throbber
Case 1:16-cv-00290-JL Document 87 Filed 08/15/18 Page 1 of 45
`
`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
`
`action turn on whether the jury returned an internally
`
`inconsistent verdict on one count. Plaintiffs Zev Shlasinger
`
`and Paul Gerardi brought one count of fraud in the inducement of
`
`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.
`
`After a four-day trial, the jury returned a verdict for the
`
`defendants on the fraud count and for the plaintiffs on the
`
`breach of contract count. As a remedy for that breach, however,
`
`the jury awarded the plaintiffs “[z]ero dollars.”
`
`After the trial, the plaintiffs renewed their motion for
`
`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
`
`judgment to award them damages that they did not request at
`
`trial. See id. Rule 59(e). Failing that, they seek a new trial
`
`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
`
`characterize as internally inconsistent. See id.
`
`Rule 59(a)(1)(A). As a last request, they seek a new trial in
`
`light of a juror’s nondisclosure of a former connection between
`
`his company and the law firm representing the defendants. See
`
`id. And for their part, the defendants request an award of
`
`attorneys’ fees.
`
`The court denies the plaintiffs’ Rule 50 motions, for which
`
`the plaintiffs offered no evidentiary support. It also denies
`
`the plaintiffs’ motion for a new trial, concluding that the
`
`jury’s verdict on liability for the breach of contract claim was
`
`logically consistent, consistent with New York law, and
`
`consistent with the evidence. Nor are the plaintiffs entitled
`
`to a new trial in light of the purportedly undisclosed former
`
`association between a juror and the defendants’ counsel.
`
`Concluding, however, that the plaintiffs are entitled to
`
`nominal damages on their breach of contract claim under New York
`
`law, the court grants the plaintiffs’ motion to amend the
`
`judgment to the extent that it awards nominal damages. And
`
`because this award precludes the defendants from claiming the
`
`position of “prevailing party,” even if the invoked fees
`
`provision applied to this action -- which does not appear to be
`
`the case -- the defendants are not entitled to recover
`
`thereunder.
`
`2
`
`

`

`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,
`
`with parties questing together for a common end and concludes,
`
`as so many campaigns also do, with disputes over which road to
`
`take and how to distribute the treasure. Plaintiff Paul
`
`Gerardi, an avid gamer, wanted to open a store in his home
`
`borough of Staten Island, New York, to sell board games, card
`
`games, and associated merchandise. He also hoped to employ the
`
`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
`
`employer, agreed to provide financial backing for Gerardi’s
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`store.
`
`Finding their alliance incomplete, Shlasinger and Gerardi
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`approached Daniel Yarrington, owner and sole member of Myriad
`
`Games, LLC, a games store with locations in Manchester and
`
`Salem, New Hampshire. Yarrington, whom Shlasinger met
`
`previously through trade shows, also operated Game Salute, a
`
`company that published and distributed board and card games.
`
`Yarrington thus brought experience as a retailer and distributor
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`into the party, along with his existing supply chain.
`
`3
`
`

`

`Case 1:16-cv-00290-JL Document 87 Filed 08/15/18 Page 4 of 45
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`A.
`
`The parties’ agreements
`
`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
`
`was the ZaP’D Games Operating Agreement,2 the agreement which
`
`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
`
`Operating Agreement, the parties also set forth their plan to
`
`share the profits: each year, Shlasinger and Yarrington would
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`each receive equal disbursements of the store’s true net yield
`
`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
`
`$100,000, as well as to provide merchandise for the store
`
`through Myriad Games’s distribution systems and an operations
`
`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.
`
`2 Tr. Ex. 15.
`
`3 Id. at Schedule A.
`
`4
`
`

