Advanced BodyCare Solutions v. Thione Int'l., Inc. ( 2010 )

[PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT FILED
________________________ U.S. COURT OF APPEALS
ELEVENTH CIRCUIT
AUGUST 25, 2010
No. 09-13151
JOHN LEY
________________________ CLERK
D. C. Docket No. 06-81128-CV-DTKH
ADVANCED BODYCARE SOLUTIONS, LLC,
Plaintiff-Counter-
Defendant-Appellant,
versus
THIONE INTERNATIONAL, INC.,
Defendant-Counter-
Claimant-Appellee,
NATURECITY, LLC,
CARL PRADELLI,
Third Party-Counter-
Defendant.
________________________
Appeal from the United States District Court
for the Southern District of Florida
_________________________
(August 25, 2010)
Before TJOFLAT, WILSON and EBEL,* Circuit Judges.
TJOFLAT, Circuit Judge:
This case arises out of a contract that required a company to make minimum
purchases of products in exchange for an exclusive license to market and
distribute them. Contending that products it initially received were defective, the
purchaser did not make the additional minimum purchases the contract required.
After attempts to negotiate a solution to the parties’ differences failed, the
purchaser brought suit against the supplier for breach of contract and for breach of
an implied warranty. The supplier counterclaimed, seeking the profits it would
have earned had the purchaser satisfied its obligations under the contract. A jury
found for the supplier on the purchaser’s claims and awarded it $2.5 million on its
counterclaim.
The district court entered judgment for the supplier for $2.5 million and
denied the purchaser’s post-judgment motions for judgment as a matter of law and,
alternatively, a new trial. The purchaser now appeals. We affirm.
I.
A.
*
Honorable David M. Ebel, United States Circuit Judge for the Tenth Circuit, sitting by
designation.
2
On April 1, 2004, Advanced Body Care Solutions, LLC (“Advanced”) and
Thione International, Inc. (“Thione”) entered into a Supply and Licensing
Agreement (the “Licensing Agreement” or “Agreement”). This Agreement
required Advanced to make minimum purchases of “Thione Antioxidant
Complex” (the “Dietary Supplement”), which reduces free radical damage to the
body, and Thione’s “Free Radical Monitor Test Kit” (the “Test Kit”), which is a
test kit for at-home use to monitor the body’s free radicals.1 The Test Kits could
be purchased as a whole or by their three components, one of which was free
radical monitor ampoules.2 In exchange, Advanced received, for the duration of
1
Advanced could choose the ratio in which it purchased the Dietary Supplements and
Test Kits, so long as it spent a certain amount on the products each quarter for the duration of the
Licensing Agreement. The amounts that Advanced was required to spend are shown in the chart
below.
1st Quarter 2nd Quarter 3rd Quarter 4th Quarter
Jan. 1st–Mar. 31st April 1st–June 30th July 1st–Sept 30th Oct 1st–Dec. 31st
2004 XX XX XX $201,450.00
2005 $268,600.00 $335,750.00 $537,200.00 $537,200.00
2006 $537,200.00 $537,200.00 $537,200.00 $537,200.00
2007 $537,200.00 $550,000.00 $550,000.00 $550,000.00
2008 $550,000.00 $550,000.00 $555,000.00 $555,000.00
2009 $555,000.00 XX XX XX
2
Ampoules are small glass tubes containing a clear liquid reagent, which tests for the
presence of free radicals in a urine sample.
3
the Agreement, “the license and authority” “to advertise, promote, market, sell and
otherwise distribute” the Dietary Supplement and the Test Kit on an exclusive
basis. The Licensing Agreement was to remain in effect for a minimum of five
years: April 1, 2004 to March 31, 2009.3
The Licensing Agreement provided that either party could terminate the
Agreement upon thirty (30) days written notice thereof to the other
party upon the breach by the other party of any of its material
representations, warranties, covenants, or agreements contained in
this Agreement. Upon the expiration of such notice period, this
Agreement shall terminate without the need for further action by
either party; provided, however, that if the breach upon which such
notice of termination is based shall have been fully cured to the
reasonable satisfaction of the terminating party within such 30-day
period, then such notice of termination shall be deemed rescinded,
and this Agreement shall be deemed reinstated and in full force and
effect. Such right of termination shall be in addition to such other
rights and remedies as the terminating party may have under
applicable law.4
Thione could also terminate the Agreement early on additional grounds, including
if Advanced failed to make any of the minimum purchases the contract required.
