Opinion
Rehearing Denied Feb. 9, 1971.
Page 117
Neef, Swanson & Myer, Fred E. Neef, Robert Swanson, Winner, Berge, Martin & Comfield, Fred M. Winner, Denver, for plaintiffs in error.
Dwight K. Shellman, Jr., Denver, for defendant in error.
COYTE, Judge.
This case was originally filed in the Supreme Court of the State of Colorado and subsequently transferred to the Court of Appeals under authority vested in the Supreme Court.
We shall refer to the parties as they appeared at trial or by name.
The case involves an action in fraud for the sale of diseased cattle. The plaintiff below, John H. Johnston, was successful at trial and the defendants now assert error.
It was plaintiff's contention at trial that the cattle purchased from the defendant Cox and certified as free from symptoms of infectious disease by the defendant Dr. Ketcham, were known by both defendants to be diseased prior to the sale. Plaintiff commenced this action alleging he sustained damages as a result of the introduction of these diseased cattle into his herd. As grounds for relief, plaintiffs brought this action under a theory of breach of express warranty of fitness, breach of implied warranty of fitness, and fraud. The jury returned a verdict for plaintiff on the grounds of fraud and awarded him $72,874.10 in actual damages and $73.000 in exemplary damages. The trial judge denied defendants' motion for a judgment non obstante veredicto or in the alternative for a new trial.
To understand this case it is necessary to have a basic understanding of the disease involved, vibrio fetus. Vibrio fetus is a pathogen, meaning a disease-producing organism, as distinguished from vibrio bulbulous, a non-pathogen or non-disease producing organism. Vibrio fetus may be further subdivided into vibrio fetus venerealis, which is spread by breeding among cattle, and vibrio fetus intestinalis which is acquired through cattle's diet, not breeding. Either of the two sub-species of vibrio fetus may cause abortions in cattle, but, as vibrio fetus venerealis is caused or spread by breeding, the introduction of cattle having this sub-species will tend to infect the entire herd, whereas cattle with vibrio fetus intestinalis will not infect other cattle.
To recover for the loss of his herd, it was necessary for plaintiff to prove that the cattle sold to him by the defendant Cox had vibrio fetus venerealis at the time of sale rather than vibrio fetus intestinalis or vibrio bulbulous. To establish this, the following chain of evidence was brought forth by plaintiff.
First, plaintiff showed that the defendants brought five samples from Cox's herd to a Dr. Horlein for testing on September 9, 1962. These samples tested negative, although the reason given by Dr. Horlein's assistant was that they were contaminated and not susceptible to proper testing. Sterile collection tubes were given to the defendants and were returned to Dr. Horlein's laboratory shortly thereafter on September 26, 1962, by Cox and Ketcham. An entry was made by the laboratory technician in the reception book that the samples came from the Cox herd. At the trial it was maintained by the defendants that this
second set of samples came from the Ketcham herd. Out of these six samples, two tested out as positive, meaning they did contain vibrio fetus venerealis. A letter was sent to Dr. Ketcham on October 2, 1962, informing him of this fact and telling him to consider the entire herd as being diseased. In September of 1963, a contract was entered into between plaintiff and the defendant Cox for the sale of approximately 390 cattle from Cox's herd. The defendant Dr. Ketcham certified the cattle as being free from symptoms of infectious disease. Two deliveries of the cattle were made thereafter, the last being in December 1963. In March 1964, according to the plaintiff, he discovered an eighth-month aborted fetus which had come from one of the cows sold to him by Cox. The fetus was tested in Dr. Horlein's laboratory and was shown to be infected with vibrio fetus venerealis. Because of the infectious nature of the disease, plaintiff claimed that his entire herd was made unfit for breeding purposes and that he was required to dispose of it as slaughter cattle. Thereafter this action was brought on the theory stated above with the favorable verdict for plaintiff.
