Opinion
110,166.
01-23-2015
Bruce W. BALLAI, Appellant/Cross–Appellee, v. KIEWIT POWER CONSTRUCTORS, CO., Peter Kiewit Sons', Inc., and Kiewit Corporation, et al., Appellees/Counterclaim Plaintiffs/Cross–Appellants, v. Bruce W. Ballai, Counterclaim Defendant/Cross–Appellee.
Bert S. Brand and Dennis E. Egan, of The Popham Law Firm, of Kansas City, Missouri, for appellant/cross-appellee. Brian M. Stolzenbach, Joel H. Kaplan, and Katherine F. Mendez, of Seyfarth Shaw LLP, of Chicago, Illinois, and Kimberly F. Seten, of Constangy, Brooks & Smith, LLP, of Kansas City, Missouri, for appellees/cross-appellants.
Bert S. Brand and Dennis E. Egan, of The Popham Law Firm, of Kansas City, Missouri, for appellant/cross-appellee.
Brian M. Stolzenbach, Joel H. Kaplan, and Katherine F. Mendez, of Seyfarth Shaw LLP, of Chicago, Illinois, and Kimberly F. Seten, of Constangy, Brooks & Smith, LLP, of Kansas City, Missouri, for appellees/cross-appellants.
Before PIERRON, P.J., BRUNS and SCHROEDER, JJ.
MEMORANDUM OPINION
PER CURIAM.
Bruce W. Ballai sued his employer, its affiliate companies, and some of the company's officers and directors after he was terminated from his employment. His employer filed a counterclaim against Ballai, and the case eventually went to a jury trial on four of Ballai's eight claims and on two of the employer's counterclaims. At trial, only two of Ballai's claims survived a motion for judgment as a matter law and were presented to the jury to decide. At the end of the 13–day trial, the jury returned a verdict finding that an implied employment contract existed between Ballai and his employer but that the implied contract had not been breached. Furthermore, the jury rejected the other claims asserted by the employer, and neither was awarded damages. On appeal, Ballai raises a number of issues, and his employer has raised additional issues in a cross-appeal. Because we do not find that the district court erred in deciding any of the issues raised by the parties, we affirm the jury's verdict.
Facts
Peter Kiewit Sons', Inc., Kiewit Power Constructors Co., and Kiewit Corporation (referred collectively as Kiewit) are all corporations organized under the laws of Delaware that conduct business in Kansas. Both Kiewit Corporation and Kiewit Power Constructors Co. are subsidiaries of Peter Kiewit Sons', Inc. Ballai, who was licensed to practice law in New Jersey, began working for Kiewit in October 1992. Kiewit assigned Ballai to its legal department from the beginning.
Over the years, Ballai performed substantial work in the area of engineering procurement construction (EPC) contracting. Specifically, Ballai helped to create a 144–point “ ‘EPC Contract Matrix.’ “ Other Kiewit employees who are mentioned in the course of this opinion are: Douglas Patterson, an executive vice president and member of the board of directors at Kiewit; Mark Langford, a vice president at Kiewit who also spent time negotiating EPC contracts; Howard Barton, a district manager for Kiewit and eventually president of Kiewit Power Constructors Co.; Toby Schropp, general counsel for Kiewit and head of the legal department; Thomas Shelby, senior vice president, division manager, and member of the board of directors; and Bruce Grewcock, chief executive officer of Kiewit and member of its board of directors.
In the spring of 2007, Patterson, Langford, and Schropp met to discuss how to best approach EPC contract negotiation and formation. Around the same time, Bailai interviewed for what he believed was a partner-level position with a Houston law firm. Shortly after Langford told Patterson that Bailai had received an offer from the Houston law firm, members of Kiewit's management held a discussion regarding a potential new organizational structure at Kiewitt with Bailai reporting directly to Patterson and having two attorneys report to him.
At some point, Patterson told Bailai that Kiewit could not pay him as much as he said the Houston law firm was offering him. But Patterson evidently told Bailai that he would recommend that Kiewit offer him an opportunity to buy additional shares in the corporation. Moreover, it appears that Schropp and Patterson encouraged Bailai not to accept an offer from the Houston law firm until they were able to present him with a counteroffer.
Ultimately, Kiewit offered Bailai an annual salary increase from $135,000 to $195,000, a promotion to assistant general counsel, and an opportunity to purchase 7,000 additional shares of Kiewit stock. Bailai accepted, and Kiewit promoted him to the position of assistant general counsel in 2007. In addition, Kiewit transferred Bailai to its Kansas office. On performance evaluations for work performed in 2007, Bailai was rated outstanding in 3 of 10 categories and commendable in every other category.
