`
`UNITED STATES DISTRICT COURT FOR THE
`DISTRICT OF NEW HAMPSHIRE
`
`
`
`
`Zev Shlasinger and Paul Gerardi
`
`
`
`
`v.
`
`
`
`
`
`
`
`Daniel Yarrington and Myriad
`Games, LLC
`
`
`
`
`
`Civil No. 16-cv-290-JL
`Opinion No. 2018 DNH 167
`
`
`MEMORANDUM ORDER
`
`
`Plaintiffs’ post-trial motions in this contract-based
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`action turn on whether the jury returned an internally
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`inconsistent verdict on one count. Plaintiffs Zev Shlasinger
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`and Paul Gerardi brought one count of fraud in the inducement of
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`a contract and one count of breach of the same contract against
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`defendant Daniel Yarrington and his company, Myriad Games, LLC.
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`After a four-day trial, the jury returned a verdict for the
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`defendants on the fraud count and for the plaintiffs on the
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`breach of contract count. As a remedy for that breach, however,
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`the jury awarded the plaintiffs “[z]ero dollars.”
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`After the trial, the plaintiffs renewed their motion for
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`judgment as a matter of law on both claims under Fed. R. Civ.
`
`P. 59(b). In the alternative, they ask the court to amend the
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`judgment to award them damages that they did not request at
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`trial. See id. Rule 59(e). Failing that, they seek a new trial
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`on their breach of contract claim (or solely on damages) in
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`
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`Case 1:16-cv-00290-JL Document 87 Filed 08/15/18 Page 2 of 45
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`light of the jury’s verdict on that claim, which they
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`characterize as internally inconsistent. See id.
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`Rule 59(a)(1)(A). As a last request, they seek a new trial in
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`light of a juror’s nondisclosure of a former connection between
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`his company and the law firm representing the defendants. See
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`id. And for their part, the defendants request an award of
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`attorneys’ fees.
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`The court denies the plaintiffs’ Rule 50 motions, for which
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`the plaintiffs offered no evidentiary support. It also denies
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`the plaintiffs’ motion for a new trial, concluding that the
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`jury’s verdict on liability for the breach of contract claim was
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`logically consistent, consistent with New York law, and
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`consistent with the evidence. Nor are the plaintiffs entitled
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`to a new trial in light of the purportedly undisclosed former
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`association between a juror and the defendants’ counsel.
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`Concluding, however, that the plaintiffs are entitled to
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`nominal damages on their breach of contract claim under New York
`
`law, the court grants the plaintiffs’ motion to amend the
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`judgment to the extent that it awards nominal damages. And
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`because this award precludes the defendants from claiming the
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`position of “prevailing party,” even if the invoked fees
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`provision applied to this action -- which does not appear to be
`
`the case -- the defendants are not entitled to recover
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`thereunder.
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`2
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`
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`Case 1:16-cv-00290-JL Document 87 Filed 08/15/18 Page 3 of 45
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`
`
`Background
`
`The travel of this lawsuit begins, as so many campaigns do,
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`with parties questing together for a common end and concludes,
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`as so many campaigns also do, with disputes over which road to
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`take and how to distribute the treasure. Plaintiff Paul
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`Gerardi, an avid gamer, wanted to open a store in his home
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`borough of Staten Island, New York, to sell board games, card
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`games, and associated merchandise. He also hoped to employ the
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`store, as is the custom in the industry, as a venue in which his
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`customers could play the games he sold. Zev Shlasinger, a
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`friend of Gerardi’s from gaming tournaments and a previous
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`employer, agreed to provide financial backing for Gerardi’s
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`store.
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`Finding their alliance incomplete, Shlasinger and Gerardi
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`approached Daniel Yarrington, owner and sole member of Myriad
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`Games, LLC, a games store with locations in Manchester and
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`Salem, New Hampshire. Yarrington, whom Shlasinger met
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`previously through trade shows, also operated Game Salute, a
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`company that published and distributed board and card games.
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`Yarrington thus brought experience as a retailer and distributor
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`into the party, along with his existing supply chain.
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`3
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`
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`Case 1:16-cv-00290-JL Document 87 Filed 08/15/18 Page 4 of 45
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`A.
