Court Opinion

ID: 2964157
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Date Created: 2015-09-21 21:21:29.246658+00
Date Added: 2024-06-11T11:42:51.848783
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USCA1 Opinion

	

                            UNITED STATES COURT OF APPEALS
                            UNITED STATES COURT OF APPEALS
                                FOR THE FIRST CIRCUIT
                                FOR THE FIRST CIRCUIT
                                 ____________________

        Nos.  95-1061
              95-1145
              95-1570
              95-1648

                       CIGNA FIRE UNDERWRITERS COMPANY, ET AL.,

                       Plaintiffs, Appellees, Cross-Appellants,

                                          v.

                              MACDONALD & JOHNSON, INC.,

                        Defendant, Appellant, Cross-Appellee.

                                 ____________________

                    APPEALS FROM THE UNITED STATES DISTRICT COURT

                          FOR THE DISTRICT OF MASSACHUSETTS

                 [Hon. Frank H. Freedman, Senior U.S. District Judge]
                                          __________________________
                                 ____________________

                                        Before

                                 Selya, Circuit Judge,
                                        _____________
                            Bownes, Senior Circuit Judge,
                                    ____________________
                              and Boudin, Circuit Judge.
                                          _____________

                                 ____________________

            John B. Stewart, with whom Edward  V. Leja and Moriarty,  Donoghue
            _______________            _______________     ___________________
        & Leja, P.C. were on brief for CIGNA Fire Insurance, et al.
        ____________
            F.  Michael Joseph,  with whom  Joseph, St.  Clair &  Cava was  on
            __________________              __________________________
        brief for MacDonald & Johnson, Inc.
                                 ____________________

                                    June 28, 1996
                                 ____________________

                      BOWNES,  Senior  Circuit  Judge.    Before  us  are
                      BOWNES,  Senior  Circuit  Judge.
                               ______________________

            appeals  by both parties after  two jury trials.   CIGNA Fire

            Insurance   Company   ("CIGNA")    is   a   large   insurance

            conglomerate.    MacDonald &  Johnson,  Inc.,  ("M&J") is  an

            independent  insurance  agent  that sold,  inter  alia, CIGNA
                                                       ___________

            insurance.   CIGNA sued M&J  for breach of  contract alleging

            failure  to  remit insurance  premiums due  it  by M&J.   M&J

            brought  a  counterclaim against  CIGNA  alleging:  breach of

            contract;    intentional   interference    with   contractual

            relations; intentional interference  with economic gain;  and

            violation of Mass. Gen. L. ch. 93A,   11, and 93A generally.

                      After a four-day trial,  the jury returned  special

            verdicts:

                      Judgment for the defendant on plaintiffs'
                      claim of breach of contract.

                      Judgment  for  the defendant  against the
                      plaintiffs  on its  counterclaim alleging
                      breach of contract  with damages  awarded
                      in the amount of $780,000.00.

                      Judgment  for  the defendant  against the
                      plaintiffs  on its  counterclaim alleging
                      interference  with  contractual relations
                      with  damages awarded  in  the amount  of
                      $500,000.00.

            Adding   interest,   the  total   award   to   M&J  came   to

            $1,544,106.73.       The  district court  found  for  CIGNA on

            M&J's claimed violations of Mass. Gen. L. ch. 93A.

                      After a  hearing, the district court  set aside the

            jury verdict and ordered a new trial.

                                         -2-
                                          2

                      After another four-day trial the  second jury found

            in  favor of  M&J and  awarded it  damages  in the  amount of

            $250,000.00. Judgment  for M&J, including  interest, came  to

            $321,333.28.  Early in the second trial, the district  judge,

            based on a  stipulation by  the parties, ruled  that M&J  had

            breached  its contract  with  CIGNA and  that the  amount due

            CIGNA was $169,798.14.  Adding interest to this resulted in a

            judgment  for CIGNA  in the  sum of  $219,888.60.   The judge

            denied both parties' post-trial motions.

                      Before starting our exposition of the evidence  and

            analysis  of the issues, we state the standard of review that

            controls our  assessment of the district  court's decision to

            set aside  the jury  verdicts and  order a new  trial in  the

            first case and decline to do so the second time around.  Fed.

            R. Civ. P. 59(a) provides in pertinent part:

                         (a)    Grounds.  A  new  trial may  be
                         (a)    Grounds.  
                      granted to all or  any of the parties and
                      on  all or part  of the issues  (1) in an
                      action in which there has been a trial by
                      jury,  for any  of the reasons  for which
                      new trials have  heretofore been  granted
                      in actions  at law  in the courts  of the
                      United States;

                      The Court has  described the scope  of the rule  as

            follows:

                      The motion for a new trial may invoke the
                      discretion of  the court in so  far as it
                      is bottomed on the claim that the verdict
                      is  against the  weight of  the evidence,
                      that the damages are excessive,  or that,
                      for other reasons, the trial was not fair
                      to  the  party   moving;  and  may  raise

                                         -3-
                                          3

                      questions of law  arising out of  alleged
                      substantial   errors   in  admission   or
                      rejection of evidence or  instructions to
                      the jury.

            Montgomery Ward & Co. v. Duncan, 311 U.S. 243, 251 (1940).
            _______________________________

                      First Circuit precedent is clear.

                         A  district  court  may  set  aside  a
                      jury's verdict and order a new trial only
                      if the verdict is so clearly against  the
                      weight of the evidence  as to amount to a
                      manifest  miscarriage  of justice.   See,
                                                           ___
                      e.g., Lama v.  Borras, 16  F.3d 473,  477
                      ____  _______________
                      (1st Cir. 1994).  A trial judge's refusal
                      to  disturb a  jury  verdict is  reversed
                      only for abuse of discretion.

            Federico  v. Order of Saint Benedict in Rhode Island, 64 F.3d
            ____________________________________________________

            1, 5  (1st Cir. 1995).   See also Fleet Nat'l  Bank v. Anchor
                                     ___ ____ ___________________________

            Media Television, Inc., 45 F.3d 546, 552 (1st Cir. 1995).
            ______________________

                      There can  be no doubt that the district court here

            understood  the  constraints applicable  to  setting aside  a

            verdict  and  ordering a  new trial.    The new  trial ruling

            states, inter alia:  
                    _____ ____

                      A jury verdict may not be set aside as  a
                      matter of law under Fed. R. Civ. P. 50(b)
                      except  on  a  "determination   that  the
                      evidence could lead  a reasonable  person
                      to only one conclusion."  Acevedo-Diaz v.
                         ___________________    _______________
                      Aponte,  1 F.3d  62, 66  (1st Cir.  1993)
                      ______
                      (quoting  Hiraldo-Cancel  v. Aponte,  925
                                _________________________
                      F.2d 10, 12 n.2 (1st Cir. 1991)).

