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Company Wrench, Ltd v. Highway Equipment Co.

United States District Court, Western District of Pennsylvania

September 12, 2014




In this defamation/intentional interference with prospective contractual relations case, the Plaintiff claimed that the Defendant's President, Thomas Reynolds, deep-sixed a lucrative heavy equipment distributorship deal that the Plaintiff was about to land with Hyundai by sending a well-timed derogatory email to the President of Hyundai. At the end of a hard-fought, one week trial, the jury found that the Reynolds email was false and defamatory of the Plaintiff, but that the Plaintiff did not suffer any actual damages as a result, nor did the email interfere with a prospective contractual relationship between the Plaintiff and Hyundai. Nonetheless, because the Court made a significant, plain error in one portion of the Verdict Form, and because Pennsylvania law requires it, there will be a new trial on the issues of presumed and punitive damages. Because the Plaintiffs other assignments of error were not error at all, that will be the scope of the new trial.[1]

Now before the Court is the Plaintiff Company Wrench's Renewed Motion for Judgment as a Matter of Law or, Alternatively, for a New Trial, ECF No. 201. The Court has considered the Plaintiffs Motion, its supporting Memorandum of Law, ECF No. 202, the Defendant Highway Equipment Company's Brief in Opposition, ECF No. 203, the Plaintiffs Reply Brief, ECF No, 204, the Plaintiffs Supplemental Brief in Support, ECF No. 209, the Defendant's Supplemental Brief in Opposition, ECF No. 210, the jury charge conference transcript, ECF No. 206, the transcript for the relevant trial proceedings, ECF No. 207, and the transcript for the parties' oral argument relative to the Plaintiffs Motion, ECF No. 208. The Court grants the Plaintiffs Motion only to the extent the Plaintiff seeks a new trial on presumed and punitive damages relative to its defamation claim, and denies the remainder of the Plaintiffs Motion.


The parties know their case well, so the details will not be repeated here, except as necessary to illuminate the Court's rulings. Company Wrench sued Highway Equipment Company ("Highway"), based on an email that Thomas Reynolds, President of Highway, sent to John Lim, President of Hyundai Equipment Americas, Inc. ("Hyundai"). Company Wrench claimed that it was inches away from landing a relationship to become an exclusive distributor of Hyundai heavy equipment in a defined territory. This was to be the very first relationship between Company Wrench and Hyundai, Company Wrench contended that Mr. Reynolds (whose business. Highway, had done business with Hyundai for years) torpedoed its deal with that eleventh-hour email to John Lim, which arrived at the very same time that the President of Company Wrench and some of his colleagues were visiting Hyundai's United States operations center to "close the deal." The trial involved Company Wrench's claims for defamation and intentional interference with a prospective contractual relationship.

The parties went to trial on October 7, 2013. On October 11, 2013, the jury returned its verdict. The jury found in its special verdict that (1) Mr. Reynolds' email was not substantially true in all material respects; (2) Mr. Reynolds' email was defamatory of Company Wrench and was sent with some level of fault; (3) Mr. Reynolds' email was understood by Hyundai to be defamatory of Company Wrench in its meaning; (4) Mr. Reynolds' email was intended by Highway to be understood by Hyundai to be about Company Wrench and its business practices; (5) Company Wrench did not suffer any actual damages as a result of Mr. Reynolds' email; and (6) that Highway did not intend to, nor did, interfere with a prospective contractual relationship between Company Wrench and Hyundai. Pursuant to Federal Rules of Civil Procedure 50(b) and 59, Company Wrench now moves for judgment as a matter of law and, in the alternative, for a new trial.


a. Company Wrench's Motion for Judgment as a Matter of Law

Federal Rule of Civil Procedure 50(b) provides:

If the court does not grant a motion for judgment as a matter of law made under Rule 5D(a), the court is considered to have submitted the action to the jury subject to the court's later deciding the legal questions raised by the motion. No later than 28 days after the entry of judgment-or if the motion addresses a jury issue not decided by a verdict, no later than 28 days after the jury was discharged--the movant may file a renewed motion for judgment as a matter of law and may include an alternative or joint request for a new trial under Rule 59. In ruling on the renewed motion, the court may:
(1) allow judgment on the verdict, if the jury returned a verdict;
(2) order a new trial; or
(3) direct the entry of judgment as a matter of law.

