Opinion ID: 2067059
Heading Depth: 1
Heading Rank: 3

Heading: NCRIC's Claims of Error

Text: NCRIC contends the trial court erred in failing to instruct the jury that it had to find NCRIC's actions wrongful, in addition to being intentionally disruptive of Columbia's business relations, in order to impose liability for tortious interference. Columbia argues that NCRIC failed to preserve this objection for appeal. In any event, Columbia argues, the court's instructions were correct as given. The trial court instructed the jury on Columbia's claim of tortious interference with business relations as follows: In order for Columbia's claim to succeed, Columbia must prove by a preponderance of the evidence, one, the existence of a valid business relationship. Two, NCRIC's knowledge of the relationship. Three, intentional interference inducing or causing a breach or termination of the relationship. And, four, damages resulting from that breach. If you find that Columbia cannot prove any one of these elements, then you must find for NCRIC on Columbia's claim for tortious interference with business relations. This instruction exactly tracked the one NCRIC itself had proposed. But NCRIC also proposed a supplemental instruction requiring Columbia to prove an additional elementthat NCRIC's conduct was egregious. In pertinent part, this proposed instruction read as follows: In order to prove that NCRIC tortiously interfered with Columbia's business relationships or prospective business advantage, you must find that NCRIC engaged in what is termed egregious conduct. You must find that any interference by NCRIC was wrongful by some measure beyond the fact of the interference itself.... On the other hand, if you do find that NCRIC engaged in egregious conduct, you must find that Columbia has satisfied the intentional interference element of its tortious interference claims. Egregious conduct includes conduct such as libel, slander, physical coercion, fraud, misrepresentation or disparagement. At the charging conference, NCRIC argued that tortious interference has to be accompanied by behavior that is aggravated, tortious or egregious, while Columbia objected that proof of egregious conduct is not an element [of tortious interference] under D.C. law. The trial court stated that it would review the case law cited by the parties in support of their respective positions. Ultimately, the court declared that it would not give NCRIC's supplemental instruction. NCRIC duly noted its exception to the omission of the discussion of egregious conduct with respect to tortious interference. NCRIC raised no other objection to the court's instructions on the tort. [2] On appeal, tacitly admitting that its proposed instruction was erroneous, NCRIC does not argue that tortious interference with business relationships requires proof of egregious misconduct. Instead, substituting a less exacting standard, NCRIC argues that it could not be held liable without proof that its conduct was wrongful in some respect. NCRIC faults the trial court for not instructing the jury that Columbia had to prove NCRIC's interference was wrongful as well as intentional. Where the appellant has preserved the issue, we review a trial court's refusal to grant a request for a particular instruction for abuse of discretion, which may be found if the court's charge as a whole does not fairly and accurately state the applicable law. [3] In this case, however, because NCRIC consistently asked the trial court to instruct the jury that aggravated, tortious or egregious conduct had to be shown, and did not object to the omission of a less stringent wrongfulness requirement, it is debatable whether NCRIC preserved its claim of instructional error. At the time of trial in 2004, Civil Rule 51 provided that [n]o party may assign as error the giving or the failure to give an instruction unless that party objects thereto before the jury retires to consider its verdict, stating distinctly the matter objected to and the grounds of the objection. [4] To satisfy this requirement, the grounds of the objection must be called to the attention of the trial court in such manner as to clearly advise it as to the question of law involved, and must be sufficiently specific to bring into focus the precise nature of the alleged error. [5] The objection must be specific enough to direct the judge's attention to the correct rule of law. [6] A request for an erroneous or misleading instruction is not sufficient to preserve a valid objection, even if the proposed instruction has buried within it a kernel that may have some validity. [7] Thus, when parties propose an instruction more favorable to them than the law permits, the court ordinarily is under no duty to redraw their instruction for them. [8] If the rule were otherwise, as Columbia points out in its brief, litigants would have every incentive to request an incorrect, overreaching instruction; fail to offer