Casco, Inc. v. John Deere Co.

United States Court of Appeals
For the First Circuit
Nos. 17-1570 & 17-1571
CASCO, INC.,
Plaintiff, Appellee/Cross-Appellant,
v.
JOHN DEERE CONSTRUCTION & FORESTRY COMPANY,
Defendant, Appellant/Cross-Appellee.
APPEALS FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF PUERTO RICO
[Hon. Pedro A. Delgado-Hernández, U.S. District Judge]
Before
Howard, Chief Judge,
Thompson and Kayatta, Circuit Judges.
Eduardo A. Zayas-Marxuach, with whom Henry O. Freese-
Souffront, Carmen M. Alfonso Rodríguez, and McConnell Valdéz LLC
were on brief, for appellant/cross-appellee.
Ricardo F. Casellas Sánchez, with whom Heriberto J. Burgos
Pérez, Carla S. Loubriel Carrión and Casellas Alcover & Burgos,
PSC were on brief, for appellee/cross-appellant.
March 2, 2021
HOWARD, Chief Judge. For years, Casco, Inc. ("Casco")
and John Deere Construction & Forestry Company ("Deere") were
parties to a dealership agreement. When Deere terminated the
agreement in 2013, Casco sued Deere for unjust impairment and
unjust termination under Puerto Rico's Dealer Protection Act, P.R.
Laws Ann. tit. 10, § 278 ("Law 75"), as well as for dolus1 (deceit)
under Article 1902 of the Puerto Rico Civil Code, P.R. Laws Ann.
tit. 31, § 3408. Deere cross-claimed to recover amounts owed to
it by Casco. After Casco presented its case to the jury, the
district court dismissed the dolus claim and granted judgment on
Deere's counterclaim. Following trial, the jury awarded relief to
Casco on both Law 75 claims.
Deere appeals the district court's denial of its post-
judgment motions for judgment as a matter of law on the Law 75
unjust termination claim and for a new trial for both Law 75
claims. Deere also appeals the district court's failure to remit
the damages award or order a new trial on damages. Meanwhile,
Casco cross-appeals the district court's mid-trial dismissal of
1 The parties, as well as courts, sometimes use the term
"dolo" to identify the same cause of action. See Feliciano-Muñoz
v. Rebarber-Ocasio, 970 F.3d 53, 62 (1st Cir. 2020) (using "dolo"),
Citibank Glob. Markets, Inc. v. Rodríguez Santana, 573 F.3d 17, 29
(1st Cir. 2009) (using "dolus" and "dolo" interchangeably).
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Casco's dolus claim, refusal to certify questions of law to the
Supreme Court of Puerto Rico, and grant of judgment on Deere's
counterclaim.
We affirm each of the challenged rulings. Based on the
evidence, the jury's findings of liability and damages against
Deere were not unreasonable. The district court properly dismissed
Casco's dolus claim because it was necessarily tied to showing
constructive termination under Law 75, which Casco could not do as
a matter of law. The court did not abuse its discretion by
declining to certify questions to the Supreme Court of Puerto Rico.
And the court correctly granted relief on Deere's counterclaim.
I. FACTUAL HISTORY
In 1986, Casco and Deere entered into a contract ("the
Agreement") under which Casco would resell Deere construction
equipment and parts to customers in Puerto Rico. Article 3 of the
Agreement listed "Dealer Essential Obligations," some of which
included stocking adequate parts and machines in inventory;
maintaining adequate service facilities and qualified, trained
personnel; and actively promoting sales in the territory. Article
10 of the Agreement, titled "Default by Dealer," provided that:
[I]f the Dealer fails, for any reason
whatsoever, to pay any indebtedness which it
owes [Deere] when the same becomes due, or
. . . the Dealer fails to perform its
essential obligations, duties, and
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responsibilities under any of the provisions
of Article 3 or any other provision of this
agreement . . . [Deere] may thereupon . . .
[t]erminate this Agreement[.]
