Opinion ID: 420996
Heading Depth: 2
Heading Rank: 1

Heading: Did the jury compromise?

Text: 9 In its answer to Special Issue # 1, the jury found in favor of BKC on the promissory notes (valued at approximately $1,000,000.00), rejecting Mason's affirmative defenses thereto. 1 However, it awarded BKC only $1.00 as damages. Responding to Issue # 2, the jury sustained BKC's right to recover on the accounts (valued at approximately $500,000.00) and found against the affirmative defenses. BKC was awarded $100,000.00 as damages for this item. 10 Neither party brought these inconsistent results to the district court's attention until after the jury had been discharged and it was too late to resubmit the damages question to the jury. BKC eventually filed a motion for a clarification of the jury verdict on the promissory notes and the accounts. By this motion, BKC sought a judgment for the face amount of the debts, as shown by the evidence, plus the damages awarded by the jury. Alternatively, BKC moved for a judgment notwithstanding the verdict for the full amount of the obligations. The district court denied both motions and, instead, ordered a new trial limited to a computation of BKC's damages on the promissory notes and the accounts. Subsequent to this order, BKC filed a motion for summary judgment supported by affidavits establishing its entitlement to the full amount of the debts. Since Mason submitted no evidence in opposition to the affidavits, the district court granted judgment to BKC for these liquidated amounts. 11 Mason contends that the jury's inadequate award of damages signifies an improper compromise verdict because there was no dispute as to the correct amount due on the notes and accounts. Mason therefore claims that the liability and damages issues were inseparable and the trial judge erred in restricting a new trial to the question of damages. 12 Rule 59(a) of the Federal Rules of Civil Procedure provides that a new trial may be granted on all or part of the issues. The decision whether to grant a new trial is discretionary with the district court and will not be reversed absent an abuse of that discretion. See, e.g., Franks v. Associated Air Center, Inc., 663 F.2d 583, 586 (5th Cir.1981); Lucas v. American Manufacturing Co., 630 F.2d 291 (5th Cir.1980); 2 Young v. International Paper Co., 322 F.2d 820, 822 (4th Cir.1963). 13 It is axiomatic, however, that a partial new trial may not be granted if it would infringe upon a litigant's seventh amendment right to a jury trial. In Gasoline Products v. Champlin Refining Co., 283 U.S. 494, 51 S.Ct. 513, 75 L.Ed. 1188 (1930), the Supreme Court enunciated the standard which governs partial new trial practice: 14 [w]here the practice permits a partial new trial, it may not properly be resorted to unless it clearly appears that the issue to be retried is so distinct and separable from the others that a trial of it alone may be had without injustice. 15 Id. at 500, 51 S.Ct. at 515, 75 L.Ed. at 1191. Applying Champlin Refining, the former Fifth Circuit Court of Appeals held that a jury verdict influenced by an improper compromise cannot stand and a complete new trial is required because liability and damages are inseparable. See, e.g., Lucas v. American Manufacturing Co., 630 F.2d 291, 294 (5th Cir.1980); Hatfield v. Seaboard Air Line R.R. Co., 396 F.2d 721, 724 (5th Cir.1968). Hence, if there is a compromised finding on liability, a separate trial on damages alone will not suffice--both liability and damages must be relitigated in a new trial. Id. 16 With this admonition in mind, we focus our attention on whether the district court abused its discretion in rejecting the compromise claim. A compromise verdict is one where it is obvious that the jury compromised the issue of liability by awarding inadequate damages. Freight Terminals Inc. v. Ryder System, Inc., 461 F.2d 1046, 1053 (5th Cir.1972). However, a review of the cases from the former Fifth Circuit Court of Appeals establishes that a nominal or inadequate finding of damages by itself does not automatically mandate the conclusion that the award was the product of a compromise verdict. See, e.g., Hadra v. Herman Blum Consulting Engineers, 632 F.2d 1242, 1247 (5th Cir.1980), cert. denied, 451 U.S. 912, 101 S.Ct. 1983, 68 L.Ed.2d 301 (1981); Davis v. Becker & Associates, Inc., 608 F.2d 621 (5th Cir.1979); Bassett Furniture Industries of North Carolina, Inc. v. NVF Co., 576 F.2d 1084, 1094 (5th Cir.), reh. denied with opinion, 583 F.2d 778 (5th Cir.1978); Parker v. Wideman, 380 F.2d 433, 437 (5th Cir.1967). Indeed, if inadequate damages was the sole test for a compromise, Rule 59(a) would have little or no purpose. Rather, our inquiry must concentrate on any indicia of compromise apparent from the record, Hatfield, 396 F.2d 721, 723-24, and other factors which may have caused the jury to return a verdict for inadequate damages. See Hadra, 632 F.2d 1242, 1244 n. 1. Only if the totality of the circumstances indicates that the issue sought to be excluded by a partial new trial is not separable from the error in the damage award, will a plenary new trial be authorized. See Williams v. Slade, 431 F.2d 605, 609 (5th Cir.1970). 