Opinion ID: 2979408
Heading Depth: 2
Heading Rank: 2

Heading: Evidence of Damages

Text: Country Coach next argues that Farley did not present sufficient evidence to support the jury’s award of $189,000 in compensatory damages on the implied-warranty claim, and the district 7 court therefore should have granted Country Coach judgment as a matter of law or remitted the jury’s verdict. We conclude that, contrary to Country Coach’s allegations, Farley presented adequate evidence of his damages under the applicable measure of the difference between the value of the RV as warranted and its actual value, see Mich. Comp. Laws § 440.2714(2), and the jury’s award was within the scope of this evidence. As a result, it was not error for the district court to uphold the jury’s verdict.
“[W]hen faced with a motion for judgment as a matter of law based on a challenge to the sufficiency of the evidence, as here, we apply ‘the standard of review employed by the courts of the state whose substantive law controls the action.’” Surles ex rel. Johnson v. Greyhound Lines, Inc., 474 F.3d 288, 303 (6th Cir. 2007) (quoting Shanklin v. Norfolk S. Ry. Co., 369 F.3d 978, 993 (6th Cir. 2004)). Under Michigan law, a motion for directed verdict or judgment notwithstanding the verdict (“JNOV”) should be granted only if the evidence viewed in the light most favorable to the nonmoving party fails to establish a claim as a matter of law. Sniecinski v. Blue Cross & Blue Shield of Mich., 666 N.W.2d 186, 192 (Mich. 2003) (citing Wilkinson v. Lee, 617 N.W.2d 305, 306–07 (Mich. 2000)). “If the evidence is such that reasonable people could differ, the question is for the jury and JNOV [or a directed verdict] is improper.” Pontiac Sch. Dist. v. Miller, Canfield, Paddock & Stone, 563 N.W.2d 693, 698 (Mich. Ct. App. 1997) (citing McLemore v. Detroit Receiving Hosp., 493 N.W.2d 441, 443 (Mich. Ct. App. 1992)). “In reviewing a trial court's ruling on a motion for a directed verdict [or JNOV], this Court examines ‘the testimony and all legitimate inferences that may be drawn in the light most favorable to the [nonmoving party].’” Kubczak v. Chemical Bank 8 & Trust Co., 575 N.W.2d 745, 749 (Mich. 1998) (alteration in original) (quoting Mulholland v. DEC Int’l Corp., 443 N.W.2d 340, 349 (Mich. 1989)). In the instant case, the district court determined, and the parties agree, that the measure of Farley’s damages on the implied-warranty claim was “the difference at the time and place of acceptance between the value of the goods accepted and the value they would have had if they had been as warranted.” Mich. Comp. Laws § 440.2714(2); “The party asserting a claim has the burden of proving his damages with reasonable certainty.” S.C. Gray, Inc. v. Ford Motor Co., 286 N.W.2d 34, 39 (Mich. Ct. App. 1979). Country Coach argues that Farley failed to present enough evidence to establish either the value of the RV as accepted or the value of the RV if it had been as warranted at the time of acceptance. In particular, Country Coach maintains that Farley’s only evidence of the actual value of the RV—the $245,000 trade-in price he received for the RV in April 2006, more than two-and-a-half years after he purchased it—is insufficient as a matter of law to submit the question to a jury. Farley’s evidence of damages was sufficient to create a jury question. To satisfy his burden of production on the issue of damages, Farley first had to present evidence of the value of the RV as warranted at the time and place of acceptance. The “primary standard” for the value of goods as warranted “is the fair market value of the goods at the time of acceptance,” but “[w]hen the fair market value cannot be easily determined, or the parties do not raise it as a measure of ‘value’, courts have generally relied on the contract’s purchase price as strong evidence of the value of the nonconforming goods as warranted.” Intervale Steel Corp. v. Borg & Beck Div., Borg-Warner Corp., 578 F. Supp. 1081, 1090 (E.D. Mich. 1984) (applying Michigan law); see also Mayberry v. Volkswagen of Am., Inc., 692 N.W.2d 226, 237 (Wis. 2005) (collecting cases). Here, Farley not only 9 attested to the $416,860 purchase price of the RV, but also demonstrated that “the suggested list price of the Magna in question was $515,000.00.” Farley, 550 F. Supp. 2d at 695. This is more than enough to sustain his burden of presenting evidence of the value of the RV as warranted. The second value on which Farley was obligated to present evidence was the actual value of the RV with its defects at the time and place of acceptance. Country Coach argues that Farley’s only piece of evidence on this point was the fact that he received a $245,000 trade-in value on the RV in April 2006, which