In January 2009, Bailai missed a district meeting held by Kiewit because he took a trip to Ukraine to see a woman he had met over the Internet. It is disputed whether Bailai gave advance notice of his intent to take vacation time during the district meeting. Subsequently, the president of Kiewit Power Constructors Co., Barton, spoke with Bailai about the detrimental effect his personal life seemed to be having on his job performance. Shelby also asked Ballai why he missed the district meeting, and afterward, Ballai and Shelby discussed Ballai's trip to Ukraine to meet the woman.
In March 2009, Ballai was demoted to the position of senior attorney based on poor evaluations he received for work done in 2008. About a year later, when Ballai's performance had not improved, Kiewit terminated Ballai's employment. Kiewit also seized Ballai's stock a few weeks later and mailed Ballai a check for the proceeds after paying off his stock loan. Thereafter, on November 2, 2010, Ballai filed a petition for damages against Kiewit Power Constructors Co, Peter Kiewit Sons' Inc., Kiewit Corporation, Shelby, Patterson, and Grewcock.
Ballai asserted eight claims against the defendants: (1) intentional and/or negligent misrepresentation regarding his move to the Kansas office; (2) breach of express or implied contract; (3) breach of stock contract; (4) promissory estoppel; (5) intentional misrepresentation and/or negligent misrepresentation regarding “Kiewit's unilateral right to arbitrarily rescind stock sales”; (6) breach of fiduciary duty involving stock loans; (7) intentional and/or negligent misrepresentation regarding changed limitations on stock ownership; and (8) breach of fiduciary duty in failing “to impose reasonableness standard upon unilateral right to rescind stock sales.”
In its answer, Kiewit denied liability. In addition, Kiewit asserted the affirmative defenses of accord and satisfaction, statute of frauds, statute of limitations, and failure to mitigate damages. On February 15, 2012, the district court granted Kiewit's motion to amend its answer and to assert a counterclaim for fraud and negligent misrepresentation regarding false information Ballai allegedly provided to Kiewit about his negotiations with the Houston law firm—information which Kiewit claimed to rely upon in adjusting the terms of Ballai's employment, his salary, and his stock option. Kiewit also alleged two claims of breach of fiduciary duty concerning allegations that Ballai had engaged in self-dealing and had disclosed information protected by the attorney-client privilege.
On June 13, 2012, Ballai filed a motion for sanctions against Kiewit, claiming that Kiewit had destroyed evidence. Specifically, Ballai argued that Kiewit had destroyed the laptop computer he used during his employment. Ballai proposed that the district court sanction Kiewit by awarding judgment in his favor. In the alternative, Ballai suggested that the district court instruct the jury on spoliation of evidence and not allow Kiewit to use any information obtained from the laptop at trial.
In response, Kiewit argued that it had produced all of the information obtained from the laptop computer before it was inadvertently recycled by an information technology manager along with dozens of other old computers as part of a general cleanup effort. After the district court conducted a hearing, it denied Ballai's motion for sanctions—finding that Kiewit had no legal duty to preserve the laptop computer. In addition, the district court ruled on several motions in limine filed by the parties regarding the admissibility of evidence at trial. Finally, a pretrial order was entered on January 9, 2013, which controlled the future course of this action.
The following is a summary of the claims preserved in the pretrial order and the disposition of each claim:
• Count I—intentional and/or negligent misrepresentation against Kiewit, Patterson, and Grewcock. In this claim, Ballai alleged that false representations had been made to him in regard to the creation of a group of lawyers in the Kansas office to work solely on transactional EPC work. The district court granted Kiewit's motion for judgment as a matter of law on this count with regard to Grewcock, but allowed the claim to go to the jury as to the other two defendants. The jury decided that Ballai had not proved this claim.
• Count II—breach of express or implied contract of employment. In this claim, Ballai alleged that Kiewit could not discharge or demote him from employment without just cause. The jury determined that Ballai had an implied employment contract with Kiewit but that the contract was not breached.
• Count III—breach of stock contract against Kiewit. In this claim, Ballai alleged he had a contract with Kiewit to maintain his stock holdings in consideration of his services and to not discharge him except for just cause. The claim was dismissed by the district court on Kiewit's motion for judgment as a matter of law filed after Ballai concluded his presentation of evidence.
• Count IV—promissory estoppel against Kiewit. In this claim, Ballai alleged that Kiewit made promises to him about his work in the Kansas office, which induced him to move to that office and forego other opportunities. The claim was dismissed by the district court on Kiewit's motion for judgment as a matter of law filed during the trial after Ballai concluded his presentation of evidence.
• Count V—intentional and/or negligent misrepresentation against Kiewit, Grewcock, and Patterson. In this claim, Ballai alleged that these defendants misrepresented to him that they would not arbitrarily or capriciously rescind stock sales. The district court dismissed this claim on Kiewit's motion for judgment as a matter of law filed during the trial after Ballai concluded his presentation of evidence.
• Count VI—breach of fiduciary duty against all defendants based on their unilateral ability to rescind stock. This claim was voluntarily dismissed by Ballai before trial.
