Un Natl Life Ins Co v. Smith

UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
____________________
No. 98-60716
____________________
UNION NATIONAL LIFE INSURANCE COMPANY,
Plaintiff-Appellee-Cross-Appellant,
versus
LESLIE E. SMITH,
Defendant-Appellant-Cross-Appellee.
_______________________________________________________________
Appeal from the United States District Court
for the Northern District of Mississippi
(3:95-CV-108-B-A)
_________________________________________________________________
March 20, 2000
Before JONES, BARKSDALE, and DENNIS, Circuit Judges.
PER CURIAM:1
For this Mississippi diversity action tried to a jury, the
principal issues are sufficiency of the evidence for whether Union
National Life Insurance Company (UN) defamed its former agent,
Leslie E. Smith, and his entitlement vel non to compensatory and
punitive damages, notwithstanding the three co-defendant UN
employees being exonerated. Smith contests FED. R. CIV. P. 50
judgments as a matter of law (JMOL) holding he breached his
contract with UN and setting aside the punitive damages; UN, denial
1
Pursuant to 5TH CIR. R. 47.5, the Court has determined that
this opinion should not be published and is not precedent except
under the limited circumstances set forth in 5TH CIR. R. 47.5.4.
of JMOL on defamation. Regarding the JMOL on the contract claim
and punitive damages, we AFFIRM; for defamation, we REVERSE and
RENDER.
I.
Except for six months in 1981, Smith was employed by UN from
1976 until mid-February 1995; he became its top credit life
salesman in three Mississippi counties (Debit 15). When Smith left
UN, his employment contract contained a covenant not to compete for
one year in 15 counties in Mississippi, including the three in
Debit 15. This notwithstanding, he continued to solicit in that
area for his new employer, Life of Georgia (LG).
In July 1995, UN filed this action against Smith for breach of
contract and injunctive relief. Both UN and LG provided “home
service”, by which, every week or month, agents visit
policyholders, mainly low-income, to collect premiums. UN claimed
that Smith’s actions had resulted in the “wholesale destruction” of
its Debit 15 business. (Prior to trial, Smith agreed to a
preliminary injunction against his soliciting in that area.)
Smith counterclaimed for defamation, contending that, after he
left UN, its employees and agents “planned and implemented a
deliberate campaign” to discredit him, by making defamatory
statements about him to his customers, inducing them to write
and/or sign statements seeking a premium refund from LG, and
sending those statements and other correspondence to LG and the
2
Mississippi Department of Insurance. Named as counterclaim co-
defendants were Ozbolt, a UN regional vice president, and two UN
agents, McDonald and Brown.
The defamation evidence Smith proffered at trial concerned
primarily the co-defendant UN employees’ alleged statements to UN
policyholders (who had subsequently purchased LG insurance from
Smith) that Smith was “stealing from the company” and “going to
jail”.
At the close of all the evidence, the district court granted
JMOL to UN on its breach of contract claim, holding, inter alia,
that the geographic and time limits for the covenant not to compete
were reasonable. The issue of UN’s damages was submitted to the
jury; it returned a $50,000 verdict for UN.
For Smith’s defamation claim, the jury rendered an arguably
inconsistent special verdict. As stated in the verdict form, the
jury found that “agents of [UN]” had defamed Smith. But, it found
also that the three co-defendant UN employees (who, as noted, were
alleged to have made the bulk of the defamatory statements) had not
defamed him. The jury awarded Smith $50,000 in compensatory, and
$500,000 in punitive, damages.
Post-verdict, Smith moved for JMOL on UN’s contract claim and,
alternatively, for a new trial. UN did likewise for Smith’s
defamation claim.
