Opinion
Civil Action CV-11-006
06-13-2014
VAUGHN SLEEPER, et al, Plaintiffs, v. DANIEL G. LILLEY, et al, Defendants
ORDER
Thomas D. Warren, Justice
Before the court are two post-trial motions by defendants Daniel G. Lilley and Daniel G. Lilley Law Offices P.A. (collectively, " the Lilley defendants"): (1) a renewed motion for judgment as a matter of law pursuant to M.R.Civ.P. 5O(b) and (2) a motion for a new trial and remittitur pursuant to M.R.Civ.P. 59(a).
Judgment was entered on January 6, 2014. The Lilley defendants' motions were timely filed on January 16. The first round of briefing was completed a month later, but resolution of the motions was thereafter delayed while portions of the transcript were ordered. A hearing on the motion was held on May 8, supplemental briefs were filed by May 16, and the parties have since filed further submissions based on review of the transcript excerpts that had been obtained.
Legal Principles Applicable to Defendants' Motions
On the Lilley defendants' renewed motion for judgment as a matter of law under Rule 5O(b), the court must determine " if any reasonable view of the evidence and those inferences that are justifiably drawn from the evidence supports the jury verdict." Russell v. Expressjet Inc ., 2011 ME 123 ¶ 10, 32 A.3d 1030, quoting Madore v. Kennebec Heights Country Club , 2007 ME 92 ¶ 5, 926 A.2d 1180. The court cannot substitute its judgment for that of the jury. The weighing of evidence, including the credibility of witnesses, is reserved to the jury. Wood v. Bell , 2006 ME 98 ¶ 12, 902 A.2d 843.
On the motion for a new trial, the Lilley defendants must establish that it is reasonably clear that prejudicial error has been committed or that substantial justice has not been done. Davis v. Currier , 1997 ME 199 ¶ 7, 704 A.2d 1207. This standard is not intended to allow a trial judge to substitute his or her view of the evidence for the decision of the jury. Chenell v. Westbrook College , 324 A.2d 735, 737 (Me. 1974). The Lilley defendants' new trial motion relies primarily on alleged errors in the admission of evidence and in the conduct of the trial that allegedly prejudiced the jury.
Arguments Raised
At the outset the court notes that lengthy portions of the legal memoranda submitted by the Lilley defendants on their post-trial motions consist of attempts to reargue the evidence. Whatever the merits of those arguments, they either were or should have been presented to the jury. Neither Rule 50(b) nor Rule 59(a) offers any relief to the extent that the jury found against the Lilley defendants on the evidence.
Moving beyond the Lilley defendants' effort to reargue the evidence, the court finds that a number of their arguments are without merit. Nevertheless, the court concludes that the following issues raised by the Lilley defendants require further discussion:
Specifically, the record does not support the Lilley defendants' contention that the Sleepers' expert did not offer an adequate opinion that the Lilley defendants were negligent in handling the IIED claim and does not support the Lilley defendants' contention that they were not informed that the court's instruction that the jury could not consider the Sleepers' estimate of the fair market value of their farm or the McCausland damage figure would be given orally rather than as part of the written instructions. In addition, the court sees no basis on which to order remittitur on the Lilley defendants' claim that the damages awarded were excessive. Under the court's instructions, all but $30,000 of the jury award constituted an award for emotional distress, and the court has no principled basis to reduce the jury's evaluation of emotional distress. Finally, the court does not find any adequate basis to disturb the jury's finding that the Lilley defendants were professionally negligent.
(1) whether there was sufficient evidence to allow the jury to decide the claim that, absent malpractice by the Lilley defendants, the Sleepers would likely have prevailed on their tortious interference claim before the arbitrator;
(2) whether there was adequate evidence to support the damages claimed on the tortious interference claim;
(3) whether, given the court's summary judgment ruling, the Sleepers should have been allowed to proceed at trial on the claim that, absent malpractice by the Lilley defendants, the Sleepers would likely have prevailed on their IIED claim before the arbitrator;
(4) whether there was sufficient evidence to allow the jury to decide the claim that, absent malpractice by the Lilley defendants, the Sleepers would likely have prevailed on their IIED claim before the arbitrator;
(5) whether the court erroneously excluded certain evidence that the Lilley defendants wished to offer on the IIED issue and that might have been considered by the jury on both IIED and on the tortious interference issue;
(6) whether the Sleepers' estimate of the fair market value of their farm and the McCausland damage calculation worked up for purposes of the arbitration improperly influenced the jury notwithstanding the court's instruction that the jury could not consider those figures as evidence of damage;
(7) whether the court's instruction as to the weight to be given to expert testimony was erroneous;
(8) whether under Steeves v. Bernstein, Shur, Sawyer & Nelson , 1998 ME 210 ¶ ¶ 17-18, 718 A.2d 186, plaintiffs should not have been entitled to a jury on the question of whether the Sleepers would have prevailed before the arbitrator and the amount of any damage award.
