Opinion
Civil Action No. 02-935.
March 1, 2005
MEMORANDUM AND ORDER
After a five day trial, a jury returned a verdict in favor of the defendant Atkinson Mullen Travel, Inc., d/b/a Apple Vacations ("Apple"), and against the plaintiff, Majestic Marine Company ("Majestic"), on Majestic's claim that the defendant Apple had breached a contract with Majestic to organize and operate cruises on Majestic's ship. As evidenced by its answer to an interrogatory, the jury concluded that the parties had not entered into a contract.
The plaintiff was originally "Chios Breeze Marine Company." On May 13, 2003, we entered an Order, under Rule 17 of the Federal Rules of Civil Procedure, substituting Majestic Marine as the real party in interest. (Document No. 17). During the trial, the parties used Chios Breeze and Majestic Marine interchangeably to refer to the plaintiff.
In its motion for a new trial, Majestic challenges the pretrial Order limiting its expert's testimony by not permitting him to testify that the parties had entered into a contract. Majestic mischaracterizes the scope of the pretrial Order, incorrectly claiming that it precluded the expert from testifying about certain matters that actually were not limited by the Order. What we precluded was Majestic's expert's stating his conclusion that the parties had made a contract because he would have improperly directed the jury to the result Majestic wanted. This limitation was within our discretion. Therefore, we shall deny the motion.
Facts
In 1997, Majestic, a Greek cruise ship company, rented the Ocean Majesty to Apple, a cruise operator, for the 1997-98 winter cruise season. The rental was governed by a signed charter party agreement. In April 1998, the parties commenced negotiations to rent the ship for the 1998-99 winter cruise season.
On May 21, 1998, Apple sent a letter to Majestic stating that Apple looked forward to working with Majestic again and was moving forward selling tour packages on the Ocean Majesty. In a fax sent to Apple the next day, Michael Lambros ("Lambros"), one of Majestic's principals, confirmed that the ship was "fully fixed."
On June 4, 1998, Majestic forwarded to Apple a draft contract for the rental of the Ocean Majesty. The contract was never signed by Apple. Instead, on August 6, 1998, Apple's CEO John Mullen ("Mullen") told Lambros that Apple had decided not to undertake the 1998-99 cruise. Majestic did not rent the Ocean Majesty for that cruise season.
At trial, Majestic contended that the parties had entered into a binding contract for the 1998-99 winter cruise season when Lambros wrote to Apple pronouncing the ship "fixed" and Apple breached that contract by unilaterally terminating it on August 6, 1998. Apple countered that the parties had only engaged in negotiations that did not result in a binding contract. To support its position, Apple noted that a charter party agreement had not been signed by the parties. Majestic did not dispute that the charter party agreement had not been signed. Instead, it argued that the Ocean Majesty was "fixed," under maritime law, because the parties had agreed to the essential terms of the contract and were bound to perform.
In maritime law, because a shipowner requires advance notice to prepare and sail its ship to a particular port on a specific date, the parties can orally or informally agree to the main terms of a contract before reducing those terms to a complete formal writing. Great Circle Lines, Ltd. v. Matheson Co., Lrd., 681 F.2d 121, 125 (2d Cir. 1982); GILMORE AND BLACK, THE LAW OF ADMIRALTY 197 (2d ed. 1975). A fixture is a meeting of the minds on the essential terms, resulting in a binding contract for the rental of a ship. Great Circle Lines, 681 F.2d at 125. Agreement on the remaining details and a complete recitation of all the formal terms of the contract are contained in the charter party agreement, which is a traditional form of a written contract and signed by both parties. Id. The jury was so instructed.
"In determining whether there was a contract, you must decide whether or not there was a meeting of the minds between Chios Breeze and Apple Vacations with respect to the specific material terms of the alleged agreement and an intention to be bound.
For a contract to exist, the terms of the contract must be reasonably certain. A contract is not enforceable if its essential terms are subject to future negotiations and mutual agreement.
A charter party, which is also known as a charter, is a document which sets for the terms and conditions of the lease of a ship by an owner to a charterer. In this case the owner is Chios Breeze. The proposed charterer is Apple Vacations. A charter party is a specialized form of contract that is typically concluded after written communications between the intermediaries, known as ship brokers.
As a maritime contract governed by maritime law, a charter party need not be reduced to a formal writing signed by the parties. The fact that the parties intended to put their agreement in writing is not necessarily inconsistent with the fact that they reached a binding oral agreement.