                                          I.
                                          I.

                             ISSUES COMMON TO BOTH TRIALS
                             ISSUES COMMON TO BOTH TRIALS
                             ____________________________

                      The evidence adduced at both trials was essentially

            the same.  CIGNA has raised two issues on appeal which are 

                                         -4-
                                          4

            common to both trials:

                      (1)   Whether the district court  erred in refusing

            to grant its motions for judgment as a matter of law on M&J's

            breach of contract claim at the conclusion of both trials.

                      (2)   Whether  the district  court erred  in ruling

            that M&J's  claims "were not  barred or  diminished" for  its

            failure to exhaust its administrative remedies provided under

            Mass. Gen. L. ch. 175,   163.  

                            Submission of M&J's Breach of
                            Submission of M&J's Breach of
                            _____________________________
                              Contract Claim to the Jury
                              Contract Claim to the Jury
                              __________________________

                      The  question,  of  course, is  whether  there  was

            sufficient evidence for  M&J's breach of contract claim to be

            decided by  the  juries.   The  relevant evidence  which  was

            substantially  the  same for  both  trials  is summarized  as

            follows.    Frank  Lombard,   president  and  owner  of  M&J,

            testified that  M&J  encountered serious  financial  problems

            when  the Bank of New England collapsed causing M&J's line of

            credit  to terminate on May 30, 1991.  Lombard testified that

            it  was usual for M&J,  and other insurance  agencies, to use

            bank  loans  to meet  its  premium  obligations to  insurance

            companies for premiums owed by the insureds.  In other words,

            the  agency would carry its clients by borrowing money from a

            bank,  pay the premiums due the company and wait for payments

            from the clients.   The collapse of  the Bank of New  England

            stripped  M&J of any  cash reserves.   Lombard testified that

            other insurance  companies with whom M&J  did business agreed

                                         -5-
                                          5

            to accept monthly  installment premium  payments or  extended

            the due date for the payment of premiums.

                      Another  factor that  impacted  on M&J's  financial

            condition was the loss of its biggest insurance account, F.L.

            Roberts Co.  ("Roberts").  Premiums on  this account amounted

            to between $800,000.00 and $1,000,000.00 a year.  Roberts was

            a  large wholesaler  and retailer  of petroleum  products and

            operator of service stations and  car washes in southern  New

            England.  

                      The  evidence discloses  the following  sequence of

            events.  Lombard was an insurance consultant for Roberts, not

            an agent, from 1979 through 1986.  In late  1986, Roberts did

            not  have a carrier for 1987.  Lombard suggested that Roberts

            try to obtain insurance coverage for a three-year period with

            the  premiums being determined on the  basis of the carrier's

            expenses  and  Roberts' losses.    Under such  a  program the

            insured, who paid a deposit premium initially,  might be owed

            refunds by the carrier  at the end  of the insurance year  or

            vice versa.   The amount  due either the  carrier or  Roberts

            would  be determined each  year.  In January  of 1987, such a

            program was entered into between  Roberts and CIGNA for three

            years with M&J  acting as agent.  The amount  of premiums due

            would  be determined in September  1988, 1989, and  1990.  In

            July or  August of 1990  Lombard calculated  that CIGNA  owed

            Roberts $200,000.00 under the program.  He contacted CIGNA on

                                         -6-
                                          6

            September 30,  1990, and was told that it would look into it.

            Lombard  called the CIGNA department in charge of the program

            and was reprimanded  for doing so.  A new  program was set to

            go into effect in January of 1991.  The down payment required

            by  CIGNA from  Roberts  was $250,000.00.   Roberts  informed

            Lombard that it would  not pay the $250,000.00 unless  it was

            credited with  the $200,000.00  refund.  Laurie  Scanlan, who

            worked in  the special  risk division of  CIGNA, acknowledged

            that CIGNA  owed Roberts money  under the program,  but would

            not  pay it  because she  asserted that  Roberts also  owed a

            surcharge of $56,000.00.   Lombard told Scanlan the surcharge

            was  not part  of  the insurance  program.   She told  him to

            collect it.  He refused.

                      An inter-office CIGNA memo states its position:

                      Per   our   discussion,   the   following
                      strategy will be utilized in  solving the
                      F.L. Roberts FVC surcharge dispute.

                         Number one, Insured Meeting.  Set up a
                      meeting  with F.L. Roberts and invite the
                      agent.

                         Number two, Program  Intent.   Discuss
                      the  need  for  the  surcharge  in  vague
                      terms.  Provide the  proposal for the '89
                      and  '90 years  to  document  the  stated
                      surcharge, in parentheses,  '87 and  '88:
                      FVC not mentioned.  Close parentheses.

                         Number 3, CIGNA's Needs.  If we cannot
                      collect the  surcharge,  we cannot  be  a
                      market for such coverages.

                         Number 4, Payment  Intentions.   After
                      discuss needs for surcharge, determine if

                                         -7-
                                          7

                      F.L. Roberts is  willing to  pay the  FVC
                      surcharge.

                         Number five, Refusal to Pay.  Legally,
                      we cannot enforce the payment of the  FVC
                      surcharge.  Therefore,  back-off if  they
                      refuse  to  pay.    But  we  should  then
                      seriously consider non-renewal.

                         Hopefully, we can satisfy  our insured
                      and  collect the  surcharge  at the  same
                      time.  Good luck.

                      M&J  expected a  proposal from  CIGNA for  the 1992

            Roberts insurance  program.  Scanlan was supposed  to work up

            the  figures.   Lombard  received a  letter  from Scanlan  on

            December 16, stating  that CIGNA would not  negotiate renewal

            terms  unless  CIGNA was  paid the  1991  premiums due.   The

            letter further  stated  that CIGNA  would issue  cancellation

            notices  the next day, but  if Roberts paid  CIGNA within ten

            days, the notices would be rescinded.  Roberts' insurance was

            cancelled  as per the  letter.  Lombard  immediately faxed to

            CIGNA  a statement by CIGNA  showing a credit  due Roberts of

            $28,903.58  as of  December 20, 1991.   After the  fax, CIGNA

            reinstated Roberts' insurance.

                      CIGNA sent  a renewal  proposal for 1992  that cost

            about  $500,000.00 more than the  prior program.  Lombard was

            given until noon the next day to  make up his mind.  He found

            the proposal totally unacceptable.  Lombard tried to work out

            an alternative program  with CIGNA.   With the permission  of

            Joann White  of CIGNA, he issued  temporary binders effective

            January 1, 1992.  Scanlan notified Roberts that the temporary

                                         -8-
                                          8

            policies  were  not valid.   Lombard  received a  letter from

            Scanlan  that a new agent, Palmer Goodell Insurance, would be

            Roberts' new broker unless  Lombard was notified otherwise by

            the  close of business on  January 17.   No such notification

            was  received.   M&J's  commissions  on  the Roberts  account

            amounted to about $80,000.00 per year.

