Court Opinion

ID: 147653
Source: CourtListenerOpinion
Date Created: 2010-06-02 17:16:36+00
Date Added: 2024-06-11T17:24:04.961776
License: Public Domain

FILED
                                                   United States Court of Appeals
                     UNITED STATES COURT OF APPEALS        Tenth Circuit

                                  TENTH CIRCUIT                             June 2, 2010

                                                                        Elisabeth A. Shumaker
                                                                            Clerk of Court
ROBERT MCBRIDE,

      Plaintiff - Appellee,
                                                             No. 07-8044
v.                                                             (D. Wyo.)
                                                    (D.C. No. 2:06-CV-00057-ABJ)
MARKET STREET MORTGAGE, a
Florida corporation,

      Defendant - Appellant.

                              ORDER AND JUDGMENT*

Before HENRY, O’BRIEN, and TYMKOVICH, Circuit Judges.

      Robert McBride entered into a three-year Employment Agreement with Market

Street Mortgage Company (Market Street) in which it agreed to pay him $230,000 in

Annual Base Salary. Approximately seven months into the Agreement, Market Street

sent McBride a letter informing him his salary was being reduced to $85,000. Believing

he had suffered a “reduction by the Company in [his] Annual Base Salary” which would

allow him to terminate the Agreement for cause, McBride gave notice and sought

      *
         This order and judgment is an unpublished decision, not binding precedent. 10th
Cir. R. 32.1(A). Citation to unpublished decisions is not prohibited. Fed. R. App. 32.1.
It is appropriate as it relates to law of the case, issue preclusion and claim preclusion.
Unpublished decisions may also be cited for their persuasive value. 10th Cir. R. 32.1(A).
Citation to an order and judgment must be accompanied by an appropriate parenthetical
notation B (unpublished). Id.
“Termination Payments” under the Agreement. Claiming the letter was a mistake,

Market Street refused to remit the “Termination Payments.” McBride sued. The critical

issue is whether the letter constituted “a reduction by the Company in [McBride’s]

Annual Base Salary.” McBride claimed it did; Market Street argued it did not because

McBride never received a paycheck at the reduced level. The district court submitted the

issue to a jury which found in favor of McBride. It awarded $894,000 in total damages—

$242,000 on McBride’s termination for cause claim and an additional $652,000 in

damages for breach of the Agreement. The court also entered a declaratory judgment

relieving McBride of his contractual obligations not to compete with Market Street.

       Market Street appeals from the jury’s verdicts and the declaratory judgment. We

affirm the jury’s liability verdicts and the declaratory relief but reverse the damages

awards and remand for further proceedings.

                          I.      FACTUAL BACKGROUND

A.     Market Street’s Purchase of Major Mortgage

       In 1995, WERCS, a Wyoming company, approached McBride about starting a

mortgage banking company on its behalf. McBride agreed and started Major Mortgage

in 1996. Eight years later, WERCS decided to sell Major Mortgage, which at that time

had thirty-five offices in ten states and was originating $800 million in loans annually.

       Market Street submitted a letter of intent to purchase Major Mortgage, which also

offered employment to Major Mortgage’s existing management team—McBride, Terry

Mott, Kip Clark, Steve Carver and Julie Zeiler. Market Street agreed to pay a total of

$1.5 million in bonuses to these individuals within the first year of the acquisition.

                                                -2-
WERCS sold Major Mortgage to Market Street in July 2005.

B.     The Employment Agreement

       On July 9, 2005, Market Street entered into a three-year Employment Agreement1

with McBride under which he would serve as Market Street’s Western Division

manager.2 Section 4 of the Agreement relates to compensation. Section 4.1 provides:

“During the Term, [McBride] shall be compensated at an annual rate equal to the Annual

Base Salary.” It also provides for an annual salary review and possible raises. Section

4.2 reads: “[McBride] shall be eligible for an annual incentive bonus determined from

time to time in accordance with Annex C hereto.” It also mentions his participation in

stock options, a matter not relevant here. Section 4.3 provides for other benefits available

to all employees, such as insurance, reimbursement for business expenses and paid time

off. Annex C to the Agreement outlines the specifics of McBride’s compensation

package: (1) he “will receive a yearly salary of $230,000 [paid bi-weekly]”; (2) he will

receive a “Signing Bonus” (the signing bonus is not mentioned in the body of the

Agreement), consisting of an initial $415,000 payment (which he received upon signing

the Agreement) and a contingent $474,000 payment one year later (for ease of reference

the $474,000 is referred to as the “contingent payment”);3 and (3) he will receive an

       1
        The Agreement appears in Market Street’s Appendix, Volume IV at 670-684.
Section 3.1 provides: “This Agreement shall remain in effect for the Term.” “‘Term’
means the period commencing on the date hereof and ending on the third anniversary of
such date.”
       2
       The Western Division included the branches Market Street acquired from Major
Mortgage as well as Market Street’s offices in Denver and Longmont, Colorado.
       3
           The “Signing Bonus” provision provides:

                                               -3-
annual “Net Contribution Incentive” (specifically referenced in the body of the

Agreement) if the Western Division is profitable.4

       The Agreement allows either party to terminate prior to its expiration (1) for cause

without giving notice or (2) without cause if the terminating party gives thirty days

written notice. As to McBride, cause (for Market Street to terminate) consists of his

dishonesty, incompetency, willful misconduct, breach of fiduciary duty involving

personal profit, intentional failure to perform his duties, willful violation of any law, rule

or regulation, material breach of any provision of the Agreement, or continued failure to

substantially perform his duties after written notice identifying shortcomings. As to

Market Street, cause (for McBride to terminate) is more detailed:

       (a) a reduction by the Company in [McBride’s] Annual Base Salary;

       (b) a material diminution in powers, responsibilities or duties of [McBride]
       that occurs within one year after a Change in Control;

       (c) the Company requiring [McBride] to be based at a location more than

       You will receive a signing bonus of $415,000 to be paid on the 1st official payday
       applicable to start date. In addition, you will receive an additional $474,000,
       assuming that $600,000,000 in volume is originated and closed within 12 months
       from the date of the acquisition by Market Street Mortgage Corporation. This
       payment would be paid in July, 2006.

This provision implemented Market Street’s agreement with WERCS (set forth in Market
Street’s letter of intent) to pay a total of $1.5 million to McBride, Mott, Clark, Carver and
Zeiler within the first year of Market Street’s acquisition of Major Mortgage. McBride
was permitted to determine how that $1.5 million would be divided among the five
recipients.
       4
         Under the net contribution incentive plan, for every dollar of profit earned by the
Western Division, Market Street would place thirty percent of it into a pool. After the
branch managers were paid their incentives from the pooled funds, McBride would
receive forty percent of the remainder.