The various assignments of error alleged by the defendants may be categorized in four general areas: (1) the instructions as given were erroneous; (2) the court should have directed a verdict for defendants and the evidence does not support a verdict based on fraud; (3) the tests performed by Dr. Horlein were unreliable and the admission of his accession book into evidence was error; (4) plaintiff failed to allege special damages as required by R.C.P.Colo. 9(g).
I.
The first alleged error concerns the instructions as given the jury. On this point we find the existence of error and must remand to the trial court for a new trial.
In order to recover in an action based on fraud, plaintiff has the burden of proving the existence of all the elements as set forth in Morrison v. Goodspeed, 100 Colo. 470, 68 P.2d 458, 71 P.2d 154, by clear and convincing evidence, which is a higher degree of proof than mere preponderance of the evidence. Wiley v. Byrd, 158 Colo. 479, 408 P.2d 72.
Instruction No. 1 adequately recites the respective theories of the parties, informing the jury that plaintiff seeks recovery on a basis of implied warranty, express warranty and fraud. Instruction No. 2, however, erroneously informs the jury that in order to recover plaintiff must prove his case by preponderance of the evidence, which though correct insofar as the issue of warranties, is clearly in error insofar as fraud is concerned. Although instruction No. 3 informs the jury that clear and convincing evidence is needed in the allegation of fraud, we note that by instruction No. 9 the jury was free to assess damages for fraud against defendants if they believed by preponderance of the evidence that the defendant misrepresented the cattle as being fit.
In Colorado there is a distinction between a preponderance of the evidence and clear and convincing evidence. The jury was not sufficiently advised as to this distinction. Where the jury, as here, has been given instructions which are incompatible with each other, one being clearly incorrect, the reviewing court will not assume that the incorrect instruction regarding burden of proof was disregarded and the correct one followed. Noel v. Jones, 142 Colo. 318, 350 P.2d 815. A correct instruction cannot correct one clearly in error. Since we must assume the jury read the instructions together, we will further assume that they felt free to follow either of the theories propounded on the burden of proof. Neilson v. Bowles, 124 Colo. 274, 236 P.2d 286. As stated in Pettingell v. Moede, 129 Colo. 484, 271 P.2d 1038:
Instruction No. 8 states:
For the first part of the instruction, plaintiff relies on Alley v. Tovey, 78 Colo. 532, 242 P. 999, as authority for the above instruction. This case was decided in 1915 and has never been cited in any case since that time.
The jury was not instructed as to the definition of the word 'inference.' The term is now defined in Colorado Jury Instructions 3:4 and should have been defined in the general instruction on the weight to be given evidence as now set forth in Colorado Jury Instructions 3:7. To commingle the instruction with the burden of proof instruction on fraud was clearly error, and as given might lead one to believe that fraud reasonably may be inferred by a preponderance of the evidence.
The jury was instructed as to the definition of the term 'preponderance of the evidence' but at no place in the instructions is the term 'clear and convincing evidence' defined. Colorado Jury Instruction 3:2 defines the term as follows:
This has become a mandatory jury instruction as adopted by the Colorado Supreme Court when it approved the Colorado Jury Instruction on September 28, 1967. This case was tried in October of 1967, but the instructions were not available for general use until June 1969. However, it was clearly error to omit advising the jury as to the definition of 'clear and convincing evidence.' Without this definition they had no guide to govern them in their deliberations.
These errors in the instructions are determinative in this appeal. However, since it is necessary to retry this case, we will cover other grounds of alleged error so that the court may be fully advised on the retrial.
II.
Defendants maintain that the court should have directed a verdict for defendants and that the evidence does not support a verdict based upon fraud. Since the case is being reversed and sent back for a new trial, we will merely state that we have read the transcript and are of the opinion that there was sufficient evidence introduced in the trial so that it was proper to submit the issues to the jury for its determination.
III.
The next error of dispute involves admission of the testimony of Dr. Horlein and the admission of his accession book into evidence.
