Vlox, LLC v. Mirzada Transport & Logistics Co. , 549 F. App'x 150 ( 2013 )

UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 12-2516
VLOX, LLC,
Plaintiff - Appellant,
v.
MIRZADA TRANSPORT & LOGISTICS CO.,
Defendant - Appellee.
Appeal from the United States District Court for the Eastern
District of Virginia, at Alexandria. Anthony J. Trenga,
District Judge. (1:11-cv-01276-AJT-TRJ)
Submitted: October 17, 2013 Decided: December 17, 2013
Before SHEDD and THACKER, Circuit Judges, and HAMILTON, Senior
Circuit Judge.
Affirmed by unpublished per curiam opinion.
Bernard J. DiMuro, Jonathan R. Mook, DIMUROGINSBERG, PC,
Alexandria, Virginia, for Appellant. Ryan C. Berry, Lesley
Whitcomb Fierst, Jason C. Hicks, WOMBLE CARLYLE SANDRIDGE &
RICE, LLP, Vienna, Virginia, for Appellee.
Unpublished opinions are not binding precedent in this circuit.
PER CURIAM:
The present appeal stems from a breach of contract dispute
between a federal government contractor and one of its
subcontractors. Following a five day jury trial, the jury
awarded the subcontractor a total of $2,814,034.12, and the
district court entered judgment in favor of the subcontractor
consistent with the jury’s verdict. On appeal, the federal
government contractor challenges numerous rulings by the
district court. Having carefully reviewed the materials before
us on appeal and the relevant legal authority, we find no basis
to disturb the final judgment. Accordingly, we affirm.
I.
On March 15, 2009, the United States Army (the Army)
awarded VLOX, LLC (VLOX) 1 a prime contract (the Prime Contract)
to provide all resources necessary to provide up to 600 trucks
per day for the secure long haul distribution of reconstruction,
security, and life support assets throughout the Afghanistan
Theater of Operations. 2 On April 25, 2009, VLOX in turn entered
into a subcontract (the Subcontract) with Mirzada Transport &
1
At a previous point in time, VLOX’s name was NCL Holdings,
LLC.
2
At times, the parties refer to these services as Host
Nation Trucking (HNT) services.
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Logistics Company (MTC) to perform trucking services under the
Prime Contract. VLOX is a United States company and MTC is an
Afghan company.
Of relevance to the issues on appeal, Article Five of the
Subcontract, entitled “Payment Terms” provides:
The Prime Contractor agrees to pay the Sub Contractor
on a paid as paid basis. All invoices will be
submitted no later than by the 30th of each month.
Sub Contractor is required to submit invoices to the
Prime Contractor for Payment. Daily time sheets and
performance certifications signed or otherwise
authorized by a designated representative of the Prime
Contractor indicating the required work has been
accomplished or otherwise achieved [SIC]. Payments
will be made to the Sub Contractor in response to
mission number(s) invoices.
(J.A. 2690). VLOX refers to the performance certifications
mentioned in this paragraph as “‘Mission Sheets.’” (J.A. 37).
The Subcontract required MTC to comply with all laws of the
United States and all international agreements.
On December 15, 2009, VLOX terminated the Subcontract. By
this time, MTC had run at least 3,200 missions for VLOX under
the Subcontract. On November 22, 2011, VLOX filed the present
civil action in the United States District Court for the Eastern
District of Virginia based upon diversity jurisdiction, given
that VLOX is a citizen of Virginia and MTC is a citizen or
subject of a foreign state and the matter in controversy exceeds
$75,000. See 28 U.S.C. § 1332(a)(2). Counts 1, 5, 6, and 7 of
VLOX’s complaint are at issue on appeal.
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Count 1 alleged a claim for breach of contract under
Virginia common law. Of relevance on appeal, VLOX alleged that
MTC breached Article 5 of the Subcontract by failing to submit
Mission Sheets to it for 562 specific missions that MTC
performed pursuant to the Subcontract. The failure to so
submit, VLOX further alleged, prevented VLOX from invoicing the
Army for payment of those missions under the Prime Contract,
resulting in VLOX losing $1,889,584 in net revenue.
Count 5 is also a claim for breach of contract under
Virginia common law. In this count, VLOX alleged that MTC
breached the Subcontract by making illegal protection payments
to the Taliban in order to secure safe passage of MTC trucks on
missions performed under the Subcontract. VLOX sought damages
for this claim in an amount no less than $1,000,000.