• Count VII—intentional and/or negligent misrepresentation regarding change in limitations on stock ownership against all defendants. This claim was also voluntarily dismissed with prejudice by Ballai before trial.
• Count VIII—breach of fiduciary duty against Grewcock, Patterson, and Shelby. In this claim, Ballai alleged that these defendants should have placed a reasonableness standard on the corporation's unilateral right to rescind stock sales. This claim was dismissed by the district court on Kiewit's motion for judgment as a matter of law filed during the trial after Ballai concluded his presentation of evidence.
• Counterclaim Count I—fraud. In this counterclaim, Kiewit alleged that Ballai made fraudulent misrepresentations regarding his employment negotiations with a Houston law firm to induce Kiewit to give him a promotion and increase his stock holdings. The jury determined that Kiewit had not proven its claim that it was damaged by Ballai's intentional false representation of an existing material fact.
• Counterclaim Count II—negligent misrepresentation. This claim also stemmed from Ballai's purported offer from the Houston law firm. The jury determined that Kiewit had not proven its claim that it was damaged by Ballai's negligent false representation regarding the offer from the Houston law firm.
• Counterclaim Counts III and IV—breach of fiduciary duty. Kiewit voluntarily dismissed these claims with prejudice during the trial after Ballai concluded his presentation of evidence.
After a 13–day trial, which commenced on April 22, 2013, the jury ultimately rejected all of the claims and counterclaims submitted to it for determination. As such, neither party was awarded damages.
On June 4, 2013, the district court filed a journal entry of judgment, and Ballai timely appealed. Subsequently, Kiewit timely filed a notice of cross-appeal. After the parties responded to an order to show cause, we retained jurisdiction.
Analysis
Motion for Sanctions
On appeal, Ballai contends that the district court erred in denying his motion for sanctions relating to the recycling of the laptop computer he used during his employment with Kiewit. The decision to impose sanctions for discovery abuses rests within the sound discretion of the district court. See Schoenholz v. Hinzman, 295 Kan. 786, Syl. ¶ 11, 289 P.3d 1155 (2012). Accordingly, we review the district court's decision to deny Ballai's motion for sanctions to determine whether the district court abused its discretion. See In re Marriage of Bergmann & Sokol, 49 Kan.App.2d 45, Syl. ¶ 2, 305 P.3d 664 (2013).
In this appeal, Ballai has the burden to show that it was an abuse of discretion for the district court to deny his motion for sanctions. See Northern Natural Gas Co. v. ONEOK Field Services Co., 296 Kan. 906, 935, 296 P.3d 1106, cert. denied 134 S.Ct. 162 (2013). A judicial action constitutes an abuse of discretion if the action is arbitrary, fanciful, or unreasonable; based on an error of law; or based on an error of fact. 296 Kan. at 935. In other words, a district court exceeds its discretion if no reasonable judicial officer would rule as the district court did under the circumstances, if it ignores controlling facts or relies on unproven factual representations, or if it acts outside the applicable legal framework. Schoenholz v. Hinzman, No. 110,388, 2014 WL 4627584, at *4 (Kan.App.2014) (unpublished opinion) (citing State v. Ward, 292 Kan. 541, Syl. ¶ 3, 256 P.3d 801 [2011], cert. denied 132 S.Ct. 1594 [2012] ).
In his motion for sanctions, Ballai argued that Kiewit's recycling of the laptop computer he used during his employment after this lawsuit was filed was “at a minimum, gross negligence of the highest order, and at worst, willful destruction of evidence.” According to Ballai, the district court should have imposed sanctions against Kiewit for violating an internal litigation hold that directed preservation of electronically stored information. In response, Kiewit argued that it produced all of the information from the laptop computer in discovery before it was inadvertently recycled. Kiewit also argued that Ballai had failed to establish that the loss of the laptop computer deprived him of any favorable evidence.
The district court held a hearing on Ballai's motion for sanctions on July 24, 2012. Following the hearing, the district court denied the motion for sanctions. Citing Koplin v. Rosel Well Perforators, Inc., 241 Kan. 206, 215, 734 P.2d 1177 (1987), the district court determined that Ballai had failed to show that Kiewit had a duty not to recycle the laptop computer after the filing of this action. Moreover, the district court determined that sanctions should not be imposed “for destroying the property without some sort of a duty not to destroy it.”
Specifically, the district judge found:
“The assumption seems to be that the duty was created when the preservation memo was sent around on one or two occasions by Kiewit. There wasn't any duty created by me. I didn't issue any orders. We don't have any case law establishing a duty in a case like this that I know of. We don't have any statutes that create a duty. I'm sure you all know and have made yourself knowledgeable about the fact that a few short years ago we did in Kansas adopt some ESI [Electronically Stored Information] statutes, but those relate to the discovery of electronically stored information and don't really get to the preservation or hold aspects in litigation. And we don't have any Supreme Court rules or anything else creating a duty.”