a correct alternative if the trial court rejects that instruction; and then take a `chance on a favorable verdict, reserving a right to impeach it if it happens to go the other way.' [9] Consequently, courts enforce the rule strictly. For example, in Rogers v. Ingersoll-Rand Company, [10] the defendant manufacturer of a machine that malfunctioned and maimed the plaintiff asked for an instruction that it could not be found liable if the machine was accompanied by adequate warnings. This instruction, which the district court refused to give, misstated the applicable law and unduly favored the manufacturer; a legally correct instruction, which the manufacturer failed to propose and the court did not give, would have explained that adequate warnings were relevant to the question of liability but not necessarily dispositive of that question. [11] In affirming the resulting $16.7 million judgment, the court of appeals held that even if the manufacturer would have been entitled to a less sweeping instruction on its `warnings' theory, .... [t]he district court was under no obligation to tinker with the flawed proposed instruction until it was legally acceptable. [12] We recognized in Pannu v. Jacobson that a party's imperfect articulation of its position does not always excuse the trial court from tailoring the requested instruction... to meet the demands of an accurate and fair statement of the law. [13] The court should not refuse to instruct on an area of law central to the case merely because of technical defects in a proffered instruction. [14] If a proposed instruction is reasonably calculated to alert the trial court to a pertinent legal principle, a modicum of confusing and improper wording should not cause the trial court to reject its contents in toto. [15] Up to a point, this precept might be considered applicable in the present case. Arguably, when NCRIC contended that gross misconduct had to be shown, it implicitly raised the question whether any degree of misconduct had to be established. And notwithstanding NCRIC's consistent use of the adjective egregious, the second sentence of its proposed instruction would have required the jury to find only that any interference by NCRIC was wrongful by some measure beyond the fact of the interference itself. (Emphasis added.) NCRIC's claim on appeal is essentially that the trial court erred by failing to tell the jury just what that sentence stated. The preservation issue is a close one. NCRIC clearly wanted the court to set an elevated benchmark for Columbia to meet; it sought nothing less. Giving NCRIC the benefit of the doubt seems to depend on disregarding the clear import of its proposed instruction and taking a single, unheralded sentence in that instruction out of contextprecisely what the trial court normally has no obligation to do. However, for the sake of argument, we shall proceed as if NCRIC's claim is preserved for appellate review. It matters not in the end, because NCRIC's position on appeal fundamentally misstates this jurisdiction's law. We have held that to establish a prima facie case of tortious interference with contractual or other business relationships [16] in the District of Columbia, a plaintiff must prove four elements: (1) existence of a valid contractual or other business relationship; (2) the defendant's knowledge of the relationship; (3) intentional interference with that relationship by the defendant; [17] and (4) resulting damages. [18] We have never declared it an element of a prima facie case that the defendant's intentional interference be otherwise wrongful. Section 766 of the RESTATEMENT states: One who intentionally and improperly interferes with the performance of a contract (except a contract to marry) between another and a third person by inducing or otherwise causing the third person not to perform the contract, is subject to liability to the other for the pecuniary loss resulting to the other from the failure of the third person to perform the contract.[ [19] ] But among the jurisdictions that have addressed the question, there is little consensus on who has the burden of raising the issue of whether the interference was improper or not and subsequently of proving that issue.... [20] In the District of Columbia, that issue is settled. Instead of the plaintiff bearing the burden of proving that the defendant's conduct was wrongful, it is the defendant who bears the burden of proving that it was not. As we stated in Altimont, [o]nce a prima facie case has been established liability may still be avoided if the defendant can establish that his conduct was legally justified or privileged. [21] In other words, we elaborated in Sorrells, a trier of fact may find for the plaintiff who presents a prima facie case unless the defendant proves that his or her conduct was justified or privileged. [22] We explained that while the RESTATEMENT describes the tort as involving intentional and improper