Opinion ID: 531044
Heading Depth: 2
Heading Rank: 3

Heading: Propriety of Jury's Valuation of Plaintiff's Companies

Text: 19 USI next contends that the district court erred in denying its motions for directed verdict, judgment notwithstanding the verdict, and new trial on Gregg's fraud claim. USI argues that the jury's award of $8.1 million resulted from its erroneous valuation of Gregg's companies at $12.5 million; a figure based solely on Gregg's own opinion as to the worth of his companies. USI claims that both the jury's valuation and Gregg's opinion were flawed because they failed to take into account the status of a dredging job in progress, Canal 38 (C-38), at the time the parties entered into the contract. According to USI, at the time of closing, the C-38 job was incurring losses and overruns which Gregg failed to consider in his valuation of the companies. Thus, USI maintains that the value of the businesses Gregg sold to it was much less than he acknowledged, and therefore, the verdict cannot stand. 20 Motions for judgments n.o.v. and directed verdicts test the sufficiency of the evidence supporting a jury verdict. J & H Auto Trim Co. v. Bellefonte Ins. Co., 677 F.2d 1365, 1368 (11th Cir.1982). Consideration of the sufficiency of the evidence is a question of law subject to de novo review by this court. Id. We therefore apply the same standard on appeal as the trial court applied in rendering its initial ruling. Id. In evaluating the district court's denial of a motion for directed verdict or judgment n.o.v.: 21 [T]he Court should consider all of the evidence--not just that evidence which supports the non-mover's case--but in the light and with all reasonable inferences most favorable to the party opposed to the motion.... [I]f there is substantial evidence opposed to the motions, that is, evidence of such quality and weight that reasonable and fair-minded men in the exercise of impartial judgment might reach different conclusions, the motions should be denied, and the case submitted to the jury.... [I]t is the function of the jury as the traditional finder of the facts, and not the Court, to weigh conflicting evidence and inferences, and determine the credibility of witnesses. 22 Boeing Co. v. Shipman, 411 F.2d 365, 374-75 (5th Cir.1969) (en banc) (footnote omitted). 7 Motions for a new trial are within the sound discretion of the district court. McDonough Power Equip., Inc. v. Greenwood, 464 U.S. 548, 556, 104 S.Ct. 845, 850, 78 L.Ed.2d 663 (1984). Our review of the district court's denial of a new trial involves determining whether the trial judge clearly abused his discretion. Pate, 819 F.2d at 1077. With these principles in mind, we turn to the merits of USI's claim. 23 The jury awarded Gregg $8.1 million in compensatory damages for his fraud claim based on its valuation of Gregg's companies as of the closing at $12.5 million less the $4.4 million in USI stock (including the earn-out) which USI actually paid to Gregg. Gregg's testimony at trial supports the jury verdict. He testified that at closing, the value of his companies was 12-and-a-half million. (R127-129). Contrary to USI's assertion that Gregg's valuation of his company was predicated upon a pre-closing discussion with a USI employee and, therefore, was not an independent valuation opinion, Gregg stated that when I was first contacted by USI we had evaluated the company right at $10 million, basically on the same basis that they evaluated it on, an earnings ratio. Id. (emphasis supplied). Moreover, Gregg testified regarding the additional $2.5 million in value he personally placed into the companies at closing: 24 I put in a million dollars as they requested early. I put in $400,000 that had been--was requested. I gave them a $500,000 note. I put in the office building, I put in the--I forgave the indebtedness that the company owed me, and that comes to approximately two million five hundred. 25 Id. at 130. USI did not object to this testimony nor comment on it at summation to the jury. 26 This court has recognized that, in Florida, an owner of property is qualified to testify regarding the value of his property. Electro Servs., Inc. v. Exide Corp., 847 F.2d 1524, 1526 (11th Cir.1988); Neff v. Kehoe, 708 F.2d 639, 644 (11th Cir.1983); J & H Auto Trim, 677 F.2d at 1369; Hill v. Marion County, 238 So.2d 163, 166 (Fla. 1st DCA 1970). In addition, an officer of a corporation may testify to the value of the property if the officer is qualified by virtue of his experience, his management of the affairs of the corporation and his knowledge of relevant value. Mercury Marine Div. v. Boat Town U.S.A., Inc., 444 So.2d 88, 90 (Fla. 4th DCA 1984). Here, Gregg could testify under both conditions. His position as founder, owner and manager of his companies from their inception made him uniquely qualified to render an opinion as to the value of his businesses. 27 USI's contention that Gregg's evaluation of his businesses was incomplete and flawed is directed at the weight of his testimony, rather than its admissibility. The weight of such testimony is, of course, affected by the owner's knowledge of circumstances which affect value, and as an interested witness, it is for the jury to evaluate the credibility of his testimony. Berkshire Mutual Ins. Co. v. Moffett, 378 F.2d 1007, 1011 (5th Cir.1967) (footnotes omitted). The owner's valuation may be attacked at trial through cross-examination and submission of independent evidence refuting his estimate. Neff, 708 F.2d at 644. USI did not cross-examine Gregg on this point at trial. However, it did present expert testimony as to its valuation of the companies. 28 USI's experts testified at trial that the former Gregg companies actually had a negative or minimal value at the time of closing in 1969, primarily due to losses incurred in completing the C-38 dredging project. 8 While it was proper for USI to challenge Gregg's valuation of his company in this manner, it was equally permissible for the jury to reject the experts' opinions. USI did not object to the proposed jury instruction regarding the expert testimony. See (R132-132). Nor did it dispute the charge given at trial that the jury was to consider the expert testimony and give it the weight the jury determined the testimony deserved. 9 (R134-117). Even uncontradicted expert opinion testimony is not conclusive, and the jury has every right not to accept it. Remington Arms Co., Inc. v. Wilkins, 387 F.2d 48, 54 (5th Cir.1967). 29 The jury here apparently found Gregg's testimony credible. Our review of the record concerning the valuation indicates that Gregg presented substantial evidence from which reasonable jurors could conclude that the companies had a value of $12.5 million at closing. 10 Gregg testified that he independently valued his companies at $10 million based on an earnings ratio, and he detailed the additional $2.5 million in cash and capital that he put into the businesses. It was wholly within the jury's function to credit Gregg's valuation. Boeing, 411 F.2d at 375. We therefore, refuse to set aside the jury's award of damages on Gregg's fraud claim. 11