United States District Court, W.D. New York
KODAK GRAPHIC COMMUNICATIONS CANADA COMPANY, AS SUCCESSOR TO CREO, INC., Plaintiff,
E.I. DU PONT DE NEMOURS AND COMPANY, Defendant
For Kodak Graphic Communications Canada Company, as Successor to Creo Inc., Plaintiff, Counter Defendant: Eric J. Ward, Heidi S. Martinez, LEAD ATTORNEYS, Jeffrey J. Harradine, Ward Greenberg Heller & Reidy LLP, Rochester, NY.
For E.I. du Pont de Nemours and Company, Defendant, Counter Claimant: Damond R. Mace, Stephanie E. Niehaus, LEAD ATTORNEYS, PRO HAC VICE, Heather L. Stutz, LEAD ATTORNEY, Felix Maximilliam Czernin, J. Philip Calabrese, PRO HAC VICE, Squire Sanders (U.S.) LLP, Cleveland, OH; Steven Skulnik, LEAD ATTORNEY, Squire Sanders (U.S.) LLP, New York, NY; Michael Davis Hoenig, Warren B. Rosenbaum, Woods Oviatt Gilman LLP, Rochester, NY.
DECISION AND ORDER
HON. FRANK P. GERACI, JR., United States District Judge.
After a 12-day trial, the jury in this case awarded Plaintiff Kodak Graphic Communications Canada Company (" KGCC") $12, 504, 253.00 in damages, which was comprised of $11.25 million in damages based upon Defendant E. I. du Pont de Nemours and Company's (" DuPont") termination of the parties' contract, as well as $1, 254, 253.00 in damages for payments owed to KGCC under the parties' 2008 research and development agreement. After the verdict, the parties agreed upon the appropriate interest calculation to be added to the jury's verdict, and judgment was entered against DuPont in the total amount of $15, 631, 464.32. Dkt. ## 232, 233. Presently before the Court are DuPont's motions for (1) judgment as a matter of law under Fed.R.Civ.P. 50(b) or (2) either a new trial or remittitur under Fed.R.Civ.P. 59. Dkt. # 238. Also before the Court is KGCC's Bill of Costs (Dkt. # 236), to which DuPont objects. Dkt. # 241. Finding no basis to disturb the jury's verdict, DuPont's motions for post-trial relief (Dkt. # 238) are denied. Also finding no reason to deviate from the default rule that costs should be allowed to the prevailing party, DuPont's objections (Dkt. # 241), are overruled.
The proponent of a motion for judgment as a matter of law (" JMOL") under Fed.R.Civ.P. 50(b) faces a " high bar, " Lavin-McEleney v. Marist Coll., 239 F.3d 476, 479 (2d Cir. 2001), and the Second Circuit has cautioned that motions for judgment as a matter of law " should be granted cautiously and sparingly." Meloff v. N.Y. Life Ins. Co., 240 F.3d 138, 145 (2d Cir. 2001). In ruling on such a motion, " the court must draw all reasonable inferences in favor of the nonmoving party, and it may not make credibility determinations or weigh the evidence . . . credibility determinations, the weighing of the evidence, and the drawing of legitimate inferences from the facts are jury functions, not those of a judge." Reeves v. Sanderson Plumbing Prods., Inc., 530 U.S. 133, 150-51, 120 S.Ct. 2097, 147 L.Ed.2d 105 (2000) (citations omitted). In order to grant the application, this Court must find that " a reasonable jury would not have a legally sufficient evidentiary basis to find for" the non-movant. Fed.R.Civ.P. 50(a); see Cameron v. City of NY., 598 F.3d 50, 60 (2d Cir. 2010) (The evidence must " so utterly discredit" the non-moving party such " that no reasonable juror could fail to believe the version advanced by the moving party.") (citation omitted).