                                                 -4-
       100 miles from the Business Location;

       (d) the failure by the Company to pay [McBride] any portion of [his]
       current compensation within seven days of the date such compensation is
       due, other than an isolated, insubstantial and inadvertent failure not
       occurring in bad faith and which is remedied by the Company promptly
       after receipt of notice thereof given by [McBride];

       (e) the failure by the Company to continue any material benefit plan in
       which [McBride] participates immediately prior to the Effective Date
       (unless (i) the discontinued plan is replaced by the Company with another
       plan that . . . is reasonably equivalent to the discontinued plan or (ii) the
       failure did not occur in bad faith and is remedied by the Company . . .); or

       (f) any termination by the Company of [McBride’s] employment other than
       as expressly permitted by this Agreement.

       Under Section 3.3 of the Agreement, “Effect of Termination,” if McBride’s

employment is terminated by Market Street for cause or by McBride without cause,

Market Street’s only obligation is to pay McBride any amounts due and owing to him on

the date of termination. However, if Market Street terminates without cause or McBride

terminates for cause, Market Street is required to meet its obligations under Section 3.4.

That section, titled “Termination Payments,” states in relevant part:

       In the event [McBride’s] employment is terminated [by Market Street
       without cause or by McBride for cause] prior to the expiration of the Term .
       . ., the Company shall pay to [McBride] as severance pay and liquidated
       damages a lump sum amount equal to the sum of the (a) Annual Base
       Salary and (b) Incentive Compensation . . . . In addition, for a period of
       twelve months following the effective date of the termination . . ., the
       Company shall continue to provide to [McBride] . . . [his] benefits . . .;
       provided, however, that in lieu of providing health benefits, the Company
       shall pay [McBride] an amount equal to the difference between (x) the cost
       of COBRA health continuation coverage . . . and (y) the amount for which
       [McBride] would have been responsible to pay under the health benefit
       plans in effect . . . immediately prior to his termination . . . .

Additionally, if Market Street terminates without cause or McBride terminates for cause,

                                                -5-
McBride is relieved from the Agreement’s non-solicitation and non-competition

provisions.

C.     The February 15 Meeting - Reduction in Salary

       The Western Division was profitable the first month after Market Street’s

acquisition of Major Mortgage. Thereafter, its branches began incurring expenses they

had not incurred prior to the acquisition. As a result, the Western Division’s profitability

declined and by year-end it had a net loss.

       On February 15, 2006, McBride and Mott met with a number of Market Street

executives—Randy Johnson (President and Chief Executive Officer (CEO)), Donnell

Smith (Executive Vice President), Steven Joyce (Senior Vice President of Strategic

Planning and Development) and Deborah Renner (Vice President of Financial

Operations)—to discuss the Western Division’s lack of profitability. Smith said the

salaries in the Western Division were too high and needed to be reduced.5 Johnson

agreed but said the salaries should be structured so they could be earned back if the

Western Division met identified profit goals. Two days later, on the morning of February

17, Johnson and Smith agreed to reduce McBride and Mott’s salaries and discussed the

level of reduction, settling on $85,000 for McBride. Johnson directed Smith to talk with

McBride and Mott and to check their employment agreements for compliance before

sending letters notifying them of the reduction.6

       5
       It is contested whether or not Smith specifically mentioned reducing McBride
and Mott’s salaries.
       6
      According to Smith’s testimony, Johnson instructed him to check with the
Human Resources Department to ensure compliance with employment agreements prior

                                               -6-
D.     Smith’s Letter to McBride

       After his discussion with Johnson, Smith drafted letters to McBride and Mott. The

letter to McBride, dated February 17, 2006, stated:

       As we discussed in our meeting on February 15th, your annual
       compensation will be reduced from $230,000 to $85,000, effective March
       1, 2006. However, if the Western Division net branch contribution is 35
       [basis points] by year-end, you will receive your normal year-end incentive
       based on your incentive plan.

       In addition, if you achieve these results the difference between your initial
       salary and the reduced salary as of March 1, 2006 will be paid to you. I
       hope you believe this is a fair plan and something you and [Mott] can work
       towards to make 2006 a successful year for the Western Division.

(R. Vol. IV at 685.)7 He also drafted a similar letter to Mott and showed copies of both

letters to Joyce and Renner. He then gave the letters to his assistant to mail as he was

scheduled to be out of the office for a period of time. Smith neither spoke to McBride (or

Mott) nor checked employment agreements prior to directing the letters to be sent.

       McBride received Smith’s letter in his Cheyenne office on February 24, 2006. He

was “absolutely shocked” because no one had discussed it with him. (R. Vol. III at 413.)

He believed it indicated Market Street “wanted [him] gone.” (Id.) On February 27,

Johnson signed an “Associate Status Change Form” indicating McBride’s salary was

being adjusted to $85,000 effective March 1, 2006. (R. Vol. IV at 701.) The form was

to sending the letters reducing McBride and Mott’s salaries. He did not recall Johnson
telling him to speak with McBride and Mott before sending the letters but conceded he
knew he should have done so.
       7
          In addition to informing McBride of a reduction in his Annual Base Salary, the
letter’s reference to “35 [basis points]” made it more difficult for McBride to earn the
“Net Contribution Incentive.”

                                               -7-
also signed by Renner and file stamped: “ENTERED FEB 27 2006 Human Resources.”

(Id.)

E.      McBride’s Notice of Termination for Cause

        The next day, February 28, McBride faxed and mailed a letter to Johnson stating:

        This is to provide notice of termination of my Employment Agreement with
        Market Street Mortgage Corporation for cause pursuant to section 3.2.2(a)
        of the Agreement. The cause is a reduction by the Company in my annual
        base salary. I was notified in writing dated February 17, 2006 that my
        annual compensation would be reduced, effective March 1, 2006. Such
        action breaches the terms of my contract and constitutes “cause” for
        termination by me provided in section 1.5.2 of the Agreement.

        I am providing notice that my employment with Market Street Mortgage
        Corporation is effectively terminated as of 5:00 pm MST on February 28,
        2006.

(R. Vol. IV at 687.) He also sought immediate payment of the “Termination Payments”

under Section 3.4 of the Agreement. On that same day, he had his assistant remove his

personal property from his Market Street office.

        After receiving McBride’s letter, Johnson called McBride twice and sent him an e-

mail requesting a return call. McBride did not receive Johnson’s calls because he was

traveling but did receive the e-mail and called Johnson that night. Johnson told McBride

he believed Smith had talked to him prior to sending the February 17 letter and asked

McBride to call him back the next day, March 1.

F.      The Mistake

        McBride called Johnson on March 1. Johnson told McBride the February 17 letter

was a mistake, his salary had not been reduced and he wanted to talk with McBride about

moving the Western Division forward. Johnson admitted he was aware McBride would

                                              -8-
be receiving a notice of salary reduction but Smith was directed to talk to McBride before

sending the notice. McBride said he would be happy to talk with Johnson but informed

him he had trust issues with Smith and did not feel he could return to Market Street.