                      The  third  aspect  of the  evidence  involved  two

            unexecuted promissory  notes  from M&J  to CIGNA.   As  M&J's

            financial  problems increased, it  approached CIGNA and asked

            to   pay  the   premiums  due   in  twelve   regular  monthly

            installments.   CIGNA told M&J  in September of  1991 that it

            would  draw up a promissory note providing for payment of the

            past due premiums in regular monthly installments.  The  note

            was brought to Lombard by Charles Glaser on February 6, 1992.

            Lombard approved it orally,  but did not sign it  because the

            word "draft" was written across the top of it.  This note had

            a principal sum of $115,507.05.   During his discussion  with

            Glaser, Lombard told him  about the Roberts account.   Glaser

            asked Lombard what he  was planning to do.   Lombard replied,

            "I  don't know, I'm  seeking a legal remedy."   A second note

            was  presented to Lombard on  March 23 by  Robert Purdy.  The

            principal was $105,324.14, but the payment terms and interest

            were  the same  as  the first  note.1   This   note, however,

                                
            ____________________

            1.  There   is  no  explanation  in  the  record  as  to  the
            difference between the principal in each note.

                                         -9-
                                          9

            included  a waiver and release  of all claims  that M&J might

            have against CIGNA.   Lombard, still smarting because  of the

            loss of the Roberts account, refused to sign the note.  Remmy

            Martens, a  marketing official for CIGNA, who  had dealt with

            Lombard  for an appreciable length of time, told Purdy at the

            time  the waiver  and release  were added  to the  note that,

            based  on   his  knowledge  of  Lombard,   Purdy  would  have

            difficulty getting Lombard to sign the note as redrafted.

                      CIGNA  cancelled  its   agency  contract  with  M&J

            forthwith  after Lombard refused to  sign the note.   It shut

            down all of M&J's computers wired into the CIGNA net.  It put

            all  of the  policies  heretofore handled  by  M&J on  direct

            billing; i.e., premiums were paid directly to CIGNA.

                      M&J notified CIGNA that the  forthwith cancellation

            was prohibited  by Massachusetts law,  which it  was.   Mass.

            Gen.  L.  ch. 175,    163  prohibits  the cancellation  of an

            agency  contract  without  180  days notice.2    After  CIGNA

                                
            ____________________

            2.           No company shall cancel  the authority
                      of  any  independent insurance  agent for
                      fire or casualty  insurance, or both,  if
                      said  agent is  not  an employee  of said
                      company and  no  company shall  modify  a
                      contract  with such  an agent  unless the
                      company  gives  written  notice   of  its
                      intent to cancel such agent or its intent
                      to  modify such  contract  at  least  one
                      hundred  and  eighty   days  before   the
                      proposed  effective  date  of   any  such
                      cancellation or modification.

                                         -10-
                                          10

            checked   the  Massachusetts   statute,   it   deferred   the

            cancellation for 180 days.  

                      We  rule that  there  was sufficient  evidence from

            which  a jury  could  find  that  CIGNA breached  the  agency

            contract with  M&J.   The evidence  provided two  grounds for

            such  a finding.  One, that  the "forthwith" cancellation was

            contrary  to  Massachusetts  law,  of  which  CIGNA  must  be

            presumed  to have  knowledge.   It also  could be  found that

            CIGNA cancelled its agency  contract with M&J by refusing  to

            honor  the  binders that  one  of its  officials  (White) had

            authorized.  

                   The Application of Mass. Gen. L. ch. 175,   163
                   The Application of Mass. Gen. L. ch. 175,   163
                   _______________________________________________

                      This  issue does  not  merit  extended  discussion.

            CIGNA  claims  "that  the  unexhausted  administrative remedy

            available  under  M.G.L.  ch.   175,  Sec.  163  eclipsed  or

            diminished  M&J's claim  for damages."   CIGNA  brief  at 37.

            First, we  do  not understand  what  the terms  "eclipsed  or

            diminished"  mean in the context  of this case.   The statute

            provides in pertinent part:

                      Except as otherwise provided  herein, any
                      agent    receiving    notice   of    such
                      cancellation, modification  or expiration
                      MAY,  within  fifteen days  after receipt
                      ___
                      thereof,  make  a   written  demand   for
                      reference  to  three   referees  of   the
                      question  as  to  whether  or   not  such
                      cancellation, modification or  expiration
                      will so affect the  renewal, continuation
                      or  replacement  of  any policies  placed
                      with the company  through the efforts  of
                      the agent, or the services  needed by any

                                         -11-
                                          11

                      policyholder  doing   business  with  the
                      company as a result of the efforts of the
                      agent,   as   to   justify   renewal   or
                      continuation  of  any  policies  then  in
                      effect  having  been  placed   with  such
                      company by such agent.  

            (Emphasis added.)

                      It cannot be reasonably doubted that the statute is

            permissive.  M&J had no duty to invoke it.

                      CIGNA  has cited no cases holding even tangentially

            that  the statute applies in  a situation similar  to the one

            that confronts us.   The  two cases it  cites are  completely

            inapposite;  they involve  different  statutes and  different

            claims.    We have  been  unable to  find any  cases  in this

            Circuit  or in  Massachusetts  requiring an  agent to  invoke

            Mass. Gen. L. Ch. 175   163 prior to asserting claims against

            an  insurance  company, and  CIGNA has  cited none.   CIGNA's

            argument is without merit.

                                         II.
                                         II.

                                   THE FIRST TRIAL
                                   THE FIRST TRIAL
                                   _______________

                      The district  court ordered  a new trial  for three

            reasons.   It ruled that  the jury  finding that M&J  had not

            breached its contract with  CIGNA to pay premiums as  due "is

            against  the clear weight  of the  evidence and  enforcing it

            would result in a  miscarriage of justice."  The  court found

            that the jury "rendered an improper 'sympathy' verdict."

                      The  court found that the amount awarded M&J on its

            breach  of contract claim was "outrageous."  It held that M&J

                                         -12-
                                          12

            "failed to  introduce evidence at trial  that established its

            entitlement to over $700,000 in damages."

                      The  court  set  aside  the  jury  verdict awarding

            $500,000.00 to M&J for intentional interference by CIGNA with

            M&J's contractual  relations with Roberts.   It ruled:   that

            "there  was  no  evidence  of  a  contract  between  M&J  and

            Roberts;" that "even if there was a contract . .  . there was

            no  evidence that  CIGNA knowingly  induced Roberts  to break

            that  contract," and  that M&J  failed to  show that  even if

            there was a contract  and interference with it by  CIGNA, M&J

            "failed  to show  that CIGNA's  interference was  improper in

            motive or means."