In Superior Boiler Works, Inc. v. Kimball, 292 Kan. 885, 895–96, 259 P.3d 676 (2011), the Kansas Supreme Court found that “there is no common-law duty to preserve evidence.” See Koplin, 241 Kan. at 215. Although neither Kimball nor Koplin deal directly with the issue presented in this case, we find the lack of a legal duty to preserve evidence in Kansas to be significant. In particular, we find it significant that in Kansas there is currently no statute, rule, or case that requires a party to a lawsuit to preserve potential evidence. Although Ballai could have sought a protective order from the district court for the preservation of potential evidence, we see nothing in the record to indicate that it did so. Even though Kiewitt failed to abide by its own internal request that potential evidence not be destroyed, we do not find that it owed a legal duty to Ballai not to recycle the laptop computer.
Perhaps there is a valid public policy argument that Kansas should have a statute or rule establishing a duty to preserve potential evidence prior to or during the course of litigation. But no such statute or rule currently exists in Kansas. Furthermore, although it probably would have been a good idea for Kiewit to preserve the laptop computer, it appears that most—if not all—of the information contained on the computer that possibly could have assisted Ballai pursue this case was disclosed. In fact, Ballai has not identified any information that he believed to be on the computer that was not produced during the course of discovery.
In the criminal context, a panel of this court has held that a district court has the authority to give a spoliation instruction in a criminal case when a party has “destroyed evidence in bad faith.” See State v. Romero, No. 89,899, 2004 WL 1086967, at *4 (Kan.App.2004) (unpublished opinion). Similarly, federal caselaw reflects that the party seeking sanctions based on the spoliation of evidence must establish that the evidence was destroyed with a culpable state of mind and that it was relevant to the party's claim or defense. Zubulake v. UBS Warburg LLC, 229 F.R.D. 422, 430 (S .D.N.Y.2004). Here, we do not find that Ballai has shown either bad faith or other culpable conduct.
The facts of this case are different from many of the spoliation of evidence cases that are reported because the evidence in question—the laptop computer—was Ballai's own work computer. As such, Ballai should have been able to at least generally identify the type of information he believed was not produced that may have been helpful to his case. The record reflects that Kiewit produced significant amounts of information from the computer—including the entire user profile—and yet Ballai does not indicate any information that would have assisted him in pursuing his claims or defenses in this case.
Regarding Ballai's alternative argument that the district court should have given an adverse inference instruction to the jury regarding the laptop computer, we find nothing in the record to reflect that he objected to the failure to give this instruction. See State v. Smyser, 297 Kan. 199, 204, 299 P.3d 309 (2013) (stating that a party cannot claim error for the district court's failure to give a jury instruction unless the party objected to the failure to give the instruction or the failure to give the instruction was clearly erroneous); Foster v. Klaumann, 296 Kan. 295, 301–02, 294 P.3d 223 (2013) (applying the criminal progression of analysis on jury instruction issues in a civil case). Nevertheless, we do not find that Ballai has made a sufficient showing that an adverse inference instruction was required—as a sanction or otherwise—in this case.
We, therefore, find no abuse of discretion by the district court in failing to order sanctions in this case.
Admission of Portions of Chat Log
Ballai also contends that the district court erred in allowing Kiewit to introduce evidence at trial from a chat log of conversations between him and his girlfriend. These conversations were evidently discovered on the Ballai's work computer after he was terminated from his employment. Ballai originally objected to the relevance of this evidence during the pretrial conference. In response, Kiewit argued that it only sought to use a redacted version of the chat log to show that Ballai was distracted from his work.
Even though its attorneys sometimes work on weekends, Kiewitt removed chats from the log that occurred on a weekend. Likewise, Kiewit removed most of the substance of the chats because the main purpose of admitting the log was to show how much time Kiewit spent chatting and not actually what was said. For the text that Kiewit left in, Kiewit went through each instance and explained how the text was relevant to the case it was trying to make in defense of Ballai's allegations.
After hearing the parties' arguments, the district court ultimately determined that the redacted version of the chat log was admissible, but the district court gave Ballai the opportunity make specific objections as to the unredacted text left in the chat log by Kiewit. In addition, the district court ruled that although the chat log was admissible, Kiewit would not be allowed to publish the entire exhibit to the jury and would have to receive permission before putting any part of the chat log on the projector screen for the jury to view. Although Ballai did not take advantage of the opportunity to raise specific objections regarding the text of the chat log, he did object to the admissibility of the entire exhibit at trial.
The first inquiry in determining the admissibility of evidence is relevance. Generally, all relevant evidence is admissible. K.S.A. 60–407(f). K.S.A. 60–401(b) defines relevant evidence as “evidence having any tendency in reason to prove any material fact.” State v. Bowen, 299 Kan. 339, 348, 323 P.3d 853 (2014). The definition encompasses two elements—materiality and probativeness. Ballai contends that the chat logs were neither material nor probative.
