Lundstrom v. Daniel M. Homolka, P.A.
| Decision Date | 15 February 2022 |
| Docket Number | 19-CV-01006-CBK |
| Parties | LOWELL LUNDSTROM, JR., Plaintiff, v. DANIEL M. HOMOLKA, P.A., DANIEL M. HOMOLKA, WATTS GUERRA LLP, AND MIKAL C. WATTS, Defendants. |
| Court | U.S. District Court — District of South Dakota |
Mr Lowell Lundstrom, Jr. ("plaintiff) motioned this Court on December 16, 2021, for a new trial on the issue of damages, and in the alternative, a new trial in its entirety. Doc. 196. Defendant Watts Guerra LLP filed its response brief on January 5, 2022, in opposition to both counts, which Mr Mikal Watts joined on opposition to Lundstrom's motion for new trial on all issues.[1] Daniel M. Homolka, P.A. and Mr Daniel Homolka ("Homolka defendants") filed their own opposition brief the same day, agreeing with the arguments laid out by Watts Guerra and Mr. Watts ("Watts defendants"). Mr. Lundstrom replied to the defendants' briefs on January 19, 2022, making this matter ripe for adjudication.[2]
The issues in this case were many. For brevity's sake, this Court discusses those facts most relevant to this motion. At the heart of this dispute is another bout of litigation, the multi-district litigation ("MDL") concerning Syngenta and its 2011 decision to commercialize genetically modified corn seed in the absence of Chinese approval to import corn with the modified trait, causing corn prices to drop dramatically in the United States. See In re Syngenta AG MIR162 Corn Litis., 65 F.Supp.3d 1401 (J.P.M.L. 2014). The Judicial Panel on Multistate Litigation condensed the flurry of suits around the country into the District Court for the District of Kansas. But that did not stop Syngenta-related litigation elsewhere.
The Watts defendants, who are plaintiffs' lawyers with a focus on mass tort litigation, figured mass tort lawsuits against Syngenta would be more advantageous than taking part in the MDL and proceeded in finding potential plaintiffs elsewhere. These other lawsuits were filed in Minnesota state court, where Syngenta's North American seed business is based. The Syngenta MDL rejected removing these state proceedings into the Kansas-based federal proceedings. Instead, these state suits were consolidated in Hennepin County, Minnesota. Watts defendants would eventually file nearly 60, 000 suits in state court against Syngenta.
On December 7, 2018, the MDL Court certified a settlement class and approved a global settlement of claims against Syngenta, including claims that had been pending in the MDL, in the consolidated proceeding in Minnesota state court, and in federal court in Illinois. In re Syngenta AG MIR 162 Corn Litis., 357 F.Supp.3d 1094 (D. Kan. 2018). The litigation was settled for $1.5 billion.
As part of its project to market the Syngenta litigation, the Watts defendants contacted hundreds of attorneys in many states, entering into agreements to act as co-counsel on behalf of the affected farmers and grain shippers, agreeing to split attorneys' fees. The attorneys orchestrated town hall meetings where interested plaintiffs could learn about the litigation and sign contingency fee agreements with the Watts defendants and local counsel. One such local law firm with whom the Watts defendants entered into a joint representation agreement was the Homolka firm.
In November 2014, the Watts and Homolka defendants entered a fee sharing agreement where they agreed to share attorneys' fees recovered on behalf of any farmer who agreed to participate in litigation against Syngenta and hire the Watts and Homolka defendants as their attorneys. Homolka in turn contacted attorneys James Hovland and Dan Rasmus, inviting them to participate in the project. In December 2014, Rasmus contacted Lundstrom to see if he would be interested in helping to market the Syngenta corn litigation project to farmers. Lundstrom, a farmer, also had marketing experience.
On December 15, 2014, Lundstrom, Rasmus, Hovland, Homolka, and Hector Eloy Guerra met in a law office in Minnesota to discuss "hiring" Lundstrom to assist in marketing the Syngenta corn litigation. Lundstrom alleged that Homolka asked Lundstrom how much money he would require per month to free him up to work on the project. Plaintiff also alleged that Homolka agreed to pay Lundstrom $10, 000 per month "through the end of the project," that is, until the litigation was dismissed or settled, to lease the web site LostCornIncome.com and for Lundstrom's services in brokering and placing media on the site. The question of when these web-leasing payments were agreed to end were heatedly debated in the November 2021 jury trial and a centerpiece of this litigation.