                      The court concluded:

                         In fine, after considering  the jury's
                      verdict in conjunction with its ruling on
                      CIGNA's breach of contract  claim, above,
                      the  Court  surmises   that  the   jury's
                      decision  on  the  MacDonald   &  Johnson
                      breach of contract claim "could only have
                      been a  sympathy" verdict.   See Phav  v.
                                                   ___ ________
                      Trueblood,  Inc., 915  F.2d at  767.   In
                      ________________
                      addition, because the issues of liability
                      and damages are so interwoven both issues
                      must be re-tried.

                      M&J, as  would be expected, objects  strenuously to

            the district court's  rulings and findings.   We discuss them

            seriatim.

                          The Jury Verdict that M&J did not
                          The Jury Verdict that M&J did not
                          _________________________________
                            Breach its Contract with CIGNA
                            Breach its Contract with CIGNA
                            ______________________________

                      The  question   is,  could  the  evidence   lead  a

            reasonable person  to only  one conclusion.   Acevedo-Diaz v.
                                                          _______________

                                         -13-
                                          13

            Aponte, 1 F.3d 62, 66 (1st Cir. 1993).  We think so.   As the
            ______

            district  court pointed  out in  its memorandum  opinion, the

            evidence was clear and not disputed by M&J that it owed CIGNA

            about $111,000.00  in premiums.  This evidence  came not only

            from  CIGNA  but from  the  testimony  of John  Januska,  the

            comptroller  and assistant treasurer of M&J.   He stated that

            there  was no question that $111,000.00 was due CIGNA in July

            of 1991.  And although strictly speaking it was not evidence,

            counsel for M&J told  the jury in his opening  statement that

            premiums due CIGNA had not been paid.

                      In its  appellate argument, M&J seeks  to shift the

            focus from  the agency contract to  the unexecuted promissory

            notes.  It contends that the notes constituted a modification

            of  the  agency contract  and  that  both parties  agreed  to

            payment  of the  overdue premiums  in   monthly installments.

            Lombard  testified that he agreed  to the terms  of the first

            note and that CIGNA did also.  CIGNA says that the first note

            was only a tentative proposal for Lombard's consideration and

            therefore  the note was not  signed by the  parties.  Lombard

            refused  to  sign the  second note,  the  one with  the added

            waiver and  release.  Lombard's  assumption that he  would be

            given  an opportunity  to  pay  the  premiums owed  CIGNA  in

            monthly installments may have caused  him not to pursue other

            options for  payment, but it is not a valid basis for finding

            either  a  modification of  the  agency  contract  or  a  new

                                         -14-
                                          14

            contract between the parties.   Such a finding  is foreclosed

            by the two  unexecuted promissory notes.  The  district court

            did not err in ruling that the jury's verdict was contrary to

            the evidence  and upholding it would result  in a miscarriage

            of justice.

                      Moreover, there is another reason for upholding the

            district court on this issue.  Early in the second trial  the

            parties stipulated  that judgment would be  entered for CIGNA

            against M&J on CIGNA's breach of contract claim in the amount

            of  $169,798.14 plus interest.   By so doing,  M&J waived any

            objections to CIGNA's contract claim in the first trial.

                        The Amount of Damages Awarded on M&J's
                        The Amount of Damages Awarded on M&J's
                        ______________________________________
                        Breach of Contract Claim Against CIGNA
                        Breach of Contract Claim Against CIGNA
                        ______________________________________

                      The jury  awarded M&J $780,000.00 on  its breach of

            contract  claim.   The  court  set this  aside  because M&J's

            evidence failed  to establish  that it was  entitled to  over

            $700,000.00  in  damages  and  because it  was  a  "sympathy"

            verdict.   Lombard  estimated  that  he  lost a  little  over

            $200,000.00  as a  result of  the termination  of the  agency

            contract  by CIGNA.    He managed  to  salvage $30,000.00  to

            $40,000.00,  making a net loss  of $160,000.00.  In addition,

            Lombard testified that he  lost $161,158.00 on his commercial

            accounts,  $39,046.00   on  "Market  Dyne"  Business,  and  a

            $215,490.00  loss was  sustained on  personal accounts.   The

            loss  of   commissions  on   the  Roberts  account   came  to

            $80,000.00, and there was a loss of profit sharing with CIGNA

                                         -15-
                                          15

            amounting to  $44,000.00.  Lombard testified  that his salary

            dropped about $60,000.00 a  year after the CIGNA termination.

            These  figures, even  if  taken at  face  value and  with  no

            allowance  for  what appears  to  be  double counting,  total

            $699,694.00, not including the reduction in Lombard's salary.

            The suit was brought  in the name of  M&J so we do  not think

            that Lombard's reduction  in salary  is a proper  item to  be

            considered.    Thus,  the  total amount  of  damages,  taking

            Lombard's testimony at face  value, did not, as the  district

            court pointed out, exceed $700,000.00.

                      It  was not  error for  the  district court  to set

            aside  as excessive  the breach  of contract  damages awarded

            M&J.   We point out that the  court found that the verdict on

            damages for M&J was infected by the jury's complete disregard

            of  the evidence on CIGNA's  breach of contract  claim.  This

            appears  to  be a  sensible  assessment of  the  first jury's

            verdict.  The second jury was not so influenced.

                      The Jury Award of $500,000.00 for CIGNA's
                      The Jury Award of $500,000.00 for CIGNA's
                      _________________________________________
                            Intentional Interference with
                            Intentional Interference with
                            _____________________________
                     M&J's Contractual Relationship with Roberts
                     M&J's Contractual Relationship with Roberts
                     ___________________________________________

                      The district court correctly  applied Massachusetts

            law to a claim  for intentional interference with contractual

            relations.   The  party  making  the  claim must  prove  four

            elements:  (1)  that there was a contract with a third party;

            (2) that defendant knowingly induced that party to  break the

            contract; (3) that  defendant's interference was  intentional

                                         -16-
                                          16

            and  improper in motive or  means; and (4)  that the claimant

            was  harmed  by  defendant's  action.   Wright  v.  Shriner's
                                                    _____________________

            Hospital  for  Crippled Children,  412  Mass.  469, 476,  589
            ________________________________

            N.E.2d 1241, 1245 (1992); see also G.S. Enterprises, Inc.  v.
                                      ___ ____ __________________________

            Falmouth Marine, Inc.,  410 Mass. 262, 272,  571 N.E.2d 1363,
            _____________________

            1369 (1991); United Truck Leasing Corp. v. Geltman, 406 Mass.
                         _____________________________________

            811, 812, 551 N.E.2d 20, 21 (1990).

