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T2 Solutions, Inc. v. Allen Datagraph Systems

March 31, 2009

T2 SOLUTIONS, INC., PLAINTIFF,
v.
ALLEN DATAGRAPH SYSTEMS, INC., DEFENDANT.



The opinion of the court was delivered by: Honorable Richard J. Arcara Chief Judge United States District Court

DECISION AND ORDER

INTRODUCTION

Plaintiff, T2 Solutions, Inc. ("T2"), brought this action against defendant Allen Datagraph Systems, Inc., ("ADS") alleging violations of three separate agreements: (1) a supply agreement between the parties signed in 2002 ("Supply Agreement") (first claim); (2) a Digital Label Finishing System Agreement signed in 2001 ("DFS Agreement") (second claim); and (3) a confidentiality agreement signed in 2001 (third claim). Defendant ADS brought a counterclaim against plaintiff for breach of the Supply Agreement. Following a jury trial on the merits, the jury returned a verdict in favor of the plaintiff as to its claim for breach of the Supply Agreement and awarded the plaintiff $130,000 in compensatory damages under that claim. The jury returned a verdict against the plaintiff for its second and third claims, and also returned a verdict against the defendant for its counterclaim.

Currently before the Court are: (1) post-trial motions by the defendant for judgment as a matter of law under Fed. R. Civ. P. 50, and for a new trial under Fed. R. Civ. P. 59; and (2) post-trial motions by the plaintiff for declaratory and injunctive relief and an award of prejudgment interest. For the reasons stated, defendant's motions for judgment as a matter of law and for a new trial are denied. Plaintiff's motion for declaratory and injunctive relief is also denied, but its request for an award of prejudgment interest is granted.

DISCUSSION

A. Defendant's Motions

Rule 50(b) of the Federal Rules of Civil Procedure permits the Court to grant judgment as a matter of law where the Court finds that a reasonable jury would not have a legally sufficient evidentiary basis to find for a party on a claim. Judgment as a matter of law should not be granted unless "(1) there is such a complete absence of evidence supporting the verdict that the jury's findings could only have been the result of sheer surmise [or] conjecture, or (2) there is such an overwhelming amount of evidence in favor of the movant that reasonable and fair minded [persons] could not arrive at a verdict against [it]." Taylor v. Brentwood Union Free Sch. Dist., 143 F.3d 679, 685 (2d Cir. 1998) (internal quotations omitted).

Rule 59(a) of the Federal Rules of Civil Procedure permits the Court to grant a new trial upon motion by a party. The Second Circuit has explained that the standard for granting a Rule 59(a) motion is less stringent than the standard for a Rule 50 motion "in two significant respects: (1) a new trial under Rule 59(a) may be granted even if there is substantial evidence supporting the jury's verdict, and (2) a trial judge is free to weigh the evidence himself, and need not view it in the light most favorable to the verdict winner." Manley v. AmBase Corp., 337 F.3d 237, 244 -245 (2d Cir. 2003) (internal quotations omitted). Nevertheless, a motion for a new trial under Rule 59(a) ordinarily "should not be granted unless the trial court is convinced that the jury has reached a seriously erroneous result or that the verdict is a miscarriage of justice." See Medforms, Inc. v. Healthcare Mgmt. Solutions, Inc., 290 F.3d 98, 106 (2d Cir. 2002) (internal quotations marks omitted).

The defendant argues that this Court should grant its motion for judgment as a matter of law or, alternatively, a new trial, because the jury's damage award was contrary to the evidence. First, the defendant argues that the jury's award of $130,000 cannot stand because it is less than the $178,875.00 in damages requested by the plaintiff. According to the defendant, there is no logical explanation as to why the jury awarded that amount and therefore, the award is improper.

The Court rejects the defendant's argument that simply because the jury awarded an amount that was less than the amount requested by the plaintiff, the verdict cannot stand. The Court instructed the jury that if the plaintiff established any of its claims, the jury should award the plaintiff an amount of damages that would leave the plaintiff in as good of a position as it would have been had the contract been performed by the defendant. At issue under the Supply Agreement was the amount of royalties owed to the plaintiff as a result of the defendant's breach. The Supply Agreement provided that the defendant could sell certain equipment known as Digital Label Finishing Systems ("DFS units") to plaintiff's competitors, provided that it paid plaintiff a specified royalty for each unit sold and provided that the plaintiff first purchased three DFS units for itself from the defendant.*fn1 The plaintiff argued that it was entitled to $178,875.00 in damages representing the total amount of royalties due under the Supply Agreement for 127 DFS units that were sold by the defendant. The plaintiff presented evidence to support its claim of $178,875.00 in damages. The defendant argued that the plaintiff was not entitled to any damages, or alternatively, that the amount of damages was less than that claimed by the plaintiff. The defendant also argued that the Supply Agreement had ended at some point earlier than the date that the plaintiff was using to calculate its damages. The parties stipulated to joint exhibits indicating the number of DFS units sold by the defendant from the date of the Supply Agreement through May 2008, and the date that each unit was sold. Assuming the jury agreed that the Supply Agreement ended at some point before May 2008, it was entitled to reduce the award of royalties being requested by the plaintiff based upon the date that it found the contract to have been terminated.*fn2 Contrary to the defendant's suggestion, "[a]bsolute certainty is not required" for a jury award, Cruz v. Local Union No. 3 of Int'l. Bhd. of Elec. Workers, 34 F.3d 1148, 1156-57 (2d Cir. 1994), and the verdict will stand where, as here, "a reasonable juror could have utilized the information provided to make a reasonable jury award." Id. See also Whitney v. Citibank, N.A., 782 F.2d 1106, 1118 (2d Cir. 1986) ( "Since these inferences are within the range of permissibility and the award . . . is a fair approximation of [the plaintiff's] loss, the award must stand.").

Alternatively, the defendant argues that the jury's award should be reduced by $15,000 representing an amount that the defendant claims it is still owed by the plaintiff. The defendant made this same argument to the jury as part of its counterclaim,*fn3 but that argument was expressly rejected when the jury found against the defendant on that claim. The Court finds no reason to disturb the jury's rejection of that argument.

Accordingly, the Court denies the defendant's Rule 50 and Rule 59 motions in their entirety.

B. Plaintiff's Motion

1. Prejudgment ...


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