The Honor able Thoma s L

. Ludington, United States District J udg e for the E astern D istrict * of Michig an, sitting by

desig nation. NO T R EC OM M EN DE D F OR F UL L- TEX T P UB LIC AT ION File Na me: 08a0717n.06 Filed: Nove mber 20, 2008 No. 06-4642 UN ITED STA TES C OU RT OF AP P EA LS F OR THE SI XT H C IR CU IT

BI L LEVES, doing busine ss as Specialized Sy ste ms, Pla int if f- Ap pe lla nt,

v. AM ERI CA

N C L EA RI

NG HO USE I

NC , e t a l, Def endant- Appellee

. ) ) ) ) ) ) ) ) ) ) ) ON APPEALFROM THE U NI TED STATES DI STRI CT COURT FOR THE SOUTHERN D I STRI CT OF O H IO

Be fore : SI L ER and McKEA GUE, Circuit Judges; LUDI NGTON , District J udg e. * P ER CURIAM . App e lla nt Bil l E ve s ( “ Ev e s” ) s old ma pp ingsy ste ms a

nd oth e r p ro du c ts a s a repr esentative for Appe llee Amer ican Clea ring house, Inc. (“ ACH”), f or a pe riod beg inning in 1997 and endingin Aug ust 2001. Eves and ACH had a pr ofit-splitti ng ag ree ment wher eby Eves re ceive d one-third of

the profits, ACH re ceive d one-third of the profits, and ACH paid marke ting e x penses wi th t he re mai ni ng on e -t

hir d o f t he pr of its . Su bs e qu e nt t o th e te rm inatio n o f t he re la tio ns hip betwee n Eves and A CH, Eves broug ht suit aga inst ACH for unpaid profits under the ories of qua ntum

me ru it, on

a c c ount, fr a

ud , a nd br e a c h o f c on tr a c t.- 2 -

The pa rties conse nted to a benc h trial by Mag istrate Judge Ma

rk R. Abel, who found that Eves could only

rec over f or bre ach of

contra ct. The ma g istrate judge awa rded Eves damag es in the amount of $22,965.53, the diff ere nce bet wee n what ACH ha d paid Eves ( $160,209.47), and w hat ACH should have pa id Eves under their ag ree men t ($ 1 8 3,175.00). Eves a ppeals the a

war d of damag es, conte nding that the mag istrate judge abused his discre tion by ignor ing e vidence that Eves of fe re d r e g a rd ingdama g e s. F or the fo llo wi ngre a so ns , w e AF F I RM. BACK GR OUND Th ro ug ho ut t

he pe ri od fr om 19 97 to Au g us t 20 01 , w he n E ve s w a s ma kin g sa le s o n b e ha lf of ACH, ACH prov i d ed Eves with monthly repor ts that detailed the pa

y ments collecte d from customers, the costs that ACH incurre d with r espec t to eac h sale, and the profit made from ea ch sale

. Eves, on the other hand, did not have a n acc ounting sy stem. Eves re lied on a che ck ser vice to tra ck his ex penses a

nd income, and he kept re ceipts for expenses in an enve lope. At trial, Eves did not advanc e any rec ords of sale s that he made on behalf of ACH. Eve

s v. Am. Clearinghouse, Inc

. , No. 2:02-CV-665, op. at 12 (S.D. Ohio Nov. 20, 2006). As a result, the mag istrate judge was unable “to deter mine the acc urac y of [Eves’s] re collections or the d o llar amount of sales [Eves] made to individual customers.” Id. I n contra st, the mag istrate judg e found that th e re wa s “ no re a so n to bel ie ve tha t th e mon thl y

re c on c ili a tio n s ta te me nts and oth e r r e po rt s ACH provided to Eves do not captur e all of hi s sales,” beca use “if Eves believed he wa s not ge tting

c r e d it f o r a s a le h e p r o mp tl y b r o u g h t th a t s a le to th e a tt e n ti o n o f A CH .” Id. Acc ording ly , the mag istrate judg e conc luded that ACH had paid Eves his sha re of the profits on income r ece ived up

un til May 29 , 2 00 1, the date of

the la st c he c k th a t A CH se nt t o E ve s.- 3 -

Whil e t h e m ag istrate judg e indicate d that Eves did not advanc e any evidenc e as to what income ACH had rec eived f rom Eves’s sa les subsequent to that date , the mag istrate judg e noted that “it seems likely

that some sales fr om [ the period betwee n May 29, 2001, and August 2001,] wer e not both billed and paid befor e the e nd of August 2001.” Id. at 1 4

