Burke Ins. Grp., Inc. v. Shuya
| Decision Date | 20 September 2012 |
| Docket Number | NO. 29,858,29,858 |
| Parties | BURKE INSURANCE GROUP, INC., Plaintiff-Appellee/Counter-Defendant, and BURKE INSURANCE GROUP, LLC, Appellee/Counter-Defendant, v. ROBERT J. SHUYA, Defendant-Appellant/Counter-Plaintiff. |
| Court | Court of Appeals of New Mexico |
This memorandum opinion was not selected for publication in the New Mexico Appellate Reports. Please see Rule 12-405 NMRA for restrictions on the citation of unpublished memorandum opinions. Please also note that this electronic memorandum opinion may contain computer-generated errors or other deviations from the official paper version filed by the Court of Appeals and does not include the filing date.
APPEAL FROM THE DISTRICT COURT OF DOÑA ANA COUNTY
Keleher & McLeod, P.A.
Charles A. Pharris
Thomas C. Bird
Cassandra R. Malone
Albuquerque, NM
for Appellee/Counter-Defendant
Michael Allison
Albuquerque, NM
for Appellant/Counter-Plaintiff
Defendant and Counter-Plaintiff Robert Shuya appeals from the judgment on a jury verdict in favor of Plaintiff and Counter-Defendant Burke Insurance Group, Inc. and Counter-Defendant Burke Insurance Group, LLC (collectively "Burke Insurance"). On appeal, Shuya argues that (1) the jury's denial of his counterclaims based on the theory of offset is not supported by the pleadings or evidence, (2) the jury's award of liquidated damages was not properly supported by the evidence, (3) the jury's award of punitive damages is not supported by the evidence, and (4) the district court's award of attorney fees was improper. We affirm.
Shuya appeals from the judgment on a jury verdict in favor of Burke Insurance. The dispute arose out of Shuya's employment as an insurance and bonding producer by Burke Insurance. His employment was first governed by an employment agreement dated December 26, 1997.
In early 2001, Will Burke (Burke), the principal of Burke Insurance, presented Shuya with a second employment agreement (the Agreement). This secondAgreement superceded all prior agreements. Relevant to this appeal, the Agreement contained (1) a confidentiality provision, in which Shuya agreed to not disclose, use, or permit the use of trade secrets for the purpose of competition against Burke Insurance; (2) a non-compete provision prohibiting Shuya from investing in an entity that sells, or participating in the sale, of any product or service offered by Burke Insurance; and (3) a non-solicitation provision prohibiting Shuya from contacting or solicitating customers, clients, or accounts of Burke Insurance. Each provision contained a section stating that "[i]n the event of a breach by [Shuya of the provision, Burke Insurance] shall be entitled to liquidated damages of three (3) times [Shuya]'s commissions for the 12 months prior to his termination." The Agreement also contained a provision providing that the "prevailing party . . . shall be entitled to recover all reasonable costs," including reasonable attorney fees in the event of litigation under the Agreement.
The Agreement provided Shuya with a right to purchase his book of business if he met a vesting requirement, which was that his book of business had to be worth $100,000 on his third anniversary of his employment. Under the Agreement, for each year that Shuya worked after vesting, he was entitled to purchase ten percent of his book of business for $1. To the extent that he worked less than ten years after vesting, he could purchase the unvested portions of the book of business by paying the amountof commissions for the unvested portions for the previous twelve months. In the event that Shuya attempted to purchase his book of business, the Agreement provided Burke Insurance with a "right of first refusal." In order to exercise the right of first refusal, the Agreement required Burke Insurance to pay Shuya the amount that Shuya would have had to pay to purchase the book of business.
Shuya remained employed by Burke Insurance until February 1, 2003, when Burke informed Shuya in a meeting that Burke Insurance was terminating his employment. On February 7, 2003, Burke sent a letter memorializing the termination and reminding Shuya about the continuing applicability of the non-compete, nonsolicitation, and confidentiality provisions of the Agreement. On February 20, 2003, Shuya sent a letter informing Burke Insurance that he intended to purchase his book of business. On March 17, 2003, Burke Insurance notified Shuya that it was "exercising its first right of refusal to sell the book" of business. Burke Insurance never made a payment to Shuya for exercising its right of first refusal.
