Court Opinion

ID: 2961448
Source: CourtListenerOpinion
Date Created: 2015-09-21 20:43:30.806388+00
Date Added: 2024-06-11T15:01:22.625561
License: Public Domain

USCA1 Opinion

	

        August 21, 1992     UNITED STATES COURT OF APPEALS                                FOR THE FIRST CIRCUIT                                 ____________________        No. 92-1082                              COOL LIGHT COMPANY, INC.,                                Plaintiff, Appellant,                                          v.                              GTE PRODUCTS CORPORATION,                                 Defendant, Appellee.                                 ____________________                                     ERRATA SHEET            The opinion of  this Court issued on  August 21, 1992,  is amended        as follows:            On  cover  under list  of  counsel  "Edward  A.  McCabe should  be        corrected to read "Edwin A. McCabe."        August 21, 1992     UNITED STATES COURT OF APPEALS                                FOR THE FIRST CIRCUIT                                 ____________________        No. 92-1082                              COOL LIGHT COMPANY, INC.,                                Plaintiff, Appellant,                                          v.                              GTE PRODUCTS CORPORATION,                                 Defendant, Appellee.                                 ____________________                     APPEAL FROM THE UNITED STATES DISTRICT COURT                          FOR THE DISTRICT OF MASSACHUSETTS                     [Hon. Robert E. Keeton, U.S. District Judge]                                             ___________________                                 ____________________                                        Before                                 Breyer, Chief Judge,                                         ___________                             Lay,* Senior Circuit Judge,                                   ____________________                          and O'Scannlain,** Circuit Judge.                                             _____________                                 ____________________            Edwin A. McCabe  with whom Joseph P. Davis, III, Karen Chinn Lyons            _______________            ____________________  _________________        and The McCabe Group were on brief for appellant.            ________________            Alan van Gestel with whom Marie P.  Buckley and Goodwin, Procter &            _______________           _________________     __________________        Hoar were on brief for appellee.        ____                                 ____________________                                 ____________________        _____________________        *  Of the Eighth Circuit, sitting by designation.        ** Of the Ninth Circuit, sitting by designation.               LAY, Circuit Judge.  This is an unusual and perplexing case.               LAY  _____________          Cool  Light  Company, Inc.  (Cool  Light) sought  to  develop and          produce a new and superior light system for television and movies          which  would emit less heat, would last longer, and would produce          better color quality on film.  The lights, not surprisingly, were          to  be  called  "cool  lights."   Cool  Light's  founder,  George          Panagiotou, obtained all rights to the lighting concept and  took          his idea  to Hollywood where he  founded Cool Light in  1977.  In          1978,  Panagiotou  was looking  for a  new supplier  of specially          coated  reflectors  needed  to  produce  cool  lights.    He  was          approached  by  GTE Products  Corporation  (GTE)  to produce  the          reflectors  and  the   two  parties  entered   into  a   business          relationship which continued throughout 1979 and 1980.               Dissatisfaction arose over the  supply of coated reflectors,          both  in number and in  quality, and problems  arose over amounts          owed by Cool Light to GTE.  Cessation of supply resulted and Cool          Light, facing a  severe cash shortage,  ultimately was forced  to          sell off its assets and became insolvent.               Cool Light sued GTE  on a number of claims,  including beach          of  contract, breach of implied  covenant of good  faith and fair          dealing,  and fraud.  After a twenty-four day trial, the district          court1 submitted to the jury a  number of special interrogatories          in  addition  to   general  verdict  forms.     On  the   special          interrogatory  form, the jury found, inter alia: (1) GTE had made                                               __________          a  false representation to Cool  Light that it  could produce the          number and quality of reflectors required, (2) Cool Light  relied          upon that misrepresentation, (3)  Cool Light and GTE had  both an          oral and written agreement, and (4) GTE's actions cost Cool Light          $9.3 million in loss  of potential profits.  The  general verdict          forms, however, indicated  that Cool Light was due $3.694 million          on  the breach of  contract claim, $2.8 million  on the breach of                                        ____________________          1The Honorable John J. McNaught, presiding.                                         -2-                                          2          implied  covenant of good faith  claim, and $9.45  million on the          fraud claim.   After the  jury returned the  verdict and  special          interrogatories,  the court sent the jury back into the jury room          to  decide how much, if any,  of the fraud damages were punitive.          The  jury  returned with  the  answer  that  $2.95  million  were          compensatory  in  nature and  $6.5  million  represented punitive          damages permitted under California law.               In  addition to the above,  the jury returned  a verdict for          GTE on all other counts, including common law misappropriation of          trade secrets, misappropriation of trade secrets under Mass. Gen.          L.  ch. 93,    42 (1990),  misappropriation of  information under          section   759   of  the   Second   Restatement   of  Torts,   and          misappropriation of  trade secrets  under the  California Uniform          Trade Secrets Act, Cal. Civ. Code   3426 (West 1992).2   The jury          also found against  GTE on  a counterclaim.   An additional  five          counts, consideredto besounding inequity, weretried by thecourt.3                                        ____________________          2The record is confusing  as to whether this count  was submitted          to the jury.   In Judge McNaught's August 9,  1990 memorandum and          order he states that the count was submitted to the jury and that          it found  in favor  of GTE.   Judge  McNaught also  included this          count in the  list of those he intended to be retried.  The final          judgment entered December 11,  1991, however, indicates that this          count was withdrawn before trial.  There is some evidence on  the          record that  the California statute was not in effect at the time          the alleged misconduct occurred.          3Cool Light challenges the  trial court's ruling in favor  of GTE          on  Cool Light's  claim  that GTE  violated  Chapter 93A  of  the          General Laws  of the  Commonwealth of Massachusetts,  which makes          unlawful any "[u]nfair . . .  acts or practices in the conduct of          any trade  or commerce . .  . ."  Mass.  Gen. L. ch.  93A,   2(a)          (1990).    Cool Light  argues that  the  jury's finding  that GTE          violated  the implied  covenant of  good faith  and fair  dealing          required the court as a  matter of law to find that  GTE violated          Chapter  93A.    Cool Light  cites  Anthony's  Pier  Four v.  HBC                                              _____________________________          Associates,  583 N.E.2d  806  (Mass. 1991),  in  support of  this          __________          argument.   In  Anthony's,  the trial  court  found in  favor  of                          _________          plaintiff on its ruling  that defendant had violated  the implied          covenant of good  faith and  fair dealing, but  the court  denied          plaintiff's  claim under Chapter 93A.  The Supreme Judicial Court          of  Massachusetts found that those  rulings could not be squared,                                         -3-                                          3               The district court granted GTE's motion for new trial on all          of   the  counts  submitted  to   the  jury.    Thereafter,  upon          stipulation the parties submitted only the  three counts on which          the jury  found in Cool  Light's favor.  These  three counts were          then  submitted to  a new  trial judge,  the Honorable  Robert E.          Keeton, and  a jury  trial was  waived.   It was stipulated  that          certain witnesses would testify, and that Judge Keeton would make          his findings  and  conclusions  of law  based  upon  his  overall          appraisal of the  record of  the first trial  and any  additional          evidence presented  before him.    Judge Keeton  entered a  final          judgment against  Cool Light  on all  counts and dismissed  GTE's          counterclaim.  He did  so based upon  a thorough analysis of  the          evidence, finding that Cool  Light did not sustain its  burden of          proof relating to breach of contract, fraud, or breach of implied          covenant  of good faith and fair  dealing.  He further found Cool          Light's  evidence  as   to  loss  of   profits  to  be   entirely          speculative.   Upon  entry  of final  judgment,  Cool  Light  has                                        ____________________          and that defendant as a matter of law violated Chapter 93A.               Anthony's is  distinguishable from  the present case  in two               _________          important respects.  First,  the jury finding against GTE  on the          implied covenant of  good faith  count was vacated  by the  trial          court  and submitted for retrial.  Under these circumstances, the          jury's   finding  cannot   be  binding   on  the   trial  court's          determination under Chapter 93A.                 