`
`The parties’ agreements
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`Shlasinger, Gerardi, and Yarrington joined forces to create
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`ZaP’D Games, LLC, in June 2012.1 The rulebook for this venture
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`was the ZaP’D Games Operating Agreement,2 the agreement which
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`formed the company. The Operating Agreement designated
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`Shlasinger as the managing member and CEO of the company,
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`Yarrington as Secretary, and Gerardi as Treasurer. In the
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`Operating Agreement, the parties also set forth their plan to
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`share the profits: each year, Shlasinger and Yarrington would
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`each receive equal disbursements of the store’s true net yield
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`until they had received $100,000, after which the parties would
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`each receive one third of the net profits.3
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`The parties each agreed to invest money and resources into
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`the Staten Island store. Shlasinger was to invest $100,000.
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`Yarrington was to contribute money on an as-needed basis for the
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`store’s operating costs and inventory, up to a maximum of
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`$100,000, as well as to provide merchandise for the store
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`through Myriad Games’s distribution systems and an operations
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`system for ordering and managing inventory. The parties
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`memorialized these investments of money and resources in a
`
`
`1 The “Z” stands for Zev, the “P” for Paul, and the “D” for
`Daniel.
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`2 Tr. Ex. 15.
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`3 Id. at Schedule A.
`
`4
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`
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`Case 1:16-cv-00290-JL Document 87 Filed 08/15/18 Page 5 of 45
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`separate agreement, the Store Agreement, entered into between
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`ZaP’D Games and Myriad Games.4
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`Finally, Gerardi was to manage the day-to-day operations of
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`the store. He also took a salary of $60,000 per year, except
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`that for first three years of the store’s operation, he would
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`receive a salary of $30,000. The $90,000 total that he forewent
`
`in salary during those three years would represent his monetary
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`investment in the store. Though the parties discussed Gerardi’s
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`investment before entering into the Store Agreement, it was not
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`memorialized in that agreement or in the Operating Agreement.
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`B.
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`The Staten Island store
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`Though Yarrington negotiated and signed a lease for the
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`Staten Island store in October 20125 and the parties hoped to
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`open in time for the holiday season that year, the store did not
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`open until the end of January 2013.6 In accordance with the
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`Store Agreement, Shlasinger contributed $50,000 to ZaP’D Games
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`and another $50,000 to Myriad Games, for a total of $100,000.
`
`
`4 Tr. Ex. 14.
`
`5 Tr. Ex. 16. Yarrington signed the lease agreement as “CEO of
`ZAP’D GAMES, LLC,” id., even though, under the Operating
`Agreement, Shlasinger was the company’s CEO. Shlasinger
`guaranteed the lease.
`
`6 Hurricane Sandy’s impact in September 2012 delayed the store’s
`opening for a week or two, and it took longer than expected for
`Gerardi to install flooring and shelving, and otherwise prepare
`the store for opening.
`
`5
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`
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`Case 1:16-cv-00290-JL Document 87 Filed 08/15/18 Page 6 of 45
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`As anticipated, Gerardi prepared the store to open and managed
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`it. Through Myriad Games, Yarrington provided the store with
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`initial inventory and managed its inventory and payroll systems.
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`Though operating under the company name ZaP’D Games, the
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`Staten Island store effectively functioned as a Myriad Games
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`store. It bore the name Myriad Games above its door, it shared
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`inventory with other Myriad Games locations, and Myriad Games
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`paid its costs out of its operating account. The Staten Island
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`store did not have a separate operating account or any separate
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`accounting system. Rather, Shlasinger’s contributions and its
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`sales went into Myriad Games’s accounts7 and the agreed-upon
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`profits to be shared between Shlasinger and Yarrington came out
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`of the same Myriad Games accounts.
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`According to Shlasinger and Gerardi, the store began
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`experiencing problems relatively early. These problems
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`included:
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`• The store was not receiving copies of new and popular
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`games, but was stocked with unpopular games from
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`Yarrington’s publishing company, Game Salute.
`
`
`7 An account for ZaP’D Games was opened at the Richmond County
`Savings Bank in 2012. Shlasinger made his first $50,000 deposit
`into that account. The money in the account was transferred to
`Myriad’s operating account and the ZaP’D Games account was
`closed in December 2012, before the Staten Island store opened.
