Lightning Lube, Inc. v. Witco Corp.

• Citation: 802 F. Supp. 1180
• Decision Date: 02 September 1992
• Docket Number: Civ. A. No. 87-3243 (WGB).
• Parties: LIGHTNING LUBE, INC., etc., Plaintiff, and Counterclaim Defendant, v. WITCO CORPORATION, et al., Defendants, Counter-claimants and Third-party Plaintiffs, v. Ralph VENUTO, et al., Third Party Defendants.
• Court: United States District Courts. 3th Circuit. United States District Courts. 3th Circuit. District of New Jersey

802 F. Supp. 1180

LIGHTNING LUBE, INC., etc., Plaintiff, and Counterclaim Defendant, v. WITCO CORPORATION, et al., Defendants, Counter-claimants and Third-party Plaintiffs, v. Ralph VENUTO, et al., Third Party Defendants.

Civ. A. No. 87-3243 (WGB).

United States District Court, D. New Jersey.

September 2, 1992.

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

Steven M. Kramer & Associates by Jeffrey Nowak, Blackwood, N.J., Steven M. Kramer & Associates by Steven M. Kramer, New York City, for plaintiff.

Carella, Byrne, Bain, Gilfillan, Cecci & Stewart by John Gilfillan, Brendan T. Byrne, Roseland, N.J., Cravath, Swaine & Moore by Ronald Rolfe, New York City, for defendants.

OPINION

BASSLER, District Judge:

On May 1, 1992, a jury returned a verdict against the defendant Witco Corporation ("Witco") in favor of the plaintiff Lightning Lube, Inc. ("Lube") for $11.5 million dollars in compensatory damages and $50 million in punitive damages. Witco renews its motion for judgment as a matter of law and in the alternative moves for a new trial.

For the following reasons, Witco's motions shall be granted in part and denied in part.

1. BACKGROUND.

The background and procedural history of this case have been well documented in prior Opinions and Orders of this Court.¹,² This action arises out of a contract dispute between plaintiff Lightning Lube, t/a Laser Lube ("Lube or Lightning Lube") and its principal, third-party defendant Ralph Venuto, and defendant counterclaimant third-party plaintiff Witco Corporation ("Witco")³ over the supply of oil to Laser Lube by Witco's Kendall Refining division and the financing of lube dispensing equipment and lifts. Lube further alleged that Kendall and co-defendant Avis ("Avis")⁴ entered into a joint venture to create a vertical monopoly in the quick lube market. At the time of trial, four claims remained in the case: (1) breach of contract; (2) fraud and misrepresentation (3) intentional interference with contracts and prospective contractual advantage and (4) punitive damages.⁵

2. DISCUSSION.

I. THE STANDARDS.

A. The Standards Governing Judgment as A Matter of Law.

Federal Rule of Civil Procedure 50(b), as amended Dec. 1, 1991, provides:

Whenever a motion for directed verdict at the close of all the evidence is denied or for any reason is not granted, the court is deemed to have submitted the action to the jury subject to a later determination of the legal questions raised by the motion. Not later than 10 days after the entry of judgment, a party who has moved for a directed verdict may move to have the verdict and any judgment entered in accordance with the party's motion for a directed verdict.... A motion for a new trial may be joined with this motion, or a new trial may be prayed for in the alternative. If a verdict was returned the court may reopen the judgment and either order a new trial or direct the entry of judgment as if the requested verdict had been directed....

The 1991 Amendment retains the concept of the former rule that the post-verdict motion is a renewal of an earlier motion made at the close of the evidence. See Comment to 1991 Amendment. Thus, a prerequisite for a motion under Rule 50(b) is that the moving party must first have moved for judgment as a matter of law (formerly directed verdict) at the close of all evidence. Fineman v. Armstrong World Industries, Inc., 774 F.Supp. 225, 230 (D.N.J.1991) (quoting Associated Business Telephone Systems Corp. v. Greater Capital, 729 F.Supp. 1488, 1502 (D.N.J.), aff'd, 919 F.2d 133 (3d Cir.1990)). In fact, "it is not enough if a party moves for a directed verdict at the close of their case. Rather, in order to preserve the right to move for judgment as a matter of law, the moving party must renew his motion for directed verdict at the close of all the evidence." Id.

In this case, Witco moved for judgment as a matter of law both at the close of plaintiff's case and at the close of all the evidence. The Court reserved decision.

When ruling on a motion for judgment as a matter of law, the trial judge must determine whether the evidence and all justifiable inferences most favorable to the prevailing party afford any rational basis for the verdict. Id., (quoting Bhaya v. Westinghouse Elec. Corp., 832 F.2d 258, 259 (3d Cir.1987), cert. denied, 488 U.S. 1004, 109 S.Ct. 782, 102 L.Ed.2d 774 (1989) (citations omitted)).

