Follo, Follo Hospitality, Inc. and Capra Real Estate, LLC v. Florinda, Morency, Cranberry Farm, LLC, PFSM, Inc. and Brookside Leasing (2007-322)
2009 VT 11
[Filed 23-Jan-2009]
NOTICE: This opinion is
subject to motions for reargument under V.R.A.P. 40
as well as formal revision before publication in the Vermont Reports. Readers
are requested to notify the Reporter of Decisions, Vermont Supreme Court,
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2009 VT 11 |
PRESENT: Reiber, C.J., Dooley, Johnson, Skoglund and Burgess, JJ.
¶ 1.
BURGESS, J. Defendants Paul Florindo
and Susan Morency appeal from a jury verdict and
judgment against them for common-law fraud and violations of
¶ 2. Plaintiff, Carl Follo,[1] the purchaser and current operator of the bed and breakfast, cross-appeals on two issues. First, he claims error in the trial court’s exclusion of punitive damages as a matter of law. Second, plaintiff argues that it was improper for the trial court to order remittitur of a portion of the jury award. We reverse the trial court’s punitive-damages decision and affirm the remittitur order.
I. Background
A. History of the Real Estate Transactions
¶ 3.
In 2000, defendants formed a
¶ 4.
Over the next two years, defendants redecorated and operated the
¶ 5. Around the time that defendants decided to get out of the innkeeping business, plaintiff decided to enter it. When plaintiff decided he wanted to buy a bed and breakfast, he began researching methods for evaluating inns listed for sale. During his research, plaintiff learned about a “gross revenue multiplier” approach to calculating sales prices for inns. Under this approach, a prospective buyer multiplies the inn’s gross earnings by a number between three and seven to determine an appropriate sales price. Plaintiff decided he would buy only an inn that showed it was profitable, that he could acquire for a maximum of five times the inn’s gross sales, and that would cost less than $1 million.
¶ 6.
Plaintiff entered into negotiations to purchase defendants’
¶ 7.
As he began to operate the Inn during the spring of 2003, plaintiff
realized that the Inn’s sales for the first few months of his ownership were
less than one-quarter of the sales figures he expected based on the information
defendants provided prior to sale. To boost sales, plaintiff decided to
try a mailing directed at the
B. Procedural History
¶ 8. During discovery in this case, in late December 2006 and early January 2007, several of the parties (defendant Morency, the real estate agents, and plaintiff) agreed to an amended discovery schedule. Although defendants were already over five months late in disclosing their expert witnesses, and over two months late in deposing the experts, the stipulation would have enlarged the time for defendants to take those actions. Before defendant Florindo signed the new discovery schedule, however, and before the trial court adopted it, plaintiff withdrew his stipulation and requested the trial court set a mediation and trial date. In response, defendants asked the court to allow them extra time for “discovery or disclosure of experts and the filing of dispositive pretrial motions.” After the trial court held a status conference on the matter, it decided to enforce the original scheduling order, thereby denying defendants’ requests to enlarge the time for them to disclose and depose their experts. The court held that defendants were prohibited from presenting any expert witnesses at trial because of their violation of the discovery schedule.
¶ 9. Plaintiff’s amended complaint of August 24, 2006, stated a variety of claims against defendants as individuals and their companies, as well as against the real estate agents and their real estate corporation. After trial, but before the case went to the jury, plaintiff dropped all claims except for common law and consumer fraud claims. At the close of plaintiff’s case, the parties made several motions that are relevant on this appeal. First, defendant Florindo moved unsuccessfully for judgment as a matter of law on fraud and on the benefit-of-the-bargain damages claimed by plaintiff. PC 335. Second, defendant Morency moved unsuccessfully for judgment as a matter of law on the Consumer Fraud Act charges, the common-law-fraud charges, and the benefit-of-the-bargain damages. Third, the court granted defendants’ motions to exclude punitive damages as a matter of law. At the close of all the evidence, defendants renewed their motions, and plaintiff objected to the trial court’s decision not to allow punitive damages as a matter of law. The trial court did not change any of its rulings in response to those motions.
¶ 10. During closing arguments, plaintiff’s counsel stated that the date on a certain tax return provided to plaintiff by defendants had been whited out and suggested to the jury that the whiting out was to cover up that the tax returns had not been prepared at the time defendants claimed. Defendant Morency objected to these statements, but the trial court overruled that objection and proceeded to charge the jury. After deliberating, the jury returned a verdict against defendants Florindo and Morency for common-law fraud and consumer fraud, but found in favor of the realtor and its agents. The jury awarded damages for plaintiff in the amount of $645,000.
