NOT PRECEDENTIAL

UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

_____________

No. 16-3079

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ROBERTS TECHNOLOGY GROUP, INC.,

 Appellant

v.

CURWOOD, INC. 

_______________

On Appeal from the United States District Court

for the Eastern District of Pennsylvania

(D.C. No. 2-14-cv-05677)

District Judge: Hon. Mark A. Kearney

_______________

Submitted Under Third Circuit LAR 34.1(a)

June 15, 2017

Before: JORDAN, KRAUSE, and GREENBERG, Circuit Judges.

(Opinion Filed: June 16, 2017)

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OPINION*

_______________

 

* This disposition is not an opinion of the full court and, pursuant to I.O.P. 5.7, 

does not constitute binding precedent.
2

JORDAN, Circuit Judge.

I. OVERVIEW

A jury awarded Roberts Technology Group (“RTG”) $3 million in a breach-ofcontract suit against Curwood, Inc. In response to the verdict, Curwood filed a motion 

for judgment as a matter of law. It argued that the verdict should be set aside because 

RTG had failed to present sufficient evidence to establish the net profits attributable to 

the alleged breach. The District Court granted the motion and ordered a new trial solely 

on the issue of damages. At the conclusion of that second trial, the jury awarded 

$971,429 to RTG. That lower sum prompted this appeal, in which RTG contends that it 

had sufficiently established lost net profits in the first trial. We agree and will vacate the 

District Court’s order granting a new trial and will remand for the original verdict to be 

reinstated.

II. BACKGROUND1

Since 1995, RTG has specialized in designing, manufacturing, and selling plastic 

films for use in covering food trays, as well as machines that can attach the films to the 

trays. In 2011, RTG sought to expand its operations by selling a unified film-plus-tray 

product in order to provide customers with “a complete solution.” (App. 302.) In pursuit 

of that goal, RTG entered into an agreement with Curwood to distribute Curwood’s food 

 

1 Since we are reviewing a grant of judgment against the party that won at trial, we 

examine the record in the light “most favorable to [RTG,] giving [it] the benefit of all 

reasonable inferences, even though contrary inferences may reasonably be drawn.” See 

In re Lemington Home for the Aged, 777 F.3d 620, 626 (3d Cir. 2015) (quoting Dudley v. 

S. Jersey Metal, Inc., 555 F.2d 96, 101 (3d Cir. 1977)). 
3

trays to RTG’s customers. As part of the deal, Curwood insisted that RTG provide it 

with a “Distributor Lead Form” for each potential customer, including the customer’s 

name, location, and estimated sales volume. RTG was reluctant to share that information 

because it had invested significant time, effort, and money to identify potential customers 

and to form relationships with them. Ultimately, RTG agreed to share its Lead Forms,

based on Curwood’s assurance that RTG would be the exclusive distributor of Curwood’s 

trays to any client approved from a Lead Form. Once a customer was approved, 

Curwood added the customer to a list of “protected” companies and assured RTG that 

“[a]ll contact to th[e] customer [would] be through RTG.” (App. 63.) Curwood ended up 

approving over 60 Lead Forms. 

Curwood did not honor that agreement. Despite its assurance that RTG would be 

the exclusive distributor of Curwood’s products to each of the protected clients, Curwood 

agreed to sell its trays directly (i.e. without RTG) to Aramark, one of the protected 

companies. Similarly, Curwood entered into a $4 million, multi-year agreement with 

Oliver Packaging & Equipment Company, a competitor of RTG’s, under which Oliver 

would distribute Curwood’s food trays to additional clients on the protected list. 

RTG responded by filing suit against Curwood in the United States District Court 

for the Eastern District of Pennsylvania. RTG asserted claims for breach of contract, 

intentional interference with contractual relations, intentional interference with 

prospective contractual relations, fraudulent misrepresentation, breach of the covenant of 

good faith and fair dealing, unjust enrichment, and promissory estoppel. Curwood 
4

brought counterclaims for breach of contract, promissory estoppel, and unjust 

enrichment. 

