court explained that it
treats [an advisory] jury with the same respect as it would any other jury
that seriously considers a case and deliberates until it reaches a collective
judgment. Therefore, when this Court chooses to adopt the advice of an
advisory jury by entering judgment upon that jury’s verdict, judgment will
be amended only if the advisory jury’s verdict would have been set aside
even if it were not advisory.
Id. at 783-84. The district court then stated:
The Court has reviewed the record in this case with special attention to the
testimony of Michael Rudoff, Richard Lissa, and Paul Radakovich. Based
upon this review, the Court FINDS that there was substantial evidence
adduced at trial to support the advisory jury’s verdict as adopted by the
Court when it entered judgment on that verdict.
Id. at 785 (bold in original).
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Almost two weeks later, the district court entered judgment in the case:
In this breach of contract action, Plaintiff OCI Wyoming sought damages of
over $6 million from Defendant PacifiCorp resulting from nine power
outages allegedly caused by PacifiCorp’s breach of a service agreement
between the parties. After a nine-day bench trial, an advisory jury, which
had been duly impaneled under Fed. R. Civ. P. 52(a), found that Defendant
PacifiCorp had breached the service agreement and that Plaintiff OCI was
entitled to total damages of $377,742 resulting from three of the nine
outages. The Court entered judgment on this verdict in open court at the
conclusion of the trial. [citation omitted]. OCI subsequently moved to set
aside the advisory jury verdict and this Court denied the motion.
Therefore, in accordance with the verdict of the advisory jury and with the
previous entry of judgment on that verdict, the Court finds that Plaintiff
OCI is entitled to judgment in its favor.
IT IS HEREBY ADJUDGED and DECREED that Defendant PacifiCorp
breached its Master Electric Services [sic] Agreement with Plaintiff OCI.
IT IS FURTHER ADJUDGED and DECREED that Plaintiff OCI
suffered damages as a direct and proximate result of three power outages:
(1) April 21, 2001; (2) November 8-9, 2002; and (3) March 26, 2003.
IT IS FURTHER ADJUDGED and DECREED that Plaintiff OCI is
entitled to damages of $377,742.
IT IS FURTHER ADJUDGED and DECREED that Defendant
PacifiCorp shall pay Plaintiff OCI’s court costs in the above-referenced
matter.
Id. at 786-87 (bold in original).
II.
OCI challenges the district court’s judgment on both procedural and substantive
grounds. Procedurally, OCI contends that the district court first erred when it impaneled
an advisory jury under Rule 39 in the absence of a motion from one of the parties, and
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again erred when it adopted the advisory jury’s verdict without setting out its own
findings of fact and conclusions of law as required by Rule 52(a). Substantively, OCI
challenges the amount of the damage award, contending it suffered compensable damages
as a result of each outage and not just the three outages identified by the advisory jury and
the district court. PacifiCorp disputes these points and adds that OCI waived the
procedural issues by failing to raise them below.
A.
The issue of whether the district court erred initially when it decided, sua sponte,
to impanel an advisory jury was waived by OCI when it failed to object. OCI, however,
did preserve the issue of whether the district court complied with Rule 52(a). In its
motion to set aside the jury verdict and for leave to file post-trial briefs, OCI clearly
stated the requirements of Rule 52(a) and provided case law identifying the particular
responsibilities the district court had in setting forth findings of fact and conclusions of
law. OCI also attached proposed findings of fact and conclusions of law to its motion. In
short, OCI clearly informed the district court of its obligations and requested that it take
the action OCI is now seeking through this appeal.
“In all actions tried upon the facts without a jury or with an advisory jury, the
court shall find the facts specially and state separately its conclusions of law thereon. . . .”
F ED. R. C IV. P. 52(a) (emphasis added). The district court’s findings of fact “should be
sufficient to indicate the factual basis for the court’s general conclusion as to ultimate
facts[,] . . . should indicate the legal standards against which the evidence was
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measured[,] . . . [and] should be broad enough to cover all material issues.” Otero v.
