DocketNumber： 92-1082
Filed Date： 8/21/1992
Status： Precedential
Modified Date： 9/21/2015
August 21, 1992 UNITED STATES COURT OF APPEALS
FOR THE FIRST CIRCUIT
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No. 92-1082
COOL LIGHT COMPANY, INC.,
Plaintiff, Appellant,
v.
GTE PRODUCTS CORPORATION,
Defendant, Appellee.
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ERRATA SHEET
The opinion of this Court issued on August 21, 1992, is amended
as follows:
On cover under list of counsel "Edward A. McCabe should be
corrected to read "Edwin A. McCabe."
August 21, 1992 UNITED STATES COURT OF APPEALS
FOR THE FIRST CIRCUIT
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No. 92-1082
COOL LIGHT COMPANY, INC.,
Plaintiff, Appellant,
v.
GTE PRODUCTS CORPORATION,
Defendant, Appellee.
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APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS
[Hon. Robert E. Keeton, U.S. District Judge]
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Before
Breyer, Chief Judge,
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Lay,* Senior Circuit Judge,
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and O'Scannlain,** Circuit Judge.
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Edwin A. McCabe with whom Joseph P. Davis, III, Karen Chinn Lyons
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and The McCabe Group were on brief for appellant.
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Alan van Gestel with whom Marie P. Buckley and Goodwin, Procter &
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Hoar were on brief for appellee.
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* Of the Eighth Circuit, sitting by designation.
** Of the Ninth Circuit, sitting by designation.
LAY, Circuit Judge. This is an unusual and perplexing case.
LAY _____________
Cool Light Company, Inc. (Cool Light) sought to develop and
produce a new and superior light system for television and movies
which would emit less heat, would last longer, and would produce
better color quality on film. The lights, not surprisingly, were
to be called "cool lights." Cool Light's founder, George
Panagiotou, obtained all rights to the lighting concept and took
his idea to Hollywood where he founded Cool Light in 1977. In
1978, Panagiotou was looking for a new supplier of specially
coated reflectors needed to produce cool lights. He was
approached by GTE Products Corporation (GTE) to produce the
reflectors and the two parties entered into a business
relationship which continued throughout 1979 and 1980.
Dissatisfaction arose over the supply of coated reflectors,
both in number and in quality, and problems arose over amounts
owed by Cool Light to GTE. Cessation of supply resulted and Cool
Light, facing a severe cash shortage, ultimately was forced to
sell off its assets and became insolvent.
Cool Light sued GTE on a number of claims, including beach
of contract, breach of implied covenant of good faith and fair
dealing, and fraud. After a twenty-four day trial, the district
court1 submitted to the jury a number of special interrogatories
in addition to general verdict forms. On the special
interrogatory form, the jury found, inter alia: (1) GTE had made
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a false representation to Cool Light that it could produce the
number and quality of reflectors required, (2) Cool Light relied
upon that misrepresentation, (3) Cool Light and GTE had both an
oral and written agreement, and (4) GTE's actions cost Cool Light
$9.3 million in loss of potential profits. The general verdict
forms, however, indicated that Cool Light was due $3.694 million
on the breach of contract claim, $2.8 million on the breach of
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1The Honorable John J. McNaught, presiding.
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implied covenant of good faith claim, and $9.45 million on the
fraud claim. After the jury returned the verdict and special
interrogatories, the court sent the jury back into the jury room
to decide how much, if any, of the fraud damages were punitive.
The jury returned with the answer that $2.95 million were
compensatory in nature and $6.5 million represented punitive
damages permitted under California law.
In addition to the above, the jury returned a verdict for
GTE on all other counts, including common law misappropriation of
trade secrets, misappropriation of trade secrets under Mass. Gen.
L. ch. 93, 42 (1990), misappropriation of information under
section 759 of the Second Restatement of Torts, and
misappropriation of trade secrets under the California Uniform
Trade Secrets Act, Cal. Civ. Code 3426 (West 1992).2 The jury
also found against GTE on a counterclaim. An additional five
counts, consideredto besounding inequity, weretried by thecourt.3
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2The record is confusing as to whether this count was submitted
to the jury. In Judge McNaught's August 9, 1990 memorandum and
order he states that the count was submitted to the jury and that
it found in favor of GTE. Judge McNaught also included this
count in the list of those he intended to be retried. The final
judgment entered December 11, 1991, however, indicates that this
count was withdrawn before trial. There is some evidence on the
record that the California statute was not in effect at the time
the alleged misconduct occurred.
