Opinion:Merrell Logistics v. Gregory Gas Services, 2021 OK CIV APP 47
Subject matter:Remedies
Date Decided:September 17 2021; Mande Issued: December 1, 2021
Trial Court:District Court of Tulsa County; Judge Morrissey
Route to this Court:Appeal from a jury verdict.
Facts:Gregory Gas Services, a seller of gas-processing equipment, contracted with Merrell Logistics, a transportation broker, to ship certain equipment to Gregory’s customer. Merrell, in turn, contracted with a third-party shipping company to actually transport the equipment. The first shipment arrived missing a key component of the order. A second shipment to deliver the missing component was delayed when the transportation company’s driver deviated from the route provided by Gregory and became stuck and special equipment was required to extract the delivery truck. Merrell billed Gregory $23,397.50 for the shipments and Gregory refused to pay. Merrell sued Gregory to collect the bill and Gregory counterclaimed for breach of contract, negligence, negligent entrustment and damage to business reputation. 
Before trial, the trial court granted summary judgment to Merrell for a portion of its bill, awarding $17,137.50. The case proceeded to jury trial on the remainder of Merrell’s bill and on Gregory’s counterclaims. On the morning of trial, Merrell filed a motion to dismiss Gregory’s counterclaims, arguing for the first time that the claims were preempted by federal law and that the trial court lacked subject matter jurisdiction. The trial court took the motion under advisement and the jury trial proceeded. 
The jury awarded Merrell $3000 out of the outstanding $6,250 billed amount (the trial court had already granted summary judgment to Merrell on the rest of the bill). The jury awarded Gregory $34,905.50 in damages for breach of contract and $75,000 in damages for damage to business reputation. The jury found in favor of Merrell on Gregory’s claims for negligence and negligent entrustment. After the verdicts were in but before entry of judgment, Merrell renewed its motion to dismiss and the trial court denied the motions. Merrell alone appealed. 
Standard of Review:In an action at law, a jury verdict is conclusive as to all disputed facts and all conflicting statements, and where there is any competent evidence reasonably tending to support the verdict of the jury, the appellate court will not disturb the jury’s verdict or the trial court’s judgment based thereon. Where such competent evidence exists, and no prejudicial errors are shown in the trial court’s instructions to the jury or rulings on legal questions presented during trial, the verdict will not be disturbed on appeal. 
This appeal also raises a pure question of law–namely, whether the trial court should have dismissed the action for want of subject matter jurisdiction–which is subject to de novo review.  
Analysis:A claim of preemption is an affirmative defense, and as such, the claim may be waived. State trial courts are courts of general jurisdiction, which have the authority to hear both state and federal claims except where Congress affirmatively assigns exclusive jurisdiction over a federal claim to federal courts. Merrell does not actually argue exclusive federal jurisdiction, rather that Gregory’s claims, if properly pled, should have been based on federal (not state) law. However, having waited until the morning of trial–and more than ten months after the deadline for dispositive motions–Merrill waived any argument it may have had based on federal preemption. 
Under Oklahoma law, damages based on injury to business reputation are not available for a breach of contract absent a showing that the parties specifically contemplated such damages in their agreement. That being the law, the trial court’s instructions to the jury on the question of injury to business reputation were fundamentally flawed because the instructions simultaneously stated a cause of action not available in Oklahoma and failed to state the elements required to recover special damages for a delay in freight delivery pursuant to Oklahoma common law. 
Outcome:Affirmed in part and reversed in part. $75,000 awarded to Gregory for damage to its reputational risk reversed. In all other aspects, the trial court’s judgment affirmed. 
Vote:Blackwell, J. (author), Wiseman, P.J., Rapp, J. (sitting by designation) concur. 
Other: No cert. petition filed; Appellant’s Motion for Attorney Fees on Appeal denied (the trial court awarded Appellant fees under 12 O.S. §936). Appellee’s Motion for Attorney Fees on Appeal also denied  (the trial court also awarded Appellee fees under 12 O.S. §936).