Eventually the parties' relationship began to sour. In
2009 Casco filed suit against Deere under Law 75 relating to
Deere's modification of payment terms. The parties settled that
claim and filed a joint motion to dismiss without prejudice. Of
relevance here, the settlement agreement required the parties "to
mutually assist and cooperate with each other in the sale and
distribution of the John Deere products."
Three years later, the parties again came to blows. In
September 2012, Casco fell behind on its payments to Deere.
Although Casco continued to make partial payments, it carried an
outstanding balance. By December, Casco was current on its
payments. On December 18, 2012, Deere cancelled a purchase order
from Casco for an excavator that Casco had sold to a construction
company in Puerto Rico. As justification, Deere cited Casco's
failure to complete all of Deere's New Model Qualification ("NMQ")
trainings that Deere required for dealers servicing the iT 4 diesel
engine, a component of the excavator.
In early 2013, Casco again fell behind on its payments.
Deere continued to accept partial payments, but by the end of
March, Casco owed Deere approximately $150,000. On March 29, 2013,
Deere invoked Article 10 and terminated the Agreement, effective
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immediately, and cited Casco's past-due payments and various
violations of Article 3 as the reasons for termination.
II. PROCEDURAL HISTORY
In April 2013, Casco filed its complaint against Deere,
asserting damages for unjust impairment of the Agreement under Law
75 for the December 2012 order cancellation (Count 1), unjust
termination of the Agreement under Law 75 (Count 2), and dolus for
Deere's alleged fraudulent inducement and performance under the
settlement agreement (Count 4).2 Deere filed a counterclaim to
recover additional outstanding balances owed by Casco that had
come due upon termination.
A jury trial was held in March 2016. After Casco
presented its case, Deere moved to dismiss all counts and sought
judgment on its counterclaim. The district court dismissed the
dolus count and granted judgment on the counterclaim, and the trial
proceeded on the Law 75 claims. The jury found in favor of Casco
on both claims, awarding $323,440 in impairment damages and
$1,440,494 in termination damages.
In a post-trial motion, Casco requested reinstatement of
the dolus claim, or alternatively, certification of questions of
law to the Supreme Court of Puerto Rico pertaining to the court's
Casco did not cross-appeal the district court's dismissal
2
of Count 3 (breach of the covenant of good faith and fair dealing).
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dismissal of that claim. Casco also renewed a previously filed
Rule 50 motion to dismiss Deere's counterclaim. For its part,
Deere renewed its Rule 50 challenge to the termination count, moved
for a new trial as to both Law 75 counts or alternatively for
remittitur of the damages against it, and sought an amended
judgment as to the counterclaim amount.
The court denied Casco's requests but partially granted
Deere's, remitting the Law 75 impairment damages to $58,000 (the
amount of potential profit on the canceled December 2012 order)
and modestly increasing the counterclaim award from $216,919.92 to
$219,913. An amended judgment issued, and this appeal and cross-
appeal followed.
III. DISCUSSION
A. Standard of Review
The parties challenge the district court's decisions on
their various Rule 50 and Rule 59 motions and on remittitur and
certification. We review de novo the district court's decisions
on the Rule 50 motions for judgment as a matter of law, viewing
the evidence in the light most favorable to the nonmoving party.
Walsh v. Zurich Am. Ins. Co., 853 F.3d 1, 8 (1st Cir. 2017). Where
there is a verdict, we reverse "only if reasonable persons could
not have reached the conclusion that the jury embraced." Sindi v.
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El-Moslimany, 896 F.3d 1, 13 (1st Cir. 2018) (quoting Sanchez v.
P.R. Oil Co., 37 F.3d 712, 716 (1st Cir. 1994)).
We review for abuse of discretion the district court's
denials of the Rule 59 motions for a new trial. Sindi, 896 F.3d
at 13. A trial court may "order a new trial only if the verdict
is against the demonstrable weight of the credible evidence or
results in a blatant miscarriage of justice." Id. ("citing
Sanchez, 37 F.3d at 717)." We review the evidence in the light
most favorable to the verdict winner, Casco. Newell P.R., Ltd. v.
