Newell Puerto Rico, Ltd. v. Rubbermaid Inc.

• Decision Date: 05 November 1993
• Docket Number: Nos. 93-1431,93-1451 and 93-1516,s. 93-1431
• Citation: 20 F.3d 15
• Parties: NEWELL PUERTO RICO, LTD., Plaintiff-Appellee, v. RUBBERMAID INCORPORATED, Defendant-Appellant. NEWELL PUERTO RICO, LTD., Plaintiff-Appellant, v. RUBBERMAID INCORPORATED, Defendant-Appellee. . Heard
• Court: U.S. Court of Appeals — First Circuit

Page 15

20 F.3d 15

28 Fed.R.Serv.3d 477

NEWELL PUERTO RICO, LTD., Plaintiff-Appellee, v. RUBBERMAID INCORPORATED, Defendant-Appellant.

NEWELL PUERTO RICO, LTD., Plaintiff-Appellant, v. RUBBERMAID INCORPORATED, Defendant-Appellee.

Nos. 93-1431, 93-1451 and 93-1516.

United States Court of Appeals First Circuit.

Heard Nov. 5, 1993.

Decided March 31, 1994.

Miguel E. Bonilla-Sierra, with whom Carlos T. Gonzalez-Contreras, Maricarmen Almodovar-Diaz and Gonzalez, Bonilla & Quinones-Tridas, were on brief, for Rubbermaid Inc.

Adrian Mercado, with whom Mercado & Soto, was on brief, for Newell Puerto Rico, Ltd.

Before TORRUELLA, Circuit Judge, COFFIN, Senior Circuit Judge, and BOUDIN, Circuit Judge.

TORRUELLA, Circuit Judge.

Plaintiff-appellee, Newell Puerto Rico, Ltd. ("Newell"), brought an action for damages against Rubbermaid Incorporated ("Rubbermaid"), alleging that Rubbermaid, without just cause, terminated and impaired the exclusive distribution agreement between the two parties in violation of the Puerto Rico Dealers' Act, commonly known as "Law 75." P.R.Laws Ann. tit. 10, Sec. 278 et seq. (1989 Supp.). The action was tried before a jury. The jury found that Rubbermaid terminated the distribution agreement without just cause and awarded Newell $1,400,000 in damages. Rubbermaid then filed a motion for a new trial. The district court denied Rubbermaid's motion and entered judgment against Rubbermaid. Rubbermaid now appeals the court's denial of its motion for a new trial. Specifically, Rubbermaid argues that (1) the district court abused its discretion in admitting certain testimony by one of Newell's expert witnesses, and (2) the jury's finding on the issue of just cause was against the clear weight of the evidence.

Newell also filed a motion requesting pre and post-judgment interest and attorneys' fees. The court granted Newell's motion for post-judgment interest but denied its motion for pre-judgment interest and attorneys' fees. Newell appeals the court's denial of pre-judgment interest and attorneys' fees.

I. BACKGROUND

We review the evidence and draw inferences therefrom in the light most favorable to the verdict winner in this case, Newell. International Adhesive Coating Co. v. Bolton Emerson Int'l, Inc., 851 F.2d 540, 542 (1st Cir.1988).

A. The Distribution Agreement

On May 31, 1968, Rubbermaid entered into an agreement with Anchor Hocking Interamericana, Ltd. for the exclusive distribution of the Rubbermaid Houseware Product Line in Puerto Rico and the United States Virgin Islands ("Distribution Agreement"). On March 28, 1972, Anchor Hocking Interamericana, Ltd. assigned and transferred its rights in the Distribution Agreement to Anchor Hocking Puerto Rico, Ltd. ("Anchor P.R."). ¹ From July 2, 1972 to July 1, 1987, Anchor P.R., became the exclusive distributor of Rubbermaid Houseware Products in Puerto Rico and the Virgin Islands. On July 2, 1987, Newell Company acquired Anchor Hocking Corporation and its subsidiaries, including Anchor P.R. and thereafter continued the distribution of Rubbermaid products in Puerto Rico and the Virgin Islands.

On October 31, 1991, Rubbermaid notified Newell that it was terminating the Distribution Agreement, effective in ninety days, because Anchor P.R. had been unable to achieve assigned sales objectives and because Newell manufactured and distributed similar products which created a conflict of interest in its distribution of Rubbermaid products. Rubbermaid then terminated the Distribution Agreement. The effective date of termination was February 3, 1992. Anchor P.R. changed its name to Newell Puerto Rico, Ltd. In February 1992, Newell brought suit against Rubbermaid, claiming that Rubbermaid's termination of the Distribution Agreement was unjustified.