3Cool Light challenges the trial court's ruling in favor of GTE
on Cool Light's claim that GTE violated Chapter 93A of the
General Laws of the Commonwealth of Massachusetts, which makes
unlawful any "[u]nfair . . . acts or practices in the conduct of
any trade or commerce . . . ." Mass. Gen. L. ch. 93A, 2(a)
(1990). Cool Light argues that the jury's finding that GTE
violated the implied covenant of good faith and fair dealing
required the court as a matter of law to find that GTE violated
Chapter 93A. Cool Light cites Anthony's Pier Four v. HBC
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Associates, 583 N.E.2d 806 (Mass. 1991), in support of this
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argument. In Anthony's, the trial court found in favor of
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plaintiff on its ruling that defendant had violated the implied
covenant of good faith and fair dealing, but the court denied
plaintiff's claim under Chapter 93A. The Supreme Judicial Court
of Massachusetts found that those rulings could not be squared,
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The district court granted GTE's motion for new trial on all
of the counts submitted to the jury. Thereafter, upon
stipulation the parties submitted only the three counts on which
the jury found in Cool Light's favor. These three counts were
then submitted to a new trial judge, the Honorable Robert E.
Keeton, and a jury trial was waived. It was stipulated that
certain witnesses would testify, and that Judge Keeton would make
his findings and conclusions of law based upon his overall
appraisal of the record of the first trial and any additional
evidence presented before him. Judge Keeton entered a final
judgment against Cool Light on all counts and dismissed GTE's
counterclaim. He did so based upon a thorough analysis of the
evidence, finding that Cool Light did not sustain its burden of
proof relating to breach of contract, fraud, or breach of implied
covenant of good faith and fair dealing. He further found Cool
Light's evidence as to loss of profits to be entirely
speculative. Upon entry of final judgment, Cool Light has
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and that defendant as a matter of law violated Chapter 93A.
Anthony's is distinguishable from the present case in two
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important respects. First, the jury finding against GTE on the
implied covenant of good faith count was vacated by the trial
court and submitted for retrial. Under these circumstances, the
jury's finding cannot be binding on the trial court's
determination under Chapter 93A.
Second, the trial court made separate findings of fact and
conclusions of law with respect to the Chapter 93A claim. The
court specifically found (1) GTE exerted its best efforts at
producing the reflectors requested by Cool Light; (2) no binding
contract existed between Cool Light and GTE; (3) no agreement
existed between the two parties except that GTE would not divulge
Cool Light's specifications to another GTE customer; (4) GTE's
conduct should be viewed as simply refusing to continue doing
business with a company that would not or could not pay its
bills; and (5) Cool Light's evidence on lost profits was
unpersuasive. The court also made findings as to the lack of
credibility of certain Cool Light witnesses, including George
Panagiotou.
We therefore find no error with respect to the trial court's
dismissal of Cool Light's claim under Chapter 93A.
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appealed only the grant of a new trial by Judge McNaught. It
seeks to sustain the money damage award set forth in the jury's
original verdict.
Cool Light argues that the trial court had a duty to
reconcile the apparent inconsistency between the verdict and the
special interrogatory answer pertaining to Cool Light's total
lost profits, and that the court abused its discretion by failing
to enter judgment in its favor. We agree with Cool Light's
assertion that the trial court had a duty to reconcile any
inconsistency between the general verdict and the answers to the
special interrogatories.4 The record is clear, however, that
Judge McNaught did attempt to reconcile the inconsistency he
perceived and concluded that he could not:
And I have struggled in vain to come up with a sensible
mode of determining how the jury would have struck upon
different figures of $3,550,000 [sic], $2,950,000 and
$2,800.000 [sic]. It would have been easier (and more
understandable) had the jury simply divided $9,300,000
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4See, e.g., Harvey v. General Motors Corp., 873 F.2d 1343, 1347
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(10th Cir. 1989); Schaafsma v. Morin Vermont Corp., 802 F.2d 629,
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635 (2d Cir. 1986); 9 Charles A. Wright & Arthur R. Miller,
Federal Practice and Procedure 2513, at 528-29 (1971); cf.
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Gallick v. Baltimore & Ohio R.R. Co., 372 U.S. 108, 119 (1963)
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(duty to reconcile answers to special interrogatories); O'Brien
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v. Papa Gino's of America, 780 F.2d 1067, 1071 (1st Cir. 1986)
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(same).