By way of background in considering the above subjects, it should be noted that the trial was significantly affected by scheduling issues. Counsel for both parties originally estimated that, with the jury already picked, the case could be tried to a verdict in four or five days. The case was therefore scheduled to begin on December 16. In retrospect this was an ill-advised decision given the nature and complexity of the case. As issues arose and the case bogged down, it became clear that the trial was going to run over into the Christmas week, and the parties and the court began rushing to try to get the case to the jury before the Christmas holiday.
At a certain cost, that objective was achieved. However, the rush to finish the case prevented the court and the parties from taking the time that should have been allowed to consider certain issues and make an adequate record. The looming Christmas holiday contributed to some of the problematic rulings and the resulting prejudice outlined below.
Closing arguments and the jury charge were given on Monday December 23. However, the jury was not able to reach a verdict that day, and the jurors were not able to deliberate on Christmas Eve or on the day after Christmas because of travel and holiday plans. The verdict was ultimately returned on December 27, after a three day hiatus.
Tortious Interference Claim
The Sleepers' tortious interference claim depended on Ronald Barnes's testimony that he attended a meeting between Agway and the pool growers at which Agway " recommended" that the pool growers not purchase potatoes from Sleeper Farms. Barnes testified that the " general consensus" he took away from the meeting was that if he purchased seed from the Sleepers, " it would have consequences for marketing my crop the following year." He could not say what Agway had said that left him with that impression.
Barnes's testimony left open whether Agway engaged in some intimidation or merely made a recommendation which resulted in a fear of future consequences that was self-induced on Barnes's part. However, the court concludes that Barnes's testimony and the other evidence offered at trial, taken as a whole, could constitute circumstantial evidence of intimidation. The Lilley defendants are not entitled to judgment as a matter of law on this issue. This does not, however, resolve the issue of whether a new trial should be granted on issues related to malpractice with respect to the tortious interference claim. As discussed below, there was certain evidence relevant to the issue of tortious interference that the court incorrectly declined to allow the Lilley defendants to introduce. See below at pp. 8-9 & n.4.
There is also a question whether there was adequate evidence that the $30,000 loss (which Vaughn Sleeper testified was caused by Agway's tortious interference) subsequently resulted in the loss of his farm-which was the basis for the Sleepers' claim of emotional distress. Although the entire farm was not sold off until approximately eight or nine years after Agway's tortious interference, Vaughn Sleeper testified that the process of liquidation began in 2001. However, there was little or no evidence as to why the $30,000 loss resulted in a need to begin liquidating the farm property, and there was evidence to the contrary-that the Sleepers could have obtained additional credit but Vaughn Sleeper decided he did not want to continue farming. There was also evidence that Agway went into bankruptcy a year after its interference with the Sleepers' sales to the pool growers and was therefore no longer in any position to interfere with the Sleepers' business.
The court does not conclude that no reasonable view of the evidence could support the Sleepers' claim that malpractice on the part of the defendants caused the loss of their farm. However, where there is a significant question as to the sufficiency of the Sleepers' evidence on that issue-given the size of the damage award in this case the court has to look closely at the Lilley defendants' other claims of prejudicial error.
In this connection, the Lilley defendants contend that the court committed error in allowing the Sleepers' expert witness, Jerrol Crouter, to express certain damage opinions. They specifically object to Crouter's testimony that the Sleepers lost their business and their farm as a result of the Lilley defendants' malpractice. The court agrees that, phrased in that manner, Crouter's testimony went beyond what should have been permissible and that there is at least a question whether the limiting instruction which the court gave with respect to Crouter's testimony was adequate to address that issue. This would not justify a new trial but adds to the court's concerns given the instances of prejudicial error discussed below.