For the several JMOL claims by Smith and UN, the court granted
3
only UN’s regarding punitive damages. Noting it was unknown whether
the jury found the three co-defendant employees did not make the
alleged defamatory statements, or found the statements were not
defamatory, the court held that, without those statements, the
evidence was insufficient for punitive damages. Concluding that
UN’s letters to the Insurance Department “comprised the only other
evidence ... on which a finding of defamation ... could be made”,
and viewing the evidence in the light most favorable to Smith, the
court upheld the defamation compensatory damages. It ruled,
however, that the letters did not evidence the requisite malice for
punitive damages, because they were “of a business nature”, written
to the proper governmental agency about a “legitimate concern”.
In sum, the court upheld the jury’s $50,000 compensatory
damages awards: to UN, for Smith’s breach of contract; to Smith,
for defamation. It also awarded UN $25,000 in attorney’s fees and
$1,500 for expenses.
II.
Smith contests the JMOLs regarding insufficiency of the
evidence for punitive damages and his breaching his contract; for
the latter, he also challenges the resulting damages and attorney’s
fees. UN contests the denial of JMOL regarding Smith being defamed.
4
A.
For punitive damages being set aside, Smith maintains the court
excluded improperly the evidence concerning the three co-defendant
UN employees. Alternatively, he claims other evidence sufficiently
supports the award.
1.
In this regard, he asserts that the court improperly reconciled
the verdict. As with any special verdict, pursuant to FED. R. CIV.
P. 49(a), the trial court must “apply[] appropriate legal
principles” to the jury’s findings, and determine “the resulting
legal obligation[s]”. Freeman v. Chicago Park Dist., 189 F.3d 613,
616 (7th Cir. 1999) (internal quotation marks and citation omitted).
Consistent with the Seventh Amendment, when a jury’s special verdict
is apparently inconsistent, we must “make a concerted effort to
reconcile [it].... before we are free to disregard [it] and remand
the case for new trial”. Alvarez v. J. Ray McDermott & Co., 674
F.2d 1037, 1040 (5th Cir. 1982) (internal quotation marks and
citations omitted).
For resolving such conflicts, we must determine whether “the
answers may fairly be said to represent a logical and probable
decision on the relevant issues as submitted”; we will reverse only
if “there is no view of the case which makes the jury’s answers
consistent and ... the inconsistency is such that the special
verdict will support neither the judgment entered below nor any
5
other judgment”. Griffin v. Matherne, 471 F.2d 911, 915 (5th Cir.
1973) (citations omitted). In addition to examining the jury
interrogatories, we must consider its instructions, Alvarez, 674
F.2d at 1040 (citation omitted), and determine if the reconciliation
“is a reasonable reading of the record”. Bingham v. Zolt, 66 F.3d
553, 563 (2d Cir. 1995).
Smith urges the exclusion of the evidence concerning the three
exonerated employees was improper, because the court ignored the
possibility the jury found the employees had defamed Smith, but
meted “lay justice to release [them] from direct responsibility”.
This verdict-construction, according to Smith, is supported by the
jury instructions that (1) the employees acted within the scope of
their employment “at all times”; and (2) if the jury found the
employees defamed Smith, it “must find in favor of [him] and against
[UN] and/or the agent or agents whom you find ... made the
defamatory statements”, because the “and/or” phrase indicated to the
jurors they could find against UN only, or UN and the three co-
defendants.
Of course, we apply Mississippi law. Erie R.R. Co. v.
Tompkins, 304 U.S. 64 (1938). Smith relies on Mississippi decisions
which permit an employer to be held liable despite exoneration of
its employee, the very person through whom liability is imputed to
the employer. See Capital Transp. Co. v. McDuff, 319 So. 2d 658,
660 (Miss. 1975); see also Meena v. Wilburn, 603 So. 2d 866, 872-73
6
(Miss. 1992) (rejecting contention that jury improperly returned
verdict against doctor while exonerating nurse who carried out his
instructions); D.W. Boutwell Butane Co. v. Smith, 244 So. 2d 11, 12-
13 (Miss. 1971) (holding that jury’s finding employer liable, but
exonerating its truck driver for plaintiffs’ injuries from collision
with truck, is permissible under Mississippi law).