Burke Insurance filed this action against Shuya in the district court, claiming breach of contract, misappropriation of trade secrets, breach of fiduciary duty, unjust enrichment, breach of good faith and fair dealing, violation of the Unfair Practices Act, misappropriation, defamation, tortious interference with contract, conspiracy, prima facie tort, trespass to chattels, respondeat superior/vicarious liability, andentitlement to remedies. Shuya counterclaimed for breach of contract, breach of implied covenant of good faith and fair dealing, and unjust enrichment stemming from Burke Insurance refusing to sell Shuya the book of business and not tendering payment for exercising the right of first refusal. After a trial, the jury found in favor of Burke Insurance for its claims against Shuya. The jury answered special interrogatories, stating that it found that Shuya breached the non-solicitation, noncompetition, and confidentiality provisions contained in the Agreement. The jury awarded compensatory damages in the amount of $308,874 based on the liquidated damages provisions in the Agreement. The jury also awarded Burke Insurance $70,000 in punitive damages, finding that Shuya acted maliciously, recklessly, or oppressively. The jury found in favor of Burke Insurance on Shuya's counterclaims. The district court awarded Burke Insurance attorney fees and costs pursuant to the Agreement and the New Mexico Uniform Trade Secrets Act, NMSA 1978, §§ 57-3A-1 to -7 (1989).
On appeal, Shuya argues that (1) the jury's denial of his counterclaims based on the theory of offset is not supported by the pleadings or evidence, (2) the jury's award of liquidated damages was not properly supported by the evidence, (3) the jury's award of punitive damages is not supported by the evidence, and (4) the district court's award of attorney fees was improper.
Shuya's arguments are a challenge to the sufficiency of the evidence upon which the jury's verdict was based. "If the verdict below is supported by substantial evidence, which we have defined as such relevant evidence that a reasonable mind would find adequate to support a conclusion, we will affirm the result." Weststar Mortg. Corp. v. Jackson, 2003-NMSC-002, ¶ 8, 133 N.M. 114, 61 P.3d 823 (internal quotation marks and citation omitted). We review the evidence in a light favoring the verdict and resolve conflicts in favor of the prevailing party. Sandoval v. Baker Hughes Oilfield Operations, Inc., 2009-NMCA-095, ¶ 12, 146 N.M. 853, 215 P.3d 791. "It is not the task of a reviewing court to sit as a trier of fact or to reweigh the evidence." Weststar Mortg. Corp., 2003-NMSC-002, ¶ 8.
Shuya argues that the denial of his counterclaims based upon the theory of "offset" is not properly supported by the pleadings or the evidence. Shuya contends that Burke testified that his only excuse for refusing to allow Shuya to buy the book of business or tender payment for exercising the right of first refusal was because he believed that Shuya owed Burke Insurance money for breach of the non-competitionprovisions of the Agreement, that the breach effectively "offset" Shuya's right to purchase his book of business, and that there was no "real evidence" to support this testimony. Shuya premises his argument on an assertion that he properly exercised his rights to purchase his book of business, that Burke exercised its right of first refusal, but that Burke never paid the money necessary to exercise the right of first refusal.
However, Burke Insurance responds that it "did not necessarily prevail on an 'offset' theory and did not have to prevail on an 'offset' theory for the jury to deny . . . Shuya's claims" based on the jury instructions in this case. Indeed, the district court provided a jury instruction titled "Burke Insurance's statement of denial and affirmative defenses" to Shuya's counterclaims. The instruction stated that "Shuya's prior breach or failure to satisfy conditions of the [Agreement], whether known to Burke Insurance at the time of the breach or not, relieved Burke Insurance of any duty of performance under the [Agreement]." Shuya did not object to this jury instruction nor does he argue on appeal that this jury instruction was erroneous as a matter of law. This instruction therefore became the law of the case. See Sandoval, 2009-NMCA-095, ¶ 43 ().
Burke Insurance presented sufficient evidence that a reasonable mind could findadequate to support a conclusion that Shuya breached the Agreement's provision pertaining to an employee's duties and responsibilities prior to his termination. See Weststar Mortg. Corp. , 2003-NMSC-002, ¶ 8. Burke Insurance presented evidence that Shuya's performance in mishandling several accounts and failing to correct or obtain financial information relating to several accounts violated his contractual responsibilities pertaining to performance. Burke Insurance also presented evidence that Shuya misrepresented himself to a client as an attorney- in-fact for an insurance company and issued bonds without authorization from Burke Insurance. Further, Burke testified that Shuya issued a bond in direct...
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