                      Our reading  of the  record confirms the  ruling of

            the district court that there was no contract between Roberts

            and  M&J.   A  long-standing business  relationship does  not

            become a contractual relationship automatically, as M&J seems

            to  argue.  The last  insurance program issued  to Roberts by

            CIGNA through M&J was for a term of three years.  None of the

            parties  had   a  contractual  obligation  to   continue  the

            insurance  coverage after  its  term expired.   The  evidence

            suggests strongly that  Roberts decided to use a broker other

            than M&J because it would be less  expensive.  There was also

            evidence  that one  of the  owners  of the  new agency  was a

            neighbor of the president  of Roberts.  We need go no further

            than the lack of a contract between Roberts and M&J to uphold

            the  ruling of  the  district court  setting  aside the  jury

            verdict awarding M&J $500,000.00 for intentional interference

            with a contractual relationship by CIGNA.

                      At  the  trial the  court  reserved  to itself  the

            decision  on the claim by M&J against CIGNA for violations of

                                         -17-
                                          17

            Mass. Gen.  L. ch. 93A.   It  found in favor  of CIGNA.   M&J

            moved for a new trial.   Our review of the record  reveals no

            basis for reversing the  judgment of the district court.   We

            do not find it necessary to delve into the nuances of chapter

            93A law.  Suffice it to say that the sparsity of the evidence

            was  a  firm basis  for the  court to  conclude that  M&J had

            failed to meet its burden of proof on its 93A claims.

                           Denial of M&J's Motion to Amend
                           Denial of M&J's Motion to Amend
                           _______________________________
                            Count III of its Counterclaim
                            Count III of its Counterclaim
                            _____________________________

                      This issue requires some  exposition.  Count III of

            M&J's  counterclaim  was entitled,  "Intentional Interference

            with  Economic Gain."   In  a pretrial  memorandum  and order

            dated February 17, 1993, the district court said:

                         Defendant's third counterclaim against
                      CIGNA admittedly is mislabeled,  but this
                      problem is  not fatal.    The Court  will
                      interpret the cause of action  as one for
                      intentional       interference       with
                      advantageous business  relations, a claim
                      recognized by  the Massachusetts courts.2
                      Here,  too,  defendant  has  pleaded  the
                      requisite elements.  

                      The footnote stated:   "Defendant  shall amend  its

            counterclaim  within  ten   days,  substituting  the  correct

            nomenclature."     Inexplicably,  M&J  did   not  amend   the

            counterclaim as ordered.

                      At  a  pretrial conference  on  the  day the  trial

            started,  the  court pointed  out to  M&J's counsel  that the

            counterclaim had not  been amended as ordered.   The attorney

            said:   "I  thought that  was  right in  there."   The  court

                                         -18-
                                          18

            replied, "No."  The  judge's law clerk then  said, "According

            to  the  documents, that  was  never  filed."   The  attorney

            responded  by saying, "Okay."  No objection was taken nor was

            permission requested to amend the counterclaim nunc pro tunc.
                                                           ____ ___ _____

                      After  the conclusion  of the  trial, M&J  moved to

            amend  its counterclaim.  The motion  was denied as untimely,

            but the court said:

                         In  the  event that  this case  is re-
                      tried,   the    Court   will   reconsider
                      MacDonald  &  Johnson's request  to amend
                      its  pleadings  to  include  a  claim for
                      intentional       interference       with
                      advantageous business relations.

                      Six days  prior to  the second  trial, M&J filed  a

            motion  to amend their  counterclaim to  include a  claim for

            intentional    interference   with    advantageous   business

            relations.    The  court  denied  the  motion  on  timeliness

            grounds,  also noting  that  the pleadings  failed to  allege

            facts to support the claim,  that CIGNA presented no evidence

            at the first trial (nor offered any at the second) to support

            the inference  that CIGNA knowingly induced  Roberts to break

            its contract with M&J  or that any interference by  CIGNA was

            improper.

                      We review a denial  of leave to amend for  abuse of

            discretion.   A  district court,  in denying such  leave, may

            properly consider a party's undue delay, repeated failures to

            cure deficiencies in  the pleadings, and the futility  of the

            proposed  amendment.   Foman  v.  Davis,  371 U.S.  178,  192
                                   _____      _____

                                         -19-
                                          19

            (1962). Without deciding whether CIGNA had presented evidence

            at  the first  trial sufficient to  enable a jury  to find an

            intentional    interference   with    advantageous   business

            relations, we  hold that the district court  acted within its

            discretion in denying the motion to amend.

                      The district court told  M&J before the first trial

            that  its  complaint should  be  amended  if  M&J  wanted  it

            considered; M&J failed to do so.  It was proper for the judge

            to  deny leave to amend  after the first  trial where counsel

            was instructed to amend  the complaint, failed to do  so, and

            failed to correct  this error when it was pointed  out by the

            court.   Having left an  opening for  M&J to  try again,  the

            court  could well find that M&J had failed to exercise proper

            diligence because it waited virtually  until the eve of trial

            before  submitting   its  motion  to  amend.     Under  these

            circumstances, we will not disturb the ruling of the district

            court.

                                   The Second Trial
                                   The Second Trial
                                   ________________

                      As  already explained,  the second  jury  trial was

            limited to M&J's breach of contract claim against CIGNA.  M&J

            moved for a new trial, which was denied.  Both parties object

            to the damages award so we start with that.

                                       Damages
                                       Damages
                                       _______

                      CIGNA attacks the damages on two grounds:  that the

            evidence  should not have been  admitted because it was based

                                         -20-
                                          20

            on hearsay and speculation  and that the award was  too high.

            M&J  asserts that  the award  was too  low because  the court

            improperly  limited  M&J's damages  to  the  period from  the

            initial  date  of cancellation  of  the  agency contract,  to

            October 15, 1992, the  extended date of cancellation required

            under Massachusetts law.

                      Before  discussing the  claims of  the parties,  we

            rehearse  the evidence on  damages as reported  in the second

            trial transcript.   The evidence  on damages came  in through

            the testimony of Frank Lombard.   He testified essentially as

            follows.  Up  to 1992, M&J's average commissions  on premiums

            it received  was "in the  $250,000 a year range."   After the

            cancellation, clients  of M&J who were insured  by CIGNA were

            sent letters  notifying them  that M&J's contract  with CIGNA

            had  been  cancelled and  all premiums  due  were to  be paid

            directly to CIGNA.  Most of these clients did not renew their

            policies  with  M&J.   Lombard  kept  a  record  of all  such

            clients.  From the date of the initial cancellation, April 2,

            1992, to October 15, 1992, premiums from the affected clients

            aggregated $1,720,495.00; M&J's loss in  commissions totalled

            $201,294.00.   This  was broken  down into  three categories:

            commercial   commissions   --   $175,138.00;    Market   Dyne

            commissions  --  $13,281.00;  and  personal   commissions  --

            $12,875.00.  In addition, M&J lost its annual  profit sharing

            income from  CIGNA of $12,871.00.   Lombard further testified

                                         -21-
                                          21

            that the  commission loss to  the end of the  year would have

            been  $215,393.00.3      Lombard  testified   that  loss   of

            commissions was the same as loss  of profits and that M&J had

            a renewal rate of 93% on insurance policies purchased through

            it.

