Michael Kaczkowski v. Emil Dovan

Case: 12-60177 Document: 00512092960 Page: 1 Date Filed: 12/21/2012
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT United States Court of Appeals
Fifth Circuit
FILED
December 21, 2012
No. 12-60177 Lyle W. Cayce
Summary Calendar Clerk
MICHAEL KACZKOWSKI,
Plaintiff - Appellee
v.
EMIL R. DOVAN,
Defendant - Appellant
Appeal from the United States District Court
for the Southern District of Mississippi
USDC No. 3:10-CV-553
Before JONES, DENNIS, and HAYNES, Circuit Judges.
PER CURIAM:*
In this diversity suit, defendant-appellant Emil Dovan appeals the district
court’s entry of judgment against him pursuant to a jury verdict on a Mississippi
state law fraud claim brought by plaintiff-appellee Michael Kaczkowski arising
out of the parties involvement in a prosthetics enterprise. First, Dovan makes
several arguments related to the sufficiency of the evidence. Second, Dovan
argues that the district court abused its discretion in declining to adopt and
*
Pursuant to Fifth Circuit Rule 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not be published and is not precedent except under the limited circumstances set forth in Fifth
Circuit Rule 47.5.4.
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No. 12-60177
submit to the jury several interrogatories. For the reasons set forth herein, we
affirm.
BACKGROUND
On August 19, 2010, Kaczkowski filed suit in Mississippi state court
against Dovan and Alatheia Prosthetic Rehabilitation, LLC, bringing state law
claims for fraud, breach of fiduciary duty, negligent misrepresentation,
misappropriation of trade secrets, conversion, tortious interference with business
relations, and constructive trust arising out of Kaczkowski’s association with
Dovan in the Alatheia business venture. Kaczkowski alleged that in the late
1990s Dovan induced him to leave his former employment with a different
prosthetics firm and become a partner with Dovan in Alatheia. Kaczkowski
further alleged, inter alia, that Dovan fraudulently misrepresented to
Kaczkowski that Kaczkowski was a partner in Alatheia, and that this fraud
resulted in financial and other injury. On October 4, 2010, Dovan and Alatheia
removed the suit to federal district court based on diversity of citizenship. See
28 U.S.C. §§ 1332, 1441.
The case was eventually tried to a jury in January 2012. Prior to
submission of the case to the jury, Alatheia was dismissed as a party and all of
Kaczkowki’s claims save the fraud claim were dismissed. With respect to the
fraud claim, Dovan twice moved the district court for judgment as a matter of
law pursuant to Federal Rule of Civil Procedure 50(a), first at the close of
Kaczkowki’s case in chief and again at the close of all the evidence. On January
17, 2012, the jury returned a verdict finding Dovan liable on the fraud claim and
awarding Kaczkowski $168,000 in compensatory damages. The jury found
Dovan not liable for additional punitive damages. Accordingly, on January 25,
2012, the district court entered a final judgment against Dovan for the amount
of $168,000. Dovan did not renew his motions for judgment as a matter of law
following the verdict. See Fed. R. Civ. P. 50(b). This appeal followed.
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DISCUSSION
We first address Dovan’s arguments implicating the sufficiency of the
evidence supporting Kaczkowski’s claim and the jury’s verdict. First, Dovan
contends that the district court erred in denying his two motions for judgment
as a matter of law filed pursuant to Rule 50(a). He argues that the district court
erred in denying his Rule 50(a) motions because the evidence was insufficient to
make out the elements of Kaczkowski’s fraud claim and because the evidence
established that the claim was barred by the applicable three-year statute of
limitations.1 He further argues that the jury verdict and the final judgment
entered on the basis of that verdict should be reversed as against the
overwhelming weight of the evidence.