The rules governing a motion for a new trial under Fed.R.Civ.P. 59 are somewhat less strict, in that the Court may weigh the evidence independently, and need not view it in the light most favorable to the prevailing party. See Manley v. AmBase Corp., 337 F.3d 237, 244-45 (2d Cir. 2003). Unlike a motion for judgment as a matter of law, a motion for a new trial " may be granted even if there is substantial evidence to support the jury's verdict." United States v. Landau, 155 F.3d 93, 104 (2d Cir. 1998). Even under this less restrictive standard, the Second Circuit has cautioned that a new trial 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." Caruolo v. John Crane, Inc., 226 F.3d 46, 54 (2d Cir. 2000). In other words, to order a new trial, the Court " must view the jury's verdict as against the weight of the evidence." Manley, 337 F.3d at 245 (quotation and citation omitted).
Where the jury has made an error in the amount of a verdict, the Court may order either remittitur -- the reducing of the amount awarded -- or a new trial. See Gasperini v. Center for Humanities, Inc., 518 U.S. 415, 435, 116 S.Ct. 2211, 135 L.Ed.2d 659 (1996) (" The role of the district court is to determine whether the jury's verdict is within the confines set by state law, and to determine, by reference to federal standards developed under Rule 59, whether a new trial or remittitur should be ordered.") (quoting Browning-Ferris Indus. of Vt., Inc. v. Kelco Disposal, Inc., 492 U.S. 257, 279, 109 S.Ct. 2909, 106 L.Ed.2d 219 (1989)).
With these standards in mind, the Court turns to the individual claims of error advanced by DuPont.
I. 2008 Research and Development Work Claim
DuPont argues that they are entitled to judgment as a matter of law on KGCC's claim for monies owed under the 2008 research and development (" R& D") claim. Alternatively, DuPont argues that the jury's award of $1, 254, 253 for the 2008 R& D claim was against the weight of the evidence, because the charges were not approved by DuPont.
During his testimony, former KGCC executive Eran Elizur told the jury the 2008 R& D costs were billed to DuPont because " in 2007 we signed an MOU whereby they said that they will cover all our R and D spending in 2008. All this was part of our spending in 2008 that was agreed and approved and, therefore, we asked [DuPont] to foot the bill and pay that amount." Tr. at 317, lines 17-21.
Elizur then referenced Trial Exhibit # 667, and identified that document as the bill he submitted on behalf of KGCC to DuPont. That document lists the amount due as $1, 254, 253 -- the exact amount that was later awarded by the jury. Elizur was then asked " Of that $1.2 million that was billed, had DuPont previously agreed to pay any of that?" to which he replied, " Well, that was part of the MOU. They said that they would cover all our R and D spending in 2008. So they have agreed." Tr. at 318, lines 3-6.
DuPont argues that the jury's determination should be disturbed by this Court because DuPont did not agree to pay for these amounts, as they argue was testified to by DuPont executive Linda West. Specifically, DuPont cites West's testimony where she was asked " Did you make it very clear [to KGCC] that you did not want any more overruns?" to which she answered " Absolutely. That we had a fixed contract, we had budgets, and that surprises like this were unacceptable . . ." Tr. at 1234-35, lines 24-2. The balance of that sentence -- which was deleted in the submissions -- continues that " ...especially saying it was June and we were talking about something from 2007, six months earlier. It made no sense." Tr. at 1235, lines 2-4. In other words, it appears that West was discussing the 2007 expenses, as opposed to the 2008 expenses at issue.
Regardless, even if West was referring to the 2008 expenses, I find no basis to disturb the jury's determination. While the evidence regarding the 2008 R& D charges was not overwhelming, it was also not insufficient. While DuPont would have the jury (and now the Court) credit Ms. West's testimony over that of Mr. Elizur's, the verdict makes clear that the jury chose to draw the opposite conclusion. That determination of credibility is certainly within the province of the jury, and this is not a case where the evidence was so lopsided as to make one version of events patently credible or incredible.
