Pipeline Prods., Inc. v. Madison Cos.
| Decision Date | 17 March 2020 |
| Docket Number | CIVIL ACTION No. 15-4890-KHV |
| Citation | 446 F.Supp.3d 733 |
| Parties | PIPELINE PRODUCTIONS, INC., et al., Plaintiffs, v. The MADISON COMPANIES, LLC, et al., Defendants. |
| Court | U.S. District Court — District of Kansas |
Anthony W. Bonuchi, Bonuchi Law, LLC, Kansas City, MO, Jack D. McInnes, Pamela Nagel Jorgensen, McInnes Law LLC, Prairie Village, KS, for Plaintiffs.
Benjamin D. Scheibe, Pro Hac Vice, Eric M. George, Pro Hac Vice, Ira G. Bibbero, Pro Hac Vice, Milin Chun, Pro Hac Vice, Russell F. Wolpert, Pro Hac Vice, Browne George Ross LLP, Los Angeles, CA, Timothy A. Shultz, Whitney L. Casement, Goodell, Stratton, Edmonds & Palmer, LLP, Topeka, KS, for Defendants.
On February 3, 2020, the Court began an eight-day trial in this matter. On February 10, 2020, after plaintiffs rested their case in chief, defendants orally moved for judgment as a matter of law pursuant to Rule 50(a), Fed. R. Civ. P. Oral Motion (Doc. #825). The Court took that motion under advisement. On February 13, 2020, after defendants had completed their case in chief, defendants filed written authorities in support of their oral motion of February 10. Defendants' Memorandum In Support Of Motion For Judgment As A Matter Of Law (Doc. #822). Later on February 13, the jury returned a verdict which found defendants liable on all claims except plaintiffs' claims for tortious interference with a business relationship or expectancy against Madison Companies, LLC ("Madison").1 Jury Verdict (Doc. #830). Specifically, the jury found (1) Horsepower Entertainment, LLC ("Horsepower") liable to Pipeline Productions, Inc. ("Pipeline") for breach of contract, breach of fiduciary duty and tortious interference, (2) Horsepower liable to Backwood Enterprises, LLC ("Backwood") for breach of contract, breach of fiduciary duty and tortious interference and (3) Madison liable to Pipeline and Backwood for breach of fiduciary duty. This matter is before the Court on defendants' Oral Motion (Doc. #825) filed February 10, 2020 and Defendants' Memorandum In Support Of Motion For Judgment As A Matter Of Law (Doc. #822) filed February 13, 2020. For the reasons below, the Court overrules defendants' motion.
Under Rule 50(a)(1), Fed. R. Civ. P., the Court may grant judgment as a matter of law when "a party has been fully heard on an issue during a jury trial and the [C]ourt finds that a reasonable jury would not have a legally sufficient evidentiary basis to find for the party on that issue." A moving party is entitled to judgment if the evidence "points but one way and is susceptible to no reasonable inferences which may support the opposing party's position." Deters v. Equifax Credit Info. Servs., Inc., 202 F.3d 1262, 1268 (10th Cir. 2000) (internal quotations and citations omitted). 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." Herrera v. Lufkin Indus., Inc., 474 F.3d 675, 685 (10th Cir. 2007).
In considering a motion for judgment as a matter of law, the Court reviews all of the evidence in the record and construes it in the light most favorable to the nonmoving party. Tyler v. RE/MAX Mountain States, Inc., 232 F.3d 808, 812 (10th Cir. 2000) (citations omitted). In doing so, the Court must refrain from making credibility determinations and weighing the evidence: the jury "has the exclusive function of appraising 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." United Int'l Holdings, Inc. v. Wharf (Holdings) Ltd., 210 F.3d 1207, 1227 (10th Cir. 2000) (internal quotations and citation omitted).
Defendants assert that they are entitled to judgment as a matter of law on all of plaintiffs' claims. Specifically, defendants argue that a reasonable jury could not find for plaintiffs because (1) plaintiffs' evidence regarding actual damages is speculative and conjectural, (2) plaintiffs' evidence does not satisfy the necessary elements of each claim and (3) plaintiffs cannot recover punitive damages.
Defendants assert that plaintiffs did not present concrete, non-speculative evidence of actual damages. Because actual damages are an essential element of plaintiffs' claims for breach of contract, breach of fiduciary duty and tortious interference, defendants argue that no reasonable jury could find in favor of plaintiffs on these claims.