In that event, as provided in Paragraph 6B, the Agreement and the exclusive
3
The Agreement provided that it would automatically extend for additional one-year
periods unless either party provided 60 days advance notice of termination.
4
Although there are no warranty claims on appeal, we note that the Licensing Agreement
warranted that the Test Kits and Dietary Supplements provided under the Agreement would be
free of defects for 180 days. If they were not, Advanced could return them, and Thione would
have the option of replacing the units or refunding the purchase price for the returned units.
4
license granted to Advanced would,
as of such date, at the sole and absolute discretion of Thione: (1) be
terminated; (2) be re-negotiated with respect to price, duration or
similar aspect; or (3) be changed from an “exclusive” license to a
“non-exclusive” license for the balance of the term of this Agreement
. . . . Notwithstanding the foregoing, prior to exercising any of the
afore-mentioned rights, Thione shall provide [Advanced] with thirty
(30) days prior written notice to remedy any purchase deficiency and
if [Advanced] cures such minimum dollar order shortfall within such
30 days period, the exclusive license shall remain intact.
Although Advanced was not required to meet a minimum purchase amount
until the fourth quarter of 2004, it had to place its initial order within thirty days of
the execution of the Agreement.5 Finally, the Agreement would be governed by
Georgia law.
On May 26, 2004, Advanced placed an order for 25,000 ampoules, for
which it paid $41,250. It received about 20,000 ampoules on September 1. It was
immediately apparent that 200–300 of the 20,000 were broken, and about 1,000
were pink, indicating that they were defective.6 The following day, Dr. Stephen
Perry, Advanced’s liaison with Thione, sent an email to Dr. Mark Hersh, the CEO
and chief scientist of Thione, stating that, “Carl [Pradelli, Advanced’s managing
5
The Agreement required that the initial order be paid in full with the purchase order; for
subsequent orders, only 50% had to be paid with the purchase order.
6
As stated in note 2, supra, the ampoules are supposed to contain a clear liquid reagent.
If the ampoules turn pink before being used by the customer, they are defective.
5
member,] received some vials that are pink,” and inquiring, “Do we have a
production issue?” Advanced received the outstanding 5,000 (of the 25,000)
ampoules on November 9. At the end of 2004, Advanced was $144,900 short on
its minimum purchase obligation of $201,450 for the quarter.7
On January 7, 2005, Advanced made a payment of $72,450 to Thione—half
of the balance due on the previous quarter’s minimum payment. Advanced did not
specify what it sought to purchase; rather, an accompanying email from Pradelli
to Hersh stated that the amount of the wire was “for $72,450 representing a 50%
deposit on a $144,900 purchase order. We previously purchased $56,550 worth of
product, the current [purchase order] gets us to the 2004 threshold of $201,450. I
hope to get specifics on the number of ampoules versus [the Dietary Supplement]
in the next 10–14 days.”
As of March 2005, Thione had not yet identified the source of the problem
with the first shipment of 20,000 ampoules, and Advanced had placed no
subsequent orders.8 On March 18, Pradelli sent Hersh a “summary report of
7
The License Agreement provided that “[a]ll orders for Products received prior to
December 31, 2004 shall be applied to the 4th Quarter 2004 minimums.” In addition to the
$41,250 spent on the ampoules, Advanced had paid $15,300 for the Dietary Supplement.
8
Advanced neither paid the remaining balance on the minimum purchase order for the
fourth quarter of 2004 nor specified what products it sought to receive with the $72,450 deposit.
As a result, Thione did not ship Advanced any products for the $72,450.