conduct, its reference to `improper' conduct is simply another way of saying that the alleged tortfeasor's conduct must be legally justified. [23] An instruction requiring the jury to find that any interference by NCRIC was wrongful by some measure beyond the fact of the interference itself would have led the jury astray by erroneously placing on Columbia the burden of proving wrongful conduct as part of its prima facie case. Such an instruction therefore should not have been given. (Still less should the trial court have given the egregious conduct instruction that NCRIC actually proposed.) NCRIC might have been entitled to an instruction on legal justification or privilege as an affirmative defense to intentional interference. NCRIC justified its intentional interference with Columbia's business relations as being necessary to protect its own existing economic interests, i.e., its insurance contracts with Columbia's physicians. Previous decisions of this court have recognized such a justification as affording a possible basis for an affirmative defense to tortious interference. [24] Thus, NCRIC might have requested a jury charge modeled on RESTATEMENT § 773, which states: One who, by asserting in good faith a legally protected interest of his own or threatening in good faith to protect the interest by appropriate means, intentionally causes a third person not to perform an existing contract or enter into a prospective contractual relation with another does not interfere improperly with the other's relation if the actor believes that his interest may otherwise be impaired or destroyed by the performance of the contract or transaction. This defense is of narrow scope, however, and protects the actor only when (1) he has a legally protected interest, and (2) in good faith asserts or threatens to protect it, and (3) the threat is to protect it by appropriate means. [25] Perhaps, as a matter of litigation strategy, NCRIC wanted to avoid an instruction explicitly requiring it to shoulder the burden of proving such a defense. Be that as it may, NCRIC did not request an affirmative defense instruction, and its objection to the absence of any discussion of egregious conduct did not suffice to inform the court that one was desired, or what it might have said. NCRIC therefore forfeited its objection to the court's failure to include such an instruction in its jury charge. [26] The court had no further obligation to piece together an unpleaded [affirmative defense] theory that [NCRIC] had only hinted at by proposing a defective instruction. [27]
The jury awarded Columbia $18 million in damages proximately caused by NCRIC's interference with the hospital's business relations with its physicians$13 million for losses sustained before the hospital closed and an additional $5 million for post-closing loss. NCRIC disputes the sufficiency of the evidence to support the award; it asserts the trial court erred by allowing the jury to award tort damages based on (1) a legally flawed damages theory, and (2) speculative and logically incoherent damages evidence. [28] The principles governing our review of NCRIC's sufficiency challenge to the damages award are well-established. We are obliged to respect the jury's prerogatives. A trial court may grant a motion for judgment as a matter of law only if no reasonable juror, viewing the evidence in the light most favorable to the prevailing party, could have reached the verdict in that party's favor. [29] Our review in this connection is de novo, applying the same legal standard as the trial court. The trial court has more leeway to evaluate the probative value of the evidence in deciding whether to grant a new trial, and its decision on that score is subject to reversal only for abuse of discretion. [30] The scope of appellate review is especially narrow when the trial court denied the motion, as in that case the trial court's unique opportunity to consider the evidence in the context of a living trial coalesces with the deference given to the jury's determination of such matters of fact as the weight of the evidence. [31] These principles of deference to the jury are especially applicable to its determination of damages. A plaintiff need prove damages only with reasonable certainty. While an award may not be based on speculation or guesswork, it may be a just and reasonable estimate based on relevant data. Probable and inferential considerations as well as direct and positive proof may provide the basis for an award.