U.S. Conference of Mayors v. Great-W. Life & Annuity Ins. Co.

• Decision Date: 29 August 2018
• Docket Number: Civil Action No. 16-00660 (TFH)
• Citation: 327 F.Supp.3d 125
• Parties: UNITED STATES CONFERENCE OF MAYORS, et al., Plaintiffs, v. GREAT-WEST LIFE & ANNUITY INSURANCE CO., Defendant.
• Court: U.S. District Court — District of Columbia

327 F.Supp.3d 125

UNITED STATES CONFERENCE OF MAYORS, et al., Plaintiffs,

v.GREAT-WEST LIFE & ANNUITY INSURANCE CO., Defendant.

Civil Action No. 16-00660 (TFH)

United States District Court, District of Columbia.

Signed August 29, 2018

Jennifer Butler Routh, Margaret Hanley Warner, Michael S. Nadel, Erika N. Pont, McDermott Will & Emery LLP, Washington, DC, for Plaintiffs.

Deanna M. Rice, Mary Patrice Brown, Shannon M. Barrett, O'Melveny & Myers, LLP, Washington, DC, Robert M. Little, Great-West Life & Annuity Insurance Co., Greenwood Village, CO, Edward C. Stewart, Michael L. O'Donnell, Shawn K. Neal, Stephanie Leech Foote, Wheeler Trigg O'Donnell LLP, Denver, CO, for Defendant.

MEMORANDUM OPINION

Thomas F. Hogan, Senior United States District Judge

Plaintiffs here are the United States Conference of Mayors and its subsidiary United States Mayor Enterprises, Inc. (collectively, "the Mayors" or "Plaintiffs"). They sued Defendant Great-West Life & Annuity Insurance Company ("Great-West" or "Defendant") in April 2016 for breach of contract and breach of the implied covenant of good faith and fair dealing. Initially, Defendant responded with counterclaims against Plaintiffs, but dropped them on the eve of trial. At the close of Plaintiffs' case-in-chief, Defendant moved orally for a directed verdict and judgment as a matter of law. The Court took the motion under advisement insofar as it related to damages and otherwise denied the motion. On January 23, 2018, after a nine-day trial, the jury returned an $8 million verdict for Plaintiffs and concluded that Defendant had breached both its contract with Plaintiffs and the implied covenant of good faith and fair dealing. Verdict Form, ECF No. 218. Defendant then renewed its motion for judgment as a matter of law. Def.'s Mot. ("Mot."), ECF No. 224. Plaintiffs opposed the motion, Pls.' Opp'n ("Opp'n"), ECF No. 235, and Great-West replied, Def.'s Reply ("Reply"), ECF No. 238. The Court held a hearing on May 23, 2018. Upon consideration of the parties' briefing and argument, for the reasons discussed herein, and in accordance with the oral ruling announced in open court on May 23, the Court denies Defendant's motion for judgment as a matter of law.

BACKGROUND

The United States Conference of Mayors ("USCM") is "a non-partisan organization of cities with populations of 30,000 or more." Am. Compl. ¶ 5, ECF No. 22. USCM's wholly-owned subsidiary, United States Mayor Enterprises, Inc. ("USME"), markets products to cities and their employees, including retirement products and services. Id. ¶¶ 2, 6. In 2012, the Mayors entered into two contracts with Great-West relating to USCM's Retirement Program: (1) a License Agreement between USCM and Great-West, and (2) a Joint Marketing and Training Agreement ("JMTA") between USME and Great-West. Id. ¶¶ 1, 16. Both Agreements included an initial ten-year term. JMTA ¶ 4.1; License Agreement ¶ 6.1, ECF Nos. 9-7 & 9-8.

In December 2015, the Mayors notified Great-West that they intended to terminate the Agreements for cause based on Great-West's contractual breaches. Am. Compl. ¶ 28. The parties attempted to engage in mediation but were unable to agree on a meeting location. March 15, 2016 Letters to JAMS, ECF Nos. 9-12 & 9-13. On April 6, 2016, the Mayors filed their original complaint. ECF No. 1. On September 30, the Mayors filed an Amended Complaint, alleging breach of contract and breach of the implied covenant of good faith and fair dealing. Am. Compl. ¶¶ 29–38, ECF No. 22. Great-West filed its Answer and Counterclaim on October 17, asserting counterclaims for unjust enrichment, breach of contract, and breach of the implied covenant of good faith and fair dealing. ECF No. 26. The Mayors filed their Answer to Great-West's counterclaims on October 28. ECF No. 28.