However, assuming that his opinions had been adequately disclosed in his designation or at his deposition, Crouter could have testified that the Lilley firm was negligent in not making the argument that the Sleepers had lost their farm as a result of Agway's tortious interference.
IIED Claim
This claim had a mysterious progression to trial. Prior to trial the Lilley defendants moved for summary judgment as to all of the claims which the Sleepers alleged that the Lilley defendants had negligently pursued at arbitration. In response to that motion, the Sleepers argued that there were disputed issues of fact as to the Lilley defendants' failure to pursue four specific claims: (1) antitrust; (2) unfair competition; (3) tortious interference with an advantageous economic relationship; and (3) defamation. See Plaintiff's Memorandum in Opposition to Summary Judgment dated April 12, 2013 at 3. In opposing summary judgment, the Sleepers did not contend that there were disputed facts for trial with respect to the Lilley defendants' handling of the Sleepers' IIED claim.
The court, focusing only on the claims raised by the Sleepers in opposition to summary judgment, ruled that the case could go forward on the antitrust and tortious interference claims and granted summary judgment on the unfair competition and defamation claims. While the court could have granted summary judgment on all of the claims on which the Sleepers had not presented any opposition, it instead worded its entry on the docket as a denial of summary judgment except as to those claims identified in the order on which summary judgment has been granted.
However, the court understood that the only remaining claims for trial were based on alleged malpractice with respect to the antitrust and tortious interference claims. At the subsequent hearing on various motions in limine, issues arose as to the circumstances under which damages for emotional distress could have been obtained in the arbitration proceeding. At that time, the court stated that it thought that any claim of malpractice arising out of the IIED claim was no longer in the case. As far as the court can recall, counsel for the Sleepers did not argue to the contrary.
It is also the court's recollection that counsel for the Sleepers did not make any mention of the IIED claim in his opening statement at trial. A review of the transcript indicates that counsel for the Sleepers first suggested that testimony would be offered with respect to the IIED claim after the second day of trial testimony. At that time the court responded it would have to look at the summary judgment ruling.
At the court's request, the court reporter conducted a search in plaintiffs' opening for any mention of " intentional infliction of emotional distress" and found none.
As far as the court can tell, most of the remaining discussion of this issue occurred off the record. It appears that the court reviewed the docket entry on the summary judgment motion and allowed the Sleepers to proceed because the docket entry did not foreclose a claim of negligence in the handling of the IIED claim. At that time, however, the court overlooked the fact that the Sleepers had not opposed summary judgment with respect to the IIED claim. The court also did not recall that at the in limine hearing it had conveyed its belief to counsel that the IIED claim was out of the case, and it did not recall that the Sleepers had not objected at that point.
It is not clear that the Lilley defendants immediately placed on the record an objection that, in light of the history recounted above, the Sleepers should not be entitled to pursue a malpractice theory based on alleged mishandling of the Sleepers' IIED claim. However, the court recalls that counsel for the Lilley defendants raised this objection off the record when the issue first arose and raised it subsequently on the record after the Sleepers rested.
The court now agrees that, at a minimum, there was a considerable element of unfair surprise in the way that events unfolded on this issue. This contributes to the court's view that the motion for a new trial should be granted.
There is an additional reason supporting a new trial on the IIED claim. Counsel for the Lilley defendants sought to introduce a portion of the transcript of a taped telephone conversation to rebut Mary Sleeper's testimony that Agway had threatened to put the Sleepers out of business if Vaughn Sleeper was unwilling to file a false insurance claim. This was the centerpiece of the Sleepers' argument that Agway had engaged in conduct so extreme and outrageous as to exceed all possible bounds of decency and that must be regarded as atrocious and utterly intolerable. It is likely this testimony was also considered by the jury on the claim relating to tortious interference.
If Agway had threatened the Sleepers in that manner, it would support a finding that Agway's " recommendation" to the pool growers was intended to be intimidating.
A review of the transcript demonstrates that when counsel for the Lilley defendants rested, he did so subject to offering some additional exhibits. A subsequent colloquy outside of the jury's presence demonstrates that the court had specifically agreed to allow the transcript of the telephone call to be admitted subject to a determination of which portions had to be included under the rule of completeness. The transcript-which was a record of the actual conversation that Mrs. Sleeper testified included the threat to put the Sleepers out of business if they did not file a false insurance claim-was probative evidence as to what had actually occurred and a portion of that transcript can be read to strongly support the Lilley defendants' argument that the Agway representative did not make such a threat.
