Opinion ID: 1003748
Heading Depth: 3
Heading Rank: 2

Heading: Discussion Of Liquidated Damages

Text: Tidewater argues that the award of liquidated damages must be set aside because it was calculated as of an incorrect date contending that, based on the language of the contract, liquidated damages must be computed for the six full calendar months period immediately preceding the transfer by client of any of the services provided under the agreement to a Fiserv competitor or in-house capabilities. Tidewater 6 TIDEWATER FINANCE CO. v. FISERV SOLUTIONS, INC. argues that the date should be the date on which services were terminated by Tidewater, not the date Fiserv ceased providing services. Paragraph 20(c) of the agreement states that liquidated damages are a sum equivalent to the average monthly gross revenue recieved by FIS on account of the Services of FIS transferred either to a competitor or to in-house capabilities by Client during the six (6) full calendar month period immediately preceding such transfer, which average monthly sum shall be multiplied by the remaining term of this agreement. This provision clearly requires liquidated damages to be calculated as of the end of the month before the date that services are transferred by Tidewater to a competitor or in-house. Thus, the only question remaining is was the jury correct in determining that the date was February 28, 1999 - the last day of the full month before March 2, 1999, the date Tidewater notified Fiserv that it would no longer use any of Fiserv’s services, or December 10, 1999 - the date Tidewater actually switched to another service? Thus, Tidewater argues that liquidated damages should be calculated using the date it stopped accessing the services, while Fiserv maintains that damages should be calculated from the date Tidewater notified Fiserv to stop providing services or making them available. As the district court noted, this dispute is a classic factual issue for the jury to decide. Accordingly, because there was a factual dispute fueled by conflicting evidence combined with the fact that the language in the contract on this issue is ambiguous, the court properly left the question of the date from which liquidated damages should be computed to the jury. The jury determined that the phrase Services of FIS transferred refers to more than the transferring of accounts to another provider, but requires the knowledge of Fiserv since it must discontinue providing services which requires its knowledge. This is certainly a reasonable interpretation. Tidewater bears the burden of proving that reasonable men could reach no other conclusion than the transfer of services occurred in TIDEWATER FINANCE CO. v. FISERV SOLUTIONS, INC. 7 December. Tidewater does not meet this burden as the jury’s interpretation is a reasonable one.
The closest and most beguiling question in this case is whether liquidated damages were at all available to Fiserv. This issue can actually be broken down into two separate questions. First, is Tidewater procedurally barred from making this argument? Second, did a partial breach, which would trigger liquidated damages, ever occur? The Fourth Circuit has held that a party who does not move for judgment as a matter of law on an issue pursuant to Rule 50(a) waives its right to move to set aside a verdict for that reason pursuant to Rule 50(b). Smith v. University of North Carolina, 632 F. 2d 316, 338-39 (4th Cir. 1980). Further, a party who waives an argument before a district court may not appeal the same argument to this court. Id. Consequently, this court does not review the sufficiency of evidence not challenged on a Rule 50(a) motion. Bristol Steel & Iron Works, Inc. v. Bethlehem Steel Corp., 41 F. 3d 182, 188 (4th Cir. 1994). Fiserv argues that Tidewater did not raise a challenge to the liquidated damages clause in its answers or in either of its Rule 50 motions and therefore may not raise the issue here. Tidewater, however, asserts that the district court erred, and that it did, in fact, raise the issue in its answers. In its answer to Fiserv’s counterclaim, Tidewater stated, affirmatively that the wording of the agreement does not impose any liability upon Tidewater. The district court found that such language was simply boilerplate and did not suffice to plead an affirmative defense. This language does not specifically mention the liquidation clause and, therefore, Tidewater should be procedurally barred from raising this issue. Even if Tidewater is not procedurally barred from raising the issue of partial versus total breach, there is enough evidence in the record for a reasonable jury to find that Fiserv notified Tidewater of a partial breach making an award of liquidated damages appropriate under the contract. For example, as a result of the March 2, 1999, conversation between the parties - a conversation in which Fiserv first learned that Tidewater was terminating the services - Fiserv calculated the liqui- 8 TIDEWATER FINANCE CO. v. FISERV SOLUTIONS, INC. dated damages and sent Tidewater a letter indicating what the termination liquidated damages were. This letter indicates Fiserv’s intention to declare a partial breach as it specifically mentions the remedy of liquidated damages, a remedy that would only be appropriate under a partial breach of the agreement. SETTLEMENT The issue of settlement in this matter, as explained by the trial judge and as suggested by the statement of the facts in this case, is a classic he said, she said. Such an issue of historical facts and credibility determinations is one for the jury to decide. THE COURT’S EVIDENTIARY RULINGS A. Standard of Review This court reviews challenges to evidentiary rulings for abuse of discretion. United States v. Whittington, 26 F. 3d 456, 465 (4th Cir. 1994). B. Discussion 1. The Default Letter Based on the standard of review applicable to evidentiary rulings, this court finds that the trial court did not abuse its discretion by allowing testimony about the default letter under the Best Evidence Rule. 2. Prevention of Performance Instruction Tidewater claims that the district court abused its discretion by instructing the jury about the doctrine of prevention of performance which states that a party is excused from performing its contractual obligations if the other party prevents performance. One of Fiserv’s defenses to the breach of contract claim against it was that if the jury found it breached (which the jury found it did not, so this point is essentially moot), then it could use the defense of prevention of perTIDEWATER FINANCE CO. v. FISERV SOLUTIONS, INC. 9 formance. Therefore, the trial court did not abuse its discretion by allowing such an instruction.
Tidewater did not object when the district court rejected its proposed instruction which explained that despite the written agreements, the jury should consider all of the representations ever made to Tidewater before and after the contracts were signed. Based on the standard of review applicable to evidentiary matters, this court would have to find that the lower court abused its discretion when it found that there was not sufficient evidence of the disputed representations. Clearly, the trial court found that there was not enough evidence to give such an instruction. Simply put, Tidewater did not object when the district court rejected its proposed instruction and the district court did not abuse its discretion in doing so.
The trial judge followed Florida law precisely in instructing the jury on how to calculate damages.
It is clear from the testimony of both parties that this matter is a contract dispute about the terms and conditions of the contract. Fraud simply did not play a part in this matter and the district court was correct in granting summary judgment for Fiserv on this issue. AFFIRMED