Court Opinion

ID: 6930278
Source: CourtListenerOpinion
Date Created: 2022-07-23 23:55:42.480352+00
Date Added: 2024-06-11T16:07:08.527845
License: Public Domain

BUTZNER, Senior Circuit Judge,
dissenting:
This appeal calls into question the standard for reviewing the denial of a motion for *1309a judgment as a matter of law made after the entry of judgment on the verdict of a jury. Although the name has been changed, the standard for reviewing such a motion remains the same as the standard for reviewing the former motion for judgment notwithstanding the verdict. See Fed.R.Civ.P. 50, advisory committee’s note. The proper standard has been succinctly stated:
In determining whether the evidence is sufficient the court is not free to weigh the evidence or to pass on the credibility of witnesses or to substitute its judgment of the facts for that of the jury. Instead it must view the evidence most favorably to the party against whom the motion is made and give that party the benefit of all reasonable inferences from the evidence.
9 Charles A. Wright & Arthur R. Miller, Federal Practice and Procedure, § 2524, at 543-45 (1971); see also Wright & Miller, supra, § 2357, at 599.
The outcome of this ease turned on the credibility of witnesses. Determination of credibility is a function of the jury, not the appellate court. Moreover, the standard of review, when applied to this case, requires viewing the evidence most favorably to BOA, which had prevailed before the jury, and to give it the benefit of all reasonable inferences from the evidence. The district court applied the proper standard and denied QSP’s motion for judgment as a matter of law.
By way of background, Bill Bright, the principal owner of BOA, wanted to sell a controlling interest in the company or enter into a joint venture, and he had approached several prospective buyers. QSP was on the lookout for the acquisition of companies including BOA and Allegro. The principals of BOA and QSP had conferences about the prospect of QSP purchasing BOA stock or QSP and BOA forming in joint venture. On this much the parties agree, but on nearly every other aspect of the case their evidence clashes.
The parties differed most emphatically on whether they had reached an agreement about a joint venture and whether BOA made certain expenditures on behalf of the joint venture. BOA claimed it made the expenditures to further the interests of the joint venture at a significant benefit to QSP. In contrast, QSP took the position that there was no joint venture and that BOA made the expenditures to perform its obligations under the supply contracts. Counsel for the respective parties devoted almost their entire summations to the jury on these issues.
When the evidence is viewed in the light most favorable to BOA without undertaking to reassess the credibility of the witnesses, the facts emerge quite differently from the self-serving scenario that QSP presents in its appellant’s brief.
In February 1989, Tom Belli of QSP phoned Frank Jorgensen and Bill Bright of BOA and told them Allegro was going out of business. Jorgensen testified that Belli said Allegro’s failure put a different perspective on the joint venture and the deal needed to be done. Belli asked Jorgensen and Bright to come to QSP’s office in Danbury, Connecticut. The next day Jorgensen and Bright met with Belli and QSP’s vice president, Herb Horn. They agreed that Allegro’s inventory for QSP should be shipped to BOA’s warehouse on behalf of the joint venture. BOA agreed to pack and distribute the inventory for QSP at 30 cents per item. They agreed on behalf of the joint venture to discuss hiring Tom Evans, president of Allegro, several other Allegro officers, and Allegro’s sales staff. They jointly interviewed Evans and the officers, but upon learning that the Allegro people were negotiating with a competing firm, they withdrew their offers of employment in part to avoid a bidding war with their competition and in part because Mrs. Evans did not wish to move from Atlanta. At QSP’s direction, however, they did hire some of Allegro’s former employees.
Subsequently, BOA made numerous expenditures. At trial, BOA thoroughly documented and extensively testified to these expenditures. The record shows that on behalf of the joint venture, in addition to hiring Allegro personnel, BOA upgraded its computer equipment and programs, relocated its data-processing keypunch operations, built a cold storage unit for the Allegro food, conducted tests to gauge the demand for QSP products, and provided prize programs for *1310Allegro products. It would not have made those expenditures simply to distribute Allegro inventory at 30 cents per item.
Jorgensen testified that in essence the joint venture was consummated at the Dan-bury meeting and that QSP would control it. ■ He also testified that Belli said, “Look, trust me, we have a deal.” Jorgensen also testified that the parties agreed to meet in the summer of 1989 to work out the details of the joint venture. Tom Evans testified that he asked Belli about the deal between BOA and QSP. Belli told Evans: “It’s a done deal.” Sharon Beth Moore, an employee of BOA, testified that Horn of QSP told her that he was calling the shots at BOA.
In contrast to BOA’s evidence, Belli testified that in his February conversation with Jorgensen and Bright he never said that the Allegro situation put another perspective on the proposed joint venture. He denied that he said at the Danbury meeting, “trust me, we have a deal,” and he denied that QSP and BOA had formed a joint venture. He denied telling Tom Evans in response to Evans’ question about the BOA-QSP deal that “[fit’s a done deal.” Horn testified that at the Danbury meeting there was “absolutely” no discussion or agreement about a joint venture. Contradicting Ms. Moore, he claimed that there was “absolutely” no discussion or agreement about QSP taking control of BOA’s operations and that he never exercised such control.
