Ireland v. Dodson
| Decision Date | 26 April 2010 |
| Docket Number | Case No. 07-4082-JAR. |
| Parties | Peter IRELAND, et al., Plaintiffs,v.Robert L. DODSON, Sr., et al., Defendants. |
| Court | U.S. District Court — District of Kansas |
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Daniel D. Covington, Covington Law, LC, Ronald S. Ryburn, Anderson & Byrd LLP, Ottawa, KS, for Plaintiffs.
Dennis J. Cassidy, Patrick Ross Miller, Dezube Miller, LLC, Overland Park, KS, for Defendants.
This matter is before the Court on defendants' Motion for Judgment Notwithstanding the Verdict [sic] (Doc. 138) and Motion for New Trial (Doc. 140) as well as plaintiffs' Motion for Costs, Attorneys Fees and Pre-Judgment Interest (Doc. 146). For the reasons explained in detail below, the Court grants in part and denies in part the parties' motions.
This case has a long and contentious history.1 Plaintiffs Peter Ireland, Flightlog Pty Ltd., and Coda Superannuation Fund, ATF, sued defendants Robert L. Dodson, Sr. (“Dodson, Sr.”), Dodson International, Dodson International Parts SA, Dodson's Services, Inc. d/b/a Dodson Services, Inc. (“Dodson Services, Inc.”), Dodson Aviation, Inc., Dodson Aviation Services, and Nion, LLC in the District Court of Franklin County, Kansas relating to the sale of aircraft and related parts. In their Petition to Recover Down Payments or Enforce Agreement for Purchase of Aircraft and Other Relief, plaintiffs contended that defendants breached an agreement to sell certain aircraft and radios. Plaintiffs asserted several claims, including fraud, constructive fraud, conversion, breach of contract, breach of warranty, breach of covenant of good faith and fair dealing, and requested injunctive relief. Defendants removed the case to this Court and, after the parties reached an agreement on jurisdiction, the Court conducted a preliminary injunction hearing, which it ultimately denied and dissolved the Temporary Restraining Order (“TRO”) entered in state court.2 Plaintiffs' motion to find defendants in contempt for violating the TRO was denied.3
Defendants moved for dismissal and partial summary judgment. The Court denied the motion to dismiss with respect to plaintiffs' breach of contract, unjust enrichment, and breach of covenant of good faith and fair dealing claims against Nion, LLC, and granted the motion with respect to all of plaintiffs' claims against the remaining moving defendants, Dodson International, Dodson Aviation, Inc., Dodson International Parts, Inc., Dodson Aviation Services, and Dodson International Parts, SA.4 The Court granted Dodson, Sr. and Dodson Services, Inc.'s Motion for Partial Summary Judgment with respect to plaintiffs' constructive fraud claim and denied the motion with respect to plaintiffs' fraud claim and corporate veil/alter ego claim, as well as plaintiffs' claims for consequential damages.5 Plaintiffs' motion to amend the complaint to add punitive damages was also denied; when plaintiffs moved to reconsider, defendants moved for sanctions.6
Defendants did not move for summary judgment with respect to the breach of contract, breach of good faith and fair dealing or unjust enrichment claims with respect to Dodson Services, Inc. and Dodson, Sr., and the parties proceeded to trial on those claims, as well as for fraud and corporate veil/alter ego with respect to Dodson, Sr.7 As the case proceeded, the parties' claims continued to evolve. At the in limine hearing, plaintiffs agreed there was an enforceable contract, and dropped the request for the Statute of Frauds instruction. At that conference, defendants dropped their Statute of Frauds affirmative defense and the Court granted their motion to dismiss their counterclaim relating to several other aircraft, and clarified their remaining counterclaim with respect to the Boeing 727, not the two Cessnas.