Second, the  trial court made separate findings  of fact and          conclusions  of law with  respect to the Chapter  93A claim.  The          court  specifically found  (1) GTE  exerted its  best efforts  at          producing the reflectors requested by Cool  Light; (2) no binding          contract existed  between Cool Light  and GTE;  (3) no  agreement          existed between the two parties except that GTE would not divulge          Cool Light's  specifications to  another GTE customer;  (4) GTE's          conduct should  be viewed  as simply  refusing to  continue doing          business  with a  company that  would  not or  could not  pay its          bills;  and  (5)  Cool  Light's  evidence  on  lost  profits  was          unpersuasive.  The  court also  made findings as  to the lack  of          credibility  of certain  Cool Light  witnesses,  including George          Panagiotou.                 We therefore find no error with respect to the trial court's          dismissal of Cool Light's claim under Chapter 93A.                                         -4-                                          4          appealed only the  grant of a  new trial by  Judge McNaught.   It          seeks to sustain the money damage  award set forth in the  jury's          original verdict.               Cool  Light  argues  that the  trial  court  had  a duty  to          reconcile the apparent inconsistency between the verdict and  the          special  interrogatory answer  pertaining to  Cool Light's  total          lost profits, and that the court abused its discretion by failing          to  enter judgment  in its  favor.   We  agree with  Cool Light's          assertion  that the  trial  court had  a  duty to  reconcile  any          inconsistency between the  general verdict and the answers to the          special  interrogatories.4   The record  is clear,  however, that          Judge  McNaught did  attempt  to reconcile  the inconsistency  he          perceived and concluded that he could not:               And I have struggled in vain to come up with a sensible               mode of determining how the jury would have struck upon               different  figures of $3,550,000  [sic], $2,950,000 and               $2,800.000 [sic].  It would have  been easier (and more               understandable) had the  jury simply divided $9,300,000                                        ____________________          4See, e.g., Harvey v.  General Motors Corp., 873 F.2d  1343, 1347           _________  _______________________________          (10th Cir. 1989); Schaafsma v. Morin Vermont Corp., 802 F.2d 629,                            ________________________________          635  (2d Cir.  1986); 9  Charles  A. Wright  & Arthur  R. Miller,          Federal  Practice and  Procedure    2513, at  528-29 (1971);  cf.          ________________________________                              ___          Gallick v. Baltimore &  Ohio R.R. Co., 372  U.S. 108, 119  (1963)          _____________________________________          (duty to  reconcile answers to  special interrogatories); O'Brien                                                                    _______          v.  Papa Gino's of  America, 780 F.2d 1067,  1071 (1st Cir. 1986)          ___________________________          (same).               Cool Light  also urges that  GTE is barred  from challenging          any  inconsistency between the  special interrogatory answers and          the  verdict  because of  its failure  to  object on  this ground          before  the jury was discharged.   See Fernandez  v. Chardon, 681                                             ___ _____________________          F.2d 42, 58  (1st Cir.) (failure to object  to jury verdict under          Rule 49 prior to discharge  of the jury waives right  to appeal),          cert. denied, 459 U.S.  989 (1982); Skillin v. Kimball,  643 F.2d          ____________                        __________________          19 (1st Cir.  1981).   As Judge Keeton  observed, however,  Judge          McNaught  did not  base his grant  of a  new trial  solely on the          inconsistency  of the  special  interrogatories  and the  general          verdict.  Thus, the  waiver rule recognized in this  circuit with          respect to Rule 49(b) does not apply here.                                         -5-                                          5               by three and given $3,100,000 for lost profits on  each               count.  They did not do so.                    . . . .                    In sum, one  must speculate in order to assess the               work of the  jury.  And that's wrong.  If the plaintiff               deserved  a particular sum  of money, he  should not be               required to  be satisfied with a dollar  less than that               amount.  Neither should  he receive a dollar more  than               he deserves.  On the present state of affairs, we don't               know what he deserves.                    There  must  be  a  new  trial.    Of  that  I  am               satisfied.   It  seems to  me also  that the  new trial               should be  had on all  the counts which  were submitted                                 ___               for the  jury's determination:  not only on  the counts               where the jury found in plaintiff's favor, but on those               counts where the jury  decided against him.  