is insufficient to establish the actual value of the RV at the time of purchase more than two-and-a-half years earlier. See Small v. Savannah Int’l Motors, Inc., 619 S.E.2d 738, 742 (Ga. Ct. App. 2005) (“[Plaintiff] presents no evidence of the value of the car as accepted, but only the wholesale trade-in value of the BMW an indeterminate time after the transaction.”). However, “[n]umerous courts and commentators have recognized that the price obtained for defective goods on resale is probative as to the value of the goods actually received.” Mayberry, 692 N.W.2d at 239 (collecting cases); see also Schultz v. Gen. R.V. Ctr., 512 F.3d 754, 759 (6th Cir. 2008) (“[I]t seems to us that the trade-in value would be as reasonable an estimate of what the R.V. is worth to Plaintiffs as the retail value.”). Even if, as Country Coach argues, the trade-in price standing alone does not reflect the retail or wholesale value of the RV, Farley also testified he had no reason to doubt that the actual value of the RV at the time of trade in was $250,000, and he had also received an estimate six months earlier from Buddy Gregg valuing the RV at $300,000. Farley, 550 F. Supp. 2d at 695–96. This testimony is sufficient to create a jury question on the value of the defective RV. See Mayberry, 692 N.W.2d at 238 (“[A]n owner of property may testify as to its value and . . . such testimony may properly support a jury verdict for damages, even though the opinion is not corroborated or based on independent factual data.” (citing D’Huyvetter v. A.O. Smith Harvestore 10 Prods., 475 N.W.2d 587, 593 (Wis. Ct. App. 1991))); see also Razor v. Hyundai Motor Am., 854 N.E.2d 607, 627–28 (Ill. 2006). Country Coach contends that Farley has not met his burden because the RV’s value at the time of trade in is not probative of its value at the time of acceptance, given that two-and-a-half years had elapsed between the original transaction and the trade in. Cf. Town East Ford Sales, Inc. v. Gray, 730 S.W.2d 796, 802 (Tex. App. 1987) (“Proof of market value at the time of trial is no evidence of value at the time of acceptance.” (citing Overseas Motors Corp. v. First Century Christian Church, 608 S.W.2d 288, 289–90 (Tex. Civ. App. 1980))). In support of this argument, Country Coach offered at trial expert testimony that the RV’s condition and service history around the time of trade in did not diminish its value, along with assertions by its expert that “in general, RVs have large depreciation factors,” Farley, 550 F. Supp. 2d at 696. Therefore, according to Country Coach, the difference between the purchase price and the trade-in price for the RV must have been due to depreciation over time as opposed to any diminution in value based on the RV’s defects. Nonetheless, the fact that the jury found Country Coach’s depreciation argument unpersuasive does not mean that Farley failed to meet his burden with respect to the value of the defective RV at the time of acceptance. The jury reasonably could conclude that the RV’s value around the time of trade-in equated to its value at the time of acceptance without speculating as to the measure of Farley’s damages. For example, the jury might have determined that any depreciation in the RV’s value was offset by the increased value of the RV after Farley had its numerous defects repaired. Alternatively, the jury might have concluded that the RV suffered negligible depreciation either because, as the district court noted, Country Coach “fail[ed] to offer any concrete evidence on 11 that issue,” id., or because Farley testified that he was largely unable to use the RV due to its numerous defects, compare Trial Tr. vol. 2, 186–87, Mar. 13, 2007 (confirming that Farley did not take any major trips in the RV that did not result in, or were not motivated by, a need for repairs), with Chapman v. Upstate RV & Marine, 610 S.E.2d 852, 857 (S.C. Ct. App. 2005) (concluding that the fair market value of a defective boat at the time of acceptance was equal to its value at the time of revocation based in part on evidence that the owners had used the boat infrequently between acceptance and revocation). Regardless of how persuasive we find Country Coach’s depreciation argument, these alternate theories are plausible and “[t]his Court [does not have] the authority to substitute its judgment for that of the jury.” Matras v. Amoco Oil Co., 385 N.W.2d 586, 588 (Mich. 1986). Therefore, Farley presented enough evidence of the RV’s value as warranted and its actual value at the time and place of acceptance to create a question of fact for the jury, and the district court did not err by denying Country Coach’s motions for judgment as a matter of law on Farley’s implied-warranty claim.
