Conjugal Partnership Comprised by Joseph Jones and Verneta G. Jones v. Conjugal Partnership Comprised of Arthur Pineda and Toni Pineda

• Decision Date: 10 March 1994
• Docket Number: No. 93-1404,93-1404
• Parties: The CONJUGAL PARTNERSHIP COMPRISED BY JOSEPH JONES AND VERNETA G. JONES, D/B/A Stenotype Systems, Plaintiffs, Appellants, v. The CONJUGAL PARTNERSHIP COMPRISED OF ARTHUR PINEDA AND TONI PINEDA, Defendants, Appellees. . Heard
• Court: U.S. Court of Appeals — First Circuit

Page 391

22 F.3d 391

28 Fed.R.Serv.3d 1423

The CONJUGAL PARTNERSHIP COMPRISED BY JOSEPH JONES AND VERNETA G. JONES, D/B/A Stenotype Systems, Plaintiffs, Appellants, v. The CONJUGAL PARTNERSHIP COMPRISED OF ARTHUR PINEDA AND TONI

PINEDA, Defendants, Appellees.

No. 93-1404.

United States Court of Appeals, First Circuit.

Heard March 10, 1994.

Decided May 4, 1994.

Olga M. Shepard, Hato Rey, PR, for appellants.

Maria H. Sandoval, Santurce, PR, for appellees.

Before CYR, Circuit Judge, BOWNES, Senior Circuit Judge, and STAHL, Circuit Judge.

BOWNES, Senior Circuit Judge.

This is a breach of contract action arising out of a dispute between two court reporters in the United States District Court for the District of Puerto Rico. The appeal involves two jury trials. In the first trial, a jury found in favor of plaintiff, Joseph Jones, and awarded him $225,000 in damages. The district court granted a postjudgment motion by defendant, Arthur Pineda, ¹ vacated the judgment, and ordered plaintiff to remit $140,000 or submit to a new trial on damages. Plaintiff refused to accept the remittitur, and proceeded to trial. This time around he was awarded $20,000. He appeals, challenging the district court's jurisdiction, its decision to vacate the original judgment and order a partial remittitur or a new trial on damages, and the court's admission of evidence, at both trials, on the issue of mitigation of damages. We affirm.

I. BACKGROUND

The following facts are viewed in the light most favorable to the verdict winner, the plaintiff, and all reasonable inferences are drawn in his favor. Lama v. Borras, 16 F.3d 473, 477 (1st Cir.1994). ² Plaintiff Jones came from New York State to Puerto Rico in March 1987 to work as the official court reporter for federal district judge Jose A. Fuste. The position was offered for a one-year term, and Jones left Judge Fuste's employ as scheduled in March 1988. Shortly thereafter, defendant Pineda, the official court reporter for federal district judge Raymond Pineda realized that he and his wife, who was not a court reporter but aided her husband in producing the transcripts, would be unable to handle this task alone. After some preliminary discussions, Pineda and Jones reached an oral agreement whereby Pineda agreed to hire Jones "for the entire length of the Dupont trial," during which they would split all of the court reporting duties and fees. Jones agreed to remain in Puerto Rico until the trial ended, and further agreed to get a letter of reference from Judge Fuste. Subsequently, Pineda sought Judge Acosta's approval, which was reluctantly given, for hiring Jones. Apparently Jones had transcribed several pretrial conferences in the Dupont case, and Judge Acosta was not impressed with his reporting skills. Nonetheless, given Pineda's repeated assurances, Judge Acosta acquiesced to Jones' participation for "phase I" of the Dupont trial. But, Pineda never informed Jones that Judge Acosta's authorization was a condition precedent to the oral contract, or that revocation of the judge's approval would result in the contract's termination. And, Pineda never informed Judge Acosta that he had hired Jones for the duration of the trial.

L. Acosta, offered Jones a lucrative opportunity. Judge Acosta was the presiding judge in the San Juan Dupont Hotel Fire Litigation, a complex multi-plaintiff case which promised a lengthy trial during which the attorneys would require daily transcripts.

The Dupont trial was scheduled to proceed in discrete "phases." Phase I began in March 1989 and lasted for thirty-three days. Jones and Pineda shared the workload and the fees generated by phase I. Phase II commenced on June 27, 1989, and lasted until December 1990. The trial ended in December 1991. Pineda terminated Jones on June 30, 1989, and told Jones that he made too many mistakes and was slowing things down. Earlier that day Pineda had voiced similar concerns about Jones to Judge Acosta who agreed that Jones should no longer work on the case and revoked his prior authorization. Pineda told Jones that he (Pineda), and not Judge Acosta was responsible for Jones' discharge. There was evidence that on June 29, the day before Jones was terminated, a new system was developed for linking the in-court stenograph machine to a computer located outside of the courtroom, enabling one reporter (Pineda) to handle the reporting work.

