Destination Travel, Inc. v. McElhanon

• Decision Date: 20 September 1990
• Docket Number: 89CA1009,Nos. 89CA0904,s. 89CA0904
• Citation: 799 P.2d 454
• Parties: DESTINATION TRAVEL, INC., a Colorado corporation, Plaintiff-Appellee and Cross-Appellant, v. Harvey McELHANON, Defendant-Appellant, Third-Party Plaintiff-Appellant, and Cross-Appellee, v. Laura NEWMAN, Third-Party Defendant-Appellee. . III
• Court: Colorado Court of Appeals

Page 454

799 P.2d 454

DESTINATION TRAVEL, INC., a Colorado corporation, Plaintiff-Appellee and Cross-Appellant, v. Harvey McELHANON, Defendant-Appellant, Third-Party Plaintiff-Appellant, and Cross-Appellee, v. Laura NEWMAN, Third-Party Defendant-Appellee.

Nos. 89CA0904, 89CA1009.

Colorado Court of Appeals Div. III.

Sept. 20, 1990.

Haligman and Lottner, P.C., Richard I. Brown, Solomon L. Leftin, Englewood, for plaintiff-appellee and cross-appellant Destination Travel, Inc., and third-party defendant-appellee Laura Newman.

Dixon and Snow, P.C., Rod W. Snow, Denver, for defendant-appellant, third-party plaintiff-appellant, and cross-appellee.

Opinion by Judge DUBOFSKY.

Defendant, Harvey McElhanon, appeals the denial of his motion for new trial after entry of a judgment granting plaintiff, Destination Travel, Inc., rescission of its contract with defendant and awarding it damages. Plaintiff cross-appeals the trial court's refusal to award attorney fees pursuant to the contract. We affirm the denial of attorney fees, reverse the denial of defendant's motion for new trial because of juror misconduct and remand for an evidentiary hearing on this motion.

In May 1986, plaintiff entered into a joint operating agreement with Travel Express Company, a travel agency owned and operated by defendant. Under the terms of the agreement, plaintiff was responsible for providing management services and defendant was required to pay a fixed sum for a one-half interest in the combined operation.

Approximately one year later, plaintiff terminated its association with Travel Express and commenced this action to rescind the joint operating agreement. Plaintiff's damage claim alleged that it was due compensation for work done by its employees pursuant to the joint operating agreement. Thus, in determining plaintiff's damages, the pay rate of plaintiff's employees who did such work was a necessary evidentiary factor. Defendant answered the complaint and filed a third-party claim against Laura Newman, an officer of plaintiff. In response, Newman asserted a slander claim against defendant.

The jury found that plaintiff was entitled to rescission of the contract and awarded $67,000 against defendant for the management services provided by plaintiff. The jury also found for Newman on the slander claim and awarded nominal damages.

I.

Defendant contends the trial court erred in summarily denying his motion for new trial based on juror misconduct. We agree.

Defendant's motion alleged that the jury's valuation of plaintiff's management services was based in part on extraneous information presented by certain jurors during deliberations. In support of the motion, defendant submitted affidavits by his attorney which summarized the attorney's post-trial conversations with two members of the jury. According to the affidavits, two jurors had stated that one other juror had provided members of the jury with estimates, based on prior business knowledge and experience, of what he assumed would have been the appropriate salaries for several of plaintiff's employees.

A party seeking a new trial on the basis of a jury's exposure to extraneous information must establish that the information was revealed to the jury and that the information had the capacity to influence the verdict. See Ravin v. Gambrell, 788 P.2d 817 (Colo.1990); Butters v. Dee Wann, 147 Colo. 352, 363 P.2d 494 (1961).

