SOLIDFX LLC v. Jeppesen Sanderson Inc

Filing 408

ORDER DENYING IN PART 377 DEFENDANT'S RULE 50(b) MOTION AND DENYING 378 DEFENDANT'S MOTION FOR NEW TRIAL OR REMITTITUR: Defendant's Rule 50(b) Motion for Judgment as a Matter of Law (ECF No. 377 ) is GRANTED in so far as it seek s clarification that the Court's earlier order applied to both the fraudulent misrepresentation and fraudulent concealment claims, but DENIED in all other respects. Defendant's Motion for a New Trial or Remittitur (ECF No. 378 ) is DENIED. By Judge William J. Martinez on 2/5/2015. (alowe)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Judge William J. Martínez
Civil Action No. 11-cv-01468-WJM-BNB
SOLIDFX, LLC,
Plaintiff,
v.
JEPPESEN SANDERSON, INC.,
Defendant.

ORDER DENYING IN PART DEFENDANT’S RULE 50(b) MOTION AND DENYING
DEFENDANT’S MOTION FOR NEW TRIAL OR REMITTITUR

Plaintiff SOLIDFX, LLC (“Plaintiff” or “SOLIDFX”) brings this action against
Defendant Jeppesen Sanderson, Inc. (“Defendant” or “Jeppesen”) alleging breach of
contract and various state law tort claims. The Court held an eight-day jury trial, which
resulted in the jury finding in Plaintiff’s favor on all claims. (ECF No. 343.) The jury
awarded Plaintiff the following damages: $42,308,000 on its claim for breach of contract
(development of iPad apps); $615,000 on its claim for breach of contract (JIT for tailored
terminal charts); $173,000 on its negligent misrepresentation claim; and $1 on each of
the other claims. (ECF No. 343-6.) After resolving some post-trial motions, the Court
entered judgment in favor of Plaintiff. (ECF No. 407.)
Before the Court are Defendant’s Rule 50(b) Motion for Judgment as a Matter of
Law (ECF No. 377) and Motion for New Trial or Remittitur (ECF No. 378) (together
“Motions”). For the reasons set forth below, the Motions are denied in part and granted
in part.

I. LEGAL STANDARD
In evaluating a motion brought under Federal Rule of Civil Procedure 50(b), the
Court must examine all the evidence admitted at trial, construe that evidence and the
inferences from it in the light most favorable to the non-moving party, and refrain from
making credibility determinations and weighing the evidence. See Tyler v. RE/MAX
Mountain States, 232 F.3d 808, 812 (10th Cir. 2000). Judgment as a matter of law is
appropriate “only if the evidence points but one way and is susceptible to no reasonable
inferences which may support the opposing party's position.” Finley v. United States, 82
F.3d 966, 968 (10th Cir. 1996).
Defendant brings its Motion for a New Trial under Rule 59(a)(1), which permits
the Court to order a new trial on all or some of the issues “for any of the reasons for
which a new trial has heretofore been granted in an action at law in federal court.” Such
a motion can be granted based on any error so long as “the district court concludes the
‘claimed error substantially and adversely’ affected the party’s rights.” Henning v. Union
Pac. R.R. Co., 530 F.3d 1206, 1217 (10th Cir. 2008) (quoting Sanjuan v. IBP, Inc., 160
F.3d 1291, 1297 (10th Cir. 1998)).
II. ANALYSIS
Though Defendant moves under both Rule 50(b) and Rule 59(a)(1)(A), many of
the arguments raised in the Motions overlap. As such, the Court will discuss the
Motions together by the issues raised therein.
A.

