Date: 08-11-2007

Case Style: Millennium Partners, L.P., et al. v. Colmar Storage, LLC

Case Number: 05-14914

Judge: Alarcon

Court: United States Court of Appeals for the Eleventh Circuit on appeal from the Southern District of Florida (Miami-Dade County)

Plaintiff's Attorney: Unknown

Defendant's Attorney: Unknown

Description:

Appellant Colmar Storage, L.L.C. ("Colmar") appeals from the final judgments entered by the District Court in favor of Appellees AIG Trading Corp. ("AIG"), Millenium Partners, LLP ("Millenium"), and One Beacon Insurance Company ("One Beacon").1 Colmar contends that the District Court committed reversible error by (1) denying its motion for judgment as a matter of law with respect to Millenium's, AIG's and One Beacon's bailment claims; (2) denying its motion for leave to add the anti-subrogation rule as an affirmative defense; (3) admitting evidence that was prejudicial; (4) overturning the jury's damages verdict as to Millenium, AIG and One Beacon, and awarding each of them an additur and a new trial on certain damages; and (5) awarding prejudgment interest to Millenium, AIG and One Beacon that ran from October 4, 2000, Millenium's, AIG's, and Boody's date of loss. We will affirm because we conclude that the District Court acted within its discretion in denying Colmar's motion to amend and admitting evidence regarding the denial of a building permit and a subsequent remedial measure. The District Court also did not err in denying Colmar's motion for judgment as a matter of law, awarding additurs, granting a new trial regarding actual damages, and awarding Millenium, AIG and One Beacon prejudgment interest from the date of Millenium's, AIG's, and Boody's loss.

I

Colmar is engaged in the business of storing coffee and other perishables. In February 2000, it leased a warehouse from Cramco Realty Inc. ("Cramco"). The warehouse is located in a low-lying area of Miami, Florida, that is prone to flooding when it rains heavily. The warehouse was certified by the New York Board of Trade's Coffee and Cocoa Exchange Board ("Coffee Exchange") for the storage of coffee. Pursuant to the terms of the lease agreement, Cramco constructed two subterranean truck loading wells, but they were built without a county building permit. The Miami-Dade County Department of Environment Resources Management ("DERM") refused to issue a building permit for the construction because the ramps were not adequately equipped with pumps and drains. Colmar stored coffee for Millenium, AIG, and Boody in the warehouse

On October 2 and 3, 2000, a tropical storm system settled over the Miami area. By the time the storm had subsided, over 15 inches of rain had fallen near the warehouse. The National Weather Service issued a flood watch on October 2, 2000. However, it was not until the early morning of October 4, 2000, that a flood warning was issued by the National Weather Service. Although Colmar learned that heavy rains were expected, it did not set up a provisional pump in the warehouse.

After the storm had subsided, Colmar inspected the warehouse and discovered that it had been inundated with water. In parts of the warehouse, the flood waters rose as high as twelve to sixteen inches off the ground level. As a result, the bags of coffee beans on the lowest tier were contaminated by water. The coffee beans that had been exposed to water had swollen. This caused some of the bottom bags to burst and topple over entire pallets of the coffee beans. Water from the bottom tier of bags percolated up into the second tier. This made the coffee beans in the bags swell and caused additional pallets to fall over. Colmar completed its clean-up efforts of the warehouse on January 22, 2001.

II

On June 29, 2001, Millenium and AIG each filed separate complaints against Colmar alleging breach of contract, bailment, and negligence. Millenium's and AIG's claims were brought on behalf of their respective subrogated insurers, Westport Insurance Corporation and Lexington Insurance Company ("Lexington"). They alleged that Colmar breached its duty to employ reasonable care to protect the coffee beans stored at Colmar's facility from water damage. They prayed for compensatory and consequential damages. Great American Insurance Company, Inc. ("Great American"), One Beacon, and Dornoch Ltd. ("Dornoch") also filed complaints alleging similar claims. Their complaints were consolidated with the complaints filed by Millenium and AIG.