However, as Kaczkowski correctly argues, Dovan forfeited his ability to
appeal these challenges to the sufficiency of the evidence by failing to file a
renewed motion for judgment as a matter of law post-verdict pursuant to Rule
50(b). See Downey v. Strain, 510 F.3d 534, 542-43 (5th Cir. 2007) (holding that
a defendant “waive[s] his right to appeal on the grounds of sufficiency of the
evidence [when] he [fails to] file a motion under Federal Rule of Civil Procedure
50(b) for judgment as a matter of law after the jury’s verdict” (citing Unitherm
Food Sys., Inc. v. Swift-Eckrich, Inc., 546 U.S. 394, 400-01 (2006)). The Downey
court explained the holding of the Supreme Court in Unitherm as follows:
In Unitherm, the Supreme Court held that when a party files a Rule
50(a) preverdict motion for judgment as a matter of law but files
neither a Rule 50(b) postverdict motion nor a Rule 59 motion for a
new trial, the party is precluded from seeking appellate review of
the sufficiency of the evidence supporting the verdict. [Unitherm,
546 U.S. at 400-01.] The Court held that the district court’s denial
of a Rule 50(a) motion cannot form the basis of a party’s appeal
because such denial is “merely an exercise of the District Court’s
1
“In Mississippi, a claim of fraud has a three-year statute of limitations.” Sullivan v.
Tullos, 19 So. 3d 1271, 1274 (Miss. 2009); see Miss. Code. Ann. § 15-1-49(1).
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discretion, in accordance with the text of the Rule and the accepted
practice of permitting the jury to make an initial judgment about
the sufficiency of the evidence.” Id. at 406; see also Fed. R. Civ. P.
50(a) (“the court may determine” that there is no legally sufficient
evidentiary basis and “may grant a motion for judgment as a matter
of law”) (emphasis added).
Downey, 510 F.3d at 543. Accordingly, Dovan’s failure to renew his motions for
judgment as a matter of law after the jury’s verdict is fatal to his appeal of the
district court’s denial of those motions.
We reject Dovan’s contention that Unitherm does not bar him from
arguing on appeal that the district court erred in denying his Rule 50(a) motions
with respect to his limitations defense. Dovan contends that his limitations
argument presents a question of law, while Unitherm bars only fact-dependent
sufficiency challenges. This argument fails to recognize that the district court
necessarily and properly weighed the disputed evidence relevant to the
limitations issue when deciding not to exercise its discretion to grant Dovan’s
Rule 50(a) motions.2
In ruling orally on Dovan’s second Rule 50(a) motion, the district court
noted that “[Dovan] argue[d] strenuously that the statute of limitations has run
on the fraud claim[],” but concluded that it “w[ould] allow that claim to go
forward to the jury,” after having properly viewed “all the evidence in favor of
the plaintiff.”3
2
See Fed. R. Civ. P. 50(a) (providing that “[i]f a party has been fully heard on an issue
during a jury trial and the court finds that a reasonable jury would not have a legally sufficient
evidentiary basis to find for the party on that issue, the court may . . . grant a motion for
judgment as a matter of law against the [non-moving] party on a claim or defense that, under
the controlling law, can be maintained or defeated only with a favorable finding on that issue”
(emphases added)).
3
See, e.g., Mullins v. TestAmerica, Inc., 564 F.3d 386, 403 (5th Cir. 2009) (“In
evaluating [a Rule 50(a) motion for judgment as a matter of law], the court must consider all
of the evidence in the light most favorable to the nonmovant, drawing all factual inferences
in favor of the non-moving party, and leaving credibility determinations, the weighing of
evidence, and the drawing of legitimate inferences from the facts to the jury.”).
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“Under Mississippi law, the plea of statute of limitations is an affirmative
defense for which the party asserting it has the burden of proof.” Huss v.
Gayden, 991 So. 2d 162, 165 (Miss. 2008). In responding to a question certified
by this court, the Mississippi Supreme Court recently explained that with
respect to the question of when a plaintiff’s cause of action accrues for
limitations purposes, “Mississippi substantive jurisprudence requires questions
of disputed fact to be decided by juries.” Id. at 168; see id. at 165 (stating that
“[t]he success vel non of the disputed affirmative defense requires a jury
determination”); see also, e.g., Fulkerson v. Odom, 53 So. 3d 849, 852 (Miss. App.