¶ 11. Following the verdict, defendant Morency moved for judgment notwithstanding the verdict, or a new trial, on the common law and consumer fraud charges. She also moved for a new trial or remittitur of the damages award, arguing that it was excessive. As part of her damages motion, Ms. Morency also argued that it was error for the trial court to have allowed plaintiff’s witness and the jury to value the Inn and the Cottage as a single property, and thus to include the value of the Cottage in the damages calculus. Defendant Florindo joined in all of defendant Morency’s requests.
¶ 12. Ruling
on the post-verdict motions, the trial court concluded that the jury’s verdicts
on common law and statutory fraud were consistent with the evidence against
defendant Morency under the jury instructions
given. The court noted that Ms. Morency had
failed to object to the jury instructions when they were given and failed, in
her post-verdict motion, to demonstrate that they were either plainly
inconsistent with established law or that their application to the evidence did
not support the jury’s conclusion that she made fraudulent misrepresentations
and committed deceptive acts under the consumer fraud statute. With
respect to the damages award, the court held there was no error in allowing the
Cottage and the
¶ 13. However, the trial court held that the jury’s damages award was higher than it could be under the law of the case and the evidence presented by plaintiff. The court concluded that the evidence presented was sufficient to support a damages award of only $295,000. Based on this determination, the court conditionally denied defendant’s motion for a new trial on damages subject to plaintiff’s agreement to remit any claim of damages above $295,000. Plaintiff agreed to the remittitur, and the court entered final judgment against defendants for damages of $295,000 plus prejudgment interest, costs, and attorney’s fees. Defendants appealed here and plaintiff filed his cross-appeal.
II. Defendants’ Claims on Appeal
A. Issues Not Preserved
¶ 14.
At the outset, we briefly address several of defendants’ claims
on appeal that were not properly preserved below. Defendants claim error
with respect to the trial court’s jury instructions on common-law fraud and
consumer fraud. In general, issues not raised at trial are unpreserved,
and this Court will not review them on appeal. Deyo v. Kinley, 152
¶ 15.
Defendants raise two other issues on appeal that were not
preserved at trial. Defendant Florindo claims it was
error to allow plaintiff’s expert appraiser to value the
¶ 16. Defendants seek to avoid application of Rule 51 and our associated case law requiring preservation below by arguing that the errors claimed amount to “plain error.”[3] We decline to so find. While we do not read Rule 51 as absolutely precluding plain-error review, this Court considers plain error in civil cases only in limited circumstances, i.e., when an appellant raises a claim of deprivation of fundamental rights, Varnum v. Varnum, 155 Vt. 376, 382-87, 586 A.2d 1107, 1110-13 (1990) (applying plain-error review where mother claimed violations of her federal and state constitutional rights to the free exercise of religion in parental rights-and-responsibilities proceeding), or when a liberty interest is at stake in a quasi-criminal or hybrid civil-criminal probation hearing, State v. Decoteau, 2007 VT 94, ¶ 11, 182 Vt. 433, 940 A.2d 661. Such circumstances are not present here.
B. Expert Witnesses
¶ 17. Defendants next argue that the trial court abused its discretion when it upheld the original scheduling order for discovery in this case and precluded defendants from presenting any expert witnesses at trial. The trial court’s ruling was prejudicial, according to defendants, because expert testimony about the subject property’s value was essential in this case. Defendants maintain that plaintiff’s fraud suit was predicated entirely on the claim that plaintiff was induced to pay more than market value for the property. Further, defendants posit that their expert testimony regarding property value was necessary because the court relied on plaintiff’s expert’s testimony as to the property’s value to determine the appropriate damage award. In sum, defendants claim they were prejudiced because, had they been allowed to present their own expert testimony regarding property values, they might have persuaded the jury or the court either that no fraud occurred or that a lesser damage award was appropriate.
¶ 18. The trial court made its exclusionary ruling in response to defendants’ attempt to amend the court-ordered discovery schedule. The original schedule, ordered in May 2006, required plaintiff to make expert disclosures by June 15, defendants to make their expert disclosures by July 15, and for the parties to complete all discovery by October 1, 2006. See V.R.C.P. 26(f) (the trial court “shall enter an order . . . establishing a plan and schedule for discovery, setting limitations on discovery . . . as are necessary for the proper management of discovery in the action”). Plaintiff named his expert witnesses by his deadline, but defendants’ deadline passed without their required disclosure. By the time these issues were presented to the trial court, in January 2007, six months had passed from the time defendants were supposed to have disclosed their expert witnesses, and they still had not done so.