Rubbermaid Inc., 20 F.3d 15, 18 (1st Cir. 1994). We also review
for abuse of discretion the district court's certification and
remittitur rulings. U.S. Steel v. M. DeMatteo Constr. Co., 315
F.3d 43, 53 (1st Cir. 2002); Sindi, 896 F.3d at 13.
The parties raise four substantive issues on appeal:
Deere's liability under Law 75, the legal viability of Casco's
dolus claim, Casco's liability for the counterclaim, and damages.
We discuss each in turn.
B. The Law 75 claims
Law 75 was enacted in 1964 to protect Puerto Rican
dealers "from the harm caused when a supplier arbitrarily
terminates a distributorship once the dealer has created a
favorable market for the supplier's products." R.W. Int'l Corp.
v. Welch Food, Inc., 13 F.3d 478, 482 (1st Cir. 1994). The statute
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prevents principals from unilaterally terminating dealership
agreements "except for just cause." P.R. Laws Ann. tit. 10, § 278a;
see also Irvine v. Murad Skin Rsch. Lab'ys., Inc., 194 F.3d 313,
317 (1st Cir. 1999). A principal who terminates without just cause
is subject to damages under Law 75 "[n]otwithstanding the existence
in a dealer's contract of a clause reserving to the parties the
unilateral right to terminate." § 278a.
The statute was amended in 1966 to also prohibit
principals from "perform[ing] any act detrimental to the
established relationship" without just cause. § 278a; see United
Med. Equip. Corp. v. S. Blickman, Inc., 260 F. Supp. 912, 914
(D.P.R. 1966). Unjust impairment of a dealer relationship also
subjects the principal to damages. § 278b; see Irvine, 194 F.3d
at 318.
Law 75 defines "just cause," in relevant part, as
"[n]onperformance of any of the essential obligations of the
dealer's contract, on the part of the dealer[.]" § 278(d).
Whether just cause existed and whether "essential obligations"
were breached are questions of fact. R.W. Int'l Corp. v. Welch
Foods, Inc., 88 F.3d 49, 51 (1st Cir. 1996).
i.Impairment
Deere appeals the denial of its motion for a new trial
on the Law 75 impairment claim. Law 75 establishes a rebuttable
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presumption of impairment whenever a principal unjustifiably fails
to fill an order. § 278a-1(b)(3), Irvine, 194 F.3d at 318. At
the same time, Law 75 only protects against impairments of "those
rights acquired under the [dealership] agreement." Medina & Medina
Inc. v. Hormel Foods Corp., 840 F.3d 26, 41 (1st Cir. 2016)
(quoting Irvine, 194 F.3d at 318).
The jury found that Deere's cancellation of the
excavator order in December 2012 was both unjustified and in
violation of Casco's rights under the Agreement. Deere argues
that a new trial is warranted because the evidence presented at
trial showed that the cancellation did not impair any of Casco's
contractual rights and was justified in any event. Although Deere
phrases these as two distinct contentions, it provides one argument
in support of both: Casco's right to purchase the excavator was
conditioned on its compliance with the New Model Qualification
requirements. Casco did not so comply, and so Deere justifiably
refused to fill the order.
In other words, Deere asserts that the evidence showed
that it had just cause to cancel the order. The existence of just
cause is a question of fact for the jury. Welch Foods, 88 F.3d at
51. While the jury did have evidence before it of the NMQ
requirements and Casco's non-compliance therewith, it also had
evidence before it that undermined Deere's claim that the
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cancellation was justified. There was testimony that Deere had
failed to rectify a technical problem restricting Casco's access
to Deere's online training platform in late 2012, that Deere was
repeatedly notified of the problem, and that Deere knew that the
access problems prevented Casco's compliance with the NMQ
requirements.
Additionally, evidence was presented that in cancelling
the order, Deere deviated from its internal policy allowing
distributors a 90-day grace period to complete the NMQ requirements
after the purchase of a new machine. Deere justified this
deviation by pointing to Casco's previous failure to meet the NMQ
requirements within the grace period. But this explanation is
undermined by the fact that two months later Deere sought Casco's
involvement in the sale of a machine to Monsanto (a U.S.-based
client who sought to use the machine in Puerto Rico)
notwithstanding Casco's continued non-compliance with the NMQ
requirements and their applicability to the machine sold to
Monsanto.