Evidence is material when the fact it supports is in dispute or in issue in the case. In re Acquisition of Property by Eminent Domain, 299 Kan 37, 44, 320 P.3d 955 (2014). Materiality is reviewed de novo. Bowen, 299 Kan. at 348. Evidence is probative if it has any tendency to prove any material fact. K.S.A. 60–401(b) ; State v. Lowrance, 298 Kan. 274, 288–89, 312 P.3d 328 (2013). Appellate courts review a district court's decision of whether evidence is probative under an abuse of discretion standard. State v. Huddleston, 298 Kan. 941, 960, 318 P.3d 140 (2014).
Ballai argues that the chat log was not relevant because it “had little if anything to do with whether Ballai was performing his job, and certainly nothing to do with his termination over a year later.” He contends that the evidence was not material because its authenticity was impossible to prove. He claims that the chat log only supported the fact that he chatted and not that any poor performance justified his termination. Ballai argues that the evidence was not probative because the fact that he may have been chatting during work hours did not prove whether he was or was not accomplishing his work assignments. He claims that “[c]hatting does not prove poor performance—it only proves chatting.”
Based on our review of the exhibit, we agree with the district court that it was relevant to Kiewit's defense. In particular, the exhibit was relevant to Kiewit's defense that it properly discharged Ballai based on him being distracted from the obligations of his work. Because this was a disputed question of fact in this case, we find the chat log also was material and probative. Furthermore, the evidence did not have to actually prove the material fact. It just had to have any tendency to prove the material fact. Lowrance, 298 Kan. at 289. Accordingly, although chatting did not in and of itself prove poor performance, it did have a tendency to show that Ballai was distracted, and it was ultimately the jury's job to determine what weight—if any—was given this evidence.
Ballai also argues that the prejudicial impact of the chat log outweighed any possible probative value. Certainly, a district court has the discretion under K.S.A. 60–445 to exclude otherwise relevant evidence if it finds that the admission of such evidence would be unduly prejudicial to a party. See Lowrance, 298 Kan. at 291 ; State v. Reed, 282 Kan. 272, 280, 144 P.3d 677 (2006). And, a party alleging that the prejudicial effect of evidence outweighs its probative value must demonstrate the unfair or undue prejudice arising from that admission of evidence. See State v. Vasquez, 287 Kan. 40, 53, 194 P.3d 563 (2008).
Ballai argues that the chat log was prejudicial because it “contained exchanges that were risque and at times sexually explicit.” But the actual text of many of these exchanges was redacted from the chat log before it was admitted into evidence. Likewise, although the district court gave Ballai an opportunity to raise specific objections to the unredacted language, it does not appear that Ballai did so. Hence, we find that Ballai has failed to meet his burden to prove that the exhibit was unduly prejudicial or that its prejudicial effect outweighed its probative value.
Ballai also contends that he was prejudiced because he was not allowed to mention that laptop computer he used for work was destroyed prior to trial. Similar to the argument he makes regarding the denial of his motion for sanctions, Ballai contends that at the very least “the trial court should have allowed [him] to introduce evidence that the laptop had been destroyed.” Nevertheless, we cannot say that no reasonable person would have ruled the same way as the district court regarding the exclusion of evidence. Thus, we find no abuse of discretion.
In summary, we find that the chat log was relevant, material, and probative. Likewise, we find that the district court adequately protected Ballai from undue prejudice by only allowing the redacted version of the chat log to be admitted into evidence. Moreover, we do not find that the district court abused its discretion in excluding evidence of the recycling of Ballai's work computer.
Evidence of Bias and Prejudice
Ballai further contends that the district court erred in ruling that evidence about certain witnesses' potential for bias and about misbehavior of other Kiewit employees was inadmissible. However, Ballai does not challenge the evidence's relevance or weigh its probative value versus its prejudicial effect. See K.S.A. 60–401(b) ; K.S.A. 60–407(f) ; K.S.A. 60–445. As such, Ballai has essentially abandoned this issue by not arguing it fully. See Friedman v. Kansas State Bd. of Healing Arts, 296 Kan. 636, 645, 294 P.3d 287 (2013) (stating that a point raised incidentally in a brief and not argued therein is deemed abandoned).
Additionally, Kiewit argues that Ballai failed to preserve this issue for appeal. The district court entered an order in limine to exclude this evidence. When a district court grants a motion in limine to exclude evidence prior to trial, the party limited by the order must make a sufficient proffer of the excluded evidence at trial to preserve the issue for appeal. See K.S.A. 60–405 ; National Bank of Andover v. Kansas Bankers Surety Co., 290 Kan. 247, 278–79, 225 P.3d 707 (2010). Based on our review of the record, we do not find that Ballai made such a proffer. And, because Ballai does not argue that any exceptions apply in this case, we conclude that this issue has not been properly preserved for appellate review.