UN upholds the propriety of the exclusion of the exonerated
employees’ statements, because the court’s construction of the
verdict is the only “logical and probable” interpretation, and the
jury could have based its defamation finding on other evidence. It
asserts that the cited Mississippi cases are not applicable, because
they did not involve special verdicts, while here, the jury
specifically found the three co-defendants did not defame Smith.
It maintains, furthermore, the Mississippi cases do not hold an
employer may be held liable for an employee’s actions if the jury
finds such actions did not occur.
The court instructed the jury that, for Smith to succeed on his
defamation claim, he had to prove:
One, that an agent of [UN], including ...
Ozbolt, ... McDonald, or ... Brown made false
and defamatory statements concerning ... Smith
to a third party.
Two, the communication was not the subject
of a privilege, on which you have been
instructed separately.
Third, that ... Ozbolt, ... McDonald, ...
Brown, and/or [UN], through one or more of
those individuals were negligent, ... reckless
7
or malicious in making the defamatory
statements, without regard to whether the
statements were true or false.
Fourth, ... Smith was injured or damaged
as a result of the defamatory statements, and
that such statements were the sole proximate
cause or a proximate contributing cause of
Smith’s damages, if any. Under those
circumstances, ... you must find in favor of
... Smith and against [UN] and/or the agent or
agents whom you find from a preponderance of
the evidence made the defamatory statements.
(Emphasis added.)
The jurors could have been misled by some of the language in
the instruction, if taken in isolation. But, in the context of the
entire instruction, as well as the instructions as a whole, the
court’s guidance was not misleading.
Concerning the Mississippi cases permitting employer liability
despite employee exoneration, the case at hand is distinguishable,
in the light of the jury’s specific finding that the three co-
defendants did not defame Smith. We agree with UN that, even under
Mississippi’s unusual precedent, it is essential for there to be a
finding that the injury-causing action was by a co-defendant
employee; “[o]therwise, the verdict could not be explained”.
Capital Transp., 319 So. 2d at 661. Therefore, the court properly
excluded the evidence relative to the three co-defendant employees.
2.
Pursuant to FED. R. CIV. P. 50(a)(1), the district court may
grant a JMOL against a party who has not presented a “legally
8
sufficient evidentiary basis for a reasonable jury to find for that
party” on an issue necessary to his claim.
Smith maintains that, even without the co-defendant employees’
statements, there is a “legally sufficient evidentiary basis” for
punitive damages. For our review of the JMOL granted UN, we utilize
the standard applied by district court. All the evidence is viewed
in the light most favorable to Smith; and, if “reasonable and fair-
minded jurors” might disagree, the court should have denied UN’s
motion. See London v. MAC Corp. of Am., 44 F.3d 316, 318 (5th Cir.
1995) (internal quotation marks and citation omitted). First,
Smith contends that the 14 March 1995 letter from UN’s Senior Vice-
President McCullough to the Insurance Department contained
defamatory statements about him. McCullough wrote that Smith
has gone back into our houses, replaced our
business with [LG] policies without regard to
the contestable clause and has apparently taken
advantage of many of the policyholders on his
route. Having worked this area for over ten
years, you could understand these policyholders
have come to trust Mr. Smith and they will do
what he asks them to do.... I don’t know if the
... department can do anything about this, but
I think you will agree what he is doing is
totally unethical.
Smith points also to a 26 April 1995 letter from McCullough to the
Department’s chief investigator, stating that Smith had induced his
former customers to send in “cash surrender values” on their UN
policies. Smith claims this statement was false, and that there was
no evidence at trial to support it. He asserts also that UN
9
attempted to ruin his reputation at LG, by falsely communicating to
it that UN had problems with Smith’s “audit” (reconciliation of his
accounts), and that he was “replacing [UN’s] business [with LG
insurance]”.
