Opinion ID: 652883
Heading Depth: 1
Heading Rank: 3

Heading: witco's appeal

Text: 28 We begin with Witco's argument that Lightning Lube failed to establish sufficiently its tortious interference claim. Under New Jersey law the five elements of a claim of tortious interference with a prospective or existing economic relationship are: (1) a plaintiff's existing or reasonable expectation of economic benefit or advantage; (2) the defendant's knowledge of that expectancy; (3) the defendant's wrongful, intentional interference with that expectancy; (4) the reasonable probability that the plaintiff would have received the anticipated economic benefit in the absence of interference; and (5) damages resulting from the defendant's interference. Fineman, 980 F.2d at 186; Printing Mart-Morristown v. Sharp Elecs. Corp., 116 N.J. 739, 563 A.2d 31, 37 (N.J.1989). In formulating this definition of the cause of action, New Jersey courts have relied on the Restatement (Second) Torts Secs. 766A and 766B. See, e.g., Printing Mart-Morristown, 563 A.2d at 37; Norwood Easthill Assocs. v. Norwood Easthill Watch, 222 N.J.Super. 378, 536 A.2d 1317, 1319 (App.Div.1988). 29 An action for tortious interference with a prospective business relation protects the right 'to pursue one's business, calling, or occupation free from undue influence or molestation.'  Printing Mart-Morristown, 563 A.2d at 36 (quoting Louis Kamm, Inc. v. Flink, 175 A. 62, 66 (N.J.1934)). Although businesses have the right to compete fairly with one another, that right does not extend to actions taken with the malicious purpose of harming a competitor's business. Thus, [w]hat is actionable is '[t]he luring away, by devious, improper and unrighteous means, of the customer of another.'  Id. (quoting Louis Kamm, Inc., 175 A.2d at 66); see also Association Group Life, Inc. v. Catholic War Veterans, 120 N.J.Super. 85, 293 A.2d 408, 415 (App.Div.1971) (in determining whether interference is actionable, jury must find defendant's conduct both injurious and transgressive of generally accepted standards of common morality or law), modified, 61 N.J. 150, 293 A.2d 382 (1972); Perlman, Interference with Contractual and Other Economic Expectancies: A Clash of Tort and Contract Doctrine, 49 U.Chi.L.Rev. 61, 78 n. 88 (1982) (citing New Jersey as an example of a jurisdiction extend[ing] liability to cases where the defendant's actions are not independently unlawful but are rendered tortious solely because the intent, the result, or both were to disrupt a particular contractual relationship). 30 Lightning Lube predicated its tortious interference claim on allegations that Witco salespersons induced its franchisees to defect by: threatening to remove equipment; offering free equipment with the knowledge that Lightning Lube had contracts with the franchisees to supply equipment; defaming Venuto; offering to sell oil directly to the franchisees without telling Venuto; and intentionally delaying the delivery of a complete equipment payback schedule to Lightning Lube so as to raise doubts in the franchisees' minds as to whether Lightning Lube owned the equipment. Lightning Lube further alleged that Witco drove away prospective franchisees by asserting a counterclaim that accused Lightning Lube of fraud when Witco knew that there was no basis for such a claim. 6 31 Though it essentially concedes that the acts attributed to the salespersons, if they occurred, were improper, Witco denies that Lightning Lube demonstrated an injury by reason of these acts. New Jersey law requires that a plaintiff alleging tortious interference with existing or prospective advantage present proof that but for the acts of the defendant, the plaintiff would have received the anticipated economic benefits. Printing Mart-Morristown, 563 A.2d at 37. See also Fineman, 980 F.2d at 186. 7 Witco argues that the evidence does not satisfy this standard, inasmuch as none of the witnesses testified that the franchisee relationship with Lightning Lube was severed because of anything Witco had done. But Witco concedes that there was testimony describing franchisee meetings held in September and December 1986, at which some Lightning Lube franchisees stated that Lightning Lube did not own the equipment, and that after these meetings approximately 14 franchisees terminated relations with Lightning Lube. However, Witco maintains that Lightning Lube failed to link these defections with any statements attributed to Witco salespersons. We disagree, as Lightning Lube did adduce sufficient evidence to permit a reasonable jury to conclude that these defections and others as well resulted from Witco's tortious statements. 32 In support of its claim of tortious interference, Lightning Lube offered the testimony of three Lightning Lube franchisees, Barry Vangarelli, Joseph Craig, and Alan Fischer, who recounted being threatened with the loss of their equipment if they did not leave Lightning Lube. Vangarelli testified that William Corwin, Witco's district sales manager, visited his shop in June 1987, and told him that if he were to use any other oil than Kendall, he ran the risk of having his equipment repossessed. He said if you run in other kind of motor oil through your reel equipment, he said don't be surprised that if somebody won't walk in your door from [Witco] and dismantle it from your ceiling. Vangarelli also testified that Corwin told him that he was being ripped off by Venuto. Corwin promised him free equipment, stating that if you walk away from Ralph and deal directly with me and [Witco], we'll come in, we'll put new reel equipment in for you and there won't be anymore rental charge. 33 Witco argues that Vangarelli's testimony does not show that Corwin's activities damaged Lightning Lube because Vangarelli remained a Lightning Lube franchisee through the trial. Yet Witco ignores Vangarelli's testimony that as a result of his conversation with Corwin he lost trust in the Laser Lube concept and that he discouraged approximately 25 to 35 prospective franchisees from signing up with Venuto. Vangarelli claims to have told them not to get involved with it [Lightning Lube]. I felt I was being ripped off, the same would happen to them. Although on cross-examination, Vangarelli admitted that he had other problems with Venuto, unrelated to Witco, a jury reasonably could have believed that Witco's conduct influenced Vangarelli to discourage prospective franchisees. Indeed, Vangarelli testified that he began discouraging prospective franchisees only after Corwin spoke with him. Vangarelli also testified that soon after his conversation with Corwin, he stopped paying royalty fees to Venuto, at least in part because Corwin's comments affected his view of Venuto. [Corwin] told me that I was being ripped off by [Venuto] and it sounded logical at the time. 34 Craig testified that he initially worked for Venuto as Lightning Lube's director of operations, and then considered becoming a franchisee himself. He claimed that a visit by Corwin changed his mind. Corwin offered him a deal if he were to go independent. The deal included the same Kendall oil at a cheaper price, free equipment, and signage and advertising dollars. Craig further testified that Corwin claimed that Witco was going to cut off Venuto. Corwin testified that but for these comments he would have joined Lightning Lube and that he repeated this information to other Lightning Lube franchisees. Craig also testified that after the December franchisee meeting, at which every one in the room was concerned that Venuto did not own the equipment, eight franchisees terminated their agreements with Lightning Lube. 35 Fischer testified that Corwin offered cheaper oil to him and that he was threatened with repossession of his equipment. Witco points out that Fischer did not leave Lightning Lube. However, Fischer testified that as a result of Corwin's comments, he underreported the number of cars on which he did lube jobs, thus reducing royalties to Venuto. [Corwin's comments] had some bearings on my thoughts about the [Lightning Lube] organization. Fischer also testified that he repeated this information to other Lightning Lube franchisees, whom he specifically identified at trial. 