Plaintiff was a refrigeration contractor that installed refrigeration systems. Defendants contracted with Plaintiff to supply a refrigeration control system. However, the refrigeration control system delivered to Plaintiff didn’t work properly, and Plaintiff brought suit for breach of contract. Defendants recruited a refrigeration expert witness to testify on their behalf.
At trial, Plaintiff relied on circumstantial evidence that Defendants supplied a defective RCS. Defendants presented expert testimony, stating that external factors could have caused the communication failures and that in his opinion, the RCS was not necessarily defective. According to Defendant’s refrigeration expert, other potential explanations for the communication losses included installation errors, problems with the conditions at the facility, flawed wiring during installation, a faulty humidistat, disruptive radio waves, power surges and voltage drops, design flaws in the refrigeration system, or continual additions and modifications. Defendant’s refrigeration expert stated that “the cause or causes of the communication failures cannot be determined within a reasonable degree of certainty.” Defendant’s refrigeration expert also testified that these other factors could have damaged the RCS, and that this damage could have continued to cause communication failures, even if the damage-causing condition was later corrected.
The district court found in favor of Plaintiff. On appeal, Defendants contend that the evidence was insufficient to establish breach. One of Defendants’ arguments was based on its expert’s testimony.
Defendants argued that they presented evidence of an equally plausible cause of the communication failures in the form of their expert’s testimony that external factors caused the communication failures. As a result, there wasn’t sufficient evidence for the district court to find breach. According to Defendants, the district court accepted its expert’s testimony and found that it was equally plausible that the communication failures were caused by external factors and not by a defect in the RCS.
Circuit Judge Joel Martin Flaum of the U.S. Court of Appeals for the Seventh Circuit wrote in his opinion that this argument failed because it mischaracterized the district court’s opinion. The district court neither accepted Defendant’s expert’s testimony nor stated that it found his theory to be equally plausible.
Defendants insisted that the district court accepted Defendant’s expert’s testimony when the court found unavailing Plaintiff’s efforts to discredit Defendant’s refrigeration expert by pointing out that he was on pain medication and recovering from surgery while preparing his report. However, the fact that the district court was unpersuaded by Plaintiff’s attacks on Defendant’s expert’s “state of mind and instinctual rigor” didn’t mean that the court found Defendant’s expert’s theory as persuasive as Plaintiff’s theory of breach. Judge Flaum reasoned that although the court didn’t find Defendant’s expert’s health issues, standing alone, to be sufficient to discredit his testimony, it was still within the role of the district court to consider Defendant’s expert’s overall credibility and weigh his testimony against other theories posited at trial. Defendants didn’t show that the district court’s credibility determinations were clearly erroneous.
Nonetheless, there was no evidence supporting Defendant’s expert’s speculation that the communication failures were caused by external factors. Plus, Defendant’s refrigeration expert didn’t testify that the communication failures were actually caused by one or more of the external factors; he merely offered them as theoretical alternatives to breach. Thus, the Circuit Court wasn’t convinced by Defendants’ claim that the parties’ alternative explanations were on point.
In contrast to Defendants’ lack of evidence supporting their expert’s speculation, there was sufficient circumstantial evidence for a reasonable factfinder to conclude that the communication failures were caused by a defect in the RCS and not by external factors.
The Seventh Circuit affirmed the district court’s conclusion that Defendants breached the contract and its award of damages.
Dual-Temp of Illinois, Inc. v. Hench Control, 2016 U.S. App. LEXIS 8434 (May 6, 2016)