Court Opinion

ID: 616618
Source: CourtListenerOpinion
Date Created: 2011-11-03 14:35:18+00
Date Added: 2024-06-11T17:50:37.801402
License: Public Domain

10-3214-cv
Edible Arrangements v. Incredible Franchise

                  UNITED STATES COURT OF APPEALS
                      FOR THE SECOND CIRCUIT

                              SUMMARY ORDER
RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A
SUMMARY ORDER FILED ON OR AFTER JANUARY 1, 2007, IS PERMITTED AND IS GOVERNED
BY FEDERAL RULE OF APPELLATE PROCEDURE 32.1 AND THIS COURT'S LOCAL RULE
32.1.1. WHEN CITING A SUMMARY ORDER IN A DOCUMENT FILED WITH THIS COURT, A
PARTY MUST CITE EITHER THE FEDERAL APPENDIX OR AN ELECTRONIC DATABASE (WITH
THE NOTATION "SUMMARY ORDER"). A PARTY CITING A SUMMARY ORDER MUST SERVE A
COPY OF IT ON ANY PARTY NOT REPRESENTED BY COUNSEL.

          At a stated term of the United States Court of Appeals
for the Second Circuit, held at the Daniel Patrick Moynihan
United States Courthouse, 500 Pearl Street, in the City of New
York, on the 3rd day of November, two thousand eleven.
PRESENT:
            ROSEMARY S. POOLER,
            BARRINGTON D. PARKER,
            DENNY CHIN,
                      Circuit Judges.

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EDIBLE ARRANGEMENTS INTERNATIONAL, INC.,
          Plaintiff-Appellant,

                  -v.-                                10-3214-cv

RICHARD CHINSAMMY,
          Defendant-Cross Defendant,

INCREDIBLE EDIBLE DELITES, INC., MAUREEN
DUGERT, RM INVESTMENTS, LLC,
          Defendants,
INCREDIBLE FRANCHISE CORP.,
          Defendant-Cross Claimant-Appellee.

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FOR PLAINTIFF-APPELLANT:      NANCY FITZPATRICK MYERS, Lynch,
                              Traub, Keefe & Errante, P.C.,
                              New Haven, Connecticut.

FOR DEFENDANT-APPELLEE:       JOHN J. JACKO, III (Alan S.
                              Fellheimer, on the brief),
                              Fellheimer & Eichen LLP, New York,
                              New York.

          Appeal from the United States District Court for the

District of Connecticut (Eginton, J.).    UPON DUE CONSIDERATION,

IT IS HEREBY ORDERED, ADJUDGED, AND DECREED that the judgment of

the district court is AFFIRMED.

          Plaintiff-appellant Edible Arrangements International,

Inc. ("Edible Arrangements") appeals from the district court's

judgment entered July 14, 2010, awarding it damages of $150,000

and denying its claim for punitive damages.    The judgment was

entered following the jury's award of $150,000 in damages to

Edible Arrangements and the denial, by the district court in a

memorandum decision entered May 25, 2010, of its motion for

punitive damages.   We assume the parties' familiarity with the

underlying facts, the procedural history of the case, and the

issues on appeal.

          "We review a district court's decision not to award

punitive damages for abuse of discretion."    Ragin v. Harry
Macklowe Real Estate Co., 6 F.3d 898, 909 (2d Cir. 1993) (citing

McCann v. Coughlin, 698 F.2d 112, 127 (2d Cir. 1983)).    See also

Browning-Ferris Indus. of Vt., Inc. v. Kelco Disposal, Inc., 492

U.S. 257, 279 (1989) (holding court of appeals should review

district court's determination regarding punitive damages under

abuse-of-discretion standard).    Edible Arrangements' claim that

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the district court's denial of punitive damages implicates its

Seventh Amendment rights does not change the standard of review.

See Cooper Indus., Inc. v. Leatherman Tool Group, Inc., 532 U.S.

424, 433, 437-48 (2001) ("If no constitutional issue is raised,

the role of the appellate court    . . . is to review the trial

court's determination [regarding punitive damages] under an

abuse-of-discretion standard." (internal citation and quotation

marks omitted)).   "Because the jury's award of punitive damages

does not constitute a finding of 'fact,'" a trial court's

determination regarding punitive damages "does not implicate

. . . Seventh Amendment concerns."      Id. at 437.
           We have reviewed the record in light of these

principles.   We affirm the district court's denial of Edible

Arrangements' motion for punitive damages for substantially the

reasons articulated by the district court.

           Specifically, the jury found defendant-appellee

Incredible Franchise Corporation ("IFC") liable only on a claim

of unjust enrichment.   Under Connecticut law, however, an award

of punitive damages in these circumstances is impermissible, and

thus the jury's verdict that an assessment of punitive damages

was warranted contravened Connecticut law.

            "In a diversity action, or in any other lawsuit where

state law provides the basis of decision, the propriety of an

award of punitive damages for the conduct in question . . . [is

a] question[] of state law."   Browning-Ferris Indus., 492 U.S. at
278.   Punitive damages in Connecticut are limited to litigation

                                  -3-
expenses and "serve primarily to compensate the plaintiff for his

injuries."    Berry v. Loiseau, 614 A.2d 414, 435 (Conn. 1992).

The Connecticut Supreme Court has recognized that "in the light

of the increasing costs of litigation," punitive damages can also

"punish and deter wrongful conduct."     Id.

             In Connecticut, however, punitive damages are not

ordinarily available in a breach of contract case unless the

breach is "founded on tortious conduct."       L.F. Pace & Sons, Inc.

v. Travelers Indem. Co., 514 A.2d 766, 776 (Conn. App. Ct. 1986).