`
`6
`
`
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`Case 1:16-cv-00290-JL Document 87 Filed 08/15/18 Page 7 of 45
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`• The store received copies of some base games without that
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`game’s explanation sets or, alternatively, copies of the
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`expansion sets without the base game.8
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`• The store did not receive popular games, even though it
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`ran in-store tournaments for those games.
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`• The store received some games that were not appropriately
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`targeted to a store in New York, such as Boston Red Sox-
`
`themed Monopoly games.9
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`• Yarrington failed to obtain a promised Pepsi refrigerator
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`for the store (to store drinks for customers to purchase)
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`for several months; it arrived only after Gerardi called
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`about it.
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`These problems, Shlasinger and Gerardi testified, resulted in
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`poor sales for the Staten Island store, which could not
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`reasonably expect to sell inventory it did not have, or that was
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`incomplete, unpopular, or inappropriately targeted to other
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`geographic markets.
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`
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`The defendants, in turn, presented evidence that Gerardi’s
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`management of the store contributed to its poor sales. Gerardi
`
`
`8 This would be the equivalent of offering for sale the first
`book in a series but not later books or, more egregiously,
`offering one or more of the later books but not the first book.
`
`9 This struck the court, and likely most jurors, as particularly
`unfortunate.
`
`7
`
`
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`Case 1:16-cv-00290-JL Document 87 Filed 08/15/18 Page 8 of 45
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`had never managed a retail location before and, despite training
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`from Myriad Games and support from its staff, failed to follow
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`certain procedures from the Myriad Games “game guide” -- its
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`employee handbook.
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`Though Yarrington sent monthly statements on the amount
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`received in sales at the Staten Island store to Shlasinger and
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`Gerardi, the plaintiffs had difficulty obtaining other inventory
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`and financial data from Yarrington. Shlasinger and Gerardi were
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`particularly troubled to learn that Yarrington had taken out a
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`line of credit in Myriad Games’s name in April 2013 and used
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`Shlasinger’s second payment of $50,000 in July 2013 to pay down
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`the loan and extend his credit. As a response of questionable
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`legality and judgment, Gerardi twice took home money, totaling
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`approximately $10,000, from the Staten Island store’s cash
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`register. He did so, he explained, to see if Yarrington would
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`notice and to demonstrate that Yarrington was ignoring the
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`financial state of the Staten Island store. He returned the
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`money after several weeks.
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`In accordance with the Store Agreement, at the end of 2013,
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`Myriad Games paid ZaP’D Games Shlasinger’s half of the seven
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`percent of the Staten Island store’s total earnings that year.
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`But the Staten Island store still had not turned a profit. That
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`December, Yarrington and Shlasinger discussed, by email, how to
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`move forward. Yarrington proposed two options: either Myriad
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`8
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`
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`Case 1:16-cv-00290-JL Document 87 Filed 08/15/18 Page 9 of 45
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`Games could continue to run the store in accordance with the
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`Store Agreement, reserving the sole discretion to close it if it
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`continued to perform poorly, or Shlasinger and Gerardi could buy
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`out the inventory, rename the store, and operate it themselves.
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`Shlasinger chose the first option.
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`Around the same time, Yarrington terminated Gerardi from
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`his position as manager of the Staten Island store. At trial,
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`he explained Gerardi’s termination as a result of Gerardi’s
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`admitted theft, his failure to follow Myriad Games policies, and
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`the store’s generally poor performance. He replaced Gerardi
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`with Paul Yellovich, a friend of Gerardi’s and one of the
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`store’s employees.
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`The Staten Island store never turned a profit. Both
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`Yellovich and a regular visitor to the store described it as
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`poorly managed after Gerardi’s departure. At the end of April
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`2014, Yarrington unilaterally, and without informing Shlasinger
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`or Gerardi, wound up the store’s business assets and closed it.
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`More specifically, he staged a raid: he and several employees
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`of his New Hampshire stores visited the Staten Island location
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`in the middle of the night, removed the merchandise, destroyed
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`shelves that Gerardi had built for the store, and drove back to
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`New Hampshire.