¶ 19. The
trial court’s rulings on the admission or exclusion of evidence are
discretionary. Boehm v. Willis, 2006 VT 101, ¶ 12, 180
¶ 20. In
an analogous case, where a party moved to extend the time for depositions three
days before the discovery schedule’s deadline for depositions, the trial
court denied the party’s motion and subsequently entered summary judgment
against her. Poplaski, 152
¶ 21. The burden of disclosing experts is not a heavy one and if, as defendants now claim, “expert testimony was crucial” in this case, they were offered sufficient time to obtain and disclose experts under the original discovery schedule. Defendants offer no reasons or excuse for their failure to disclose experts within the time given under the original schedule or for their decision not to move for an extension of time before their discovery deadline passed. Accordingly, we do not see how the trial court’s order prohibiting defendants from presenting expert testimony at trial was an abuse of discretion or “inconsistent with substantial justice.” V.R.C.P. 61.
C. The Consumer Fraud Act Claims
¶ 22.
Turning to defendants’ arguments that the evidence did not support the verdicts
against them on the Consumer Fraud Act (CFA) counts, we disagree.
Defendants moved for judgment as a matter of law on these issues at trial and
after the trial court entered judgment against them. On appeal,
defendants’ arguments regarding the sufficiency of the evidence are intertwined
with their arguments that the jury instructions were erroneous. Because we will not review the jury instructions, see supra
¶¶ 14, 16, we will not consider any alleged errors in the jury instructions as
bearing on the sufficiency of the evidence to support the verdicts.
Instead, we take the jury instructions as the governing law of the
case. Lemnah v. Am. Breeders Serv., Inc., 144
¶ 23.
For different reasons, both defendants failed to comply with the
procedural requisites of Rule 50 in moving for judgment as a matter of law on
consumer fraud, and thus we cannot review their CFA issues on appeal.
Defendant Florindo failed to move in the first
instance for judgment as a matter of law on the CFA claim; thus, we will not
review this claim on appeal. Stacy v. Merchants Bank,
144
¶ 24. Defendant
Morency acknowledges in her brief that the jury
instructions on the CFA charge stated that plaintiff established that he was a
consumer as a matter of law. The instructions did not state the CFA
definition of seller nor did they state that plaintiff had the burden of
establishing that defendants were sellers in order to prevail on his CFA
claims. As we noted above, defendant failed to object to these instructions.
Consequently, these CFA issues are not preserved for appeal. Foster,
173
D. The Common-Law Fraud Claims
¶ 25. We
turn now to defendants’ contests of their common-law fraud liability.
Defendant Morency moved for judgment as a matter of law on the common-law fraud count both at the
close of the evidence and after the verdict was entered against her.
However, defendant Florindo made a motion for
judgment as a matter of law regarding the common-law fraud charge only at the
close of the evidence, and not after the jury returned its verdict.
Although defendant Florindo attempted to join
his co-defendant’s post-verdict motion, the trial court pointedly refused to
consider Mr. Florindo’s challenges to the sufficiency
of the evidence against him because instead of briefing the issues himself, Mr.
Florindo simply claimed to join in all of his
co-defendant’s requests without additional briefing. Defendant Morency’s motion, however, expressly argued that her
actions must be distinguished from those of Florindo.
Accordingly, the trial court decided not to discuss in any depth
the sufficiency of the evidence to establish fraudulent conduct by Mr. Florindo, as he failed to allege or brief why the jury’s
verdicts against him on those issues were contrary to the evidence. Given
this context, we consider only Mr. Florindo’s motion
for judgment as a matter of law made at the close of the evidence. Lussier
v. N. Troy Eng’g, 149
¶ 26. Motions
for judgment as a matter of law made before the case is submitted to the jury
and those made after the verdict is returned “raise substantially the same
legal questions . . . and are treated alike.” Center
v. Mad River Corp., 151
¶ 27.
Rule 50 motions are granted only where there is “no legally
sufficient evidentiary basis for a reasonable jury to find for the nonmoving
party.” Schaad v. Bell Atlantic NYNEX Mobile, Inc., 173
¶ 28. The sufficiency of the evidence for common-law fraud against each defendant is evaluated under the law of the case. The trial court’s instructions on common-law fraud stated, in relevant part:
In order to prove fraud, plaintiffs must demonstrate by clear and convincing evidence each of the following essential elements. One, that defendants misrepresented an existing fact which affected the essence of the transaction with plaintiffs or knowingly allowed another to make such a representation on defendants’ behalf; two, that defendants did so intentionally; three, that the misrepresentation was false when made and known at the time to be false by a defendant, or that the representation was recklessly made as being within the defendants’ own knowledge without defendant in fact knowing whether it was true or not.