In response to Ballai's argument that a “jury verdict against Kiewit could have a devastating effect on the price of Kiewit stock,” Kiewit contends that such an argument is speculative. We agree. Accordingly, we conclude that Ballai has not shown that the district court erred in excluding this evidence.
Ballai also briefly argues that the district court erred in excluding the testimony of Don Bendetti, who began working as the vice president of human resources for Kiewit in January 2009. Ballai argues that Bendetti “would have testified that similar representations [to the ones made to Ballai] regarding employment were made to him.” But Ballai presents no argument in support of his position that the district court erred in excluding this evidence. As such, we find no abuse of discretion. Furthermore, this evidence would have simply supported Ballai's position that he had an implied employment contract with Kiewit—which the jury found existed. So, even if we were to find it was error for the district court to exclude this evidence, any such error would have been harmless error.
Breach of Fiduciary Duty Claim
Additionally, Ballai contends that the district court erred in granting Kiewit's motion for judgment as a matter of law on his breach of fiduciary duty claim. When ruling on a motion for judgment as a matter of law under K.S.A.2013 Supp. 60–250, the district court is required to resolve all facts and inferences that it may reasonably draw from the evidence in favor of the party against whom the ruling is sought. Where reasonable minds could reach different conclusions based on the evidence, the district court must deny the motion. We apply a similar analysis when reviewing the grant or denial of a motion for judgment as a matter of law. City of Neodesha v. BP Corporation, 295 Kan. 298, 319, 287 P.3d 214 (2012).
“The inquiry is ‘whether the evidence presents a sufficient disagreement to require submission to a jury or whether it is so one-sided that one party must prevail as a matter of law.’ Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 251–52, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986) ; see, e.g., Smith, 285 Kan. at 40 (‘In other words, a motion for judgment as a matter of law must be denied when evidence exists upon which a jury could properly find a verdict for the nonmoving party.’).” City of Neodesha, 295 Kan. at 319–20.
On May 2, 2013, the ninth day of trial, Kiewit filed a motion for judgment as a matter of law on all counts of Ballai's petition. Kiewit argued that the breach of fiduciary duty claim would be too confusing to present to the jury. In particular, Kiewit pointed the district court to the pretrial order and noted that the breach of fiduciary duty claim was alleged against defendants Grewcock, Patterson, and Shelby and not against the corporate defendants. Kiewit further argued that these defendants had nothing to do with the stock repurchase and that the repurchase of Ballai's stock was done in accordance with the terms of the stock purchase program. In response, Ballai argued that the evidence presented at trial regarding the fiduciary duty claim was sufficient to go to the jury.
The district court determined that Ballai failed to show that these defendants breached their fiduciary duty because his demotion and, later, termination triggered the repurchase of the stock under the explicit terms of the stock purchase agreement. Moreover, the district court found that Ballai had not presented evidence that the stock repurchase was done contrary to the requirements of the agreement. Thus, the district court granted the motion for judgment as a matter of law on the breach of fiduciary duty claim.
On appeal, Ballai argues that there was no question these defendants owed him a fiduciary obligation. Yet Ballai acknowledges that the evidence was undisputed that “a decision to demote or terminate an employee automatically meant the employee would be forced to sell back stock.” This is exactly the rationale for the district court's conclusion that there was no breach of fiduciary duty in buying back the stock—because a stock repurchase was to occur automatically in a situation where an employee was demoted or terminated. Likewise, as Kiewit points out, Ballai was limited to the allegations set forth in the final pretrial order. See K.S.A.2013 Supp. 60–216(d) ; Rector v. Tatham, 287 Kan. 230, 232, 196 P .3d 364 (2008). And the pretrial order specifically stated Ballai's claim to be that Grewcock, Patterson, and Shelby breached their fiduciary duty when they rescinded the stock purchase of Plaintiff without reasonable or just cause, and forced Plaintiff to sell his stock back to the company.” Because the terms of the stock purchase agreement required an employee to sell his or her stock back to the corporation upon demotion or termination, we do not find that the district court erred in granting Kiewit's motion for judgment as a matter of law on this issue.
Furthermore, it is important to note that the jury ultimately concluded that Kiewit did not breach its implied contract not to demote or discharge Ballai without just cause. In other words, the jury found that Kiewit's demotion and termination of Ballai was not improper. Accordingly, we find that Ballai's argument that the defendants breached their fiduciary duty by arbitrarily discharging him—which in turn resulted in him having to sell his stock back to the corporation—has no merit. See McAlister v. City of Fairway, 289 Kan. 391, 398–99, 212 P.3d 184 (2009). Thus, we affirm the district court's decision to grant Kiewit's motion for judgment as a matter of law on Ballai's claim of breach of fiduciary duty.