                      He started to testify  about future loss of profits

            when  there was an objection  followed by a bench conference.

            The  court  reminded  counsel  for M&J  that  it  had limited

            damages to October 15, 1992.  M&J's counsel  made an offer of

            proof that damages would be $215,000.00 in lost commissions a

            year plus loss of profit sharing of $56,000.00 for a total of

            $271,000.00 a year "ad infinitum."

                      We  start our  analysis of  M&J's objection  to the

            court's ruling  on damages  with the  observation that  it is

            obvious that an "ad infinitum" claim for damages has no basis

            in  law and confounds common  sense.  Confining our analysis,

            however, to the claim by M&J that  the court's ruling that no

            damages could be awarded  after October 15, 1992, was  error,

            we point out  that the  transcript of  the jury  instructions

            shows that no such instruction was given.   The court left it

            entirely up to the  jury to determine the period  of time for

            which damages could be awarded:  

                      In  considering  any  claim  for  loss of
                      anticipated  profits   resulting  from  a

                                
            ____________________

            3.  These amounts  are considerably  lower than the  items of
            damages claimed in the first trial.

                                         -22-
                                          22

                      breach of contract,  you should  consider
                      the  length of  time that  parties  had a
                      right  to expect to  receive the benefits
                      of the contract.

                         If you determine the contract was only
                      for a certain period of time, or could be
                      terminated by  notice to the  other party
                      after  a  certain  period,  you  may only
                      award damages for losses  incurred during
                      that limited period of time.

                      CIGNA did not object to the failure of the court to

            limit the time period for awarding damages.

                      M&J  argues that this  unexpected volte-face by the
                                                        __________

            court on damages prevented it from introducing more extensive

            evidence  on damages.   The  answer to  this is  that Lombard

            testified:  "Your  [sic] damages are, our  loss of commission

            both  for 1992,  and these people,  based on  our experience,

            would  have  renewed  their  insurance each  year  and  these

            customers  are  gone."   It is  hard  to see  what additional

            evidence could have been introduced.  This sum of $271,000.00

            for  annual  lost profits  was in  evidence  for the  jury to

            consider and  there was no restriction in the charge limiting

            the  period of damages.  We have  read the final argument for

            M&J carefully and there is  no discussion in it of any  time-

            period limitations on damages.  The attorney for M&J, without

            objection, stated, "a  whole year's commission was  $215,000,

            not 201."   Based on  the evidence  before the  jury and  the

            court's instructions, we find that M&J was not  prejudiced by

            the court's bench  ruling that damages  could not be  awarded

                                         -23-
                                          23

            after October 15, 1992, because this  ruling was not conveyed

            to the jury.  

                      We are not impressed by CIGNA's objections that the

            evidence on damages was based on speculation and hearsay  and

            should  have  been  excluded.   As  the  court  pointed  out,

            Lombard's  testimony  was  based   on  his  own  records  and

            experience in the insurance business.  That the testimony was

            self-serving went to  its credibility not its  admissibility.

            Lombard  was  subjected   to  rigorous  cross-examination  on

            damages and  CIGNA introduced testimony  through experts that

            contradicted  Lombard's  testimony.   The  jury's verdict  of

            $250,000.00 in  damages for  M&J strikes  us as  a reasonable

            assessment  of the  evidence.   Moreover,  even if  Lombard's

            testimony was hearsay in part, it did not affect the verdict.

            The $250,000.00 award could only have been for the year 1992.

            As to what  happened to  M&J's clients in  1992, Lombard  had

            first-hand information.  He testified as follows:

                      A.   I kept track from the day this event
                      occurred in March of 1992.  I was the one
                      in charge.  I was the  one that talked to
                      the  people  that  got  the  letter  from
                      CIGNA. I was the one that handled all the
                      commercial  accounts, so  I knew  who was
                      affected by that action.

                      Any violation of the hearsay rule was de minimis.
                                                            __________

                      CIGNA's other objection that the award was too high

            does  not  fare  any  better.    CIGNA  argues  that  Lombard

            testified only as to lost revenues but ignored the other side

                                         -24-
                                          24

            of the ledger  -- savings  in ongoing expenses  -- thus,  the

            damages were  higher than  what normally would  be the  case.

            Lombard  did   testify  specifically,  however,   that  M&J's

            expenses  did  not contract  after  the loss  of  the Roberts

            account but continued at  the same level.  He  testified that

            no one  was terminated, and  that expenses  continued at  the

            same rate.   Lombard  was cross-examined intensively  on this

            point  but  did not  give ground.    It was  well  within the

            province of the jury to believe Lombard's testimony.  

                      Our rulings and findings on damages negate  CIGNA's

            argument  that its motion  for a remittitur  should have been

            allowed.

                               The Conduct of the Judge
                               The Conduct of the Judge
                               ________________________

                      M&J's main  attack on  the jury  verdict is  a two-

            pronged condemnation  of the  conduct of the  district judge.

            It asserts that  the judge should  have recused himself  from

            presiding over the second trial because of bias and prejudice

            against  M&J.     It  also  accuses  the  judge  of  secretly

            communicating with the jury  during its deliberations.  These

            are serious charges.

                                       Recusal
                                       Recusal
                                       _______

                      In its motion for recusal filed prior to the second

            trial, M&J states three specific reasons for recusal:

                      1.  The very nature of a retrial order is
                      such that it should  be considered by one
                      other than the original trial judge.

                                         -25-
                                          25

                      2.  At  the pretrial  conference held  on
                      March 13, 1994,  Judge Freedman stated in
                      open  court  that  he  thought  that  the
                      Defendant,  Plaintiff  in   counterclaim,
                      Frank Lombard, was insincere.

                      3.   At  the pretrial conference  held on
                      March 13, 1994,  Judge Freedman stated in
                      open court that if a jury finds similarly
                      on  retrial, that he  would order a third
                      trial.

                                         -26-
                                          26

                      In its brief, M&J has expanded its reasons:  

                         The  trial judge  not only  stated his
                      bias,   but  allowed  it  to  infect  his
                      rulings.  As indicated in prior arguments
                      in this  brief, he took away  verdicts in
                      favor of M & J after the first trial even
                      though  there  was   ample  evidence   to
                      support them.  In ruling on these motions
                      he  denied the  existence of  evidence of
                      damages  which  was  clearly  before  the
                      jury.   He failed to apply  proper law in
                      finding  against  M  & J  for  the  claim
                      arising out  of  the  loss  of  the  F.L.
                      Roberts account.  He failed  to adhere to
                      the  rules  of civil  procedure regarding
                      notice   pending    and   amendments   to
                      pleadings.  He found against M & J on the
                      c.  93A count without making any findings
                      of fact to support his decision.