Both defendants argue that they were entitled to judgment as a matter of law on common-law fraud mainly because they claim there was insufficient evidence to show that they knew their misrepresentations were false when made. The jury instructions allow a fraud verdict both for defendants’ actual knowledge of the falsity of their representations and for recklessly making misrepresentations without actual knowledge. To evaluate whether the evidence fairly and reasonably supports the jury’s fraud verdict, it is helpful to flesh out the meaning of “recklessly” in the context of common-law fraud.
¶ 29. Fraud exists not only when speakers knows their statements are false, but also when the statements are “made in such a reckless manner that the law will presume them to be made with knowledge.” Town of Townshend v. Howard’s Estate, 94 Vt. 215, 217, 109 A. 903, 904 (1920); see also Bennington Housing Auth. v. Bush, 2007 VT 60, ¶ 9, 182 Vt. 133, 933 A.2d 207 (fraud can consist in making a false statement “with reckless indifference as to its truth”) (quotation omitted).
¶ 30. The
Restatement (Second) of Torts provides guidance on this issue. According
to the Restatement, an actual fraudulent representation occurs when a person
misrepresents a fact in a way that “assert[s] that the maker knows it” to be
so, but in fact “has merely a belief in its existence and recognizes that there
is a chance . . . that the fact may not be as it is represented.” Restatement (Second) of Torts § 526 cmt.
e (1977). Fraud perpetrated in this manner is
characterized as a “false representation . . . made recklessly” because
the person making the misrepresentation asserts something as fact regardless of
“whether it is true or false.”
maker’s personal knowledge of the fact in question, or even upon his personal investigation of the matter. . . . [or] though not expressly stated, the representation [is] made in a form or under such circumstances as to imply that this is the case. . . . [then the] misrepresentation so made is fraudulent even though the maker is honestly convinced of its truth from hearsay or other sources that he believes to be reliable.
¶ 31. Taking
the evidence in the light most favorable to the jury’s verdict and to
plaintiff, the following facts were established at trial. Plaintiff’s
decision to buy the Inn and Cottage for $1,245,000 was founded in large part on
his belief that the
¶ 32. Data
gathered by plaintiff after he purchased the
¶ 33. Other
documents contradicted defendants’ representations to plaintiff prior to
purchase. An audit of defendants’ tax and bank records, obtained in
discovery, documented far less income than the approximately $226,000 and
$250,000 represented in defendants’ disclosures to plaintiff prior to the sale
of the
¶ 34. Moreover, Mr. Florindo’s testimony supplied evidence that his misrepresentations were knowingly or recklessly made. The trial court found that Mr. Florindo’s testimony could be construed as unresponsive or evasive by a reasonable jury. The court concluded that a reasonable jury could imply from this evasiveness that defendant Florindo intentionally falsified the figures shared with plaintiff. Additionally, the court concluded that even if the jury would not find that Mr. Florindo was being evasive or that he had provided false numbers intentionally, the jury could believe that it was reckless for him to provide the revenue numbers for potential buyers of the property given how little understanding he claimed to have about the revenues and sales, and how little data and supporting evidence he could provide for those numbers.
¶ 35. Our
review of the record supports the trial court’s characterization of Mr. Florindo’s testimony. Asked questions about his
recordkeeping and how he had developed the
¶ 36. In
another set of questions, plaintiff asked defendant Florindo
to explain why he had filed a 2002 income tax return that reported gross
receipts of less than $150,000 for the
¶ 37. These
examples are illustrative of the full scope of Mr. Florindo’s
responses to a lengthy and detailed examination by plaintiff regarding sales
and revenue for the
¶ 38. Ms. Morency argues that all of
the trial testimony, including that of plaintiffs and her co-defendants,
revealed that she, personally, never made any representations to plaintiff
regarding the
¶ 39. We agree that the record does not reveal any evidence that
Ms. Morency made misrepresentations directly to
plaintiff or directly to the real estate agents, as Mr. Florindo
did. Instead, the evidence of fraud by defendant Morency
subsists in her documented involvement in the companies and the business of
operating the
¶ 40. Ms. Morency testified at
trial that she did not take part in paying the Inn’s bills and that she had
little to do with the
¶ 41. Additionally,
the guest-information forms and room-assignment book that plaintiff introduced
at trial were filled out, for the most part, in Ms. Morency’s
handwriting. Even though she had filled out those forms, she could not
explain why the 2002 guest-information forms contained many customer names and
reservations that never appeared in the corresponding room-assignment
book. This provides sufficient information for a reasonable jury to
conclude that defendant Morency made
misrepresentations by aiding in supplying false statements of occupancy rates
to plaintiff while he was deciding to purchase the
¶ 42. All of these facts, coupled with her close relationship
with Mr. Florindo, provide a sound basis for the jury
to have concluded that Ms. Morency was enmeshed in
the companies, the
¶ 43.
