Obelisk Corp. v. Riggs Nat. Bank of Washington, DC

• Citation: 668 A.2d 847
• Decision Date: 21 December 1995
• Docket Number: No. 94-CV-1391.,94-CV-1391.
• Parties: OBELISK CORPORATION, Appellant, v. The RIGGS NATIONAL BANK OF WASHINGTON, D.C., Appellee.
• Court: Court of Appeals of Columbia District

668 A.2d 847

OBELISK CORPORATION, Appellant, v. The RIGGS NATIONAL BANK OF WASHINGTON, D.C., Appellee.

No. 94-CV-1391.

District of Columbia Court of Appeals.

Argued October 26, 1995.

Decided December 21, 1995.

Michael E. Friedlander, Washington, DC, for appellant.

Richard S. Hoffman, Washington, DC, for appellee.

Before FERREN and KING, Associate Judges, and MACK, Senior Judge.

FERREN, Associate Judge:

A jury awarded appellant, Obelisk Corporation, $100,000 plus interest and statutory costs in a breach of contract dispute with appellee, The Riggs National Bank. Liability is not at issue in this appeal, which is limited to Obelisk's claim, as prevailing party, that the trial court's allowance of damages was too low. Specifically, Obelisk appeals the trial court's rulings that: (1) granted Riggs' motion for a partial directed verdict on Obelisk's claim for damages based on lost future earnings; (2) excluded certain evidence tending to prove Obelisk's lost future earnings; (3) gave a jury instruction on agreements to make future contracts; and (4) gave the jury an instruction on mitigation of damages. We find no error and therefore affirm.

I.

On May 25, 1990, Obelisk Corporation, owned and operated by its founder, Basil Rahim, entered into a consulting contract to help The Riggs National Bank expand its financial advisory services by developing a Merchant Banking Group under the direction of Alton G. Keel, Jr., a former ambassador to NATO. Under the contract, Riggs was to pay Obelisk an annual base retainer fee, or draw, of $80,000. Obelisk's principal remuneration, however, was to be 50% of the fees Riggs "actually earned" on any jointly handled merchant banking business, less a maximum offset of 25% for Riggs' out-of-pocket expenses. Obelisk's commissions were to continue for a period of four years after execution of the contract, or four years after the last renewal, whichever came later. The contract provided that Riggs had "sole discretion" over the products and services offered to customers and that Riggs retained "absolute right" to refuse any business that Obelisk introduced to Riggs.

Riggs established its Merchant Banking Group and, with the personal assistance of Rahim, began to build the foundation for its financial advisory services. Riggs and Obelisk had scheduled the contract to terminate on December 31, 1991, but had provided for automatic one-year renewals in the absence of a notice of non-renewal. Before the first contract year expired, however, Obelisk and Riggs amended the contract on December 5, 1990, to expand the scope of their cooperation. The amended contract required Obelisk to become more involved in developing the products and services of Riggs' Merchant Banking Group, including the hiring and training of Riggs' in-house merchant banking staff. Rahim orally promised to devote more time to working at Riggs. Obelisk's annual base draw was increased to $140,000, and the contract was extended to December 31, 1992. Rahim received permission to use Riggs' letterhead and business cards and to designate himself a Riggs "Senior Advisor."

The relationship between Riggs and Obelisk soured in 1991, primarily because of a disagreement over Obelisk's commissions for transactions which Riggs had initiated without Obelisk's assistance, but on which Obelisk had worked. In May 1990, Rahim had proposed a 50% commission on two such transactions, but Riggs had rejected the suggestion. The parties therefore began negotiations in 1991 to amend the contract a second time. On November 25, 1991, Rahim and Keel signed a second amendment to the original contract (as amended). Under the terms of that second amendment, Obelisk would receive a $75,000 fee for all merchant banking transactions for which Riggs received revenues before 1992; Obelisk would earn certain percentage commissions on five specified merchant banking contracts expected to generate fees in 1992; and Obelisk would receive commissions to be negotiated case-by-case for all new accounts, but not to fall below 25% of Obelisk's 50% commission for "privatization" transactions under the original contract (i.e., a floor of 12½%).¹ All other terms of the original contract (including the first amendment) were incorporated by reference into the second amendment.

