Addie v. Kjaer
| Decision Date | 01 March 2011 |
| Docket Number | Civil No. 2004-135 |
| Parties | ROBERT ADDIE, JORGE PEREZ and JASON TAYLOR, Plaintiffs, v. CHRISTIAN KJAER, HELLE BUNDGAARD, STEEN BUNDGAARD, JOHN KNUD FURST, KIM FURST, NINA FURST, and KEVIN F. D'AMOUR, Defendants. |
| Court | U.S. District Court — Virgin Islands |
Attorneys:
Gregory H. Hodges, Esq.
St. Thomas, U.S.V.I.
For the plaintiffs.
St. Thomas, U.S.V.I.
For defendants Christian Kjaer, Helle Bundgaard, Steen
Bundgaard, John Knud Furst, Kim Furst, and Nina Furst.
St. Thomas, U.S.V.I.
For defendant Kevin F. D'Amour.
Before the Court is the motion of Christian Kjaer, Helle Bundgaard, Steen Bundgaard, John Knud Furst, Kim Furst, and Nina Furst (collectively the "Sellers"), for judgment as a matter of law and an amended judgment against plaintiff Jason Taylor ("Taylor"). In the alternative, the Sellers seek an amendedjudgment. Also before the Court is the Sellers' motion for judgment as a matter of law in their favor on Taylor's breach of contract claim against them.
Because the Court writes primarily for the parties, whose familiarity with these proceedings is presumed, only the essential facts will be outlined.
Robert Addie, Jorge Perez and Jason Taylor (collectively the "Buyers"), agreed to purchase two parcels of land from the Sellers: Great St. James Island, St. Thomas, U.S. Virgin Islands and Parcel No. 11 Estate Nazareth, No. 1 Red Hook Quarter, St. Thomas, U.S. Virgin Islands. The Buyers entered into two contracts of sale with Sellers ("Contracts of Sale") one for the purchase of the Great St. James Property and the other for the purchase of the Estate Nazareth property. The Buyers entered into an escrow agreement ("Escrow Agreement") wherein they agreed to pay $1.5 million into an escrow account managed by Premier Title Company, Inc., formerly known as First American Title Company, Inc. ("Premier"). At all times relevant, defendant Kevin D'Amour ("D'Amour") was Premier's president and sole shareholder. D'Amour also acted as counsel to the Sellers.
Neither parcel of land was conveyed as the partiescontemplated. The Buyers demanded the return of the escrow money. The escrow money was not returned. This action ensued.
The Buyers alleged the following: breach of contract; fraud by certain defendants; fraud by D'Amour; conversion; breach of fiduciary duty by Premier; and unjust enrichment. The Buyers also sought a declaration that: they are entitled to terminate the land contracts; the Sellers cannot deliver marketable title to the land; and the Sellers have defaulted under the terms of the land contracts. The Sellers asserted two counterclaims, one for fraudulent misrepresentation and another for breach of contract against the Buyers.
This matter was tried to a jury from June 22, 2009 to July 2, 2009. Following deliberations, the jury found the Sellers liable on the Buyers' breach of contract and unjust enrichment claims. The jury also found Addie and Perez liable for breach of contract and fraud. The jury did not find Taylor liable for either of those claims. The jury found the Sellers liable on the Buyers' breach of contract claim against them. The Sellers now argue that they are entitled to judgment as a matter of law pursuant to Federal Rule of Civil Procedure 50 ("Rule 50") on their contract and fraud claims against Taylor. They also seeks relief pursuant to Rule 50 on Taylor's breach of contract claimagainst them. Additionally, they move for a new trial or amended judgment pursuant to Federal Rule of Civil Procedure 59 ("Rule 59").
Pursuant to Rule 50 a party may move for judgment as a matter of law where it "has been fully heard on an issue and there is no legally sufficient evidentiary basis for a reasonable jury to find for that party on that issue." Reeves v. Sanderson Plumbing Prods., Inc., 530 U.S. 133, 149 (2000). In evaluating whether there was adequate evidence presented to support the jury verdict, the court must give the non-movant, "as verdict winner, the benefit of all logical inferences that could be drawn from the evidence presented, resolve all conflicts in evidence in his favor and, in general, view the record in the light most favorable to him." Williamson v. Consol. Rail Corp., 926 F.2d 1344, 1348 (3d Cir. 1991). Judgment as a matter of law under Rule 50 "should only be granted if 'the record is critically deficient of that minimum quantity of evidence from which a jury might reasonably afford relief.'" Raiczyk v. Ocean County Veterinary Hospital, 377 F.3d 266, 269 (3d Cir. 2004)(quoting Powell v. J.T. Posey Co., 766 F.2d 131, 133-34 (3d Cir. 1985)).