For his work on phase I of the trial, Jones received, $49,108.00, or approximately $1,500 for each of the thirty-three sessions. This represents half of the total fees paid for reporting services during phase I, $112,083, less expenses. The entire trial generated a total of $465,787.75 in court reporting fees.

The jury found that, under the parties' agreement, Pineda was obligated to pay Jones one-half of the compensation received for transcribing the trial, whether or not Judge Acosta continued to authorize Jones' presence in the courtroom. Consequently, it awarded Jones $225,000 in damages.

Pineda moved for judgment as a matter of law, or alternatively, for a new trial pursuant to Fed.R.Civ.P. 50 and 59. In a thoughtful opinion, the district court denied the motion for judgment as a matter of law:

[T]he jury found reasonably that, in exchange for plaintiff's promise to stay, the defendant promised to employ plaintiff for the duration of the Dupont trial and to divide equally the compensation he received; and further found reasonably that defendant's obligation to pay was not conditioned on Judge Acosta's continuing approval of plaintiff's participation and, alternatively, that defendant knowingly assumed the risk that Judge Acosta would not approve of plaintiff's participation after phase I....

Conjugal I, 798 F.Supp. at 896. The court also declined to order a new trial on liability because "the verdict on liability, while by no means inevitable, was not against the clear weight of the evidence." Id. at 899. The court found, however, that damages were a "different story." Id. at 899. The court found that the jury's award was excessive, was based on a flawed analysis, and that a new trial limited to the issue of damages was necessary. Id. at 900-02. The court added that plaintiff could avoid a retrial on damages by agreeing to remit $140,000. Id. at 902-03. Plaintiff declined the offer and proceeded to trial. He was awarded $20,000 in damages. This appeal ensued.

II. DISCUSSION

On appeal plaintiff argues primarily that: (1) the district court lacked subject matter jurisdiction; (2) the trial judge abused his discretion in vacating the original judgment and ordering a remittitur or alternatively, a new trial on damages; and (3) the trial judge erred in allowing defendant to present evidence, in both the first and second trials, concerning mitigation of damages because defendant had not pleaded mitigation as an affirmative defense.

A. Jurisdiction

This action was removed from Puerto Rico Superior Court pursuant to 28 U.S.C. Sec. 1442(a)(3). See Conjugal Partnership Comprised by Jones v. Conjugal Partnership Comprised by Pineda, 734 F.Supp. 41 (D.P.R.1990) (granting defendant's removal petition and denying plaintiff's motion to remand). That statute provides:

(a) A civil action or criminal prosecution commenced in a State court against any of the following persons may be removed by them to the district court of the United States for the district and division embracing the place wherein it is pending: ...

(3) Any officer of the courts of the United States, for any Act under color of office or in the performance of his duties.

28 U.S.C. Sec. 1442(a)(3). ³ Plaintiff contends that the case was improvidently removed from superior court and should be remanded. We disagree.

The statute guarantees an officer of the federal courts the right to remove an action commenced against him in state court when he can allege a "colorable" federal defense to that action. Mesa v. California, 489 U.S. 121, 136, 109 S.Ct. 959, 968, 103 L.Ed.2d 99 (1989); American Policyholders Ins. Co. v. Nyacol Products, 989 F.2d 1256, 1259 n. 3 (1st Cir.1993). Although the Mesa court was concerned principally with Sec. 1442(a)(1), the general provision of the federal officer removal statute, ⁴ the Court noted that "subsections (2)-(4) of Sec. 1442(a) are largely the 'residue' of the pre-1948, more limited removal statutes now entirely encompassed by the general removal provision of the first clause of subsection (1)." Mesa, 489 U.S. at 134, 109 S.Ct. at 967. The Court further noted that subsection (3) should be interpreted consistently with subsection (1). Id. at 135, 109 S.Ct. at 967-68. Consequently, the present case was properly removed if defendant asserted a federal right or raised a question of federal law in his defense. Id. at 126-27, 109 S.Ct. at 963-64 (citing Tennessee v. Davis, 100 U.S. 257, 262, 25 L.Ed. 648 (1880)).

In his Answer, defendant alleged that plaintiff "served at the pleasure of the [District] Court," was no longer acceptable to the court because of poor performance, and was properly dismissed by Judge Acosta. Answer to Complaint at pp A-C & E. Defendant's removal petition averred that the dispute arose "out of the laws and regulations of the United States ... which govern and set the relationship between the United States Courts and the court reporters [who] perform duties for said courts, including the power to dismiss or terminate the duties of said court reporters." Notice of Removal at p 2. The removal petition also stated that,

[i]n order to determine whether the defendants are or [are] not liable in this civil action ... any court ... must construe the terms [and] provisions of those Acts of Congress dealing with the United States Courts and those regulations issued by the Administrative Office of the United States dealing with court reporters and the supervisory powers of the courts over federal court reporters....

Id. Finally, in opposition to plaintiff's motion to remand, defe...