B. Expert Witness Testimony

During the course of discovery, in June 1992, Newell's expert witness on damages, Mr. Jose Villamil, submitted a written report estimating Newell's damages under Law 75. In July 1992, Rubbermaid's expert, Dr. Elias R. Gutierrez, submitted a report challenging the accuracy of the valuation estimate presented by Mr. Villamil, and questioning whether the estimate was prepared according to acceptable professional standards. Doctor Gutierrez concluded that major flaws were present in the methods used by Mr. Villamil to estimate damages, and these flaws had the effect of producing an upward bias in the estimated value of damages for the Rubbermaid line of products. ²

During his first deposition on August 11, 1992, Mr. Villamil acknowledged that he inadvertently included the value of the Rubbermaid Commercial Products Line, which is not at issue in this case, in his valuation of damages. ³ Accordingly, Mr. Villamil agreed to adjust his estimate and submit an amended report reflecting his new evaluation. On August 13, 1992, four days prior to trial, Mr. Villamil submitted an amended report. ⁴ According to Rubbermaid, this amended report included new calculations using a methodology and valuation procedure different from that used in Mr. Villamil's previous report. On August 13, the court ordered that both experts be deposed anew and that transcripts of the depositions be filed not later than August 27, 1992. The Court further determined that it would appoint an economist to render a neutral expert report. Trial was rescheduled for December 21, 1992.

Mr. Villamil was deposed again on August 20, 1992. During this deposition, Mr. Villamil again acknowledged that corrections should be made to his calculations. On August 27, 1992, Rubbermaid filed a "Motion to Disqualify Plaintiff's Expert Witness, Exclude Plaintiff's Expert Witness Reports and Request for Sanctions." The court denied this motion.

On December 8, 1992, the court appointed expert, Ernst & Young, rendered a report which included a review of the different reports filed by the expert witnesses for the parties and an independent calculation of a value or a range of values of damages for the distribution agreement under Law 75. On January 19, 1993, due to additional information provided by counsel for Newell, Ernst & Young supplemented the December 8 report. On February 2, 1993, Ernst & Young submitted a final report. ⁵

During trial, the court heard testimony from Ernst & Young regarding its report. Mr. Villamil then testified as an expert for Newell. At trial, Rubbermaid expressly conceded that Mr. Villamil was qualified as an expert. Mr. Villamil testified that he believed his role was to evaluate Ernst & Young's report. Rubbermaid objected to Mr. Villamil's testimony on the grounds of surprise, arguing that his expressed views were different from and inconsistent with the opinions rendered in his reports. The court overruled the objection and permitted Mr. Villamil to testify.

II. DISCUSSION

A. Admission of Expert Testimony

Rubbermaid challenges the admission at trial of Mr. Villamil's testimony on grounds of surprise. Federal Rule of Civil Procedure 60(b)(1); Perez-Perez v. Popular Leasing Rental, Inc., 993 F.2d 281, 283 (1st Cir.1993).

At the time of Mr. Villamil's testimony, Rubbermaid's counsel objected on the ground that Mr. Villamil was presenting new computations to the jury not contained in his first or second report. The court overruled Rubbermaid's objection, indicating that Mr. Villamil was entitled to criticize constructively Ernst & Young's report. When ruling on Rubbermaid's objection, the district court stated that Rubbermaid was entitled to "cross-examine him in light of not only this analysis he is making here today but in relation to the analysis he has made previously of the reports you have rendered and which you have a copy and which were the object of the deposition."

Rubbermaid knew that Mr. Villamil was going to be an expert witness at trial. Moreover, Rubbermaid was very familiar with the subject matter upon which he would render his testimony. Rubbermaid had ample opportunity to cross-examine Mr. Villamil. Even if Rubbermaid had been surprised by Mr. Villamil's testimony, the appropriate remedy would have been to ask for a continuance to allow Rubbermaid to prepare for the presentation of rebuttal testimony. Szeliga v. General Motors Corp., 728 F.2d 566 (1st Cir.1984) (the remedy for surprise in the introduction of evidence is not to seek reversal after an unfavorable jury verdict, but a request for continuance at the time surprise occurs). Rubbermaid did not request a continuance, a sidebar or even a limiting jury instruction. See Smith v. Massachusetts Institute of Technology, 877 F.2d 1106 (1st Cir.1989), cert. denied, 493 U.S. 965, 110 S.Ct. 406, 107 L.Ed.2d 372 (1989) (courts look with disfavor on parties who claim surprise but who do not ask for a recess so they may attempt to counter the opponent testimony).

Rubbermaid also claims that Mr. Villamil's testimony was inadmissible pursuant to Fed.R.Evid. 702, 703, 705 and 403 and Fed.R.Civ.P. 26(e). We find Rubbermaid's claims to be without merit.

The admissibility of opinion evidence by experts is a matter within the discretion of the trial court and its determination of admissibility should be sustained unless clearly erroneous. International Adhesive Coating Company, 851 F.2d at 544. Federal Rules of Evidence 702 ⁶ and 703 ⁷ "allow an expert to present scientific or technical testimony in the form of opinion based on facts or data perceived or made known to the expert before or at trial." DaSilva v. American Brands, Inc., 845 F.2d 356, 360 (1st Cir.1988). Once admitted, Rules 703 and 705 ⁸ then "place the full burden of exploration of the facts and assumptions underlying the testimony of an expert witness squarely on the shoulders of opposing counsel's cross-examination." International Adhesive Coating Company, 851 F.2d at 544-45 (quoting Smith v. Ford Motor Co., 626 F.2d 784 (10th Cir.1980)).

[I]f in arriving at his opinion the expert has reasonably relied on facts or data before trial, the basis for the opinion need not be...