Court Opinion

ID: 998661
Source: CourtListenerOpinion
Date Created: 2013-07-04 17:14:04.832133+00
Date Added: 2024-06-11T15:35:55.449292
License: Public Domain

UNPUBLISHED

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

JIMMY JONES,
Plaintiff-Appellant,

v.
                                                               No. 98-1133
COLONIAL LIFE & ACCIDENT
INSURANCE COMPANY,
Defendant-Appellee.

JIMMY JONES,
Plaintiff-Appellee,

v.
                                                               No. 98-1223
COLONIAL LIFE & ACCIDENT
INSURANCE COMPANY,
Defendant-Appellant.

Appeals from the United States District Court
for the Eastern District of North Carolina, at Raleigh.
Malcolm J. Howard, District Judge.
(CA-95-361-5-1-H)

Argued: March 2, 1999

Decided: May 3, 1999

Before WIDENER, WILLIAMS, and MICHAEL, Circuit Judges.

_________________________________________________________________

Affirmed by unpublished per curiam opinion.

_________________________________________________________________
COUNSEL

ARGUED: William D. McNaull, Jr., Charlotte, North Carolina, for
Appellant. John Lester Sarratt, KILPATRICK STOCKTON, L.L.P.,
Raleigh, North Carolina, for Appellee. ON BRIEF: Karen F. Gray,
KILPATRICK STOCKTON, L.L.P., Raleigh, North Carolina, for
Appellee.

_________________________________________________________________

Unpublished opinions are not binding precedent in this circuit. See
Local Rule 36(c).

_________________________________________________________________

OPINION

PER CURIAM:

Jimmy Jones brought breach of contract and state law deceptive
practices claims against his former employer, Colonial Life & Acci-
dent Insurance Company (Colonial Life). The district court dismissed
the deceptive practices claim before trial. At trial, on the question of
damages, the court excluded Jones's testimony regarding future lost
earnings. A jury found for Jones on the breach of contract claim, but
awarded no damages. Jones now appeals. Colonial Life cross-appeals
the finding that it breached the contract. We affirm.

I.

Jimmy Jones began selling insurance for Colonial Life in 1962.
Eventually, Jones entered into a formal Market Director Agreement
(the Agreement) with Colonial Life. Among other things, the Agree-
ment required Jones to recruit, train, and motivate new independent
agents to sell Colonial Life insurance. As compensation, Jones
received a commission on all premiums received on policies sold by
the agents under him and a commission on each of these policies that
was renewed. The Agreement provided that if Jones was terminated,
he would no longer receive sales commissions. Nevertheless, Jones
was entitled to the renewal commissions for the remainder of his life

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or 20 years, whichever was longer, provided he did not compete with
Colonial Life in the future.

On January 2, 1995, Colonial Life terminated Jones on the grounds
that his job performance was inadequate. Jones then sued, alleging
that Colonial Life (1) breached the Agreement and (2) engaged in
unfair or deceptive acts or practices in violation of North Carolina
General Statutes § 75-1.1. He contended that his sudden difficulty in
recruiting and motivating insurance agents was due to two actions
taken by Colonial Life. First, the company began to pay to Statewide
Benefits, Inc., a third-party broker, a 13 1/2 percent share of commis-
sions on policies sold to state government agencies. Second, Colonial
Life assigned all of the school teacher accounts in North Carolina to
another Market Director. Jones also contended that these actions
caused a substantial reduction in his potential future income.

Colonial Life moved to dismiss the deceptive practices claim pur-
suant to Federal Rule of Civil Procedure 12(b)(6), and the district
court granted this motion. At trial on the remaining breach of contract
claim, Jones testified about his past income under the Agreement.
However, the court prevented him from testifying about his future
expectations with regard to his renewal commissions. Ultimately, a
jury found that Colonial Life breached the Agreement, but awarded
no damages. Jones moved for a new trial on the question of damages,
and the court denied that motion.

Jones now appeals, contending that the district court improperly
dismissed his deceptive practices claim. He further asserts that the
court improperly excluded his testimony regarding future renewal
commissions and erred by denying his motion for a new trial.* Colo-
nial Life cross-appeals, contending that the jury's verdict finding a
breach of contract was not supported by the evidence.
_________________________________________________________________

*We dismissed an initial appeal by Jones because the district court had
not yet entered a final order. See 28 U.S.C.§ 1291. The district court has
since disposed of the outstanding issues in the case, and Jones now
appeals from a final order.

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II.

We affirm the district court's dismissal of Jones's deceptive prac-
tices claim.