At trial, RTG’s damages expert, John Maloney, estimated that RTG had lost 

approximately $3.4 million because of Curwood’s breach. Maloney is a Certified Public 

Accountant with over 30 years of experience. He is also a Certified Valuation Analyst, is 

accredited in business appraisal review, and is certified in financial forensics. As part of 

his testimony, Maloney explained that he arrived at his damages estimate after reviewing 

RTG’s financial documents, conducting tests, and interviewing RTG personnel. 

Maloney split his damages analysis into two parts – damages attributable to the 

Aramark account, and damages attributable to Curwood’s deal with Oliver.

2

 First, 

Maloney explained that RTG earned 12.9 cents for each tray it sold to Aramark, that its 

gross profit margin was 14 percent, and that, but for the breach, it would have sold an 

additional 7.7 million trays to Aramark each year for four years. Maloney thus concluded 

that RTG had lost $542,645 in net profits from tray sales. Maloney performed the same 

analysis to conclude that RTG lost an additional $115,661 in film sales to Aramark. 

After applying a statutory interest rate, Maloney concluded that RTG lost a total of 

$687,538 because of Curwood’s deal with Aramark.

Maloney applied a similar methodology when calculating the amount of profits 

RTG lost because of Curwood’s agreement with Oliver. He used sales records to 

 

2 While there were over 60 protected accounts, Maloney limited his analysis to 28 

accounts. He explained that he limited his analysis to those accounts because “they were 

the only accounts in which [he] could get reasonable numbers as far as the number of 

annual trays.” (App. 390.)
5

estimate the volume of sales RTG would likely have made and relied on RTG’s 

accounting records to predict how much revenue and profit it would have been able to 

extract from those sales. During his direct examination, Maloney explained that the 

average profit margin for the protected accounts (excluding Aramark) was 43.7% for 

trays and 51.5% for film. When calculating his damages estimate, however, Maloney 

applied a more conservative profit margin – 35% for trays and 40% for film. When 

asked to explain why he chose lower profit margins, Maloney said that he chose them 

because he thought they were “reasonable number[s] to use.” (App. 395.) Based on 

those estimates, Maloney concluded that RTG had lost a total of $2,716,666 of net profits 

because of Curwood’s agreement with Oliver. After combining the lost profits from 

Aramark with the lost profits from Curwood’s agreement with Oliver, Maloney 

concluded that RTG had lost a total of $3,404,204 of net profits because of Curwood’s 

breach. 

On cross-examination, counsel for Curwood asked Maloney whether his 

calculations took into account various expenses that RTG would have incurred in order to 

make its profits, including salaries, employee benefits, travel expenses, marketing 

expenses, and other promotional expenses. Maloney indicated that he had considered 

employee salaries, but concluded that he did not need to address them in his report 

because “those salaries had already been paid.” (App. 398.) As to the other expenses, 

Maloney explained that he did not address them in his report because “it wasn’t necessary 

and I already had used a lower average gross profit margin.” (App. 399.)
6

The jury returned a verdict in favor of RTG on its breach of contract claim, 

awarding damages of $3 million. The jury also awarded Curwood $83,880.42 on its 

counterclaim for breach of contract. Following the verdict, Curwood invoked Federal 

Rule of Civil Procedure 50(b) and asked for judgment as a matter of law. It argued that, 

based on the evidence presented at trial, no reasonable jury could have calculated the net 

lost profits RTG experienced as a result of the breach. Curwood maintained that 

Maloney’s testimony focused on gross lost profits, rather than net lost profits3and that, in 

doing so, he failed to take into account numerous expenses that would have decreased the 

loss suffered by RTG.4 The Court decided to order a new trial on damages. 

In reaching that decision, the Court explained that “the proper measure of lost 

profits is net profits, not gross.” (App. 27.) The Court then reviewed the trial testimony 

and concluded that RTG presented evidence relating to gross profits, but failed to present 

evidence showing the net profits it had lost from Curwood’s breach. 