In sum, given the jury instructions and the totality of the evidence
presented at trial, there is no basis for reversing the jury’s verdict or
ordering a new trial as a matter of law. Coupling her trial testimony
with her background and experience with the
III. Plaintiff’s Issues on Cross Appeal
A. Punitive Damages
¶ 44. At
trial, defendants successfully moved for judgment as a matter of law on the
issue of punitive damages. Relying mainly on our analysis in Brueckner v. Norwich University, 169
¶ 45. While
the prerequisites for imposing punitive damages in tort actions are demanding,
our cases indicate that when defendants have been found liable for common-law
fraud, it is proper to put the issue of punitive damages to the jury. Proctor Trust Co. v. Upper Valley Press, Inc., 137
[a]ctual fraud is accomplished with an evil intent, and if a jury finds that actual fraud was committed, an injured party is entitled to have the jury consider punitive or exemplary damages. It was error for the trial court to take the issue of punitive damages from the jury’s consideration.
¶ 46. From the trial court’s decision in the present case, it is clear that confusion exists surrounding the preconditions for imposing punitive damages in tort cases. For this case, the importance lies in distinguishing actual common-law fraud cases, such as the present case, from other cases where we have held that the evidence of tortious conduct did not rise to a level sufficient to support a punitive-damages charge. Proctor Trust demonstrates that actual common-law fraud, as opposed to other kinds of intentional torts, inherently possesses the necessary malice and ill will that may make punitive damages appropriate. Merely intentional, but non-fraudulent torts, by contrast, can be performed without the tortfeasor acting maliciously. Thus, the particular intentional tort for which a party is liable is one of the integral issues in determining whether punitive damages are appropriate.
¶ 47. Neither
of the cases relied on by the trial court here, Brueckner
and Monahan, were actual fraud cases, and neither involved direct
intentional wrongdoing. At issue in Brueckner
was
¶ 48. Monahan
involved a breach of the duty of good faith and fair dealing, based on a breach
of contract and what this Court characterized as “negligent indifference,”
and that opinion alludes to our rule that intentionally fraudulent torts
inherently possess the malice upon which punitive damages depend. We held
in Monahan that the standard for breaching the duty of good faith and
fair dealing falls below the level of conduct that evidences “the personal ill
will, or . . . the bad motive associated with malice.” 2005
VT 110, ¶ 60. Part of our decision that the
defendant’s breach of the duty of good faith and fair dealing in Monahan
was not malicious involved rejecting the plaintiff’s argument that the
defendant’s agents had acted fraudulently. Importantly, we noted
in Monahan that “[a] sufficient showing of fraudulent conduct can
satisfy the actual malice requirement for punitive damages.”
¶ 49. Because the jury in the present case found defendants liable for actual common-law fraud, an intentional act with a specific intent to defraud the buyer, the trial court erred in not sending the issue of punitive damages to the jury.
B. Remittitur
¶ 50.
The final issue before us is plaintiff’s
cross-appeal on the issue of whether it was appropriate for the trial court to
have ordered either remittitur of part of the jury’s damages award or a new
trial. Under V.R.C.P. 59(a), if the trial court’s only ground for
ordering a new trial is that the jury’s damage award is excessive, it may not
order a new trial unless it first gives the “prevailing party . . . an
opportunity to remit such portion thereof as the court deems to be
excessive.” Here the trial court concluded that the jury’s damages award
of $645,000 was excessive because it was far higher than any amount that the
jury could have calculated based on the jury instructions. Consequently,
the court gave plaintiff the option of accepting a remittitur of any damages
above $295,000 or a new trial. While a party who accepts a remittitur, as
plaintiff did here, may not then appeal it directly, it may cross-appeal on
that issue if the opposing party appeals on other issues. Brault
v. Flynn, 166
¶ 51. In this case, the jury was instructed that it could measure damages either by “the difference between the purchase price paid by Plaintiffs and the actual fair market value of the business as it existed at the time of any fraudulent . . . misrepresentations or deceptive statements” or by the benefit-of-the-bargain measure. The benefit-of-the-bargain measure of damages was defined as the “amounts [plaintiff] believe[s] the business would have generated in profit had the income and expenses been as represented by Defendants.” The trial court explicitly stated that the jury could award damages under only one of these measures, not both. Again, neither party objected to these instructions after they had been given, although, as noted, supra ¶ 9, defendants had objected to the benefit-of-the-bargain instruction at the close of the evidence.