Section 8.2 of the Contract
Following the close of evidence, the Court granted Defendant’s Rule 50(a)

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Motion to the extent it sought to preclude recovery of certain categories of lost profits
sought by Plaintiff. (ECF No. 356 at 232-41.) Defendant challenges this ruling in both
of the instant Motions.
In its Rule 50(b) Motion, Defendant argues that, under Colorado law, lost profits
are always classified as consequential damages, and therefore § 8.2 of the contract
barred Plaintiff from recovering any lost profits. (ECF No. 377 at 14.) Defendant also
contends that § 8.2 bars recovery of lost profits as a matter of law, regardless of
whether lost profits are classified as consequential or direct damages. (ECF No. 377 at
13.)
In its Motion for New Trial, Defendant contends that the Court improperly ruled as
a matter of law on the meaning of § 8.2 of the contract. (ECF No. 378 at 7-8.)
Defendant points out that, in ruling on Defendant’s Motion for Summary Judgment, the
Court held that § 8.2 was ambiguous, but that the Court reconsidered this issue during
trial and construed the meaning of § 8.2 as a matter of law. (Id.; see also ECF No. 218
at 34-35.) Defendant argues that the Court’s ruling at trial was error, and that the jury
should have been permitted to determine the meaning of § 8.2 of the contract. (ECF
No. 378 at 7.) Defendant also contends that it was “significantly prejudiced” by the
Court’s ruling in that it “devoted substantial time and effort at trial to a defense based on
Section 8.2 that was premised on the Court’s prior finding of ambiguity.” (Id. at 9.)
First, the Court notes that Defendant re-raised the issue of whether § 8.2 barred
Plaintiff’s claim for lost profits in its mid-trial Rule 50(a) motion. (See ECF No. 336 at 512.) Defendant took the position that “the plain language of § 8.2 could not be clearer”,
and that the Court has an obligation to enforce “an unambiguous contract according to
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its plain language.” (Id. at 6-7.) Defendant then renewed this motion at the close of all
evidence, and repeated its position that the Court should interpret § 8.2 as a matter of
law. (ECF No. 356 at 225.) Having asked the Court to interpret § 8.2 as a matter of
law, Defendant cannot now argue that the Court “significantly prejudiced” Defendant by
doing so.
Second, a denial of summary judgment is not a final judgment, and a district
court is always free to reconsider such rulings. See Fye v. Okla. Corp. Comm’n, 516
F.3d 1217, 1224 n.2 (10th Cir. 2008); Anderson v. Deere & Co., 852 F.2d 1244, 1246
(10th Cir. 1988) (“It is within the District Judge’s discretion to revise his interlocutory
orders prior to entry of final judgment.”) At summary judgment, the Court was far less
informed on issues that were key to the Court’s ruling at trial. Defendant devoted two
pages in its sixty page summary judgment brief to this issue, and Plaintiff offered a three
page response. (ECF No. 128 at 53-54; ECF No. 164 at 58-60.) Neither party’s
summary judgment briefs discussed the nature of Plaintiff’s plans under the contract,
specifically its intent to make two apps displaying Defendant’s terminal charts, and then
two apps that built on the goodwill of these original products. (ECF No. 128 at 53-54;
ECF No. 164 at 58-60.) These were key facts that gave the Court the required context
needed to interpret § 8.2 of the contract as a matter of law.
As to the substantive arguments raised by Defendant, the Court issued and
explained its ruling following the close of evidence at trial. (ECF No. 356 at 232-41.)
The Court held that § 8.2 of the contract was enforceable and unambiguous, and that it
barred lost profits that were consequential damages but did not bar lost profits that were
direct damages. (Id. at 235.) The Court noted that whether damages are direct or
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consequential is a matter of law, see Int’l Tech. Instruments, Inc. v. Eng. Measurements
Co., 678 P.2d 558, 561 (Colo. App. 1983), and that lost profits can be either direct or
consequential depending on the facts of the case, see Penncro Assoc. v. Sprint
Spectrum L.P., 499 F.3d 1151 (10th Cir. 2007). Based on the facts of this case, the
Court found that the lost profits from FXView and apps 1 (FXView HD) and 2 (FXView
Enterprise) were direct damages and therefore recoverable by Plaintiff, but that lost
profits for apps 3 (FX Maintain) and 4 (FX Mobile) were consequential damages and
barred by § 8.2. (ECF No. 356 at 237-38.)
The Court has reviewed the arguments raised by Defendant in the instant Motion
and sees no reason to reconsider this ruling. Defendant does not make any new
argument or point to any evidence that the Court previously failed to consider. As such,
the Court finds that Defendant has failed to show that it is entitled to judgment as a
matter of law on Plaintiff’s claim for lost profits, and its Rule 50(b) Motion is denied in
this regard. Defendant has also failed to show that it is entitled to a new trial due to the
Court’s ruling regarding the effect of § 8.2 of the contract on Plaintiff’s entitlement to
recover lost profits.
B.