At the time there was a question as to whether certain exhibits had been formally admitted and, as part of the effort to hurry the case along and get to the jury before Christmas, the court had allowed the parties to supplement the record with certain identified exhibits after they had formally rested before the jury.
See excerpt of December 20, 2013 transcript ordered for new trial motion at 8 (relating to the resting of defendants' case subject to the offering of exhibits). The parties had agreed that the transcript of the telephone call was authentic and that no testimony was necessary to provide foundation but were in disagreement as to what portions should be admitted.
Ultimately, however, faced with the urgency of trying to conclude the trial before the Christmas holiday, the court declined to allow admission of the transcript because the parties could not agree as to the portions admissible under the rule of completeness. This was error. When the parties could not agree, given that the court had previously agreed to allow the Lilley defendants to offer portions of the transcript, the court should have itself reviewed the transcript and ruled on what portions were required for completeness-rather than excluding the transcript altogether. The court finds that the Lilley defendants were prejudiced by this ruling and that the prejudice was potentially significant.
The Lilley defendants also argue that they are entitled to judgment as a matter of law with respect to malpractice as it related to the IIED claim because there was no adequate evidence that the Sleepers suffered emotional distress that no reasonable person could have been expected to endure. On this issue the court discerns some tension between the Law Court's 2010 decision in Lyman v. Huber , 2010 ME 139 ¶ ¶ 21-24, 10 A.3d 707, and its decision this year in Bratton v. McDonough , 2014 ME 64 ¶ ¶ 23-24. A final ruling on this issue may depend on whether there is a sufficient connection between the allegedly outrageous conduct by Agway and the loss of the Sleeper farm-an issue that can be considered on retrial once the status of whether the IIED claim is in or out of this case is resolved.
Whether Error with respect to Alternate Theory Affects Verdict
The Sleepers presented two theories to the jury. The first was that the Lilley defendants were negligent as to the handling of the Sleepers' tortious interference claim. The second was that the Lilley defendants were negligent as to the handling of the Sleepers' IIED claim. The Sleepers now argue that even if there was an infirmity with respect to either the evidence or the court's rulings on one of those two theories, the verdict can nevertheless be sustained if the jury could have found for the Sleepers on the other theory.
The first answer to this argument is that some of the problems necessitating a new trial relate to both of the Sleepers' theories. See, e.g., discussion above at pp. 8-9 & & n.4 and discussion below at pp. 11-14.
Secondly, the court disagrees that, in a case where the verdict form did not differentiate as to whether the Sleepers had prevailed on malpractice with respect to tortious interference or malpractice with respect to IIED, the verdict must be sustained so long as one of the two theories can be upheld. Although the Sleepers have cited contrary authority the Law Court's most recent decision on this issue ruled that where the evidence was insufficient on one of the two theories upon which a damage award could have been based but the verdict form did not distinguish between theories, a new trial was required. Withers v. Hackett , 1998 ME 164 ¶ 11, 714 A.2d 798. The Law Court adhered to that rule upon a second appeal in the same case. Withers v. Hackett II , 1999 ME 117 ¶ 5, 734 A.2d 189 (court not able to speculate as to what portion of the damages might have been awarded absent the claim that should not have gone to the jury).
Sylvain v. Masonite Corp ., 471 A.2d 1039 (Me. 1984); Depositors Trust Co. v. Farm Family Life Insurance Co ., 445 A.2d 1014 (Me. 1982).
This is consistent with long-established U.S. Supreme Court precedent in criminal cases. See Black v. United States , 561 U.S. 465, 470 (2010), quoting Yates v. United States , 354 U.S. 298, 312 (1957) (verdict must be set aside " where the verdict is supportable on one ground, but not on another, and it is impossible to tell which ground the jury selected"). The court sees no basis to distinguish civil from criminal cases in this context.