"'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.'" Johnson v. Campbell, 332 F.3d 199, 204 (3d. Cir. 2003)(quoting Gomez v. Allegheny Health Servs. Inc., 71 F.3d 1078, 1083 (3d Cir. 1995)).
A motion for a new trial pursuant to Rule 59 may be granted "on all or some of the issues— and to any party...." Fed. R. Civ. P. 59 (a). There are three principal grounds on which a motion to alter or amend judgment may be based: "(1) an intervening change in the controlling law; (2) the availability of new evidence [not available previously]; [or] (3) the need to correct a clear error [of law] to prevent manifest injustice." N. River Ins. Co. v. CIGNA Reins. Co., 52 F.3d 1194, 1218 (3d Cir. 1995)(alterations in original)(quotation marks omitted).
The Sellers seek judgment as a matter of a law on their breach of contract and fraud claims against Taylor. They assert that such relief is appropriate based on (1) what the Sellers perceived as a presumed partnership formed among Addie, Perez, and Taylor and (2) the evidence of Taylor's own conduct including (a) his alleged fraudulent misrepresentation and (b) his alleged breach of the terms of the Contracts of Sale. The Sellers also seek judgment as a matter of law in their favor on Taylor's breach of contract claim against them. The Court will address each assertion seriatim.
The Sellers assert that Taylor should have been found liable for the misrepresentations made and breaches of contract committed by Addie and Perez, because the evidence at trial established that the Buyers had formed a partnership. They thus contend that Taylor is liable for the duties and obligations his partners breached in the course of performing partnership-related business.
A partnership is defined under Virgin Islands law as "the association of two or more persons to carry on as co-owners a business for profit...." V.I. Code ann. tit. 26, § 22(a). "Joint tenancy, tenancy in common, tenancy by the entireties, joint property, common property, or part ownership does not by itself establish a partnership, even if the co-owners share profits made by the use of property." Id. at (c)(1).
The discrete question of whether Perez, Addie, and Taylorhad formed a partnership was not submitted to the jury. Notwithstanding that fact, the Sellers curiously attempt to use a Rule 50(b) motion to litigate the existence of a partnership at this stage. In so doing, the Sellers implicitly urge the Court to presume that the jury answered that question in reaching its verdict and found a partnership because they found two putative partners liable for fraud and breach of contract.
If the Court were to engage in such an effort, it would likely have to speculate about the underpinnings of the jury's deliberations. Courts are ill advised to undertake such ventures. Moreover, the record supports a jury finding that a partnership did not exist. Though there was some testimony regarding early discussions about shared profits related to the development of the Great St. James property, there was no evidence of business operations or a fixed profit-sharing arrangement between the Buyers. As such, despite some preliminary discussions regarding business plans, there was not sufficient crystallization of those plans to amount to the formation of a partnership. In sum, the Court does not find sufficient grounds to award judgment as a matter of law on the fraud claim based on the existence of a partnership between Addie, Perez, and Taylor.
The Sellers argue that judgment as a matter of law on their fraudulent misrepresentation claim against Taylor is appropriate. In order to establish that a party committed fraud, a claimant must establish: (1) a false representation of material fact, (2) the defendant's intent that the statement be acted upon, (3) reliance upon such a statement by the persons claiming to have been deceived, and (4) damages." Charleswell v. Chase Manhattan Bank, N.A., 308 F. Supp.2d 545, 568-69 (D.V.I. 2004)(citations omitted). The Sellers' motion for judgment as a matter of law on their fraud claim centers on the false representation of material fact element of their fraud claim.
Paragraph 12 of the Contracts of Sale provides:
12. FINANCING: This is a cash offer. Any fees, costs or expenses incurred by Seller related in any way to the financing of this transaction shall be paid by the Buyer. Buyer represents that it is financially able to close.
(Contracts of Sale ¶ 12, Trial Ex. 73; Trial Ex. 365.) The Sellers assert that Taylor was unable to meet the financing requirements of the Contracts of Sale and misrepresented his financial ability to close the transaction. They cite Taylor's testimony that at the time he entered into the Contracts he didnot personally possess the funds required under the contract. Taylor testified that he believed at the time he entered the Contracts of Sale, he had the financial ability to close:
Q. At the time that you entered into...
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