Carnell Constr. Corp. v. Danville Redev. & Hous. Auth.

• Decision Date: 03 May 2011
• Docket Number: Case No. 4:10CV00007
• Court: U.S. District Court — Western District of Virginia
• Parties: CARNELL CONSTRUCTION CORP., Plaintiff/Counterclaim Defendant, v. DANVILLE REDEVELOPMENT & HOUSING AUTHORITY, Defendant/Counterclaim Plaintiff v. BLAINE SQUARE, LLC, Defendant/Counterclaim Plaintiff v. INTERNATIONAL FIDELITY INSURANCE COMPANY, Counterclaim Defendant.

CARNELL CONSTRUCTION CORP., Plaintiff/Counterclaim Defendant,

v.DANVILLE REDEVELOPMENT & HOUSING AUTHORITY, Defendant/Counterclaim Plaintiff

v.BLAINE SQUARE, LLC, Defendant/Counterclaim Plaintiff

v.INTERNATIONAL FIDELITY INSURANCE COMPANY, Counterclaim Defendant.

Case No. 4:10CV00007

UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF VIRGINIA DANVILLE DIVISION

Entered : May 3, 2011.

CORRECTED MEMORANDUM OPINION

By: Jackson L. Kiser

Senior United States District Judge

Before me is Defendant/Counterclaim Plaintiff Danville Redevelopment & Housing Authority's and Defendant/Counterclaim Plaintiff Blaine Square, LLC's Motion for Judgment as a Matter of Law or, in the Alternative, Motion for a New Trial (ECF No. 208) pursuant to Federal Rules of Civil Procedure 50(b) and 59(a)(1)(A). The parties filed supporting and opposing briefs to the motion and I heard oral argument on April 12, 2011. The matter is now ripe for decision. For the reasons stated below, I will DENY Defendants' Motion for Judgment as a Matter of Law and GRANT Defendants' Motion for a New Trial. All other pending motions are OVERRULED AS MOOT.

I. Facts and Procedural History

The facts of this case are detailed in my January 27, 2011 Amended Memorandum Opinion (ECF No. 127) and my January 27, 2011 Memorandum Opinion (ECF No. 131). To summarize, Carnell Construction Company ("Carnell"), as the low bidder on a publicly bid construction contract ("the Contract"), agreed with the Danville Redevelopment & Housing Authority ("DRHA") to perform grading work on Phase 4 of the Blaine Square Hope VI Project ("the Project") in Danville, VA. The United States Department of Housing and Urban Development ("HUD") provided partial funding for the Project. DRHA assigned its interest in the contract to Blaine Square, LLC ("Blaine Square"), though DRHA continued to manage the Project. Counterclaim Defendant International Fidelity Insurance Company ("IFIC") issued Carnell its Performance Bond ("the Bond") on June 4, 2008, thereby acting as Carnell's surety on the Project. As the Project progressed, Carnell's costs exceeded expectations and the parties encountered numerous delays. Carnell and DRHA accused each other of breaching the Contract and Carnell accused DHRA of racial discrimination in violation of Title VI. IFIC echoed Carnell's arguments and asserted that DRHA was barred from making a claim against the bond.

On February 17, 2011, after eight days of trial, the jury returned a verdict against DRHA in the amount of $3,168,341.14. All of Plaintiff's awarded damages stemmed from the jury's finding that DRHA was liable under Title VI for intentional racial discrimination. The jury also found that Carnell, DRHA and Blaine Square all breached the Contract but did not award damages under those claims. The jury found in favor of IFIC on DRHA's counterclaim against the Bond.

II. Standard of Review

Under Rule 50(b), the district court should grant a motion for judgment as a matter of law if "there is no legally sufficient evidentiary basis for a reasonable jury to find for the nonmovingparty on that issue." DeJarnette v. Corning, Inc., 133 F.3d 293, 297 (4th Cir. 1998); Givens v. O'Quinn, 447 F.Supp.2d 593, 596 (W.D. Va. 2006); Szedlock v. Tenet, 139 F.Supp.2d 725, 729 (E.D. Va. 2001). In general, "a jury verdict is 'permitted to stand unless, under Rule 50(b), no substantial evidence is presented to support the award....'" Stamathis v. Flying J, Inc., 389 F.3d 429, 436 (4th Cir. 2004).

In assessing whether this standard has been met, a court should not attempt to substitute its judgment for the jury, weigh the evidence, or pass on the credibility of witnesses. Instead, the evidence must be construed in the light most favorable to the party against whom the motion is made, giving that party the benefit of all inferences.

Szedlock, 139 F.Supp.2d at 729 (citations omitted). "Thus, the moving party bears a 'hefty burden' in establishing that the evidence is insufficient to uphold the jury's verdict." Price v. City of Charlotte, 93 F.3d 1241, 1349 (4th Cir. 1996) (citation omitted).

Rule 59(a)(1)(A) provides for the grant of a new trial upon a party's motion "for any reason for which a new trial has heretofore been granted in an action at law in federal court." Fed. R. Civ. P. 59(a)(1)(A). The Fourth Circuit has provided a more detailed framework:

On such a motion it is the duty of the judge to set aside the verdict and grant a new trial, if he is of the opinion that [1] the verdict is against the clear weight of the evidence, or [2] is based upon evidence which is false, or [3] will result in a miscarriage of justice, even though there may be substantial evidence which would prevent the direction of a verdict.