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`9
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`
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`Case 1:16-cv-00290-JL Document 87 Filed 08/15/18 Page 10 of 45
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`C.
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`The trial
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`The plaintiffs brought two claims before the jury: one
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`count of fraud in the inducement of the Operating Agreement and
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`one count of breach of the Operating Agreement.10 Before trial,
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`the plaintiffs submitted their proposed jury instructions. With
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`respect to their fraud in the inducement claim, they sought an
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`instruction on reliance damages.11 On the breach of contract
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`claim, they proposed an instruction on expectation damages.12
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`Though the court did not adopt the plaintiffs’ language, it did
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`adopt the substance of the plaintiffs’ proposed damages
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`instructions, which it found consistent with New York law and
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`the New York pattern jury instructions. The plaintiffs never
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`objected to these instructions nor requested any other damages
`
`
`10 At no point, either in the complaint or during trial, did the
`plaintiffs allege that the defendants fraudulently induced or
`breached the Store Agreement, or bring any claim based on that
`Agreement. This is significant because the defendants request
`attorneys’ fees under the Store Agreement, not the Operating
`Agreement.
`
`11 Plaintiffs’ Proposed Jury Instructions (doc. no. 53) at 4
`(“Damages are to be calculated to compensate plaintiffs for what
`they lost because of the fraud, not to compensate them for what
`they might have gained.”).
`
`12 Id. at 7-8 (“The law awards damages for breach of contract to
`compensate for injury caused by the breach — injury which was
`foreseeable, in other words, reasonably within the contemplation
`of the parties, at the time the contract was entered into.
`Money damages are substitutional relief designed in theory to
`put the injured party in as good a position as he would have
`been put by full performance of the contract.”).
`
`10
`
`
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`Case 1:16-cv-00290-JL Document 87 Filed 08/15/18 Page 11 of 45
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`instruction, such as an alternative instruction on reliance
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`damages for their breach of contract claim. Nor did either
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`party request an instruction on nominal damages.
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`Both claims went to the jury, which returned a verdict
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`against the plaintiffs on their fraud in the inducement claim.
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`And though the jury found that the defendants had breached the
`
`Operating Agreement, it awarded “zero dollars” in damages to the
`
`plaintiffs for that breach.
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`D.
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`Post-trial motions
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`The plaintiffs moved for judgment as a matter of law on
`
`both claims.13 See Fed. R Civ. P. 50(a). In the event the court
`
`denied that motion (as it now does), they also ask the court for
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`relief on their breach of contract claim, on which the jury
`
`found the defendants liable but awarded plaintiffs no damages.
`
`See Fed. R. Civ. P. 50(b). Specifically the plaintiffs ask the
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`court either to grant an entirely new trial, or at least a new
`
`trial on damages, see Fed. R. Civ. P. 59(a), or to adjust the
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`damages award to reflect the jury’s liability conclusion, see
`
`id. Rule 59(e). Finally, the plaintiffs move for a new trial on
`
`grounds of alleged juror misconduct. The court addresses each
`
`of these motions in turn.
`
`
`13 The defendants also moved for judgment as a matter of law
`under Rule 50, but withdrew their motion after trial in light of
`the jury’s verdict.
`
`11
`
`
`
`Case 1:16-cv-00290-JL Document 87 Filed 08/15/18 Page 12 of 45
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` Plaintiffs’ motion for judgment as a matter of law
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`“Under Federal Rule of Civil Procedure 50, the court may
`
`grant judgment as a matter of law to a party on an issue if ‘the
`
`court finds that a reasonable jury would not have a legally
`
`sufficient evidentiary basis to find for the [nonmoving] party
`
`on that issue.’” T G Plastics Trading Co. v. Toray Plastics
`
`(Am.), Inc., 775 F.3d 31, 37 (1st Cir. 2014) (quoting Fed. R.
`
`Civ. P. 50). “‘[A] party seeking to overturn a jury verdict
`
`faces an uphill battle,’ since ‘[c]ourts may only grant a
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`judgment contravening a jury’s determination when the evidence
`
`points so strongly and overwhelmingly in favor of the moving
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`party that no reasonable jury could have returned a verdict
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`adverse to that party.’” Id. (quoting Monteagudo v. Asociación
`
`de Empleados del Estado Libre Asociado de P.R., 554 F.3d 164,
`
`170 (1st Cir. 2009)).