After recounting the trial testimony, the Court observed that “[t]he inescapable 

conclusion drawn from Mr. Maloney’s trial testimony—based entirely on his expert 

 

3

In broad terms, “gross profit” refers to the difference between the sale price of a 

product and the cost of goods sold. Brown v. N.L.R.B., 462 F.2d 699, 702 (9th Cir. 1972) 

(“A dealer’s gross profit is the difference between the cost of [goods] to him and the price 

he sells them.”). The term “net profit” refers to the difference between the sale price of a 

product and each of the expenses incurred as part of the sale process (e.g., the purchase 

price of the product, marketing costs, etc.). Id. (“Net profit is derived by deducting [a 

dealer’s] costs of operation from his gross profit.”).

4 Curwood also asserted that RTG failed to mitigate damages and moved for 

remittitur. However, because the District Court granted Curwood’s motion based on the 

gross profits argument, the Court did not reach Curwood’s other arguments, which, of 

course, it may address if renewed on remand. 
7

report—is his damages calculations do not involve any review of costs pegged to the 

number of units sold.” (App. 31 (internal quotation marks omitted).) In reaching that 

conclusion, the Court referred to Maloney’s statement that gross profits and net profits

were “one and the same” in the context of Curwood’s breach, as well as his assertion that 

he did not need to account for expenses related to employee salaries, employee benefits, 

or marketing. (Id.) The Court rejected that theory:

RTG ... argues the bulk of its costs were borne up front, and any remaining 

costs were “zero or minimal.” ... RTG offers no evidence to this effect other 

than Mr. Maloney’s unsupported statement regarding salaries already being 

paid. No other witness offered by RTG testified as to any quantification of 

its costs in obtaining business or generating any future revenue.

(App. 34.) Rather than entering judgment as a matter of law, the Court exercised 

its discretion under Rule 50(b)(2) to order a new trial on damages only. The Court 

explained:

While Curwood did not move for a new trial on damages, it is within our 

discretion to grant such a remedy if we determine the malady may be cured 

in a second trial. Because we find the scintilla of damages evidence does 

not sufficiently support the jury’s finding on net lost profit damages, we 

order a new trial on Plaintiff’s damages alone and permit the parties to 

more fully address RTG’s net profits lost ... as a result of the breach of 

contract ... .

(App. 35 (footnotes omitted).) After the second trial,5the Court entered a final order. 

This appeal followed.

 

5 As earlier noted, the jury in the second trial awarded RTG $971,429 in damages. 

Neither party challenges the verdict reached in the second trial. 
8

III. DISCUSSION6

“We exercise plenary review of an order granting or denying a motion for 

judgment as a matter of law and apply the same standard as the district court.”7 

Lightning Lube, Inc. v. Witco Corp., 4 F.3d 1153, 1166 (3d Cir. 1993) (citing Wittekamp 

v. Gulf & Western Inc., 991 F.2d 1137, 1141 (3d Cir. 1993)). A motion made under Rule 

50(b) should be granted “only if, as a matter of law, the record is critically deficient of 

that minimum quantity of evidence from which a jury might reasonably afford relief.” In 

re Lemington Home for the Aged, 777 F.3d 620, 626 (3d Cir. 2015) (quoting Trabal v. 

Wells Fargo Armored Serv. Corp., 269 F.3d 243, 249 (3d Cir. 2001)). In reviewing the 

record, we must view “the evidence in the light most favorable to the nonmovant” – RTG 

– and must give the nonmovant “the advantage of every fair and reasonable inference.” 

 

6 The District Court had subject matter jurisdiction under 28 U.S.C. § 1332. We 

have jurisdiction pursuant to 28 U.S.C. § 1291. Curwood contends that we do not have 

jurisdiction because the order that is the subject of the appeal was not a final judgment. 

While it is true that the District Court’s grant of Curwood’s 50(b) motion was not a final 

order at the time it was entered, the order became final and appealable once the Court 

entered final judgment following the second trial. Morton Int’l, Inc. v. A.E. Staley Mfg. 

