Edible Arrangements International, Inc. v. Chinsammy , 446 F. App'x 332 ( 2011 )

10-3214-cv
Edible Arrangements v. Incredible Franchise
UNITED STATES COURT OF APPEALS
FOR THE SECOND CIRCUIT
SUMMARY ORDER
RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A
SUMMARY ORDER FILED ON OR AFTER JANUARY 1, 2007, IS PERMITTED AND IS GOVERNED
BY FEDERAL RULE OF APPELLATE PROCEDURE 32.1 AND THIS COURT'S LOCAL RULE
32.1.1. WHEN CITING A SUMMARY ORDER IN A DOCUMENT FILED WITH THIS COURT, A
PARTY MUST CITE EITHER THE FEDERAL APPENDIX OR AN ELECTRONIC DATABASE (WITH
THE NOTATION "SUMMARY ORDER"). A PARTY CITING A SUMMARY ORDER MUST SERVE A
COPY OF IT ON ANY PARTY NOT REPRESENTED BY COUNSEL.
At a stated term of the United States Court of Appeals
for the Second Circuit, held at the Daniel Patrick Moynihan
United States Courthouse, 500 Pearl Street, in the City of New
York, on the 3rd day of November, two thousand eleven.
PRESENT:
ROSEMARY S. POOLER,
BARRINGTON D. PARKER,
DENNY CHIN,
Circuit Judges.
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EDIBLE ARRANGEMENTS INTERNATIONAL, INC.,
Plaintiff-Appellant,
-v.- 10-3214-cv
RICHARD CHINSAMMY,
Defendant-Cross Defendant,
INCREDIBLE EDIBLE DELITES, INC., MAUREEN
DUGERT, RM INVESTMENTS, LLC,
Defendants,
INCREDIBLE FRANCHISE CORP.,
Defendant-Cross Claimant-Appellee.
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FOR PLAINTIFF-APPELLANT: NANCY FITZPATRICK MYERS, Lynch,
Traub, Keefe & Errante, P.C.,
New Haven, Connecticut.
FOR DEFENDANT-APPELLEE: JOHN J. JACKO, III (Alan S.
Fellheimer, on the brief),
Fellheimer & Eichen LLP, New York,
New York.
Appeal from the United States District Court for the
District of Connecticut (Eginton, J.). UPON DUE CONSIDERATION,
IT IS HEREBY ORDERED, ADJUDGED, AND DECREED that the judgment of
the district court is AFFIRMED.
Plaintiff-appellant Edible Arrangements International,
Inc. ("Edible Arrangements") appeals from the district court's
judgment entered July 14, 2010, awarding it damages of $150,000
and denying its claim for punitive damages. The judgment was
entered following the jury's award of $150,000 in damages to
Edible Arrangements and the denial, by the district court in a
memorandum decision entered May 25, 2010, of its motion for
punitive damages. We assume the parties' familiarity with the
underlying facts, the procedural history of the case, and the
issues on appeal.
"We review a district court's decision not to award
punitive damages for abuse of discretion." Ragin v. Harry
Macklowe Real Estate Co., 6 F.3d 898, 909 (2d Cir. 1993) (citing
McCann v. Coughlin, 698 F.2d 112, 127 (2d Cir. 1983)). See also
Browning-Ferris Indus. of Vt., Inc. v. Kelco Disposal, Inc., 492
U.S. 257, 279 (1989) (holding court of appeals should review
district court's determination regarding punitive damages under
abuse-of-discretion standard). Edible Arrangements' claim that
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the district court's denial of punitive damages implicates its
Seventh Amendment rights does not change the standard of review.
See Cooper Indus., Inc. v. Leatherman Tool Group, Inc., 532 U.S.
424, 433, 437-48 (2001) ("If no constitutional issue is raised,
the role of the appellate court . . . is to review the trial
court's determination [regarding punitive damages] under an
abuse-of-discretion standard." (internal citation and quotation
marks omitted)). "Because the jury's award of punitive damages
does not constitute a finding of 'fact,'" a trial court's
determination regarding punitive damages "does not implicate
. . . Seventh Amendment concerns." Id. at 437.
We have reviewed the record in light of these
principles. We affirm the district court's denial of Edible
Arrangements' motion for punitive damages for substantially the
reasons articulated by the district court.
Specifically, the jury found defendant-appellee
Incredible Franchise Corporation ("IFC") liable only on a claim
of unjust enrichment. Under Connecticut law, however, an award
of punitive damages in these circumstances is impermissible, and
thus the jury's verdict that an assessment of punitive damages
was warranted contravened Connecticut law.
"In a diversity action, or in any other lawsuit where
state law provides the basis of decision, the propriety of an
award of punitive damages for the conduct in question . . . [is
a] question[] of state law." Browning-Ferris Indus., 492 U.S. at
278. Punitive damages in Connecticut are limited to litigation
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expenses and "serve primarily to compensate the plaintiff for his
injuries." Berry v. Loiseau, 614 A.2d 414, 435 (Conn. 1992).
The Connecticut Supreme Court has recognized that "in the light
of the increasing costs of litigation," punitive damages can also
"punish and deter wrongful conduct." Id.In Connecticut, however, punitive damages are not
ordinarily available in a breach of contract case unless the
breach is "founded on tortious conduct." L.F. Pace & Sons, Inc.
v. Travelers Indem. Co., 514 A.2d 766, 776 (Conn. App. Ct. 1986).