Both parties filed various motions in limine, which the Court resolved before trial. Among these rulings, the Court excluded an anonymous letter detailing allegations of sexual harassment and other forms of misconduct against one of Defendant's employees but permitted the letter to remain available for impeachment and cross-examination purposes. ECF No. 150. Two employees were fired as a result of the investigation that followed receipt of the anonymous letter, and the Court ruled that the internal communication announcing the firings was admissible, as was Defendant's filing with the Financial Industry Regulatory Authority ("FINRA") reporting these employees' ethical violations. Id. Also relevant here, the parties disputed the significance of certain attachments to their Agreements, which showed profit and reimbursement calculations based on estimated participant enrollment in the insurance program. See Mot. to Exclude Improper & Irrelevant Evidence at 4, ECF No. 103. Defendant argued that these were "hypothetical examples" rather than contractual obligations and that Plaintiffs should not be allowed to imply that a failure to achieve those figures constituted a breach of contract. Id. The Court ruled that Plaintiffs could not refer to the attachments as projections but instead must refer to them as "hypothetical examples." ECF No. 151. Defendant also argued—for the first time after months of discovery and pretrial disputes—that the contract language precluded Plaintiffs from seeking lost revenue or profits, among other types of damages. ECF No. 98. The Court disagreed and so ruled in U.S. Conference of Mayors v. Great-West Life & Annuity Insurance Co. , 288 F.Supp.3d 4 (D.D.C. 2017), providing several reasons why Defendant's reading of the contract was unnatural. Id. at 9–10.¹

Now, Defendant moves for judgment as a matter of law, alleging that Plaintiffs have, over the course of this litigation, "refused to commit to a single damages theory—or even to any particular set of alternative theories." Mot. at 2. For purposes of judgment as a matter of law, the relevant facts include only the evidence that was presented to the jury. See Radtke v. Lifecare Mgmt. Partners , 795 F.3d 159, 165 (D.C. Cir. 2015) ("Appellants have shown at most that there was a conflict in the evidence before the jury. It is the function of the jury and not this court to weigh evidence and make findings."). Accordingly, the Court will focus on the evidence adduced at trial and related legal arguments here.

ANALYSIS

I. STANDARD OF REVIEW

Federal Rule of Civil Procedure 50 allows parties to seek judgment as a matter of law "any time before the case is submitted to the jury," and to renew that motion after trial. Fed. R. Civ. P. 50(a)(2), (b). "The motion must specify the judgment sought and the law and facts that entitle the movant to the judgment." Fed. R. Civ. P. 50(a)(2).

"Judgment as a matter of law is appropriate only if the evidence and all reasonable inferences that can be drawn therefrom are so one-sided that reasonable men and women could not have reached a verdict in plaintiff's favor." Estate of Muldrow v. Re-Direct, Inc. , 493 F.3d 160, 165 (D.C. Cir. 2007) (citing McGill v. Munoz , 203 F.3d 843, 845 (D.C. Cir. 2000) ). "In making that determination, a court may not assess the credibility of witnesses or weigh the evidence." Halcomb v. Woods , 610 F.Supp.2d 77, 80 (D.D.C. 2009) (citing Hayman v. Nat'l Acad. of Sciences , 23 F.3d 535, 537 (D.C. Cir. 1994) ); see also Wright & Miller, 9B Fed. Prac. & Proc. Civ. § 2524 at 250–57 (3d ed. 2018). "Even if the Court finds the evidence that led to the jury verdict unpersuasive, or that it would have reached a different result if it were sitting as the fact-finder, that is not a basis for overturning the jury's verdict and granting judgment as a matter of law." Pitt v. Dist. of Columbia , 558 F.Supp.2d 11, 16–17 (D.D.C. 2008). Thus, "the Court must consider the evidence in the light most favorable to the non-moving party and draw all reasonable inferences in her favor." Halcomb , 610 F.Supp.2d at 80.

Defendant makes two arguments in its motion. The questions before the Court are 1) whether the Mayors adequately established that Great-West's breach of contract caused the Mayors damages and 2) whether the jury had enough evidence to award damages in the amount that it did without engaging in guesswork or speculation.² See Mot. at 9. The Court will address each argument in turn.

II. CAUSATION

A breach of contract is "an unjustified failure to perform all or any part of what is promised in a contract entitling the injured party to damages." Window Specialists, Inc. v. Forney Enters., Inc. , 106 F.Supp.3d 64, 89 (D.D.C. 2015) (citing Fowler v. A & A Co. , 262 A.2d 344, 347 (D.C. 1970) ). "A ‘material’ breach is one where the injured party received something substantially less or different from that for which he bargained." Id. Causation is an element of a breach of contract claim. See, e.g., Tsintolas Realty Co. v. Mendez , 984 A.2d 181, 187 (D.C. 2009) ("To prevail on a claim of breach of contract, a party must establish (1) a valid contract between the parties; (2) an obligation or duty arising out of the contract; (3) a breach of that duty; and (4) damages caused by breach."). Nonetheless, "[n]ominal damages at least can be recovered immediately upon the happening of the breach." Wright v. Howard Univ. , 60 A.3d 749, 753 (D.C. 2013) ; see also Window Specialists , 106 F.Supp.3d at 92 ("If a party establishes breach of contract but fails to prove actual damage or its proof of damages is vague or speculative, the party is entitled to no more than nominal damages.").

Few D.C. cases discuss failure to adequately prove causation, but under "Maryland law, the element of proximate causation for breach of contract lost profit damages is satisfied when the breach was a substantial factor in causing the loss."³ CR-RSC Tower I, LLC v. RSC Tower I, LLC , 202 Md.App. 307, 32 A.3d 456, 472–73 (Md. Ct. Spec. App. 2011) ; see also Parr v. Ebrahimian , 70 F.Supp.3d 123, 133 (D.D.C. 2014) ("[T]o survive a motion for summary judgment based on the asserted insufficiency of proof of...