We  cannot               know  for the  moment precisely  what evidence  will be               offered  and admitted  at a  new trial.   If,  in fact,               there is  admissible evidence which  makes a  different               impression  on the  jurors'  minds,  plaintiff may  (be               entitled  to and  may) prevail  on one  or more  of the               counts  on which  this past  jury decided  adversely to               him.          Cool Light Co.  v. GTE Products Corp., No. 86-2668Mc,  at 4-5 (D.          _____________________________________          Mass. August 9, 1990) (memorandum and order on proposed orders of          judgment and on motion for judgment n.o.v.).                  Cool  Light's argument  that the verdict  and answer  can be          reconciled  hinges  upon its  assumption  that  the jury  awarded          separate and distinct  damages for each  count; that each  damage          award can be causally related to a separate breach of duty.  Cool          Light  further  urges  that  although  the  compensatory  damages          awarded  on the general verdict  forms add up  to $9,444 million,          the  extra  $144,000  can be  explained  as  some  other form  of          compensatory damages, such as out-of-pocket expenses.               The difficulty  with this argument is that  the trial record          fails  to support  the theory  that each  claim was  supported by                                         -6-                                          6          separate  damages.   The  trial court  recognized throughout  the          trial that plaintiff's  counts were alternative  counts.  In  the          instructions to the jury, the court explained:                    There are  cases in  which somebody has  more than               one  arrow to  fire; and  this is  one of  those cases.               When Mr. Panagiotou brought his case as against GTE, he               decided that he ought to have 12 arrows to fire.  So he               stated what  we call 12  theories of liability  at law.               And you're entitled to do that.  When you bring a  case               in our courts you may  say I want to recover  either on               the  basis of tort or recover on the basis of contract.               And  if you  can prove  the  essential elements  of any               theory of  liability, then you're  entitled to recover.               That's called alternative pleading.          Trial  Transcript, Vol. 24, at 10.  These instructions made clear          the  alternative nature  of  Cool Light's  case,  and Cool  Light          itself never spelled out any basis for finding  separate damages.          The law is clear that a  party cannot recover multiple awards  of          damages for  a single harm.  Clark v. Taylor,  710 F.2d 4, 8 (1st                                       _______________          Cir.  1983)  ("[T]he  amount  of  compensatory  damages  properly          awardable does not depend  on the number of theories  under which          plaintiff  may recover, but on  the extent of  his injury."); see                                                                        ___          also Diversified Graphics, Ltd. v. Groves, 868 F.2d 293, 295 (8th          ____ ____________________________________          Cir.  1989); Clappier v. Flynn,  605 F.2d 519,  529-30 (10th Cir.                       _________________          1979); Cunningham v. M-G Transp. Serv., 527 F.2d 760, 761-62 (4th                 _______________________________          Cir. 1975).               Thus, not  only is the  answer to the  special interrogatory          inconsistent with the general  verdicts, but the general verdicts          are  inconsistent  with one  another.   In  addition, we  find it          significant  that  in  considering  the  non-jury  claims   Judge          McNaught found no breach  of contract, lack of good  faith on the          part of at  least one  of the plaintiff's  witnesses, failure  to          prove  fraud,  and failure  to prove  damages.   We  mention this          background  because  Judge McNaught  observed  in  his new  trial          order:                                         -7-                                          7                    I  considered  granting   judgment  non   obstante               veredicto on one or more of the counts of the complaint               which  were given  to the  jury for  determination, and               decided against it, since,  if a new trial  is granted,               new  evidence might be offered.  There is also the fact               that even  if I act in that  fashion, we are still left               to  speculate  concerning  the  award  of damages,  the               source of the amounts decided upon by the jury, and the               possibilities that  the jury came  up with inconsistent               amounts, or amounts that  were divided among the counts               improperly.          Cool Light Co.  v. GTE Products Corp., No. 86-2668Mc,  at 4-5 (D.          _____________________________________          Mass. August 9, 1990) (memorandum and order on proposed orders of          judgment  and on  motion for  judgment n.o.v.).   Thus,  as Judge          Keeton later observed:               [E]ven if  I assume  that  there was  an  inconsistency               between the general verdict and the jury's response  to               special interrogatory  number 14, . .  . I nevertheless               conclude that  the order  for new  trial should  not be               vacated.   Plaintiff has  made  no showing  that  Judge               McNaught abused his discretion by ordering a new  trial               in light of  his concerns about the verdict  apart from               the inconsistency issue.  In the absence of any showing               that Judge McNaught's order for new trial was a clearly               erroneous  exercise  of  his   discretion--taking  into               consideration all of his expressed reasons for ordering                             ___               the new  trial--the order  for new  trial  will not  be               vacated,  and  plaintiff's  motion for  reconsideration               will be denied.          Cool  Light Co. v. GTE Products  Corp., No. 86-2668-K, at 4-5 (D.          ______________________________________          Mass. July 25, 1991) (memorandum and order) (citation omitted).               This inconsistency among the general verdicts also precludes          Cool Light's argument that the trial  court abused its discretion          in failing to enter judgment on the special answer.   While it is          true that  a trial court may  enter judgment on the  answer where          there  is  an inconsistency  between  the general  verdict  and a                                         -8-                                          8          special interrogatory  answer,5 there  is no abuse  of discretion          in  failing to do so where the verdicts evidence either confusion          or improperly duplicative awards.               We are mindful of  plaintiff's Seventh Amendment concerns in          vacating  a jury  verdict.   Yet  there  exists no  violation  of          Seventh Amendment rights where a trial judge exercises his lawful          discretion  in  awarding  a  new  trial  where  speculation   and          confusion  are  manifest  in   not  only  the  verdict   but  the          evidentiary  record itself.  See  Globe Liquor Co.  v. San Roman,                                       ___  ______________________________          332  U.S. 571 (1948);  Montgomery Ward & Co.  v. Duncan, 311 U.S.                                 ________________________________          243 (1940); Kavanaugh  v. Greenlee Tool Co., 944  F.2d 7, 10 (1st                      _______________________________          Cir. 1991); MacQuarrie v.  Howard Johnson Co., 877 F.2d  126, 131                      _________________________________          (1st Cir.  1989)  ("[t]rial  courts  have  wide  discretion  when          considering  a motion for a new trial"); Atlantic Tubing & Rubber                                                   ________________________          Co. v.  International Engraving  Co.,  528 F.2d  1272, 1276  (1st          ____________________________________          Cir.) (broad discretion to order new trial "encompasses the power          to   refuse    to   accept   a   jury's    answers   to   special          interrogatories."), cert.  denied, 429 U.S. 817  (1976); 6A James                              _____________          W.  Moore & Jo Desha  Lucas, Moore's Federal  Practice   59.04[2]                                       _________________________          (2d ed.  1991).  A judge  should not enter judgment  on a verdict          where it is impossible  to understand the jury's intentions.   To          do so would make a mockery of the Seventh Amendment right of jury          trial.               We fully recognize  the disappointment to  the plaintiff  in          what  appeared to be a  vindication of plaintiff's  rights in the          form of a multimillion dollar verdict.  Yet, to obviate confusion          and to improve  upon significant evidentiary gaps, Cool Light was          given a second  trial before a  highly competent and  fair-minded          judge.   His thorough analysis in finding  plaintiff's failure of                                        ____________________          5Fed. R. Civ. P. 49(b); Stoddard v. School Dist. No.  1, 590 F.2d                                  _______________________________          829, 834 (10th Cir. 1979); Nimnicht v. Dick Evans, Inc., 477 F.2d                                     ____________________________          133, 135  (5th Cir. 1973); Elston v. Morgan, 440 F.2d 47, 49 (7th                                     ________________          Cir. 1971).                                         -9-                                          9          proof is totally justified by the record.  We are convinced  from          our own review of the record that Judge McNaught's grant of a new          trial  was not  a miscarriage of  justice.   We find  no abuse of          discretion in his ruling.               Judgment affirmed.                                         -10-                                          10