`
`Plaintiffs moved at the appropriate times during trial for
`
`judgment as a matter of law on both of their claims.14
`
`Specifically, and as permitted by the court,15 they filed an ex
`
`
`14 Plaintiffs’ Rule 50 Mot. (doc. no. 66).
`
`15 See Final Pretrial Order (doc. no. 60) ¶ 20. The purpose of
`this practice, employed frequently by this court in jury trials,
`is to apprise the court, in advance, of the specific grounds and
`arguments the parties expect to advance under Rule 50 later in
`the trial. The plaintiffs’ later Rule 50 motions in this case
`contained no argument or evidentiary citations not contained in
`this memorandum.
`
`12
`
`
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`Case 1:16-cv-00290-JL Document 87 Filed 08/15/18 Page 13 of 45
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`parte memorandum in support of their expected Rule 50 motion at
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`the beginning of the trial. In accordance with this court’s
`
`practice,16 that motion was unsealed and provided to defense
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`counsel, and defense counsel was afforded an opportunity to
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`object, at the close of the plaintiffs’ case in chief. The
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`court took the motion under advisement. It now addresses -- and
`
`denies -- the plaintiffs’ motion on both counts.17
`
`A.
`
`Fraud in the inducement (Count 1)
`
`The plaintiffs first claimed fraud in the inducement of the
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`Operating Agreement. The plaintiffs moved for judgment as a
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`matter of law on this claim, see Fed. R. Civ. P. 50(b), on two
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`theories, only one of which they alleged in their complaint.
`
`Neither theory merits judgment in the plaintiffs’ favor.
`
`1.
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`Reliance on misrepresentations
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`First, the plaintiffs contend that they are entitled to
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`judgment as a matter of law on their claim for fraud in the
`
`
`16 See id.
`
`17 At the conclusion of the trial, the court asked plaintiffs’
`counsel whether plaintiffs wished to proceed with this motion.
`The plaintiffs’ local counsel, not knowing whether plaintiffs
`wished to proceed, represented that counsel would contact the
`court with an answer in short order. The court heard nothing
`from counsel until plaintiffs filed this motion, requesting that
`the court rule on their Rule 50 motion. To the extent the
`plaintiffs intend to suggest that the court has been slow to
`rule on their motion for any reason other than counsel’s failure
`to respond to the court’s query, they are incorrect.
`
`13
`
`
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`Case 1:16-cv-00290-JL Document 87 Filed 08/15/18 Page 14 of 45
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`inducement in its traditional form. That is, where one party
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`makes a promise as to future action for the purpose of inducing
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`the other to enter into a contract, knowing at the time that the
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`promise was made that he did not intend to fulfill that promise,
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`and then does not fulfill that promise, a party who relies on
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`that promise to his detriment may recover for fraud. See Centro
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`Empresarial Cempresa S.A. v. Am. Movil, S.A.B. de C.V., 952
`
`N.E.2d 995, 1000 (N.Y. 2011).
`
`The plaintiffs argue that they introduced evidence
`
`sufficient to prove this claim by demonstrating the defendants
`
`made certain representations for the purpose of inducing the
`
`plaintiffs to rely on those representation in entering into the
`
`Operating Agreement, and that the plaintiffs did so to their
`
`detriment.18 They do not, however, cite or even refer in a
`
`general sense to the evidence that they contend is sufficient to
`
`entitle them to judgment as a matter of law.19 A motion under
`
`Rule 50 “must specify the judgment sought and the law and facts
`
`that entitle the movant to the judgment.” Fed. R. Civ.
`
`P. 50(a)(2) (emphasis added). Absent such support, plaintiffs’
`
`
`18 See Plaintiffs’ Rule 50 Mot. (doc. no. 66) ¶¶ 7-11.
`
`19 See id.; see also Plaintiffs’ Request for Ruling on Rule 50
`Motion and Incorporated Motion for Corrected Judgment and/or for
`Partial or Complete New Trial (“Plaintiffs’ Mem.”) (doc. no. 79)
`(renewing, but not supplementing, Rule 50 motion made at trial).