2011) (“considering the evidence in the light most favorable to [the plaintiff]” in
“find[ing] [when] his claim accrued” for “limitations purposes” at summary
judgment).4 Therefore, as with his arguments regarding the sufficiency of the
evidence supporting the elements of Kaczkowki’s fraud claim itself, Dovan
forfeited his argument regarding his entitlement to judgment as a matter of law
on the limitations issue by failing to renew it post-verdict.
Having thus determined that Dovan forfeited his evidentiary arguments,
we turn briefly to his contention that the district court abused its discretion in
declining to adopt special interrogatories proffered by Dovan that would have
required the jury to specify which facts Dovan misrepresented and when each
of those facts was misrepresented.
“This court reviews jury instructions for abuse of discretion.” Garriott v.
NCsoft Corp., 661 F.3d 243, 247 (5th Cir. 2011). “If a party wishes to complain
on appeal of the district court’s refusal to give a proffered instruction, that party
must show as a threshold matter that the proposed instruction correctly stated
4
Having received the Mississippi Supreme Court’s answer to the question in Huss, this
court adopted “[t]he [Mississippi] Supreme Court’s [conclusion] that the [plaintiffs’] claims
[were] not prescribed as a matter of law” as “resolv[ing] the limitations issue.” Huss v. Gayden,
571 F.3d 442, 451 (5th Cir. 2009)
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the law. If a party makes this threshold showing, he must then demonstrate
that the actual charge as a whole creates substantial and ineradicable doubt
whether the jury has been properly guided in its deliberations. But if the charge
correctly states the substance of the law, we will not reverse.” Julian v. City of
Houston, Tex., 314 F.3d 721, 727 (5th Cir. 2002) (internal quotation marks and
footnotes omitted). Here, we determine that the district court’s instruction on
Kaczkowski’s fraud claim correctly stated the law and therefore affirm.
The district court’s charge to the jury regarding the fraud claim was as
follows:
Plaintiff has asserted a claim for fraud in this case. In order to
recover on his claim of fraud, plaintiff must prove by clear and
convincing evidence in this case that, one, Defendant Emil Dovan
made a representation to plaintiff about a past or present fact; two,
that the representation was false; three, that the representation was
material; four, that Emil Dovan did know that the representation
was false or was ignorant of its truth; five, that Emil Dovan did
intend that the representation should be acted upon by Michael
Kaczkowski; six, that Michael Kaczkowski did not know that the
representation was false; seven, that Michael Kaczkowski did rely
on the representation's truth; eight, that Michael Kaczkowski did
have a right to rely on the representation, and; nine, that Michael
Kaczkowski suffered damages as a result of his reliance on the
representation, then your verdict shall be for the plaintiff. However,
if you believe that the plaintiff has failed to show any one of the
above elements by a clear and convincing evidence in this case, then
your verdict shall be for the defendant.
As the district court explained to Dovan’s counsel at the conference on jury
instructions, this charge was drawn verbatim from the Mississippi Model Jury
Instructions on the elements of a fraud claim, which in turn were based on
recent Mississippi Supreme Court jurisprudence. The charge given to the jury
mirrored the model instructions and correctly set forth the substantive
Mississippi law. See Miss. Prac. Model Jury Instr. Civil § 21:5 (2d ed.) (citing
State v. Bayer Corp., 32 So. 3d 496, 501 (Miss. 2010); Bayer Corp., 32 So. 3d at
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501 (“[T]he elements of fraud . . . are: (1) a representation; (2) its falsity; (3) its
materiality; (4) the speaker’s knowledge of its falsity or ignorance of its truth;
(5) the speaker’s intent that the representation should be acted upon by the
hearer and in the manner reasonably contemplated; (6) the hearer’s ignorance
of its falsity; (7) the hearer’s reliance on the representation’s truth; (8) the
hearer’s right to rely thereon; and (9) the hearer’s consequent and proximate
injury.” (quoting Allen Tools v. Mac Tools, Inc., 671 So. 2d 636, 642 (Miss. 1996)).
Accordingly, “the charge correctly state[d] the substance of the law, [such
that] we will not reverse.” See Garriott, 661 F.3d at 247.
CONCLUSION
For the foregoing reasons, we AFFIRM the judgment of the district court
in all respects.
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