Smith contends further there was sufficient proof that UN
agents, other than the three exonerated co-defendants, gathered
defamatory written statements from policyholders, including: (1) one
“retraction letter”, in which a policyholder specifically mentioned
Floyd as having drafted a statement (there were several letters in
the record, in which policyholders stated they had been misled by
UN agents and did not wish to cancel their LG insurance); (2) former
UN agent Tinnerello’s admission that he gathered statements; and (3)
co-defendant Ozbolt’s admission that he and other UN agents gathered
and sent policyholder statements to UN’s home office, which
forwarded them to the Insurance Department.2
According to Smith, all of the written statements were
defamatory per se, because they falsely accused him of practices
incompatible with his trade or business, citing Taylor v. Standard
Oil Co., 186 So. 294, 295 (Miss. 1939), with damages and malicious
2
In addition, one policyholder testified that a
“representative”, or “representatives” of UN (other than the three
co-defendant employees), whom she did not identify, “would say
things like, ‘you know, Les [Smith] is in jail, he has been in jail
over the weekend,’ and, you know, things like that”. But, as
noted, Smith’s focus is on written statements. In any event, this
testimony, concerning an unidentified person, is not sufficient
evidence of defamation, much less for punitive damages.
10
intent being presumed, citing, e.g., Brewer v. Memphis Publ’g Co.,
626 F.2d 1238, 1245-46 (5th Cir. 1980), and Natchez Times Publ’g Co.
v. Dunigan, 72 So. 2d 681, 684-85 (Miss. 1954). He contends the
court ignored this presumption, and therefore erred in finding
insufficient proof of malice.
Finally, Smith asserts that the jury reasonably could have
concluded, especially from the Insurance Department’s investigation
file (which included the policyholders’ requests for refunds from
LG, their “retraction” letters, and McCullough’s letters), that UN’s
employees’ actions were caused by UN’s intentional and malicious
practice of obtaining false statements and delivering them to LG and
the Insurance Department, in an effort to discredit him and cost him
his livelihood.3
UN contends that punitive damages cannot stand on this “other”
evidence alone. In this regard, it notes that: neither the
McCullough letters nor the alleged statements to LG demonstrate
malice justifying such damages; at a minimum, UN believed, in good
faith, the statements were true; testimony regarding its statements
to LG should not be considered, because UN’s hearsay objection was
sustained; and Smith failed to show Tinnerello and Floyd had
malicious intent. It notes also the jury was instructed, pursuant
to Smith’s own instruction:
3
As a result of UN’s correspondence, the Department decided
Smith was in violation of regulations requiring him having
authorization to sell insurance for LG; it and Smith were fined.
11
Smith can recover punitive damages from [UN]
for the actions of ... Ozbolt, ... McDonald,
... Brown or ... [non counter-defendant] Floyd,
and from each individual Counter-Defendant only
if he proves to you by a preponderance of the
evidence as to those respective Counter-
Defendants, that defamatory words were
published by that particular Counter-Defendant,
or its representative in the case of [UN], with
knowledge of the words being false or with
reckless disregard for the truth or falsity of
the words.
The Court further instructs you that you
may award punitive damages if ... Smith has
proven by a preponderance of the evidence that
the defamation of Smith, if any, by [UN] agents
was willfully or intentionally committed. You
may consider all events that occurred both
individually and as a whole in making this
decision.
(Emphasis added.)
We agree with the district court that, without the properly
excluded evidence regarding the three exonerated co-defendant UN
employees, the remaining evidence is insufficient to support
punitive damages, as discussed infra regarding qualified privilege.
B.
By cross-appeal, UN claims the evidence fails to support
defamation, because its communications to the Insurance Department
were substantially true (and therefore not defamatory), and/or
qualifiedly privileged.4 Because we find privilege, we need not
address truthfulness vel non.
4
As noted supra, the district court sustained UN’s objection
to the testimony regarding UN’s alleged statements to LG.