6
[Advanced’s] marketing efforts for” the Test Kit. Following five pages on that
subject was a section of the letter entitled “The Lingering Black Cloud.” This
section asserted and stressed that Advanced’s “biggest concern” was the defective
ampoules and that it could not launch any additional marketing initiatives until
satisfied that the problem was permanently solved. Following the receipt of this
letter, Hersh sent an email to Pradelli on March 28. In the email, Hersh
acknowledged that 1,440 of the initial 20,000 shipped were defective and told
Pradelli that they would be replaced. After Pradelli responded that 4,000
ampoules had turned pink, Hersh asked Pradelli to return these ampoules and
offered to send replacements immediately. He also assured Pradelli that the
problem had been identified and all of the ampoules other than those received in
the initial shipment of 20,000 were fine. Pradelli then replied that the problem
went beyond the 4,000 defective ampoules; as ampoules were continuing to turn
pink, he could not tell how many would ultimately prove defective. Pradelli did
not return the defective ampoules, but Thione sent Advanced 6,700 replacement
ampoules in November 2005.
During the summer of 2006, Advanced and Thione attempted to renegotiate
the Licensing Agreement. The renegotiation efforts failed.
B.
7
On September 26, 2006, Advanced filed suit against Thione for damages in
the Circuit Court of Palm Beach County, Florida. In its complaint, Advanced
claimed that Thione had breached the Licensing Agreement and an implied
warranty by providing Advanced with defective ampoules.9 Thione timely
removed the case to the Southern District of Florida,10 and after the district court
denied its motion to dismiss the action, Thione answered Advanced’s complaint
and filed a counterclaim. The answer denied that Thione breached the Licensing
Agreement and any implied warranty. The counterclaim alleged that Advanced
breached the Agreement by failing to make the minimum purchases the Agreement
required and that Thione was entitled to recover the profits it would have earned
had Advanced made the purchases.11 Advanced’s answer to Thione’s
counterclaim denied the breach. The answer also asserted that Thione’s breach of
9
The complaint also asserted claims for breach of an implied covenant of good faith and
fair dealing, conversion, and civil theft. These claims were disposed of adversely to Advanced
prior to the submission of the case to the jury and are not at issue here.
10
Thione removed the case pursuant to 28 U.S.C. § 1441(a) on the ground that the
district court had original jurisdiction of the action under 28 U.S.C. § 1332(a)(1).
11
Thione also counterclaimed for “trademark infringement,” “unfair competition,” and
“false advertising and deceptive trade practices” under the Lanham Act, 15 U.S.C. § 1125(a), and
for the “violation of [the] right of publicity” under Fla. Stat. § 540.08 and common law. Thione
also asserted these claims against Carl Pradelli and Nature City, LLC; Thione joined these parties
in the counterclaim under Fed. R. Civ. P. 13(h) and 20(a)(2)(B). All of these claims were
disposed of adversely to Thione (the jury found against Thione on the trademark infringement
and false advertising claims) and are not at issue here.
8
the Agreement relieved Advanced of its minimum purchase obligations and,
addressing Thione’s claim for lost profits, alleged that Thione had failed to
mitigate the loss.
Prior to trial, Advanced moved the district court in limine to prevent Thione
from presenting any evidence of lost profits to the jury on two alternative grounds:
(1) the Agreement, by its terms, precluded the recovery of lost profits; and (2) the
testimony of the witness Thione planned to call to calculate the loss, Dr. Robert D.
Coston, an economics professor, could not qualify as expert testimony. The court
denied the motion without prejudice to Advanced’s right to object to the
introduction of such evidence at trial.
On April 14, 2009, the case proceeded to trial on Advanced’s claims for
breach of contract and implied warranty and Thione’s counterclaim for breach of
contract. Advanced presented testimony relating to the circumstances surrounding
the execution of the Licensing Agreement, its subsequent receipt of the defective
ampoules, and the steps it took to have Thione remedy the problem. Then, after
calculating the damages it incurred as a result of Thione’s alleged breaches, some
$2.075 million, Advanced rested its case.
Thione, in its case, presented evidence to support its view of the parties’
respective performances of the Agreement, and, over Advanced’s renewed
9
objection to the admissibility of his anticipated testimony, called Dr. Coston to the
witness stand to establish the profits Thione would have earned had Advanced
made the purchases the Agreement required it to make through the life of the
Agreement. Using the minimum purchases the Agreement required Advanced to
make through the first quarter of 2009, which totaled about $9 million,12 Coston
subtracted Thione’s costs of goods and expenses and arrived at a net profit loss of
around $4.7 million.