Count 6 alleged a claim for tortious interference with
contractual relations under Virginia common law. In this count,
VLOX alleged that MTC tortiously interfered with VLOX’s
contractual relations with the Army by failing to submit the
required Mission Sheets and by failing to provide VLOX with
information to disprove the validity of an alleged quote by
MTC’s chief executive officer in the November 14, 2009 edition
of the Financial Times of London that “MTC had made security
payments to the Taliban.” (J.A. 41). Count 6 further alleged
that MTC’s actions were a factor leading to the Army’s
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determination that VLOX was not eligible to be awarded a
follow-on contract to the Prime Contract. VLOX sought damages
for this claim in an amount no less than $1,000,000.
Count 7 alleged a claim for wrongful interference with a
prospective business relationship under Virginia common law.
Specifically, VLOX alleged that MTC wrongfully interfered with
VLOX’s prospective business relationship with the Army by
exerting improper influence over the Afghanistan Attorney
General and the Ministry of the Interior to VLOX’s detriment.
VLOX sought damages for this claim in an amount no less than
$1,000,000.
MTC alleged two counterclaims under Virginia common law.
Of relevance to the present appeal, Counterclaim 1 alleged an
unjust enrichment theory. MTC alleged that VLOX was unjustly
enriched by MTC’s provision of shipping containers that were
necessary to complete trucking missions on VLOX’s behalf and for
which MTC was not contractually obligated to provide under the
Subcontract.
Of relevance on appeal, Counterclaim 2 alleged breach of
contract as follows:
62. Verbal communications between [VLOX] and MTC,
together with various documents exchanged and the
subsequent course of dealing between the parties,
together effectuated a contractual relationship
between the parties.
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63. This contract was never reduced to an integrated
writing; however, the contractual terms can be
ascertained from documents exchanged, including
pricing sheets, flow-down clauses from the [Prime]
[C]ontract, detailed daily reports, party
correspondence, and other documents and testimony
subject to discovery in this action.
64. Pursuant to this contract, MTC agreed to provide
transportation and security services, at negotiated
prices, on an as-needed basis to support [VLOX] on its
[Prime] [C]ontract with the U.S. Army.
65. MTC has performed all required services
consistent with the agreement of the parties. MTC’s
services included thousands of hazardous trucking
missions throughout Afghanistan which [VLOX]
requested, and the completion of which [VLOX]
acknowledged by seeking payment from the U.S. Army.
66. [VLOX], however, breached its obligations under
the agreement by failing to pay for services performed
by MTC.
67. As a direct and proximate result of [VLOX’s]
breach, MTC has sustained damages.
68. MTC is entitled to damages in an amount to be
determined at trial, but in no event less than
$10,000,000.00, plus interest, costs and fees,
including reasonable attorneys’ fees.
(J.A. 69-70) (emphasis added).
Following discovery, the parties filed cross-motions for
summary judgment. The district court denied both motions on
September 21, 2012.
VLOX’s breach of contract claim alleged in Count 1 and
MTC’s two counterclaims were fully tried before a jury in a
five-day trial in October 2012. Counts 5, 6, and 7 never went
to the jury because the district court granted judgment as a
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matter of law in favor of MTC with respect to those claims based
upon a motion for such relief made by MTC at the close of VLOX’s
case-in-chief. With respect to these counts, the district court
concluded that VLOX had failed to present sufficient evidence to
permit a reasonable jury to render a verdict in VLOX’s favor.
On appeal, VLOX acknowledges such failure, but blames it on
several adverse evidentiary rulings by the district court.
The trial did not end well for VLOX. The jury found in
MTC’s favor with respect to Count 1 of VLOX’s complaint for
breach of contract. The jury awarded MTC $273,250 with respect
to its unjust enrichment counterclaim (Counterclaim 1) for
reimbursement of its costs in providing shipping containers to
complete trucking missions for VLOX. The jury also found in
favor of MTC on its breach of contract counterclaim
(Counterclaim 2) with respect to transportation services that it
provided to VLOX in the amount of $1,082,634.12 and with respect
to security services that it provided to VLOX in the amount of
$1,458,150.
Of relevance on appeal, pursuant to Rule 50(b) of the
Federal Rules of Civil Procedure, VLOX renewed, post-verdict,
its prior motion for judgment as a matter of law with respect to
Counterclaims 1 and 2. Alternatively, VLOX moved for a new
trial with respect to these counterclaims.