Johnson asked McBride to think about returning and said McBride could report directly

to him, rather than Smith, were he to return. McBride did not believe that arrangement

would work because Johnson and Smith had worked together for over twenty years and

he told Johnson so; nevertheless, he agreed to consider it and to contact Johnson on

March 3.

       On March 1, Johnson also sent McBride a letter stating the February 17 letter,

“which outlined a reduction in your salary, was sent in error. No change in your

compensation has been made.” (R. Vol. IV at 688.) Additionally, he informed the

Human Resources Department not to process the “Associate Status Change Form.” The

Human Resources Department wrote on the form “Per Randy [Johnson]—Done in

error—should not be processed. Deleted from system.” (Id. at 701.)

G.     McBride Decides Not to Return to Market Street

       On March 3, McBride called Johnson saying he would not return to Market Street.

He told Johnson about a conversation he had with Mott, who said before the February 15

meeting Smith had asked Kip Clark if he would be willing to take over the Western

Division should McBride and Mott be gone. Johnson said he was not aware of Smith’s

conversation with Clark. He did indicate, however, that McBride and Mott had higher

salaries than any other regional managers and admitted he had agreed with Smith their

salaries needed to be brought more in line with the other managers. McBride followed up

                                              -9-
this conversation with a letter to Johnson reiterating that he was not willing to rejoin

Market Street. McBride’s letter explained he did not believe the February 17 letter was a

“mistake” because (1) it was sent by Smith, to whom he reported; (2) Smith had

approached Clark about replacing McBride before sending the letter; and (3) at the

February 15 meeting Smith said (and Johnson agreed) McBride’s salary needed to be

reduced. (R. Vol. IV at 689.) McBride stated: “It appears the only mistake is that

apparently no one bothered to read the Employment Agreement regarding my right to

terminate the contract and receive the severance payment and liquidated damages set

forth in the contract.” (Id. at 689-90.) He again requested payment of Section 3.4’s

“Termination Payments.”

       On March 3, Johnson sent McBride a letter confirming his March 1 telephone

statement that the February 17 letter had been sent in error and there had been no change

in McBride’s Annual Base Salary. Therefore, Johnson claimed, there was no cause for

McBride to terminate the Agreement and Market Street considered McBride’s

termination to be without cause. Johnson also referred McBride to the non-solicitation

and non-competition clauses of the Agreement.

       On March 31, McBride began working for Freedom Mortgage for $190,000 per

year. He left two months later. In July 2006, he began working for Republic Mortgage

for $60,000 per year.

                        II.    PROCEDURAL BACKGROUND

       McBride filed suit against Market Street making four claims: (1) entitlement to the

“Termination Payments” under Section 3.4 of the Agreement based on his termination of

                                               - 10 -
the Agreement for cause (the termination for cause claim); (2) a declaration that he

terminated the Agreement for cause and therefore was not bound by its non-solicitation

and non-competition provisions; (3) breach of the Agreement based on Market Street’s

unilateral reduction of his salary and incentive compensation as well as breach of the

implied covenant of good faith and fair dealing; and (4) tortious interference with a

prospective economic advantage based on Market Street’s attempt to enforce the

Agreement’s non-solicitation and non-competition provisions (as evidenced by Johnson’s

March 3 letter referring to those provisions). Market Street answered and asserted

several counterclaims against McBride including breach of the Agreement’s non-

competition provisions because of McBride’s post-termination employment with

Freedom Mortgage. Two months later, Market Street voluntarily dismissed its

counterclaims.

       Market Street moved for summary judgment on several grounds. The district

court granted the motion on McBride’s tortious interference claim. The remaining issues

proceeded to trial. The breach of good faith and fair dealing claim was dismissed at the

close of McBride’s evidence upon Market Street’s oral motion for judgment as a matter

of law under Rule 50(a) of the Federal Rules of Civil Procedure. The court determined

Wyoming did not recognize such a claim in the employment law context.

       The jury returned a verdict in favor of McBride. It found “the actions of

Defendant Market Street constituted a ‘reduction by the Company in [McBride’s] Annual

Base Salary’”; “McBride was entitled to terminate his employment for cause”; and

“Defendant Market Street Mortgage Corporation breached the Employment Agreement

                                              - 11 -
with [McBride].” (R. Vol. IV at 802.) The jury awarded McBride $242,000 on the

termination for cause claim and $652,000 on the breach of contract claim. Based on the

jury’s verdict, the court relieved McBride of any non-competition and non-solicitation

obligations. It denied Market Street’s post-verdict motion for judgment as a matter of

law or in the alternative for new trial or remittitur under Rules 50(b) and 59 of the

Federal Rules of Civil Procedure.

                              III.     CHOICE OF LAW

       The Agreement contains a choice-of-law provision: “This Agreement shall be

construed and enforced under and in accordance with Federal law, where applicable, and

then with the laws of the State of Georgia.” (R. Vol. IV at 678.) Because this is a

diversity case, we apply Wyoming law to determine whether to enforce the Agreement’s

choice-of-law provision. See Vitkus v. Beatrice Co., 127 F.3d 936, 941 (10th Cir. 1997)

(“A federal court sitting in diversity . . . must apply the substantive law of the forum

state, including its choice of law rules.”). Wyoming will enforce a contractual choice-of-

law provision unless (1) the parties’ chosen state has no reasonable relationship to the

parties or transaction or (2) application of the foreign state’s law would be contrary to

Wyoming’s law, public policy or the general interests of its citizens. Res. Tech. Corp. v.

Fisher Scientific Co., 924 P.2d 972, 975 (Wyo. 1996).

       Georgia has a reasonable relationship to the parties and transaction in this case.

Market Street’s parent corporation, NetBank Inc., is headquartered in Georgia and the

Agreement was derived from a form created and used by NetBank. Moreover, because

the contract laws of Georgia and Wyoming are similar, application of Georgia law in this

                                               - 12 -
case would not offend the law or public policy of Wyoming or the general interests of its

citizens. Consequently, Wyoming would likely enforce the parties’ choice-of-law

provision; neither party contends otherwise. See id. (enforcing choice-of-law provision

where defendant was headquartered in the chosen state and chosen state’s laws similar to

Wyoming’s).