            M&J's Brief at 42-43.

                      28 U.S.C.   455(a) provides:

                         (a) Any justice, judge,  or magistrate
                      of  the  United  States shall  disqualify
                      himself  in any  proceeding in  which his
                      impartiality    might    reasonably    be
                      questioned.

            We turn  to the  case law  to determine  when the  statute is

            implicated.  In this Circuit the question is:

                      whether   the   charge    of   lack    of
                      impartiality  is  grounded on  facts that
                      would    create   a    reasonable   doubt
                      concerning the  judge's impartiality, not
                      in the mind of  the judge himself or even
                      necessarily in  the mind of  the litigant
                      filing  the motion under 28 U.S.C.   455,
                      but rather in the mind  of the reasonable
                      man.

            United  States v. Arache, 946  F.2d 129, 140  (1st Cir. 1991)
            ________________________

            (quoting United States v. Cowden, 545 F.2d 257, 265 (1st Cir.
                     _______________________

            1976), cert. denied, 430 U.S. 909 (1977)).   See also Town of
                   _____ ______                          ___ ____ _______

                                         -27-
                                          27

            Norfolk v. United States Army Corps of Eng'rs, 968 F.2d 1438,
            _____________________________________________

            1460 (1st Cir. 1992); United States v. Lopez, 944 F.2d 33, 37
                                  ______________________

            (1st Cir. 1991).

                      In  In Re  Allied-Signal, Inc.,  891 F.2d  967 (1st
                          __________________________

            Cir. 1989), Judge  Breyer, now Justice Breyer,  made a number

            of observations  that  are  pertinent  here:   The  court  of

            appeals  will not reverse a  district judge's decision to sit

            unless  such  decision  "cannot  be defended  as  a  rational

            conclusion supported by a  reasonable reading of the record."

            (quoting In Re  United States,  666 F.2d 690,  695 (1st  Cir.
                     ____________________

            1981)).  Id. at 970.  He amplified:
                     ___

                      When  considering  disqualification,  the
                      district court is not to use the standard
                                        ___
                      of  Caesar's wife,  the standard  of mere
                      suspicion  .  .  .  that  is  because the
                      disqualification  decision  must  reflect
                      not   only  the  need  to  secure  public
                      __________
                      confidence   through   proceedings   that
                      appear  impartial, but  also the  need to
                                         _________
                      prevent parties from too easily obtaining
                      the disqualification of a  judge, thereby
                      potentially  manipulating the  system for
                      strategic  reasons,  perhaps to  obtain a
                      judge more to their liking.
            Id. 
            ___

                      We end our case  review with a quote from  El Fenix
                                                                 ________

            de Puerto Rico v. The M/Y Johanny, 36 F.3d 136, 140 (1st Cir.
            _________________________________

            1994).

                         No  permissible reading  of subsection
                      455(a)   would   suggest  that   Congress
                      intended  to allow  a litigant  to compel
                      disqualification   simply  on   unfounded
                      innuendo    concerning    the    possible
                                                       ________
                      partiality of the presiding judge.

                                         -28-
                                          28

                      We start our  analysis by noting  that there is  no

            rule  of federal procedure that requires a different judge to

            preside over a new  jury trial ordered by the  original trial

            judge.   M&J  has cited no  case to  this effect  and we have

            found  none.   Absent  a Local  Rule  that so  provides  (and

            Massachusetts  has  none),  this   is  a  matter  within  the

            discretion  of  the trial  judge.    Although  there  may  be

            circumstances  in which a  new judge should  preside over the

            second trial,  such substitution  is not the  usual practice.

            We find  nothing in the record  here suggesting circumstances

            that would make  the trial judge think twice  about presiding

            over the new trial.

                      Because we  have affirmed the rulings  and findings

            of the district court setting aside the verdicts in the first

            trial  and ordering  a new  trial, it  would be  pointless to

            discuss the asseverations made by M&J  at pages 42 and 43  of

            its brief.  Our affirmance of the rulings and findings of the

            district court scotches any  bias or prejudice claim on  this

            basis. 

                      This leaves for consideration  the comments made by

            the  judge at  the pre-trial  hearing on May  13, 1994.   The

            record reads as follows.

                           THE  COURT:     Well,  Mr.   Joseph,
                      without even thinking  F.L. Roberts  what
                      is your client  earnestly, sincerely  and
                      so forth believe he's  entitled to on the
                      breach of contract on the counter-claim?

                                         -29-
                                          29

                           MR.  JOSEPH:   He is,  believes he's
                      entitled  to  the  jury  verdict  on  the
                      counter-claim.

                           THE COURT:  $500,000?

                           MR. JOSEPH:  Oh, indeed.

                           THE COURT:  There's  no way to  move
                      if that's his thinking.

                           MR.  JOSEPH:    Well,  that  is  his
                      thinking.

                           THE  COURT:    Well,  if  that's his
                      thinking then you have no authority to do
                      anything.

                           MR. JOSEPH:  Well, I have the authority.

                           THE COURT:  Then, we'll have to talk
                      trial date and go from here.

                           MR. JOSEPH:  All right, sir.

                           THE COURT:  And I have to advise you
                      in advance that if  a second jury went as
                      far  as the  first  jury went  as far  as
                      $500,000, the  money, I'd take  that away
                      as  well.   You have  to know  you're not
                      going  to get it.   I don't care what you
                      did.  At least not  from this Judge.  You
                      could always  take an appeal  and see  if
                      you could get  another trial. That  would
                      be up to the first circuit.

                           MR. JOSEPH:  Okay.

                           THE COURT:  I was hoping we might be
                      able to be sincere in our thinking and go
                      somewhere.  Your client is not sincere in
                      my eyes.

                           MR.  JOSEPH:   Judge, I  really must
                      disagree with you and I insist  my client
                      is very  sincere.   Perhaps if  you don't
                      think  he's  sincere  you  should  recuse
                      yourself.

                                         -30-
                                          30

                           THE  COURT:   No,  I'm saying  if he
                      thinks a  jury verdict should be given to
                      him if he's not  willing to accept and go
                      with another trial, I frankly don't think
                      another jury would  go anywhere near that
                      figure.   If they  give anything  at all.
                      I'm  not  even convinced  he,  they would
                      ever do that.