36 Viewing this evidence in the light most favorable to Lightning Lube, we conclude that it has produced at least that minimum quantum of evidence required to show that Witco damaged it. Based on the testimony of these three witnesses, a jury reasonably could have inferred that rumors at the September and December franchisee meetings--that Lightning Lube did not own the equipment--arose from Corwin's threats and misrepresentations. The jury further could have inferred that Corwin's threats and offers of better deals injured Lightning Lube because the franchisees who heard these comments held back royalties and repeated them to other franchisees at the 1986 meetings, which resulted in fewer people opening Lightning Lube centers or paying franchise fees. Indeed, Venuto testified that after the September and December 1986 franchisee meetings, sales contracts for new franchisees decreased. Furthermore, he testified that in 1987 and 1988, following these franchisee meetings, Lightning Lube's cash flow situation became very bad as growing numbers of franchisees withheld royalty payments. Everybody stopped paying me ... we were just completely cash poor. This reduction of Lightning Lube's cash flow, according to Venuto, made it almost impossible for him to sell new franchises and to serve properly the existing ones. In sum, notwithstanding Witco's assertions to the contrary, the evidence permitted a jury to conclude that Witco's tortious acts damaged Lightning Lube. 37 In seeking to avoid this conclusion, Witco argues that Lightning Lube has failed to establish that it would have signed up the prospective franchisees without Witco's interference. In this regard it points to our opinion in Fineman, 980 F.2d at 195, in which we held that a plaintiff's claim of tortious interference with prospective relations, based on the theory that a defendant ruined his future prospects as a consultant by injuring his reputation, failed because he had not demonstrated a reasonable prospect of attaining future business. However, we find proof of whether the prospective franchisees would have signed up with Lightning Lube unnecessary to sustain the jury's verdict in this case. Lightning Lube established that it already had sold over a hundred franchises in its first year of existence, but only a fraction of these centers actually opened. This evidence, in conjunction with the testimony that existing franchisees withheld royalty payments, permitted the jury to conclude that Witco injured Lightning Lube by causing the loss of income from these existing franchisees, irrespective of whether the prospective franchisees would have joined Lightning Lube. Thus, unlike the plaintiff in Fineman, who predicated his claim solely on the lost potential for future business, Lightning Lube presented the jury with evidence of current business with which Witco interfered. 38 Witco next argues that whatever the propriety of his acts, Corwin did not have an improper intent because he merely intended to make sure that the franchisees used Kendall oil, which is not inconsistent with their remaining with Lightning Lube. We reject this argument. The above testimony makes clear that Corwin not only tried to ensure that the franchisees used Kendall oil, but also tried to lure them away from Lightning Lube through devious and improper means. 39 Finally, Witco argues that Lightning Lube failed to prove that Corwin specifically intended to interfere with the franchisees other than the three people with whom he directly spoke. Witco reads New Jersey law to require that a plaintiff alleging tortious interference with multiple agreements establish the defendant's specific intent to interfere with each of these agreements. Thus, in Witco's view, in order to recover for the destruction of its business, Lightning Lube was required to demonstrate that Corwin desired that the franchisees who heard his comments repeat them to others. We disagree with this reading of New Jersey's tort law. 40 It is true that a plaintiff seeking to recover for tortious interference must show that the defendant specifically intended to interfere with that plaintiff. See Fineman v. Armstrong World Indus., Inc., 774 F.Supp. 225, 250-51 (D.N.J.1991) (finding under New Jersey law that individual plaintiff's claim of tortious interference must be dismissed because he did not show a specific intent to interfere with his contracts; rather he showed only that defendant intended to interfere with plaintiff's company's contracts), aff'd in part, rev'd in part on other grounds, 980 F.2d 171 (3d Cir.1992), cert. denied, --- U.S. ----, 113 S.Ct. 1285, 122 L.Ed.2d 677 (1993); Restatement (Second) of Torts Sec. 766, comment p ([t]o subject the actor to liability under this rule, his conduct must be intended to affect the contract of a specific person). From this precept, it is axiomatic that a defendant cannot be liable for interfering with a contract of which he or she was unaware. See, e.g., Trump Taj Mahal Assocs. v. Construzioni Aeronautiche Giovanni Agusta, S.p.A., 761 F.Supp. 1143, 1164 (D.N.J.1991), aff'd, 958 F.2d 365 (3d Cir.) (table), cert. denied, --- U.S. ----, 113 S.Ct. 84, 121 L.Ed.2d 47 (1992). We also assume arguendo 8 that third-party plaintiffs may not recover for tortious interference unless they are parties to the contract that the defendant sought to disrupt. See Glass Bottle Blowers Ass'n v. National Bottle Co., 584 F.Supp. 970, 972 (E.D.Pa.1983) (applying Pennsylvania law and Restatement in dismissing complaint of third party plaintiffs because they were not parties to the contract interfered with); Restatement (Second) of Torts Sec. 766. 41 In those cases which require knowledge of the specific contract and prohibit third parties from recovering for tortious interference, the defendant did not intend to harm the suing parties. Here, however, Witco did intend to harm Lightning Lube in regard to its contractual relations; at most it did not intend the magnitude of harm which resulted. Witco essentially argues that even if Corwin intended to interfere, he did not intend the extent of consequential damages which resulted, inasmuch as he desired to steal only three of the franchisees who eventually abandoned Lightning Lube. Yet, once it is established that a defendant in a case of tortious interference specifically intended to harm a particular plaintiff, at least with respect to a particular category of contracts, it is appropriate for the trier of fact to consider whether the resulting consequential damage to that plaintiff was a proximate result of the defendant's conduct, not whether the defendant specifically intended to cause the extent of harm suffered. See, e.g., Norwood Easthill Assocs., 536 A.2d at 1319-20 (discussing proximate cause with reference to consequential damages). As the Restatement suggests, courts will imply an intent on a defendant's part to harm the plaintiff to whatever extent such harm proximately resulted from defendant's tortious interference: 42 [I]f there is no desire at all to accomplish the interference and it is brought about only as a necessary consequence of the conduct of the actor engaged in for an entirely different purpose, his knowledge of this makes the interference intentional. 43 Restatement (Second) of Torts Sec. 767, comment d (emphasis added). For this reason, we do not think that whether a defendant specifically intended to interfere with one contract involving a plaintiff or many is the determinative issue. Rather, once a plaintiff establishes the defendant's knowledge of the contracts at issue and the defendant's intent to harm the plaintiff with respect to some of these contracts, the relevant issue as to liability is whether the injury which followed was the proximate result of the alleged interference. 9 44 The district court's holding in Fineman, does not lead us to reach a different result. In that case, the principal of a company brought an action for tortious interference both on his own behalf as an individual, and on behalf of the company. The district court held that even if the plaintiff had established a viable claim with respect to his company, he had not shown that the defendant intended to interfere with the plaintiff's potential contracts. 