In sum, there was evidence both that Casco's right to
have Deere fill the excavator order was not in fact rigidly
conditioned on strict NMQ compliance and that Casco's failure to
comply with the NMQ requirements was partly attributable to Deere's
own failure to remedy Casco's access problem. Construing this
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evidence in the light most favorable to Casco, see Newell, 20 F.3d
at 18, the jury's finding of impairment is neither contrary to
"the demonstrable weight of the credible evidence" nor a blatant
miscarriage of justice," Sindi, 896 F.3d at 13. Thus, the district
court committed no abuse of discretion in denying Deere's motion
for a new trial as to impairment.
ii. Termination
Deere claims that the district court erred in denying
its post-judgment motion for judgment as a matter of law or in the
alternative for a new trial on the issue of unjust termination.
Since it is undisputed that in March 2013 Deere terminated the
Agreement with Casco, Deere's argument again comes down to its
claim that it acted with just cause.
To convince us that the jury's finding to the contrary
is unsustainable, Deere principally cites Casco's failure to pay
for goods on time and its express right under Article 10 to
unilaterally terminate upon Casco's failure to timely pay. Casco
admits it had a past-due balance of nearly $150,000 at the time of
termination.
Paying for goods on time is normally an essential
obligation of a dealer, the non-performance of which may constitute
just cause for termination under Law 75. PPM Chem. Corp. of P.R.
v. Saskatoon Chem. Ltd., 931 F.2d 138, 139 (1st Cir. 1991); see
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also Biomedical Instrument & Equip. Corp. v. Cordis Corp., 797
F.2d 16, 17 (1st Cir. 1986) ("consistent failure to pay on time
likely violates an 'essential obligation'"). Appealing to this
common-sense observation, Deere would have us take from the jury
the chance to look deeper at the parties' actual relationship. As
then-Judge Breyer noted in Biomedical, "the matter is not so
simple." 797 F.2d at 17. Whether timely payment is an essential
obligation in any particular case remains a triable question of
fact, Welch Foods, 88 F.3d at 51, as evidence of "special
circumstances" may support a finding that a termination decision
was not in fact justified by untimely payment, Biomedical 797 F.2d
at 17; see also Saskatoon, 931 F.2d at 140 (timely payment is
deemed non-essential in those "abnormal circumstance[s] in which
a supplier does not care about late payments").
Here, the jury was presented with evidence of such
"special circumstances." Casco pointed out that Article 3 of the
agreement expressly lists its "Essential Obligations" and does not
include timely payment. Additionally, Casco presented evidence
tending to show that Deere's "decision to terminate had little to
do with overdue balances." Biomedical, 797 F.2d at 17 (Breyer,
J.) (pointing to evidence that supplier mainly decided to terminate
for reason other than dealer's untimely payment as contributing to
factual dispute over whether the untimely payment constituted just
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cause for termination); see also Waterproofing Sys., Inc. v. Hydro-
Stop, Inc., 440 F.3d 24, 30 (1st Cir. 2006)(affirming magistrate
judge's finding that termination was unjustified based in part
upon dealer's strong showing that principal's stated reason of
untimely payment was pretextual). Casco argued at trial that Deere
had instead terminated the Agreement because of bitterness over
Casco's relationship with Volvo, a Deere competitor. In support
of this theory, Casco presented evidence that Deere wanted to
change the Agreement in 2002 to prohibit competition, but Casco
refused; that Deere's executives threatened to withdraw support if
Casco had any business with Volvo; that Deere refused to provide
competitive financing for Casco's rental operation and was upset
when Casco looked elsewhere for financing; that Deere revoked
certain funding because of Casco's association with Volvo; and
that in 2009, Deere began excluding Casco -- and only Casco --
from its important regional and annual dealer conferences.