Prior Harassment Claim
The next contention made by Ballai on appeal is that the district court erred in excluding evidence that Kiewit had reviewed the information his work computer shortly before his termination and found “ ‘nothing inappropriate’ “ when evidence of the chat log with his girlfriend and evidence of an investigation into a complaint made by his former administrative assistant were admitted into evidence. Although Ballai argues that the multi-step test for admissibility of evidence is applicable to this issue, he fails to actually apply the test. Instead, Ballai argues that it was extremely prejudicial to allow the jury to hear evidence that there was a chat log on his work computer that included “risque conversations” and that his administrative assistant had made a complaint against him without allowing the jury to also hear evidence that shortly after the complaint, Kiewit “found nothing inappropriate” on the computer.
In response, Kiewit points out that it was Ballai who moved to exclude the evidence regarding the investigation of the allegations made by his administrative assistant. It was during this investigation that Kiewit reviewed Ballai's computer and found that it revealed “nothing inappropriate” as to the allegations being explored. Kiewit contends, therefore, that Ballai cannot argue on the one hand that the evidence as a whole was inadmissible but that, on the other hand, he should have been allowed to admit a small part of that evidence. We agree. Hence, we conclude that Ballai has not shown that the district court abused its discretion in making this evidentiary ruling, nor do we find the ruling to be unduly prejudicial.
Evidence of Ballai's Employment Value
Also, Ballai contends that the district court should have allowed him to present evidence from an employment “ ‘head hunter’ “ named Michael Enbar who would have evidently testified regarding Ballai's value in the market. According to Ballai, Enbar would have rendered the opinion that Ballai could earn an annual salary of between $400,000 and $500,000 based on his training and experience. Once again, although Ballai cites the appropriate test for the admissibility of evidence, he does not apply the test. Moreover, although the evidence was the subject of an order in limine, Ballai does not show that he preserved the issue by making a sufficient proffer of the excluded evidence during the course of the trial. This alone would be a sufficient reason to affirm the district court's decision regarding the exclusion of this evidence. See K.S.A. 60–405 ; Friedman, 296 Kan. at 645 ; National Bank of Andover, 290 Kan. at 278–79.
The district court found that Enbar's opinions were based on hearsay and that he had not been qualified as an expert witness. Further, Ballai has failed to show that he complied with requirements of K.S.A.2013 Supp. 60–226(b)(6), which requires a detailed designation of an expert witness as well as his or her anticipated testimony. On appeal, Ballai argues that even if Enbar was not qualified as an expert, K.S.A. 60–456(a) allows opinion testimony as long as it was “limited to such opinions or inferences as the judge finds (a) may be rationally based on the perception of the witness and (b) are helpful to a clearer understanding of his ... testimony.”
Ballai cites Ryan v. Kansas Power & Light Co., 249 Kan. 1, 7, 815 P.2d 528 (1991), which held that a landowner or other nonexpert witness can testify about fear in the marketplace of overhead power lines if there is a proper foundation laid by showing that members of the public have conveyed such information to the landowner or nonexpert witness. Ballai argues—based on Ryan —that he laid a proper foundation by showing that Enbar had experience in placing high-level attorneys in law firms and that Enbar should have been allowed “to testify based on information conveyed by others, in addition to his own knowledge and experience.” However, we find that this argument fails for two reasons. First, Ballai did not raise it before the district court, and issues not raised before the district court cannot be raised on appeal. See Wolfe Electric, Inc. v. Duckworth, 293 Kan. 375, 403, 266 P.3d 516 (2011). Second, Ballai did not show that Enbar's opinions were based on information conveyed to him by members of the public in general.
We, therefore, conclude that Ballai has failed to show that the district court abused its discretion or otherwise erred in excluding the opinion testimony of Enbar.
Closing Arguments
Ballai further contends that the district court erred by excluding any mention of certain portions of the testimony by Kiewit's Chief Executive Officer Grewcock. Specifically, Ballai wanted to discuss during closing arguments the fact that Grewcock had testified on cross-examination that Kiewit could “make up whatever rules we want” and could “determine how arbitrary or capricious we want to be” regarding the stock program. Kiewit argued, however, that this testimony by Grewcock became irrelevant once the district court granted judgment as a matter of law on the claims relating to the administration of the stock program, including the breach of fiduciary duty claim relating to the sale of Ballai's stock back to the corporation.
Ballai argued that the testimony was still relevant. In addition to other arguments, Ballai argued that although Grewcock initially made the statement that the corporation and its executives could be as arbitrary and capricious as they wanted in relation to coming up with a stock purchase plan, similar statements in his deposition were not restricted to the stock plan. Ultimately, the district court ruled that no mention of this testimony should be made during closing arguments.