Mesa County Valley Sch. Dist., 568 F.2d 1312, 1316 (10th Cir. 1977) (citations omitted);
see also Joseph A. v. N.M. Dep’t of Human Servs., 69 F.3d 1081, 1087 (10th Cir. 1995)
(describing “the touchstone for whether findings of fact satisfy Rule 52(a) [as] whether
they are ‘sufficient to indicate the factual basis for the court’s general conclusion as to
ultimate facts’ so as to facilitate a ‘meaningful review’ of the issues presented”) (quoting
Otero, 568 F.2d at 1316). “If a district court fails to meet this standard – i.e. making only
general, conclusory or inexact findings – we must vacate the judgment and remand the
case for proper findings.” Joseph A., 69 F.3d at 1087 (citing Battle v. Anderson, 788
F.2d 1421, 1425 (10th Cir. 1986)).
The only findings and conclusions set forth by the district court are found in its
order denying OCI’s motion to set aside the verdict and the final judgment. The order
states:
The Court has reviewed the record in this case with special attention to the
testimony of Michael Rudoff, Richard Lissa, and Paul Radakovich. Based
upon this review, the Court FINDS that there was substantial evidence
adduced at trial to support the advisory jury’s verdict as adopted by the
Court when it entered judgment on that verdict.
Aplt. App. at 785 (bold in original). In the final judgment, the district court concluded
that PacifiCorp breached the parties’ agreement and that OCI suffered $377,742 in
damages from the outages on April 21, 2001, November 8-9, 2002, and March 26, 2003.
Id. at 787.
Rule 52(a) does not require the district court to set out its findings and conclusions
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in excruciating detail. As stated in the advisory committee notes to Rule 52, “the judge
need only make brief, definite, pertinent findings and conclusions upon the contested
matters; there is no necessity for overelaboration of detail or particularization of facts.”
Fed. R. Civ. P. 52 Notes of Advisory Committee on 1946 Amendments (citations
omitted); see also Colo. Flying Acad., Inc. v. United States, 724 F.2d 871, 877 (10th Cir.
1984) (warning against “inordinately detailed findings”) (citations omitted); Lopez v.
Current Dir. of Tex. Econ. Dev. Comm’n, 807 F.2d 430, 434 (5th Cir. 1987) (making
clear that Rule 52 “‘exacts neither punctilious detail nor slavish tracing of the claims issue
by issue and witness by witness’”) (citation omitted).
Yet we have also cautioned that too little detail frustrates meaningful appellate
review by requiring the parties and this court to guess at why the district court reached its
conclusion. Roberts v. Metro. Life Ins. Co., 808 F.2d 1387, 1390-91 (10th Cir. 1987).
“‘Where the trial court provides only conclusory findings, unsupported by subsidiary
findings or by an explication of the court’s reasoning with respect to the relevant facts, a
reviewing court simply is unable to determine whether or not those findings are clearly
erroneous.’” Id. (quoting Lyles v. United States, 759 F.2d 941, 944 (D.C. Cir. 1985)).
What we have traditionally required, at a point between these two extremes, is a recitation
of all of the subsidiary facts necessary to permit us to see the steps taken by the district
court in reaching its ultimate conclusion. See id. (citing Snyder v. United States, 674
F.2d 1359, 1363 (10th Cir. 1982)). This is no “hypertechnical” requirement, but one that
is “absolutely essential for meaningful appellate review.” Jones v. Jones Bros. Constr.
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Corp., 879 F.2d 295, 300 (7th Cir. 1989); Prof’l Plan Exam’rs, Inc. v. Lefante, 750 F.2d
282, 289 (3d Cir. 1984).
The district court’s “findings” – PacifiCorp breached its agreement with OCI; OCI
suffered damages from three of nine outages; and those damages amounted to $377,742 –
tell us what the district court found. What is missing is why the district court ruled as it
did. The district court does not lay out, in any level of detail, the facts supporting its
award. The district court does list witnesses Michael Rudoff, Richard Lissa, and Paul
Radakovich, as providing testimony in support of the verdict. Rudoff and Lissa testified
on behalf of OCI; Radakovich testified on behalf of PacifiCorp. Lissa and Rudoff
testified that OCI was a lost volume seller and then explained how they calculated OCI’s
lost profits as regards each of the alleged nine outages. Radakovich testified that,
although he made recommendations to OCI to ensure reliable power supplies, his
recommendations were ignored. PacifiCorp argues that a review of this testimony shows
that OCI failed to establish that it was a lost volume seller, which would have entitled
OCI to a higher damage award. Perhaps the district court agreed, but given the dearth of
its rulings, we are only left to guess. It is not our function “‘to search the record and
analyze the evidence in order to supply findings which the trial court failed to make.’”