In the end, the jury faced conflicting evidence about
whether Casco's failure to make timely payments breached an
essential obligation of the Agreement, thereby giving Deere just
cause to terminate. While Article 10 stated that Casco's failure
to timely pay constituted "just cause" for termination,3 Article
3Of course, the mere fact that the terms of a contract reserve
to the supplier the right to terminate unilaterally if the dealer
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3 excluded timely payment from the list of Casco's "Essential
Obligations." While Deere presented evidence that it was not
indifferent to Casco's untimely payment, Casco presented evidence
that Deere's true concern was retaliation for Casco's relationship
with Deere's competitor. And the jury was properly instructed
that timely payment is normally one of a dealer's essential
obligations but may not be in "abnormal circumstances." See
Saskatoon, 931 F.2d at 139-40. Its conclusion that this was such
a circumstance was not unreasonable.
In addition to identifying Casco's untimely payment as
just cause for termination, Deere secondarily points to Casco's
alleged breach of four of its Article 3 obligations. Deere argues
that Casco breached its "Essential Obligations" (1) to comply with
Deere's recommended parts and service management programs by
failing to comply with the NMQ requirements; (2) to stock and
fails to satisfy a certain obligation does not, without more, make
failure to satisfy that obligation "just cause" to terminate within
the meaning of Law 75. By the plain text of the statute, Law 75's
just-cause requirement cannot be contractually renounced. §278a.
Were it otherwise, the statute would be a nullity, as powerful
suppliers could insert in their dealership agreements provisions
reserving to themselves the unilateral right to terminate upon
substantively non-essential grounds. This would defeat the
statute's clear design. See Medina & Medina v. Country Pride
Foods, Ltd., 858 F.2d 817, 820 (1st Cir. 1988) (reproducing Supreme
Court of Puerto Rico's answer to certified question arising under
Law 75, explaining the statute's history and purpose). Deere
correctly acknowledges that Law 75 does not put "form over
substance."
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maintain an adequate inventory of machines; (3) to maintain
adequate facilities along with qualified personnel so as to provide
market penetration, coverage, and service in a manner consistent
with Deere's reputation by, again, failing to comply with the NMQ
requirements; and (4) to take appropriate corrective action to
remedy these deficiencies. The jury was reasonably unconvinced.
Deere repeatedly points to Casco's non-compliance with
the NMQ requirements as evidence of these alleged breaches.
However, as discussed above in the impairment analysis, Casco
presented evidence that this non-compliance was attributable to
Deere's own failings. As to inventory, market penetration, and
service, Casco was not required to have a specific number of
machines in stock, achieve a certain market share, or submit a
marketing or business plan.
Meanwhile, Casco presented evidence that it promoted
Deere products, made regular sales visits, participated in
government bids for Deere, and attended trade shows. Moreover,
there was not a single customer complaint about Casco's services
prior to Deere's termination of the Agreement.
Considering all the evidence before it in the light most
favorable to Casco, Walsh, 853 F.3d at 8 (Rule 50 motion),
Newell, 20 F.3d at 18 (Rule 59 motion), the jury's finding that
Deere's termination lacked just cause was not outside the realm of
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conclusions a reasonable jury could reach nor did it result in a
"blatant miscarriage of justice," Sindi, 896 F.3d at 13. The
district court was correct to deny both of Deere's post-judgment
motions on the termination count.
C. Dolus
Casco's cross-appeal challenges the district court's
Rule 50(a) dismissal of Casco's dolus claim. We review de novo.
Walsh, 853 F.3d at 8. Under the Puerto Rico Civil Code, dolus
bars a contracting party from inducing another party through "words
or insidious machinations" to "execute a contract which without
them he would not have made." P.R. Laws Ann. tit. 31 § 3408.
Dolus entails bad faith in the formation or performance of a
contract. Oriental Fin. Grp., Inc. v. Fed. Ins. Co., 598 F. Supp.
2d 199, 219-221 (D.P.R. 2008).
