Opinion ID: 2584198
Heading Depth: 3
Heading Rank: 2

Heading: The Motion for Summary Judgment Based on the Plaintiffs' Inability to Prove Damages

Text: On February 3, 2005, DuPont filed a motion for summary judgment based on the plaintiffs' inability to prove damages. Relying on E.I. DuPont de Nemours & Co. v. Florida Evergreen Foliage, 744 A.2d 457 (Del.1999), Richardson v. Economy Fire & Casualty Co., 109 Ill.2d 41, 92 Ill.Dec. 516, 485 N.E.2d 327 (1985), and Urtz v. New York Central & Hudson River Railroad Co., 202 N.Y. 170, 95 N.E. 711 (1911), discussed infra, DuPont maintained that the plaintiffs' remedies are limited to either: (1) rescinding their settlement agreements, returning any benefits they may have received, and seeking a return to the status quo ante; or (2) affirming the agreements and suing for damages in a fraud action, which damages are measured based upon the fair compromise value of their released tort claims at the time of settlement. DuPont further contended that: Despite electing to forego their claims for the actual judgment value of their [product liability] claimsindeed, settling these claims, releasing these claims, and keeping DuPont's settlement money for these claims[the] plaintiffs have not sought the fair compromise value of their [product liability] claims as of the day of their settlements. Rather, [the] plaintiffs in this case seek the actual judgment value of their RELEASED [product liability] cases as of today[, as demonstrated by the plaintiffs' statement of the appropriate measure of recovery in the first amended complaint]. (Emphases and capitalization in original.) DuPont argued that, inasmuch as what the compromise value factors are in a particular case, as well as how they would be evaluated in that case, are not matters within the common knowledge and experience of jurors[,] . . . expert testimony by lawyers experienced in litigating and compromising cases is required to aid the jury in determining the fair compromise value of a case. (Footnote omitted.) (Emphases in original.) Consequently, DuPont asserted that the plaintiffs did not have the expert testimony required to sustain their burden of proof on the proper measure of damages, stating that: [The plaintiffs' underlying product liability action] lawyers[, in their expert reports, as discussed infra, did] not opine about the factors relevant to the determination of the fair compromise value of each plaintiff's case on the date of the settlement, nor how those factors would be appliedto each case. They simply state, generally, that their respective clients' [product liability] cases would have been stronger had they had the hidden evidence, and thus the settlement value of the cases would have been higher. (Emphases in original.) In their memorandum in opposition to DuPont's motion, filed February 17, 2005, the plaintiffs argued that their remedy should not be limited to the reasonable settlement value absent fraud. Rather, they argued the remedy should be measured by the plaintiffs' change in circumstances resulting from the fraudulent conduct, which, according to the plaintiffs, is the value of the position that was foregone, plus any consequential costs incurred as a result of the misconduct. The plaintiffs contended that: If [the plaintiffs in this case are limited by the [c]ourt solely to the recovery of the value of a reasonable settlement in 1994, DuPont receives the benefit of its fraud. Such a ruling would serve to encourage fraud in settlements. Allowing a fraud-feasor to first reduce the value of a plaintiff's settlement (or even judgment) by withholding evidence, but then, [if] fraud is discovered, limiting the remedy 1, 2, 3 (or, in this case, 11) years later to that amount the defendant might have paid towards settlement in the absence of that fraud, but no more, would reward the fraud-feasor, who would first have had the use of the unpaid portion of the unrecovered settlement or judgment, and then protection from the court against imposition of any fuller remedy. If that were the law, every defendant in litigation would be motivated to first try fraud, and only later try to be reasonable. The plaintiffs maintained that the duty of the jury will be to measure the entire value of [the p]laintiffs' loss resulting from the fraudulent induced settlements, which naturally includes consideration of the value of the settled [product liability] claims. It will be the jury's role to determine if the consideration paid in the original settlement is more or less than the loss. . . . In this case, only after the jury had first considered the value of [the p]laintiffs' [product liability] claims (judgment value), should the jury next consider what the value the jury believes was actually lost through fraud. (Emphasis in original.) Lastly, the plaintiffs argued that their expert opinions fully satisfied the evidentiary requirements inasmuch as these opinions repeatedly touch[ed] on the issues of factors related to liability, settlement, client recommendations, and the relation between liability, damages, settlement, and judgments in the product [liability] action[s]. Following a hearing on the motion, the circuit court entered an order on February 28, 2005, granting DuPont's motion for summary judgment, concluding that, as a matter of law, when a[p]laintiff claims to have been fraudulently induced to settle a tort claim because of discovery/litigation fraud, (s)he has two options[, i.e., two choices of remedies]: (1) to sue to rescind the settlement contract; or (2) to affirm the contract and sue for fraud. If (s)he chooses to sue for fraud, the remedy available to [the p]laintiff is the fair compromise value of the claim at the time of the settlement. In order to meet their burden of proving the fair compromise value at the time of settlement, [the p]laintiffs would need to meet this burden with expert lawyer testimony directed to the numerous compromise factors, and how they would have applied to each [p]laintiff's case. [The p]laintiffs have not submitted the expert testimony required to sustain their burden of proof on the proper measure of damages in their cases. The deadlines for [the p]laintiffs to submit their final expert reports and amend their pleadings were October 15, 2004, and December 14, 2004, respectively. This court previously made clear that expert reports were to be final and that the experts would not be allowed to testify on matters beyond their respective reports in its Order Related to Trial Procedures, filed May 6, 2004. [The p]laintiffs are therefore unable to prove the fact or amount of settlement fraud damages as a matter of law, and summary judgment is granted on all remaining claims herein. (Emphasis added.) On August 10, 2005, the above order, inter alia, was certified, pursuant to HRCP Rule 54(b), as final judgment on all of the plaintiffs' claims. The plaintiffs filed their notice of appeal on September 6, 2005. DuPont's notice of cross-appeal was filed on September 19, 2005.