Defendants' contention conters upon the test results of the six samples known as entry V-83, and the results of tests run on the eighth-month fetus found in March of 1964. This evidence is particularly damaging to defendants since it tends to show that the disease of vibrio fetus venerealis was present in Cox's herd prior to the sale to plaintiff. Defendants do not dispute the expertise of Dr. Horlein, merely the reliability of the test used by him in reaching his conclusions as to the presence or absence of this disease.
It was contended at trial that Dr. Horlein's tests were scientifically unreliable to
the extent that the results were improperly placed before the jury. The prove this contention the defendants produced their own expert, Dr. Berry, who testified that a minimum of eleven days was necessary in order to reach a reliable conclusion as to whether or not a particular sample contained vibrio fetus venerealis. According to Dr. Horlein, however, a valid conclusion could be reached after only five days, provided the sample tested was sufficiently pure.
To obtain his results, Dr. Horlein testified that two tests were run on each submitted sample. First, was a catalase test, which, if positive, eliminated the possibility of vibrio fetus bulbulous being present. Next, a hydrogen sulfide test was administered, which, if positive, meant that vibrio fetus venerealis was present in the sample. Thus, according to Dr. Horlein, in order to prove the presence of vibrio fetus venerealis it was necessary that both tests register positive.
We therefore have a conflict between the defendants' expert, Dr. Berry, and plaintiff's expert, Dr. Horlein, as to whether or not adequate and reliable results could be reached in less than eleven days. This conflict or disagreement between the two experts is a question of evidence. The testimony of each expert as to the amount of time necessary is relevant to the weight to be given this evidence by the jury, but does not pertain to the admissibility of the test results. As pointed out in Kallnbach v. People, 125 Colo. 144, 242 P.2d 222, wherein the results of the Nicloux blood analysis test used by the State was attacked by the defendant:
Even if sufficiently accurate to be presented to the jury for its consideration, however, the defendants contend that entry V-83 attributing the disease to the Cox herd was inadmissible by reason of its hearsay nature.
Dr. Kraemer, who made the initial entry, testified at trial. He admitted under cross-examination that he had no independent recollection of the facts stated in the entry, but testified that he did follow the prescribed course of procedure when he made the entry. Defendants fully cross-examined all witnesses who had anything to do with the entry V-83, on the means of testing, the methods of recording, and the accuracy of the results of the tests.
The hearsay rule is not a bar to the admission of this entry into evidence. Where the original entrant is present at trial, he should be permitted to testify from regularly kept records, even if he lacks a present memory of the transaction recorded, under the theory of 'past recollection recorded.' C. McCormick, The Law of Evidence s 280.
IV.
As a fourth assignment of error, defendants contend that plaintiff failed to allege special damages as required by R.C.P.Colo. 9(g) and therefore should be denied recovery of such damages. Although R.C.P.Colo. 9(g) requires special damages to be specifically pleaded in order to recover, there is no requirement that the dollar amount be specifically pleaded. United Insurance Co. of America v. B. W. Rudy, Inc., D.C., 42 F.R.D. 398 (interpreting Federal Rules of Civil Procedure 9(g)). See also Denver Tramway Corp. v. Kuttner, 95 Colo. 312, 35 P.2d 852, wherein a complaint stating specific damages without specifying the amount was held valid.
The underlying purpose behind the rule requiring specific pleading of special damages is to put the defendants on notice as to any unusual damages being sought by
virtue of their alleged wrongdoing which could not otherwise reasonably be inferred as resulting from the wrongful act. Hunter v. Quaintance, 69 Colo. 28, 168 P. 918.
Under paragraph 5 of the complaint, plaintiff seeks recovery for damages resulting:
Since the special damages awarded plaintiff corresponded with the above losses specifically pleaded, R.C.P.Colo. 9(g) was not violated by this complaint.
Judgment reversed and remanded with direction that a new trial be held on all issues.
SILVERSTEIN C.J., ENOCH, J., concur.