[ [32] ] The evidence offered must form an adequate basis for a reasoned judgment; [33] mathematical precision is not required. [34] Furthermore, the courts quite reasonably have been very liberal in permitting the jury to award damages where the uncertainty as to their extent arises from the nature of the wrong itself, for which the defendant, and not the plaintiff, is responsible. [35] Where the jury finds a particular quantum of damages and the trial judge refuses to disturb its findings on the motion for a new trial ... an appellate court should be certain indeed that the award is contrary to all reason before it orders a remittitur or a new trial. [36] At trial, Columbia linked the bulk of its claimed damages to the loss of net revenue caused by the NCRIC-induced departures of many of its attending physicians. According to Columbia's chairman and its CEO, the hospital's annual gross revenues dropped by ten million dollars. The witnesses attributed this gross revenue loss to the sudden drop in patient referrals, which were the hospital's main source of income. [37] Assuming Columbia operated at a marginal cost rate of 30%a conservative estimate, according to Peter Ben Ezra, a certified public accountant familiar with Columbia's finances [38] its annual net revenues dropped by $7 million. In addition, Ben Ezra testified that he calculated the present value of the lost cash flow from the decline in admissions assuming a permanent loss of twenty-four physicians on Columbia's staff as a result of NCRIC's interference. Using a 30% marginal cost rate and a discount rate of 10.5%, Ben Ezra computed that Columbia lost approximately $5 million before it closed and would have lost $21 million to $22 million over a twenty-year time frame had it survived. The chairman of Columbia's Board, Dr. Rifka, identified another component of its damages from NCRIC's tortious interference. Dr. Rifka testified that Congress had appropriated $5 million to support the hospital's on-going community outreach programs in 2002. Columbia was unable to collect that grant and use it to defray the costs of its operations before it was forced to close. On its face, Columbia's evidence of its damages was sufficient to support the award. Even if the jury rejected Ben Ezra's optimistic long-term cash flow projections in their entirety, it still could have found that Columbia's annual net patient revenues (gross revenues less marginal costs) declined by $7 million in the near-term as a result of NCRIC's conduct. In his closing argument, Columbia's counsel expressly urged the jury to use that figure to calculate the hospital's damages. To compensate Columbia for its lost revenues in the twenty-two months before it ceased operations, counsel thus requested $13 million, [39] which was precisely what the jury awarded for that period. On the same principle, and on the premise that Columbia would have survived at least three more years without NCRIC's tortious interference, counsel asked for an additional $21 million as post-closing damages. He reminded the jury that even NCRIC's expert witness had opined Columbia might have survived one year. The jury's actual award of $5 million in post-closing damages was supported on the conservative assumption that Columbia would have continued operating for as little as nine months. [40] If the jury calculated Columbia's lost revenues as its counsel proposed, it did not award any compensation for its lost congressional appropriation (which counsel had sought as part of the hospital's pre-closing damages). While the jury could have based its damages award on other reasonable permutations of the evidence, we need notand indeed cannotreconstruct the precise mathematical formula that the jury adopted. Nor need we explore every possible quantitative analysis or compute the basis of each penny and dollar in the award. [41] The jury's award will be upheld as long as it is a `just and reasonable estimate based on relevant data,' even if it is not proven with mathematical precision. [42] We turn now to NCRIC's challenges to the sufficiency of the foregoing evidence to support the jury's award. Most of those challenges were not preserved for appellate review. In a civil jury trial, Civil Rule 50(a) requires a party to assert its specific claims of evidentiary insufficiency in a motion for judgment as a matter of law before the case is submitted to the jury. [43] One important purpose of this requirement is to call the attention of the opposing party to the alleged deficiency in the evidence at a point in the trial where that party may cure the defect by presentation of further evidence. [44] The failure to assert a particular sufficiency challenge in a Rule 50(a) motion precludes consideration of that challenge on appeal. [45] NCRIC's principal claim is that the evidence does not support the jury's award because Columbia's theory of damages was flawed. Specifically, NCRIC argues that hypothetical lost profits are not a proper measure of Columbia's damages because Columbia has never been a profitable business. [46] Moreover, NCRIC contends, Columbia calculated its lost revenue stream improperly, because it should have reduced its hypothetical gross patient revenues by its total costs (i.e., including its fixed costs) rather than just its marginal costs (i.e., its variable costs). Relatedly, NCRIC also claims there