Charts v. Nationwide Mut. Ins. Co., Civ.A. 397CV1621CFD.

• Decision Date: 25 October 2005
• Docket Number: No. Civ.A. 397CV1621CFD.,Civ.A. 397CV1621CFD.
• Court: U.S. District Court — District of Connecticut
• Parties: Alex CHARTS and Charts Insurance Associates, Inc. Plaintiffs, v. NATIONWIDE MUTUAL INSURANCE CO., et al. Defendants

Page 357

397 F.Supp.2d 357

Alex CHARTS and Charts Insurance Associates, Inc. Plaintiffs, v. NATIONWIDE MUTUAL INSURANCE CO., et al. Defendants

No. Civ.A. 397CV1621CFD.

United States District Court, D. Connecticut.

October 25, 2005.

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Frederick E. Hedberg, Jane I. Milas, Nicole E. Liguori, Raymond A. Garcia, Richard Belford, and Steven R. Kolodziej, Garcia & Milas, New Haven, CT, for Plaintiffs.

Deborah S. Freeman, G. Eric Brunstad, Jr., James Scott Rollins, Jonathan B. Alter, and Michael C. D'Agostino, Bingham McCutchen, Hartford, CT, for Defendants.

RULING ON POST-TRIAL MOTIONS

DRONEY, District Judge.

The plaintiffs, Charts Insurance Associates, Inc. ("CIAI") and Alex Charts (collectively "Charts"), brought this three-count action against Nationwide,¹ alleging violations of the Connecticut Franchise Act ("the Franchise Act"), Conn. Gen.Stat. § 42-133e et seq., the Connecticut Unfair Trade Practices Act ("CUTPA"), Conn. Gen.Stat. § 42-110a et seq., and the implied covenant of good faith and fair dealing. Following a nine-day trial, the jury returned a verdict in favor of Charts on all three counts and awarded damages of $2,300,000. Judgment was entered on December 13, 2004. Pending are three post-trial motions: (1) Nationwide's motion for judgment as a matter of law on all three counts pursuant to Fed.R.Civ.P. 50, or, in the alternative, for a new trial pursuant to Fed.R.Civ.P. 59; (2) Charts' motion for attorney's fees; and (3) Charts' motion for prejudgment interest. For the following reasons, Nationwide's motion is granted in part and denied in part. Charts' motion for prejudgment interest is denied, and Charts' motion for attorney's fees is granted, as modified by the Court.

The procedural background of this case has been recounted in prior rulings. See Alex Charts and Charts Ins. Assoc., Inc. v. Nationwide Mutual Ins. Co., 16 Fed.Appx. 44 (2d Cir.2001); Charts v. Nationwide Mut. Ins. Co., 300 B.R. 552, 553 (2003). In order to frame the discussion of the parties' post-trial motions, however, the Court sets forth the following limited background: Charts brought this action against Nationwide on August 11, 1997, claiming various violations of Connecticut law arising from Nationwide's termination of Charts' insurance agency. After three years of contested motion practice, Magistrate Judge William I. Garfinkel issued a recommended ruling granting Nationwide's motion for summary judgment on the ground that, inter alia, Charts' claims against Nationwide were part of the bankruptcy estate of Alex and Helena Charts, and as such could not be asserted here by Alex Charts and CIAI.² On September 29, 2000, this Court approved the recommended ruling on that ground, over Charts' objection, and judgment entered for Nationwide.³ The Second Circuit, without addressing the merits of this Court's ruling, remanded to the District Court, concluding that the bankruptcy trustee was a necessary party in making a determination as to standing. On remand, therefore, this Court vacated its prior ruling and the action was consolidated with the bankruptcy action. Nationwide then filed a new motion for summary judgment, essentially relying on the same arguments presented in its first motion. On September 30, 2003, after reconsidering the parties' arguments, and hearing from the trustee of Charts' bankruptcy, the Court denied Nationwide's motion for summary judgment, finding that the claims were not property of the bankruptcy estate and Charts and CIAI had standing to assert them in this case.

On November 29, 2004, the case proceeded to trial. At the conclusion of Charts' case-in-chief, Nationwide made an oral motion for judgment as a matter of law pursuant to Rule 50. The Court denied that motion without prejudice to Nationwide renewing it at the conclusion of all the evidence. Nationwide made a second motion for judgment as a matter of law at the conclusion of all the evidence. The Court reserved judgment until after the jury had reached its verdict. On December 10, 2004, the jury returned its verdict in favor of Charts on all three counts. On December 13, 2004, the Court entered judgment in accordance with the jury's verdict. On December 23, 2004, Nationwide renewed its request for judgment as a matter of law or a new trial by filing a motion with this Court. Both parties subsequently submitted numerous memoranda of law in response to Nationwide's motion.