12
Under Mississippi law, a communication, which might otherwise
be defamatory, is qualifiedly privileged when it concerns a matter
“‘in which the person making it has an interest, or in reference to
which he has a duty ... if made to a person or persons having a
corresponding interest or duty’”, as long as the statement “‘is made
without malice and in good faith’”. Garziano v. E.I. Du Pont De
Nemours & Co., 818 F.2d 380, 385 (5th Cir. 1987) (quoting Louisiana
Oil Corp. v. Renno, 157 So. 705, 708 (Miss. 1934)); see also
Burroughs v. FFP Operating Partners, L.P., 28 F.3d 543, 547 (5th
Cir. 1994) (noting that “statements made by an employer against an
employee, that affect the latter’s employment”, are so privileged)
(citing Benson v. Hall, 339 So. 2d 570, 572 (Miss. 1976)).
Such a communication, if “limited to those persons who have a
legitimate and direct interest in the subject matter”, carries a
“presumption of good faith”. Benson, 339 So. 2d at 572 (citation
omitted). Where qualified privilege may be relevant, Mississippi
courts determine whether the privilege arose in the context of the
communication, and, if so, whether the scope of the privilege was
exceeded. Garziano, 818 F.2d at 386.
When the relevant facts are undisputed, the trial court must
make the initial decision whether a qualified privilege applies: if
it does apply, the court “should instruct the jury accordingly; if
not the jury should be given a special interrogatory on this issue”.
Id. at 394. If the statements were made on an occasion of qualified
13
privilege, then “[a]ctual or express malice”, demonstrating “a
design to willfully or wantonly injure another”, must be clearly
proved to overcome the good faith presumption. Hayden v. Foryt, 407
So. 2d 535, 539 (Miss. 1982) (internal quotation marks and citation
omitted). Malice is not implied, even where a statement could be
considered defamatory per se; the one claiming to have been defamed
must demonstrate “bad faith, actual malice, or abuse of the
privilege through excess publication”. Garziano, 818 F.2d at 388.
According to UN, the jury should have been instructed that UN’s
communications with the Department were qualifiedly privileged. At
any rate, it maintains that: there was insufficient evidence to
support finding it abused the privilege, citing Goforth v. Avemco
Life Ins. Co., 368 F.2d 25, 32 (4th Cir. 1966) (finding no inference
of bad faith in complaint letters to insurance department); as the
district court observed in its memorandum opinion, UN had a
legitimate interest in protecting its business, and arguably had a
duty to report what it perceived to be questionable conduct to the
state agency charged with general oversight; and Smith did not
present sufficient evidence of malice, bad faith, or excessive
publication in connection with those letters, or the policyholder
letters.
Smith claims sufficient evidence for UN not being entitled to
a qualified privilege, and that UN waived any objection to the
instruction on this issue by failing to object.
14
On qualified privilege, the court instructed:
If you find that the alleged defamatory
statements were made by [UN] and its
agents and were made to persons who have
an interest in knowing the information
which was conveyed, then [UN] and its
agents enjoy what is known as a qualified
privilege. Where a qualified privilege
exists, the statements, if made, are
presumed to be made in good faith....
Smith then bears the burden of overcoming
this presumption of good faith.... Smith
may overcome this qualified privilege by
establishing by a preponderance of the
evidence that [UN] or its agents either
published the defamatory statements in bad
faith or actual malice, or abused that
privilege through excess publication, or
where the scope of the statements exceeded
what was necessary to protect the
interests of [UN], ... then [UN] loses the
qualified privilege even as to the
individuals ... to whom it applied.
(Emphasis added).
This instruction is consistent with Mississippi law on
qualified privilege. It acts “as a shield against defamation claims
as a matter of public policy”. Garziano, 818 F.2d at 385.
For the evidence relied on by Smith, we agree with the district
court that McCullough’s letters are the most significant evidence
remaining in Smith’s favor. This is because there is little
evidence that agents, other than the exonerated co-defendants,
drafted any defamatory statements subsequently sent to the Insurance
Department, or induced policyholders to do so.