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Notably, VLOX did not renew, post-verdict, its motion for
judgment as a matter of law with respect to Count 1 of its own
complaint for breach of contract. Rather, VLOX dropped the
following cryptic footnote in its memorandum in support of its
post-verdict motion for judgment as a matter of law or, in the
alternative, for a new trial with respect to MTC’s
counterclaims:
VLOX does not concede that the jury’s verdict as to
VLOX’s Count I for MTC’s breach of contract was
correct. To the contrary, VLOX asserts that the
verdict was incorrect in that regard, and expressly
reserves its rights to appeal.
Memorandum in Support of Motion for Judgment as a Matter of Law
in Favor of VLOX, LLC, or, in the Alternative, for a New Trial
and/or Other Relief at 1, n.1, VLOX, LLC v. Mirzada Transport &
Logistics Co., No. 1:11-cv-01276 (E.D.Va. Nov. 2, 2012), ECF No.
280. The district court denied VLOX’s post-verdict motion for
judgment as a matter of law or, in the alternative, for a new
trial with respect to MTC’s counterclaims.
On November 13, 2012, the district court entered judgment
in favor of MTC consistent with the jury’s verdict. This timely
appeal followed.
II.
On appeal, VLOX first challenges the district court’s entry
of judgment in favor of MTC with respect to Count 1 of its own
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complaint alleging that MTC breached the Subcontract by failing
to submit Mission Sheets for 562 missions that MTC performed
under the Subcontract. According to VLOX, MTC failed to present
sufficient evidence to create a genuine issue of material fact
with respect to this claim, and therefore, the district court
erred by submitting such claim to the jury instead of entering
judgment as a matter of law in its favor for $1,889,584. In
other words, VLOX contends that MTC failed to introduce
sufficient evidence at trial to rebut the evidence that VLOX had
already introduced with respect to this claim in its case-in-
chief.
Supreme Court and Fourth Circuit precedent bar VLOX’s
sufficiency of the evidence challenge on appeal because VLOX
failed to move post-verdict for judgment as a matter of law with
respect to this claim, pursuant to Rule 50(b). See Unitherm
Food Sys., Inc. v. Swift-Eckrich, Inc., 546 U.S. 394, 404 (2006)
(holding that party’s “failure to comply with Rule 50(b)
forecloses its challenge to the sufficiency of the evidence” on
appeal); Belk, Inc. v. Meyer Corp., 679 F.3d 146, 160 (4th Cir.
2012) (appellant’s “failure to move pursuant to Rule 50(b)
forfeits the sufficiency of the evidence challenge on appeal”);
A Helping Hand, LLC v. Baltimore County, Md., 515 F.3d 356, 369-
70 (4th Cir. 2008) (appellant “failed to move for judgment under
Rule 50(b) in the district court and so did not preserve this
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challenge to the sufficiency of the evidence for appellate
review”). In this regard, we hold that the cryptic footnote
regarding Count 1 of VLOX’s complaint that VLOX included in its
memorandum in support of its Rule 50(b) motion pertaining to
MTC’s counterclaims is wholly inadequate to qualify as VLOX
moving, post-verdict, for judgment as a matter of law with
respect to Count 1 for lack of sufficient evidence to send the
claim to the jury.
Alternatively, assuming arguendo that VLOX had moved
post-verdict for judgment as a matter of law with respect to
Count 1 of its complaint on the ground that MTC had failed to
introduce sufficient evidence at trial to rebut the evidence
that it (VLOX) had already introduced with respect to this claim
in its case-in-chief, the district court would have been correct
in denying such motion. We review the denial of a motion for
judgment as a matter of law de novo, viewing the evidence in the
light most favorable to the nonmovant and drawing all reasonable
inferences in the nonmovant’s favor, without weighing the
evidence or assessing the credibility of the witnesses.
Ocheltree v. Scollon Prods., Inc., 335 F.3d 325, 331 (4th Cir.
2003).
VLOX contends that it is entitled to judgment as a matter
of law with respect to Count 1 because, according to VLOX,
Article 5 of the Subcontract can only be read to require that
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MTC provide, as an affirmative obligation, a Mission Sheet to a
designated representative of VLOX for every mission that MTC
completed under the Subcontract and to require every MTC “truck
driver . . . to obtain signatures of authorized Army personnel
on the Mission Sheet at both the cargo’s point of origin and the
point of delivery when the cargo was loaded and unloaded.”
(VLOX’s Opening Br. at 13).