On August 15, 2003, Colmar moved for summary judgment. It asserted that the economic loss doctrine barred Great American's, One Beacon's, Dornoch's, Millenium's and AIG's tort claims for negligence and bailment, that their damages were caused by an Act of God, and that AIG's claim was barred by the antisubrogation rule. The District Court granted Colmar's motion to dismiss the negligence claims. It denied the motion to dismiss the bailment claims. The District Court also dismissed the motion for summary judgment based on the Act of God defense because conflicting expert testimony concerning the foreseeability of the tropical storm event and flooding presented genuine issues of material fact that should be decided at trial. The District Court refused to consider the antisubrogation rule defense, which was initially raised in Colmar's motion for summary judgment in regard to AIG's claims, because it was not raised in Colmar's answer or the joint pretrial status report.

The breach of warehouse contract and bailment claims were tried to a jury. Great American's, One Beacon's, Dornoch's, Millenium's and AIG's bailment claim was based on discrete theories of liability: Colmar breached its duty to exercise reasonable care to prevent damage from flooding; Colmar failed to exercise reasonable care in its remediation efforts to prevent damage to the coffee beans caused by the flooding of the warehouse. Great American, Dornoch, and Colmar each stipulated to the value of the damaged coffee beans that were destroyed. Millenium, AIG and Colmar stipulated to the number of bags of coffee beans that were destroyed.

At trial, Colmar requested that a jury instruction be given that would "instruct the jury to allocate the damages pursuant to the different potential actionable conduct on the part of the defendant." Specifically, Colmar argued to the District Court:

in your instruction on Count 2, you tell the jury that the plaintiff's claim Colmar breached its duty to act as a reasonably prudent warehouseman, both in failing to protect the goods at the time of the flooding incident and in failing to protect the goods from further damage after the flooding incident.

These are two distinct claims, and yet in this damages instruction, you are peremptorily telling them what the damages are. . . . [T]hey need to be instructed that they have to allocate those damages according to the incident that caused it.

In denying Colmar's request, the District Court stated: "I don't find a basis for allocation here based upon the evidence of this case." On appeal, Colmar has not challenged the District Court's denial of the request for an allocation instruction. Thus, that claim is forfeited. See Access Now, Inc. v. Southwest Airlines Co., 385 F.3d 1324, 1330 (11th Cir. 2004) ("[T]he law is by now well settled in this Circuit that a legal claim or argument that has not been briefed before the court is deemed abandoned and its merits will not be addressed.").

The jury returned a verdict for Colmar on the breach of warehouse contract claim but found for Great American, One Beacon, Dornoch, Millenium and AIG on their bailment claim. The jury did not find for Colmar on its "Act of God" affirmative defense. The jury awarded Great American, One Beacon, Dornoch, Millenium and AIG roughly 40-60% of the stipulated damages.

Great American, One Beacon, Dornoch, Millenium and AIG filed post-trial motions seeking judgment as a matter of law or a new trial on damages. Colmar also filed motions for judgment as a matter of law and for a new trial. The District Court awarded Great American, One Beacon, Dornoch, Millenium and AIG additurs as to their claimed ancillary damages. It also awarded an additur and entered judgment as a matter of law as to the value of lost coffee for Great American and Dornoch. It ordered a new trial on the value of lost coffee for Millenium, AIG and One Beacon. Each of Colmar's post-trial motions was denied.

The retrial on the value of the coffee took place on April 12-14, 2005. Colmar stipulated to the value of Millenium's and AIG's coffee beans damaged by the flood. Thus, the jury was asked to determine the value of One Beacon's loss caused by Colmar's failure to exercise reasonable care. Colmar and One Beacon stipulated to a fair market value per pound of coffee and that at least 691 bags of coffee beans owned by One Beacon's insured were destroyed. In addition, One Beacon claimed that an additional 3059 bags of coffee were damaged. The jury rejected One Beacon's claim, finding that no additional bags had been damaged or destroyed.

The District Court entered final judgments for AIG on May 24, 2005, and for Millenium and One Beacon on June 8, 2005. Colmar has timely appealed. This Court has jurisdiction over this appeal pursuant to 28 U.S.C. § 1291.

* * * *

Outcome: We AFFIRM the decision of the District Court.

Plaintiff's Experts: Unknown

Defendant's Experts: Unknown

Comments: None