17 Two former Fifth Circuit cases offer instructive examples of situations where the record contained adequate indications of compromise to warrant a complete new trial. In Hatfield, the court held that a jury verdict finding liability and awarding $1.00 in damages was the result of a compromise. The court found that under all the circumstances, including the jury's confusion concerning contributory negligence and the fact that it took two days to return a verdict, there was strong support for the conclusion that the inadequate award of damages was the culmination of a compromise among the jurors. The former Fifth Circuit again determined that the jury probably compromised in Lucas v. American Manufacturing Co., 630 F.2d 291 (5th Cir.1980). In Lucas, the trial judge admonished the jury to return a verdict quickly because a hurricane was approaching the city. The jury did so, but after finding the defendant liable, awarded the plaintiff patently inadequate damages. On appeal, the Fifth Circuit remanded for a new trial on liability and damages. The court reasoned that in their haste to decide the case before the arrival of the hurricane, the jurors probably compromised, agreeing to find liability only if the damages were kept to a minimum. 18 By contrast, the court has rejected the compromise theory when the record discloses another basis for the improper award. For example, in Hadra v. Herman Blum Consulting Engineers, 632 F.2d 1242 (5th Cir.1980), cert. denied, 451 U.S. 912, 101 S.Ct. 1983, 68 L.Ed.2d 301 (1981), the jury found that the defendant had breached the plaintiff's employment contract but awarded no damages. The district court ordered a new trial confined to the plaintiffs' claim of damages for the breach. The Fifth Circuit affirmed the grant of a partial new trial. The court rejected the defendant's contention that the jury verdict was the product of a compromise, thereby affirming the district court's explanation that the failure to afford monetary relief could have resulted from an improper determination that the plaintiff failed to mitigate his damages by accepting alternative employment. See 632 F.2d at 1244, n. 1. In Hadra, the court emphasized that the defendant pointed to no circumstances, such as those listed in Hatfield, that indicate the possibility of a compromise verdict .... Id. at 1246. Consequently, since there was sufficient evidence to support the jury's finding of liability, the court held that it was proper to order a new trial limited to damages. 19 The record before us confirms our belief that the liability and damages issues were also separable in this instance. First, and foremost, the jury repeatedly found that Mason failed to establish its affirmative defenses, the only basis upon which Mason could escape liability. It did so in finding against Mason on the promissory notes and accounts; it rejected the affirmative defenses again when they were asserted as grounds for setting aside the terminations of the development agreements; and once more when they constituted the foundation for the counterclaim against BKC. We can come to no other conclusion than that the jury did not believe Mason's allegations of economic coercion, fraudulent inducement or wrongful termination of the development agreements. Having clearly convinced the jury that these claims lacked merit, BKC should not have to defend against them again. Second, the record contains absolutely no indicia of a compromise other than the low amount of damages. After a long, protracted trial, the jury required only two to three hours to reach its verdict. It obviously was not deadlocked. The jury did not request additional instructions or attempt to qualify its verdict in any manner. Finally, as BKC points out, the award could be explained by reference to the use of the term damages on the special interrogatories. It is possible that the jury thought that BKC would receive payment on the promissory notes and accounts based solely on their finding that BKC was entitled to recover for these items and, therefore, any additional finding of damages would simply amount to a duplication. 3 The totality of the circumstances simply do not point to a compromise verdict. Viewed in this factual and procedural setting, the district court did not abuse its discretion in ordering the partial new trial.