The opinion of the court was delivered by: ROBERT W. SWEET
This action between Plaintiff Paper Corporation of the United States ("Paper Corporation") and Defendant Schoeller Technical Papers, Inc. ("Schoeller") was tried before a jury from July 8 to 16, 1992. On July 16 the jury returned a verdict for Paper Corporation, awarding it $ 1,114,002 in damages and interest.
Schoeller has now moved pursuant to Rule 50, Fed. R. Civ. P. for a judgment as a matter of law or, in the alternative, for a new trial pursuant to Rule 59, Fed. R. Civ. P. For the reasons set forth below, this motion is denied.
This motion comes at the end of a series of proceedings that culminated in the aforementioned seven-day jury trial. In four previous opinions, familiarity with which is assumed, the Court has described the parties and their respective business and discussed their relationship with each other in the paper business, which extends back to 1964, and the history of the relevant market conditions precipitating this action. See Paper Corp. of United States v. Schoeller Technical Papers, Inc., 773 F. Supp. 632, 633-35 (S.D.N.Y. 1991) ("Schoeller IV"); Paper Corp. of United States v. Schoeller Technical Papers, Inc., 759 F. Supp. 1039, 1041-43 (S.D.N.Y. 1991) ("Schoeller III"); Paper Corp. of United States v. Schoeller Technical Papers, Inc., 742 F. Supp. 808, 809 (S.D.N.Y. 1990) ("Schoeller II"); Paper Corp. of United States v. Schoeller Technical Papers, Inc., 724 F. Supp. 110, 111-14 (S.D.N.Y. 1989) ("Schoeller I").
On July 31, 1992, Schoeller filed the present motion. Oral argument was heard and the Court considered the motion fully submitted on August 26, 1992.
I. Schoeller is Not Entitled to a Judgment as a Matter of Law
The standard pursuant to which Schoeller's motion for a judgment as matter of law must be decided is set forth in Rule 50(a)(1), Fed. R. Civ. P.:
If during a trial by jury a party has been fully heard with respect to an issue and there is no legally sufficient evidentiary basis for a reasonable jury to have found for that party with respect to that issue, the court may grant a motion for judgment as a matter of law against that party on any claim . . . that cannot under the controlling law be maintained without a favorable finding on that issue.
Rule 50(b) provides that when a Rule 50(a)(1) motion is denied, "the court is deemed to have submitted the action to the jury subject to a later determination of the legal questions raised by the motion."
A judgment as a matter of law should be entered on behalf of a party when
Song v. Ives Lab., Inc., 957 F.2d 1041, 1046 (2d Cir. 1992) (citations and internal quotations omitted).
Accord County of Suffolk v. Long Island Lighting Co., 907 F.2d 1295, 1311 (2d Cir. 1990); Baskin v. Hawley, 807 F.2d 1120, 1129 (2d Cir. 1986).
In deciding a Rule 50 motion, the evidence must be considered in the light most favorable to the nonmovants. See Sirota v. Solitron Devices, Inc. 673 F.2d 566, 573 (2d Cir.), cert. denied, 459 U.S. 838, 74 L. Ed. 2d 80, 103 S. Ct. 86 (1982); Quintel Corp., N.V. v. Citibank, N.A., 606 F. Supp. 898, 905 (S.D.N.Y. 1985). Furthermore,
courts are not free to reweigh the evidence and set aside the jury verdict merely because the jury could have drawn different inferences or conclusions or because judges feel that other results are more reasonable.
Tennant v. Peoria & Pekin Union Ry. Co., 321 U.S. 29, 35, 88 L. Ed. 520, 64 S. Ct. 409 (1944).
Therefore, Schoeller is entitled to a judgment as a matter of law only if it establishes that the unweighed evidence and testimony presented at the trial supports a single conclusion contrary to the verdict reached by the jury. In other words, Schoeller must show that no reasonable jury could have found in favor of Paper Corporation. But the jury's verdict must be affirmed if there is sufficient evidence to support the jury's reasonable findings of fact, even if a different conclusion is also possible. See Quintel, 606 F. Supp. at 907; Fund of Funds, Ltd. v. Arthur Andersen & Co., 545 F. Supp. 1314, 1326 (S.D.N.Y. 1982).
A review of the record and Schoeller's proofs reveals that a reasonable jury could have reached a conclusion other than the one Schoeller now presses upon the Court as the only conclusion possible as a matter of law. The record supports the conclusion that a reasonable and fair-minded jury could have returned a verdict in favor of Paper Corporation as this jury did.