. Ac co rd i n gl y , t h e m agi s t ra t e j u d ge deter mined that Eves wa s entitled to some amount of dama g es base d on income re ceive d by ACH, fr om w hic h A CH did

no t pa y Ev e s h is o ne -t

hir d s ha re of the pr of its

. At trial, Eves a lso did not offer a ny eviden ce o f unpaid ex penses. Id. Eves testified that ACH ty pically reque sted rec eipts prior to reimbursing Eves for expenses, and Eve s did not present any rec eipts at trial for which he cla imed that ACH had not y et re imbursed him. Accor dingly , the mag istrate judg e found that ACH had re imbursed Eves f or all of the expenses that he had inc urre d in connec tion with his sales ac tiviti es for ACH. Thus, the cha lleng e that the mag istrate judg e fa ced w as to deter mine Eves’s sha

re of the profits on income re ceive d from May 29, 2001, throug h Aug ust 2001, when Eves did not present a ny

ev i d en ce o f s al es o nwh i ch AC H ha d n o tp ai d E v es h i s s h ar e o f t h e p ro fi t s . T h e m agi s t ra t e j u d ge hig hli g hte d th a t E ve s “ ha d a n o pp or tun ity to take dis c ov e ry fr om AC H, so that he c ou ld atte mpt to prove those sales for which commissions we re still owing

. He offe red no such evide n ce at trial.” Id. a t 1 5

. I n a d d i t i o n , E v e s “ d i d n o t h a v e an a c c o u n t an t l o o k a t A C H ’ s r e c o r d s an d a t t e mptto calc ulate its profits from t h e s ales.” Id. at 11-12. ACH pr ovided documenta ry evidenc e showing that it had paid Eves $160,209.47 over the life of their r elationship and ACH’s a ccounta nt testified that ACH should ha

ve paid Eves a total of $183,175.00 over the life of the re lationship. Base d on this evidence , the mag istrate judg e aw arde d Eves $22,965.53. DI SCU SSIO N- 4 - A. Standard of

Review When damag es ar e an a

ppropriate reme dy , “[q] uestions rai s ed concer ning da mag es ar e essentially

questions of fac t.” Duty v. U .S. Dep’ t of Interior , 735 F.2d 1012, 1014 ( 6th Cir. 1984) (citations omitted). Acc ording ly , in a non-jury action, the tria l judge ’s “de termination of dama g es is reviewa

ble onl y fo r ab u s e o f discre tion, subject to being set aside a s a finding of fa ct under the ‘cle arly err oneous’ standa

rd of R u l e 5 2 (a ) of the F eder al Rules of Civil P roce dure.” Smith v. Ma na us a , 5 3 5 F. 2 d 3 5 3 , 3 5 4 (6 th C i r. 1 9 7 6 ) ( ci t i n g Albermarle Pape r Co. v. Moody , 422 U.S. 405, 424-25 ( 1 9 7 5 ))

. C l ear

err or exists “only

when the r eviewingcourt is left with the de finite, firm conviction that a mistake ha s been ma de.” Is ab e l v . Ci ty of M e mp his , 404 F.3d 404, 411 (6th Cir. 2 0 0 5 ) ( ci t i n g An de rso n v . Ci ty of B esse me r Ci ty , 470 U.S. 564, 573 (1985)). The appellant be ars the burden of proving the exist ence of a mistake, Godley v. Ky. Res. Corp. , 640 F.2d 831, 834 ( 6th Cir. 1981), and c annot satisfy

the burde n mere ly

by showing that there is conflicting evidenc e, W alling v. Ge n. Indus. Corp. , 3 30 U. S. 5 45 , 5 49 (1 94 7) , o r b y a sse rt ingthat so me wi tne sse s w e re inh e re ntl y more or le ss cre dible than deter mined by the trial judg e. Su

gg s v . S e rv ic e Ma ste r E du c . F oo d M gm t. , 7 2 F. 3 d 1 2 2 8 , 1 2 3 2 (6 t h C i r. 1 9 9 6 ) ( ci t i n g Anderson , 4 70 U. S. at 57 3- 74 ). I f t he re are tw o p la

us ibl e way s to view the evidenc e pre sented, the tria l judge ’s choice cannot be clea rly err oneous. United States v. Y

ellow Cab Co. , 338 U.S. 338, 342 (1949). B . A na ly sis Eves adva nces thre e ar g uments to show that the mag istrate judge abused his discr etion when he awa rd e d E ve s $ 22 ,9 65 .5 3 in

dama g e s. F ir st, Ev e s a

rgue s th a t th e ma g ist

rate ju dge ab us e d h is discretion bec ause a

co-ow ner of ACH, Renee Hog g , a.k.a. Re nee Jones (“Jones”), testified that at least $4,007.36 of the $160,209.47 that ACH had paid to Eves wa s intended to reimburse Eves for- 5 -

e xpe ns e s, rathe r t

ha n to con st it ut e a p or

tio n o f E ve s’ s o ne -t

hir d s ha re of the pr of its . Jon e s d id identify cer tain pay ments, totaling $4,007.36, that we re intended to reimburse Eves for expenses, but J ones only

identified those pay

ments subsequent to testifying that she could not rec all which pay ments were for commissions and which we re f or expenses. See Trial Tr. 711: 10- 24, J .A. 263. The mag istrate j u d ge apparently deter mined that J ones’s testimony was not cr edible, or at l e a s t n o t c o mp e l l i n g , a s t o w h i c h p ay m e n t s w e r e f