Recovery of Lost Profits
In its Rule 50(b) Motion, Defendant contends that Plaintiff should not have been

permitted to recover any damages for lost profits because the evidence offered was too
speculative. (ECF No. 377 at 7-12.) Relying on Western Cities Broadcasting v.
Schueller, 849 P.2d 44 (Colo. 1993), Defendant argues that Colorado law bars recovery
of lost profits when there is no evidence of past profits. (ECF No. 377 at 7-8.)
Defendant contends that, because Plaintiff had no past profits associated with iPad
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sales, Western Cities bars Plaintiff from recovering any lost profits damages. (Id.)
However, in Western Cities, the Colorado Supreme Court explicitly stated that it was not
establishing “a per se rule requiring a showing of past profitability in order to award lost
profits.” 849 P.2d at 50. Rather, it made clear that long-standing Colorado law on lost
profits remained the appropriate standard. Id.
At trial, the Court instructed the jury on this standard, and the jury returned a
verdict in Plaintiff’s favor. (ECF Nos. 343-3, 343-6.) Drawing all reasonable inferences
in favor of Plaintiff, as the Court must on a Rule 50(b) Motion, the Court concludes that
Plaintiff introduced sufficient evidence to have allowed a reasonable juror to award lost
profits damages. Thus, the Court concludes that Defendant has failed to show that
Plaintiff’s lost profit projections—which the jury adopted in its verdict—were speculative
as a matter of law.
C.

Dona Flamme’s Testimony
In its Motion for New Trial, Defendant argues that the Court should have

excluded Dona Flamme’s testimony on the profits that she had projected Plaintiff would
make if the contract had not been breached. (ECF No. 378 at 5.) Defendant contends
that Ms. Flamme should not have been permitted to offer lay witness testimony on lost
profits under Federal Rule of Evidence 701, and that she was not qualified to offer an
expert opinion on lost profits under Rule 702. (Id. at 5-16.)
Prior to trial, Defendant raised the same arguments in its Motion to Exclude
Testimony of Dona Flamme and Melinda Harper Regarding Lost App Profits and Lost
Business Value. (ECF No. 221.) Noting that the Tenth Circuit has routinely permitted
business owners to testify about the projected profits of their own business, the Court
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ruled that Ms. Flamme’s testimony was admissible under Rule 701. (ECF No. 270 at
12-13.) Alternatively, the Court held that, to the extent her testimony went beyond that
permitted under Rule 701, she was qualified to offer expert testimony under Rule 702.
(Id. at 13.) The Court noted that Ms. Flamme’s impressive educational background, as
well as her experience leading major business entities, with specific experience
projecting profits. (Id.)
Having reviewed the arguments raised by Defendant in the instant Motion, the
Court sees no reason to reconsider this ruling, and it is specifically incorporated herein.
(See ECF no. 270 at 11-14.) While the Court’s pretrial ruling was based on Ms.
Flamme’s anticipated testimony, Ms. Flamme and other witnesses testified about her
professional experience budgeting, controlling costs, and projecting profits in complex
technical industries. Defendant’s criticisms of Ms. Flamme’s qualifications—such as the
fact that Ms. Flamme had no experience marketing or selling iPad apps—go to the
weight the jury could have assigned her testimony, not to its admissibility under Rules
701 or 702. Defendant vigorously cross-examined Ms. Flamme about the bases for her
profit projections at trial, and it was up to the jury to assess her credibility. The Court
confirms its ruling that Ms. Flamme’s testimony was admissible under either Rule 701 or
702, and sees no reason to grant Defendant a new trial on this basis.
D.