MTC makes numerous points in response. First, the term
“Mission Sheet” does not appear anywhere in the entire
Subcontract. Second, the only document that Article 5 of the
Subcontract expressly requires to be submitted in order to
receive payment is an invoice; the certification language is
only a sentence fragment. Third, MTC’s Vice President, Abdul
Hasib (MTC Vice President Hasib), testified at trial that MTC
provided Mission Sheets for some missions merely because VLOX
asked for them, rather than due to any contractual obligation.
Fourth, under cross examination by MTC, David Etchart, VLOX’s
former president, admitted that unlike the Subcontract between
VLOX and MTC, the subcontract that VLOX subsequently drafted for
use with its other subcontractors specifically requires the
submission of Mission Sheets to VLOX. Fifth, at most, Article 5
required Mission Sheets as a precondition to receiving any
payment for its services, and therefore, MTC’s alleged failure
to satisfy this condition with respect to the 562 missions at
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issue subjects MTC to nonpayment for such missions, but does not
constitute breach of the Subcontract by MTC. Sixth, through the
testimony of MTC Vice President Hasib, MTC demonstrated at
trial: (1) that submission of a Mission Sheet with all of the
details and signatures that VLOX claims were required was far
from within MTC’s control; (2) that most of the drivers hired by
MTC were sub-subcontractors who owned their own trucks; and (3)
that some of these sub-subcontractors withheld Mission Sheets
from MTC when VLOX failed to pay for previously completed
missions.
The bottom line for us is that VLOX has failed to establish
that its reading of the language in Article 5 (as affirmatively
requiring MTC to submit a Mission Sheet to VLOX for every
mission it performs under the Subcontract) is the only
reasonable reading of such language. In particular, we agree
with MTC’s argument that the jury could have reasonably read
Article 5 as conditioning mission payment to MTC on MTC’s
submission of a corresponding Mission Sheet, but not placing an
affirmative obligation on MTC to so submit. Therefore, because
the record is undisputed that VLOX never paid MTC for the 562
missions at issue in Count 1, the entire underpinning of VLOX’s
breach of contract claim based upon MTC’s failure to provide
Mission Sheets for such missions is nonexistent. Accordingly,
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we affirm the judgment in favor of MTC with respect to Count 1
of VLOX’s complaint.
III.
VLOX next challenges the district court’s denial of its
post-verdict motion for judgment as a matter of law with respect
to Counterclaim 1, alleging a claim for unjust enrichment
pertaining to MTC’s provision of shipping containers to complete
missions for VLOX. According to VLOX, the evidence of this
claim at trial was insufficient to support the jury’s award of
$273,250. Again, we review the denial of a motion for judgment
as a matter of law de novo, viewing the evidence in the light
most favorable to the nonmovant, here MTC, and drawing all
reasonable inferences in the nonmovant’s favor, without weighing
the evidence or assessing the credibility of the witnesses.
Ocheltree, 335 F.3d at 331.
In order to prevail upon its unjust enrichment claim, MTC
was required to proffer sufficient evidence for a reasonable
jury to find by a preponderance of the evidence that: (1) MTC
conferred a benefit on VLOX; (2) VLOX knew of the benefit and
should reasonably have expected to repay MTC; and (3) VLOX
accepted or retained the benefit without paying for its value.
Schmidt v. Household Finance Corp., 661 S.E.2d 834, 838 (Va.
2008). In support of the district court’s entry of judgment in
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its favor with respect to its unjust enrichment claim, MTC
points to: (1) certain trial testimony by MTC Vice President
Hasib; (2) certain deposition testimony by VLOX’s chief
financial officer and Rule 30(b)(6) 3 corporate designee, William
Gombar (VLOX CFO Gombar), read to the jury; and (3) Defendant’s
Exhibit 441R.
MTC points to testimony by MTC Vice President Hasib that:
(1) containers were not included on the price list in the
Subcontract; (2) after execution of the Subcontract, VLOX
requested that MTC furnish containers; (3) MTC furnished
containers for a VLOX mission when necessary to complete the
mission; (4) VLOX knew about and accepted the benefit of those
containers; (5) the parties engaged in negotiations about the
price that VLOX would pay for the use of the containers
furnished by MTC (MTC had some of its own containers and paid to
rent others); (6) the parties agreed upon $150 per mission day4;
3
See Federal Rule of Civil Procedure 30(b)(6) (governing
corporate designation of deposition witness to testify on its
behalf).
4
A “mission day” consisted of a mission up to 200
kilometers one way. (J.A. 1379). Thus, for example, a mission
trip from Kabul to Kandahar consisted of three mission days.