Cool Light also urges that GTE is barred from challenging
any inconsistency between the special interrogatory answers and
the verdict because of its failure to object on this ground
before the jury was discharged. See Fernandez v. Chardon, 681
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F.2d 42, 58 (1st Cir.) (failure to object to jury verdict under
Rule 49 prior to discharge of the jury waives right to appeal),
cert. denied, 459 U.S. 989 (1982); Skillin v. Kimball, 643 F.2d
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19 (1st Cir. 1981). As Judge Keeton observed, however, Judge
McNaught did not base his grant of a new trial solely on the
inconsistency of the special interrogatories and the general
verdict. Thus, the waiver rule recognized in this circuit with
respect to Rule 49(b) does not apply here.
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by three and given $3,100,000 for lost profits on each
count. They did not do so.
. . . .
In sum, one must speculate in order to assess the
work of the jury. And that's wrong. If the plaintiff
deserved a particular sum of money, he should not be
required to be satisfied with a dollar less than that
amount. Neither should he receive a dollar more than
he deserves. On the present state of affairs, we don't
know what he deserves.
There must be a new trial. Of that I am
satisfied. It seems to me also that the new trial
should be had on all the counts which were submitted
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for the jury's determination: not only on the counts
where the jury found in plaintiff's favor, but on those
counts where the jury decided against him. We cannot
know for the moment precisely what evidence will be
offered and admitted at a new trial. If, in fact,
there is admissible evidence which makes a different
impression on the jurors' minds, plaintiff may (be
entitled to and may) prevail on one or more of the
counts on which this past jury decided adversely to
him.
Cool Light Co. v. GTE Products Corp., No. 86-2668Mc, at 4-5 (D.
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Mass. August 9, 1990) (memorandum and order on proposed orders of
judgment and on motion for judgment n.o.v.).
Cool Light's argument that the verdict and answer can be
reconciled hinges upon its assumption that the jury awarded
separate and distinct damages for each count; that each damage
award can be causally related to a separate breach of duty. Cool
Light further urges that although the compensatory damages
awarded on the general verdict forms add up to $9,444 million,
the extra $144,000 can be explained as some other form of
compensatory damages, such as out-of-pocket expenses.
The difficulty with this argument is that the trial record
fails to support the theory that each claim was supported by
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separate damages. The trial court recognized throughout the
trial that plaintiff's counts were alternative counts. In the
instructions to the jury, the court explained:
There are cases in which somebody has more than
one arrow to fire; and this is one of those cases.
When Mr. Panagiotou brought his case as against GTE, he
decided that he ought to have 12 arrows to fire. So he
stated what we call 12 theories of liability at law.
And you're entitled to do that. When you bring a case
in our courts you may say I want to recover either on
the basis of tort or recover on the basis of contract.
And if you can prove the essential elements of any
theory of liability, then you're entitled to recover.
That's called alternative pleading.
Trial Transcript, Vol. 24, at 10. These instructions made clear
the alternative nature of Cool Light's case, and Cool Light
itself never spelled out any basis for finding separate damages.
The law is clear that a party cannot recover multiple awards of
damages for a single harm. Clark v. Taylor, 710 F.2d 4, 8 (1st
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Cir. 1983) ("[T]he amount of compensatory damages properly
awardable does not depend on the number of theories under which
plaintiff may recover, but on the extent of his injury."); see
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also Diversified Graphics, Ltd. v. Groves, 868 F.2d 293, 295 (8th
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Cir. 1989); Clappier v. Flynn, 605 F.2d 519, 529-30 (10th Cir.
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1979); Cunningham v. M-G Transp. Serv., 527 F.2d 760, 761-62 (4th
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Cir. 1975).
Thus, not only is the answer to the special interrogatory
inconsistent with the general verdicts, but the general verdicts
are inconsistent with one another. In addition, we find it
significant that in considering the non-jury claims Judge
McNaught found no breach of contract, lack of good faith on the
part of at least one of the plaintiff's witnesses, failure to
prove fraud, and failure to prove damages. We mention this
background because Judge McNaught observed in his new trial
order:
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I considered granting judgment non obstante
veredicto on one or more of the counts of the complaint
which were given to the jury for determination, and
decided against it, since, if a new trial is granted,
new evidence might be offered. There is also the fact
that even if I act in that fashion, we are still left
to speculate concerning the award of damages, the
source of the amounts decided upon by the jury, and the
possibilities that the jury came up with inconsistent
amounts, or amounts that were divided among the counts
improperly.
Cool Light Co. v. GTE Products Corp., No. 86-2668Mc, at 4-5 (D.