`
`14
`
`
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`Case 1:16-cv-00290-JL Document 87 Filed 08/15/18 Page 15 of 45
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`motion amounts to a mere recitation of their claim, and
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`accordingly must be denied.
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`Furthermore, to the extent that the record contains such
`
`evidence, it cannot be said that a reasonable jury would not
`
`have a legally sufficient evidentiary basis to find for the
`
`defendants on the plaintiffs’ fraud in the inducement claim.
`
`See T G Plastics, 775 F.3d at 37. The plaintiffs bore the
`
`burden of proving the elements of that claim. A reasonable jury
`
`could have found, based on the evidence adduced at trial, that
`
`the plaintiffs failed to carry that burden. The court is
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`disinclined, especially absent the plaintiffs’ reliance on any
`
`specific evidence, to conclude otherwise.
`
`2.
`
`Fiduciary duty
`
`The plaintiffs also moved for judgment on the pleadings on
`
`a claim for fraud in the inducement on the theory that
`
`defendants concealed information that they had a fiduciary duty
`
`to disclose.20 The plaintiffs did not plead this claim in their
`
`complaint nor seek to add it to the action until, midway through
`
`the trial, they moved to amend their complaint to conform to the
`
`evidence.21 The court denied that motion from the bench.
`
`
`20 Plaintiffs’ Rule 50 Mot. (doc. no. 66) ¶¶ 15-26.
`
`21 Plaintiffs’ Mot. to Amend (doc. no. 69).
`
`15
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`
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`Case 1:16-cv-00290-JL Document 87 Filed 08/15/18 Page 16 of 45
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`Under Rule 15(b), a party may move to amend the pleadings
`
`to conform them to the evidence “when an issue not raised by the
`
`pleadings is tried by the parties’ express or implied consent
`
`. . . .” The defendants in this case did not expressly consent.
`
`Nor did they impliedly consent by “acquiesce[ing] in the
`
`introduction of evidence which is relevant only to” the
`
`plaintiffs’ new claim. DCPB, Inc. v. City of Lebanon, 957 F.2d
`
`913, 917 (1st Cir. 1992) (emphasis added) (internal quotations
`
`omitted). As the court explained on the record, the evidence
`
`relied on by the plaintiffs was relevant to their breach of
`
`contract claim. “The introduction of evidence directly relevant
`
`to a pleaded issue cannot be the basis for a founded claim that
`
`the opposing party should have realized that a new issue was
`
`infiltrating the case.” Id. The plaintiffs’ breach of
`
`fiduciary duty-based claim was thus never properly before the
`
`court or the jury. The court accordingly denies the plaintiffs’
`
`Rule 50 motion on that theory as well.
`
`B.
`
`Breach of the Operating Agreement (Count 2)
`
`The jury’s verdict in the plaintiffs’ favor on their claim
`
`for breach of contract renders moot the plaintiffs’ motion for
`
`judgment as a matter of law on that claim.22 The court denies it
`
`as such.
`
`
`22 Plaintiffs’ Rule 50 Mot. (doc. no. 66) ¶¶ 27-34.
`
`16
`
`
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`Case 1:16-cv-00290-JL Document 87 Filed 08/15/18 Page 17 of 45
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`Even were it not rendered moot by the jury’s verdict, the
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`plaintiffs’ motion lacked any evidentiary support, and thus
`
`fails to satisfy Rule 50(a)(2). The plaintiffs merely repeated
`
`the allegations in their complaint concerning which provisions
`
`of the Operating Agreement the defendants allegedly breached,
`
`without recounting any evidence of the breach. Nor does the
`
`plaintiffs’ mere citation to the law of reliance damages --
`
`which, as discussed infra Part III.C, the plaintiffs surrendered
`
`when they agreed to a jury instruction on expectation damages --
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`without more afford them any relief.
`
` Motion for a new trial
`
`Following a jury trial, this court may “grant a new trial
`
`on all or some of the issues . . . for any reason for which a
`
`new trial has heretofore been granted in an action at law in
`
`federal court.” Fed. R. Civ. P. 59(a)(1)(A). “A trial court
`
`may grant a new trial on the basis that the verdict is against
`
`the weight of the evidence,” or “whenever, in its judgment, the
`
`action is required in order to prevent injustice.” Jennings v.