774 F.Supp. at 251. But unlike the situation here, in Fineman the financial injury alleged as to the plaintiff was different from that alleged as to the company; the defendant purportedly caused the company to lose one type of customer, and the plaintiff another. Id. In the present case, however, Corwin is alleged to have done the same type of harm to Lightning Lube no matter which contracts he specifically intended to disrupt. Furthermore, in Fineman the individual plaintiff was not a party to the corporate contract that the defendant disrupted and he had not demonstrated any viable potential contracts. Here, Lightning Lube was a party to all the existing contracts with which Corwin interfered, and Lightning Lube has demonstrated the concrete possibility of attracting additional franchisees. 45 Although to our knowledge the New Jersey courts have not had an occasion to consider directly a fact pattern similar to ours, we believe our approach is consistent with New Jersey law. Therefore, we think that if presented with this case, the Supreme Court of New Jersey would hold that if Corwin wrongfully intended to interfere with Lightning Lube's relations with the three existing or potential franchisees to whom he spoke and he reasonably could foresee that this interference also would cause Lightning Lube to lose other franchisees, he need not have intended specifically for all of that damage to have occurred in order for Witco to be liable for the entire injury. Evidence of both Corwin's specific intent with respect to the three persons to whom he spoke, two franchisees and one potential franchisee, and of the consequences that directly flowed from his conduct in regard to them suffices to impose full liability upon Witco for the consequences which followed. 46 In this case, we are satisfied that Lightning Lube's proof meets the standard to support the liability imposed. Corwin clearly intended to interfere with Lightning Lube's business relations with Vangarelli, Craig, and Fischer. Even disregarding Lightning Lube's allegation that Witco's management schemed to destroy Lightning Lube, we believe sufficient proof exists that Corwin, as evidenced by his conduct in connection to these three franchisees or potential franchisees, wished to strip away Lightning Lube's franchisees, through devious and improper means, if only to ensure that they bought more Kendall oil. Inasmuch as Corwin wished to interfere with three of Lightning Lube's existing or potential franchisees, the jury could have concluded that he intended to interfere with many more for there was nothing unique about the franchise contracts of the three individuals he approached. We also believe that a jury reasonably could infer, given Corwin's regular interaction with Lightning Lube's franchisees and his expertise in the business, that at the time of his tortious conduct, he knew of the existence of the other franchisees and reasonably could foresee that the people he spoke with would repeat his comments, with the result that Lightning Lube would lose more business. We therefore find that both prongs of this test have been satisfied: Corwin intended to harm this plaintiff and the harm of which Lightning Lube complains proximately resulted from Corwin's conduct. Accordingly, we will affirm the district court's order denying Witco's motion for judgment on this claim. 47 Concurrent with its motion for judgment as a matter of law on the tortious interference claim, Witco moved, in the alternative, for a new trial, asserting that the jury's verdict on this claim was against the weight of the evidence. The district court denied this motion for the same reasons it denied the motion for judgment. See Lightning Lube, Inc. v. Witco, 802 F.Supp. at 1192. We do not believe that the district court abused its discretion in this regard and thus we will affirm the denial of this motion as well.
48 In its contract claim, Lightning Lube alleged that Witco breached their agreement by: (1) not selling motor oil to Lightning Lube at the lowest available price; (2) delaying in providing a payback schedule, which damaged Lightning Lube because it could not prove to its doubting franchisees that it owned the equipment it rented to them; and (3) not reimbursing Lightning Lube for joint sign costs. The jury found that Witco did provide Lightning Lube with the lowest price available for motor oil, but that it breached its obligations on the payback schedule and sign fees. The jury therefore awarded Lightning Lube $2.5 million in damages for the delay in providing a payback schedule and $18,340 for the sign costs. 49 Witco's challenge to the jury's award of $2.5 million in regard to the payback schedule, rather than disputing the liability determination, addresses the sufficiency of the evidence sustaining the damage award. 10 In this regard, it argues that Lightning Lube failed to adduce sufficient evidence that Witco could have contemplated at the time of contracting that its breach of contract in not providing a payback schedule to Lightning Lube on a timely basis would damage Lightning Lube in excess of $2 million by ruining its business. 11 Witco maintains that it was not reasonably foreseeable or contemplated by the parties on May 9, 1986, when Lightning Lube and Witco reached their agreement, that if for some reason Witco did not provide Lightning Lube with a payback schedule for more than a year, the franchisees would know that Lightning Lube did not have a payback schedule; that as a consequence the franchisees would lose faith in Lightning Lube; and that the payback schedule would have provided sufficient proof of Lightning Lube's ownership of the equipment to mollify the franchisees. 50 The district court did not consider the merits of Witco's foreseeability argument because Witco failed to include this point in either its motion for judgment as a matter of law filed at the close of Lightning Lube's case, or in its renewal of the motion at the close of all the evidence. In order to preserve an issue for judgment pursuant to Rule 50(b), the moving party must timely move for judgment as a matter of law at the close of the nonmovant's case, pursuant to Rule 50(a), and specify the grounds for that motion. Fed.R.Civ.P. 50(b). Absent a motion in accordance with Federal Rule of Civil Procedure 50(a), judicial reexamination of the evidence abridges [a party's] right to a trial by jury. Fineman, 980 F.2d at 183. Thus, we will not consider the merits of the foreseeability argument that Witco presses on appeal unless we are satisfied that Witco sufficiently preserved it in the district court. 51 Witco first urges that it did raise this issue in its Rule 50(a) motion, when it argued that [t]here is no evidence that plaintiff sustained any damages as a result of Witco's alleged breach of contract either as to price of oil or as to the equipment. We disagree with this assertion. A motion for judgment as a matter of law pursuant to Rule 50(b) must be preceded by a Rule 50(a) motion sufficiently specific to afford the party against whom the motion is directed with an opportunity to cure possible defects in proof which otherwise might make its case legally insufficient. Acosta v. Honda Motor Co., 717 F.2d 828, 831-32 (3d Cir.1983). Witco's Rule 50(a) motion raised arguments exclusively of proximate causation, and did not put Lightning Lube or the court on notice that Witco was proceeding under the contract law of foreseeability. Thus, Witco's motion would have alerted Lightning Lube as to deficiencies of proof only in so far as Witco contended that its delay in transmitting the payback schedule did not cause the franchisees to defect. However, it did not put Lightning Lube on notice that it might not have adduced insufficient proof that Witco could have foreseen such a result. 