Little more than a month later, on December 31, 1991, Riggs orally terminated the consulting contract with Obelisk. Riggs proceeded to dismantle its Merchant Banking Group and did not pursue any merchant banking transactions under negotiation. On July 13, 1992, Obelisk filed suit against Riggs for breach of contract, claiming damages under the contract as amended both in December 1990 and in November 1991. Specifically, Obelisk claimed as damages (1) the $140,000 base consulting fee for 1992 specified in the first amendment; (2) the $25,000 remaining unpaid on the $75,000 commission agreed upon in the second amendment for the merchant banking revenues that Riggs received before 1992; (3) a $147,396 commission on revenues Riggs received on the five contracts specified in the second amendment; (4) a $157,904 commission on a transaction involving the Mongolian Peoples Republic; and (5) a $579,934 commission reflecting lost future earnings that Obelisk allegedly would have received on projected merchant banking revenues from business under negotiation at the time of Riggs' breach.

Except as to the unpaid $140,000 under the first contract amendment, Obelisk premised its claim at trial on Riggs' alleged breach of the second contract amendment, in particular on four provisions reflecting the different categories of damages specified above. According to Rahim's trial testimony, the second amendment reflected Obelisk's agreement to forgo claims against Riggs totaling $673,000 arising out of merchant banking transactions under the original contract, in return for Riggs' assurance that Obelisk would be able to work on, and receive fees from, all future transactions however originated. Riggs answered that the second amendment had never become contractually binding; rather, it was merely a proposal on which agreement had not been reached on two important issues: the formula for fee sharing, and Rahim's proposed "restructuring plan" for Riggs' merchant banking activities and officers.

Obelisk's case for liability was presented primarily through the testimony of Rahim, the cross-examination of several Riggs' employees responsible for negotiating the second amendment, and various documents relating to that amendment. To establish damages, including the $579,934 for lost future earnings, Obelisk relied upon the express terms of the first and second amendments, as well as on the testimony of Rahim. Rahim calculated lost future earnings by listing projected Riggs' retainer fees from 24 transactions under negotiation and then multiplying those fees by the percentage Obelisk estimated its commission would be for each. Because Obelisk and Riggs had never reached agreement on Obelisk's commissions for any of these transactions, however, Rahim used percentage commission floors that Obelisk and Riggs had negotiated for two particular types of merchant banking transactions, privatization and banking management services, see supra note 1, and then "conservatively" estimated Obelisk's percentage commissions for the remaining transactions under negotiation. Obelisk's evidence also included future earnings projections prepared by Obelisk for Riggs before termination of the contract, as well as cross-examination of Riggs personnel and documentation that at least one transaction under negotiation in 1991 had been consummated.

At the completion of Obelisk's case, Riggs moved for a partial directed verdict on Obelisk's $579,934 claim for damages based on lost future earnings. The trial judge granted the motion on the ground that Obelisk's future damages were too speculative. As to the rest of Obelisk's claims derived from the first and second contract amendments, the jury returned a verdict for $100,000. At the conclusion of the trial, Riggs proposed a special verdict form that asked the jury specifically whether it found the second amendment to be an enforceable contract and, if not, whether it found Riggs had breached the original contract. Obelisk, however, opposed Riggs' proposal, the trial judge agreed with Obelisk, and the jury rendered a general verdict. The trial court entered judgment on September 23, 1994.

II.

As a threshold response to Obelisk's claim for damages attributable to lost future earnings, based on the second contract amendment, Riggs contends that the jury's $100,000 verdict, in such low amount, reflects a finding that the parties never agreed to the second amendment. As a result, says Riggs, any claim to lost future earnings is automatically precluded. Riggs argues, in the alternative, that Obelisk's successful opposition to Riggs' request for a special verdict form estops Obelisk from contesting the partial directed verdict that rejected future lost earnings since one cannot be sure, in the absence of a special verdict, that the jury based its verdict on the second amendment.

We do not believe the $100,000 verdict speaks with sufficient clarity to permit the conclusive inference that the jury did not find Riggs bound by the second amendment. The $100,000 award was no more obviously inconsistent with a finding of liability under the second amendment than under the first amendment, since that award does not correspond to a figure that could logically be calculated under either possibility.²

Riggs' contention based on its rejected request for a special verdict form fares no better. Riggs argues that Obelisk should be estopped from raising on appeal the issue of lost future earnings because Obelisk intentionally opposed use of a special verdict form that would have made clear whether the jury had based its $100,000 award on the original contract, as first amended, or on the second...