       While the district court enforced the Agreement’s choice-of-law provision, it only

applied Georgia law to McBride’s termination for cause claim; it applied Wyoming law

to the breach of contract claim and applied both Wyoming and Georgia law in

determining the propriety of the jury’s damages award. The court apparently believed the

choice-of-law provision only applied to the termination for cause claim because only that

claim involved the “constru[ction] and enforce[ment]” of the Agreement. (R. Vol. IV at

678.) It was mistaken. Georgia law should have been applied not only to the termination

for cause claim but also to the breach of contract claim and to the review of the jury’s

damages award because they too were premised on the Agreement. See Pepsi-Cola

Bottling Co. of Pittsburg, Inc. v. PepsiCo., Inc., 431 F.3d 1241, 1255 (10th Cir. 2005)

(applying New York law to plaintiff’s breach of contract and third-party beneficiary

claims where choice-of-law provision stated terms and conditions of contract shall be

governed and interpreted by New York law); Century 21 Real Estate Corp. v. Meraj Int’l

Inv. Corp., 315 F.3d 1271, 1281 (10th Cir. 2003) (applying New Jersey law to claim that

jury’s breach of contract damages award was excessive where choice-of-law provision

stated New Jersey law would govern the “construction” of the contract). We apply

Georgia law.

                                               - 13 -
                                 IV.       DISCUSSION

       Market Street challenges the jury’s liability and damages verdicts and the district

court’s entry of a declaratory judgment.

A.     Jury Liability Verdicts and Declaratory Judgment

       In its motion for summary judgment, Market Street argued, inter alia, McBride’s

termination of the Agreement was without “cause” because he never suffered a

“reduction by the Company in [his] Annual Base Salary” as his salary was never reduced.

The district court concluded the term “reduction” was ambiguous because it was unclear

whether the parties intended it to require the actual receipt of a reduced paycheck or mere

notice of a reduction. It determined this ambiguity needed to be resolved by the jury. At

the close of McBride’s trial evidence, Market Street orally moved for judgment as a

matter of law pursuant to Rule 50(a) of the Federal Rules of Civil Procedure, again

arguing the interpretation of “reduction” was for the court, not the jury, and “under any

reasonable interpretation of the reduction language . . . simply receiving a letter, without

more, [does not] constitute[] a reduction.” (R. Vol. III at 542.) The court denied the

motion. Repeating the arguments made to the district court, Market Street contends its

Rule 50(a) motion should have been granted and the court improperly sent the

interpretation of the phrase “reduction by the Company in [McBride’s] Annual Base

Salary” to the jury.

       We review the denial of a motion for judgment as a matter of law de novo.

Bayless v. Christie, Manson & Woods Int’l, Inc., 2 F.3d 347, 351 (10th Cir. 1993).

Contract interpretation is a question of law in Georgia, see Mon Ami Int’l., Inc. v. Gale,

                                               - 14 -
592 S.E.2d 83, 86 (Ga. Ct. App. 2003), which is also reviewed de novo. Kaw Nation v.

Springer, 341 F.3d 1186, 1189 (10th Cir. 2003).

       Georgia applies a three-step analysis in construing a contract. First, a court must

decide whether the contract’s language is clear and unambiguous. Covington Square

Assocs., LLC v. Ingles Mkts., Inc., 641 S.E.2d 266, 268 (Ga. Ct. App. 2007). “Contract

language is unambiguous if it is capable of only one reasonable interpretation.” Pipkin v.

Cora Bett Thomas Realty Co., 650 S.E.2d 394, 395 (Ga. Ct. App. 2007) (quotations

omitted); see also Ben Farmer Realty, Inc. v. Owens, 649 S.E.2d 771, 774 (Ga. Ct. App.

2007) (“Ambiguity exists when a contract is uncertain of meaning, duplicitous, and

indistinct, or when a word or phrase may be fairly understood in more than one way.”)

(quotations omitted). If the language is unambiguous, no construction is required and the

court simply enforces the contract according to its terms. Covington Square Assocs., 641

S.E.2d at 268. Second, if the contract is ambiguous, the court applies the rules of

contract construction to resolve the ambiguity. Id. (“If the court determines that an

ambiguity exists, . . . a jury question does not automatically arise, but rather the court

must first attempt to resolve the ambiguity by applying the rules of construction . . . .”).

Finally, if the contract remains ambiguous after applying the rules of construction, the

meaning of ambiguous language and the intent of the parties are jury questions. Id.

       The Agreement does not define “a reduction by the Company in [McBride’s]

Annual Base Salary,” in particular, the word “reduction.” The plain and ordinary

meaning of “reduction” is “the act or process of reducing: the state of being reduced.”

See www.merriam-webster.com. “[R]educe” means “to diminish in size, amount, extent,

                                                - 15 -
or number.” Id. These definitions are not helpful because they do not define the “act” or

“process.” As the parties’ arguments illustrate, the act or process could reasonably mean

(1) the decision to reduce, (2) the decision to reduce and notification thereof, or (3) the

decision to reduce and the actual receipt of a paycheck at the lower rate. Because it is

susceptible to more than one reasonable meaning, the language is ambiguous. But,

contrary to the district court’s conclusion, the rules of contract construction resolve the

ambiguity.

       The cardinal rule is to ascertain the parties’ intent. Covington Square Assocs., 641

S.E.2d at 269. To determine that intent, “all the contract terms must be considered

together in arriving at the construction of any part, and a construction upholding the

contract in whole and every part is preferred.” DBL, Inc. v. Carson, 645 S.E.2d 56, 62

(Ga. Ct. App. 2007). “[A] court should, if possible, construe a contract so as not to

render any of its provisions meaningless and in a manner that gives effect to all of the

contractual terms.” Pomerance v. Berkshire Life Ins. Co. of Am., 654 S.E.2d 638, 641

(Ga. Ct. App. 2007) (quotations omitted). A contract’s words are to be given their usual

and common significance and a contract will be strictly construed against its drafter.

Eastside Gardens of Snellville, LLC v. Sims, 547 S.E.2d 383, 385 (Ga. Ct. App. 2001).

       Both parties point to provisions in the Agreement supporting their respective

interpretations of “reduction.” Market Street points to Annex C, which outlines

McBride’s compensation package and uses the term “receive” several times. It alleges

these references demonstrate McBride must receive a salary less than $230,000 annually

in order to experience a “reduction.” Market Street also points to the other situations

                                                - 16 -
besides “a reduction by the Company in [McBride’s] Annual Base Salary” in which the

Agreement allows McBride to terminate for cause. Two of those situations are “a

material diminution in [McBride’s] powers, responsibilities or duties” occurring within

one year from the date of acquisition and “the failure by the Company to pay [McBride]

any portion of [his] current compensation within seven days of the date such

compensation is due.” (Id. at 671.) It alleges these situations require an actual

diminution in powers or failure to pay, not merely a notice. Consequently, Market Street

asserts “a reduction by the Company in [McBride’s] Annual Base Salary” also requires

an actual reduction.