Based on the final note sent out by the jury during its deliberations, it is possible to surmise that the jury verdict was based solely on the theory that the Lilley defendants were professionally negligent with respect to the tortious interference claim. However, the court cannot make that assumption. There were nine members of the jury and six who joined in the verdict. The court's answer to the jury's final note may have led a number of the jurors to decide the case based on malpractice with respect to the tortious interference claim. However, this does not rule out the possibility that at least one of the jurors who joined in the verdict was instead basing his or her vote on malpractice with respect to the IIED claim.
Million Dollar Damage Testimony
Vaughn Sleeper testified without objection as to his opinion of the fair market value of the farm. Mary Sleeper also testified as to her opinion of the fair market value of the farm although an objection was lodged to her testimony on the ground that she had not been designated to offer that testimony. The court overruled that objection.
Thereafter the court allowed testimony, over Mr. MacColl's objection, that the Lilley defendants had hired Alan McCausland to offer testimony at the arbitration to the effect that the Sleepers had incurred economic damages of 1.8 million. Whether this was admissible had been the subject of considerable dispute before and during trial. The record indicates that the court was ultimately was persuaded that the $1.8 million damage figure was relevant because it constituted a basis for concluding that the Sleepers had a significant claim which the Lilley defendants should have vigorously pursued.
Subsequently, after further argument, the court was persuaded that the fair market value of the farm (where no evidence had been offered as to the extent that the farm was mortgaged) was not relevant to damages. It instructed the jurors that they could not consider the Sleepers' estimate as to the value of the farm real estate as a basis for awarding damages. It also gave an instruction that the McCausland figure related solely to amounts claimed, that the jury could not consider the McCausland figure as evidence of the damages incurred by the Sleepers, and that the jury had to base any award of damages on the proof submitted at the trial before them, not on amounts claimed at arbitration.
Given the court's instructions recited above, the court would not be inclined to grant a new trial based solely on the admission of the McCausland economic damage figure or the Sleepers' testimony as to market value. However, the court agrees that the Sleepers' testimony as to market value and the McCausland evidence were prejudicial to the Lilley defendants and that there is a fair possibility that, notwithstanding the court's instruction, the jury was influenced by that evidence in awarding damages. Since the McCausland damage figure was offered in the arbitration as evidence of the Sleepers' economic damages, it was wholly irrelevant to the IIED claim. And since the Sleepers were only able to offer proof of $30,000 in economic damages resulting from the tortious interference claim, the McCausland figure should probably have been excluded under Rule 403 as more unfairly prejudicial than probative.
The problematic nature of the damages evidence offered in this case contributes to the court's view that a new trial is the appropriate remedy here.
Jury Instruction as to Expert Testimony
The Lilley defendants contend that the court's jury instructions were erroneous with respect to the consideration of expert testimony. Specifically, they contend that the instructions essentially told the jury not to consider expert testimony as it related to the question of whether the Sleepers would have received a more favorable result at the arbitration but for professional negligence on the part of the Lilley defendants.
On this issue the court's written instructions were less than ideal and the court's oral instructions were erroneous.
Once again, this is an issue which was affected by the rush to get the case to the jury before the Christmas holiday.
The court's written instructions stated that the jury could consider the opinions of the expert witnesses " as they bear on the issues in this case but you ultimately have to reach your own decision based on the evidence." However, this instruction was given under a topic heading relating to whether the Sleepers would have received a more favorable result at the arbitration but for negligence on the part of the Lilley defendants. No comparable instruction was given with respect to the role of expert testimony in determining whether the defendants had been professionally negligent. This could have been interpreted as a suggestion that the jury should give less weight to the expert testimony on the issue of causation than on the issue of professional negligence.
The court's oral instructions on this issue were intended to be the same as its written instructions. However, in giving the instructions orally the court appears to have inadvertently departed from the written instructions and stated that the jury could consider expert opinions as they bear " on the issue of professional negligence" but had to reach its own decision on whether the Sleepers would have received a more favorable result. Counsel for the Lilley defendants objected to the instruction as given, but the court did not correct the oral instruction or direct the jury to the more accurate written instruction.
Except for the addition of the word " ultimately, " which was added for clarity to the written instructions after a sidebar when counsel were asked for any objections or further instructions. The addition of " ultimately" was not a substantive change.
