Court Opinion

ID: 9468923
Source: CourtListenerOpinion
Date Created: 2023-08-05 02:26:52.580685+00
Date Added: 2024-06-11T17:41:07.069104
License: Public Domain

PALMIERI, District Judge:
This appeal and cross-appeal are from a judgment of the United States District Court for the Eastern District of New York, Mark A. Costantino, Judge, entered after a jury verdict finding the defendants liable to plaintiff on two counts for breach of oral contracts to perform certain mailing services. The damages awarded to plaintiff Contemporary Mission, Inc. (CMI) totalled $100,000 on Count One and $132,000 on Count Two. There was also an award of $750,000 in punitive damages on Count Three, to the effect that Bonded Mailings, Inc. and Interstate Computer Services, Inc., the defendant mailing companies, and their owner-officer, Max Houss (collectively, “Bonded”), knowingly and falsely represented that they had performed certain mailings. The judgment of the district court (a) upheld the verdicts on Counts One and Two from which the Bonded defendants cross-appeal, and (b) set aside the verdict for punitive damages on Count Three from which CMI directly appeals. We affirm.
*83FACTUAL BACKGROUND
CMI, a religious organization,1 entered into two oral contracts with Bonded, a mailer in the direct mail industry, to prepare and send over two and one-half million pieces of mail solicitations for two publications: “Guaranteed Tax Plan” (“Tax”) and the “Edgar Cayce Handbook of Health” (“Cayce”). CMI alleged that Bonded breached its contracts and tortiously injured it: 1) by failing to mail out a large percentage of the solicitations; 2) by tardily mailing out those solicitations which it did mail; and 3) by intentionally misrepresenting to CMI that it had performed. CMI sought actual contract damages and punitive damages on the tort count. CMI introduced evidence of Bonded’s inadequate postage meter readings to cover the mailing costs asserted, its negligible or non-existent return rates from many states to be solicited under the contract, the usual return rates, and the timely performance of all conditions precedent to Bonded’s performance.
Bonded introduced evidence to the contrary on the above issues and specifically argued that CMI failed to perform conditions precedent and otherwise prevented Bonded from performing: 1) by not paying postage to Bonded in advance; 2) by not supplying in a timely manner all component inserts; 3) by removing all inserts and materials from Bonded’s plant before the due date for mailing; and 4) by not receiving Post Office approval of its non-profit mailing status until it was too late to meet the contract mailing deadlines. Bonded also argued that while “time was of the essence” in the Tax mailing contract, no such agreement was reached in regard to the Cayce contract.
The jury returned with a verdict in favor of CMI on all three counts, awarding contract damages of $100,000 on Count One (Tax mailing), $132,000 oh Count Two (Cayce mailing), and punitive damages of $750,000 on Count Three (intentional tort).
On Bonded’s motion for a judgment notwithstanding verdict or, in the alternative, for a new trial, the district court granted a judgment notwithstanding the verdict on Count Three finding that, as a matter of law, punitive damages were unavailable, under the applicable New York law, where the underlying action lies in contract. The district court held that the third count was not properly before the jury.
BONDED’S CLAIMS
The ease before the trial court was, and remains, a contract dispute between CMI and Bonded. Bonded argues, however, that the trial court erred in excluding evidence which would have opened the door to an examination of whether CMI was a bona fide religious organization and a relitigation of an independent suit between CMI and a party not involved in the immediate controversy. We find that the district judge properly excluded this potentially extensive, confusing and prejudicial evidence.
Bonded claims that the district court should have allowed it to introduce evidence that fraud and illegality were involved in obtaining CMl’s non-profit mailing permit. Bonded asserts that such evidence was relevant because the mailing permit was an integral part of the contract. We cannot disturb the trial court’s evidentiary determination on this basis. If a contract is not itself unlawful, the bargain may still be illegal if it is closely connected with an unlawful act. 15 Williston, Contracts § 1752 (3d ed.) (1972). If the contract is merely collaterally rather than directly connected with the illegal act, the contract is valid. McConnell v. Commonwealth Pictures Corp., 7 N.Y.2d 465, 471, 199 N.Y.S.2d *84483, 166 N.E.2d 494 (1960). Since connection is a matter of degree, some illegalities are only incidental to the contract. Id. Cf. Armstrong v. American Exchange National Bank, 133 U.S. 433, 469,10 S.Ct. 450, 461, 33 L.Ed. 747 (1890) (“An obligation will be enforced, though indirectly connected with an illegal transaction, if it is supported by an independent consideration, so that the plaintiff does not require the aid of the illegal transaction to make out his case.”).