After the evidence closed, on April 24, the district court noted for the record
that Advanced wanted to move the court for judgment as a matter of law (pursuant
to Federal Rule of Civil Procedure 50(a)) and then sent the case to the jury;13
Advanced could present its motion, and the court would rule on it, while the jury
was deliberating. As Advanced was preparing to proceed, however, the jury
returned its verdicts. It found in favor of Thione on all of Advanced’s claims and
awarded it $2.5 million on its breach of contract counterclaim.
After polling and then discharging the jury, the court invited Advanced to
proceed. Advanced moved for judgment as a matter of law on its breach of
12
See supra note 1.
13
The court did so, it said, because “the trial had gone on longer than we anticipated
[and] we had jurors who had indicated travel plans and other matters.” Trial Tr., vol. 14, at 1638.
10
contract claim and Thione’s breach of contract counterclaim. Advanced argued
that it was entitled to judgment on the grounds that Thione had materially
breached the Licensing Agreement and the contract barred the recovery of lost
profits. As an additional ground for judgment on the counterclaim, Advanced
argued that Dr. Coston’s testimony lacked probative value and thus should be
stricken from the record.
The district court denied Advanced’s motions. The court then set May 20 as
the deadline for filing post-trial motions; thereafter, on May 4, the court entered a
final judgment for Thione in accordance with the jury’s verdicts.
On May 20, Advanced moved the district court pursuant to Federal Rule of
Civil Procedure 50(b) for judgment as a matter of law on its breach of contract
claim and Thione’s counterclaim. Advanced moved alternatively pursuant to
Federal Rule of Civil Procedure 59(a) for a new trial on the damages element of
Thione’s counterclaim.14 The court denied these alternative motions on May 22,
and on June 16, Advanced filed a notice of appeal. The notice stated that
Advanced was appealing the final judgment entered on May 4 and the district
court’s denial of its post-trial motions on May 22. We have jurisdiction over the
14
Advanced also moved the court pursuant to Fed. R. Civ. P. 59(e) to alter and amend its
judgment.
11
appeal of the post-trial motions pursuant to 28 U.S.C. § 1291 but, as indicated in
the margin, not the final judgment.15
15
Thione contends that we lack jurisdiction to entertain Advanced’s appeal because it
was not filed within 30 days of the entry of the judgment. See Fed. R. App. P. 4(a)(1)(A). A
timely motion filed pursuant to Fed. R. Civ. P. 50(b) or 59—that is, no later than 10 days after
the judgment is entered, see Fed. R. Civ. P. 50(b), 59 (2009)—tolls the time for appealing the
judgment, Fed. R. App. P. 4(a)(4)(A). Advanced’s Rule 50(b) and Rule 59(a) and (e) motions
were not filed within 10 days of the judgment’s entry, however, and, thus, as Thione correctly
points out, they did not toll the time for appealing the judgment.
“[T]he timely filing of a notice of appeal in a civil case is a jurisdictional requirement.”
Bowles v. Russell, 551 U.S. 205, 214, 127 S. Ct. 2360, 2366 (2007). It is a jurisdictional
requirement because “[t]he time limits in Appellate Rule 4(a) are based on the statutory time
limits for filing a notice of appeal found in 28 U.S.C. § 2107.” Green v. DEA, 606 F.3d 1296,
1301 (11th Cir. 2010). Restrictions on a district court’s authority to extend a filing deadline,
however, are another matter. An example of such a restriction is found in Federal Rule of Civil
Procedure 6(b)(2), which prohibits a district court from extending the time for filing motions
under Rules 50(b) or 59. Rule 6(b) is not grounded in a statutory requirement. Rule 6(b) is
therefore classified as a claims-processing rule rather than a jurisdictional rule. See Kontrick v.
Ryan, 540 U.S. 443, 454–56, 124 S. Ct. 906, 915–16 (2004). While a party cannot forfeit an
objection to a court’s failure to apply a jurisdictional rule because lack of subject matter
jurisdiction is always a valid objection, an objection to a court’s failure to apply a claims-
processing rule can be forfeited. Id. at 459–60, 124 S. Ct. at 917–18.