Intentional Interference Claim
At trial, the jury found in favor of Plaintiff on its claim that Defendant intentionally

interfered with business relations, and awarded Plaintiff $1 on this claim. (ECF No. 3436.) Defendant moves for judgment as a matter of law on this claim, arguing that its
contact with Plaintiff’s potential customers was privileged because those customers
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were already existing customers of Defendant. (ECF No. 377 at 16-17.)
Over Plaintiff’s objection, the Court instructed the jury on the business
competition privilege, which is an exception to an intentional interference with business
relations claim. (ECF No. 343-3 at 42.) Specifically, the Court instructed the jury that
“Defendant’s actions were not improper if it was addressing its existing business
relationship with that commercial airline. Competitors in an industry are allowed to
compete with each other, and to induce third persons to do business with it instead of its
competitor.” (Id.) The Court must presume that the jury followed this instruction.
The Court finds that Plaintiff presented sufficient evidence to permit a reasonable
juror to find in its favor on the intentional interference with business relations claim.
Plaintiff showed that Defendant took steps to prevent multiple airlines from purchasing
Plaintiff’s products. (See ECF No. 352 at 262-84; 391-7.) While Defendant had an
existing business relationship with these airlines, a reasonable juror could have
concluded that Plaintiff and Defendant were not “competitors in an industry” because
they were supposed to be working together. If they are not competitors, the business
competition privilege does not apply.
Accordingly, the Court finds that Defendant is not entitled to judgment as a
matter of law on Plaintiff’s intentional interference with business relations claim.
E.

Fraudulent Misrepresentation and Concealment
In ruling on Defendant’s Renewed Rule 50(a) Motion, the Court held that Plaintiff

had failed to show that Defendant had an independent legal duty to Plaintiff, and
therefore its tort claims were barred by the economic loss doctrine. (ECF No. 369 at
12.) This holding resulted in the Court vacating the jury’s award of $173,000 on
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Plaintiff’s fraudulent misrepresentation claim. (Id.) While the Court’s order mentioned
the fraudulent concealment claim, the Court did not specifically vacate the jury’s verdict
on that claim. (Id.)
Defendant now seeks clarification that the Court’s ruling applies to both Plaintiff’s
claim for fraudulent misrepresentation and the claim for fraudulent concealment. (ECF
No. 377 at 18-19.) It does. Plaintiff failed to show that Defendant owed it a legal duty
that was independent of any contractual duty and, therefore, the economic loss rule
bars both fraud claims. Omission of the fraudulent concealment claim was simply an
oversight, which the Court will now correct.
Accordingly, the Court finds that Plaintiff is not entitled to collect damages on its
fraudulent concealment claim, and the jury’s award of $1 on that claim is vacated.
F.

Remittitur
Defendant seeks remittitur of the jury’s award of damages on the grounds that it