Charter parties can be formed in two stages. In the first stage, the significant main terms are negotiated. These terms are referred to as the `bare bones' of the contract. During the second stage, the parties continue to work out the details of the main terms. . . .
A charter party is a contract governed by the rules and requirements of contract law. A charter party or contract comes into being and is binding and enforceable when the parties agree to all the essential terms of the charter. Conversely, no charter exists where the parties fail to agree on all the essential terms or where some are too indefinite to be enforceable.
As I have explained, before there can be a fixture, there must be a meeting of the minds on the essential terms of the charter. Whether the parties agreed on the essential terms of a charter is a question of fact for you to determine. Thus, it is your job to determine whether there was a meeting of the minds of the parties on the essential terms of the charter."
Tr. 2/27/04 at 23-26.
To assist the jury in understanding maritime trade custom and practices, Majestic proffered John Hanbidge, an expert witness in the shipping industry. Prior to trial, Apple filed a motion in limine seeking to preclude Hanbidge from testifying because his opinions stated a legal conclusion that there was a binding fixture. We granted the motion in part and denied it in part. We permitted Hanbidge to testify as an expert regarding the negotiating process in chartering a ship. Contrary to Majestic's argument, the ruling did not bar Hanbidge from testifying as to the meaning of the terms fixture, fixture confirmation, fixture recap and related terms. He was free to inform the jury what these terms meant during his explication of the negotiating process in chartering a ship. He was not permitted to state his conclusion that the parties had entered into a binding contract or that the documents exchanged by the parties in this case constituted a fixture recap or a fixture confirmation, although he could have opined that the documents were consistent with such. In short, the ruling allowed expert testimony regarding industry practice so the jury could evaluate the testimony in the context of the shipping industry in reaching its own conclusion whether a contract was made. See United States v. Bennett, 161 F.3d 171, 182-83 (3d Cir. 1998).
The other two grounds raised by Apple were that Hanbidge had no experience with the fixture of a cruise ship and he did not verify the accounting work performed by Moore Stephens so that he could comment on its conclusions. Neither of these is relevant to Majestic's motion for a new trial.
Order, Feb. 18, 2004. (Document No. 60).
Majestic's argument demonstrates how compelling the banned conclusive testimony would have been. It argues that the ruling prevented Majestic from presenting evidence, which, if it had been admitted, would have led to a jury verdict in Majestic's favor. Majestic further contends that Apple violated the Order during its cross-examination of Hanbidge and the violation prejudiced Majestic by diminishing Hanbidge's credibility before the jury.
Standard of Review
Where a motion for new trial addresses an issue other than that the jury verdict was against the weight of the evidence, district courts possess wide discretion in determining whether to grant it. Klein v. Hollings, 992 F.2d 1285, 1289-90 (3d Cir. 1993); Henry v. Hess Oil Virgin Islands Corp., 163 F.R.D. 237, 243-44 (D.V.I. 1995).
Admissibility and Scope of Expert Testimony
The trial judge has "broad discretion" over the admissibility of expert testimony, including the matters about which an expert may testify. Aloe Coal Co. v. Clark Equip. Co., 816 F.2d 110, 114 (3d Cir. 1987) (quoting Salem v. United States Lines Co., 370 U.S. 31, 35 (1962)). Although his testimony can embrace the ultimate issue to be decided by the jury, an expert can not tell the jury what result to reach and he can not offer legal conclusions. Burger v. Mays, 176 F.R.D. 153, 156-57 (E.D. Pa. 1997) (citing FED. R. EVID. 704 advisory committee notes).
Because Hanbidge had sufficient experience and knowledge in the shipping industry, he was found qualified to testify as an expert on the process of arranging ship charters, including an explanation of fixtures. However, he was not permitted to testify that the documents exchanged in this case did constitute a fixture because he would have been giving a legal conclusion, specifically, that a contract was made — the very issue that was for the jury to decide. See FED. R. EVID. 704 advisory committee notes. Such conclusive testimony is not permitted. Id.
Majestic suggests that Hanbidge was not allowed to testify as to what factors constituted the essential terms of a fixture. On the contrary, Hanbidge was permitted to explain to the jury the terms generally needed to be agreed upon by the parties in order to fix a ship. He was only prohibited from telling the jury that the documents in this case did constitute a fixture or, in other words, there was a meeting of the minds on the essential terms of the contract. Because counsel did not pursue a line of questioning does not mean he was precluded from doing so.