Atlas Food Sys. and Serv., Inc. v. Crane Nat'l Vendors, Inc., 99 F.3d 587, 594 (4th Cir. 1996) (quoting Aetna Cas. & Surety Co. v. Yeatts, 122 F.2d 350, 352-53 (4th Cir. 1991). When considering a Rule 59(a) motion, unlike a Rule 50(b) motion, the Court is "permitted to weigh the evidence and consider the credibility of witnesses." Cline v. Wal-Mart Stores, Inc., 144 F.3d 294, 301 (4th Cir. 1998) (citing Poynter v. Ratcliff, 874 F.2d 219, 223 (4th Cir. 1989)). "The decision to grant or deny a new trial is within the sound discretion of the district court, and we respect that determination absent an abuse of discretion." Id.

III. Summary of Arguments

In their 84-page brief, ¹ Movants advance a host of arguments. DRHA and Blaine Square contend they are entitled to judgment as a matter of law because (1) "Carnell failed to present sufficient evidence of intentional race discrimination"; (2) "Carnell failed to comply with the notice and dispute resolution clauses of contract [sic]"; (3) "Carnell is not a person under Title VI"; (4) Title VI does not support the type of damages the jury awarded; and, (5) "Carnell is not an intended beneficiary under Title VI." Defs.' Br. JAML/New Tr. at 45, 76, 79. In the alternative, DRHA and Blaine Square contend that they are entitled to a new trial because (1) "Carnell's witnesses gave false evidence"; (2) Plaintiff's evidence on damages under Title VI was inadmissible; (3) Plaintiffs evidence on damages under Title VI did not support the jury's verdict; (4) the jury was improperly selected; (5) the jury was improperly maintained; (6) the jury was "poisoned" by Plaintiffs counsel's "improper comments"; (7) the jury was improperly instructed; (8) the jury's verdict is inconsistent; and, (9) the evidence relating to McGuireWoods Consulting should have been admitted in its entirety. Id. at 3, 8, 23, 80.

In addition to disputing Defendants' motion on the merits, Plaintiff contends Defendants' arguments regarding the kind of damages recoverable under Title VI, the verdict's alleged inconsistency, and the threshold barriers to Plaintiffs Title VI recovery were not raised at trial and are, therefore, waived. Pl.'s Br. Opp. JMAL/New Tr. at 45, 66.

IV. Analysis

A. Judgment as a Matter of Law under Fed. R. Civ. P. 50(b)

1. Sufficient Evidence

To satisfy its burden under Rule 50(b), Defendants must establish that Plaintiff failed to provide a legally sufficient evidentiary basis such that a reasonable jury could conclude that Defendants intentionally discriminated against Plaintiff in violation of Title VI and, as a result, Plaintiff suffered adverse consequences. See Lewis v. Amherst Cnty. Sch. Bd., 151 F.3d 1029, *5, n.2 (4th Cir. 1998) (Table) (affirming summary judgment under Title VI because Plaintiff failed to prove that Defendants' action was racially "motivated."); Thompson By and Through Bruckhanon v. Bd. of Special Sch. Dist. No. 1, 144 F.3d 574, 581 (8th Cir. 1998) ("To establish the elements of a prima facie case under Title VI, a complaining party must demonstrate that his/her race, color, or national origin was the motive for the discriminatory conduct."). As the Sixth Circuit has stated:

[T]o avoid summary judgment on a claim under [Title VI], a plaintiff must create a genuine issue of material fact that the defendant intended to discriminate on the basis of race. To establish a genuine issue of material fact that the defendants intentionally discriminated against [Plaintiff] on the basis of his race, plaintiff must demonstrate that the decision to exclude [Plaintiff] from a federally financed program was motivated by race and that his race was a determining factor in the exclusion. In other words, proof of discriminatory intent is critical.

Buchanan v. City of Bolivar, Tenn., 93 F.3d 1352, 1356 (6th Cir. 1996) (emphasis added); see also Gierlinger v. Gleason, 160 F.3d 858, 868 (2d Cir. 1998) (noting that, under Title VI, "plaintiffs burden is to show that that the impermissible factor was a 'substantial' or 'motivating factor' in her adverse treatment. She is not required to show that the impermissible factor dwarfed all other factors.").

More specifically, Title VI claims "are appropriately analyzed under the Title VII proof scheme...." Middlebrooks v. Univ. of Maryland, 166 F.3d 1209, *4 (4th Cir. 1999) (Table).

[A] Title VII plaintiff my 'avert summary judgment... through two avenues of proof.'... A plaintiff can survive a motion for summary judgment by presenting direct or circumstantial evidence that raises a genuine issue of material fact as to whether an impermissible factor such as race motivated the employer's adverse employment decision....

Alternatively, a plaintiff may 'proceed under [the McDonell Douglas] 'pretext framework, under which the employee, after establishing a prima facie case of discrimination, demonstrates that the employer's proffered permissible reason for taking an adverse employment action is actually a pretext for discrimination.'

Diamond v. Colonial Life & Accident Ins. Co., 416 F.3d 310, 318 (4th Cir. 2005). As I stated in my Amended Memorandum Opinion ruling on the pre-trial summary judgment motions, "[t]he exact McDonnell Douglas test is not applicable to the facts of this case because it focuses on an...