Opinion ID: 747826
Heading Depth: 2
Heading Rank: 1

Heading: AT & T's Appeals for Judgment as a Matter of Law

Text: 12 First, we address AT&T's appeal of the district court's denial of judgment as a matter of law on both the economic duress claim and the breach of written contract claim. We review de novo the district court's determination of a motion for judgment as a matter of law, applying the same standard as the district court. Mason v. Oklahoma Turnpike Authority, 115 F.3d 1442, 1450 (10th Cir.1997). A party can obtain judgment as a matter of law in its favor only if the proof is all one way or so overwhelmingly preponderant in favor of the movant as to permit no other rational conclusion. Conoco Inc. v. ONEOK, Inc., 91 F.3d 1405, 1407 (10th Cir.1996) (quotations omitted). Using this standard, a court will not substitute its conclusions for that of a jury but must enter judgment as a matter of law if 'there is no legally sufficient evidentiary basis ... with respect to a claim or defense ... under the controlling law.'  Mason, 115 F.3d at 1450 (quoting Harolds Stores, Inc. v. Dillard Dep't Stores, Inc., 82 F.3d 1533, 1546-47 (10th Cir.1996)).
13 We hold that under the controlling Oklahoma law, STM failed to provide legally sufficient evidence of economic duress. The doctrine of economic duress grew from a narrow band of cases that provided relief from contracts secured through actual imprisonment or threats to the reluctant contracting party's life or limb. See John D. Calamari & Joseph M. Perillo, CONTRACTS § 9-2 (3d ed.1987). The doctrine has evolved into one that seeks to impos[e] ... certain minimal standards of business ethics in the market place. Centric Corp. v. Morrison-Knudsen Co., 731 P.2d 411, 413 (Okla.1986). One must read this statement in light of the doctrine's historically limited scope and the fact that ordinary [h]ard bargaining ... [is] acceptable, even desirable, in our economic system and should not be discouraged by the courts. Id. 731 P.2d at 413-14. 14 In Oklahoma, economic duress allows a party to avoid a contract that it has entered if a wrongful act [of the other party was] sufficiently coercive to cause a reasonably prudent person faced with no reasonable alternative to succumb to the perpetrator's pressure. Id. 731 P.2d at 416. As that rule suggests, a party seeking to prove economic duress must prove that the defendant committed a wrongful act. More importantly, however, the plaintiff must also show a causal relationship between the bad act and the contract at issue. The defendant's bad act, not something else, must have forced the plaintiff to sign the burdensome contract. As the Centric court stated, the coercing party has been subjected to legal sanctions if ... its actions or threats caused impaired bargaining power.... Id. (emphasis added). 15 A litigant cannot, therefore, make out a claim of economic duress by alleging merely that the opposing party took advantage of her weak negotiating position or because of business necessities. Id. at 417; accord Bell v. United States, 380 F.2d 682, 686 (10th Cir.1967) ( 'The assertion of duress must be proven by evidence that the duress resulted from defendant's wrongful and oppressive conduct and not by plaintiff's necessities.'  (quoting W.R. Grimshaw Co. v. Nevil C. Withrow Co., 248 F.2d 896, 904 (8th Cir.1957))). An independent contractor's dependence on one particular source of employment is just such a business necessity. That dependence may allow the employer to squeeze uncomfortable concessions out of the contractor during business negotiations. It does not, however, result from any wrongful act of the employer. Therefore, it is not the basis for avoiding any resulting contracts. 16 In Sinclair Refining Co. v. Roberts, 201 Okla. 358, 206 P.2d 193 (1949), cited by the Centric court, 731 P.2d at 416 n. 16, a distributor had continually agreed to decrease its contract prices for one wholesaler whenever the wholesaler threatened to remove its business. The court found that the distributor's weak bargaining position did not justify recision of the modified contracts. See Sinclair Refining, 206 P.2d at 198. 17 This case is very similar to Sinclair Refining. Here, STM alleges that AT&T threatened to remove its business if STM did not hire inspectors and allow AT&T to take control. STM agreed to those changes because of its financial dependence on AT&T. STM agreed to the modifications because of the volume of work that [it was] doing for [AT&T]. Pretrial Conf. at 12. STM had no reasonable economic choice and made concessions because of the preponderance of the work, over 90 percent, that [it was] doing for AT&T and had done for such a time period. Id. at 12-13. 18 Even if AT&T engaged in wrongful conduct by misrepresenting the quality (and hence, the cost) of labor that it would request from STM, that misrepresentation was not a bad act that led to the contract modification. If AT&T had been a small company with whom STM did not plan to work with again, STM may have denied AT&T's request for more expensive labor, finished the job, and been on its way. 19 On this project, the situation was different. STM's business dependence on AT&T drove STM's decisions. STM readily admits that point, and there is no evidence to the contrary. We hold, therefore, that because duress imposed by one's own business necessities cannot support a claim of economic duress in Oklahoma, there is no legally sufficient evidentiary basis with respect to this claim under the controlling law. See Mason, 115 F.3d at 1450. We therefore reverse the district court and grant AT&T judgment as a matter of law on the claim of economic duress.