       Not surprisingly, McBride contends Market Street’s interpretation is inconsistent

with other provisions of the Agreement, namely, the provision allowing McBride to

terminate the Agreement for cause for “the failure by the Company to pay [McBride] any

portion of [his] current compensation within seven days of the date such compensation is

due.” If Market Street’s interpretation of a “reduction by the Company in [McBride’s]

Annual Base Salary” is adopted, this provision would be rendered meaningless. In order

to give effect to both provisions, McBride asserts, a “reduction by the Company in

[McBride’s] Annual Base Salary” must address a decision to reduce the contract salary

whereas “the failure by the Company to pay [McBride] any portion of [his] current

compensation within seven days of the date such compensation is due” addresses the

situation where there is no decision or notice of reduction but Market Street simply fails

to actually pay the agreed salary.

       We agree with McBride. Construing the Agreement as a whole, the term

                                               - 17 -
“reduction” does not require actual receipt of a reduced paycheck—a decision to reduce

and notice thereof is sufficient. Among the six situations entitling McBride to terminate

for cause are subsection (a)—“a reduction by the Company in [McBride’s] Annual Base

Salary”—and subsection (d)—“the failure by the Company to pay [McBride] any portion

of [his] current compensation within seven days of the date such compensation is due.”

(Emphasis added.) By separately listing these two provisions in the same section, the

parties necessarily intended for disparate meaning, i.e., to constitute distinct “causes”

permitting McBride to terminate. Were we to adopt Market Street’s interpretation of

subsection (a), the two clauses would overlap and subsection (d) would be rendered

superfluous. Not only does that interpretation contradict the parties’ obvious intent, it

violates a fundamental rule of contract construction—a contract should be construed so as

not to render any of its provisions meaningless. See Vaughn, Coltrane & Assocs. v. Van

Horn Constr., Inc., 563 S.E.2d 548, 550 (Ga. Ct. App. 2002). McBride’s interpretation

of subsection (a), on the other hand, is faithful to the language of the Agreement by

giving effect to both subsection (a) and subsection (d).

       Section 4 of the Agreement also supports McBride’s interpretation. It states

McBride’s Annual Base Salary shall be reviewed annually by Market Street’s CEO and

McBride “shall be entitled to receive annually an increase in such amount, if any, as may

be determined by the [CEO]. Such salary shall be payable in accordance with the

Company=s normal payroll practices.” Under Section 4, all that is required to increase

McBride’s Annual Base Salary is a determination by the CEO (Johnson). While that

“determination” will be implemented in McBride’s paychecks, a paycheck is not a

                                               - 18 -
prerequisite for that “determination.” Logically, if all that is required to increase

McBride’s Annual Base Salary is an official “determination,” then an official

“determination” or decision is all that is required to reduce it.

       Moreover, the Agreement was derived from a form created by Market Street’s

parent corporation which Market Street adapted for its managers. While McBride

negotiated the terms and Annual Base Salary and decided how to divide the bonuses

among Major Mortgage’s five-member management team, he had no role in drafting the

Agreement. Therefore, any ambiguity must be construed against Market Street. Eastside

Gardens of Snellville, LLC, 547 S.E.2d at 385.

       Because any ambiguity in the contested language can be resolved by the rules of

contract construction, the issue should not have been sent to the jury.8 Nevertheless, the

district court correctly denied Market Street’s Rule 50(a) motion because it was based on

an improper interpretation of the term “reduction” as requiring more than a decision and

notification. Moreover, the jury’s verdict is consistent with the proper contract

interpretation and there was more than sufficient evidence at trial demonstrating a

decision to reduce and notification thereof.9 The reduction in McBride’s salary may have

       8
         Market Street argues that even assuming the district court correctly sent the
interpretation of “reduction by the Company in [McBride’s] Annual Base Salary” to the
jury, the court erred in refusing to tender its proposed jury instruction providing the
dictionary meaning of “reduction.” Because the court should not have sent the issue to
the jury, this argument is moot. In any event, there was no error. As explained
previously, the dictionary definition of “reduction” is not helpful and the jury reached the
correct result.
       9
       Smith and Johnson agreed McBride’s salary should be reduced to $85,000.
Johnson knew Smith would be drafting a letter informing McBride of the decision to

                                                - 19 -
been ill-advised, but it was not a “mistake.” The real “mistake,” failing to appreciate

consequences, is not excusable, as a simple clerical error might be.

       As a final attempt to set aside the jury’s verdicts, Market Street contends that even

if McBride suffered a reduction in his Annual Base Salary, his breach of contract claim

fails because such a reduction does not constitute a breach of the Agreement. It claims

the Agreement clearly contemplates that a reduction in the Annual Base Salary may

occur. Because it had a right to reduce McBride’s salary, the fact it did so is not a breach.

Market Street raised this argument in its oral Rule 50(a) motion. The district court did

not specifically address that argument in denying the motion but did so implicitly by

erroneously allowing the issue to go to the jury.10

       Market Street had a duty under the Agreement to pay McBride $230,000 a year for

three years11 unless the parties agreed in writing to a different amount12 or the CEO

reduce. Smith did in fact draft a letter to McBride notifying him of that decision and
Johnson signed an “Associate Status Change Form” implementing that decision with
Market Street’s payroll department. Smith mailed the letter to McBride who received it.
       10
          Interpreting the Agreement is a question of law for the court. Mon Ami Int=l.,
Inc., 592 S.E.2d at 86.
       11
            Section 4 of the Agreement provides:
       [McBride] shall receive the following salary and benefits:
       4.1 Annual Base Salary. During the Term, [McBride] shall be compensated at an
       annual rate equal to the Annual Base Salary. The Annual Base Salary and
       performance shall be reviewed by the Chief Executive Officer annually, and
       [McBride] shall be entitled to receive annually an increase in such amount, if any,
       as may be determined by the Chief Executive Officer . . . .
(Emphasis added.) Under “Annual Base Salary,” Annex C says “[McBride] will receive
a yearly salary of $230,000.” (Emphasis added.)
       12
            The Agreement states: “No amendment or modification of this Agreement shall

                                               - 20 -
determined at the annual review that McBride was entitled to a salary increase.13 Market

Street may have breached this duty by unilaterally reducing McBride’s Annual Base

Salary.14 But we see no reason to engage in such analysis. Whether it was a breach of

the Agreement or cause for McBride to terminate the Agreement, the measure of

damages flowing from such a reduction is the same, dictated by Section 3.4 of the

Agreement—his Annual Base Salary, Incentive Compensation and his health benefits for

one year or the difference between the cost of COBRA benefits and the amount McBride

paid for benefits at Market Street at the time of his termination for one year.

