United States District Court, N.D. Iowa, Cedar Rapids Division
ORDER DENYING MOTION FOR NEW TRIAL
STUART SCOLES CHIEF MAGISTRATE JUDGE NORTHERN DISTRICT OF
matter comes before the Court on the Motion for New Trial
(docket number 73) filed by Plaintiff BVS, Inc. on December
15, 2016, and the Resistance (docket number 78) filed by
defendant Credit Union Executives Society, Inc.
("CUES") on December 26. Pursuant to Local Rule
7.c, the motion will be decided without oral argument.
an Iowa corporation which focuses on helping financial
institutions enhance their customer service, employee
satisfaction, and profitability through training and
technology. CUES is a Wisconsin corporation focusing on
leadership development for management-level employees at
credit unions. On May 31, 2011, BVS and CUES executed a
Master Agreement and related Addendum. Pursuant to the
Agreement, CUES afforded BVS access to its marketing vehicles
and membership. In consideration, BVS paid CUES a
6, 2015, BVS sued CUES, claiming CUES had failed to provide
BVS with the marketing opportunities required by the
Agreement. CUES filed a counterclaim, asserting BVS breached
the Agreement by failing to pay the required commissions.
Following a five-day trial, the jury found for CUES.
instant motion, BVS seeks a new trial on two grounds: First,
BVS argues die Court erred in granting CUES' RULE 50(a)
motion for judgment as a matter of law on BVS' claim of
fraud in the inducement. Second, BVS argues the Court erred
in granting CUES' motion in limine, precluding
BVS from introducing evidence of "benefit of the
Rule of Civil Procedure 59(a)(1)(A) authorizes the Court to
grant a new trial on all or some of die issues "for any
reason for which a new trial has heretofore been granted in
an action at law in federal court." In White v.
Pence, 961 F.2d 776 (8th Cir. 1992), the Court discussed
at length the standard to be applied by the trial court in
considering a motion for new trial. "[T]he standard is
simply one as to whether a miscarriage of justice has
occurred." Id. at 778. See also Murphy v.
Missouri Dept. of Corrections, 506 F.3d 1111, 1116 (8th
Cir. 2007) ("The grant of a motion for new trial is
appropriate only if 'die verdict is against the weight of
the evidence and allowing it to stand would result in a
miscarriage of justice.'"); Beckman v. Mayo
Found., 804 F.2d 435, 439 (8di Cir. 1986) ("The
district court can only disturb a jury verdict to prevent a
miscarriage of justice.").
Measure of Damages
argues die Court erred in a pretrial ruling and in a trial
ruling, thereby requiring a new trial. In a pretrial motion
in limine, CUES asked die Court to prohibit BVS from
offering evidence regarding alleged "benefit of die
bargain" damages. As detailed in the Court's Ruling
(docket number 58) on the motion in limine, BVS
filed this action on July 6, 2015. Throughout the pendency of
this action, BVS consistently described its damages as
"recovering all royalties paid to CUES." BVS
approximated the damages at $1 million. As recently as May
2016, BVS' attorney refused to produce BVS' financial
information, arguing it was irrelevant because "BVS'
damages claim constitutes recovering the royalties it paid to
CUES." It was not until September 9, 2016 - just 80 days
prior to trial, and after the deadline for completing
discovery had expired - that BVS served CUES with a
supplemental Rule 26 initial disclosure, stating that BVS
intended to seek damages for "lost expectations/benefit
of the bargain: $4, 787, 510.51."
discussed in my Ruling on CUES* motion in limine,
FEDERAL Rule of Civil Procedure 26(a)(1)(A)(iii) requires a
party to disclose "a computation of each category of
damages claimed by the disclosing party, " and further
requires the party to make available documents or other
materials bearing on those damages. Furthermore, Rule
26(e)(1)(A) requires a party to supplement its disclosure
"in a timely manner." If a party fails to provide
information as required by Rule 26(a) or (e), then it is
prohibited from using the information at trial "unless
the failure was substantially justified or is harmless."
See Fed. R. Civ. P. 37(c)(1).
concluded BVS' failure to supplement its damages claim
until 80 days prior to trial, and well after the deadline for
discovery had expired, was neither substantially justified
nor harmless. This case had been pending for more than a year
- and a similar case was brought the previous year - before
BVS alerted CUES that it intended to seek nearly $5 million
in alleged lost profits. By that time, it was too late for
CUES to conduct appropriate discovery (which had previously
been refused by BVS) or retain a necessary expert witness.
Because BVS' new theory of damages was not disclosed in a
timely manner, I concluded it could not advance that measure
of damages at trial. For all of the reasons set forth in my
previous ruling, I decline the opportunity to reverse myself
note parenthetically that the error, if any, in refusing to
allow BVS to offer benefit of the bargain damages is
harmless. That is, the jury found for CUES on the breach of
contract dispute and, therefore, never reached
BVS' alleged damages. In other words, BVS could not
recover benefit of the bargain damages in any event, even if
they could be proved, because the jury found CUES had not
breached the contract.
Fraud in ...