Counterclaim v. Celeritas Technologies Llc.
Decision Date | 02 July 2010 |
Docket Number | Case No. 07-1121-EFM. |
Citation | 722 F.Supp.2d 1250 |
Court | U.S. District Court — District of Kansas |
Parties | The PARADIGM ALLIANCE, INC., Plaintiff/Counterclaim Defendant, v. CELERITAS TECHNOLOGIES, LLC, and Celeritasworks, LLC, Defendant/Counterclaim Plaintiff, v. Ken Wilkerson, Third Party Defendant. |
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Brian P. Baggott, Sherman Taff Bangert Thomas & Coronado, P.C., Michael S. Cargnel, William R. Sampson, Shook, Hardy & Bacon LLP, Kansas City, MO, Kurt A. Harper, Sherwood, Harper, Dakan, Unruh & Pratt, LC, Wichita, KS, for Plaintiff/Counterclaim Defendant.
Bernard J. Rhodes, David R. Barnard, James Moloney, Jason C. Parks, Lathrop & Gage, LLP, Kansas City, MO, Jack A.J. Focht, Foulston Siefkin LLP, Wichita, KS, for Defendant/Counterclaim Plaintiff.
Mark D. Katz, Steven F. Coronado, Sherman Taff Bangert Thomas & Coronado, P.C., Kansas City, MO, for Third Party Defendant.
Plaintiff The Paradigm Alliance, Inc. (“Paradigm”) commenced this action against Defendants Celeritas Technologies, LLC and Celeritasworks, LLC (collectively “Celeritas”), alleging numerous claims, including breach of contract, breach of fiduciary duty and fair dealing arising from a joint-venture business relationship, fraud by silence, conversion, misappropriation of trade secrets, and violation of the Computer Fraud and Abuse Act. In answering, Celeritas asserted several counterclaims against Paradigm and third party defendant Ken Wilkerson, alleging claims of defamation, tortious interference with contracts, tortious interference with business expectations, violation of the Lanham Act, breach of contract, and violation of the Computer Fraud and Abuse Act. 1 Prior to trial, the Court dismissed on summary judgment Paradigm's claims of fraud by promise of future events and fraud by inducement, and dismissed all but Celeritas' defamation and tortious interference with business expectation counterclaims. The case proceeded to trial for the parties' remaining claims on November 30, 2009. At the close of Celeritas' evidence, Paradigm and Wilkerson moved for judgment as a matter of law on Celeritas' counterclaims, which the Court granted. The jury returned a verdict in Paradigm's favor.
Judgment as a Matter of Law (Doc. 505), and Motion for New Trial and/or to Alter or Amend the Current Judgment (Doc. 507). Also before the Court is Paradigm's Motion to Modify, Alter, or Amend the Judgment to Add Declaratory Relief and a Constructive Trust (Doc. 503). The Court will address each in turn.
At the close of Celeritas' evidence, Paradigm and Wilkerson moved for judgment as a matter of law as to both of Celeritas' counterclaims. After hearing argument, the Court granted Paradigm's and Wilkerson's motion, dismissing Celeritas' claims for defamation and tortious interference with business expectation. Celeritas now moves for a new trial pursuant to Rule 59(a) of the Federal Rules of Civil Procedure on these counterclaims. The basis of their motion is that the Court erred by failing to construe the evidence and inferences in a light most favorable to Celeritas, weighed the credibility of Celeritas' principal witness as to its counterclaims, and substituted its own judgment for that of the jury in ruling that Celeritas failed to demonstrate that it was damaged by Paradigm's and Wilkerson's alleged defamatory statements. For the following reasons, we deny the motion.
A motion for new trial under Rule 59(a) is committed to the sound discretion of the trial court. 2 Such a motion is “ ‘not regarded with favor and should only be granted with great caution.’ ” 3 A motion for new trial should not be granted unless “ ‘the court believes the verdict is against the weight of the evidence, prejudicial error has occurred, or substantial justice has not been done.’ ” 4 It is the moving party's burden to demonstrate trial error which constitutes prejudicial error. 5 In reviewing a motion for new trial, the Court must view the evidence in the light most favorable to the prevailing party. 6
Celeritas argues that during trial, they submitted evidence from which the jury could have found that Wilkerson made the alleged defamatory statements. Specifically, Celeritas asserts that certain emails of Eilene Nettleton-Stanger, along with entries she made into ESRI's Pivotal system, proved that the defamatory statements Wilkerson made to Steve Kinzy caused Celeritas' termination from ESRI's business partner program. While Celeritas agrees that this evidence is hearsay, they contend that it is nonetheless admissible because neither Paradigm nor Wilkerson objected to its admission at trial. As a result, Celeritas suggests that there existed sufficient question so that the Court should have permitted their counterclaims to go to the jury.
