In Salamone v. Douglas Marine Corp., No. 21-1331 (2d Cir. Aug. 8, 2024), the Second Circuit affirms a jury verdict in a state-law contract case, but reverses the district court’s post-verdict tripling of the damages, holding that the plaintiff forfeited a challenge to the jury’s calculation and there was no fundamental error warranting judicial intervention in the award.
“In December 2015, Plaintiffs entered into a contract with Douglas Marine to purchase a new, custom-made Skater 388 Race Boat (the “Skater”) and boat trailer. The parties stipulated that the contract purchase price for the Skater was $542,117. The contract price did not include engines or certain other equipment that Plaintiffs were to purchase separately. On December 30, 2015, Plaintiffs made an initial payment to Douglas Marine of $300,000. On December 31, 2016, they paid Douglas Marine $61,500. In March 2017, Plaintiffs paid Douglas Marine $140,000 for engines that they had authorized Douglas Marine to order for the Skater.”
Unfortunately, defendants did not deliver the Skater in the contracted period. Plaintiffs cancelled the order and received a $50,000 refund on the purchase price after defendants found a new buyer. The plaintiffs sued defendants under Michigan state contract law.
At trial, “the parties agreed that Plaintiffs had paid a total of $501,500 to Douglas Marine and that Douglas Marine had remitted only $50,000 to Plaintiffs. But while Plaintiffs proposed that the court instruct the jury that their damages were thus $451,500, Douglas Marine refused to stipulate that Plaintiffs were damaged in that amount. It contended that Plaintiffs had both impeded the sale of the Skater at a price higher than Douglas Marine eventually received and caused Douglas Marine to incur storage costs because that eventual sale was delayed.”
The jury awarded a verdict to plaintiffs but only granted $131,171.00 in damages. Plaintiffs did not move to have the jury reconsider the number based on inconsistency of the verdict and the jurors were dismissed. But in post-trial motions, the plaintiffs “moved pursuant to Fed. R. Civ. P. 59(e) to alter or amend the judgment principally . . . ‘to rectify a clear and fundamental error of law and increas[e] the damage award from $131,171 to $451,500[.]’” The district court granted the relief, holding that the “clear-cut commands of Michigan contract law” demanded a $451,500 award.
The Second Circuit, though rejecting other bases for reversal, holds that the district court erred in recalculating the damages after trial. The defendants argued that the award effectively constituted additur which, they contended, violates the Seventh Amendment jury guarantee. Without addressing the constitutional argument, the panel instead holds that the plaintiff waived the calculation of damages by not raising it before the jury was dismissed, and that the issue could not be revived on the grounds of fundamental error.
“The fundamental-error standard, applied in civil cases, is akin to the plain error standard applicable to criminal cases, see Fed. R. Crim. P. 52(b), but is even ‘more stringent’ . . . . [Yet] Plaintiffs did not point to an error of law. While they argue that the jury’s verdict was erroneous, juries decide questions of fact, not law . . . . Nor did Plaintiffs point to any error by the district court—much less an error that affected the integrity of the trial or led to a jury verdict that was not rational.”
“While Plaintiffs insist that the damages to which they were entitled was clearly and simply $451,500—i.e., the $501,500 they paid Douglas Marine, minus the $50,000 that Douglas Marine remitted to them—Plaintiffs’ summation to the jury made the amount of damages they sought complicated, and anything but clear.” Because the district court was able to rationalize at least one way that the jury could have awarded the smaller amount, that was sufficient to show that the verdict was rational.
“Plaintiffs could have made their current desire for damages in the amount of $451,500 as clear to the jury as they stated it in their Rule 59(e) motion and on appeal. In the charge conference, when the parties were proffering numerous possible damages formulas, the court had warned that the jury would likely be confused and had agreed to instruct the jury that the parties were in agreement that Plaintiffs had paid Douglas Marine $501,500, and that the amount Douglas Marine had repaid was $50,000. Yet, Plaintiffs’ counsel in summation, while including reference to these two numbers, never mentioned them in conjunction or even suggested that they were the two components of the relevant equation. Counsel instead chose to bury the two most relevant numbers in an avalanche of different dollar figures . . . and chose never to mention the dollar amount that they now claim as their ‘clear’ damages, $451,500.”
“In sum, we see no fundamental error or manifest injustice here. The record does not permit a conclusion that the jury reached a verdict that was irrational or that there was any impingement on the integrity of the trial process. And it surely does not permit a conclusion that Plaintiffs—whose summation was confusing and contained misstatements that may have led directly to the jury’s bottom-line calculation of damages—were victims of any manifest injustice. Even if there were no constitutional impediment to the court’s increasing Plaintiffs’ recovery—a question we need not reach—we would conclude that the district court erred as a matter of law in ruling that there was a fundamental error or a manifest injustice that required or permitted the court to increase the amount of damages awarded by the jury.”
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