North Carolina General Statutes § 75-1.1 outlaws unfair methods
of competition and unfair or deceptive acts or practices in or affecting
commerce. However, it does not apply to an "ordinary breach of con-
tract," even if that breach was intentional. United Roasters, Inc. v.
Colgate-Palmolive Co., 649 F.2d 985, 992 (4th Cir. 1981). Section
75-1.1 only covers actions that are "actually deceptive or approach
deception." Id. We have also concluded that for this statute to apply,
the deception must have taken place at the time the contract was
made. Id.

Jones contends that Colonial Life violated § 75-1.1 when it (1)
began paying a portion of sales commissions to Statewide Benefits for
policies sold to state government agencies and (2) transferred the
accounts of teachers in North Carolina to another Market Director.
These claims, however, involve allegations of ordinary breach of con-
tract on the part of Colonial Life. Furthermore, these actions by Colo-
nial Life occurred after the formation of the Agreement; Jones does
not allege any deception at the time the contract was made. Therefore,
§ 75-1.1 does not apply to Colonial Life's conduct. Even if all facts
are construed in Jones's favor, the deceptive practices claim fails to
state a claim upon which relief may be granted.

III.

We conclude that the district court did not abuse its discretion in
excluding testimony by Jones regarding his predictions of future
renewal commissions.

On direct examination Jones testified about his past earnings under
the Agreement and about the components of that income. He also esti-
mated, based on his past experience, the rate at which policy renewals
decline over time. However, the court sustained Colonial Life's
objection when Jones was asked about "his personal expectation or
perception of his renewals in the future, given the present state of the
situation. In other words, with his not being with the company."

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Federal Rule of Evidence 701 requires that lay opinion testimony
be "rationally based on the perception of the witness." In other words,
the testimony must be based on the firsthand knowledge of the wit-
ness, including "relevant historical or narrative facts that the witness
has perceived." MCI Telecommunications Corp. v. Wanzer, 897 F.2d
703, 706 (4th Cir. 1990) (quoting Teen-Ed, Inc. v. Kimball Interna-
tional, Inc., 620 F.2d 399, 403 (3d Cir. 1980)). The district court
properly allowed Jones to testify on matters within his firsthand
knowledge -- his past income and past experience with renewals.
However, Jones's predictions regarding future renewals would have
been entirely speculative and outside his firsthand knowledge.

Jones contends that MCI Telecommunications supports the admis-
sibility of his testimony. In that case, this court ruled that the opinion
testimony of a non-party bookkeeper (who was not designated as an
expert) was admissible. MCI Telecommunications , 897 F.2d at 706.
The testimony involved her calculations of her company's profits dur-
ing the three years prior to trial. We based our decision on the book-
keeper's firsthand knowledge of the company's underlying financial
records and the fact that her calculations were based on these records.
Id. Here, however, Jones's testimony would have involved predic-
tions of future events, not estimates of amounts that had already
accrued before trial. As a result, it would have been more speculative
than the evidence in MCI Telecommunications. Therefore, we cannot
say that the district court abused its discretion in excluding this evi-
dence.

IV.

The district court did not abuse its discretion by denying Jones's
motion for a new trial on the question of damages. The fact that the
jury found a breach of the Agreement but awarded no damages is
unremarkable. See, e.g., City of Richmond v. Madison Mgmt. Group,
Inc., 918 F.2d 438, 456-58 (4th Cir. 1990). The jury may simply have
concluded that although Colonial Life breached the Agreement, there
was insufficient evidence of damages. Alternatively, there was ample
evidence for a reasonable jury to find that Jones failed to mitigate his
damages. He continued to earn renewal commissions after he was ter-
minated (he received more than $150,000 in 1995). He admitted that
he did no work at all in 1995, nor did he seek any other employment.

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He also rejected the position of Sales Director that Colonial Life
offered him.

The jury's decision to award no damages was therefore supported
by the evidence. Accordingly, the district court's denial of Jones's
motion for a new trial on the question of damages was not an abuse
of discretion.

V.

Colonial Life cross-appeals, contending that the evidence was
insufficient to support the jury's finding that the company breached
the Agreement. We disagree.

The Agreement gave Colonial Life the right to terminate Jones for
"just cause." Colonial Life contends that Jones was terminated
because he failed to fulfill his contractual duty to recruit, train, and
motivate sales representatives. Although his performance numbers
were decreasing, Jones offered evidence that his decline in perfor-
mance was due to Colonial Life's agreement with Statewide Benefits.
Several rebuttal witnesses confirmed this story. This evidence was
sufficient for a reasonable jury to conclude that Colonial Life
breached the Agreement.

VI.

For the reasons stated above, the judgment of the district court is

AFFIRMED.

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