52 Witco next argues that it preserved the foreseeability argument by making a motion in limine to exclude certain expert testimony. In seeking to exclude the testimony, Witco argued that Lightning Lube's alleged damages for breach of contract were unforeseen and uncontemplated at the time of contract. The district court held: 53 I do not find it to be within the scope of a motion in limine to make a determination of what was and was not contemplated by the parties during their contract negotiations. I will not rule on the foreseeability of plaintiff's alleged damages. That determination is best left to the jury to be ascertained at trial. 54 JA 523. Citing to our holding in Repola v. Morbark Indus. Inc., 934 F.2d 483, 488-89 (3d Cir.1991), Witco argues that an in limine argument on which the court has not made a ruling preserves an issue for a Rule 50(b) motion. 55 In Repola the plaintiff, after sustaining a severe injury from a woodchopper machine, brought a products liability suit against the manufacturer and the seller of the machine under common law negligence and New Jersey statutory law. On the first day of trial, counsel for the seller initiated a somewhat confusing exchange between counsel and the court ... which can only be described as a motion in limine, to dismiss the separate negligence cause of action, arguing that the statutory claim was the sole basis for relief available under New Jersey law. 934 F.2d at 486. The district court reserved decision on the motion and never decided it in terms. At the close of the plaintiff's case, the seller moved for a directed verdict but failed to renew its objection to the negligence claim. After a finding of liability and award of separate damages on the common law count, the defendant moved for judgment notwithstanding the verdict, asserting that the statutory claim subsumed the negligence claim and that the jury's findings amount to a rejection of the statutory claim. The district court denied the motion on the ground that the defendant had failed to advance this argument when it moved for a directed verdict. On appeal, we reversed. 56 In so doing, we recognized that [i]ndisputably, if an argument is raised in support of a motion in limine, the motion is denied, and the argument is not restated at the appropriate time, the argument is not preserved under Rules 50 or 51. 934 F.2d at 488 (emphasis in the original). We held that it is an altogether different matter, however, when an argument is raised in support of a motion in limine, but the court reserves disposition of the motion and never decides it. Id. (emphasis in the original). In such circumstances, counsel reasonably may conclude that the court has the motion under continuous advisement and that it need not be restated. Id. 57 This holding, however, does not help Witco. In this case Witco could not have thought reasonably that its foreseeability argument was under continuous advisement because the court denied its in limine motion and expressly informed the parties that it would not consider the issue, and instead would leave it to the jury to resolve. This action forewarned Witco that if it thought Lightning Lube had not adduced sufficient evidence of foreseeability, it was incumbent upon it to make a motion for judgment. We also find it significant that unlike Repola, this case involved a three-month trial, prior to which two district court judges ruled on 69 pretrial motions. It would have been foolhardy for Witco to expect the district court to have kept in mind an issue raised in an in limine motion in such a complex and lengthy litigation. Indeed, in Repola the so-called in limine motion was made during the trial and was not an evidentiary motion at all, but in essence was a motion to dismiss. We therefore find that the district court correctly ruled that Witco waived this argument. Consequently, we will not disturb the order denying Witco's motion for judgment on the breach of contract claim. The district court also denied Witco's motion for a new trial on this issue, 802 F.Supp. at 1193, and we see no reason to disturb that determination either.
58 Witco next argues that the district court erred in not setting aside the jury's award of compensatory damages. Because we will affirm the order of the district court granting Witco judgment as a matter of law on the fraud claims for the reasons we set forth below, the only damage verdicts that we will discuss are those of $7 million for tortious interference and $2.5 million for breach of contract. Witco advances a two-pronged challenge to these damage verdicts. First, Witco argues that Lightning Lube's principal damages evidence, Venuto's lay opinion testimony, was inadmissible under Fed.R.Evid. 701. Second, Witco argues the testimony was too speculative to sustain the damages awarded. 59 Prior to trial, Lightning Lube sought to qualify Venuto as an expert on the quick-lube business, but the district court on Witco's motion in limine ruled that Venuto could not testify as an expert. The court agreed, however, to allow Venuto to offer lay opinion evidence pursuant to Rule 701 concerning the damages he suffered if a sufficient foundation for the testimony could be laid. At trial Witco objected to the admission of Venuto's lay opinion but the court overruled that objection, reasoning that in view of Venuto's experience in the quick-lube business, he was qualified to predict how well Lightning Lube could have been expected to do. 60 During his testimony, Venuto presented a claim for $74 million in compensatory damages. He stated that these damages for the most part represented the loss of past royalties and future profits over the ten-year period from 1986 to 1996, as well as refunds he had to give to the franchisees who had terminated their agreements. Venuto limited his future damages to a ten-year period because the franchise contracts he signed were of that duration. 61 As to past damages, Venuto testified that in his first year he sold 117 franchises at $17,500 each and that because of terminations caused by Witco's activities he had to refund these monies, which came to a total of $2,475,000. Venuto established these damages through his testimony and that of his bookkeeper, which showed that he spent approximately $500,000 out of his own pocket and was indebted for $2 million in promissory notes to reimburse the franchisees. 62 Venuto calculated future profits in two ways. First, he calculated the profits he would have earned on the 117 franchise contracts that he actually sold. Venuto predicted that after four years in business each center would have been generating $28,000 in royalty fees. Given this calculation, plus the money the franchisees would have earned in the first four years, Venuto predicted that he would have earned $27,729,000 in future profits from the 117 existing contracts through 1996. Next, Venuto calculated the lost profits on the franchises he expected to have sold. Based on projections he developed with an accounting firm when he was planning to take the company public, Venuto predicted that he would have sold 370 more franchises over the ten-year period, that all of them would have opened (37 a year), and that he would have earned $43,821,000 from these franchises using the formula discussed above. 63 Venuto further testified that he based his determination of profits on his low operating costs. Although Venuto did not compare his operation to other lube franchises such as Jiffy Lube or Grease Monkeys, he did compare it to the profit and costs projections of Avis Lube contained in a document made by Witco and obtained by Lightning Lube through discovery. Venuto went down the costs line by line, explaining why his operation was cheaper to run than Avis's and thus why he would make the anticipated profits. 64 It appears that the jury apportioned Venuto's past damages, ($2.5 million) under breach of contract, and his claims of future damages ($7 million) under tortious interference. It is quite clear from the record that there is ample support for the past damages. Thus, we will discuss only whether Lightning Lube has demonstrated its entitlement to an award of $7 million in future lost profits.
