Here, the plaintiff (dairy farmer) decided to expand his operations and contacted the defendant (contractor) to obtain a bid for the construction of a new milking parlor. The plaintiff accepted the defendant’s bid and the defendant designed a customized system for water storage on the dairy. At trial, the plaintiff testified that he consistently experienced problems with the water storage system. For instance, he had trouble keeping the water clean and he noticed a steady decline in the herd’s health and milk production. Apparently, the water storage system had contamination problems and organisms built up in the system. The plaintiff further testified that he ended up having to bypass the entire system and immediately saw a positive change in the health of the heard. The defendant subsequently corrected the problems and the plaintiff began using the system again.
However, the plaintiff sued for negligence, breach of implied warranty of merchantability, and breach of implied warranty of fitness for a particular purpose for the damages he sustained in the health of the herd and low milk production. The trial court awarded the plaintiff $439,750 in damages.
The defendant appealed, arguing that the plaintiff never established a causal relationship between the water storage system and the economic losses. They further argued that the trial court improperly determined that an expert witness was qualified to testify at trial and that the trial court improperly admitted evidence of the presence of bacillus (a bacteria that is toxic when ingested by animals) in the water. They also attempted to argue that the plaintiff’s negligence claim was precluded by the “doctrine of economic loss.”
The Iowa Court of Appeals first addressed the issue of whether the water storage tanks and subsequent contamination led to the plaintiff’s damages. At trial, the plaintiff called on a veterinarian to testify that the water coming out of the tanks contributed to the herd’s problems. The veterinarian testified that the decrease in milk production and the related health problems were directly linked to the water storage system. Another experienced dairy worker explained to the jury how the build-up of harmful substances in the tanks and decreased circulation on his farm led to the same problems. Thus, the court found that the testimony of the experts “as a whole” showed that it was “reasonably probable” that the water storage system was the direct cause of the plaintiff’s problems.
The appellate court went on to explain that all of the plaintiff’s expert witnesses were qualified to testify because Iowa has a liberal view on the admissibility of expert testimony. If the expert assists the jury in understanding the evidence and the evidence offered is relevant, then the expert is deemed to be qualified.
The court also found that the trial court properly admitted evidence of the presence of bacillus in the water. The Iowa rules of evidence provide that evidence is relevant when the probative value is substantially outweighed by the danger of unfair prejudice or misleading the jury. Here, the evidence of the contaminating and harmful bacteria in the storage water was critical to the case and it was properly admitted.
Next, the court addressed the issue of whether the system was “fit” for the particular purpose of use on a dairy farm. In Iowa, a buyer of goods may recover damages if the goods are not fit for the particular purpose that the buyer needs. To recover under this type of action, the buyer must show that the seller knew or had reason to know of the buyer’s particular purpose and that the seller knew that the buyer was relying on their good skill or judgment to furnish suitable goods. Here, the defendant claimed that he had no reason to know of the plaintiff’s particular purpose. The appellate court disagreed. They found that the defendant worked extensively with the plaintiff to “expand” and design the system as needed for the plaintiff’s dairy operation. The defendant knew or should have known that the system was to provide safe and “potable” water for the herd. Rozeboom Dairy, Inc. v. Valley Dairy Farm Automation, Inc., No. 0-393/09-1447, 2011 Iowa App. LEXIS 161 (Iowa Ct. App. Feb. 23, 2011).