On January 12, 2005, Charts filed a motion for attorney's fees and a motion for prejudgment interest. Those motions also have been fully briefed by the parties. The Court heard arguments on all post-trial motions on July 20, 2005.⁴

NATIONWIDE'S MOTION FOR JUDGMENT AS A MATTER OF LAW, OR, IN THE ALTERNATIVE, FOR A NEW TRIAL

Nationwide's post-verdict motion seeks judgment as a matter of law as to all counts pursuant to Rule 50, or, in the alternative, a new trial on all counts and/or damages pursuant to Rule 59. The Court turns to the motion for judgment as a matter of law first.

I Motion for Judgment as a Matter of Law

A) Standard of Review

"If, for any reason, the court does not grant a motion for judgment as a matter of law made at the close of all the evidence, the court is considered to have submitted the action to the jury subject to the court's later deciding the legal questions raised by the motion. The movant may renew its request for judgment as a matter of law by filing a motion no later than 10 days after entry of judgment...." Fed.R.Civ.P. 50(b). When ruling on such a post-verdict motion for judgment as a matter of law, a district court may allow the judgment to stand, order a new trial or direct entry of judgment as a matter of law. Id.

A Court may properly grant a post-verdict Rule 50 motion when "there can be but one conclusion as to the verdict that reasonable men could have reached." Merrill Lynch Interfunding, Inc. v. Argenti, 155 F.3d 113, 120 (2d Cir.1998) (quoting Samuels v. Air Transport Local 504, 992 F.2d 12, 14 (2d Cir.1993)). In other words, "a Rule 50 motion for judgment as a matter of law must be granted where `(1) there is such a complete absence of evidence supporting the verdict that the jury's findings could only have been the result of sheer surmise and conjecture, or (2) there is such an overwhelming amount of evidence in favor of the movant that reasonable and fair minded men could not arrive at a verdict against him.'" Hernandez v. Keane, 341 F.3d 137, 143-44 (2d Cir.2003) (quoting Newmont Mines Ltd. v. Hanover Ins. Co., 784 F.2d 127, 132 (2d Cir.1986)). In making such a determination, a court "must view the evidence in a light most favorable to the nonmovant and grant that party every reasonable inference that the jury might have drawn in its favor." Samuels, 992 F.2d at 16. A court "cannot assess the weight of conflicting evidence, pass on the credibility of the witnesses, or substitute its judgment for that of the jury." Id. (quoting Mattivi v. South African Marine Corp., 618 F.2d 163, 168 (2d Cir.1980)). Instead, a court "must defer to the credibility assessments that may have been made by the jury and the reasonable factual inferences that may have been drawn by the jury." Williams v. County of Westchester, 171 F.3d 98, 101 (2d Cir.1999).

In considering the forgoing principles of law, it has been noted that the moving party bears a "heavy burden" on a post-verdict Rule 50 motion. Concerned Area Residents for the Env't v. Southview Farm, 34 F.3d 114, 117 (2d Cir.1994); Matthews v. Armitage, 36 F.Supp.2d 121, 124 (N.D.N.Y.1999); see also Holt v. Home Depot, U.S.A. Inc., 2004 WL 178604 (D.Conn. Jan.22, 2004) (finding that the "stringent standards that apply to" a post-verdict Rule 50 motion were not met). Moreover, "[b]ecause a judgment as a matter of law intrudes upon the rightful province of the jury, it is highly disfavored." Sabir v. Jowett, 214 F.Supp.2d 226, 236 (D.Conn.2002) (quotations and citations omitted).

Nationwide's renewed motion for judgment as a matter of law challenges the jury's verdict on each count separately. Each argument will be addressed in turn.⁵

B) Connecticut Franchise Act

The jury found that Nationwide violated the Franchise Act when it terminated its contracts with Charts and CIAI, and Nationwide now challenges this finding on several grounds.

i) Jury Issue

Nationwide first claims that the Franchise Act claim should not have gone to the jury. The Court rejects this argument for several reasons. First, and most important, it was not raised in the pre-verdict Rule 50 motion. See Rand-Whitney Containerboard Ltd. Partnership, 289 F.Supp.2d at 67; see also footnote 5 of this ruling. Second, although Charts' complaint and jury demand was filed August 11, 1997, at no subsequent time did Nationwide object to the submission of the Franchise Act claim to the jury.⁶ See Fed.R.Civ.P. 39(a)(2) (allowing for a party to object to a jury demand). Indeed, although Nationwide made several objections to the Court's proposed instructions on the Franchise Act count at the charging conference, none addressed the underlying question of whether the Franchise Act claim should be submitted to the jury. Only now, after the matter already has been submitted to the jury and a plaintiffs' verdict returned, Nationwide raises its objection. The Court finds that such an objection has been waived.⁷ Compare Thompson v. Parkes, 963 F.2d 885 (6th Cir.1992) (finding that the district court improperly found that the claims were equitable and took them from the jury one week after the jury had returned its verdict) with Merex A.G. v. Fairchild Weston Sys., Inc., 29 F.3d 821, 822 (2d Cir.1994) (finding that the district court properly took an equitable claim from the jury at the close of evidence, before the case was given to the jury).⁸

Prior decisions from the Connecticut Supreme Court and the United States Court of Appeals for the Second Circuit...