In this case, Advanced had 10 days from the entry of judgment on May 4 to file motions
under Rule 50(b) and Rule 59. Fed. R. Civ. P. 50(b); 59(a), (e) (2009). Because weekends were
excluded in calculating the time period for filing these motions, see Fed. R. Civ. P. 6(a)(2)
(2009), the motions had to be filed by May 18. Although the district court attempted to extend
the time for filing them until May 20, that attempt was ineffective because Rule 6(b)(2)
prohibited the extension. Green, 606 F.3d at 1300. Thus, Advanced’s Rule 50(b) and Rule 59
motions were untimely and did not toll the time period for appealing the May 4 judgment. Id.(“Untimely motions under Rules 59 and 60 will not toll the time for filing an appeal.” (quoting
Advanced Estimating Sys., Inc. v. Riney, 77 F.3d 1322, 1323 (11th Cir. 1996) (per curiam))). As
Federal Rule of Appellate Procedure 4(a) is a jurisdictional rule, Advanced’s appeal of the May 4
judgment was untimely, and we lack jurisdiction to hear it.
However, since Rule 6(b) is a claims-processing rule, Thione, in failing to object to the
district court’s violation of the rule (by extending the time for filing post-trial motions) forfeited
its objection to the time extension. In light of this forfeiture, the district court had the authority
to entertain Advanced’s motions. Advanced appealed the district court’s order denying the
motions within 30 days of the court’s entry of the order. Since that appeal was timely, we have
jurisdiction to review the district court’s May 22 order as to Advanced’s post-trial motions.
12
II.
Advanced argues that the district court should have granted it judgment as a
matter of law on its breach of contract claim and Thione’s counterclaim.
Advanced also argues that the district court erred in submitting the issue of
Thione’s lost profits to the jury because the Licensing Agreement foreclosed the
recovery of lost profits as a remedy for breach of the Agreement.16 Assuming that
the Agreement allowed the recovery of lost profits, Advanced seeks a new trial
because the jury’s $2.5 million award for lost profits was based on inadmissible
expert opinion testimony and, moreover, was against the great weight of the
evidence. In subpart A, we consider whether the court erred in denying Advanced
judgment as a matter of law in whole or in part. In subpart B, we consider whether
the court should have granted Advanced a new trial on the issue of Thione’s
damages.
A.
16
Advanced presents this argument in the context of its Rule 59(e) motion to alter or
amend the judgment, but if Advanced is correct in the argument, it would be entitled to judgment
on the counterclaim pursuant to Rule 50(b). What Advanced is actually contending is that the
district court should not have permitted Thione to present evidence on its lost profits (in
accordance with Advanced’s objection, raised initially in its pretrial motion in limine), because
their recovery was precluded by the Agreement, and accordingly should have struck the lost-
profits element of Thione’s counterclaim at the close of the evidence. Then, with the lost profits
element having been struck from its counterclaim, Thione would have had no other damages to
present to the jury, so Advanced would be entitled to judgment. For convenience, we address the
objection in subpart A, which addresses Advanced’s Rule 50(b) objections.
13
When considering whether or not a ruling on a motion for [judgment
as a matter of law] should be upheld, the standard of review to be
applied by this Court is the same as that applied by the district court.
Thus, we consider all the evidence, and the inferences drawn
therefrom, in the light most favorable to the nonmoving party.
Carter v. City of Miami, 870 F.2d 578, 581 (11th Cir. 1989) (footnotes omitted).
We then determine whether, in this light, there was any “‘legally sufficient basis
for a reasonable jury to find in favor’ of the nonmoving party.” Brough v.
Imperial Sterling Ltd., 297 F.3d 1172, 1177 (11th Cir. 2002) (quoting Carter v.
DecisionOne Corp., 122 F.3d 997, 1003 (11th Cir. 1997)).
Advanced argues that the jury lacked a legally sufficient evidentiary basis
for finding for Thione on Advanced’s breach of contract claim and for Thione on
its breach of contract counterclaim for two reasons: (1) Thione’s inclusion of
defective ampoules in the 20,000 ampoule shipment of September 1, 2004,
constituted a breach of the contract as a whole; and (2) Thione thereafter
repudiated the Licensing Agreement by failing to provide Advanced with adequate
assurances. Consequently, Advanced was relieved of its obligation to make
further purchases (after the fourth quarter of 2004).
1.