15
Utilizing Mississippi’s two-part test, we find, first, as a
matter of law, that McCullough’s letters to the Department were
qualifiedly privileged. (While such an instruction would have been
proper, UN apparently did not object in district court to the given
qualified privilege instruction.) For the test’s second prong,
there is insufficient evidence of the requisite malice or excess
publication to overcome the privilege. See Tipps Tool Co. v.
Hollifield, 67 So. 2d 609, 618 (Miss. 1953).
While the court found that McCullough’s letters did not
evidence such malice, it concluded erroneously, perhaps in its
effort to reconcile the verdict, that the letters could support
compensatory damages. Because the evidence remaining after the
court reconciled the verdict is legally insufficient for a
reasonable jury to find for Smith, UN is entitled to a JMOL on his
defamation claim. See Weisgram v. Marley Co., __ S. Ct. __, 2000
WL 196662, at *3 (22 Feb. 2000). (In the light of this holding, we
need not address Smith’s contentions regarding the district court’s
conditionally granting UN a new trial on punitive damages, and
denying Smith attorney’s fees.)
C.
Smith contests the breach of contract JMOL, as well as the
resulting damages and attorney’s fees. (In his contract, Smith
“agree[d] ... [to] reimburse [UN] for reasonable attorneys’ fees and
costs incurred by [UN] in enforcing this covenant not to compete”.)
16
He maintains neither enforceability of the non-compete covenant nor
proximate cause of damages was proved.
1.
Whether a covenant not to compete is valid and enforceable “is
largely predicated upon the reasonableness and specificity of its
terms, primarily, the duration of the restriction and its geographic
scope”; and “[t]he burden of proving the reasonableness of these
terms is on the employer”. Empiregas, Inc. v. Bain, 599 So. 2d 971,
975 (Miss. 1992) (citations omitted). We must also examine the
covenant’s effect on “the rights of the employer, the rights of the
employee, and the rights of the public”, and balance these
respective interests. Texas Rd. Boring Co. v. Parker, 194 So. 2d
885, 888 (Miss. 1967).
Mississippi courts recognize an employer has a right to protect
itself “from loss of customers by the activities of the former
employees who have peculiar knowledge of and relationships with the
employer’s customers”. Redd Pest Control Co. v. Heatherly, 157 So.
2d 133, 136 (Miss. 1963). On the other hand, the ex-employer must
overcome a presumption against such restraints by showing that it
is economically justified. Thames v. Davis & Goulet Ins., Inc., 420
So. 2d 1041, 1043 (Miss. 1982).
Smith contends that, because UN only presented evidence that
the covenant existed and that he competed with UN after he left its
employ, UN failed to prove the economic justification or
17
reasonableness, rendering the covenant unenforceable as a matter of
law.
UN counters that it produced ample evidence concerning scope
and duration reasonableness, and economic justification. Regarding
its interest, UN asserts it proved Smith was “the vital link between
[UN] and its policyholders” in Debit 15, and this relationship was
a protectable economic interest sufficient to justify enforcement
of a narrowly tailored non-compete. It points to the testimony of
Smith’s own witnesses that they were fond of, and trusted, him, and
that they subsequently bought LG, and later Texas Life, insurance
from him. As to Smith’s interest, UN contends the evidence shows
that he would not be unreasonably burdened by the covenant’s
enforcement, as evidenced by Ozbolt’s testimony that, under the
covenant’s terms, Smith would only be restricted from soliciting in
Debit 15 (a smaller area than the 15 counties listed in the
contract), and only for one year, and its implication that Smith
would not be prohibited from soliciting new customers elsewhere in
Mississippi. Finally, UN asserts that enforcement would not
disserve the public, because the evidence established that Smith
often represented multiple companies, demonstrating that
“competition in the life insurance industry abounds”.