Many of the 3,200 mission trips MTC performed for VLOX consisted
of between three and five mission days. Some mission trips even
consisted of six mission days.
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and (7) VLOX never paid MTC for the containers despite the fact
that VLOX had enjoyed the benefit of their use.
VLOX CFO Gombar’s deposition testimony read to the jury
regarding MTC’s provision of containers is consistent with the
testimony of MTC Vice President Hasib and supports MTC’s unjust
enrichment theory:
Q. But then some of the missions that the government
requested required the contractor to obtain the
container?
A. Yeah. It requested the contractor to bring an
empty container.
Q. And when that happened the -- [VLOX] requested
that MTC provide the container?
A. Yes.
Q. And the container -- container prices were not
included in the original subcontract agreement, right?
A. No.
Q. But it was understood that [VLOX] would have to
reimburse MTC for the cost of that container, correct?
A. We were looking into negotiating the price for
the use of their container.
Q. Did [VLOX] though accept the benefit of MTC’s
providing the container for those missions right?
A. Yes.
(J.A. 1656-57). The jury also heard deposition testimony by
VLOX CFO Gombar that VLOX never paid MTC any separate payments
for containers furnished by MTC during missions that it ran for
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VLOX, and that the parties had estimated that a fair amount for
the cost of a container was $150 per mission day.
Defendant’s Exhibit 441R, which MTC introduced at trial
without objection from VLOX, is a spreadsheet prepared by VLOX
CFO Gombar in May 2011. In deposition testimony read to the
jury, VLOX CFO Gombar testified that this spreadsheet compiled
every mission that MTC had performed for VLOX, but for which
VLOX had not paid MTC. For every mission, the spreadsheet
specifies the dispatch date, whether the mission included a
container, and the number of mission days attributed to such
mission.
We hold that the evidence just recounted, when viewed in
the light most favorable to MTC, is sufficient for a reasonable
jury to find that: (1) MTC conferred a $273,250 benefit on VLOX
in the form of container usage and container management; (2)
VLOX knew of that benefit and should reasonably have expected to
repay MTC; and (3) VLOX accepted or retained the benefit without
paying for its value. Accordingly, we affirm the district
court’s entry of judgment in favor of MTC with respect to
Counterclaim 1.
IV.
VLOX challenges the district court’s denial of its
post-verdict motion for judgment as a matter of law with respect
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to Counterclaim 2, alleging breach of contract and seeking
reimbursement for transportation and security services that it
provided VLOX. We review the district court’s denial of this
motion de novo, viewing the evidence in the light most favorable
to the nonmovant, here MTC, and drawing all reasonable
inferences in the nonmovant’s favor, without weighing the
evidence or assessing the credibility of the witnesses.
Ocheltree, 335 F.3d at 331. The jury found in favor of MTC on
this claim, awarding MTC $1,082,634.12 for transportation
services and $1,458,150 for security services.
A. Transportation Services
With respect to transportation services, MTC’s theory at
trial was that VLOX breached the Subcontract by failing to pay
MTC for all the missions it performed under the Subcontract. In
its post-verdict motion for judgment as a matter of law, VLOX
did not dispute that it had failed to pay MTC for all of the
missions that MTC had performed for VLOX under the Subcontract.
However, VLOX argued that MTC failed to provide it invoices for
such missions and that such failure relieved VLOX’s contractual
obligation to pay MTC for such missions. According to VLOX,
providing VLOX an invoice for each mission was a condition
precedent for payment under Article 5 of the Subcontract. This
is the sole basis upon which VLOX challenged the jury’s verdict
with respect to the jury’s award in favor of MTC for
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transportation services. Notably, VLOX did not take issue with
the trial testimony of MTC Vice President Hasib that the parties
had a course of dealing with respect to Article 5’s invoicing
requirement. According to VLOX’s post-verdict Rule 50(b)
motion, during his trial testimony, MTC Vice President Hasib
described a process by which VLOX would propose an invoice, MTC
would merely modify it slightly as deemed necessary, and then
MTC would send it back to VLOX for payment. “But,” VLOX argued,
“that simply demonstrates that MTC’s burden of meeting this
condition for payment was quite low, and it failed to meet it
anyway.” Memorandum in Support of Motion for Judgment as a
Matter of Law in Favor of VLOX, LLC, or, in the Alternative, for
a New Trial and/or Other Relief at 6, VLOX, LLC v. Mirzada
Transport & Logistics Co., No. 1:11-cv-01276 (E.D.Va. Nov. 2,
2012), ECF No. 280.