In determining whether the evidence is sufficient the court is not free to weigh the evidence or to pass on the credibility of witnesses or to substitute its judgment of the facts for that of the jury. In other words, the fundamental principle is that there must be a minimum of interference with the jury. 9 Charles A. Wright & Arthur A. Miller, Federal Practice and Procedure § 2524, at 543-545 (1971), see also National Freight v. Southeastern Pa. Transp. Auth., 698 F.Supp. 74, 76 (E.D.Pa. 1988), aff'd, 872 F.2d 413 (3d Cir.1989). Nevertheless, a scintilla of evidence is not enough to withstand a motion for judgment as a matter of law. See Denneny v. Siegel, 407 F.2d 433, 439-40 (3d Cir.1969).

Moreover, it is well settled that the party against whom a motion for "J.N.O.V." is made must be given the benefit of every legitimate inference that can be drawn from the evidence. 9 Charles A. Wright & Arthur A. Miller, Federal Practice and Procedure § 2528, at 564 (1971). Some courts say that an inference is legitimate only where the evidence offered makes the existence of the fact to be inferred more probable than the nonexistence of the fact, and they warn that any lesser test would permit the jury to rest its verdict on speculation and conjecture. But the Supreme Court itself has suggested that a case may not be taken away from the jury merely because "a measure of speculation and conjecture is required." Id. at 565 n. 19, 566-67; see also Lavender v. Kurn, 327 U.S. 645, 653, 66 S.Ct. 740, 744, 90 L.Ed. 916 (1946). It is with this high standard in mind that I consider this motion.

B. The Standards Governing a Motion for a New Trial.

A trial court should grant a motion for a new trial when, in its opinion, "the verdict is contrary to the great weight of the evidence, thus making a new trial necessary to prevent a miscarriage of justice." Fineman v. Armstrong World Industries, Inc., 774 F.Supp. 266, 269 (D.N.J.1991), (quoting Roebuck v. Drexel University, 852 F.2d 715, 736 (3d Cir.1988)).

The standard for granting a new trial is substantially less demanding than that for judgment as a matter of law. 9 Charles A. Wright & Arthur A. Miller, Federal Practice and Procedure § 2531, at 575 (1971). In fact, contrary to the lack of discretion that a trial court has when ruling on a motion for judgment as a matter of law, when a trial court rules on a motion for a new trial it is vested with wide discretion. Id. This discretion is exemplified by the fact that in ruling on a motion for a new trial the trial court is permitted to consider the credibility of witnesses and weigh the evidence. Id. Such deference is appropriate because it is the district court that was able to observe the witnesses and follow the trial in a way that an appellate court cannot replicate by reviewing the record. Roebuck v. Drexel University, 852 F.2d 715 (3d Cir.1988) (citing Semper v. Santos, 845 F.2d 1233, 1237 and n. 35 (3d Cir.1988)).

The discretion of the court, however, is not unlimited. When a motion for a new trial based on the weight of the evidence is granted, the court has:

to some extent at least substituted its judgment of the facts and the credibility of the witnesses for that of the jury. Such an action effects a denigration of the jury system and to the extent that new trials are granted the judge takes over, if he does not usurp, the prime function of the jury as the trier of facts.

Fineman, 774 F.Supp. 266 (D.N.J.1991), (citing Williamson v. Consolidated Rail Corp., 926 F.2d 1344, 1352 (3d Cir.1991) (citation omitted)). Thus, as with a motion for judgment as a matter of law "a District Court may not substitute its own judgment for that of the jury simply because the court might have come to a different conclusion." Id. (quoting Grace v. Mauser-Werke Gmbh, 700 F.Supp. 1383, 1387 (E.D.Pa.1988)). Nor does a dispute over credibility justify a new trial. Consumers Power Co. v. Curtiss-Wright Corp., 780 F.2d 1093, 1097 (3d Cir.1986) (citation omitted).

A motion for a new trial may be granted on a number of grounds:

Although Fed.R.Civ.P. 59 does not enumerate the grounds for a new trial, the following have been recognized as general grounds for a new trial: the verdict is against the clear weight of the evidence; damages are excessive; the trial was unfair; and that substantial errors were made in the admission or rejection of evidence or the giving or refusal of instructions.

Northeast Women's Center, Inc. v. McMonagle, 689 F.Supp. 465 (E.D.Pa.1988), aff'd in relevant part, 868 F.2d 1342 (3d Cir. 1989).

II. THE COMPENSATORY DAMAGE CLAIMS.

A. The Claim for Fraud and Misrepresentation.

The jury awarded $1,000,000 to the plaintiff on its claim for fraud and misrepresentation with respect to Witco's failure to disclose its intent to enter into the quick lube business as a competitor of Lube. It also awarded $1,000,000 with respect to the claim that Witco had no intention to honor the agreement it formed with Lube at the time the agreement was made. On the claim for fraud and misrepresentation with respect to the source of oil, the jury found that all of the elements of fraud were satisfied but found that Lube suffered no damages.

In order to prove a claim for fraud, plaintiff must prove the following five elements:

(1) Defendant made a false representation of fact;

(2) Defendant knew or believed that the representation was false;

(3) Defendant intended to deceive the plaintiff;

(4) Plaintiff believed and justifiably relied upon the statement and was induced to take action upon it, and

(5) As a result of plain

...