See also Triangle Sheet Metal Works, Inc. v. Silver, 222 A.2d
220, 225 (Conn. 1966). A claim of unjust enrichment is a quasi-
contract claim for which the right to recovery is "essentially
equitable." Meaney v. Conn. Hosp. Ass'n, Inc., 735 A.2d 813,
819-20 (Conn. 1999) (internal citations omitted). Relief comes
in the form of restitution measured in terms of a theoretical
contract price -- in other words, "the precise amount for which
the defendant would have been liable if there had been an
enforceable contract." Id. at 821.
Here, despite finding liability only on the unjust
enrichment claim, the jury still awarded punitive damages against
IFC. Further, Edible Arrangements failed to prove any underlying
tortious conduct sufficient to warrant punitive damages. See
L.F. Pace & Sons, 514 A.2d at 776. The jury's limited finding
with respect to the Connecticut Unfair Trade Practices Act
("CUTPA") -- that IFC had engaged in an unfair trade practice
that was deceptive -- did not create a basis for an award of
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punitive damages because the jury did not find that IFC's acts
proximately caused Edible Arrangements to suffer an
"ascertainable loss." See Larobina v. Home Depot, USA, Inc., 821
A.2d 283, 288 (Conn. App. Ct. 2003) ("[T]o be entitled to any
relief under CUTPA, a plaintiff must first prove that he has
suffered an 'ascertainable loss' due to a CUTPA violation."
(emphasis in the original) (citing Hinchliffe v. American Motors
Corp., 440 A.2d 810, 815 (Conn. 1981))). Thus, the district
court correctly concluded that the jury's award of punitive
damages on the unjust enrichment count contravened Connecticut
law.1
We note that the jury's award was likely due to the
fact that both the jury charge and the special verdict form
failed to instruct the jury that it could not award punitive
damages on the unjust enrichment count.2 The district court,
1
Edible Arrangements cites two cases for the contention
that punitive damages involving equitable claims are nevertheless
appropriate under Connecticut law. These cases are
distinguishable as both involved an underlying tort and not a
contract or quasi-contract claim. See Waterbury Petroleum
Prods., Inc. v. Canaan Oil and Fuel Co., Inc., 477 A.2d 988, 990
(Conn. 1984); Collens v. New Canaan Water Co., 234 A.2d 825, 828
(Conn. 1967). The parties offer no Connecticut cases that
squarely address an award of punitive damages on an unjust
enrichment claim. We have only found one. See Withers Bergman,
LLP v. New England Personnel of Hartford, LLC, No. CV054007037,
2007 WL 1193165, at *8 (Conn. Super. Ct. April 5, 2007) (denying
recovery of punitive damages on a breach of contract claim and an
unjust enrichment claim noting that the plaintiff conceded that
such claims do not support an award of punitive damages).
2
Specifically, the jury charge stated that "if you've
awarded compensatory damages in this case on any of the
Plaintiff's claims, then you must also determine whether an award
of punitive damages may be assessed against IFC." (Trial Tr. 92,
April 14, 2010). Similarly, the special verdict form explained
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however, in denying the motion for punitive damages, caught this
error and corrected it before entering judgment for Edible
Arrangements. A trial court certainly may correct a legal error
of its own, prior to or even after entering a final judgment.
Cf. In re 310 Assocs., 346 F.3d 31, 35 (2d Cir. 2003) (holding
that motions for relief from judgment or order brought under
Federal Rule of Civil Procedure 60(b)(1) provide means for "a
district court to correct legal errors by the court" (internal
citation omitted)); Schildhaus v. Moe, 335 F.2d 529, 531 (2d Cir.
1964) ("[T]here is indeed good sense in permitting the trial
court to correct its own error . . . ; no good purpose is served
by requiring the parties to appeal to a higher court, often
requiring remand for further trial proceedings, when the trial
court is equally able to correct its decision in the light of new
authority . . . ." (internal citation omitted)); McDowell v.
Celebrezze, 310 F.2d 43, 44 (5th Cir. 1962) ("Overburdened
courts, trial and appellate, should not have to squander precious
time and resources in such artificial maneuvers where the Judge
on his own and in time faces up to the error and corrects it by
effective action.").
Here, the district court acted properly and "within the
permissible scope of discretion" to correct its error and deny
Edible Arrangements' motion for punitive damages. See Aczel v.
that if the jury answered affirmatively on certain questions,
including the last interrogatory under the unjust enrichment
count, it should proceed to the questions on compensatory and
punitive damages.
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Labonia, 584 F.3d 52, 59 (2d Cir. 2009) (affirming district
court's striking of compensatory damages awarded by jury that
also found defendant entitled to qualified immunity).
Further, we conclude that ordering a new trial
altogether or ordering a trial limited to damages, as is often
done when a jury verdict is deemed excessive, see Tingley Sys.,
Inc. v. Norse Sys., Inc., 49 F.3d 93, 96 (2d Cir. 1995), would be
of no use here. We have previously found that there is no point
in ordering a new trial where such a trial would result "in the
same outcome," making any previous error of the court an "error
without consequence." Id. Here, a new trial would not change
the outcome: if punitive damages are not available on an unjust
enrichment claim, then the jury charge and special verdict form
would so instruct, and Edible Arrangements would still not
receive an award of punitive damages on the unjust enrichment
count.
We have considered appellant's other arguments on
appeal and have found them to be without merit. Accordingly, the
judgment of the district court is hereby AFFIRMED.
FOR THE COURT:
CATHERINE O'HAGAN WOLFE, CLERK
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