Federal Rule of Evidence 701 provides: 65 If the witness is not testifying as an expert, the witness' testimony in the form of opinions or inferences is limited to those opinions or inferences which are (a) rationally based on the perception of the witness and (b) helpful to a clear understanding of the witness' testimony or the determination of a fact in issue. 66 As we have recognized previously, [t]he modern trend favors the admission of [lay] opinion testimony, provided that it is well founded on personal knowledge and susceptible to specific cross-examination. Teen-Ed, Inc. v. Kimball Int'l, Inc., 620 F.2d 399, 403 (3d Cir.1980). Venuto thus was not required to qualify as an expert to offer opinion testimony concerning Lightning Lube's lost profits. Id. (accountant's personal knowledge of plaintiff's balance sheets sufficient to qualify him as a lay witness eligible under Rule 701 to testify as to calculation of lost profits); Joy Mfg. Co. v. Sola Basic Indus., Inc., 697 F.2d 104, 110-12 (3d Cir.1982) (district court abused its discretion in striking nonexpert opinion testimony rationally based on witness's personal knowledge). 67 Witco argues that Lightning Lube failed to satisfy either of Rule 701's prerequisites for establishing a foundation for Venuto's lay opinion testimony. Witco first contends that the testimony was not based on Venuto's perceptions because he relied on the reports of an accountant. However, Venuto testified that he personally participated in making that report, a fact which Witco conceded at trial when it sought to exclude the accountant's damage report on the ground that Venuto and not the accountant formulated the projections. Thus, Witco's previous admissions belie its present argument. In any event, given Venuto's knowledge and participation in the day-to-day affairs of his business, his partial reliance on the report, even if prepared by an outsider, does not render his testimony beyond the scope of Rule 701. As the district court correctly noted, [i]t is logical that in preparing a damages report the author may incorporate documents that were prepared by others, while still possessing the requisite personal knowledge or foundation to render his lay opinion admissible under Fed.R.Evid. 701. Lightning Lube, Inc. v. Witco, 802 F.Supp. at 1193. 68 Next, Witco argues that Venuto's damages testimony with respect to lost profits was not helpful to the jury because it bore no relation to the operating history of Lightning Lube's franchisees and thus was speculative. It is true that [a]n opinion based on false assumptions is unhelpful in aiding the jury in its search for the truth, and is likely to mislead and confuse. Wilkinson v. Rosenthal & Co., 712 F.Supp. 474, 479 (E.D.Pa.1989). See generally Daubert v. Merrell Dow Pharmaceuticals, Inc., --- U.S. ----, 113 S.Ct. 2786, 125 L.Ed.2d 469 (1993). But, as we explain below in regard to the sufficiency of the future damages evidence, we have determined that at least some of Venuto's assumptions were valid. His testimony thus was helpful to the jury. Given the broad discretion accorded to the district court concerning the admission or exclusion of testimony, we therefore cannot conclude that the district court erred in admitting Venuto's testimony. 69
70 Even if the damage testimony was admitted properly, Witco argues that the evidence in this case did not permit a damage award for lost profits. According to Witco, the lost profits claimed were speculative because Venuto did not offer any documentary evidence comparing his operation to those of his competitors, did not discuss the market conditions for quick-lube centers generally, did not assess the impact of the stock market crash of 1987 on the likelihood of whether Lightning Lube would have gone public, and did not consider the impact of the 1990-91 recession on lube sales generally. More importantly, Witco argues that Venuto did not base his prediction of lost future profits on the number of cars processed by Lightning Lube in the past, but instead speculated that the number of cars serviced would increase every year. Thus, in Witco's view there was no basis for the conclusion that the franchisees would continue in business for the full ten-year term of their agreements, that more franchisees would join the chain, and that the franchisees would reap a substantial profit in the ten-year period even though none of them had been in existence for more than a year when the alleged tortious conduct began. 71 In assessing the merits of this argument, we must bear in mind two principles. First, it is well-settled in New Jersey that although the plaintiff bears the burden of proving that it has in fact been damaged, Sandler v. Lawn-A-Mat Chem. & Equip. Corp., 141 N.J.Super. 437, 358 A.2d 805, 814 (App.Div.), certif. denied, 71 N.J. 503, 366 A.2d 658 (1976), after the plaintiff has established an injury, it need prove the amount of damages only to a reasonable degree of certainty. Tessmar v. Grosner, 23 N.J. 193, 128 A.2d 467, 472 (1957). Thus, once the plaintiff proves it has been damaged, it need not prove the amount of those damages with precision. Where a wrong has been committed and damages have resulted, mere uncertainty as to the amount of damages will not preclude a recovery even though proof of the amount of damages is inexact. Viviano v. CBS, Inc., 251 N.J.Super. 113, 597 A.2d 543, 551 (App.Div.1991), certif. denied, 127 N.J. 565, 606 A.2d 375 (1992). 72 Additionally, New Jersey no longer adheres to its new business rule which, as embodied in several older New Jersey cases, indicated that lost profits of a new business are too remote and speculative to permit an award of damages. See, e.g., Weiss v. Revenue Bldg. Loan Ass'n, 116 N.J.L. 208, 182 A. 891 (1936); Adrian v. Rabinowitz, 116 N.J.L. 586, 186 A. 29 (Sup.Ct.1936). In In re Merritt Logan, Inc., 901 F.2d 349, 357-58 (3d Cir.1990), we predicted that the New Jersey Supreme Court would abandon the new business rule in favor of permitting the recovery of such damages if proven with reasonable certainty. Shortly thereafter, the New Jersey Supreme Court confirmed this prediction in Perini Corp. v. Greate Bay Hotel & Casino, Inc., 129 N.J. 479, 610 A.2d 364, 379 (1992), in which that court, in permitting a renovated casino to recover lost future profits as a new business, cited In re Merritt Logan. While we recognize that Perini involved damages awarded in an arbitration, we believe that the Supreme Court of New Jersey would apply its holding to trials in court as well. 73 Applying these principles to this case, we conclude that Lightning Lube established the amount of damages to a reasonable certainty. While it may be that Venuto's testimony could not have sustained an award of $70 million in future lost profits, nonetheless the jury could have concluded reasonably that Lightning Lube would have earned $7 million over the ten-year period. 74 In challenging this assessment, Witco argues that Venuto's estimate of $28,000 in expected royalties per center after four years was unrealistic, because each center would have to handle 50 cars a day to reach that number, and there was no evidence to show that any of Lightning Lube's centers achieved that kind of business during its existence. While this argument may be true, the jury did not have to accept Venuto's projection of $28,000 to reach its award. 