Fed. R. Civ. P. 50(b). Under Rule 50(b), this Court "must determine whether 'viewing the evidence in the light most favorable to the nonmovant and giving the nonmovant the advantage of every fair and reasonable inference, there is insufficient evidence from which a jury reasonably could' reach the conclusions that it did, " Rinehimer v. Cemcolift, Inc., 292 F.3d 375, 383 (3d Cir. 2002) (alterations omitted) (quoting Lightning Lube, Inc. v. Witco Corp., 4 F.3d 1153, 1166 (3d Cir. 1993)).

"Although judgment as a matter of law should be granted sparingly, [it is granted] where the record is critically deficient of the minimum quantum of evidence in support of the verdict." Eshelman v. Agere Sys., Inc., 554 F.3d 426, 433 (3d Cir. 2009) (internal quotation marks omitted). "The question is not whether there is literally no evidence supporting the unsuccessful party, but whether there is evidence upon which a reasonable jury could properly have found its verdict." Id. (quoting Gomez v. Allegheny Health Servs., Inc., 71 F.3d 1079, 1083 (3d Cir.1995)). Furthermore, in performing this narrow inquiry, the court "must refrain from weighing the evidence, determining the credibility of witnesses, or substituting our own version of the facts for that of the jury." Marra v. Phila. Hous. Auth, 497 F.3d 286, 300 (3d Cir. 2007).

Company Wrench argues that judgment as a matter of law in its favor "is appropriate because no reasonable jury could fail to award damages for Highway's defamation of Company Wrench, " and "no reasonable jury could fail to find damages resulting from Highway's tortious interference with Company Wrench's prospective Hyundai deal...." Pls.' Mem. of Law in Supp. ("Pl's. Mem."), ECF No. 202, at 6. Specifically, Company Wrench contends that two (2) defense damage experts testified that the opinion of Mr. Ronald Slee, Company Wrench's damages expert, was flawed because his damages calculation was inaccurate in any number of ways, but their opinions really only attacked the weight of Mr. Slee's opinion, and they did not testify that no damages occurred at all. Id. at 8. Company Wrench represents that it produced "overwhelming evidence of economic loss as a result of Highway's wrongful conduct." Id. at 10. As to Company Wrench's intentional interference with prospective contractual relations claim, Company Wrench contends that "no reasonable jury could find that Company Wrench had nothing more than a 'mere hope' of entering into a contractual relationship with Hyundai." Id. at 8.

Contrary to Company Wrench's contention, there was a "minimum quantum of evidence" (and in the Court's estimation, even a bit more) presented at trial upon which a reasonable jury could have properly concluded that Company Wrench suffered no actual damages, as defined in the jury instructions.[2] Recall, the Plaintiffs entire case turned on whether an email from the Defendant's President, Mr. Reynolds, defamed the Plaintiff or interfered with the Plaintiffs anticipated deal with Hyundai. The jury could conclude that Company Wrench did not lose any orders or business when the Hyundai deal as it wanted it fell through, and that it actually exceeded its sales projections in the period after the Reynolds email. In addition. Company Wrench was able to purchase excavators and wheel loaders from manufacturers other than Hyundai.[3]

While the testimony adduced by the Plaintiff certainly would have supported a jury finding that the Reynolds email was the kiss of death on the Company Wrench/Hyundai deal, at the same time, there was also sufficient evidence presented upon which a reasonable jury could properly have concluded that the Reynolds' email did not trigger or cause Hyundai's decision as to what form of business arrangement it would offer Company Wrench. Highway submitted evidence that the critical factors in Hyundai's decision to not offer Company Wrench the exclusive distributorship that the Plaintiff thought was in the works were (1) Mr. Hutchinson's rather expansive statements at a dinner meeting with Hyundai that rendered Hyundai doubtful that Company Wrench would honor what would be its defined and limited sales territory; (2) the challenges of Hyundai implementing the apparently novel idea of an exclusive national distributorship with the Plaintiff; and (3) Hyundai's solution, based on its own business judgment, that it would offer Company Wrench the opportunity to obtain national account status with Hyundai - not a complete refusal to deal with Company Wrench.