       In addition to the salary reduction, McBride’s breach of contract claim was based

on Market Street changing the terms of his net contribution incentive compensation and

failing to pay him Section 3.4’s “Termination Payments.”15 The evidence showed

be valid or binding upon [Market Street] or [McBride] unless made in writing and signed
by both parties.”
       13
         Notably, McBride’s annual review could only result in an increase in the Annual
Base Salary, not a reduction. Under the maxim expressio unius est exclusio alterius—
“[t]he express mention of one thing implies the exclusion of another”—we may presume
the omission of allowing a reduction in salary after an annual review was deliberate. See
Krogh v. Pargar, LLC, 625 S.E.2d 435, 439 (Ga. Ct. App. 2005).
       14
          The United States District Court for the Northern District of Texas reached a
different result in Mott’s lawsuit against Market Street based on the reduction of his
salary. See Mott v. Mkt. St. Mortgage Corp., No. 3:06-CV-0423-M, 2007 WL 2457609
(N.D. Tex. Aug. 29, 2007). It concluded “the reduction in Mott’s salary was not a breach
of the Employment Agreement [because] the agreement specifically contemplated that
Market Street might reduce Mott’s salary and provided for that contingency in § 3.4.” Id.
at *4. Of course we are not bound by that decision, but at the end of the day the result we
reach is not substantially different.
       15
         McBride also alleged Market Street breached the Agreement because the
February 17 letter placed conditions on his ability to earn his Annual Base Salary. We do
not consider this a separate breach from the reduction in his Annual Base Salary. At oral

                                               - 21 -
Smith’s letter changed the terms of McBride’s net contribution incentive compensation,

making it more difficult to earn. And it was undisputed Market Street never paid

McBride the “Termination Payments.” These actions may have breached the Agreement,

but, as we explain below, any resulting damages were not proved or are limited to

interest. Accordingly, the jury’s damages awards are excessive.

B.    Damages

      Market Street complains the jury’s damages awards are excessive because they

exceed the “Termination Payments” provided for in the Agreement, which it claims

amounted to $242,000 —McBride’s Annual Base Salary ($230,000) plus the difference

in the cost of his insurance ($12,000).16 We agree.

      1.     Termination for Cause Claim

      Under the Agreement, Market Street was obligated to pay McBride the

“Termination Payments” if he terminated for cause. “Termination Payments” is defined

in the Agreement as the sum of (1) the Annual Base Salary, (2) the Incentive

Compensation and (3) health benefits for one year or the difference between the cost of

COBRA benefits and the amount McBride paid for benefits at Market Street at the time

of his termination for one year. The Agreement provides McBride’s Annual Base Salary

is $230,000. It defines “Incentive Compensation” as “the highest annual incentive bonus

argument, McBride argued for the first time that Market Street breached the Agreement
by attempting to enforce its non-solicitation and non-competition provisions. We will not
consider this argument. Fed. Ins. Co. v. Tri-State Ins. Co., 157 F.3d 800, 805 (10th Cir.
1998) (“Issues raised for the first time at oral argument are considered waived.”).
      16
        Market Street also alleges McBride received an impermissible double recovery.
Because we conclude the damages awards are excessive, we need not address this issue.

                                             - 22 -
paid or payable to [McBride] . . . for any of the two fiscal years . . . immediately prior to

the fiscal year in which the date of termination of employment occurs.” (R. Vol. IV at

671.) The only “annual incentive bonus” is the “Net Contribution Incentive” which

McBride was only entitled to if the Western Division was profitable.17 The evidence was

clear the Western Division was not profitable. Finally, the evidence demonstrated

McBride was paying $400 per month for benefits at Market Street at the time of his

termination for cause and had paid $1,400 in COBRA benefits for one month after his

       17
         McBride argues the contingent part of his signing bonus is part of his “Incentive
Compensation.” Market Street contends McBride would only be entitled to the $474,000
contingent payment if the Western Division originated and closed $600 million in volume
and he remained in Market Street’s employ until the contingent payment was earned and
paid.
        The evidence at trial demonstrated the Western Division reached the July 2005 to
July 2006 volume goal, but McBride terminated his involvement with Market Street on
March 1, 2006, and was thus gone for at least four of the relevant twelve months. In
retrospect it is clear that had he stayed with Market Street for a few more months,
applying his shoulder to the wheel, he would have been entitled to the contingent portion
of the signing bonus. But he did not. While the signing bonus language does not
specifically require McBride to be employed by Market Street in July 2006 or to have
contributed one year’s effort in order to qualify for the one time/one year contingent
bonus payment, it is fairly implied.
      In any event, the $474,000 contingent payments does not meet the definition of
“Incentive Compensation” contained at Section 4.2 of the Agreement, which provides:
       Incentive Compensation. [McBride] shall be eligible for an annual incentive
       bonus determined from time to time in accordance with Annex C hereto. In
       addition, [McBride] shall be entitled to participate in such stock option programs
       as are made available to similarly situated executives of [Market Street] from time
       to time. Any options granted will comply in all respects with the terms of the
       NetBank, Inc. Stock Incentive Plan.
The signing bonus (initial payment or contingent payment) does not satisfy the
Agreement’s definition of “Incentive Compensation” as the described payments are not
an “annual incentive bonus.” The only annual bonus mentioned in Annex C is the “Net
Contribution Incentive Plan,” for which, as we will discuss, McBride did not qualify.

                                                - 23 -
termination. Therefore, the difference in these monthly amounts ($1,000) for one year is

$12,000. Consequently, the “Termination Payments” totaled $242,000 ($230,000 plus

$12,000)—the amount awarded by the jury on the termination for cause claim.

       2.     Breach of Contract Claims

       In its oral Rule 50(a) motion and its written motion for remittitur or in the

alternative a new trial, Market Street argued McBride’s breach of contract damages were

limited to the liquidated damages specified in the Agreement, i.e., Section 3.4’s

“Termination Payments.” The district court denied Market Street’s Rule 50(a) motion on

this basis believing the matter should go to the jury. It also rejected Market Street’s

motion for new trial and remittitur. It concluded Section 3.4 is not a liquidated damages

provision for all breaches of the Agreement but instead provides payment only when one

of the situations allowing McBride to terminate for cause occurs. Therefore, Section 3.4

did not prevent McBride from being awarded damages on his other alleged breaches, i.e.,

Market Street’s changing the terms of his incentive compensation and failing to pay him

Section 3.4’s “Termination Payments,” because they were not situations by which

McBride could terminate for cause. The court also concluded the jury award was not

excessive, finding McBride’s full lost salary,18 the $474,000 contingent signing bonus

payment and other incidental damages, could “easily add up” to the jury’s awards. (R.

Vol. IV at 880.)

       We review for an abuse of discretion a court’s denial of a motion for new trial or

       18
         $230,000 per year for the remainder of the Agreement’s three-year term, less
mitigation—his actual and projected earnings for that period.

                                               - 24 -
remittitur grounded on a claim the jury’s damages award was excessive. Blanke v.

