Opinion ID: 4525695
Heading Depth: 5
Heading Rank: 1

Heading: Damages Award for the Breach of the MSA

Text: Thomas Nelson argues EPAC failed to present evidence to support the jury’s determination of compensatory damages in the amount of $3 million. New York substantive law governs the breach of the MSA claim; therefore, we look to New York’s standard of review for judgments as a matter of law. Under New York law, a party can recover lost profit damages in a breach of contract claim if it demonstrates the alleged loss with reasonable certainty and the damages were fairly within the contemplation of the parties to the contract at the time it was made. Trademark Research Corp. v. Maxwell Online, Inc., 995 F.2d 326, 332 (2d Cir. 1993) (citing New York Law). And “[d]rawing all inferences in the favor of the non-moving party, as we must, the evidence—including but not limited to the expert testimony—sufficed to establish reasonable certainty for the damages awarded.” Alaska Rent-A-Car, Inc. v. Avis Budget Grp., Inc., 738 F.3d 960, 972 (9th Cir. 2013) (applying New York law to breach of contract lost profits damages claim). Especially so, since damages need not be determined with absolute certainty. Myheal Techs., Inc. v. Fonar Corp., 100 F.3d 944 (2d Cir. 1996) (table). The district court found that each side presented its arguments, its experts, and its calculations regarding damages. EPAC’s expert presented a figure of $5,598,634 in lost profits. Thomas Nelson’s expert found at most the lost profits were $632,549. Thomas Nelson had urged the district court to reduce the damages amount to $2 million at most. The district court found it - 19 - Case Nos. 19-5836/5838, EPAC Technologies, Inc. v. HarperCollins Christian Publishing, Inc. could not “reweigh the evidence (expert reports and testimony) and the credibility of” both parties’ experts. And the district court found it would be unreasonable to grant Thomas Nelson judgment as a matter of law when the jury verdict of $3 million “lies within a range suggested by both EPAC and Thomas Nelson.” The district court didn’t err here, given EPAC presented evidence that could support with “reasonable certainty” a damages amount of $3 million and the damages amount lies within the range contemplated by both parties. Trademark Research Corp., 995 F.2d at 332. b. Unfair Prejudice from Fraudulent Concealment Claim Evidence Thomas Nelson argues that EPAC’s presentation of its “non-viable” fraud claim unfairly prejudiced Thomas Nelson, and so Thomas Nelson moved for a new trial on the breach of contract claim. We review a district court’s denial of a new trial motion for abuse of discretion. Pittington v. Great Smoky Mt. Lumberjack Feud, LLC, 880 F.3d 791, 798–99 (6th Cir. 2018). The district court found that there was no indication that the jury was inflamed or considered inadmissible parol evidence when resolving the breach of contract issue. The district court gave a limiting instruction, telling the jury that it “may consider any such evidence only for the purpose for which it was admitted[.]” And the district court correctly noted that “[f]ederal courts generally presume the jury will follow the instructions correctly as given.” Barnes v. Owens-Corning Fiberglass Corp., 201 F.3d 815, 822 (6th Cir. 2000). Without any indication in the record that the jury was “inflamed” or improperly swayed, Hinds v. Titan Wheel Int’l, Inc., 45 F. App’x 490, 496 (6th Cir. 2002) (per curiam), we conclude that the district court didn’t abuse its discretion in denying a motion for a new trial on these grounds. - 20 - Case Nos. 19-5836/5838, EPAC Technologies, Inc. v. HarperCollins Christian Publishing, Inc. c. Adverse Inference Instructions Thomas Nelson argues it is entitled to a new trial because it was unfairly prejudiced by two adverse inference instructions given to the jury—one relating to damaged books, the other to electronic warehouse data: • Books. Thomas Nelson had a duty to preserve evidence relevant to this litigation; it breached that duty by negligently allowing the books in its control to be sold, lost, or destroyed; and you may infer that, if available, the books would support EPAC’s claims and be adverse to Thomas Nelson. • “Warehouse” Data. Thomas Nelson also had a duty to preserve its warehouse data as of April 18, 2011, and negligently failed to do so. Such data, now lost, may have shown whether EPAC-printed books were sold or returned, whether Thomas Nelson received customer complaints about EPAC-printed books, the quantity and timeliness of EPAC’s order fulfillment, and from what EPAC facility the books were shipped. You may give this whatever weight you deem appropriate as you consider all of the evidence presented at trial. As way of background, Thomas Nelson allegedly failed to preserve any damaged books, customer complaints, or electronic warehouse data, despite knowing of its duty to preserve as early as April 2011 (when EPAC sent a letter to Thomas Nelson telling it to preserve all relevant evidence). District courts have broad discretion to craft sanctions for spoliated evidence, Adkins v. Wolever, 554 F.3d 650, 651 (6th Cir. 2009), and we review a district court’s decision to give an adverse inference instruction for abuse of discretion. Ross v. Am. Red Cross, 567 F. App’x 296, 301 (6th Cir. 2014); Flagg v. City of Detroit, 715 F.3d 165, 177 (6th Cir. 2013). But see West v. Tyson Foods, Inc., 374 F. App’x 624, 635 (6th Cir. 2010) (propriety of jury instruction is reviewed de novo but noting Adkins rule that federal courts have broad discretion in crafting proper sanction for spoliation). The district court didn’t err in issuing the above two jury instructions. First off, the instructions above are merely permissible, telling the jury what they “may” infer. The fact that Thomas Nelson was only “negligent” does not defeat the instructions. Only - 21 - Case Nos. 19-5836/5838, EPAC Technologies, Inc. v. HarperCollins Christian Publishing, Inc. mandatory adverse instructions require a culpable state of mind in the destruction of evidence. See generally Flagg, 715 F.3d at 178. Second, both instructions were no greater than necessary because they were only permissive in nature. Tyson Foods, Inc., 374 F. App’x at 635 (“The jury instruction the district court gave here was merely a permissive one, allowing, but not requiring, the jury to draw a negative inference.”); Fed. R. Civ. P. 37(e)(1) (for failure to preserve electronic evidence, district court “may order measures no greater than necessary to cure the prejudice”). Giving broad discretion to the district court and even reviewing the propriety of the instructions de novo, we find that Thomas Nelson’s claim for a new trial based on these instructions fails.