Pursuant to Georgia law, the Licensing Agreement is an installment
contract. “An ‘installment contract’ is one which requires or authorizes the
14
delivery of goods in separate lots to be separately accepted . . . .” O.C.G.A. § 11-
2-612(1). “Whenever nonconformity or default with respect to one or more
installments substantially impairs the value of the whole contract there is breach of
the [installment contract as a] whole.” Id. § 11-2-612(3). Viewing the evidence in
the light most favorable to Thione, less than 5,000 of the 25,000 ampoules shipped
by the end of 2004 were damaged. Because the Licensing Agreement covered far
more than the sale of ampoules, a reasonable jury could find that one order in
which less than twenty percent of the goods were impaired did not breach the
contract as a whole—especially when the order in question covered only $41,250
of the nearly $9 million contract. Moreover, Advanced never had a problem with
the 5,000 ampoules shipped in November 2004 or the 6,700 replacement ampoules
shipped in 2005. Given this evidence, the district court properly rejected
Advanced’s argument that Thione’s shipment of the defective ampoules breached
the entire Licensing Agreement.
2.
Georgia law provides that “[w]hen reasonable grounds for insecurity arise
with respect to the performance of either party the other may in writing demand
adequate assurance of due performance and until he receives such assurance may
if commercially reasonable suspend any performance for which he has not already
15
received the agreed return.” O.C.G.A. § 11-2-609(1). Of course, “[a] party
already in breach is not entitled to invoke section 2-609 by demanding
assurances.” Hope’s Architectural Prods., Inc. v. Lundy’s Constr., Inc., 781 F.
Supp. 711, 715 (D. Kan. 1991) (citing United States v. Great Plains Gasification
Assocs., 819 F.2d 831, 835 (8th Cir. 1987)).17 We agree that “[t]o hold otherwise
would allow a party to avoid liability for breaching its contract by invoking
2-609.” Id.By January 1, 2005, Advanced was in breach of the Licensing Agreement
because it had not met the minimum purchasing requirement of the last quarter of
2004. Therefore, Advanced would have had to make a valid demand for adequate
assurances before that date. The only communication that Advanced points to as a
demand for adequate assurances made prior to the end of 2004 is Perry’s
September 2, 2004 email inquiring whether the pink ampoules meant that there
was “a production issue.” The district court did not err by declining to rule that, as
a matter of law, this simple email inquiry constituted a “writing [that] demand[ed]
adequate assurance of due performance,” for a reasonable jury could have
concluded it did not. See SPS Indus., Inc. v. Atl. Steel Co., 366 S.E.2d 410, 411,
413–14 (Ga. Ct. App. 1988) (declining to rule that a letter demanding immediate
17
O.C.G.A. § 11-2-609 is identical to U.C.C. § 2-609 in all material respects.
16
information on a defective product constituted as a matter of law a demand for
adequate assurances, instead characterizing it as “nothing more than a request for
information”); see also Automated Energy Sys., Inc. v. Fibers & Fabrics of Ga.,
Inc., 298 S.E.2d 328, 329–30 (Ga. Ct. App. 1982) (holding that a request for a
party to sign financial statements did not constitute a “demand [of] assurance of
due performance”).
3.
Advanced’s argument that the Licensing Agreement barred Thione’s
recovery of lost profits is grounded in Paragraph 6B of the Agreement, which
addresses the effect of Advanced’s failure to meet the minimum purchase
requirements.18 Paragraph 6B provided that if Advanced “fail[ed] to order and pay
for at least the minimum dollar amount of Products during any applicable period
of time,” Thione could, “at [its] sole and absolute discretion,” terminate or
renegotiate the Agreement, or revoke its exclusivity. Advanced contends that
these remedies were the only remedies available to Thione.
The provision in Georgia’s commercial code that governs limitation of
remedies provides, in relevant part, that subject to certain restrictions, an
agreement “may limit or alter the measure of damages recoverable under this
18
The relevant part of Paragraph 6B is quoted in part I.A, supra.
17
article,” but that “[r]esort to a remedy [in an agreement] is optional unless the
remedy is expressly agreed to be exclusive, in which case it is the sole remedy.”
O.C.G.A. § 11-2-719(1).19 According to the comment to Georgia’s enactment of
the Uniform Commercial Code, this language “creates a presumption that clauses
prescribing remedies are cumulative rather than exclusive. If the parties intend the
term to describe the sole remedy under the contract, this must be clearly
expressed.” O.C.G.A. § 11-2-719 cmt. 2.