was insufficient evidence at trial to link the $10 million drop in Columbia's patient revenues to NCRIC or to justify Ben Ezra's adoption of a marginal cost rate of 30% (as opposed to some other, significantly higher percentage). The factual and legal merits of these contentions are debatable, butmore importantlyNCRIC did not include them in its Rule 50(a) motions for judgment as a matter of law. [47] We decline to consider them. NCRIC also argues that the lost congressional appropriation for Columbia's community outreach programs cannot support the jury's award because it was not adjusted downward to reflect the expenses the hospital would have incurred in carrying out those programs. [48] We decline to address this issue because, once again, NCRIC did not preserve it by appropriate objection at trial. When Columbia's counsel argued to the jury that the appropriated funds would have gone straight to the bottom line, NCRIC did not object or dispute the assertion. Nor did NCRIC raise Columbia's failure to set off its outreach program costs against the congressional appropriation in its Rule 50(a) motions during trial. NCRIC first mentioned that defect in its renewed motion for judgment as a matter of law after the verdict, which it filed pursuant to Civil Rule 50(b). [49] That was too late; new grounds may not be asserted in the post-verdict motion. [50] Lastly, NCRIC challenges Ben Ezra's expert opinion testimony as being too speculative (or flatly disproved by the evidence) because he assumed that: (1) Columbia would have remained alive for twenty-five years but for NCRIC's interference; (2) at least twenty-four physicians left Columbia because of NCRIC's conduct; and (3) those physicians would have stayed for twenty years or longer (until they retired at age sixty-five) but for NCRIC's interference. We are satisfied NCRIC preserved this challenge. However, although Ben Ezra's premises were questionable, there was at least some evidence to support their reasonableness. As discussed above, the evidence permitted the jury to ascribe the mass departure of physicians from Columbia to NCRIC's interference and to disbelieve the doctors who claimed they left for other, unrelated reasons. There also was testimony regarding Columbia's enhanced viability following its emergence from bankruptcy and of the long-term loyalty of its attending physicians. The shortcomings in Ben Ezra's analysis were exposed and probed at trial; we agree with the trial court that they went to the weight of his testimony rather than its admissibility and therefore were for the jury to assess. Moreover, in awarding only $5 million in post-closing damages, the jury evidently rejected Ben Ezra's loss projections as too speculative. The jury had other evidencespecifically, the abrupt drop in Columbia's annual revenues after a large proportion of its doctors lefton which to base its verdict.
As an alternative to judgment as a matter of law, NCRIC moved for a new trial pursuant to Civil Rule 59(a). [51] Among other things, NCRIC asked the trial court to grant a new trial unless Columbia accepted a remittitur of $1 million of the $5 million post-closing damages award. In support of this request, NCRIC asked the court to take judicial notice that the actual amount of Congress's grant to Columbia in 2002 for outreach programs was $1 million less than Columbia's chairman, Dr. Rifka, had testified at trial. [52] Observing that NCRIC had not objected to the congressional appropriation testimony at trial, the court declined to notice new facts outside the trial record and refused to grant a remittitur. The trial court did not abuse its discretion by so ruling. [53] We agree with NCRIC that the court may reduce a damage award when it is apparent as a matter of law that certain identifiable sums included in the verdict should not have been there. [54] That standard is not met here, however. Contrary to NCRIC's assumption, it is not apparent that the award of $5 million for post-closing damages represented the lost congressional appropriation. The jury was not asked to identify the basis for its post-closing award, and it did not do so. Although the amount of the award equaled the supposed amount of the appropriation (per Dr. Rifka), there are reasons to doubt the two are related. The evidence of lost patient revenues could have explained the award in its entirety, or at least in part, and it is less than plausible that the jury awarded no such revenues at all as post-closing damages. Moreover, in closing argument, Columbia's counsel asked the jury to treat the lost appropriation as pre-closing damages, not as post-closing damages. In the end, it remains speculative whether, or to what extent, the congressional appropriation factored into the jury's award at all too speculative for us to conclude the trial court abused its discretion by declining to remit $1 million based on the correct amount of the appropriation. [55]