20 We next address the district court's denial of AT&T's motion for judgment as a matter of law on STM's claim of breach of written contract. We review the district court's decision de novo, using the standard of review set forth above. Here, we affirm the district court's decision, as STM provided evidence upon which a juror could make reasonable inferences in STM's favor. 21 The parties' contract required AT&T to pay STM a percentage of the total project costs. In its breach of contract claim, STM sought 23.5 percent of the difference between the $7,229,874 total cost figure contained in the FD-10 and the $6,514,891 cost that AT&T used in setting STM's compensation. To assess whether AT&T is entitled to judgment as a matter of law, we must examine STM's evidence that the total project cost, as used in the contract, was $7,229,874. 22 The contract did not define total project cost. The district court appropriately ruled that because of the term's ambiguity, parol evidence could be admitted to illuminate what the parties meant by it. Tr. at 67; see, e.g., United States v. Federal Ins. Co., 634 F.2d 1050, 1051 n. 1 (10th Cir.1980). STM's most persuasive evidence on this point was the FD-10 itself, an AT&T accounting record of the Lightguide Project. The FD-10 is a Financial Project Completion Report. It shows a final cost of $7,229,874.74 for the Lightguide Project. The FD-10 included AT&T's internal costs, including more than $500,000 attributable to AT&T's internal allocation of interest on capital. 23 On appeal, AT&T argues that we should grant it judgment as a matter of law because there is no evidence from which a juror could infer that the FD-10, particularly the internal costs tabulated in it, reflected what the parties meant by total project cost. The FD-10 itself is evidence, however, and some pieces of evidence draw their own inferences. The mere fact that AT&T produced such a document and titled it a Financial Project Completion Report could indicate to a reasonable person that the document reflected AT&T's view of the total project costs. Other factors bolster that conclusion. Most importantly, the contract gives AT&T responsibility for tracking the total project costs. Because AT&T produced no other accounting record of the Lightguide Project, a juror could reasonably conclude that the FD-10 was AT&T's tracking of the costs under the contract. Furthermore, Dick Lowe, an employee of STM, testified that the parties considered both AT&T's internal and external costs to be part of the total project costs. Tr. at 485-86. Mr. Lowe did not mention allocation of interest on capital specifically, but he did state that the parties considered all of AT&T's internal costs to be included in the total project cost. See id. at 490-91. This evidence on the record, and the reasonable inferences that a juror could draw from it, suffice to prevent judgment as a matter of law for AT&T. 24 AT&T alternatively argues that it is entitled to judgment as a matter of law in spite of the apparent sufficiency of the above evidence. According to AT&T, STM released AT&T from its contractual obligation to pay STM a percentage of the total project costs by agreeing to an accord and satisfaction at the Tulsa meeting. Revisiting the standard for judgment as a matter of law, we note that AT&T's accord and satisfaction defense will not be dispositive unless the evidence points but one way and no reasonable juror could find that the accord and satisfaction did not take place. Mason, 115 F.3d at 1450. 25 Under Oklahoma law, an accord and satisfaction occurs when parties agree to discharge each other's obligations under an old contract and perform under a new contract. See FDIC v. Inhofe, 16 F.3d 371, 374-75 (10th Cir.1994). There must be  'a substitution by agreement of the parties of something else in place of the original claim.'  Id. at 374 (citation omitted). AT&T contends it is entitled to judgment as a matter of law because the parties settled on a dollar amount for a final payment at the Tulsa meeting. This argument is unavailing. For an accord and satisfaction to have taken place, the parties must have agreed that AT&T would give STM something different from the original contract obligation. Id. 26 There is significant evidence in the record that the parties did not make a substitute agreement in Tulsa, and that they believed the original contract was still in force. STM's final invoice to AT&T is denominated the [f]inal invoice for project management on the Florissant-Hillsboro Fiber Cable, per exhibit B in our contract, dated Dec. 3, 1990. Appellant's. App. Tab 17 at 2 (emphasis added). Further, when asked on direct examination whether the parties had settled on STM's compensation at the Tulsa meeting, Philip Gustin, a STM employee, responded, According to the contract, yes. Tr. at 1322. A juror could reasonably infer from this evidence that the parties did not agree to release each other from the original contract terms at the Tulsa meeting. We therefore affirm the district court's denial of judgment as a matter of law.