The statutory language and comment show a strong reluctance to construe a
contractual remedy as exclusive. Courts have shared this reluctance, sometimes
refusing to construe remedies as limited—even when they have thought that an
exclusive remedy was intended—if the magic words “exclusive” or “sole” remedy
were not used and the agreement language did not otherwise “specify that the
remedy or remedies provided were to be exclusive of any other remedy which
appellant ‘might have under the various provisions of the UCC.’”20 Parsons v.
Motor Homes of Am., Inc., 465 So. 2d 1285, 1291 (Fla. 1st Dist. Ct. App. 1985)
(quoting Council Bros., Inc. v. Ray Burner Co., 473 F.2d 400, 406 (5th Cir.
19
This provision is identical to the Uniform Commercial Code’s provision on limitation
of remedy, U.C.C. § 2-719, in all material respects.
20
The word “sole” appears in Paragraph 6B, but it modifies Thione’s discretion, not
Thione’s remedies.
18
1973)). Applying these principles, we conclude that because the Licensing
Agreement does not clearly express that the listed remedies are the exclusive
remedies available to Thione, regardless of what the parties’ intentions may have
been, the Agreement did not effectively limit Thione’s remedies. Hence, the
district court did not err in allowing Thione’s claim for lost profits to go forward.
B.
Advanced argues that the district court abused its discretion in denying its
motion for a new trial21 on the issue of damages.22 A new trial is warranted, it
contends, because the jury’s $2.5 million award (1) was based on expert opinion
testimony that should not have been admitted, and (2) was excessive and therefore
21
In its opening brief on appeal, Advanced argues that it should receive a new trial on the
ground that the court failed to instruct the jury, in accordance with Advanced’s request, that if
Thione believed that Advanced had breached the Licensing Agreement, it was obligated to send
notice to Advanced and give Advanced 30 days in which to cure the breach. Advanced did not
present this ground in its Rule 50(b) or Rule 59 motion. Thus, since our review is limited to the
district court’s order denying those motions, as we explain in note 15, supra, we do not consider
this argument.
22
In addition to seeking a new trial on damages on the grounds set out in the text that
follows, Advanced contends that a new trial is necessary because the court failed to include an
interrogatory on the jury verdict form asking whether Thione had a reasonable opportunity to
mitigate its damages but failed to do so. We dispose of the argument with this brief comment.
The jury did receive an instruction on mitigation of damages, as Advanced properly concedes.
Whether the court should have gone one step further and included the interrogatory Advanced
proposed in the verdict form was a matter committed to the court’s discretion, Worsham v. A.H.
Robins Co., 734 F.2d 676, 690 (11th Cir. 1984). The district court did not abuse its discretion,
and in denying Advanced a new trial on the ground that the absence of the proposed interrogatory
prejudiced its defense against Thione’s counterclaim, the district court may have taken into
account the fact that the jury did reduce the amount of lost profits Thione was seeking from $4.7
million to $2.5 million.
19
contrary to “the great weight of the evidence,” Williams v. City of Valdosta, 689
F.2d 964, 973 (11th Cir. 1982).23
1.
“Our review of the district court’s decision to admit [expert] testimony is
very limited” and is reviewed “only for abuse of discretion.” Maiz v. Virani, 253
F.3d 641, 662 (11th Cir. 2001). Prior to trial, Advanced moved the district court
in limine to bar Dr. Coston from testifying as an expert on the issue of Thione’s
23
In its opening brief on appeal, under the heading “The Trial Court Erred in Denying
Appellant’s Motion for Remittitur or to Reduce or Set-Aside Damages Awarded to Appellee,”
Advanced argues that “[b]ecause the jury’s verdict was not supported by competent evidence, it
should have been reduced or set aside, or in the alternative, a new trial ordered.” Brief at 54–55.
We explain in this subpart why competent evidence did support the jury’s verdict, but it is also
important to explain why the court would be unable to provide Advanced with the primary relief
requested—that the district court order a remittitur or itself reduce or set aside the damages.