`
`Jones, 587 F.3d 430, 436 (1st Cir. 2009). Its discretion is
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`limited, however, in that it “may not grant a motion for a new
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`trial merely because [it] might have reached a conclusion
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`contrary to that of the jurors . . . .” Conway v. Electro
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`Switch Corp., 825 F.2d 593, 598-99 (1st Cir. 1987).
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`17
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`Case 1:16-cv-00290-JL Document 87 Filed 08/15/18 Page 18 of 45
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`The plaintiffs move for a new trial on the basis that the
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`jury’s verdict on that claim was internally inconsistent.23 In
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`returning its verdict, the jury answered “Yes” to the question
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`“Do you find that the plaintiffs have proven, by a preponderance
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`of the evidence, their claim for breach of the Operating
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`Agreement?”24 It then awarded “Zero dollars” to the plaintiffs
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`on their claim for breach of contract.25 Though they raised no
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`objection at the time, the plaintiffs now argue that, under New
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`York law, a jury cannot consistently conclude that a plaintiff
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`has proven all of the elements of a breach of contract claim
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`while at the same time awarding zero damages, as the jury did in
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`this case.
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`Concluding as it does that the jury’s verdict is logically
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`consistent under New York law, consistent with the jury
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`instructions (to which the plaintiffs did not object), and not
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`against the weight of the evidence, the court denies the
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`plaintiffs’ motion for a new trial.
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`A.
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`Logical consistency under New York law
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`Under New York law, “the essential elements of a cause of
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`action to recover damages for breach of contract” are “the
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`23 Plaintiffs’ Mem. (doc. no. 79) ¶¶ 23-38.
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`24 Jury Verdict (doc. no. 74) at 2.
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`25 Id.
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`18
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`Case 1:16-cv-00290-JL Document 87 Filed 08/15/18 Page 19 of 45
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`existence of a contract, the plaintiff’s performance under the
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`contract, the defendant’s breach of that contract, and resulting
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`damages.” JP Morgan Chase v. J.H. Elec. of New York, Inc., 893
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`N.Y.S.2d 237, 239 (N.Y. App. Div. 2010). The court so
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`instructed the jury.26 Without more than a statement of the
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`elements of the claim, which is all that the plaintiffs invoke,
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`the verdict does appear to be internally inconsistent on its
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`face, as the plaintiffs argue. A more thorough consideration of
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`New York law, however, suggests that it is not.
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`As an initial matter, the plaintiffs failed to preserve
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`their objection to the verdict’s alleged logical inconsistency.
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`“‘[O]bjections to inconsistences in the verdict must be lodged
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`‘while the jury is still in the box,’ or the issue is
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`forfeited.” Smith v. Jenkins, No. 07-CV-12067-RGS, 2011 WL
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`1660577, at *2 n.3 (D. Mass. May 3, 2011), aff’d, 732 F.3d 51
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`(1st Cir. 2013) (quoting Correia v. Fitzgerald, 354 F.3d 47, 57
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`(1st Cir. 2003)). The plaintiffs lodged no such objection,
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`therefore forfeiting it.
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`For the sake of completeness, however, the court addresses
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`their argument, which runs as follows. By finding for the
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`plaintiffs on the breach of contract claim, the jury necessarily
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`found that the plaintiffs proved each element of the claim by a
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`26 Jury Instructions (doc. no. 71) at 21.
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`19
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`Case 1:16-cv-00290-JL Document 87 Filed 08/15/18 Page 20 of 45
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`preponderance of the evidence. If damages is a necessary
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`element of that claim, then by finding for the plaintiffs, the
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`jury necessarily found that the plaintiffs proved that they were
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`damaged by the appropriate quantum of evidence. But, by
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`awarding zero damages, the jury also appears to have found that
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`the plaintiffs did not prove, by a preponderance of the
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`evidence, that they were damaged. Ordinarily, “[w]hen a jury’s
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`verdict is internally inconsistent, the trial court must direct
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`either reconsideration by the jury or a new trial.”27 Sabarese
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`v. Bd. of Educ. of Tuxedo Union Free Sch. Dist., 55 N.Y.S.3d
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`432, 433 (N.Y. App. Div. 2017). On that basis, the plaintiffs
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`request such relief.