In its complaint, Casco alleged that Deere acted with
dolus by inducing it to enter into the 2009 settlement agreement
despite never intending to "assist and cooperate with" Casco in
the distribution of Deere products, as promised under that
agreement. Casco argues that, but for this dolus, Casco would
have litigated a Law 75 constructive termination claim in 2009
rather than waiting until the actual termination in 2013, which
would have yielded a much higher damages calculation because Law
75 guidelines base termination damages off of the dealer's profits
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for the five years preceding the termination, §278b(d), and the
five years preceding 2009 were significantly more profitable than
those preceding 2013 due to market conditions. Alternatively,
Casco now also argues that, regardless of whether its 2009 lawsuit
could have succeeded, evidence of its profits in the five years
preceding 2009 should have been admitted as a baseline for
calculating damages for the 2013 termination claim because of
Deere's alleged dolus.
In granting Deere's Rule 50 motion on the dolus claim,
the court observed that the claim was premised on the possibility
that Casco could have been awarded five years of lost profits had
it pursued its 2009 constructive termination claim. But the
district court found that this could not have occurred as a matter
of law because constructive termination is not a valid theory under
Law 75.
To reach this conclusion, the court analyzed the
statute's legislative history and case law interpreting the
statute, and determined that Law 75 recognizes impairment and
termination as two distinct causes of action. The court explained
that as originally enacted in 1964, Law 75 did not reach impairment
of contracts that fell short of total abrogation. See United Med.
Equip. Corp. v. S. Blickman, Inc., 260 F. Supp 912, 914 (D.P.R.
1966). A 1966 amendment expanded the statute's prohibition to
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encompass unjust impairment. See Law No. 105 of June 23, 1966,
1966, P.R. Laws (2nd Reg. Sess., 5th Legislature) at p. 332. Thus,
the legislature added a new cause of action under Law 75 to provide
a remedy where a dealership relationship has been impaired by a
supplier without just cause but the relationship nonetheless
continues.
The distinction carries a difference because five-year
profit damages, which Casco seeks, are not usually available in
impairment actions. See Matosantos Com. Corp. v. SCA Tissue N.
Am., LLC, 369 F. Supp. 2d 191, 197 (D.P.R. 2005) ("In an impairment
case . . . the dealer should only be awarded the profits actually
lost."). This is so because "evidence of damages is an essential
element of a Law 75 violation as to which plaintiff bears the
burden of proof." Irvine, 194 F.3d at 313 (citing opinion of
Supreme Court of Puerto Rico in Marina Indus., Inc. v. Brown Boveri
Corp., 14 P.R. Offic. Trans. 86, 118 (1983)." A dealer who has
suffered impairment short of actual termination will be unlikely
to prove that its damages amount to five years of lost profits.
Disagreeing with the district court's analysis, Casco
argues that Eliane Exportadora, Ltda. v. Maderas Alfa, Inc.
supports the availability of a constructive termination theory
under Law 75. No. KAC1998-1327(506), 2007 WL 2585173 (P.R. Cir.
June 20, 2007) (certified English translation at Docket No. 278-
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1).. In the alternative, Casco argues that whether constructive
termination is a viable theory under Law 75 is unsettled, and the
district court erred in refusing to certify the issue to the
Supreme Court of Puerto Rico for clarification.
The district court's conclusion that Law 75 does not
recognize constructive termination was correct. Although Maderas
Alfa does use the term "de facto termination," 2007 WL 2585173 at
*13, the district court noted that the supplier in Maderas Alfa
had ceased dealing with the distributor altogether for five months
prior to the suit, id. at *2. Thus, the case really involved an
actual termination without a termination letter. In short, Law 75
recognizes actual termination, or alternatively, impairment. The
statute does not recognize constructive termination.
It follows that certification to the Supreme Court of
Puerto Rico for guidance was unnecessary. A federal court sitting
in diversity may certify an open question of Puerto Rico law to
the territory's highest court, or it may "undertake its prediction
when the course [the Puerto Rico] courts would take is reasonably
clear." VanHaaren v. State Farm Mut. Auto. Ins. Co., 989 F.2d 1,
3 (1st Cir. 1993) (internal quotes and citations omitted). Here,
existing authority makes the district court's conclusion on
constructive termination reasonably clear. Thus, the district
court did not abuse its discretion by refusing to certify.