In response, MTC reiterated the point made by MTC Vice
President Hasib that the spreadsheet of completed missions that
VLOX gave to MTC to submit back to VLOX “was the invoicing
process.” MTC’s Opposition to VLOX’s Motion for Judgment as a
Matter of Law, or, in the Alternative, for a New Trial and/or
Other Relief at 9, VLOX, LLC v. Mirzada Transport & Logistics
Co., No. 1:11-cv-01276 (E.D.Va. Nov. 9, 2012), ECF No. 281.
When the relationship between VLOX and MTC deteriorated, VLOX
stopped providing information to MTC. MTC also pointed to
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deposition testimony the jury heard by VLOX CFO Gombar admitting
that VLOX had not paid MTC for $1.1 million dollars’ worth of
transportation expenses for missions that MTC performed under
the Subcontract. MTC accurately pointed out that this amount
was calculated based upon a spreadsheet prepared by VLOX
obtained by MTC during discovery in the present litigation,
which is the same type of spreadsheet that MTC would submit back
to VLOX in satisfaction of the invoicing requirement. MTC
further accurately pointed out that VLOX did not list MTC’s
failure to submit invoices as an affirmative defense to this
claim in its answer or argue such a defense to the jury.
In denying VLOX’s post-trial motion for judgment as a
matter of law with respect to Counterclaim 2 as such
counterclaim pertained to transportation services, the district
court stated:
The Court also finds and concludes that the
evidence was sufficient as a matter of law to sustain
the jury’s verdict as to transportation services. In
that regard, the jury determined that MTC was entitled
to recover . . . $1,082,634.12, which is essentially
the amount that appeared in plaintiff’s own books and
records and the amount that plaintiff’s designated
representative admitted was due and owing to MTC based
on its mission sheets submitted for payment and
payments from the government.
(J.A. 3004).
The parties’ opposing arguments on appeal essentially
repeat their arguments before the district court. We affirm the
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district court’s entry of judgment in favor of MTC with respect
to this claim pertaining to MTC’s provision of transportation
services. When the evidence in the record is viewed in the
light most favorable to MTC and all reasonable inferences
therefrom are drawn in its favor, sufficient evidence exists to
support the jury’s verdict.
B. Security Services
With respect to security services, MTC’s theory at trial
was that MTC arranged for the provision of licensed security on
virtually every mission that it performed for VLOX between May
and November 2009, and that VLOX agreed to pay MTC a flat rate
for security services of at least $200 per mission day
regardless of whether MTC actually provided security for every
mission. According to MTC, the $200 per mission day rate for
security services was a flat rate or so called blended rate upon
which it and VLOX had agreed because some missions were very
expensive (upwards of $2,500 to $3,000) and others were not as
expensive. The jury awarded MTC a total of $1,458,150 for its
provision of security services.
In its post-verdict Rule 50(b) motion, VLOX disagreed with
MTC’s flat/blended rate theory. VLOX did concede, however, that
it agreed to pay MTC $200 for each mission day for which MTC
actually provided security services. Nonetheless, VLOX argued
that MTC failed to adduce evidence at trial demonstrating that
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MTC actually provided security services for any of the missions
it performed under the Subcontract. According to VLOX, in order
to sustain the jury’s $1,458,150 award for security services,
MTC was required to provide the jury with the following
evidence, but failed to do so: (1) a copy of every written
subcontract that MTC had with a security provider that MTC hired
to perform security services on missions that MTC performed for
VLOX; (2) an invoice from such security provider for every VLOX
mission it worked; and (3) copies of bank statements, canceled
checks, or any other evidence which corroborates MTC’s claim for
breach of contract damages related to security services.
MTC points to the following evidence before the jury in
support of the jury’s verdict with respect to its provision of
security services on behalf of VLOX. First, MTC points to the
testimony of David Etchart, VLOX’s president from late September
2009 until the end of December 2011, that: (1) the Prime
Contract required VLOX to provide security for all missions; and
(2) the per mission-day rate the federal government paid VLOX
under the Prime Contract included compensation for mission
security services regardless of the type of mission and
regardless of whether VLOX or the federal government actually
provided mission security.