After concluding, as a matter of law, there was “no question”
Smith breached his contract, the district court held reasonable the
covenant’s geographic and time limits. As UN admits, the covenant
18
would only prohibit Smith from competing in Debit 15. Therefore,
we agree that it made the requisite showing for enforceability.
Concomitantly, in the light of this ruling, we reject Smith’s
contention that UN is not entitled to attorney’s fees, as allowed
by his contract. (Smith does not challenge the amount awarded, only
failure to prove entitlement.)
2.
Smith asserts also that UN failed to prove its damages were
proximately caused by his breach. (Again, he does not challenge the
amount awarded.) He maintains that, instead, UN relied only on its
assumption that, if a UN policy lapsed, it was due to Smith’s
conduct; and that it did not provide a sufficient basis for its lost
profits calculation. He contends that UN’s calculations rested
solely on a list, compiled by UN’s attorney, of names of former UN
policyholders, which “matched” with names on LG’s policyholder list;
and that, based on it, a UN employee created a computer-generated
“lost policy” list, used by UN’s damages expert to calculate
damages. Smith maintains that: neither list-maker visited Debit
15 to verify why the policies lapsed; the testimony established they
may have lapsed for a number of reasons; and many lapsed prior to
his leaving UN or after expiration of the one-year limitation.
Noting that there is “nothing wrong” with policyholders owning
multiple policies, he asserts further that the fact that he sold
many of the LG policies on the list, by itself, is insufficient to
19
prove he caused the lapses.
UN notes that, per Smith’s own jury instruction, it had only
to demonstrate his breach was the “reasonably probable” cause of its
injuries, and that, of course, “mathematical precision” was not
required. It asserts it did prove the cause of its damages: namely,
that Smith contacted UN policyholders to sell them LG insurance, in
violation of his covenant; at least 285 UN policyholders in Smith’s
former service area appeared on LG’s policyholder list or on one of
its policy applications; and many of Smith’s witnesses testified
that they bought a LG policy from him. Additionally, UN contends
that its damages expert made adjustments for UN’s “historical lapse
and mortality experience” in calculating UN’s damages, and
“utiliz[ed] a profitability analysis used in the ordinary course of
[UN’s] business to price new products and determine profitability
of old products”.
Under Mississippi law, “reasonable certainty” is the standard
of proof for recovering profits lost from a breach of contract;
while “[t]here are no guidelines set in stone specifying the degree
of certainty”, and the necessary proof “usually depends on the
particular facts of the case”, the calculation must be based, of
course, on more than “speculation or conjecture”. Lovett v. E.L.
Garner, Inc., 511 So. 2d 1346, 1353 (Miss. 1987) (internal quotation
marks and citation omitted); see also Ammons v. Wilson & Co., 170
So. 227, 229 (Miss. 1936) (stating that damages must be “trace[d]
20
... directly to the breach of the contract”).
Of course, the burden of proof lies with the party seeking
damages. The proof will be sufficient if it provides “a reasonable
basis for [its] computation and the best evidence which is
obtainable under the circumstances”, to allow the factfinder “to
arrive at a fair approximate estimate of [the] loss”. City of New
Albany v. Barkley, 510 So. 2d 805, 808 (Miss. 1987) (internal
quotation marks and citation omitted).
UN did not unequivocally link each of its lapsed policies to
Smith’s breach; but, Mississippi law does not require that.
Instead, UN, to a “reasonable certainty”, presented evidence
sufficient for the jury to find Smith’s conduct caused its loss.
III.
For the foregoing reasons, those parts of the judgment
concerning punitive damages, UN’s contract claim, and its damages
and attorney’s fees and expenses are AFFIRMED; those parts as to
Smith’s defamation claim and corresponding compensatory damages are
REVERSED and judgment is RENDERED for UN on those matters.
AFFIRMED IN PART; REVERSED AND RENDERED IN PART
21