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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
`
`the store. He also took a salary of $60,000 per year, except
`
`that for first three years of the store’s operation, he would
`
`receive a salary of $30,000. The $90,000 total that he forewent
`
`in salary during those three years would represent his monetary
`
`investment in the store. Though the parties discussed Gerardi’s
`
`investment before entering into the Store Agreement, it was not
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`memorialized in that agreement or in the Operating Agreement.
`
`B.
`
`The Staten Island store
`
`Though Yarrington negotiated and signed a lease for the
`
`Staten Island store in October 20125 and the parties hoped to
`
`open in time for the holiday season that year, the store did not
`
`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
`
`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
`
`

`

`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
`
`it. Through Myriad Games, Yarrington provided the store with
`
`initial inventory and managed its inventory and payroll systems.
`
`Though operating under the company name ZaP’D Games, the
`
`Staten Island store effectively functioned as a Myriad Games
`
`store. It bore the name Myriad Games above its door, it shared
`
`inventory with other Myriad Games locations, and Myriad Games
`
`paid its costs out of its operating account. The Staten Island
`
`store did not have a separate operating account or any separate
`
`accounting system. Rather, Shlasinger’s contributions and its
`
`sales went into Myriad Games’s accounts7 and the agreed-upon
`
`profits to be shared between Shlasinger and Yarrington came out
`
`of the same Myriad Games accounts.
`
`According to Shlasinger and Gerardi, the store began
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`experiencing problems relatively early. These problems
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`included:
`
`• The store was not receiving copies of new and popular
`
`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
`
`

`

`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
`
`game’s explanation sets or, alternatively, copies of the
`
`expansion sets without the base game.8
`
`• The store did not receive popular games, even though it
`
`ran in-store tournaments for those games.
`
`• The store received some games that were not appropriately
`
`targeted to a store in New York, such as Boston Red Sox-
`
`themed Monopoly games.9
`
`• 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
`
`about it.
`
`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
`
`geographic markets.
`
`
`
`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.
`
`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
`
`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
`
`approximately $10,000, from the Staten Island store’s cash
`
`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
`
`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
`
`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
`
`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
`
`2014, Yarrington unilaterally, and without informing Shlasinger
`
`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
`
`New Hampshire.
`
`9
`
`

`

`Case 1:16-cv-00290-JL Document 87 Filed 08/15/18 Page 10 of 45
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`C.
`
`The trial
`
`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,
`
`the plaintiffs submitted their proposed jury instructions. With
`
`respect to their fraud in the inducement claim, they sought an
`
`instruction on reliance damages.11 On the breach of contract
`
`claim, they proposed an instruction on expectation damages.12
`
`Though the court did not adopt the plaintiffs’ language, it did
`
`adopt the substance of the plaintiffs’ proposed damages
`
`instructions, which it found consistent with New York law and
`
`the New York pattern jury instructions. The plaintiffs never
`
`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
`
`

`

`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
`
`party request an instruction on nominal damages.
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`Both claims went to the jury, which returned a verdict
`
`against the plaintiffs on their fraud in the inducement claim.
`
`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.
`
`D.
`
`Post-trial motions
`
`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
`
`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
`
`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
`
`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
`
`“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
`
`judgment contravening a jury’s determination when the evidence
`
`points so strongly and overwhelmingly in favor of the moving
`
`party that no reasonable jury could have returned a verdict
`
`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
`
`

`

`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
`
`the beginning of the trial. In accordance with this court’s
`
`practice,16 that motion was unsealed and provided to defense
`
`counsel, and defense counsel was afforded an opportunity to
`
`object, at the close of the plaintiffs’ case in chief. The
`
`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
`
`Operating Agreement. The plaintiffs moved for judgment as a
`
`matter of law on this claim, see Fed. R. Civ. P. 50(b), on two
`
`theories, only one of which they alleged in their complaint.
`
`Neither theory merits judgment in the plaintiffs’ favor.
`
`1.
`
`Reliance on misrepresentations
`
`First, the plaintiffs contend that they are entitled to
`
`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
`
`