In essence, Majestic wanted Hanbidge to usurp the jury's fact finding function by telling the jury that the parties had a meeting of the minds on the terms essential to the formation of a contract. The question whether there was a binding contract should not have been based on Hanbidge's opinion or hindsight. Rather, it was for the jury to determine, within the industry context that the expert presented, whether the parties had a meeting of the minds on the essential terms necessary to form a contract. Therefore, restricting Hanbidge from testifying that the parties entered into a binding contract and that the documents exchanged constituted a fixture was proper, particularly in light of the jury explaining the law of fixture.
In its supplemental memorandum, Majestic also argues that Apple improperly took advantage of the Order's limitation during the cross-examination of Hanbidge. It claims that counsel's unanswered question suggested that a written agreement was a prerequisite to a contract in the shipping industry. It cites the following exchange:
Q. Mr. Hanbidge, just what I want to get clear is, to your knowledge, every time a cruise ship has actually sailed on an itinerary picking up and discharging passengers, at some point in the process of negotiations that culminated and actually getting passengers on board and actually lining them up, there was a formal detailed written —
A. Before it sails, yes.
Q. And, in fact, you've told me that it's imperative to get that full, signed, long detailed written agreement. Isn't that correct?
A. Yes, because of its provisions.
Q. Right, and, in fact, Chios Breeze recognized that in this case, Didn't they? They thought —
Mr. Thornton: Objection, Your Honor.
Mr. Krause: May I bring up an exhibit? They've said —
The Court: Do you know what the rulings were before?
Mr. Krause: I'm sorry. Withdraw my question. I'll move on.
Tr. 2/25/04 at 57-58.
Majestic believes that because Hanbidge was asked a question that required an answer that was precluded by the Order, the jury was left to speculate why Majestic's counsel had not asked Hanbidge the question and sought his opinion in this case, and what his opinion would have been. It claims that this damaged the credibility of its witnesses.
Majestic's argument rests upon an incorrect and incomplete interpretation of what happened at trial. Hanbidge never answered the question asked by Apple's counsel. Immediately upon objection, the Court sustained the objection before the witness could answer and stopped Apple's counsel from pursuing that line of questioning. Even though the improper question was never answered, the Court gave the following cautionary instruction:
Ladies and gentlemen, I'm going to give you your mid-morning break, but before I do that let me point something out to you. Mr. Hanbidge has been called as an expert witness to give you some background to how the shipping industry works, and you have heard various terms about a charter party agreement and about a fixture. I, at the conclusion of the case, will instruct you on the law, and I will tell you what the law is with respect to a charter party agreement and a fixture, and if you determine after I give you those instructions that whatever Mr. Hanbidge or any other witness who testifies about charter party or fixtures differs from what I tell you, you know whose you follow. Right? It's what I tell you that you will follow, and I'm not saying it may differ from that. I just want to let you know that what the law is — remember I told you the other day it's what I give you and that's what will control. Okay? Enjoy your break."
Tr. 2/25/04 at 72-73.
This cautionary instruction reinforced the purpose of Hanbidge's testimony and reminded the jury that the Court — and not Hanbidge — would be responsible for providing the law of the case. Majestic did not object to this instruction nor did it offer any modifications.
Later, in the final jury charge, as had been done in preliminary instructions, the jury was reminded that questions are not evidence and only the answers to questions are evidence. Specifically, the Court instructed that, "[i]f, during the course of the trial, I sustained an objection by counsel to a question asked by other counsel, you are to disregard the question and you must not speculate as to what the answer might have been." Tr. 2/27/04 at 13.
Hanbidge never answered the challenged question, and the jury was instructed to disregard it. The jury was reminded that the purpose of Hanbidge's testimony was to provide background on the shipping industry. At no time was the jury instructed that a signed charter party agreement was necessary to form a contract in this case. Therefore, we find no merit to Majestic's contention that it suffered any prejudice by Apple's counsel's attempt to skirt our Order.
Conclusion
Considering the nature of the issue and the circumstances of the case, we exercised our discretion to limit Hanbidge's expert testimony. In reasonably restricting Hanbidge's testimony, we prevented him from impermissibly directing the jury toward the conclusion Majestic desired. Additionally, Majestic has not demonstrated any prejudice by Apple's counsel's unanswered question. Furthermore, any harmful effect was cured by the cautionary jury instructions. Accordingly, we shall deny Majestic's motion.