A. Proof of a Breach of Contract Claim
The Court instructed the jury that, under New York law, to establish a claim for breach of contract, a plaintiff must prove (1) that an agreement existed between it and the defendant, (2) what the respective obligations of the parties were, (3) that the plaintiff performed its obligations under the agreement, (4) that the defendant breached the agreement by failing to perform its obligations, and (5) that the plaintiff suffered damages as a result of the breach. See Tr. 842; 2 New York Pattern Jury Instructions -- Civil 4:1 Comment at 868. The Court then gave further instructions regarding each of these elements, and the jury's findings on each of these elements was not inconsistent with the trial record.
B. The Existence of an Enforceable Agreement
The first element that a plaintiff must establish to succeed on a breach of contract claim is that an enforceable contract existed between the parties. In order to be enforceable, an agreement must satisfy various well-known conditions required by New York contract law. The Court instructed the jury in some detail regarding each condition, and again, the findings of the jury on each condition and on the enforceability of the agreement were not inconsistent with the evidence presented.
The Court instructed the jury on the law of New York regarding the formation of enforceable contracts as follows:
to establish the agreement Paper Corporation must prove that Paper Corporation and Schoeller mutually agreed to the terms and conditions of the agreement. This is referred to as the meeting of the minds. There can be no agreement if only one party intends to be bound.
Since intent, including intent to be bound, is not always susceptible to direct proof because it relates to a person's state of mind, the law presumes that a person intends the natural and probable results of one's acts. The meeting of the minds or the mutual manifestation of intent may be made wholly or partly by written or spoken words or by other acts or conduct, and an internal or unexpressed intention not to be bound is not effective.
In making this determination as to whether there was an agreement between the parties, you must use an objective approach. Each party's intent to enter into the alleged agreement must be determined by considering the relationship of the parties, including what they said and what they did, in all the surrounding circumstances. Moreover, the parties must have reached an agreement as to all of its essential terms. There must be an offer by one side which is accepted and agreed to by the other side. If they failed to agree on a single essential term, then you must find that the parties did not enter into an agreement.
A term is essential to an agreement if it seriously affects the rights and obligations of the parties. Such terms include price, quantity, duration, and consideration.
Tr. 842-43. See Schurr v. Austin Galleries of Illinois, Inc., 719 F.2d 571, 576 (2d Cir. 1983); Gennaro v. Rosenfield, 600 F. Supp. 485, 489-90 (S.D.N.Y. 1984); John's Insulation, Inc. v. Siska Constr. Co., 671 F. Supp. 289, 293 (S.D.N.Y. 1987); Brown Bros. Electrical Contractors, Inc. v. Beam Constr. Corp., 41 N.Y.2d 397, 393 N.Y.S.2d 350, 352, 361 N.E.2d 999 (1977).
2. Terms of the Agreement
With regard to the terms of the agreement, the Court charged the jury as follows:
Paper Corporation contends that it and Schoeller are parties to an agreement pursuant to which Schoeller was to sell, Hallmark was to purchase exclusively through Paper Corporation, specified quantities of greeting card paper in each of the years 1988 through 2004, at prices determinable under a formula based in part upon the price Schoeller had to pay for pulp, . . . and in part on a 30 percent profit margin for Schoeller. Schoeller denies that it made such an agreement.
If Paper Corporation has established that such an agreement existed, then, if Schoeller failed to perform its obligations under that agreement, you must return a verdict for Paper Corporation.
Despite the charge that the jury could find an agreement between Paper Corporation and Schoeller spanning the years from 1988 through 2004, the jury awarded Paper Corporation damages only through the end of 1992. This verdict suggests that the jury found either that the parties reached an agreement as to specific quantities only through 1992 or that the parties did, in fact, reach an agreement through 2004. A reasonable jury could have reached the latter conclusion and returned the verdict of this jury by following the charge and holding that the writings at issue did not sufficiently confirm commitments for specific quantities beyond 1992, and that the agreement was therefore terminable at will by Schoeller after, but not before, 1992.
In fact, when the Court first addressed this issue, in Schoeller I, in the course of deciding Schoeller's Rule 12(b)(6) motion to dismiss for failure to state a claim, the Court acknowledged the possibility that a reasonable jury could find an enforceable agreement between the parties. At that point, the record consisted only of the pleadings and various documents Paper Corporation had appended to its complaint, which were alleged to ...