In a case in which the plaintiff (here, Thione) has recovered a money judgment in
accordance with a jury verdict, the district court has the discretion to grant the defendant (here,
counter-defendant Advanced) a new trial unless the plaintiff remits a portion of the judgment.
Griffin v. City of Opa-Locka, 261 F.3d 1295, 1298 (11th Cir. 2001). In its motion to alter or
amend the judgment, see supra, note 13, Advanced asked the court to order a remittitur, but its
motion and accompanying memorandum did not ask the court to order Thione to remit a portion
of the award or suffer the granting of a new trial. Rather, Advanced asked the court simply to
reduce the amount of the $2.5 million awarded to Thione. Because Advanced did not indicate
the amount of the remittitur or judgment reduction the district court should have ordered—put
another way, since Advanced did not point the district court to a dollar amount that would not be
excessive—it is unclear how the district court could have divined such amount.
That leaves the court with the option of itself reducing or setting aside the jury’s damages
award. We are aware of no authority, in the statutes or the cases, holding that a district judge has
the discretion to reduce the plaintiff’s money judgment by a sum certain and enter a new
judgment in the amount of the difference. Reducing a money judgment in this way could, in
effect, deprive the plaintiff of its Seventh Amendment right of trial by jury. See Johansen v.
Combustion Eng’g, Inc., 170 F.3d 1320, 1329 (11th Cir. 1999). In any event, the court did not
abuse its discretion by denying the post-trial motion.
20
lost profits. In support of its motion in limine and later at trial, Advanced argued
that Coston should not be permitted to testify because his methodology was to
calculate Thione’s anticipated profits simply by using projected revenue and cost
data provided by Thione24 without verifying beforehand the accuracy of the
projected revenue and the underlying data. Advanced claimed that the projected
revenue and underlying data were flawed; they assumed an incorrect ratio at which
Advanced would purchase the Test Kits and Dietary Supplement.25
We agree with the district court’s explanation for denying Advanced’s
objection to Dr. Coston’s testimony—Advanced’s arguments went not to
admissibility but to “the weight to be attributed to [his] testimony.” Advanced
was free to challenge—on cross-examination and on rebuttal—the reliability of
24
In determining the amount of costs to deduct from the revenue generated by
Advanced’s purchases, Coston relied on expense and pricing data received from Thione.
25
Advanced also argued that Coston’s calculations were flawed because Coston
calculated damages from the time of breach, not the date Thione sent Advanced a letter in August
2007 notifying Advanced that it was in breach. The date of breach was the appropriate period to
begin calculating damages—“‘[t]he time when performance should have taken place is the time
as of which damages are measured.’ In many cases, the appropriate date for calculation of
damages is the date of breach.” Energy Capital Corp. v. United States, 302 F.3d 1314, 1330
(Fed. Cir. 2002) (quoting Reynolds v. United States, 158 F. Supp. 719, 725 (Ct. Cl. 1958)). We
also note that the date Thione sent the letter of termination is not relevant because Advanced had
already brought suit against Thione at that point. Cf. Solitron Devices, Inc. v. Honeywell, Inc.,
842 F.2d 274, 278 (11th Cir. 1988) (explaining that after a party terminates a contract, “a cure
notice from [the other party] . . . serve[s] no purpose. . . . Where the contract has already been
terminated by the party allegedly in breach, the [other] party’s compliance or lack of compliance
with [a] termination clause is irrelevant”).
21
the revenue projections and data on which Coston grounded his opinions and thus
the weight the jury should ascribe to those opinions.26 We find no abuse of
discretion here.
2.
Advanced’s argument that the $2.5 million damages award is excessive and
contrary to the great weight of the evidence is based primarily on the assumption
that Dr. Coston’s testimony should not have been admitted. Having concluded
that the court did not abuse its discretion in allowing the testimony, we must
conclude that the jury’s verdict, which did not exceed the amount of Coston’s
calculations, was neither against the great weight of the evidence nor excessive.
III.
For the foregoing reasons, we AFFIRM the district court’s order denying
Advanced’s post-trial motions.
SO ORDERED.
26
Advanced cross-examined Coston at length about the data he relied upon and the
assumptions he drew from that data. In addition, Advanced called its own expert, William David
Ellrich, Jr., in rebuttal, to criticize Coston’s opinions.
22