In particular, Highway produced witnesses from Hyundai at trial. They testified that the Reynolds email did not shape what would be a brand new relationship with Company Wrench. They testified that at a dinner involving Hyundai and Company Wrench leaders the evening before the email was sent, Mr. Hutchinson in essence did himself in by talking in a swashbuckling manner and, by his words and conduct, leading them to believe that no matter what he or a contract said, his enthusiastic push the envelope approach to business practices[4] would cause him to not abide by the territorial restrictions that Hyundai had in mind for Company Wrench's distribution of Hyundai equipment. In short, he made them very nervous, or so they testified. Mr. Hutchinson, on the other hand, testified that Company Wrench and Hyundai were good to go with an exclusive distributorship arrangement, that is until the Reynolds poison pen email arrived and that after that, the deal that Mr. Hutchinson anticipated cratered.

Which version was true? Was it the Reynolds email, or the dinner conversation, that affected Hyundai's thinking? Perhaps both of them? What was the exact nature of the deal that Hyundai had in mind? Did that change, either before or after the arrival of the Reynolds email? Did any change in the structure of a deal available with Hyundai actually harm the Plaintiff? Well, those things are what the jury trial was all about. The jury heard the witnesses, examined the exhibits, and listened to the arguments of able counsel on all sides. It rendered a verdict that Highway's President did send the email in question, it was defamatory of Company Wrench, it was intended to be read as defamatory by Hyundai, and was so read, but that it also did not cause Company Wrench any actual damages, nor did it interfere with a prospective business relationship between Company Wrench and Hyundai.

Was that the only possible conclusion that the jury could reach? No, but it certainly was one permitted by the evidence admitted at trial. That is why the Court sent the case to the jury. Both the verdict the jury actually rendered, and the verdict that Company Wrench argued for, were/would have each been supported by plenty of admissible record evidence. The jury rendered its verdict the way that it did and there was more than sufficient evidence to support it. Therefore, judgment as a matter of law on those matters for either party was, and is, out of the question under Rule 50, especially when viewing the evidence in the light most favorable to the nonmovant, Highway, and giving Highway the advantage of every fair and reasonable inference. Company Wrench's argument is more akin to asking this Court to re weigh the evidence in Company Wrench's favor, which it may not do.[5] Therefore, this Court denies the Plaintiffs Motion to the extent that the Plaintiff moves for judgment as a matter of law.

b. Company Wrench's Motion for a New Trial

Federal Rule of Civil Procedure 59(a)(1) provides:

(1) The court may, on motion, grant a new trial on all or some of the issues-and to any party-as follows:
(A) after a jury trial, for any reason for which a new trial has heretofore been granted in an action at law in federal court; or
(B) after a nonjury trial, for any reason for which a rehearing has heretofore been granted in a suit in equity in federal court.

Fed. R. Civ. P. 59(a)(1).

A new trial may be granted when the verdict is contrary to the great weight of the evidence; that is, "where a miscarriage of justice would result if the verdict were to stand." Pryer v. CO. 3 Slavic, 251 F.3d 448, 453 (3d Cir. 2001) (quoting Olefins Trading, Inc. v. Han Yang Chem Corp., 9 F.3d 282 (3d Cir. 1993)). Rule 59(a) does not set forth specific grounds on which a court may grant a new trial. "The decision to grant or deny a new trial is confided almost entirely to the discretion of the district court." Blancha v. Raymark Indus., 972 F.2d 507, 512 (3d Cir. 1992) (citing Allied Chem. Corp. v. Daiflon, Inc., 449 U.S. 33, 36 (1980)). Requests for a new trial are disfavored by the law, and a trial court will not grant a new trial on the basis of trial error unless the error resulted in prejudice. Dean v. Specialized Sec. Response, 876 F.Supp.2d 549, 552-53 (W.D. Pa. 2012). In other words, no injustice will be found in non-prejudicial trial errors. Id.

The scope of the court's discretion in evaluating a motion for a new trial depends upon whether the motion is based upon a prejudicial error of law or on a verdict alleged to be against the weight of the evidence. See Klein v. Hollings, 992 F.2d 1285, 1289-90 (3d Cir. 1993). Because the court must be cautious not to usurp the proper role of the jury, the court has more limited discretion when the basis for the motion is that the verdict is against the weight of the evidence; the court ought only grant a new trial on that basis when the verdict, if left standing, would result in a miscarriage of justice. Id. at 1290. This protects against a trial court ...

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