`

`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
`
`makes a promise as to future action for the purpose of inducing
`
`the other to enter into a contract, knowing at the time that the
`
`promise was made that he did not intend to fulfill that promise,
`
`and then does not fulfill that promise, a party who relies on
`
`that promise to his detriment may recover for fraud. See Centro
`
`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
`
`

`

`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
`
`accordingly must be denied.
`
`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
`
`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
`
`

`

`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
`
`

`

`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
`
`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 --
`
`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
`
`limited, however, in that it “may not grant a motion for a new
`
`trial merely because [it] might have reached a conclusion
`
`contrary to that of the jurors . . . .” Conway v. Electro
`
`Switch Corp., 825 F.2d 593, 598-99 (1st Cir. 1987).
`
`17
`
`

`

`Case 1:16-cv-00290-JL Document 87 Filed 08/15/18 Page 18 of 45
`
`The plaintiffs move for a new trial on the basis that the
`
`jury’s verdict on that claim was internally inconsistent.23 In
`
`returning its verdict, the jury answered “Yes” to the question
`
`“Do you find that the plaintiffs have proven, by a preponderance
`
`of the evidence, their claim for breach of the Operating
`
`Agreement?”24 It then awarded “Zero dollars” to the plaintiffs
`
`on their claim for breach of contract.25 Though they raised no
`
`objection at the time, the plaintiffs now argue that, under New
`
`York law, a jury cannot consistently conclude that a plaintiff
`
`has proven all of the elements of a breach of contract claim
`
`while at the same time awarding zero damages, as the jury did in
`
`this case.
`
`Concluding as it does that the jury’s verdict is logically
`
`consistent under New York law, consistent with the jury
`
`instructions (to which the plaintiffs did not object), and not
`
`against the weight of the evidence, the court denies the
`
`plaintiffs’ motion for a new trial.
`
`A.
`
`Logical consistency under New York law
`
`Under New York law, “the essential elements of a cause of
`
`action to recover damages for breach of contract” are “the
`
`
`23 Plaintiffs’ Mem. (doc. no. 79) ¶¶ 23-38.
`
`24 Jury Verdict (doc. no. 74) at 2.
`
`25 Id.
`
`18
`
`

`

`Case 1:16-cv-00290-JL Document 87 Filed 08/15/18 Page 19 of 45
`
`existence of a contract, the plaintiff’s performance under the
`
`contract, the defendant’s breach of that contract, and resulting
`
`damages.” JP Morgan Chase v. J.H. Elec. of New York, Inc., 893
`
`N.Y.S.2d 237, 239 (N.Y. App. Div. 2010). The court so
`
`instructed the jury.26 Without more than a statement of the
`
`elements of the claim, which is all that the plaintiffs invoke,
`
`the verdict does appear to be internally inconsistent on its
`
`face, as the plaintiffs argue. A more thorough consideration of
`
`New York law, however, suggests that it is not.
`
`As an initial matter, the plaintiffs failed to preserve
`
`their objection to the verdict’s alleged logical inconsistency.
`
`“‘[O]bjections to inconsistences in the verdict must be lodged
`
`‘while the jury is still in the box,’ or the issue is
`
`forfeited.” Smith v. Jenkins, No. 07-CV-12067-RGS, 2011 WL
`
`1660577, at *2 n.3 (D. Mass. May 3, 2011), aff’d, 732 F.3d 51
`
`(1st Cir. 2013) (quoting Correia v. Fitzgerald, 354 F.3d 47, 57
`
`(1st Cir. 2003)). The plaintiffs lodged no such objection,
`
`therefore forfeiting it.
`
`For the sake of completeness, however, the court addresses
`
`their argument, which runs as follows. By finding for the
`
`plaintiffs on the breach of contract claim, the jury necessarily
`
`found that the plaintiffs proved each element of the claim by a
`
`
`26 Jury Instructions (doc. no. 71) at 21.
`
`19
`
`