Alexander, 152 F.3d 1224, 1236 (10th Cir. 1998). To the extent Market Street’s

excessiveness argument challenges the district court’s interpretation of the Agreement,

our review is de novo. Kaw Nation, 341 F.3d at 1189; Mon Ami Int=l., Inc., 592 S.E.2d at

86. “The determination of whether a specified sum is enforceable as liquidated damages

is a question of law” which we review de novo. Kaw Nation, 341 F.3d at 1189; Antonios

v. Gwinnett Clinic, Ltd., 668 S.E.2d 531, 532 (Ga. Ct. App. 2008).

      We agree with Market Street. Analyzing the damages resulting from each breach

separately, the jury’s $652,000 breach of contract damages must be set aside.

             a)     Reduction in Annual Base Salary

      We have already concluded Market Street’s reduction in McBride’s Annual Base

Salary allowed McBride to terminate the Agreement for cause and may have constituted

a breach of the Agreement. Section 3.4 of the Agreement provides that in the event

McBride terminates the Agreement for cause, Market Street shall pay McBride

      as severance pay and liquidated damages a lump sum amount equal to the
      sum of the (a) Annual Base Salary and (b) Incentive Compensation . . . . In
      addition, for a period of twelve months following the effective date of the
      termination . . ., the Company shall continue to provide to [McBride] . . .
      [his] benefits . . . ; provided, however, that in lieu of providing health
      benefits, the Company shall pay [McBride] an amount equal to the
      difference between (x) the cost of COBRA health continuation coverage . . .
      and (y) the amount for which [McBride] would have been responsible to
      pay under the health benefits plans in effect . . . immediately prior to his
      termination . . . .

(Emphasis added.) The question is whether this provision is an enforceable liquidated

damages clause under Georgia law, thereby limiting Market Street’s liability for reducing

                                             - 25 -
McBride’s salary to the “Termination Payments” provided by Section 3.4. We believe it

is.

       Georgia allows parties to agree “in their contract to a sum to liquidate their

damages.” S.E. Land Fund, Inc. v. Real Estate World, Inc., 227 S.E.2d 340, 343 (Ga.

1976). “If the parties agree in their contract what the damages for a breach shall be, they

are said to be liquidated and, unless the agreement violates some principle of law, the

parties are bound thereby.” Ga. Code Ann. § 13-6-7. A liquidated damages provision is

enforceable if: “(1) the injury caused by the breach of the contract is difficult or

impossible to accurately estimate; (2) the parties intended to provide for damages rather

than a penalty; and (3) the sum stipulated upon by the parties is a reasonable pre-estimate

of the probable loss.” Caincare, Inc. v. Ellison, 612 S.E.2d 47, 50 (Ga. Ct. App. 2005).

Where a designated sum is inserted into a contract for the purpose of deterring one or

both of the parties from breaching it or where it plainly has no reasonable relation to any

probable actual damage which may follow a breach, the contractual provision will be

construed as an unenforceable penalty. Id.; see also Lager’s, LLC v. Palace Laundry,

Inc., 543 S.E.2d 773, 778-79 (Ga. Ct. App. 2000).

       Here, the injury caused to McBride by the reduction in his Annual Base Salary is

difficult or impossible to estimate accurately. The scope of his injury would depend on

when in the three-year term of the Agreement the reduction occurred and his ability to

mitigate his damages by obtaining a new position. See Ga. Code Ann. § 13-6-5 (“Where

by a breach of contract a party is injured, he is bound to lessen the damages as far as is

practicable by the use of ordinary care and diligence.”); see also Boone v. Atlanta Ind.

                                                - 26 -
Sch. Sys., 619 S.E.2d 708, 712 (Ga. Ct. App. 2005). It also would depend on whether he

would have been entitled to his “Net Contribution Incentive,” which in turn would

depend on whether Market Street would have been profitable at the end of the year had

McBride not terminated for cause.

       It is also clear the parties intended Section 3.4 to provide for damages rather than a

penalty. Section 3.4 expressly states Market Street will pay McBride the “Termination

Payments” as “liquidated damages.” This contractual language is indicative of the

parties’ intent for the damages to be liquidated. See Caincare, Inc. 612 S.E.2d at 50; see

also Liberty Life Ins. Co. v. Thomas B. Hartley Constr. Co., 375 S.E.2d 222, 223 (Ga.

1989) (“[T]here is no question the parties intended to provide for liquidated damages—

the damages clause was denominated as liquidated by the parties . . . .”); Nat’l

Emergency Servs., Inc. v. Wetherby, 456 S.E.2d 639, 641 (Ga. Ct. App. 1995) (although

employee’s uncontradicted affidavit stated he and the employer never discussed any

figure which would represent the employer’s damages in the event of a breach, the

language of the employment contract itself uses the phrase “liquidated damages” to

describe the amount; court “must first look to the language of the contract to determine

whether the parties intended the provision in question to be a penalty or a legally

cognizable liquidated damages clause”).19

       19
         In S.E. Land Fund, Inc., the Georgia Supreme Court said the label prescribed to
a provision is not determinative of whether it is a liquidated damages or penalty
provision. 227 S.E.2d at 342. However, in diversity jurisdiction cases, we are obligated
to follow the most recent pronouncement of the state’s highest court—in this case,
Liberty Life Ins. Co. See Otis Elevator Co. v. Midland Red Oak Realty, Inc., 483 F.3d
1095, 1102 n.10 (10th Cir. 2007).

                                               - 27 -
       Finally, the “Termination Payments,” which is defined as McBride’s Annual Base

Salary, his Incentive Compensation and his health benefits for one year or the difference

between the cost of COBRA benefits and the amount McBride paid for benefits at Market

Street at the time of his termination for one year, is a reasonable pre-estimate of

McBride’s probable loss. Although there was no testimony as to how the parties arrived

at the “Termination Payments,” it is clear they generally represent one-year’s worth of

McBride’s compensation package at Market Street. Obviously, the parties believed one

year would be a reasonable time for McBride to obtain new employment. We cannot say

the “Termination Payments” bear no reasonable relation to any probable actual damage

McBride would suffer.20

       It may appear unfair to limit McBride to one year’s salary and benefits when he

was terminated within the first year of his three-year employment term. Most likely,

allowing McBride to recover breach of contract damages (even considering his mitigation

of those damages by obtaining new employment) would result in a larger recovery.

However, it only seems unfair due to the timing of the termination. Had the reduction in

salary and subsequent termination for cause occurred three months before the end of the

three-year employment term, allowing McBride the “Termination Payments” would

appear to be a windfall.21 But (absent a claim of unconscionability) it is not our

       20
         The district court determined Section 3.4 was not a liquidated damages
provision because it only accounted for some breaches of the Agreement. But a
liquidated damages provision need not apply to all breaches. See Fortune Bridge Co. v.
Dep’t of Transp., 250 S.E.2d 401, 402 (Ga. 1978).
       21
            Another benefit to the “Termination Payments” provision is that McBride has

                                               - 28 -
responsibility to measure fairness. We are bound by the terms of the parties’ Agreement:

       Another feature implicit in the concept of liquidated damages . . . is that both
       parties are bound by their agreement. A non-breaching party who has agreed to
       accept liquidated damages cannot elect after a breach to take actual damages
       should they prove greater than the sum specified. The breaching party cannot
       complain that the actual damages are less than those specified as liquidated
       damages. The liquidated damages become the maximum as well as the minimum
       sum that can be collected.