MTC next points to the testimony of MTC Vice President
Hasib that: (1) the Subcontract did not provide payment to MTC
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for security services; (2) one week after the Subcontract
started, MTC and VLOX reached a verbal agreement that, in order
to compensate MTC for sourcing mission related security services
for missions MTC ran under the Subcontract, VLOX would pay MTC
an additional flat rate of $280.00 per mission day; and (3) once
MTC and VLOX reached this verbal agreement, MTC provided
security for the missions it ran for VLOX under the Subcontract
by hiring Watan Risk Security (Watan) and Solution Group.
MTC also points out that the jury heard deposition
testimony by VLOX CFO Gombar consistent with MTC Vice President
Hasib’s testimony, with the exception that VLOX CFO Gombar
testified that the agreed rate for security services was $200
per mission-day. The jury also heard deposition testimony by
VLOX CFO Gombar from which the jury could have reasonably
inferred that VLOX paid MTC for security services in August 2009
based upon a flat rate of $200 per mission day without requiring
any type of substantiation from MTC.
During his testimony, MTC Vice President Hasib explained
that the general lack of documentary evidence in support of its
claim that MTC actually sourced security for the missions it ran
for VLOX under the Subcontract stemmed from the fact that
Afghanistan is a cash-based society based on trust, rather than
written promises or contracts. MTC Vice President Hasib also
identified Defendant’s Exhibits 278 and 279 as receipts for cash
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payments that MTC made to Watan for security services that Watan
provided during missions that MTC performed under the
Subcontract. One receipt was for $400,000 and the other for
$100,000.
Of relevance here, the record also contains a May 2009
email in which, after the Subcontract’s execution, VLOX asked
MTC to obtain security services for the missions that MTC ran
for VLOX. Defendant’s Exhibit 441R established the number of
mission days that MTC performed under the Subcontract.
Viewing the evidence before the jury regarding the security
services aspect of MTC’s breach of contract counterclaim in the
light most favorable to MTC and drawing all reasonable
inferences from such evidence in MTC’s favor, we hold that the
jury’s verdict is supported by sufficient evidence. From the
evidence outlined above, a reasonable jury could find that VLOX
and MTC had an agreement for VLOX to pay MTC a flat/blended rate
of $200 per mission day to compensate MTC for any and all
security services that MTC provided on behalf of VLOX for the
duration of the Subcontract. The jury needed only to consider
Defendant’s Exhibit 441R, a spreadsheet compiled by VLOX which
lists every mission MTC performed for VLOX under the
Subcontract, to calculate the total amount of compensation due
MTC for security services. Because the evidence supports MTC’s
theory of at least a $200 per mission-day rate, regardless of
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the cost of security per mission, VLOX’s argument that MTC was
required to show documentary evidence that it provided security
for every mission day and MTC’s cost of such security is without
merit.
Accordingly, we affirm the district court’s entry of
judgment in favor of MTC based upon the jury’s verdict
pertaining to MTC’s provision of security services.
V.
On appeal, VLOX seeks a new trial on Counts 1, 5, 6, and 7
of its complaint and upon MTC’s successful counterclaims based
upon numerous evidentiary rulings by the district court that
VLOX contends are erroneous. We review the district court’s
evidentiary rulings for abuse of discretion. Belk, Inc., 679
F.3d at 161.
Our review of VLOX’s evidentiary challenges reveals that
all are without merit. Three are worthy of our addressing
separately. In Count 5 of VLOX’s complaint, VLOX alleged that
MTC breached the Subcontract by paying bribes to the Taliban for
safe passage of missions that MTC performed for VLOX under the
Subcontract. VLOX also wanted to use MTC’s alleged bribery of
the Taliban in support of its tort claims alleged in Counts 6
and 7 of its complaint and in defense of MTC’s Counterclaim 2.
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On appeal, VLOX specifically challenges the district
court’s grant of MTC’s motion in limine to exclude the following
from being submitted as evidence at trial: (1) a November 14,
2009 newspaper article appearing in the Financial Times of
London, purporting to quote MTC Chief Executive Officer Haji
Fatah (MTC CEO Fatah) as saying that “‘Every truck costs about
$200 as a bribe I pay on the route – to police or Taliban.
. . . The Taliban don’t care about small money: they ask for
$10,000, $20,000 or $50,000 when they kidnap people.’” (J.A.