                      This pre-trial  hearing was called by  the judge in

            an  attempt to  settle  the case.    We  see nothing  in  the

            comments of  the judge that  would create a  reasonable doubt

            concerning  the  judge's  impartiality   in  the  mind  of  a

            reasonable person.

                           The Alleged Secret Communication
                           The Alleged Secret Communication
                           ________________________________
                              by the Judge with the Jury
                              by the Judge with the Jury
                              __________________________

                      M&J  has alleged  that  the  trial  judge,  without

            advising counsel, responded in the negative to a question  by

            the jury asking whether  it could award damages of  more than

            $240,000.00  to  M&J.    This  alleged  secret  communication

            between  the judge and jury  first surfaced in a conversation

            between Gary  W.  Lavallee, foreman  of the  jury, and  Frank

            Lombard,  president of  M&J, at  a local restaurant  three or

            four weeks after  verdict and judgment  in the second  trial.

            The jury     foreman subsequently  executed a sworn affidavit

            which stated:

                            AFFIDAVIT OF GARY W. LAVALLEE
                            _____________________________

                         I  am Gary W.  Lavallee.   My business
                      address   is   82   Main   Street,   West
                      Springfield, Massachusetts.

                                         -31-
                                          31

                         I was  the foreman of the  jury in the
                      case of  CIGNA vs. MacDonald  and Johnson
                      Insurance Agency, Inc. in November 1994.

                         Based   on    our   recent   conversa-
                           tion regarding your jury award,
                           we the jury sent  two questions
                           out    to     Judge    Freedman
                           requesting   guidance.      One
                           question specifically asked  if
                           we could award damages over and
                           above  the   $240,000  you  had
                           illustrated on the  blackboard,
                           to  justify  for   a  loss   of
                           renewal income.  His  reply was
                           that we couldn't.

                         During  our  deliberation,  the  whole
                      jury   was   in  complete   agreement  to
                      awarding additional damages based on loss
                      of renewal income.

                   Signed under the pains and penalties of perjury this
                  1st   day of March 1995.
                _______

                                                 \s\ Gary W. Lavallee    
                                          _______________________________
                                                 Gary W. Lavallee

                      The  other  question asked  by  the  jury poses  no

            problem.  It stated in writing:

                      (1)  Are  we  allowed  to  tack  on   (or
                      provide)  interest  to amount  of damages
                      that MacDonald is asking for?

                           If so, can we charge 8%?

                      After consulting with counsel  the judge replied in

            writing:

                      Interest cannot be  added to any  verdict
                      by the jury.

                                          Judge Freedman.

                                         -32-
                                          32

                      The  allegation by  the  jury foreman  of a  secret

            communication  was  never  squarely  resolved  on the  merits

            because  the district court ruled  in a motion  to strike the

            affidavit  that it  had  been  obtained  in violation  of  an

            explicit rule prohibiting interviews by counsel, litigants or

            agents except  under the  supervision of the  district court.

            See United States v.  Kepreos, 759 F.2d 961, 967  (1st Cir.),
            ___ _________________________

            cert.  denied,  474 U.S.  901 (1985).    We concluded  that a
            _____  ______

            complete  record was  necessary for  a fair  determination of

            this  issue  and that  the  district  court should  determine

            whether there was any private communication as alleged by the

            jury   and,  if   so,  the   circumstances   surrounding  the

            communication.

                      We,   therefore,   issued   an    order   retaining

            jurisdiction and 

                      remanding to the  district court for  the
                      limited  purpose  of determining  whether
                      the    alleged   private    communication
                      occurred    and,    if   so,    in   what
                      circumstances.  A new district judge will
                      be  assigned  by the  chief judge  of the
                      district court for the limited purpose of
                      conducting this proceeding.

                      Judge Douglas Woodlock was assigned by Chief  Judge

            Tauro of the U.S. District Court of  Massachusetts to conduct

            the proceeding.  On May 2, Judge Woodlock took testimony from

            the  jury  foreman,  Lavallee, two  district  court  security

            officers,  a deputy  U.S. Marshal,  and the  courtroom deputy

            clerk to Judge Freedman during the trial.

                                         -33-
                                          33

                      On May 6 testimony was taken from six other jurors.

            One of  the jurors had left the state and no attempt was made

            to obtain her  testimony.   Testimony was also  taken on  the

            same  day from  Frank  Lombard,  president  of M&J,  and  the

            courtroom deputy clerk for the proceeding.  At the conclusion

            of  this evidentiary  hearing;  Judge  Woodlock informed  the

            parties  of   his  intention   to  give  Judge   Freedman  an

            opportunity to  state his recollection of  the allegations in

            the  Lavallee  affidavit.   Counsel  was  advised that  after

            reviewing  Judge  Freedman's  statement  they  would  have an

            opportunity to interrogate him.

                      In the meantime, counsel had advised Judge Woodlock

            that Judge Freedman's  law clerk  at the time  of the  trial,

            Kenneth B. Walton, might have relevant evidence to offer.  On

            May 21, Mr. Walton's  evidence was taken.  At  the conclusion

            of this hearing the parties informed Judge Woodlock that they

            sought  no  other testimony  and that  they  did not  wish to

            interrogate Judge Freedman.

                      Judge Woodlock made the following ultimate finding:

                         Based upon my review of  the materials
                      of record  in this case  and the evidence
                      adduced   at  the   evidentiary  hearings
                      pursuant  to my  assignment, I find  as a
                      matter   of  fact  that  after  the  jury
                      retired  to  begin  its deliberations  in
                      this  case  on  November  17,  1994,  and
                      before  it  returned  with  its  verdict,
                      Judge    Freedman     had    no    secret
                      communication with the  jury outside  the
                      presence   of   counsel.       The   only
                      communication Judge Freedman had with the

                                         -34-
                                          34

                      deliberating jury involved the receipt of
                      a  jury   question  concerning  interest,
                      which   he   shared  with   counsel,  and
                      responded  to in writing, pursuant to his
                      standard    practice    regarding    such
                      inquiries.

                       We  have  reviewed  carefully  the record  of  the

            evidentiary hearings held by  Judge Woodlock and the detailed

            subsidiary findings  he made.   We unhesitatingly  affirm his

            ultimate finding and his underlying subsidiary findings.4 

                                         III.
                                         III.

                                      CONCLUSION
                                      CONCLUSION
                                      __________

                      The judgments of the  district court in both trials

            are affirmed.
                affirmed
                ________

                      No costs to either party.
                      No costs to either party.
                      _________________________

                                
            ____________________

            4.  In view of Judge Woodlock's findings, we need not address
            the question of whether  the initial contacts between Lombard
            and Lavallee,  and the subsequent securing  of the affidavit,
            violated   the  mandate   of  Kepreos,   759  F.2d   at  967.
                                          _______
            Accordingly, we express no opinion on that question.

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                                          35