Co., 460 F.3d 470, 476 (3d Cir. 2006) (explaining “[t]he general rule that once all claims 

against all parties have been dismissed a prior order will become final for purposes of 

appeal.”).

 

7 Curwood argues that we should review the District Court’s decision under an 

“abuse of discretion” standard. We disagree. The decision to grant a new trial is subject 

to review for abuse of discretion, Cone v. West Va. Pulp & Paper Co., 330 U.S. 212, 215 

(1947) (“[Rule 50(b)] does not compel a trial judge to enter a judgment notwithstanding 

the verdict instead of ordering a new trial; it permits him to exercise a discretion to 

choose between the two alternatives.”), but the question on appeal is not whether the 

District Court erred in ordering a new trial; it is instead whether the Court erred in 

granting Curwood’s motion for judgment as a matter of law at all. We review that 

question de novo. In re Lemington Home for the Aged, 777 F.3d 620, 626 (3d Cir. 

2015).
9

Lightning Lube, Inc., 4 F.3d at 1166. Nevertheless, “we must affirm an order granting 

judgment as a matter of law if, upon review of the record, it is apparent that the verdict is 

not supported by legally sufficient evidence.” Id.

It is undisputed that, under Erie R.R. Co. v. Tompkins, 304 U.S. 64, 78 (1938), the 

substance of this case is governed by Pennsylvania law. In Pennsylvania, “damages need 

not be proved with mathematical certainty, but only with reasonable certainty, and 

evidence of damages may consist of probabilities and inferences.” Delahanty v. First Pa. 

Bank, N.A., 464 A.2d 1243, 1257 (Pa. Super. Ct. 1983) (citation omitted). Pennsylvania 

law also provides that damages in a breach of contract case are equal to the amount of 

revenue lost as a result of the breach, minus the costs avoided as a result of the same 

breach. Kutner Buick, Inc. v. Am. Motors Corp., 868 F.2d 614, 618 (3d Cir. 1989)

(applying Pennsylvania law); Hallmark Ins. Admr’s v. Colonial Penn Life Ins. Co., 990 

F.2d 984, 989 (7th Cir. 1993) (citing Kutner Buick, 868 F.2d at 618) (same). In other 

words, Pennsylvania law dictates that a successful plaintiff in a breach-of-contract suit is 

entitled to recover the net lost profits caused by the breach. Given the deferential 

standard the District Court was required to apply in reviewing the jury verdict, we 

conclude that RTG presented sufficient evidence to support the conclusion that it lost

approximately $3 million in net profits.

Maloney indicated that his estimate of lost net profits was equal to his estimate of 

lost gross profits – that, in this case, net profits and gross profits are “really one and the 

same[.]” (App. 397.) On cross-examination, Curwood’s counsel challenged that

conclusion by identifying several expenses that RTG might have avoided as a result of 
10

Curwood’s alleged breach. Specifically, Curwood’s counsel questioned Maloney about 

employee salaries and benefits, as well as expenses related to travel, client entertainment, 

and marketing. In response, Maloney explained why the expenses identified by Curwood 

did not undermine his analysis. He said that he did not need to include employee salaries 

in his damages calculations because the salaries “had already been paid[,]” and were thus 

fixed costs that RTG would have incurred regardless of Curwood’s breach. (App. 398.) 

He further opined that it “wasn’t necessary” to include any of the other expenses 

Curwood identified. (App. 399.) According to Maloney, what variable costs might have 

been associated with generating the profits in question were effectively backed out 

because he “already had used a lower average gross profit margin.” (App. 399.)

While it was RTG’s burden to prove damages, ATACS Corp. v. Trans World 

Commc’ns, Inc., 155 F.3d 659, 669 (3d Cir. 1998), once it had done so with reasonable 

rather than mathematical certainty, it became “the defendant’s obligation to prove that a 

lesser amount than that claimed by plaintiff would sufficiently compensate for the loss.” 

Phila. Television Network, Inc. v. Reading Broad., Inc., 2005 WL 1668346, at *33 (Pa. 