12 The jury could have concluded that in its first year Lightning Lube received approximately $333,200 in total royalties. 13 Venuto testified that he had sold over 170 contracts, but only 35-40 franchises actually opened because of Witco's tortious acts. In order to reach its award of lost profits the jury thus could have assumed that if 34 existing franchisees provided Lightning Lube with $333,200 in royalties, Lightning Lube merely would have had to get several more of those already sold to open and then achieve only a modest growth over its centers' first year rate of quick-lube jobs. Such an estimate is very conservative, considering Venuto's testimony, and bears some relation to the facts to which he testified. Thus, the jury need not have assumed that Lightning Lube would have sold more contracts or that its franchisees each would have generated $28,000 in royalties a year. 75 Additionally, the jury may have found Venuto's projections of future profits particularly credible because he testified without contradiction that in its first year of operations, the profitability and growth of Lightning Lube surpassed his projections. Actual first-year revenue per franchisee was 40% higher than Venuto had expected. Having found his earlier projections to have been conservative, the jury may have believed that his future projections merited great weight as well. See In re Merritt Logan, Inc., 901 F.2d at 358 (in considering sufficiency of lost profits testimony, court found it noteworthy that plaintiff's sales in first week actually exceeded its projections). 76 It is also notable that, contrary to Witco's assertions, Venuto did account for the effect of the recession when he explained that it would not reduce the number of automobiles on the road in need of oil maintenance. From his testimony, the jury could have inferred reasonably that although the recession would have prevented consumers from purchasing new cars, they still would need to obtain quick-lube jobs for their current vehicles. In fact, a Witco document expressly projected increased lube sales on the assumption that older vehicles needed more oil maintenance than newer cars. Thus, it would have been reasonable for the jury to conclude that if the recession forced consumers to retain their current automobiles, they would require more lube jobs. In this regard, the jury also heard testimony that quick-lube centers in general were expected to continue to grow because of the increase in self-service gasoline stations and the withdrawal of the oil companies from providing complete automobile service. 77 There also was testimony that Lightning Lube was the fastest growing quick-lube franchise in the United States. In the Delaware Valley it was larger than Jiffy Lube, the largest quick-lube franchisor in the country. Furthermore, even disregarding Venuto's testimony there was other testimony to support an inference that Lightning Lube had a value of at least $7 million, because Tom Peppelman, of P & M Oil, the Exxon supplier, testified that in August 1987 he had considered paying that amount to purchase Lightning Lube. 78 Given the relative liberality of New Jersey damages law, we therefore think Lightning Lube has satisfied its burden in establishing the amount of its damages. We recognize that in our analysis we are not basing an award of lost profits solely on the past year's performance as we did in In re Merritt Logan Inc. In that case, the plaintiff produced evidence that it exceeded a contemplated figure of $130,500 in weekly sales before the defendant breached its contract. It then projected that it would have continued to make this amount of sales absent the breach. Here, however, we are determining that the record supported not only a conclusion that Lightning Lube would have continued to make $333,200 in royalties but that it would have more than doubled its revenues. Although this conclusion might appear to be somewhat speculative, in light of this record, we find the award is supported adequately.
79 In its final challenge, Witco contends that the district court erred in its treatment of misconduct by Lightning Lube and its trial counsel, Steven Kramer. More specifically, Witco focuses on attempted witness tampering by Kramer. During the course of the trial, Kramer contacted Robert Roe and Rufus Knowlin, former Lightning Lube franchisees, who were going to testify against Venuto, and Irving Pollack, whose wife was a Lightning Lube franchisee and who was also expected to testify adversely to Lightning Lube. 80 Kramer telephoned Pollack and told him that it would not be in his wife's interest to testify against Lightning Lube, because if Lightning Lube won it would pay the franchisees to whom Venuto owed money out of the award. Kramer further threatened that if his wife testified adversely to him and he lost, Venuto would sue her. Kramer approached Robert Roe in the bathroom of the courthouse, prior to Roe's testimony, advising him that Venuto intended to pay his promissory note to Roe if Lightning Lube won. Finally, Kramer telephoned Rufus Knowlin, saying he wanted to discuss a settlement of franchise fees which Knowlin owed. 81 When the district court became aware of these tactics, it conducted a voir dire of these witnesses outside the presence of the jury. All of the witnesses denied that Kramer's overtures had intimidated them and claimed that they would not change their expected testimony. Indeed, all three testified adversely to Lightning Lube at the trial. Following the voir dire, the district court found: 82 Mr. Kramer's approach to the witnesses was done to improperly influence their testimony adversely to Witco. The circumstances surrounding his approach to the witnesses, the timing of opening settlement discussions of a witness's claim against Lube on the eve of trial and Mr. Knowlin's own evaluation of Mr. Kramer's conduct all serve to depreciate Mr. Kramer's dissembling disavowal of an errant motive. 83 802 F.Supp. at 1201 n. 10. But based on the demeanor of the witnesses, the district court further determined that there is no indication that their testimony was 'chilled' or altered by Mr. Kramer's importuning them. 802 F.Supp. at 1201. 84 Witco moved for an immediate mistrial or, in the alternative, for permission to call Kramer to the stand before the jury to examine him about his contacts with the witnesses. The district court denied both motions. However, it permitted the three witnesses to testify about what Kramer told them, although not what they perceived to be his intentions. The district court also instructed the jury that it could infer, based on Kramer's conduct, that Lightning Lube did not have confidence in its case. See Newark Stereotypers' Union v. Newark Morning Ledger, 397 F.2d 594, 599 (3d Cir.1968) (recognizing that an attempt by a litigant to persuade a witness not to testify is properly admissible against him as an indication of his own belief that his claim is weak or unfounded or false), cert. denied, 393 U.S. 954, 89 S.Ct. 378, 21 L.Ed.2d 365 (1969). 85 Witco now argues, as it did before the district court in seeking a new trial, that the district court should have granted a mistrial, or at the very least permitted Witco to call Kramer as a witness and examine the three witnesses as to their perceptions of what Kramer intended when he contacted them.