CRE 606(b) states, in relevant part:

"Upon an inquiry into the validity of a verdict or indictment, a juror may not testify as to any matter or statement occurring during the course of the jury's deliberations or to the effect of anything upon his or any other juror's mind or emotions as influencing him to assent to or dissent from the verdict or indictment or concerning his mental processes in connection therewith, except that a juror may testify on the question whether extraneous prejudicial information was improperly brought to the jurors' attention or whether any outside influence was improperly brought to bear upon any juror. Nor may his affidavit or evidence of any statement by him concerning a matter about which he would be precluded from testifying be received for these purposes." (emphasis added)

Jurors are permitted to use their common knowledge and observations in life in deciding cases. See Mutual Life Insurance v. Good, 25 Colo.App. 204, 136 P. 821 (1913). However, jurors are not permitted to rely on specialized factual knowledge they have learned from outside the record which bears on relevant issues in a case. The use of such outside factual knowledge during the course of the jury's deliberations violates the jurors' responsibility to base their determination solely on the evidence presented in the case. Furthermore, the use of this outside knowledge deprives the parties of the right to cross-examine or otherwise to rebut its validity.

In discussing this matter, the court, in Head v. Hargrave, 105 U.S. 45, 26 L.Ed. 1028 (1882), stated:

"While they [jurors] cannot act in any case upon particular facts material to its disposition resting in their private knowledge, but should be governed by the evidence adduced, they may, and to act intelligently they must, judge of the weight and force of that evidence by their own general knowledge of the subject of inquiry."

The boundary line between general knowledge and specialized outside knowledge of facts can be vague and difficult to determine. Gault v. Poor Sisters of Saint Francis, 375 F.2d 539 (6th Cir.1967); see Mueller, Jurors' Impeachment of Verdicts and Indictments in Federal Court under Rule 606(b), 57 Neb.L.Rev. 920 (1978).

The courts have, however, generally accepted the distinction and allowed the impeachment of verdicts if it is demonstrated that specialized knowledge of facts obtained outside the record by jurors may have contributed to the verdict. Hard v. Burlington Northern R.R., 812 F.2d 482 (9th Cir.1987) (juror's statements about defendant's railroad and settlement practices warranted a hearing to determine if extraneous information was in fact communicated); State v. Thacker, 95 Nev. 500, 596 P.2d 508 (1979) (verdict set aside where a juror's outside special knowledge of cattle weight and price was used by jury on similar critical issues in the case); see United States ex rel. Owen v. McMann, 435 F.2d 813 (2d Cir.1970), cert. denied, 402 U.S. 906, 91 S.Ct. 1373, 28 L.Ed.2d 646 (1971) (jurors' statements to jury that defendant had been in trouble before constituted prejudicial error); United States v. McKinney, 429 F.2d 1019 (5th Cir.1970) ("while jury may leaven its deliberations with its wisdom and experience, in doing so it must not bring extra facts into the jury room"); Plaster v. Roper, 152 S.W.2d 927 (Tex.Civ.App.1941) (reversible error for contractor juror to calculate construction damages for jury from his personal experience rather than evidence at trial); Jones v. Sieve, 203 Cal.App.3d 359, 249 Cal.Rptr. 821 (1988); People v. Brown, 48 N.Y.2d 388, 423 N.Y.S.2d 461, 399 N.E.2d 51 (1979); El Paso Electric Co. v. Cannon, 128 Tex. 613, 99 S.W.2d 907 (1937).

Commentators in the field of evidence also agree that jury verdicts can be impeached on the basis that specialized relevant facts from outside of the record were communicated to and relied on by jurors. See 3 J. Weinstein & M. Berger, Weinstein's Evidence p 606 at 44 (4th ed. 1988); 3 D. Louisell & C. Mueller, Federal Evidence § 288 at 133 (1979); S. Gard, Jones on Evidence § 2:8 at 39 (6th ed. 1972).

Here, the attorney's affidavits indicate that the jurors made improper assumptions about the employees' pay in determining damages. However, jurors are permitted to make the best use of existing evidence to determine damages. Also, the amount of damages is often imprecise and jurors are expected to make their best estimation of the appropriate amount. See Peterson v. Colorado Potato Flake & Mfg. Co., 164 Colo. 304, 435 P.2d 237 (1967). Therefore, to the extent defendant's claims of misconduct are based on general allegations of improper assumptions by the jury in determining damages, we reject the...