Court Opinion

ID: 8306016
Source: CourtListenerOpinion
Date Created: 2022-10-17 12:36:56.719384+00
Date Added: 2024-06-11T16:44:33.186977
License: Public Domain

SOTOMAYOR, Circuit Judge,
concurring.
The majority holds that (1) the automatic bankruptcy stay, 11 U.S.C. § 362(a), applies to bankrupt debtor Mare Gardner and his wholly owned corporation, Queenie Ltd., but not to the remaining Counterclaim Defendants, Joseph Heaven and Heavenly Fabrics, Inc. (the “Heavenly Appellants”),1 and (2) the Heavenly Appellants have waived the potential defense that compensatory or nominal damages are required to support an award of punitive damages. I agree with both of these holdings. I write separately to clarify exactly when I believe the Heavenly Appellants’ waiver occurred.
I would hold the Heavenly Appellants responsible only for failing to make their motion before Judge Buchwald rendered her decision as factfinder on compensatory damages. It is not completely clear from the record whether, under the parties’ agreed bifurcation, the judge was simply to find the amount of compensatory damages, or was to be the factfinder with respect to compensatory damages in general, or even what this distinction might mean. Judge Buchwald instructed the jury both that she would “place a dollar value” on the compensatory damages Ny-gard suffered if the jury found the Counterclaim Defendants hable and that “[y]our job is the punitive damages side, if you find liability. Mine is the actual damages side.” Given the ambiguity in the record, I disagree with the majority that the Heavenly Appellants are responsible for failing to make a Rule 50 motion before the jury trial on the issue whether compensatory damages are required to support an award of punitive damages.
In its submission for compensatory damages to Judge Buchwald, Nygard relied solely upon its argument that attorney’s fees were compensable damages in a claim for tortious interference with prospective economic advantage. Had the Heavenly Appellants argued in their Rule 50 motion, filed after the jury verdict but before Judge Buchwald’s determination of compensatory damages, that attorney’s fees were not compensable damages and therefore Nygard had demonstrated no compensatory damages to the relevant factfinder (that is, Judge Buchwald), the motion would have been timely and the Heavenly Appellants would have properly raised the potential defense that compensatory damages must support a punitive damages award. By neglecting to make this argument in the district court, the Heavenly Appellants have waived it. See Tolbert v. Queens Coll., 242 F.3d 58, 76 (2d Cir.2001).
I note that because the Heavenly Appellants raised this argument for the first time on appeal, Nygard did not have the opportunity to provide additional evidence to the district court regarding compensatory damages, or to request nominal damages in an attempt to cure any potential problem. Avoiding such an inequity is precisely the purpose of Rule 50’s requirement that a motion be made before the issue is submitted to the factfinder. See id. at 76-77 (“[T]he motion must be sufficient to inform the opposing party of the precise issue as to which more evidence is *292needed in order to warrant its submission to the jury.”); see also Fed.R.Civ.P. 50 advisory committee note (1991 Amendment).
Thus, I am in agreement with the majority that the Heavenly Appellants’ waiver disposes of this appeal, but have a different view of what actually constituted the waiver.2 I would not impose upon the Heavenly Appellants an obligation to raise the compensatory damages defense before the close of the jury trial, because it was not clear that the jury was the factfinder on the issue of compensatory damages. Parties may shape litigation in a variety of ways, including various bifurcation methods. One hopes that in so doing, they think through the implications of their choice. Given the ambiguity in the record, the Heavenly Appellants may have relied upon a reasonable, albeit different, understanding of the parties’ agreed bifurcation than the majority assumes. I would not hold the Heavenly Appellants bound by their choice when the record does not provide a clear answer regarding what that choice was. Cf. City of New York v. Minetta, 262 F.3d 169, 181 (2d Cir.2001) (finding waiver in the context of a deliberate choice to remain silent).
I do, however, hold the Heavenly Appellants bound by their failure to alert Judge Buchwald to the failure of Nygard’s proof with respect to compensatory damages, and therefore concur that the judgment in favor of Nygard and against the Heavenly Appellants should be affirmed.

. While I applaud counsel's rhetorical turn of phrase, I note that, given the serious nature of the claims against the Counterclaim Defendants, including perpetrating a fraud on the United States Copyright Office, the appellation may be less than appropriate. Not lacking a sense of irony, however. I too refer to these parties as the "Heavenly Appellants.”

. The majority suggests that I misread their position on the Heavenly Appellants’ waiver. I read the majority as finding two separate waivers that combine to defeat the Heavenly Appellants’ arguments. First, the Heavenly Appellants waived their argument that Ny-gard did not present sufficient evidence of compensatory damages to the jury by failing to make a Rule 50 motion before the end of the jury trial. Majority Op. at 289. Second, the Heavenly Appellants agreed to a bifurcation procedure that forfeited their arguable defense that an award of punitive damages is only proper if some form of compensatory damages is awarded. Majority Op. at 289-90. The first waiver is not relevant to the Heavenly Appellants' argument on appeal, as they no longer argue that Nygard failed to present sufficient evidence of compensatory damages to the jury. I do not agree that the second waiver was, in fact a waiver, see supra, because the parties’ bifurcation of compensatory and punitive damages did not automatically sever the legal link between compensatory and punitive damages. Nonetheless, for the reasons stated above, I believe that the Heavenly Appellants have waived their argument that some amount of compensatory damages are required to support an award of punitive damages.