86 We do not ignore the seriousness of Kramer's attempt to interfere with opposing witnesses. This conduct threatened to undermine the integrity of the trial proceedings and demonstrated a complete disregard of his obligations as an officer of the court. However, in considering the district court's refusal to grant a mistrial because of this misconduct, we must keep in mind our limited scope of review. Our standard of review with respect to the grant of a new trial for prejudicial conduct by counsel is deferential. Fineman, 980 F.2d at 207. We recognize that the trial judge has considerable discretion in determining whether conduct by counsel is so prejudicial as to require a new trial. Draper v. Airco, Inc., 580 F.2d 91, 94 (3d Cir.1978) (citations omitted). The trial judge is entrusted with wide discretion  'because he is in a far better position than we to appraise the effect of the improper [conduct] by counsel.'  Fineman, 980 F.2d at 207 (quoting Reed v. Philadelphia, Bethlehem & New England R.R. Co., 939 F.2d 128, 133 (3d Cir.1991) (citations omitted)). When measured against this deferential standard, the district court's refusal to grant a mistrial did not constitute an abuse of discretion. 87 It is clear that no prejudice resulted to Witco from Kramer's attempted witness tampering, inasmuch as the witnesses themselves claimed under oath not to have felt intimidated; they testified adversely to Lightning Lube; and the district court made an express finding based on their demeanor that their testimony did not seem to have been altered by Kramer's overtures. Furthermore, we find it significant in assessing the risk of any prejudice to Witco that the witnesses testified before the jury as to the attempted witness tampering and the district court instructed the jury that it could draw an adverse inference against Lightning Lube based on this testimony. Thus, if anything, Witco benefitted from Kramer's conduct, inasmuch as it received the opportunity to damage his credibility and that of his client in front of the jury. 88 Additionally, Witco has not explained what benefit that it legitimately hoped to gain from a mistrial. Once the factor of possible prejudice is discarded, Witco's only argument is that because, after the lawsuit began, Lightning Lube issued promissory notes to many of the franchisees, telling them explicitly that they would be paid out of any judgment, 14 a mistrial would have enabled Witco to investigate whether Venuto or Kramer was responsible for the refusal of a number of former franchisees to testify or even be interviewed. But as the district court accurately noted, Witco knew prior to trial that many former Lightning Lube franchisees possessed promissory notes from Lightning Lube. Thus, Witco had ample opportunity during discovery to investigate whether prospective witnesses had been intimidated or inhibited by either Kramer or Venuto. Witco's speculation, which it raised only at trial, that Venuto may have dissuaded other witnesses from testifying favorably to Witco, does not support the grant of a mistrial. We therefore will defer to the district court's judgment that a mistrial was unnecessary. 15 2. Refusal to Allow Kramer to Testify 89 Witco also argues that the district court's refusal to allow Kramer to testify about the allegations of witness tampering is grounds for a new trial. We reject this argument for the same reasons as discussed above. Considering that the court gave a jury instruction adverse to Lightning Lube's case and that the witnesses testified about the tampering, which, as the district court put it, exposed the jury to the full flavor of what transpired, it is difficult to imagine how Witco was prejudiced by the failure of Kramer to testify. Because we find that Kramer's testimony was not critical to Witco's case, we also hold that the court was well within its discretion not to disqualify Kramer from representing Lightning Lube in this case. 90 Witco argues that Kramer's cross-examination of these witnesses was fraught with leading questions which it likened to testimony that matched his credibility against theirs. But the district court found that Witco had ample opportunity to explore the witnesses' responses to Kramer's cross-examination and thus was not prejudiced. Accordingly, we will defer to the trial judge's assessment. 3. Limiting the Witnesses' Testimony 91 Witco argues that the district court handicapped its examination of the three witnesses by preventing it from asking them what they thought Kramer meant when he spoke with them. Witco claims that Kramer, in his cross-examination of the witnesses, convinced the jury of his good intentions because in his out-of-court encounters he carefully had avoided asking explicitly that the witnesses not testify or slant their testimony. According to Witco, the effect of that bit of disingenuousness could have been vitiated only by asking each witness what he understood Kramer was communicating. Thus, only by permitting lay opinion testimony pursuant to Fed.R.Evid. 701 could Kramer's credibility be evaluated properly. Relying on our holding in United States v. Dicker, 853 F.2d 1103, 1109 (3d Cir.1988), the district court held that the witnesses' interpretation of what they thought Kramer meant was inadmissible because his statements, as recounted to the jury, were clear. 92 In United States v. De Peri, 778 F.2d 963, 977-98 (3d Cir.1985), we held that a police officer's explanations of cryptic remarks made in tape recorded conversations between drug traffickers were admissible under Fed.R.Evid. 701 because they rationally were based on his perception of the conversation and helpful to the trier of fact. In Dicker, however, we explained that De Peri did not authorize the admission of all opinion testimony regarding the substance of a recorded or recalled conversation. Rather, such testimony is admissible only to assist in the jury's interpretation of coded portions of the conversation. 853 F.2d at 1109. But we held that where the statements are clear, such opinion testimony is not helpful to the trier of fact and is inadmissible under both Rules 701 and 702. Thus, under the facts of that case, we found that a customs agent should not have been allowed to interpret a defendant's potentially legitimate reference to export certificates as phony documents when the reference was clear and straightforward. 