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`A deeper exploration of New York law suggests, however,
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`that the jury’s breach-of-contract verdict is not in fact
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`logically inconsistent. Under New York law, “a party’s rights
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`in contract arise from the parties’ promises and exist
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`independent of any breach.” Kronos, Inc. v. AVX Corp., 612
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`N.E.2d 289, 292 (N.Y. 1993). New York recognizes nominal
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`damages as a remedy for breaches of contract, allowing a
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`plaintiff to recover “even if the breach of contract caused no
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`loss or if the amount of loss cannot be proven with sufficient
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`27 Neither party requested reconsideration at the time the jury
`rendered its verdict.
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`20
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`Case 1:16-cv-00290-JL Document 87 Filed 08/15/18 Page 21 of 45
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`certainty . . . .” Hirsch Elec. Co. v. Cmty. Servs., Inc., 536
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`N.Y.S.2d 141, 142 (N.Y. App. Div. 1988); see also Kronos, 612
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`N.E.2d at 292-93.
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`This is in sharp contrast to tort claims, where “damage is
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`an essential element of the tort,” and as such “the claim is not
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`enforceable until damages are sustained.” Kronos, 612 N.E.2d at
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`292. Thus, to prove a tort claim, a plaintiff must prove
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`damages as an element of the claim itself; without proof of
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`injury, a tort claim will not lie. In contract, however, the
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`breach of the contract itself constitutes the injury (the
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`damage) and gives rise to the claim; a plaintiff then must prove
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`the amount of damages due him as a remedy for that injury.28
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`New York’s pattern jury instruction on breach of contract,
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`which the court gave to the jury in this case, bears out this
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`distinction. It provides that the jury “will find for the
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`
`28 Though the plaintiffs cite a number of extrajurisdictional
`cases in support of their argument, see Plaintiffs’ Mem. (doc.
`no. 79) ¶¶ 25-28, none of those cases address internally
`inconsistent verdicts in contract actions. See Thomas v.
`Stalter, 20 F.3d 298, 303 (7th Cir. 1994) (excessive force);
`Brooks v. Brattleboro Mem’l Hosp., 958 F.2d 525, 529 (2d Cir.
`1992) (negligence); Wright v. Hoover, 329 F.2d 72, 76 (8th Cir.
`1964) (wrongful death); In re Testosterone Replacement Therapy
`Prod. Liab. Litig. Coordination Pretrial Proceedings, No. 14 C
`1748, 2017 WL 6569632, at *8 (N.D. Ill. Dec. 22, 2017) (products
`liability); Bushey v. French, 108 N.W.2d 237, 238 (Neb. 1961)
`(personal injury); Klein v. Miller, 77 P.2d 1103, 1104 (Or.
`1938), overruled by Fischer v. Howard, 271 P.2d 1059, 1069-70
`(Or. 1954) (personal injury); McLean v. Sanders, 7 P.2d 981, 981
`(Or. 1932) (false imprisonment).
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`21
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`Case 1:16-cv-00290-JL Document 87 Filed 08/15/18 Page 22 of 45
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`plaintiffs on their breach of contract claim” if it concludes
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`that the plaintiffs proved the first three elements by a
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`preponderance of the evidence -- that is, existence of a
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`contract, plaintiffs’ performance, and defendants’ breach. N.Y.
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`Pattern Jury Instr. - Civil § 4:1; see also Bellinson Law, LLC
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`v. Iannucci, 983 N.Y.S.2d 21, 22 (N.Y. App. Div. 2014)
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`(presenting only the first three elements as interrogatories to
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`the jury). Only after those three elements are proven does it
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`permit the jury to “go on to consider the plaintiffs’ damages in
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`accordance with” the court’s instructions” on that issue. N.Y.
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`Pattern Jury Instr. - Civil § 4:1.
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`Thus, a verdict would be logically inconsistent had the
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`jury returned a verdict for the plaintiffs despite concluding
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`that the plaintiffs had not met their burden of proof on one of
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`the first three elements of the contract claim -- that is, that
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`a contract existed between the parties,