On appeal, Ballai contends that decision by the district court was an abuse of discretion because the court precluded the use of evidence already heard by the jury during the trial. Ballai is correct that parties are usually given wide latitude in presenting closing argument as long as they do not mention facts not in evidence. See State v. Rodriguez, 269 Kan. 633, 643, 8 P.3d 712 (2000). Nevertheless, the district court has wide latitude to control the course of a trial—including closing arguments. See State v. Herbel, 296 Kan. 1101, 1115–16, 299 P.3d 292 (2013) (citing State v. Walker, 252 Kan. 279, 290, 845 P.2d 1 [1993] ; c.f. Holt v. State, 290 Kan. 491, 500, 232 P.3d 848 [2010] [recognizing district court's inherent authority to “manage litigation”]; State v. Rowray, 18 Kan.App.2d 772, 777, 860 P.2d 40, rev. denied 254 Kan. 1009 [1993] ); accord State v. Holman, 295 Kan. 116, 142, 284 P.3d 251 (2012) (stating that scope of cross-examination is subject to district court's reasonable control). Moreover, Ballai does not cite authority stating that a district court abuses its discretion by precluding an attorney from discussing evidence that was admissible when presented but became irrelevant when the district court granted judgment as a matter of law on the claim to which the evidence pertained.
Ballai also argues that because he was a stockholder and termination required the return of the stock, Kiewit was not in fact permitted to be arbitrary and capricious. Furthermore, Ballai contends that the testimony from Grewcock was relevant to show the corporation was willing to terminate Ballai without cause. A review of the record shows, however, that Grewcock was merely discussing the authority of the board of directors to establish the terms of the stock plan and was not discussing the termination of employees. Regardless, the district court found that the evidence was no longer relevant, and Ballai has failed to show that was an abuse of discretion. See Huddleston, 298 Kan. at 960.
Projections of Stock Value
Finally, Ballai contends that the district court erred in excluding portions of two exhibits—Exhibit 273 and 114—regarding projections of the value of Kiewit stock. Again, Ballai cites the standard of review for admissibility of evidence but does not actually attempt to apply it in his brief. Nevertheless, although this evidence was relevant to damages to the breach of contract claim, the jury found there was no breach of contract.
The district court sustained Kiewit's objection to Exhibit 273, but Ballai does not cite the district court's analysis or the reason the district court gave for sustaining the objection. Regarding Exhibit 114, the district court admitted part of the exhibit, but not all of it. It appears that for both exhibits, the district court admitted the portions of the documents pertaining to historical performance of the stock but not the future projections.
Ballai argues that the district court should have allowed him to present this evidence of future projections. He points out that the documents included Kiewit's projections of its own stock. As such, he contends that the documents would have provided the jury with more than simply speculation. In response, Kiewit argues that Ballai could not rely on the exhibits because they were created in 2000 and 2006, and no expert testimony had been offered about Kiewit's projected future performance based on the corporation's current position. Specifically, Kiewit argues that the admission of these exhibits into evidence would have required the jury to “imbue unfounded significance into the figures [set forth] in these exhibits based on nothing but conjecture.”
Ballai relies on Vickers v. Wichita State University, 213 Kan. 614, 618, 518 P.2d 512 (1974), for its proposition that the general rule is that
“loss of profits resulting from a breach of contract may be recovered as damages when such profits are proved with reasonable certainty, and when they may reasonably be considered to have been within the contemplation of the parties. [Citations omitted.] Recovery for loss of profits caused by a breach of a contract depends upon the facts and circumstances of each particular case. [Citation omitted.]
Furthermore, the Kansas Supreme Court stated in Vickers: “The fact that damages cannot be calculated with absolute exactness will not render them so uncertain as to preclude an assessment.” 213 Kan. at 619.
But the Vickers court also found that “a method of establishing a loss of profits with reasonable certainty is by showing a history of past profitability.” 213 Kan. at 620. Here, a review of the record reveals that the district court appropriately permitted evidence from these exhibits pertaining to past performance of the corporation but excluded those portions claiming to project the future profitability of the stock. We cannot say that such an evidentiary ruling constitutes an abuse of discretion under the circumstances presented.
Cross–Appeal
Because we affirm the verdict reached by the jury, we will not address the issues presented in Kiewit's cross-appeal.
Conclusion
Our review of the voluminous record—which includes 82 volumes—reveals that the district court diligently addressed the complex issues presented and worked to keep the jury's attention focused on the issues. Although it is possible that we would not have ruled the same way on some of the evidentiary issues presented, we do not find that the district court abused its discretion. Likewise, although the evidence presented at trial was complicated and extensive, a review of the record reveals that the jury carefully worked through the issues and ultimately found that neither party had proven their claims or counterclaims by a preponderance of the evidence. Consequently, even though the trial of this case may not have been perfect, we find that it was fair to the parties and the verdict of the jury should stand.
Affirmed.