Colo. Flying Acad., Inc., 724 F.2d at 878 (quoting Kelley v. Everglades Drainage Dist.,
319 U.S. 415, 421-22 (1943)).
B.
Having concluded the district court erred in failing to provide adequate findings
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and conclusions, we must now determine what remedy is appropriate. The parties agree
that, if we conclude that the district court did not satisfy Rule 52(a), we must, at a
minimum, vacate the judgment. Beyond that, the parties disagree.
PacifiCorp argues that remand should be limited to requiring the district court to
make factual findings and legal conclusions to support the judgment previously entered.
OCI argues that a new trial is necessary in order for the district court to independently
decide this case without reliance upon the advisory jury’s verdict. OCI contends that the
district court’s reliance upon the advisory jury renders this case so unusual that we must
order a new trial. OCI’s logic is as follows: the district court did not have authority to
impanel an advisory jury; the district court knew from the start that it would use the
advisory jury as the factfinder in the case, improperly ceding that role from itself to the
advisory jury; as a consequence, the district court did not focus upon the evidence
presented as directly as it would were it the ultimate factfinder – judging the credibility of
the witnesses and determining the weight of the evidence as the trial unfolded – but rather
the court deferred to the advisory jury, treating it as the ultimate factfinder. OCI argues
that only with a new trial will the district court be able to independently examine the
evidence.
Both parties rely on Hargrove v. Am. Cent. Ins. Co., 125 F.2d 225 (10th Cir.
1942), where we addressed what impact the use of an advisory jury impaneled in
violation of Rule 39(b) had upon a final judgment. In Hargrove, we held that “the
[district] court was not authorized of its own initiative to call a jury in an advisory
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capacity, when a jury was waived in the absence of a motion by one of the party
litigants.” Id. at 228-29. But, we affirmed the district court’s judgment in Hargrove,
despite the unauthorized impaneling of an advisory jury, because the district court clearly
performed an independent evaluation of the record and came to its own factual findings
and legal conclusions. Id. at 229. We concluded the advisory’s jury’s verdict formed “no
part” of the district court’s judgment, and, as a result, the appellant suffered no prejudice
from the use of the advisory jury because they received all to which they were entitled:
“the right to insist that the cause be submitted to and tried by the court, without the advice
of a jury. . . .” Id.
Analogizing to Hargrove, PacifiCorp contends that we should affirm the district
court because OCI suffered no prejudice from the district court’s use of the advisory jury.
However, we agree with OCI that it, unlike the appellant in Hargrove, was prejudiced in
the instant case because the district court essentially ceded its duty to conduct factfinding
to the advisory jury. As we have held, “the findings of such a jury are, of course, merely
advisory; the trial court must . . . make its own findings and ‘review on appeal is of the
findings of the court as if there had been no verdict from an advisory jury.’” Marvel v.
United States, 719 F.2d 1507, 1515 n.12 (10th Cir. 1983) (citation omitted) (emphasis
added). While the district court may exercise its discretion to accept or reject the
advisory jury’s verdict, the advisory jury’s decision is not binding on the district court
and the district court has the “ultimate responsibility” for deciding the case’s legal and
factual issues. Wilson v. Prasse, 463 F.2d 109, 116 (3d Cir. 1972) (citations omitted); 8
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J AMES W M. M OORE ET AL., M OORE’S F EDERAL P RACTICE ¶ 39.42[3] (3d ed. 2006).
While we agree that OCI suffered prejudice, we do not agree that the extreme
sanction of a new trial is warranted. OCI gives us no reason to believe that the district
court on remand will be unable to independently evaluate the evidence, make its own
findings and conclusions, and render its own judgment. Neither party contends that the
record generated at trial is in any way deficient and nothing would be gained by requiring
the parties to present their evidence again. We therefore vacate the judgment and remand
with instructions that the district court review the evidence previously presented and
reach its own judgment, setting forth sufficient findings of fact and conclusions of law
pursuant to Rule 52(a) without giving deference to the advisory jury’s verdict.
III.
The judgment of the district court is VACATED and the case is REMANDED for
findings and conclusions.
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