See also Triangle Sheet Metal Works, Inc. v. Silver, 222 A.2d
220, 225 (Conn. 1966).    A claim of unjust enrichment is a quasi-

contract claim for which the right to recovery is "essentially

equitable."    Meaney v. Conn. Hosp. Ass'n, Inc., 735 A.2d 813,

819-20 (Conn. 1999) (internal citations omitted).       Relief comes

in the form of restitution measured in terms of a theoretical

contract price -- in other words, "the precise amount for which

the defendant would have been liable if there had been an

enforceable contract."    Id. at 821.

             Here, despite finding liability only on the unjust

enrichment claim, the jury still awarded punitive damages against

IFC.   Further, Edible Arrangements failed to prove any underlying

tortious conduct sufficient to warrant punitive damages.       See

L.F. Pace & Sons, 514 A.2d at 776.      The jury's limited finding

with respect to the Connecticut Unfair Trade Practices Act

("CUTPA") -- that IFC had engaged in an unfair trade practice

that was deceptive -- did not create a basis for an award of

                                  -4-
punitive damages because the jury did not find that IFC's acts

proximately caused Edible Arrangements to suffer an

"ascertainable loss."   See Larobina v. Home Depot, USA, Inc., 821

A.2d 283, 288 (Conn. App. Ct. 2003) ("[T]o be entitled to any

relief under CUTPA, a plaintiff must first prove that he has

suffered an 'ascertainable loss' due to a CUTPA violation."

(emphasis in the original) (citing Hinchliffe v. American Motors

Corp., 440 A.2d 810, 815 (Conn. 1981))).    Thus, the district

court correctly concluded that the jury's award of punitive

damages on the unjust enrichment count contravened Connecticut

law.1
            We note that the jury's award was likely due to the

fact that both the jury charge and the special verdict form

failed to instruct the jury that it could not award punitive

damages on the unjust enrichment count.2   The district court,

        1
          Edible Arrangements cites two cases for the contention
that punitive damages involving equitable claims are nevertheless
appropriate under Connecticut law. These cases are
distinguishable as both involved an underlying tort and not a
contract or quasi-contract claim. See Waterbury Petroleum
Prods., Inc. v. Canaan Oil and Fuel Co., Inc., 477 A.2d 988, 990
(Conn. 1984); Collens v. New Canaan Water Co., 234 A.2d 825, 828
(Conn. 1967). The parties offer no Connecticut cases that
squarely address an award of punitive damages on an unjust
enrichment claim. We have only found one. See Withers Bergman,
LLP v. New England Personnel of Hartford, LLC, No. CV054007037,
2007 WL 1193165, at *8 (Conn. Super. Ct. April 5, 2007) (denying
recovery of punitive damages on a breach of contract claim and an
unjust enrichment claim noting that the plaintiff conceded that
such claims do not support an award of punitive damages).
        2
          Specifically, the jury charge stated that "if you've
awarded compensatory damages in this case on any of the
Plaintiff's claims, then you must also determine whether an award
of punitive damages may be assessed against IFC." (Trial Tr. 92,
April 14, 2010). Similarly, the special verdict form explained

                                 -5-
however, in denying the motion for punitive damages, caught this

error and corrected it before entering judgment for Edible

Arrangements.   A trial court certainly may correct a legal error

of its own, prior to or even after entering a final judgment.

Cf. In re 310 Assocs., 346 F.3d 31, 35 (2d Cir. 2003) (holding

that motions for relief from judgment or order brought under

Federal Rule of Civil Procedure 60(b)(1) provide means for "a

district court to correct legal errors by the court" (internal

citation omitted)); Schildhaus v. Moe, 335 F.2d 529, 531 (2d Cir.

1964) ("[T]here is indeed good sense in permitting the trial

court to correct its own error . . . ; no good purpose is served

by requiring the parties to appeal to a higher court, often

requiring remand for further trial proceedings, when the trial

court is equally able to correct its decision in the light of new

authority . . . ." (internal citation omitted)); McDowell v.
Celebrezze, 310 F.2d 43, 44 (5th Cir. 1962) ("Overburdened

courts, trial and appellate, should not have to squander precious

time and resources in such artificial maneuvers where the Judge

on his own and in time faces up to the error and corrects it by

effective action.").

          Here, the district court acted properly and "within the

permissible scope of discretion" to correct its error and deny

Edible Arrangements' motion for punitive damages.   See Aczel v.

that if the jury answered affirmatively on certain questions,
including the last interrogatory under the unjust enrichment
count, it should proceed to the questions on compensatory and
punitive damages.

                                -6-
Labonia, 584 F.3d 52, 59 (2d Cir. 2009) (affirming district

court's striking of compensatory damages awarded by jury that

also found defendant entitled to qualified immunity).

          Further, we conclude that ordering a new trial

altogether or ordering a trial limited to damages, as is often

done when a jury verdict is deemed excessive, see Tingley Sys.,

Inc. v. Norse Sys., Inc., 49 F.3d 93, 96 (2d Cir. 1995), would be

of no use here.   We have previously found that there is no point

in ordering a new trial where such a trial would result "in the

same outcome," making any previous error of the court an "error

without consequence."   Id.   Here, a new trial would not change

the outcome: if punitive damages are not available on an unjust

enrichment claim, then the jury charge and special verdict form

would so instruct, and Edible Arrangements would still not

receive an award of punitive damages on the unjust enrichment

count.

          We have considered appellant's other arguments on

appeal and have found them to be without merit.   Accordingly, the

judgment of the district court is hereby AFFIRMED.

                          FOR THE COURT:

                          CATHERINE O'HAGAN WOLFE, CLERK

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