93 Similarly, in this case, regardless of what Kramer intended by his comments to the three witnesses, the comments, as recounted by those witnesses, were in themselves clear and straightforward, and thus we cannot say that the district court erred in holding that they did not need clarification by way of the witnesses' interpretations. The testimony of the witnesses accurately conveyed to the jury Kramer's words, which strongly suggested Kramer's intent to influence them and which further suggested Kramer's lack of confidence in Lightning Lube's case. Thus, even without the witnesses' lay opinion as to Kramer's intent, the jury was very likely to draw inferences from the witnesses' testimony against Lightning Lube. In addition, the court's special instruction to the jury advising it that any such negative inferences which it might make would be permissible, as well as Witco's closing argument, mitigated any remotely arguable prejudice to Witco.4. General Prejudice Claim 94 Aside from its contention that it is entitled to a new trial because of Kramer's attempted witness tampering, Witco also argues that the district court, having recognized that other misconduct by Kramer 16 and other trial errors caused Witco enough prejudice to necessitate a new trial on punitive damages and fraud, erred in not granting a new trial on Lightning Lube's other claims on that basis. In granting a new trial on punitive damages, the district court noted that it had erred in permitting the admission of evidence from Lightning Lube of statements attributable to Witco implying that Witco filed a counterclaim against Lightning Lube merely to destroy its business. Samuel Kleger, Lightning Lube's vice-president, testified that after Lightning Lube filed suit against Witco, John Bain, a lawyer for Witco, threatened that we'll bury you. In addition, Venuto testified that after Witco filed its counterclaim, Benjamin Liebowitz, a Witco attorney, kind of laughed at me, says [sic], you can't sell no [sic] franchises now can you Ralph? This evidence was offered by Lightning Lube in an attempt to demonstrate the malice and evil minded acts necessary to support its claim for punitive damages based on the counterclaim. 95 In granting Witco a new trial on punitive damages, the district court ruled that the evidence of these statements should not have been admitted over Witco's objections, because Lightning Lube failed to adduce proof that Witco ratified or authorized these statements. 802 F.Supp. at 1198-99. Furthermore, in the court's view, the statements could not have been authorized implicitly because they were not related to the management of the litigation. Id. 96 The district court further held that Venuto's contrived efforts (even after judicial admonition) to appeal to the sympathy of the jury through emotional displays inflamed the jury and provided an additional reason to set aside the punitive award. Mr. Venuto's persistent theatrical displays--tears, raised eyebrows and facial grimaces--all done to arouse undue passion and prejudice, effectively impeded defendant's chance for a fair trial. Id. at 1200. 97 Additionally, in granting a conditional new trial on two of the fraud claims, the district court determined that it had erred both in giving over Witco's objection a missing witness charge, and in permitting Lightning Lube to argue on summation that a Witco word processor who typed the Avis-Witco partnership draft agreements was a missing witness who the jury should presume would have failed to support Witco's claim as to why the wrong dates appeared on those documents. Id. at 1190. The district court concluded that there was no such witness and that the jury could have predicated its fraud verdict on a presumption not based on evidence of record, but simply on the unfounded speculation of Lightning Lube's counsel. Id. The court also found that none of the evidence presented at trial reasonably supported Lightning Lube's Avis-Witco conspiracy theory of fraud. 98 Witco now argues that the prejudice from these errors spilled over into the rest of the verdict, and thus the court should have granted a new trial as to the entire case. This argument is without merit. All of these errors related to whether Witco acted with the requisite malice to entitle Lightning Lube to punitive damages, and at most were only related remotely to the question of liability on the tortious interference and contract claims. Indeed, the missing witness instruction and reference by Kramer to that witness during summation concerned the timing of the Avis-Witco partnership agreement, an issue germane only to the fraud claim. The missing witness error thus could not have affected the jury's deliberations on the contract and tortious interference claims. Similarly, the threatening statements by Witco's lawyers related to Witco's malice in filing the counterclaim. This issue was irrelevant to the breach of contract claim and could not have affected the jury's deliberations as to the issue of tortious interference, inasmuch as there was more than sufficient evidence to establish Witco's liability on this claim. Likewise, we believe that Venuto's conduct in trying to get sympathy from the jury would not have affected the compensatory damages award which was supported fully by the evidence. 99 We also note that a jury's determination of punitive damages invariably involves a much more emotional decisionmaking process than does its determination of liability and compensatory damages. In awarding punitive damages, the jury in a sense vents society's collective anger. Punitive damages ... serve to express the community's disapproval of outrageous conduct--the 'admonitory' function. Fischer v. Johns-Manville Corp., 103 N.J. 643, 512 A.2d 466, 473 (1986). For this reason, they have been described as a  'display of ethical indignation.'  Id. (citation omitted). Thus, it stands to reason that a jury is much more susceptible to being inflamed when considering a punitive award than it would be in formulating a liability or compensatory damages verdict. In a recent case the Supreme Court of New Jersey recognized a jury's increased vulnerability to inflammatory tactics when assessing punitive damages: 100 We have proceeded with an appreciation that at the core of punitive damages lurks a volatile dilemma: the same findings necessary for the award of punitive damages can incite a jury to act irrationally. A condition precedent to a punitive damages award is the finding that the defendant is guilty of actual malice. The purposes of the award--the deterrence of egregious misconduct and the punishment of the offender--when mixed with a finding that the defendant is malicious, can readily inflame an otherwise-dispassionate jury. 101 Herman v. Sunshine Chem. Specialties, Inc., 133 N.J. 329, 627 A.2d 1081, 1085 (1993) (citation omitted). 102 Given that a jury's approach when considering punitive damages is so volatile, we think it not unlikely that an evidentiary error which could prejudice a defendant in regard to the jury's determination of punitive damages, would not affect determinations on liability or the quantum of compensatory damages. For this reason, and given the record before us, we find that the district court did not abuse its discretion in concluding that, although the wrongful admission of the evidence and the misconduct by Kramer and Venuto could have inflamed the jury during its deliberation of punitive damages, they did not affect its determination of the other claims. We thus will affirm on this point.