I also reject DuPont's argument that the jury's verdict should be reduced by half, because in KGCC's closing argument, KGCC's counsel argued to the jury that " [KGCC] should have to bear some of the expense of the over run that it incurred. I think that's fair. But I also think it's fair that DuPont would pay half of that, which it had agreed to do a number of times as you saw." Tr. at 1418, lines 12-14.
While KGCC's counsel suggested a compromise to the jury, the jury was certainly free to accept or reject that proposal. Here, the jury decided it was not necessary to compromise the amount billed by KGCC to DuPont, as reflected in Trial Exhibit # 667, and awarded KGCC the full amount billed. On this record, and regarding both the award of damages and the amount awarded, I cannot conclude that " the jury has reached a seriously erroneous result or that the verdict is a miscarriage of justice." Caruolo, 226 F.3d at 54.
II. Termination of the Contract
A. Motion for JMOL Regarding Materiality
DuPont argues that they are entitled to judgment as a matter of law regarding materiality, " because the evidence at trial was undisputed that the timely delivery requirement in Revision 9 was a material term of the parties' agreements." Dkt. #238-1, at 8.
The gist of this argument revolves around the inclusion of a " time is of the essence" provision in the parties' agreement. DuPont argues that provision is essentially determinative, because " where time is of the essence, Illinois courts, tending to be strict constructionists, will enforce the clause and hold that a delay of one day is a material breach." Elda Arnhold and Byzantio, L.L.C. v. Ocean A. Woodland Corp., 284 F.3d 693, 704 (7th Cir. 2002) (emphasis added). Id.
This argument, which was previously made and rejected before Judge Telesca during the summary judgment stage of the case, see Dkt. # 117, at 12-15, fares no better at the close of trial. DuPont's quotation from Arnhold is an incomplete reading of the case. Just a paragraph before the language quoted by DuPont appears (which, although not noted as such in their papers, is actually the 7th Circuit quoting 12A Illinois Law & Practice § § 303-05 (1983 & Supp. 2001)), the Seventh Circuit explained that a " time of the essence" provision is not automatically a material term of a contract, but rather held that " even when the parties agree to make timely performance an essential element of the contract, the factfinder must also consider whether the breach was material as to justify the other party's subsequent refusal to perform, based upon the totality of the circumstances." Arnhold, 284 F.3d at 704.
As one district court later explained:
No court's inquiry into the issue now up for consideration can end with the mere recitation of contractual language stating that time is of the essence of the contract. Even where the contract contains such an express clause, it is still necessary to " inquire into the situation of the parties and the underlying circumstances to determine whether a delay in performance resulted in a 'material breach'" ( Anest v. Bailey, 198 Ill.App.3d 740, 746, 556 N.E.2d 280, 283, 144 Ill.Dec. 813 (2d Dist. 1990) and cases cited there). Thus, before a court acts to enforce such a provision in its strictest sense, it must make a determination of the " intent of the parties with respect to the disputed provision and the equitable factors and circumstances surrounding the breach of the provision, " both as taught by Elda Arnhold & Byzantio .
Beverage Realty, Inc. v. Chatham Club, LLC, No. 01 C 1396, 2003 WL 444572, at *7 (N.D.Ill. Feb. 21, 2003)
In their papers, both parties point to evidence that supports their respective views of the evidence. In my view, there were competing inferences that could have been drawn from the facts presented by the parties regarding the materiality of the delivery dates in the contract, and those factual disputes are exactly what the jury was called upon to resolve. Judgment as a matter of law is appropriate only where " a reasonable jury would not have a legally sufficient evidentiary basis to find for the party on that issue." Fed.R.Civ.P. 50(a)(1). Further, the Court " may not make credibility determinations or weigh the evidence." Reeves, 530 U.S. at 150-51.
Unlike such a case where the evidence is one-sided, in DuPont's words, " this was a close and complex case." Dkt. #241-1. I fully agree with this statement, which further emphasizes the inappropriateness of granting judgment as a matter of law in this case. Sufficient evidence existed to support the jury's finding that the delivery dates were ...