Ct. Com. Pl. July 14, 2005) (quotation omitted); see Morrow-Smith Co. v. Cleveland 

Tractor Co., 145 A. 915, 915 (Pa. 1929) (“The ... question involved ... asks us to decide 

only whether the agreed discounts accurately measure plaintiff’s damages. ... [T]his 

question is not raised by the affidavit of defense, and hence ... could not stand in the way 

of judgment ... .”); Moyer v. White, 48 Pa. D. & C.3d 487, 503 (Ct. Com. Pl. 1988). 

Curwood failed to identify any evidence showing that, in the absence of its breach, RTG

would have incurred additional expenses. While Curwood identifies costs that RTG
11

incurred, it failed to show how those costs were avoided or reduced because of 

Curwood’s breach. For example, Curwood claims that “RTG’s evidence showed 

unequivocally that there were costs—including marketing costs, trips to trade shows, 

employee salaries, and processing costs—that the company avoided when it stopped 

marketing and selling trays.” (Ans. Br. 17.) However, Curwood does not provide any 

citations to the record to support that assertion. In fact, viewing the record in RTG’s 

favor, it appears that the expenditures for trade shows and marketing were made to gather 

information useful in forming relationships with potential clients. (See App. 314-15 

(explaining that RTG would invest substantial resources to build relationships and trust 

with potential customers and that, after investing those resources, it would submit a 

Distributor Lead Form to Curwood).) Curwood has cited nothing to support its claim that

RTG expended additional resources to obtain sales on an account after establishing a 

sufficient relationship with a prospective client to submit a Distributor Lead Form.

8

Curwood argues that we should affirm the District Court based on our decision in 

Deaktor v. Fox Grocery Co., 475 F.2d 1112 (3d Cir. 1973). In that case, we affirmed a 

grant of summary judgment against a plaintiff for failing to distinguish between gross 

profits and net profits. Id. at 1114-17. In doing so, we acknowledged that “[o]ther than 

the unsupported statement that net profit would have increased in the same amount as 

 

8

In granting Curwood’s motion, the District Court referenced an email from RTG 

in which it acknowledged some of its marketing expenses. At trial, the e-mail was read 

into the record. The e-mail states: “Our advertising, marketing, trade shows, sales 

personnel, travel expenses, and legal fees have exceeded $350,000 to promote your 

product ... .” (App. 276.) While the e-mail provides evidence that RTG incurred 

marketing expenses, it is silent as to whether those expenses were ongoing, or whether 

the expenses were one-time costs that had already been paid to acquire customers.
12

gross profit, the record was barren of evidence concerning net profit.” Id. at 1116. 

Unlike in Deaktor, the record in this case contains sufficient evidence upon which a jury 

could rely to conclude that RTG would not have incurred any additional substantial 

expenses in the absence of a breach. The jury was free to evaluate Maloney’s opinion 

that each of the costs identified by Curwood was either a sunk cost or was accounted for 

by the lower gross profit margin estimate he selected.

We note that Curwood had the opportunity to cross-examine Maloney and to 

identify and expose any flaws in his analysis. And the jury may have been persuaded in 

some degree by Curwood’s cross-examination, since the damages award was $400,000 

less than the estimate presented by Maloney.

Our conclusion that Curwood is not entitled to judgment as a matter of law does 

not amount to an endorsement of Maloney’s analytical approach. But, as the District 

Court recognized, the proper way to challenge improper expert testimony is through a 

Daubert motion filed before trial, or, if testimony extends beyond the scope of an expert 

report, through an objection made at the time the improper testimony is elicited. A 

motion for judgment as a matter of law is not an adequate substitute for those wellestablished mechanisms. At this point, we are reviewing the jury’s verdict and must 

affirm if any reasonable jury could have reached the verdict in light of the evidence 

presented at trial. We conclude it could have.
13

IV. CONCLUSION

For the foregoing reasons, we will vacate the District Court’s order granting 

Curwood’s motion for judgment as a matter of law and will remand with instructions to

reinstate the first jury’s verdict.