`

`Case 1:16-cv-00290-JL Document 87 Filed 08/15/18 Page 20 of 45
`
`preponderance of the evidence. If damages is a necessary
`
`element of that claim, then by finding for the plaintiffs, the
`
`jury necessarily found that the plaintiffs proved that they were
`
`damaged by the appropriate quantum of evidence. But, by
`
`awarding zero damages, the jury also appears to have found that
`
`the plaintiffs did not prove, by a preponderance of the
`
`evidence, that they were damaged. Ordinarily, “[w]hen a jury’s
`
`verdict is internally inconsistent, the trial court must direct
`
`either reconsideration by the jury or a new trial.”27 Sabarese
`
`v. Bd. of Educ. of Tuxedo Union Free Sch. Dist., 55 N.Y.S.3d
`
`432, 433 (N.Y. App. Div. 2017). On that basis, the plaintiffs
`
`request such relief.
`
`A deeper exploration of New York law suggests, however,
`
`that the jury’s breach-of-contract verdict is not in fact
`
`logically inconsistent. Under New York law, “a party’s rights
`
`in contract arise from the parties’ promises and exist
`
`independent of any breach.” Kronos, Inc. v. AVX Corp., 612
`
`N.E.2d 289, 292 (N.Y. 1993). New York recognizes nominal
`
`damages as a remedy for breaches of contract, allowing a
`
`plaintiff to recover “even if the breach of contract caused no
`
`loss or if the amount of loss cannot be proven with sufficient
`
`
`27 Neither party requested reconsideration at the time the jury
`rendered its verdict.
`
`20
`
`

`

`Case 1:16-cv-00290-JL Document 87 Filed 08/15/18 Page 21 of 45
`
`certainty . . . .” Hirsch Elec. Co. v. Cmty. Servs., Inc., 536
`
`N.Y.S.2d 141, 142 (N.Y. App. Div. 1988); see also Kronos, 612
`
`N.E.2d at 292-93.
`
`This is in sharp contrast to tort claims, where “damage is
`
`an essential element of the tort,” and as such “the claim is not
`
`enforceable until damages are sustained.” Kronos, 612 N.E.2d at
`
`292. Thus, to prove a tort claim, a plaintiff must prove
`
`damages as an element of the claim itself; without proof of
`
`injury, a tort claim will not lie. In contract, however, the
`
`breach of the contract itself constitutes the injury (the
`
`damage) and gives rise to the claim; a plaintiff then must prove
`
`the amount of damages due him as a remedy for that injury.28
`
`New York’s pattern jury instruction on breach of contract,
`
`which the court gave to the jury in this case, bears out this
`
`distinction. It provides that the jury “will find for the
`
`
`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).
`
`21
`
`

`

`Case 1:16-cv-00290-JL Document 87 Filed 08/15/18 Page 22 of 45
`
`plaintiffs on their breach of contract claim” if it concludes
`
`that the plaintiffs proved the first three elements by a
`
`preponderance of the evidence -- that is, existence of a
`
`contract, plaintiffs’ performance, and defendants’ breach. N.Y.
`
`Pattern Jury Instr. - Civil § 4:1; see also Bellinson Law, LLC
`
`v. Iannucci, 983 N.Y.S.2d 21, 22 (N.Y. App. Div. 2014)
`
`(presenting only the first three elements as interrogatories to
`
`the jury). Only after those three elements are proven does it
`
`permit the jury to “go on to consider the plaintiffs’ damages in
`
`accordance with” the court’s instructions” on that issue. N.Y.
`
`Pattern Jury Instr. - Civil § 4:1.
`
`Thus, a verdict would be logically inconsistent had the
`
`jury returned a verdict for the plaintiffs despite concluding
`
`that the plaintiffs had not met their burden of proof on one of
`
`the first three elements of the contract claim -- that is, that
`
`a contract existed between the parties,

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