Maine precedent establishes that expert testimony is both relevant and necessary on the issue of whether a more favorable result would have been obtained in the absence of alleged malpractice. See, e.g., Corey v. Norman Hanson & DeTroy , 1999 ME 196 ¶ 14, 742 A.2d 933. To the extent that the jury instructions departed from that rule-or at the very least seriously muddied the water on that issue-this supports the conclusion that a new trial should be ordered.
Right to Jury Trial
The final issue raised by the Lilley defendants is that plaintiffs should not have been entitled to a jury trial on certain issues in the case-specifically on whether the Sleepers would likely have obtained a more favorable result from the arbitrator and the amount of damages that would have been awarded by the arbitrator in the absence of professional negligence by the Lilley defendants. This issue was raised by the Lilley defendants before trial, and the court disagreed at that time. However, when it issued that ruling, the court was unaware of the Law Court's decision in Steeves v. Bernstein, Shur, Sawyer & Nelson , 1998 ME 210, 718 A.2d 186.
The Steeves decision involved a claim of legal malpractice based on an allegedly negligent failure to advise the plaintiff that she could have sought protection under Chapter 11 of the bankruptcy code. The plaintiff argued that a determination of the extent to which a bankruptcy petition would have protected her should have been made by a jury, but the Law Court disagreed. Citing the Utah case of Harline v. Barker , 912 P.2d 433 (Utah 1996), the Court concluded that where the issues in question would have been decided by a bankruptcy judge, there would be no role for a jury in a subsequent malpractice action. 1998 ME 210 ¶ ¶ 17-18.
Steeves can be distinguished from the case at bar because the question of whether the plaintiff would have received a more favorable outcome in Steeves was largely a question of law, as opposed to the factual issues in this case-whether the Sleepers would have been likely to have prevailed before the arbitrator and of so, the damages the arbitrator would likely have awarded. Whether Steeves should in fact be distinguished on that ground, however, is not clear because of the Law Court's reliance on Harline , a case in which the Utah Supreme Court specifically rejected the theory that in a legal malpractice action, a jury should decide all issues on the " case within a case" unless those issues were legal rather than factual. 912 P.2d at 440. In a passage quoted by the Law Court, Harline stated that a party should not be able to " bootstrap" its way into having a jury decide when the underlying factual issues would have been decided by an expert judge. Id., quoted in 1998 ME 210 ¶ 18.
By its terms, Harline applies when " the underlying case could only have been decided by a judge, " 912 P.2d at 440, quoted in 1998 ME 210 ¶ 18, and the Sleepers argue that condition is not met in this case. On the other hand, once the federal court sent the Sleepers' case against Agway to an arbitrator with Agway having filed for bankruptcy, the Sleepers' case against Agway was only going to be decided by an arbitrator.
As the court noted in its decision on summary judgment, the Sleepers' expert acknowledged that there was no realistic prospect of returning the case to the federal district court for a jury trial.
As a practical matter, a jury was likely to be far more sympathetic to the Sleepers' emotional distress claims than an arbitrator ruling on claims brought against a bankrupt company. Although the court is a strong adherent of the right to a jury trial, it must acknowledge that it is somewhat illogical that a claimant suing a lawyer for malpractice because the lawyer did not obtain a more favorable award from an arbitrator is entitled to have a jury decide how the arbitrator would likely have ruled and the amount of damages that the arbitrator would likely have awarded.
This issue relates only to the " case within a case" aspect of a legal malpractice claim. The court cannot see any basis on which to conclude that a jury should not decide the issue of whether the Lilley defendants' handling of the case was professionally negligent. As a result, since the court has otherwise decided that the motion for a new trial should be granted, the court is inclined to have this case put on the jury list for retrial. The court will reserve the question of whether the jury should decide all issues, whether the court should be prepared to rule on the II case within a case" issues, whether there should be an advisory jury on the II case within a case" issues, or whether some other procedure should be followed to resolve the jury issue.
Conclusion
The court recognizes that there is no such thing as a perfect trial. However, this trial fell too far short. Particularly when the issues identified above are considered in combination, the court finds that the Lilley defendants have demonstrated that prejudicial error occurred at the trial. As a result, the court is constrained to find that, through no fault of the jury, there was a failure of substantial justice necessitating a new trial.
The entry shall be:
Defendants' motion for judgment as a matter of law is denied. Defendants' motion for a new trial is granted. The Clerk is directed to incorporate this order in the docket by reference pursuant to Rule 79(a).