Here, the contract to mail solicitations at the cost of nine dollars per thousand was valid. The postal permit merely established CMI’s charges for postal service. In essence, Bonded could perform its contract regardless of the postal charges. Indeed, Bonded mailed approximately 145,000 solicitations before receiving the permit which seems to indicate that the company did not consider the receipt of the permit an integral, but rather a collateral, part of the contract. Accordingly, evidence dealing with whether CMI had engaged in illegal conduct in procuring the permit could properly be determined irrelevant, and thus ex-cludable, at trial.
Similarly, Bonded’s claim that the trial court erred in excluding extensive cross-examination of a CMI Vice President, Reverend John T. O’Reilly, on the genuineness of his and other members’ affiliation with the Roman Catholic Church, is without merit. We cannot say that the trial court erred in denying extensive questioning on this collateral, potentially confusing and prejudicial, issue which would perforce have raised a “religious problem,” as observed by Judge Costantino. The trial court’s ruling — which kept complicated issues of religious affiliation out of a relatively simple contract damages case — was proper. Clearly a contract dispute is not an appropriate setting for raising issues of uncertain constitutional dimension, particularly where the court must reach out to meet gossamer issues.
Bonded also claims that the district court erred in excluding cross-examination of CMI Vice President O’Reilly with regard to an independent action against CMI in Connecticut by Dependable Lists, Inc., the supplier of the mailing lists involved in the immediate action. This evidence was excluded as irrelevant. Once again, we cannot find that the trial court erred in precluding this evidentiary offer. In so holding, we recognize that the trial court has great latitude in determining the admissibility of evidence and its rulings will be upheld unless there is a clear abuse of discretion. See United States v. Ravich, 421 F.2d 1196, 1203-05 (2d Cir.), cert. denied, 400 U.S. 834, 91 S.Ct. 69, 27 L.Ed.2d 66 (1970); Fed.R.Evid. 403. Accord United States v. Glenn, 473 F.2d 191, 194-95 (D.C. Cir.1972); Beaty Shopping Center, Inc. v. Monarch Insurance Co., 315 F.2d 467, 470-71 (4th Cir. 1963); McCormick on Evidence § 185 & n.35.
The basic issue before the trial court was whether Bonded failed to mail out CMI’s solicitations in a timely fashion according to the terms of their agreement. The evidence relating to Dependable Lists is not alleged to relate to this issue. Rather, Bonded claims that the independent trial between CMI and Dependable Lists relates to the issue of damages suffered by CMI as a result of any contract breach for which it may be held liable. Particularly in light of the applicable measure of damages, as set forth below, we find that the trial court did not abuse its discretion in precluding this cumulative, potentially extensive, evidence on the allegations and merits of a separate suit between CMI and a third party.
 The proper measure of damage is the amount necessary to put the plaintiff in as good a position as he would have been if the defendant had abided by the contract. Western Geophysical Co. v. Bolt Associates, Inc., 584 F.2d 1164, 1172-73 (2d Cir. 1978). The award can include lost profits even if the breach occurred before the profits were realized. Id. Once a plaintiff has been damaged, he need only demonstrate the amount of damages with reasonable certainty, and a wrongdoer has no right to insist upon a mathematically precise evaluation of damages suffered. CMI provided sufficient documentation — comparisons of *85sales and costs of late mailings with test mailing of the publications as well as overhead — to permit the jury to reach a reasonable estimate of damages.
Bonded’s other claims are equally without merit.
CMI’S CLAIM
CMI’s claim on appeal — that the district court improperly set aside the verdict for punitive damages on Count Three — is also without merit. Punitive damages are not available for “mere breach of contract.” Garrity v. Lyle Stuart, Inc., 40 N.Y.2d 354, ,358, 386 N.Y.S.2d 831, 353 N.E.2d 793 (1976). Acts which constitute a breach of contract may also give rise to liability in tort if they violate a legal duty independent of the contractual relationship between the parties. Hargrave v. Oki Nursery, Inc., 636 F.2d 897, 898-99 (2d Cir. 1980). If the only interest involved, however, is holding a party to a promise, a plaintiff will not be permitted to transform the contract claim into one for tort. Id.
CMI attempted to turn a breach of contract claim into a tort claim of misrepresentation. Since punitive damages are not available for breach of contract, the district judge ruled that the jury was incapable of rendering a punitive damage award. Accordingly, he properly granted that part of Bonded’s motion for judgment notwithstanding the verdict dealing with punitive damages.
CONCLUSION
The numerous challenges raised by Bonded, as well as that of CMI, are without merit. Accordingly, we affirm.

. We do not herein determine, in any manner, whether CMI is in fact a genuine religious organization. Cf. Contemporary Mission, Inc. v. United States Postal Service, 648 F.2d 97 (2d Cir. 1981) (CMI’s religious affiliation directly at issue). The record below leads us to doubt whether either CMI or Bonded is all that it purports to be. Yet it is not the task of this court to reach out to resolve all questions involving the legal, ethical or religious standing of parties embroiled in a particular controversy. Only when such issues directly affect the claims presented, can they properly be considered.