o r c o m m i s s i o n s an d w h i c h w e r e f o r e xpe ns e s. Both the ma g istrate judg e’s a nd Eves’s c hara ct erizations of J ones’s testimony are plausible; howeve r, Eves c annot show cle ar e rror simply by asking this Court t o re as s es s t he cr edibility of Jone s’ s st a te me nts . A c c or din g ly , th e Cou rt re je c ts E ve s’ s argume nt t

hat his d a ma g e awa

rd sh ou ld be incr ease d by

$4,007.36. Se c on d, and

in t he a lte rn a tiv e , E ve s argue s th at $29, 60 6. 21 of the tot a l amou

nt t hat A CH pa id t o E ve s w a s r e imb ur se me nt f or e xpe ns e s, be c a

us e , a s of Ma

y 20 00 , AC H h a d ma de pa y me nts to Eves in the amount of $29,606.21, a nd the business relationship betwee n ACH and Eves did not show a gross profit until J une 2000. There fore , acc ording to Eves, the $29,606.21 that he r ece ived from ACH could not have been part of hi s share of the prof its, and must have bee n reimburse ment fo r e xpe ns e s. Ho we ve r, Jone s te sti fi e d that AC H ma de pa y me nts to E ve s b e fo re AC H t ur ne d a pr of it

on Ev e s’ s sa le s b e c a

us e Ev e s re pr e se nte d to AC H that he ne e de d th e mon e y in o rd e r t o c on tin

ue his sales ef forts. See Trial Tr. 443, J .A. 244. Ba sed on this testimony , the mag istrate judg e’s a ppare nt concl u s io nth a t $ 2 9 , 6 0 6

. 2 1 o f th e a mo u n t p a id

to E v e s w a s n o t f

o r e xp e n s e s is p la

u s ib le

. Ac co rd i n gl y , E v es h as n o ts h o wn cl ea r e rr o r, an d t h e C o u rt re

j ec t s h i s ar gu m en t t h a tt h e d am age

awa rd should be incr ease d by $29,606.21.- 6 -

Third, and f

inally , Eves ar g ues t hat t he mag istrate judg e abuse d his discretion when he relied on the testimony

of ACH’s a ccounta

nt, Thomas P. Giusti , to d et er m i n e t h e total amount of the pr of its that A CH sh ou ld h a ve pa id t o E ve s o ve r t he lif e of the pa rt ie s’ re la tio ns hip

. Sub se qu e nt t o Eves’s f iling of this lawsuit, ACH hired Giusti to deter mine any amounts that ACH owed to Eve s under the ir ag ree ment. Acc ording to Giusti, when he revie wed ACH’s rec ords, he discovered that ACH had been providing err oneous monthly repor ts to Eves, beca

use ACH had failed to subtract from th e p r o f

it c e rta in c o s ts o f s a le s , in c lu d in g c o s ts s u c h a s p ay r o ll taxe s , o v e rti me , s ic k and

vacation pay , and the c ost of office space . Giusti testified that gen er all y acc epted a ccounting pr inc ipl e s a llo we d A CH to u se the c or re c te d f ig ur e s to de te rm ine the a mou nt o f the pr of

its that A CH sh ou ld h a ve pa id t o E ve s o ve r t he lif e of the pa rt ie s’ re latio ns hip . G ius ti d e te rm ine d th a t A CH should have pa id Eves $183,175.00. Acc ording to Eves, the mag istrate judge should ha ve awa rded damag es based on the orig inal

acc ounting methodolog y

that ACH had used to provide monthly repor ts to Eve s, beca

use the ne w profit ca lculations made by Giusti were t h e re s u lt of an impermissible chang e in an a ccounting principle. Unde r this theory , the mag istrate judg e should have awa rded Eve s a total of $184,326.84 in d a ma g e s b e c a

us e , a c c or din g to E ve s, the numbe rs that A CH ini tia lly pr ov ide d to Ev es indi c a te that his share of

the profits over

the life of his re lationship with ACH was $344,536.31. L ike Ev e s’ s oth e r tw o argume nts , thi s fi na l argume nt a mou nts to an a tta c k on

the ma g istrate jud g e ’s c re dib ili ty de te rm inatio ns . I n re lying on Gi us ti’ s ca lc ulatio ns of the pr of its ow e d to Ev e s, the mag istrate judg e re

jected the testimony

of Steedman, Eve s’s expert witness, s u gges t i n g that chang es we re ma de by

ACH, and that they wer e prohibited unde r g ener ally rec og nized accounting principles. Eve s has not shown that it was clea r er ror f or the mag istrate judg e to cr edit ACH’s expert- 7 -

witness testimony

over the testimony

of Eves’ s expert witnes s . T h us, this C ourt reje cts Eves’s

argume nt t

hat he is e nti tle d to an a dd iti on a l $1 84 ,3 26 .8 4 in dama g e s. AFF I RMED.