When deciding a motion for remittitur in a case governed by state law, “‘[t]he role of the district court is to determine whether the jury's verdict is within the confines set by state law, and to determine, by reference to federal standards developed under [Federal Rule of Civil Procedure] 59, whether a new trial or remittitur should be ordered.’” Gasperini v. Ctr. for Humanities, Inc., 518 U.S. 415, 435 & n.18 (1996) (quoting Browning-Ferris Indus. of Vt., Inc. v. Kelco Disposal, Inc., 492 U.S. 257, 279 (1989)). In our review of a district court’s determination of such a motion, we are “guided by the damage-control standard state law supplies,” but we will only reverse for an abuse of discretion. Id. at 438–39. Under Michigan law, a trial court can remit a jury verdict to the 12 “highest . . . amount the evidence will support” only “[i]f the court finds that the only error in the trial is the . . . excessiveness of the verdict.” Mich. Ct. R. 2.611(E)(1). When ruling on whether a verdict is excessive, a court can consider “objective considerations relating to the actual conduct of the trial or to the evidence adduced,” Palenkas v. Beaumont Hosp., 443 N.W.2d 354, 356 (Mich. 1989) (emphasis omitted), including the following: whether the verdict was the result of improper methods, prejudice, passion, partiality, sympathy, corruption, or mistake of law or fact; . . . whether the verdict was within the limits of what reasonable minds would deem just compensation for the injury sustained; . . . whether the amount actually awarded is comparable to awards in similar cases within the state and in other jurisdictions. Id. “A verdict should not be set aside simply because the method of computation used by the jury in assessing damages cannot be determined, unless it is not within the range of evidence presented at trial.” Diamond v. Witherspoon, 696 N.W.2d 770, 782 (Mich. Ct. App. 2005) (citing Green v. Evans, 401 N.W.2d 250, 255 (Mich. Ct. App. 1985)). The jury’s award of $189,000 in compensatory damages is within the range supported by the evidence adduced at trial. Based on Farley’s testimony, the jury could conclude that the value of the RV as warranted was somewhere between the $416,860 purchase price and the $515,000 list price, and that the value of the defective RV was between its $245,000 trade-in value and the $300,000 value estimate given to Farley by Buddy Gregg. These figures support a compensatory damages award between $116,860 and $265,000, with the actual award falling squarely in the middle of this range. Country Coach advances a host of arguments as to why the $189,000 award was the result of speculation or confusion on the part of the jury, based mainly on Farley’s counsel’s closing argument requesting this amount as the difference between the approximately $434,000 that Farley 13 actually paid for the RV, taking into account taxes and fees, and the $245,000 trade-in credit he received for it. Regardless of whether Country Coach is correct that the jury should not have factored taxes and licensing fees into the RV’s value as warranted, or should have set the actual value of the RV at $300,000 based on mitigation principles, Country Coach can produce no admissible evidence that the jurors relied on the calculation proposed by Farley’s attorney to reach its verdict. See Fed. R. Evid. 606(b) (stating that “[u]pon an inquiry into the validity of a verdict . . . a juror may not testify as to any matter or statement occurring during the course of the jury’s deliberations or the effect of anything upon that or any other juror’s mind or emotions as influencing the juror to assent to or dissent from the verdict . . . or concerning the juror's mental processes in connection therewith,” unless an enumerated exception applies). The jury was properly instructed that the measure of damages for a breach of an implied-warranty claim “is the difference at the time and place of acceptance between the value of the goods accepted and the value they would have had if they had been as warranted,” that “[t]he plaintiff has the burden of proving his damages with reasonable certainty [and] you must not speculate as to the amount of plaintiff’s damages,” and that “[a]rguments, statements, and remarks of attorneys are not evidence and you should disregard anything said by an attorney which is not supported by the evidence or by your general knowledge and experience.” The damage award returned by the jury was within the range supported by Farley’s evidence and was not clearly the result of “improper methods, prejudice, passion, partiality, sympathy, corruption, or mistake of law or fact.” Palenkas, 443 N.W.2d at 356. Therefore, the verdict was not excessive and the district court did not abuse its discretion by denying Country Coach’s motion for remittitur.