Plaintiff also claims that he agreed to engage in a host of other marketing related activities in exchange for further compensation. In addition to establishing and maintaining a web domain (lostcornincome.com), plaintiff claims he produced a 30-minute-long infomercial ("LOST CORN INCOME: Special Report"), arranged and managing a toll-free telephone number for prospective clients to call, managed all media buys (for formats including radio, newspapers, and television), prepared fact sheets to give prospective agricultural clients, and prepared budgets for all of the above. Plaintiff also participated in town hall meetings used to solicit and attract Syngenta litigation clients.
In addition to the question of how much Lundstrom was owed for these web-leasing payments, namely, when were they agreed to cease, two other promises were alleged by Lundstrom to have been made. Plaintiff asserted that a promise was made by Mr. Homolka that Lundstrom would be reimbursed for his traveling to participate in these town hall meetings with $50, 000 for a new truck. Finally, and most importantly to Lundstrom, he argued before this Court and a jury of his peers that defendant Homolka promised him a $3.4 million bonus if he could sign up plaintiff farms whose claims totaled six million acres, i.e., that this bonus was non-discretionary. Lhe theory presented by Lundstrom was that he was told by Homolka that if he accepted less money monthly "up front," he would receive a higher bonus at the end of the project. Whether this promise of a multi-million-dollar bonus existed and was non-discretionary posed a critical question at trial. Despite the serious financial stakes at hand, no written agreement was ever drafted, because of purported concerns by defendants about fee-sharing between the defendants and Lundstrom, a non-lawyer. Without such an agreement on paper, the oral contract made by Homolka and what exactly it entailed, was the crux of this litigation.
On November 12, 2021, a jury of eight found that Daniel M. Homolka P. A and Watts Guerra LLP were liable to the plaintiff for a breach of contract made by Mr. Homolka, of which Daniel M. Homolka, P.A. and Watts Guerra LLP are jointly liable because Homolka was acting as agent for the two entities. However, the jury did not find that the fourth defendant, Mikal Watts, was culpable because Mr. Homolka was not acting as agent of Watts, but rather only Watts' limited liability partnership. Lhe jury also did not find that Mr. Homolka - and thus, any of the defendants - had fraudulently induced Mr. Lundstrom. Accordingly, the jury awarded Lundstrom $175, 000 in compensatory damages and decided that he was not entitled to prejudgment interest. The jury also found that Mr. Watts was acting as a partner for Watts Guerra and that Mr. Watts, Watts Guerra, Mr. Homolka, and Daniel M. Homolka, P.A. were not engaged in a joint venture. The Court entered an amended judgment in favor of Mr. Lundstrom against defendants Daniel M. Homolka, P.A. and Watts Guerra LLP jointly and severally.[3]
Mr. Lundstrom argues a new trial on damages is necessary because there is no reasonable basis in the evidence to support a compensatory award of only $175, 000. Lhe plaintiff asserts this measure of damages is too divorced from the facts of this case when three separate theories of breach of contract were presented: (1) the $10, 000 per month web-leasing payments; (2) the $50, 000 truck reimbursement, and the (3) purported non-discretionary $3.4 million bonus. The three liable defendants counter that the verdict is firmly grounded in the evidence presented to the jury, and that because there was a breach of contract, that does not mean the jury found for Lundstrom on all three theories pertaining to beach of the oral contract. Instead, the defendants point to the evidence on how the jury could have conjured the $175, 000 figure.
Next, in the alternative, the plaintiff motions this Court for a new trial in its entirety, out of concern the jury brought back a "compromise verdict," asserting there was a close question of liability, the jury's compensatory award was inadequate, and that there was an odd pattern of jury deliberations. Taken together, Lundstrom argues, the verdict was borne out of compromise among differing factions in the jury and is not in fact a unanimous verdict.
To invade the province of the jury should only be done in the rarest of cases. Because of the reasons set forth, this case does not rise to the high bar to disrupt the place of the jury in our civil justice system.
Pursuant to Federal Rule of Civil Procedure 59(a)(1), district courts may grant motions for new trials, or for certain aspects of a trial, including on the sole question of the appropriate measure of damages. Kirk v. Schaeffler Group USA Inc., 887 F.3d 376, 390 (8th Cir. 2018). See Bavlsik v. Gen. Motors, LLC, 870 F.3d 800, 809 (8th Cir. 2017) (). See...
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