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BISHOP LOGGING CO. v. JOHN DEERE INDUS. EQUIP.2/13/1995
Respondent Bishop Logging Company (Bishop Logging) brought this action against John Deere Industrial Equipment Company (John Deere), Construction Equipment Sales, Inc. (CES), and Denharco, f/k/a Hurricana Metals, charging fraud, negligent misrepresentation, and breach of express warranty in connection with the sale of several pieces of heavy forestry equipment which were to be utilized in a novel swamp logging operation. The jury returned a verdict for Bishop Logging on each cause of action against John Deere, and awarded Bishop Logging $1,000,000 in actual damages and $1,200,000 in punitive damages. The trial court denied John Deere's post-trial motions for judgment n.o.v., new trial, and new trial nisi. We affirm in part and reverse in part.
FACTS
Bishop Logging Company is a large, family owned logging contractor formed in 1980 in the low country of South Carolina. Bishop Logging has traditionally harvested pine timber. However, in 1988 Bishop Logging began investigating the feasibility of a fully mechanized hardwood swamp logging operation when its main customer, Stone Container Corporation, decided to expand hardwood production. In anticipating an increased demand for hardwood in conjunction with the operation of a new paper machine, Stone Container requested that Bishop Logging harvest and supply hardwood for processing at its mill. In South Carolina, most suitable hardwood is Since Bishop Logging had already been successful in its totally mechanized pine logging operation, it began a search for improved methods of hardwood swamp logging centered on mechanizing the process in order to reduce labor, minimize personal injury and insurance costs, and improve efficiency and productivity.
A fully mechanized swamp logging operation was a new concept in hardwood logging. As planned, it consisted of three components. First, a feller-buncher would cut the timber. The feller-buncher was a tract mounted mobile saw which would travel through the swamp to the timber. Second, a mobile stroke delimber would travel behind the feller-buncher to the felled tree. It would remove the limbs, top the tree, and prepare it to be dragged from the swamp. Finally, grapple skidders would remove the logs from the swamp to log trucks.
As Bishop Logging knew that no fully mechanized swamp logging package of equipment was available for purchase, it launched a campaign to design a package to suit its needs. Its search began with a number of equipment companies and manufacturers. Adrian Bishop, the president of Bishop Logging, approached representatives of John Deere, Hurricana, and CES to determine if existing equipment could be modified to work in a swamp environment. In cooperation with the sales representatives, Bishop Logging investigated various types of equipment, including observing some of the equipment operating in different conditions.
Bishop Logging ultimately purchased several pieces of John
Soon after being placed in operation in the swamp, the machinery began to experience numerous mechanical problems. John Deere, through CES, made over $110,000 in warranty repairs on the equipment. However, Bishop Logging contended the swamp logging system failed to operate as represented by John Deere and, as a result, it suffered a substantial financial loss.
I.
On appeal, John Deere first asserts the court erred in failing to grant its motions for directed verdict and judgment n.o.v. on the fraud cause of action because it did not make misrepresentations of present fact about the suitability of the equipment for the swamp logging operation. Bishop Logging, on the other hand, contends that John Deere engaged in fraud by representing that this u
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