575); (2) testimony by David Etchart, VLOX's former president,
that he asked a VLOX employee who allegedly speaks English and
Dari to ask MTC CEO Fatah whether he had made the statements
quoted in the Financial Times article, and after the employee
complied with his request, MTC CEO Fatah remained silent; and
(3) a June 2010 report, entitled Warlord, Inc.: Extortion and
Corruption Along the U.S. Supply Chain in Afghanistan (the
Warlord Report), prepared by the majority staff of the
Subcommittee on National Security and Foreign Affairs of the
Committee on Oversight and Government Reform in the United
States House of Representatives, which report republishes the
alleged quote by MTC CEO Fatah in the Financial Times article,
and in which report the following statement is made:
Finding: Within the HNT contractor community, many
believe that the highway warlords who nominally guard
the trucks in turn make protection payments to
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insurgents to coordinate safe passage. This belief is
evidenced in numerous documents, incident reports, and
e-mails that refer to attempts at Taliban extortion
along the road. The Subcommittee has not uncovered
any direct evidence of such payments and Commander
Ruhullah, the Popal brothers, and Ahmed Wali Karzai
all adamantly deny that any convoy security commanders
pay insurgents. According to experts and public
reporting, however, the Taliban regularly extort rents
from a variety of licit and illicit industries, and it
is plausible that the Taliban would try to extort
protection payments from the coalition supply chain
that runs through territory in which they freely
operate.
(J.A. 231).
VLOX wanted to introduce these three items of evidence at
trial to prove the statements attributed to MTC CEO Fatah were
in fact made and that MTC in fact made illegal security bribes
to the Taliban. During the oral argument colloquy with the
district court on MTC’s motion in limine, VLOX admitted under
questioning by the district court that the Warlord Report did
not find that any bribes to the Taliban were, in fact, made.
VLOX further admitted that although the Warlord Report reported
much talk about government contractors paying the Taliban
security bribes and reported a lot of anecdotal statements about
such behavior, it also reported the specific denials by the
people in authority within the Afghan government and the authors
of the report’s failure to uncover any direct evidence of such
illicit payments. VLOX further admitted that the alleged quote
by MTC CEO Fatah in the Financial Times cannot come into
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evidence as a party admission under Federal Rule of Evidence
801(d)(2)(A) unless VLOX can prove the foundational fact that
MTC CEO Fatah actually made the statement. Notably, MTC CEO
Fatah steadfastly denies making the statement.
While still at the hearing on MTC’s motion in limine, VLOX
proffered the testimony mentioned above of its former president,
David Etchart, regarding MTC CEO Fatah’s silence in the face of
the question about the Financial Times quote allegedly asked of
him in Dari by a VLOX employee. In response to questioning by
the district court, VLOX informed the district court that it
would not call such employee to testify regarding what he
actually asked MTC CEO Fatah; rather, it would only call its
former president, David Etchart, who does not speak Dari. VLOX
also informed the district court that it did not intend to call
as a witness the reporter who wrote the Financial Times article
or the interpreter who allegedly reported the quote to the
reporter.
In its written opinion granting MTC’s motion in limine, the
district court found that in the absence of necessary
foundational testimony, the statements reported in the Financial
Times article and David Etchart’s testimony regarding such
statements would be inadmissible hearsay. The district court
further found
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that the statements in the FINANCIAL TIMES article are
not admissible under either Fed. R. Evid. 803(8)
(pertaining to governmental findings based on the
investigation set forth in [the Warlord Report] or
Fed. R. Evid. 807 (the residual hearsay exception).
The [Warlord Report] specifically disclaimed any
finding that payments had in fact been made to the
Taliban or other insurgent groups, and the conditions
necessary for application of the residual hearsay
exception under Fed. R. Evid. 807 have not been met.
(J.A. 906-07).
We hold the district court did not abuse its discretion in
granting MTC’s motion in limine with respect to these three
items of evidence. On appeal, VLOX rehashes the same meritless
arguments that it had made below in opposition to MTC’s motion
in limine. VLOX’s entire position on this issue hinges upon it
being able to prove that MTC CEO Fatah actually made the
statements quoted in the Financial Times article. VLOX attempts
to so prove through its silent admission theory. However, for
silence to be admitted into evidence as a tacit admission, there
must be preliminary proof of an accusatory statement. United
States v. Williams, 445 F.3d 724, 736 (4th Cir. 2006). Here,
the district court reasonably concluded such proof was lacking.
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VI.
In conclusion, we affirm the judgment below in toto. 5 We
dispense with oral argument because the facts and legal
contentions are adequately presented in the materials before the
court and argument would not aid the decisional process.
AFFIRMED
5
With respect to arguments and/or assignments of error made
by VLOX on appeal that we have not expressly addressed in this
opinion, we have so considered and find them to be without
merit.
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