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Mass. August 9, 1990) (memorandum and order on proposed orders of
judgment and on motion for judgment n.o.v.). Thus, as Judge
Keeton later observed:
[E]ven if I assume that there was an inconsistency
between the general verdict and the jury's response to
special interrogatory number 14, . . . I nevertheless
conclude that the order for new trial should not be
vacated. Plaintiff has made no showing that Judge
McNaught abused his discretion by ordering a new trial
in light of his concerns about the verdict apart from
the inconsistency issue. In the absence of any showing
that Judge McNaught's order for new trial was a clearly
erroneous exercise of his discretion--taking into
consideration all of his expressed reasons for ordering
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the new trial--the order for new trial will not be
vacated, and plaintiff's motion for reconsideration
will be denied.
Cool Light Co. v. GTE Products Corp., No. 86-2668-K, at 4-5 (D.
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Mass. July 25, 1991) (memorandum and order) (citation omitted).
This inconsistency among the general verdicts also precludes
Cool Light's argument that the trial court abused its discretion
in failing to enter judgment on the special answer. While it is
true that a trial court may enter judgment on the answer where
there is an inconsistency between the general verdict and a
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special interrogatory answer,5 there is no abuse of discretion
in failing to do so where the verdicts evidence either confusion
or improperly duplicative awards.
We are mindful of plaintiff's Seventh Amendment concerns in
vacating a jury verdict. Yet there exists no violation of
Seventh Amendment rights where a trial judge exercises his lawful
discretion in awarding a new trial where speculation and
confusion are manifest in not only the verdict but the
evidentiary record itself. See Globe Liquor Co. v. San Roman,
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332 U.S. 571 (1948); Montgomery Ward & Co. v. Duncan, 311 U.S.
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243 (1940); Kavanaugh v. Greenlee Tool Co., 944 F.2d 7, 10 (1st
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Cir. 1991); MacQuarrie v. Howard Johnson Co., 877 F.2d 126, 131
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(1st Cir. 1989) ("[t]rial courts have wide discretion when
considering a motion for a new trial"); Atlantic Tubing & Rubber
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Co. v. International Engraving Co., 528 F.2d 1272, 1276 (1st
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Cir.) (broad discretion to order new trial "encompasses the power
to refuse to accept a jury's answers to special
interrogatories."), cert. denied, 429 U.S. 817 (1976); 6A James
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W. Moore & Jo Desha Lucas, Moore's Federal Practice 59.04[2]
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(2d ed. 1991). A judge should not enter judgment on a verdict
where it is impossible to understand the jury's intentions. To
do so would make a mockery of the Seventh Amendment right of jury
trial.
We fully recognize the disappointment to the plaintiff in
what appeared to be a vindication of plaintiff's rights in the
form of a multimillion dollar verdict. Yet, to obviate confusion
and to improve upon significant evidentiary gaps, Cool Light was
given a second trial before a highly competent and fair-minded
judge. His thorough analysis in finding plaintiff's failure of
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5Fed. R. Civ. P. 49(b); Stoddard v. School Dist. No. 1, 590 F.2d
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829, 834 (10th Cir. 1979); Nimnicht v. Dick Evans, Inc., 477 F.2d
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133, 135 (5th Cir. 1973); Elston v. Morgan, 440 F.2d 47, 49 (7th
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Cir. 1971).
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proof is totally justified by the record. We are convinced from
our own review of the record that Judge McNaught's grant of a new
trial was not a miscarriage of justice. We find no abuse of
discretion in his ruling.
Judgment affirmed.
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diversified-graphics-ltd-a-corporation-v-ray-j-groves-an-individual , 868 F.2d 293 ( 1989 )
hubert-alle-schaafsma-and-marie-schaafsma-v-morin-vermont-corporation , 802 F.2d 629 ( 1986 )
Michael James Kavanaugh, Jr. And Mary Kavanaugh, Etc. v. ... , 944 F.2d 7 ( 1991 )
Craig Charles Clappier v. Dennis Flynn, Sheriff of Laramie ... , 605 F.2d 519 ( 1979 )
J. Conrad MacQuarrie v. Howard Johnson Company , 877 F.2d 126 ( 1989 )
Claude Cunningham v. M-G Transport Services, Inc. , 527 F.2d 760 ( 1975 )
Sidney A. Clark v. Donald Taylor , 710 F.2d 4 ( 1983 )
Gloria Elston v. Larry Morgan and Clarence A. Brown , 440 F.2d 47 ( 1971 )
Gregory Allen Harvey, by and Through His Legal Guardian, ... , 873 F.2d 1343 ( 1989 )
John J. O'Brien v. Papa Gino's of America, Inc. , 780 F.2d 1067 ( 1986 )
Globe Liquor Co. v. San Roman , 68 S. Ct. 246 ( 1948 )
Gallick v. Baltimore & Ohio Railroad , 83 S. Ct. 659 ( 1963 )