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Nor did the court err by granting Deere's motion to
dismiss the dolus claim. Even if but for Deere's alleged dolus
Casco would have pursued its 2009 claim, that claim could not, as
a matter of law, have resulted in the lost future profits Casco
claims it lost due to dolus. There was no actual termination in
2009 and constructive termination, as analyzed above, is
unavailable under Law 75. Count 4 was properly dismissed.
Finally, Casco's argument that evidence of its profits
in the five years preceding 2009 should have been admitted to
calculate damages for Deere's unjust termination in 2013 also lacks
merit. Casco argues that Deere acted with dolus by waiting until
2013 to wrongfully terminate despite first hatching the plan to do
so in 2009. Under Casco's theory, Deere decided to unjustly
terminate in 2009 but craftily delayed "precisely to reduce its
exposure for an eventual termination." This is pure speculation
unsupported by any citation to the record, and Casco failed to
allege this theory in its complaint. Besides the dearth of
evidence and likely waiver, it is odd for Casco to claim that Deere
wronged it by not unjustly terminating sooner. Thus, evidence of
Casco's profits for the five years preceding 2009 was properly
excluded.
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D. Deere's Counterclaim
Casco also seeks to vacate the district court's grant of
judgment as a matter of law on Deere's counterclaim and the denial
of Casco's post-judgment motion to dismiss that claim. We review
de novo. Walsh, 853 F.3d at 8.
The court ordered Casco to pay Deere its outstanding
balance of $219,913, which Casco admits was incurred prior to and
came due at termination. Casco claims that under Article 1077 of
the Puerto Rico Civil Code, because Deere breached the Agreement,
its obligations to pay Deere should be rescinded. See P.R. Laws
Ann. tit. 31 § 3052. Casco is incorrect.
Article 1077 permits a party to rescind its half of a
mutual obligation if the other party fails to comply with its
reciprocal obligation. See id.; cf. Martinez v. Colon Franco, RE-
86-6, 1989 WL 608549 (P.R. Dec. 19, 1989) (Off. Trans.) (explaining
same principle embodied in different part of civil code). Here,
the money owed by Casco was for supplies rendered to Casco prior
to termination. Payment for these supplies was not conditioned on
the continuing force of the Agreement, but only on Deere's
providing them to Casco, which it did. Therefore, Casco owed Deere
money regardless of termination and the district court correctly
granted judgment as a matter of law on the counterclaim.
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E. Damages
Finally, Deere seeks a remittitur on termination
damages, or alternatively, a new trial as to damages. We review
for abuse of discretion the district court's denials of these
motions. Sindi, 896 F.3d at 13. A court may remit a jury's damage
award only if it "exceeds any rational appraisal or estimate of
the damages that could be based upon the evidence before it."
Trainor v. HEI Hosp., LLC, 699 F.3d 19, 29 (1st Cir. 2012) (quoting
Wortley v. Camplin, 333 F.3d 284, 297 (1st Cir. 2003)).
The jury awarded termination damages of $522,011 for
lost profits and $918,483 for loss of goodwill, the amounts
calculated by Casco's expert. Deere contends that the expert made
methodological errors in arriving at those numbers and so the award
should be correspondingly remitted or vacated. But Deere never
asked the trial court to exclude the testimony of Casco's expert
for either a lack of qualifications or use of an invalid
methodology, instead relying on cross-examination to show that the
expert was incorrect. The jury was unconvinced. See Newell, 20
F.3d at 21("When the factual underpinning of a[] [properly
admitted] expert opinion is weak, it is a matter affecting the
weight and credibility of the testimony -- a question to be
resolved by the jury") (quoting Int'l Adhesive Coating Co., Inc.
v. Bolton Emerson Int'l, Inc., 851 F.2d 540, 545 (1st Cir. 1988)).
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Meanwhile, Casco's president testified that the company suffered
termination damages of over one million dollars per year.
In the end, the jury faced competing testimony from
qualified experts and chose an award recommended by one of them,
which was within the bounds of a "rational appraisal." See
Trainor, 699 F.3d at 29. The district court did not abuse its
discretion by declining to upset the jury award or order a new
trial on damages.
IV. CONCLUSION
For the foregoing reasons, we affirm the judgment of the
district court on all counts. The parties shall bear their own
costs of appeal.
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