Corroborating Jorgensen’s testimony, the parties met in the summer of 1989, but QSP refused to work out the details of the joint venture. After QSP repudiated the joint venture and an agreement to purchase BOA stock, BOA commenced this suit, alleging among other causes of action a claim for unjust enrichment.
The trial lasted 13 days, giving the jury ample opportunity to view the demeanor of the witnesses and assess their credibility. In view of the conflict in the testimony of the principal witnesses for each party, it is apparent that the jury did not credit QSP’s evidence. The jury’s verdict firmly establishes that the damages it awarded BOA arose out of the expenditures that benefitted QSP and that BOA incurred the damages on BOA’s understanding that BOA and QSP had embarked on a joint venture. Contrary to QSP’s contention throughout the trial, the jury found that the damages BOA incurred— including the costs of hiring Allegro personnel, upgrading operations and facilities, and providing test and prize programs — did not arise from BOA’s supply agreements with QSP.
It is hornbook law that one who performs in accordance with an express contract cannot recover restitutionary damages. If in fact BOA performed all of the services pursuant to the express supply contracts, BOA could not recover as a matter of law. Restatement of Restitution § 107 (1937). But if the evidence showed BOA performed the services, for which the jury awarded damages, pursuant to its belief that QSP had entered into a joint venture, quite apart from the supply contracts, BOA should not be denied relief as a matter of law. Id. Consequently, the evidence of QSP’s promotion of the joint venture is material to this cause of action. The inquiry is factual. Did the evidence establish that BOA performed all services pursuant to the express supply contracts, as QSP contends? Or did the evidence establish that in addition to servicing the supply contracts BOA performed additional services, which were not contemplated by the supply contracts, as BOA contends and the jury found? The district court understood the issues when it instructed the jury and later when it denied QSP’s motion for judgment as a matter of law.
The jury’s verdict is consistent with the court’s instructions on unjust enrichment and restitution damages. The judge instructed the jury that to prevail under their unjust enrichment claim, BOA had to prove four elements: (1) that QSP improperly utilized BOA facilities and personnel, (2) that QSP did so without compensating BOA, (3) that QSP received the benefit of an “ownership” interest in BOA, and (4) that BOA suffered damages. The judge instructed the jury that if they found unjust enrichment they should award BOA restitution damages that would restore BOA to its original position prior to the alleged wrongful interference. While these instructions are not a model for every *1311claim of unjust enrichment, the court and the parties recognized that they were well tailored to fit the facts of this case. QSP did not object to these instructions, nor does it claim on appeal that the instructions were plain error.
The evidence discloses that QSP improperly utilized the facilities and personnel of BOA. QSP directed BOA to provide services not included in the supply contracts that caused BOA to incur costs. QSP did not compensate BOA for these services and consequently received the benefit of an “ownership” interest. The jury’s verdict illustrates the notion: “[I]t is the ordinary understanding that a person who asks another to do something for him ... will pay for it unless the circumstances under which the request is made indicate otherwise.” Restatement of Restitution § 107 cmt. c (1937). Here the circumstances presented a factual question that the jury, in the face of conflicting evidence, resolved in favor of BOA.
Under West Virginia law, restitution damages from a claim of unjust enrichment are measured in terms of the benefit the plaintiff conferred to the defendant. Dunlap v. Hinkle, 173 W.Va. 423, 317 S.E.2d 508, 512 (1984); Somerville v. Jacobs, 153 W.Va. 613, 170 S.E.2d 805, 810 (1969). “A person may be unjustly enriched not only where he receives money or property, but also where he otherwise receives a benefit. He receives a benefit ... where he is saved expense or loss.” Prudential Ins. Co. v. Couch, 180 W.Va. 210, 376 S.E.2d 104, 109 (1988) (quoting Blue Cross of Cent. New York, Inc. v. Wheeler, 93 A.D.2d 995, 461 N.Y.S.2d 624, 626 (1983)); see also Dunlap, 317 S.E.2d at 512 n. 2; Restatement of Restitution § 1 cmt. b (1937).
The judge’s instructions, and BOA’s argument on appeal, comport with this definition of benefit. QSP benefitted to the extent that BOA saved QSP the costs it would have incurred absent BOA’s expenditures. BOA would not have incurred these costs absent a perception that a joint venture existed. The jury carefully followed the court’s instructions, including limiting BOA’s damages to its losses. Consequently, it disallowed $193,-903 of BOA’s claim. The disallowance appears to have been adequate to account for any benefit BOA received from its expenditures such as the residual value of the cooling facility and software.
In its order denying QSP’s motions for judgment as a matter of law, or to amend the judgement, or to grant a new trial, the district court stated:
The Court concludes that the jury’s verdict was supported by substantial evidence. The Court also concludes that the verdict was neither against the clear weight of the evidence, based upon false evidence, nor a miscarriage of justice. Finally, the award to the Plaintiff did not ‘exceed[ ] the maximum limit of a reasonable range within which’ the jury could properly operate under the applicable law and evidence. Therefore, Defendant’s motions are hereby DENIED, (citations omitted).
The district court had an opportunity to assess the weight of the evidence. Its grasp of the issues and its denial of QSP’s motions are supported by the record and West Virginia law. I would affirm its judgment.