Under Kansas law, actual damages are an essential element of breach of contract, breach of fiduciary duty and tortious interference claims. Gateway Fin. Grp., Inc. v. Mission Bank, No. 95-2428-GTV, 1997 WL 567791, at *5 (D. Kan. Aug. 15, 1997) (); Fergus v. Faith Home Healthcare, Inc., No. 18-2330-JWL, 2019 WL 3817961, at *10 (D. Kan. Aug. 14, 2019) (). To satisfy this element, plaintiffs must provide evidence of actual damages that is "based on more than mere speculation, conjecture, or surmise." Sibley v. Sprint Nextel Corp., No. 08-2063-KHV, 2017 WL 8944042, at *4 (D. Kan. Apr. 21, 2017), report and recommendation adopted, No. 08-2063-KHV, 2017 WL 2471304 (D. Kan. June 8, 2017) (citations omitted). Plaintiffs' evidence of actual damages can be adequately concrete even if they do not quantify or place a specific dollar amount on them. Fergus, 2019 WL 3817961, at *10 (); Sunlight Saunas, Inc. v. Sundance Sauna, Inc., 442 F. Supp. 2d 1160, 1170 (D. Kan. 2006) (). In other words, where it is an essential element of a claim, Kansas law requires plaintiffs to prove the existence of non-speculative, actual damages – but not necessarily the dollar amount of such damages.
Defendants' argument focuses on plaintiffs' claims for tortious interference and breach of fiduciary duty.2 In that regard, defendants argue that plaintiffs failed to provide non-speculative evidence of specifically-quantifiable damages, and plaintiffs therefore failed to establish the fact of damage. As the Court explained above, however, Kansas law does not support this rigid test for actual damages. Plaintiffs need only prove the existence of non-speculative, actual damage. They have done so here. With respect to the tortious interference claims, Mosiman testified that Horsepower stole several employees (Nate Prenger, Brian Pilsl, Brian Wingerd and Taylor Gustafson) from Backwood and Pipeline, which cost Backwood and Pipeline their value and forced them to hire and train new ones. Mosiman likewise testified that when Horsepower and Madison breached their fiduciary duties to Backwood and Pipeline by trying to force them to accept different deals, suing and threatening more litigation, sending defamatory letters and stealing their employees, Horsepower and Madison severely damaged their reputation and viability as music festival business. As a result, Backwood and Pipeline have been unable to produce any more music festivals. Because plaintiffs provided non-speculative evidence of actual damages, the Court overrules defendants' motion on this issue.
Horsepower asserts that it is entitled to judgment as a matter of law on the breach of contract claims because no reasonable jury could find that a contract existed between it and Pipeline and/or Backwood. Specifically, Horsepower argues that any alleged agreement omitted too many key provisions to be binding, which shows that the parties only intended to enter a future contract.
Under Kansas law, parties form a binding contract – which can be written or oral – when they reach a meeting of the minds on all essential elements of the agreement. See Ludwikoski & Assocs., Inc. v. Yeti Coolers, LLC, No. 13-2649-EFM, 2014 WL 3767684, at *5 (D. Kan. July 31, 2014) ; see also RLI Ins. Co. v. Russell, No. 14-2479-EFM, 2015 WL 9455569, at *5 (D. Kan. Dec. 23, 2015). For the parties to reach a meeting of the minds, "there must be a fair understanding between [them] which normally accompanies mutual consent and the evidence must show with reasonable definiteness that the minds of the parties met upon the same manner and agreed upon the terms of the contract." Felling v. Hobby Lobby, Inc., No. 04-2374-GTV, 2005 WL 928641, at *3 (D. Kan. Apr. 19, 2005) (citations omitted). To determine whether the parties did so, the Court applies an objective test that asks whether they manifested their intent to be bound by the agreement. Sw. & Assocs., Inc. v. Steven Enterprises, LLC, 32 Kan. App. 2d 778, 781, 88 P.3d 1246, 1249 (2004). In other words, the relevant inquiry is the "manifestation of a party's intention, rather than the actual or real intention." Id. Accordingly, the Court looks to the parties' "outward expression[s] of assent." Pierce v. PrimeRevenue, Inc., No. 17-2233-JWB, 2018 WL 4749331, at *2 (D. Kan. Oct. 2, 2018). Parties can manifest an intent sufficient to form a binding contract even if they "contemplate the subsequent execution of a formal instrument as evidence of their agreement," and even if they "know[ ] that there are other matters on which the have not agreed and on which they expect further negotiation." Phillips & Easton Supply Co. v. Eleanor Int'l, Inc., 212 Kan. 730, 735, 512 P.2d 379, 384 (1973) ; Storts v. Martin K. Eby Const. Co., 217 Kan. 34, 40, 535 P.2d 908, 913 (1975).
Here, a reasonable jury could find that Backwood, Pipeline and Horsepower entered into an agreement to partner in the...
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