Defendants moved for judgment pursuant to Fed.R.Civ.P. 50(a) at the close of plaintiffs' evidence and renewed the motion at the close of all evidence.8 The Court took the motions under advisement. At the jury instruction conference, plaintiffs dropped their claim for lost profits, and defendants objected to the claim for interest on a loan secured by Ireland to purchase the Boeing 727 on the ground that it was not previously disclosed or included in the Pretrial Order. Defendants also reiterated issues raised in the Rule 50(a) motion with respect to the alter ego claim and the agency breach of contract claim against Nion, LLC. Finally, plaintiffs originally stated the claim for breach of contract and unjust enrichment in the alternative and the parties both submitted proposed instructions stating the claims in the alternative i.e., if the jury found there was no contract, then the jury was to consider the unjust enrichment claim. At the instruction conference, the parties agreed on instructions and verdict interrogatories to that effect. The next morning, however, prior to instructing the jury and closing arguments, counsel for defendants requested the prefatory language to the unjust enrichment question in the instructions and verdict form be eliminated, thus setting the stage for the jury to enter a verdict in favor of plaintiffs on both claims for breach of contract and unjust enrichment. 9
Subsequently, the jury returned a verdict in favor of plaintiffs on the breach of contract claim against Dodson Services, Inc. relating to the Boeing 727 aircraft, and awarded damages in the amount of $300,000 for funds paid and $62,000 interest on the loan obtained to purchase that aircraft; 10 the breach of contract claim against Dodson Services, Inc. with respect to the purchase and installation of radio equipment, and awarded damages in the amount of $21,500; and the breach of contract claim against Dodson Services, Inc. and Nion, LLC relating to the Cessna 172 and 310 aircraft, and awarded damages in the amount of $100,000.11 The jury also ruled in favor of plaintiffs on the breach of good faith and fair dealing claim, awarding damages of $300,000 in funds paid and interest of $62,000.12 The jury found that Dodson, Sr. should be held personally liable for the obligations of Dodson Services, Inc. on the breach of contract and good faith and fair dealing claims.13 Finally, the jury found in favor of plaintiffs on the unjust enrichment claim against Dodson Services, Inc., and awarded damages in the amount of $300,000 for funds paid for the Boeing 727, $100,000 for the funds paid for the Cessna aircraft, and $21,500 for funds paid for the radio equipment and installation.14 The jury ruled in favor of Dodson Services, Inc. and Dodson, Sr. on plaintiffs' fraud claims.15 After the verdict was read, the Court orally denied defendants' Rule 50(a) motions.
On May 12, 2009, Judgment was entered in favor of plaintiffs as follows: against defendants Dodson Sr. and Dodson Services, Inc.: (1) for breach of contract regarding the Boeing 727 aircraft; (2) for breach of contract regarding purchase and installation of radio equipment; (3) for breach of the duty of good faith and fair dealing; and (4) for unjust enrichment; and against defendants Dodson Sr., Dodson Services, Inc. and Nion, LLC; and (5) for breach of contract regarding the Cessna aircraft. Judgment was entered against defendants Dodson Sr. and Dodson Services, Inc. in the amount of $483,500.00, as follows: $300,000.00 for funds paid for the Boeing 727, $62,000.00 for interest on the funds used to pay for the Boeing 727, $21,500.00 for funds paid for the purchase and installation of radio equipment, and $100,000.00 for funds paid for the Cessna aircraft. Judgment was entered against defendant Nion, LLC in the amount of $100,000.00 for funds paid for the Cessna aircraft.16
Defendants timely renewed their motion for judgment as a matter of law as well as for a new trial. They also filed a motion for supersedeas bond to stay enforcement of the judgment pending a ruling on the post-trial motions, which the Court granted despite prolonged and numerous objections by plaintiffs.17
Defendants renew their motion for judgment as a matter of law under Rule 50(b) with regard to all claims for which the jury found liability. “Judgment as a matter of law is appropriate only if the evidence points but one way and is susceptible to no reasonable inferences which may support the opposing party's position.” 18 “The question is not whether there is literally no evidence supporting the nonmoving party but whether there is evidence upon which a jury could properly find for that party.” 19 In order for a jury to properly find for a party, “more than a scintilla of evidence” must be presented to support a claim.20 The Court must consider the evidence admitted at trial, construing it and the inferences from it in the light most favorable to the non-moving party. 21 The Court may not make credibility determinations or weigh the evidence.22 “The jury has the exclusive function of appraising the credibility, determining the weight to be given to the testimony, drawing inferences from the facts established, resolving conflicts in the evidence, and reaching ultimate conclusions of fact.” 23
The elements for a breach of contract claim under Kansas law are: (1) the existence of a contract between the parties; (2) consideration; (3) the plaintiff's performance or willingness to perform in compliance with the contract; (4) defendant's breach of the contract; and (5) that plaintiff suffered damage caused by the breach.24 “[I]n order to prevail on an implied duty of good faith and fair dealing theory under Kansas law, plaintiffs must (1) plead a cause of action for ‘breach of contract,’ not a separate cause of action for ‘breach of duty of good faith,’ and (2) point to a term of the contract ‘which the defendant allegedly violated by failure to abide...
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