is excessive and against the weight of the evidence. (ECF No. 378 at 17.) Because
“[t]rial by jury is a bedrock right of our legal system”, a district court “abuses its
discretion in ordering a remittitur ‘when the size of the verdict turns upon conflicting
evidence and the credibility of witnesses.’” Prager v. Campbell Cnty. Mem. Hosp., 731
F.3d 1046, 1061 (10th Cir. 2013) (quoting Palmer v. City of Monticello, 31 F.3d 1499,
1508 (10th Cir. 1994)). A jury’s verdict is “inviolate” and remains so as “long as it is not
so excessive as to shock the judicial conscience and to raise an irresistible inference
that passion, prejudice, corruption or other improper cause invaded the trial.” Id.; see
also M.D. Mark, Inc. v. Kerr-McGee Corp., 565 F.3d 753, 766 (10th Cir. 2009).
Defendant asks the Court to remit the lost profits damages awarded to Plaintiff in
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this case because Plaintiff’s projected profits far exceed what Defendant has obtained
marketing and selling its own iPad app. (ECF No. 17-18.) Defendant argues that
Plaintiff’s “bloated projections simply are not credible and only further confirm that
SolidFX’s damages calculations are unreasonable and against the weight of the
evidence.” (Id. at 19.)
The Court acknowledges that Plaintiff’s profit projections exceeded what
Defendant has experienced over the past five years. However, this is not a basis for
remittitur. Plaintiff introduced evidence showing that its app would have been first to
market, and that its customers were pleased with other electronic products that it had
offered. Perhaps Plaintiff’s iPad app would have been superior to Defendant’s app such
that Plaintiff would have been able to charge higher fees and still have a higher
subscription rate. Although these are all hypothetical possibilities, Defendant caused
this uncertainty by breaching the contract and refusing to allow Plaintiff to develop iPad
apps. Having forced Plaintiff to rely on projected profits rather than realize actual
profits, Defendant cannot complain about the inaccuracy of Plaintiff’s projections.
This is not a case in which the jury awarded damages that were significantly
higher than what the Plaintiff requested or where the jury appeared to pull an
outrageously high number out of thin air. See Lewis v. Bd. of Sedgwick Cnty., 140 F.
Supp. 2d 1125, 1140 (D. Kan. 2001) (jury’s damages award that was twice what plaintiff
requested caused the court to conclude that the jury had considered an impermissible
factor and that remittitur was appropriate); Blangsted v. Snowmass-Wildcat Fire
Protection Dist., 642 F. Supp. 2d 1250, 1257-58 (D. Colo. 2009) (given the limited and
non-quantifiable evidence of emotional injury presented at trial, court remitted $500,000
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award for emotional damages to $250,000). Rather, the jury’s verdict in this case was
precisely in line with Ms. Flamme’s and Ms. Harper’s profits projections. Defendant had
the opportunity to cross-examine these witnesses about such projections, and also
presented its own expert witness who testified that Plaintiff would not experience any
lost profits. The jury heard this evidence, weighed the credibility of these witnesses,
and chose to award damages consistent with Ms. Flamme’s and Ms. Harper’s profit
projections. This is precisely how our system is designed to function.
The jury holds “the exclusive function of appraising credibility, determining the
weight to be given to the testimony, drawing inferences from the facts established,
resolving conflicts in the evidence, and reaching ultimate conclusions of fact.” United
Int’l Holdings, Inc. v. Wharf (Holdings) Ltd., 210 F.3d 1207, 1227 (10th Cir. 2000)
(quotation omitted). “It is a fundamental legal principle that the determination of the
quantum of damages in civil cases is a fact-finder’s function.” Bennett v. Longacre, 774
F.2d 1024, 1028 (10th Cir. 1985). As the verdict in this case was well supported by the
testimony of Plaintiff’s witnesses, the Court cannot say that it was so excessive that
remittitur is appropriate. Accordingly, Defendant’s request for a new trial or remittitur
based on the amount of the jury’s damages award is denied.
III. CONCLUSION
For the reasons set forth above, the Court ORDERS as follows:
1.

Defendant’s Rule 50(b) Motion for Judgment as a Matter of Law (ECF No. 377) is
GRANTED in so far as it seeks clarification that the Court’s earlier order applied
to both the fraudulent misrepresentation and fraudulent concealment claims, but
DENIED in all other respects; and
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2.

Defendant’s Motion for a New Trial or Remittitur (ECF No. 378) is DENIED.
Dated this 5th day of February, 2015.
BY THE COURT:

William J. Martínez
United States District Judge

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