¶ 52. There was arguably evidence to support either approach. The jury had before it plaintiff’s purchase price of $1,245,000, and plaintiff’s expert witness’s market price appraisal of the property of $950,000. Also for the jury’s consideration was evidence of the revenues and profit-and-loss statements that defendants presented to plaintiff before plaintiff purchased the property, and the evidence of the profits actually produced by the property under defendants’ ownership.
¶ 53.
At closing, however, not relying on this
evidence, plaintiff argued instead that he would have paid only $600,000 for
the Inn had he known the
¶ 54. The jury returned damages for plaintiff in the amount of $645,000, which is the exact difference between plaintiff’s actual purchase price and his hypothetical purchase price using the “gross revenue multiplier.” The trial court granted defendants’ motion for remittitur because it concluded that this award had no basis in the court’s jury instructions on damages, and that the “gross revenue multiplier” approach was not an accepted method for calculating damages. It also noted that the benefit-of-the-bargain instruction focused on profits plaintiff would have received, not revenues, and that the “gross revenue multiplier” approach was focused wholly on revenues. Determination of loss, or damages, cannot be achieved by measuring revenue alone. The trial court explained that plaintiff did not make any “effort to demonstrate from the evidence how they had realized smaller profits than they reasonably ought to have expected given the deceptive representations.” Further, plaintiff had not even offered evidence regarding his actual revenues. Thus, there was no basis for the jury to measure benefit-of-the-bargain damages based on plaintiff’s case. It was equally evident that the $600,000 figure was not a reasonable fair market value of the property in light of plaintiff’s own expert’s appraisal value of $950,000. The trial court noted, reasonably, that it was “inconceivable” that defendants would have accepted an offer of $600,000 given plaintiff’s own expert appraisal of the property at the time of trial. For these reasons, the trial court determined that the jury’s award was excessive and that “the only fair measure of damages which the jury could have assessed” was the difference between the purchase price and the properties’ fair market value as presented by plaintiff’s expert appraiser, which difference was $295,000.
¶ 55.
“Remittitur is within the sound
discretion of the trial court, and its ruling will not be set aside on appeal
absent abuse of discretion.” Lent v. Huntoon,
143
¶ 56.
We also hold that the remittitur amount
ordered by the trial court was appropriate. “The size of the remittitur is
the amount needed to eliminate the excess damages in the jury’s verdict.”
Haynes v. Golub Corp., 166
¶ 57.
Because we have few cases in which a plaintiff
appeals a remittitur order, we look to other jurisdictions for guidance
regarding the appropriate standard for evaluating the size of a remittitur.
By awarding the maximum amount the jury could have awarded, the trial court’s
order in this case is consistent with the preferred standard in the United
States Court of Appeals for the Second Circuit because it is the least
intrusive on the jury’s verdict and thus most faithful to the jury’s
intent. Earl v. Bouchard Transp. Co., 917 F.2d
1320, 1328-30 (2d Cir. 1990). When the trial court is as
deferential as possible to the jury verdict, appellate courts are “even less
willing to find that [the trial court] abused [its] discretion.”
Affirmed in part and reversed in part. Remanded for jury determination of punitive damages, if any, to be awarded.
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[1]
The two businesses Mr. Follo formed to purchase and
run the
[2]
Plaintiff sought financing for his purchase through the same bank that held the
mortgages on the
[3]
In their briefing, defendants cite Federal Rule of Civil Procedure 51(d)(2) as authority for their position that plain error review
is appropriate to examine unpreserved issues regarding jury instructions.
Indeed, that provision of the federal rule specifically authorizes “plain
error” review of unpreserved jury instruction issues if the issue “affects
substantial rights.” F.R.C.P. 51(d)(2).
That provision of the federal rule was adopted in 2003, Advisory Committee
Notes, 2003 Amendments, F.R.C.P. 51, but