Court of Appeals Office of Appellate Courts
Paul F. Shoemaker, Shoemaker & Shoemaker, PLLC, Minneapolis, Minnesota; and Michael K. Hoverson, Hoverson Law Offices, P.A., Minneapolis, Minnesota, for respondent.
Mark V. Steffenson, Henningson & Snoxell, Ltd., Maple Grove, Minnesota, for appellant.
Robert J. King, Jr., Kay Nord Hunt, Bryan R. Feldhaus, Lommen, Abdo, Cole, King & Stageberg, P.A., Minneapolis, Minnesota, for amicus curiae Minnesota Association for Justice.
1. Because a practical distinction exists between a discovery deposition and deposition to preserve trial testimony of an out-of-state witness caused by the witness's unavailability to testify at trial, a deposition to preserve trial testimony of an unavailable, out-of-state witness is not covered by a general discovery deadline in a scheduling order.
2. The district court abused its discretion in its rulings related to respondent's motion for a protective order to prohibit appellant's depositions to preserve trial testimony of out-of-state witnesses because it applied the wrong legal standard and its factual findings were not supported by the record.
Reversed and remanded.
The issue in this case is whether a party may take a deposition to preserve trial testimony of an unavailable, out-of-state witness, even though the deposition would occur after a discovery deadline in a scheduling order. Respondent TC/American Monorail, Inc., brought this civil action to recover payment for industrial equipment that it fabricated for appellant Custom Conveyor Corporation. Custom Conveyor counterclaimed for breach of contract. Following a jury trial, the district court entered judgment in favor of TC/American for $208, 428. Custom Conveyor moved for judgment as a matter of law or a new trial on various grounds, arguing, among other things, that the district court erred by granting TC/American's motion for a protective order to preclude the depositions of two out-of-state witnesses from going forward shortly before trial. The district court denied the motion, and the court of appeals affirmed. Because we conclude that the district court abused its discretion by denying the motion for a new trial and by granting the underlying motion for a protective order, and that Custom Conveyor was prejudiced by these rulings, we reverse and remand for a new trial.
In 2009 Custom Conveyor entered into a contract with the City of North Las Vegas, Nevada, to supply equipment needed for a wastewater treatment facility construction project. Custom Conveyor manufactured certain components of the equipment itself and solicited bids for fabrication of the other components, including four steel hoppers and support stands.
TC/American submitted a bid of $305, 000 for fabrication of the hoppers and support stands. The hoppers would be connected to the stands with field weld joints. In preparing the bid, the TC/American project manager communicated to Custom Conveyor that TC/American was a "D1.1 shop, " which means that its welders were certified to the D1.1 standard of the American Welding Society. The D1.1 standard provides that welds must pass visual inspection, but not electronic testing. Custom Conveyor ultimately selected TC/American's bid.
When the first shipment of TC/American's product arrived at the project site, the City expressed dissatisfaction with the quality of the welds. Custom Conveyor notified TC/American, and TC/American agreed to have the product returned to its plant for repairs. Upon return, TC/American's project manager and quality control manager inspected the product and determined that some of the disputed welds did not conform to D1.1 standards.
TC/American repaired and reshipped the product to the project site and made several additional shipments through December 2009. The City again objected to the quality of the welds. Custom Conveyor asked TC/American to perform additional repairs on the product, but TC/American refused. TC/American asserted that its welds met the
D1.1 standard of visual inspection and that is was not obligated to satisfy the City's higher electronic testing. In the end, Custom Conveyor elected to fix and use the hoppers fabricated by TC/American, but did not use the support stands. TC/American sent invoices for its product, and Custom Conveyor refused to pay the invoices in full.
In April 2010, TC/American sued Custom Conveyor for breach of contract and failure to pay for goods sold and delivered on the North Las Vegas project and two other projects. Custom Conveyor counterclaimed for breach of contract. In September 2010, the district court issued a scheduling order establishing a discovery deadline of January 21, 2011, ...