S.E. Land Fund, Inc., 227 S.E.2d at 343 (citations and quotations omitted) (emphasis

added); see also Jefferson Randolph Corp. v. Progressive Data Sys., Inc., 553 S.E.2d

304, 308 (Ga. Ct. App. 2001) (stating that “[i]f liquidated damages are recoverable, then

the parties cannot elect between liquidated and actual damages”) (emphasis added), rev’d

on other grounds, 568 S.E.2d 474 (Ga. 2002). Here, McBride elected to terminate the

Agreement for cause upon receiving a reduction in his Annual Base Salary, which

entitled him to the liquidated damages provided by Section 3.4.

              b)     Change in the Terms of Net Contribution Incentive

       McBride was only entitled to the net contribution incentive if the Western

Division was profitable. The evidence demonstrated the Western Division was not

profitable in 2005. It also showed that at the time of trial in December 2006, it was

unknown whether the Western Division would be profitable for 2006 because the year-

end numbers would not be determined until early 2007. No evidence projected the

Western Division’s profitability for 2007. Thus, McBride failed to show he suffered any

no duty to mitigate them. See Royal Crown Cos. v. McMahon, 359 S.E.2d 379, 382 (Ga.
Ct. App. 1987) (“Because under the contract plaintiff’s right to severance pay was
absolute . . . we find no merit in Royal Crown’s additional argument that plaintiff’s
damages should have been reduced under the ‘mitigation theory.’”) (quotations omitted).

                                              - 29 -
actual damage as a result of Market Street changing the terms of his net contribution

incentive compensation. McBride was entitled to at most nominal damages as a result of

this breach. See Belcher v. Thomson Newspapers, Inc., 379 S.E.2d 204, 205 (Ga. Ct.

App. 1989) (“‘In every case of breach of contract the injured party has a right to

damages, but if there has been no actual damage, the injured party may recover nominal

damages sufficient to cover the costs of bringing the action.’”) (quoting Ga. Code. Ann. §

13-6-6).

       Contrary to McBride’s arguments to the jury and this Court, he is not entitled to

his compensation and benefits for the remaining term of the Agreement (reduced by any

mitigation) or his $474,000 contingent signing bonus as a result of Market Street

changing the terms of his net contribution incentive. An injured party is entitled to

recover only the “compensatory damages that he suffered by reason of the breach of his

contract; in other words, . . . the proper measure of damages arising from [a] breach of [a]

contract of employment [is the] actual loss sustained by the breach, and not the gross

amount of wages and expenses under the contract.” Rodgers v. Georgia Tech Athletic

Ass’n, 303 S.E.2d 467, 472 (Ga. Ct. App. 1983) (quotations omitted). McBride’s

damages are limited to those caused by the alleged breach, i.e., the net contribution

incentive he would have earned had Market Street not changed the terms. He failed to

prove he would have earned any incentive even had the terms not been changed, as

earning that incentive was always conditioned upon the Western Division being

profitable. As explained above, he failed to prove profitability.

                                              - 30 -
              c)      Failure to Pay the “Termination Payments”

       As a matter of law, the only damages arising from Market Street’s failure to pay

McBride the “Termination Payments” are the payments themselves. See Bauer, 527

S.E.2d at 244-45. Those payments total $242,000. The fact Market Street did not

immediately remit that amount to McBride upon his termination for cause is compensated

by the payment of interest. Under Georgia law, prejudgment interest may be awarded

when a plaintiff seeks a liquidated sum.22 See Ga. Code. Ann. § 7-4-15 (“All liquidated

demands, where by agreement or otherwise the sum to be paid is fixed or certain, bear

interest from the time the party shall become liable and bound to pay them; if payable on

demand, they shall bear interest from the time of the demand.”). Here, the district court

awarded post-judgment interest under 28 U.S.C. § 1961 but not pre-judgment interest.23

Given our determination above that McBride’s damages for a reduction in his Annual

Base Salary are a liquidated amount and because he requested an award of “interest on

the unpaid liquidated damages and severance benefits” in his complaint, on remand the

district court should award pre-judgment interest. (R. Vol. I at 20.)

       d)     Summary of Breach of Contract Damages

       McBride is entitled, as a matter of law, to the “Termination Payments” ($242,000)

       22
        Here, Market Street contests McBride’s entitlement to damages but concedes
$242,000 is the correct amount.
       23
          “A federal court sitting in diversity applies state law, not federal law, regarding
the issue of prejudgment interest.” See Strickland Tower Maint., Inc. v. AT & T
Commc’ns, Inc., 128 F.3d 1422, 1429 (10th Cir. 1997). “But even in cases founded on
diversity jurisdiction, the post-judgment interest rate on a federal court judgment is
established by federal law, not state law.” In re Riebesell, 586 F.3d 782, 794 n.11 (10th
Cir. 2009).

                                                - 31 -
plus pre-judgment interest as a result of the reduction in his salary and failure to timely

remit those payments. However, because McBride is entitled to receive the “Termination

Payments” on the termination for cause claim, he is not entitled to receive them again

under the breach of contract claim. See Ga. Ne. R.R., Inc., v. Lusk, 587 S.E.2d 643, 644

(Ga. 2003) (“Georgia, as part of its common law and public policy, has always prohibited

a plaintiff from a double recovery of damages; the plaintiff is entitled to only one

recovery and satisfaction of damages, because such recovery and satisfaction is deemed

to make the plaintiff whole.”). Nor is he entitled to receive more for the reduction in his

salary (i.e., his actual damages) than that provided for by the liquidated damages clause.

See S.E. Land Fund, Inc., 227 S.E.2d at 343 (“A non-breaching party who has agreed to

accept liquidated damages cannot elect after a breach to take actual damages should they

prove greater than the sum specified.”).

       With regard to the change in the terms of the net contribution incentive, McBride

is only entitled to an award of nominal damages as there was no evidence of actual

damages.

                                 V.        CONCLUSION

       We AFFIRM the jury’s liability verdicts as well as the district court’s entry of a

declaratory judgment. However, we REVERSE the damages awards and REMAND to

                                               - 32 -
the district court to enter a damages award of $242,000 plus any pre-and post-judgment

interest to which he may be entitled.

                                        Entered by the Court:

                                        Terrence L. O’Brien
                                        United States Circuit Judge

                                            - 33 -