The issue is not whether Stanger's emails and Pivotal entries were admissible, but whether the evidence presented was so speculative that there was no legally sufficient basis for a jury to find in favor of Celeritas on their counterclaims. The only evidence that controverted Kinzy's testimony was speculative and unreliable, and the Court is not required to submit such evidence to the jury. As the Tenth Circuit has recognized,[I]t is the province of the jury to resolve conflicting inferences from circumstantial evidence. Permissible inferences must still be within the range of reasonable probability, however, and it is the duty of the court to withdraw the case from the jury when the necessary inference is so tenuous that it rests merely upon speculation and conjecture. 7
Stanger, who was neither present nor a party to Kinzy's conversation with Wilkerson, relied on Kinzy as the source for both her emails and the Pivotal time entries. Kinzy, who had the actual conversations with Wilkerson, and thereafter, Stanger, disagreed with the accuracy of Stanger's entries and testified that Wilkerson did not make the statements to which Stanger attributed to him. Stanger's testimony failed to provide any reliability to her entries, which are clearly speculative in nature. As a result, because Celeritas' evidence relating to Stanger's emails and Pivotal time entries merely rest upon speculation, the Court was not required to submit that evidence to the jury.
Kinzy further testified that neither Wilkerson nor Paradigm contributed to ESRI's decision to terminate Celeritas from its business partner program, and in fact, he had recommended Celeritas' termination from the program after a 2006 evaluation due to Celeritas' failure to provide financial or strategic value to the program. Stanger's emails do nothing to controvert Kinzy's testimony that, notwithstanding any alleged statements by Wilkerson or Paradigm, Celeritas would have been terminated from ESRI's program. Celeritas failed to present any evidence to demonstrate that, as a result of any alleged defamatory conduct by either Paradigm or Wilkerson, its relationship with ESRI was affected in ways that would not otherwise have been affected absent the alleged conduct. Therefore, judgement as a matter of law on their counterclaims was appropriate.
Paradigm and Wilkerson also suggest that granting a new trial based on Celeritas' hearsay evidence would be futile. They contend that their lack of objection at trial does not preclude them from asserting their objection to the admission of this hearsay evidence in a future trial or moving for summary judgment, and as Celeritas' counsel agreed, without this evidence, their counterclaims fail. Interestingly, Celeritas argues that Paradigm's and Wilkerson's failure to object to this admission of hearsay evidence became a stipulation, and therefore, neither is permitted raise objection in the future. This argument is without merit. A party does not “stipulate,” or admit to the facts contained in any particular piece of evidence simply because they choose not to object to its admission into evidence. As Wilkerson's counsel indicated, it was a strategic decision made for this trial, as nowhere in the record does either party make any express or implied admission relieving Celeritas from proving any particular set of facts contained within either Stanger's emails or her Pivotal system entries. Therefore, neither Paradigm nor Wilkerson would be precluded, as Celeritas suggests, from raising an objection to Celeritas' attempt to admit this hearsay evidence in a future trial.
Celeritas also argues that the Court erred by ruling that the jury could not legally conclude that Celeritas was damaged by the change in the tenor of their relationship with ESRI. Celeritas asserts that during trial, it provided sufficient evidence concerning damages that related to its termination from ESRI's business partner program, and as a result, whether it was damaged became a question for the jury and not the Court. They further contend that they were not required to demonstrate actual out-of-pocket expenses to prove damages, and thus, the fact that they have yet to spend the approximate $750,000 to change their primary GIS software vendor to someone other than ESRI is inapposite to the question of damages. Based on this error, Celeritas claims a new trial is required.
Paradigm and Wilkerson contend that the evidence presented at trial proves that Celeritas suffered no damage as a result of being terminated from the business partner program with ESRI. They argue that Celeritas' CEO, Rob Cossins, testified that the only damages Celeritas was claiming was related to the costs they would incur in converting their GIS software over to another vendor, which are costs that would not be incurred if Celeritas...
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