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Sivak v. Versen

November 6, 2007


The opinion of the court was delivered by: Honorable Larry Alan Burns United States District Judge






[Dkt Nos. 71, 72, 73]

On October 15, 2007, the court convened the hearing of post-trial motions following jury verdicts in this action in favor of plaintiff Cynthia Sivak ("Sivak") on: her breach of contract claim against defendant Tom Versen ("Versen"), awarding her $75,250.00 in past economic loss damages; her unjust enrichment claim against Versen, awarding her $43,645.00; her unjust enrichment claim against defendant Blue Sky Productions, LLC ("Blue Sky"), awarding her $43,645.00; her fraud claim against Versen and Blue Sky, awarding her $125,000 in past economic loss damages; her punitive damages claim against Versen, awarding her $433,000; and her punitive damages claim against Blue Sky, awarding her $50,000. Dkt Nos. 60-66. Defendants move pursuant to FED.R.CIV.P. ("Rule") 50(a) for judgment as a matter of law on the breach of contract claim and on the unjust enrichment claim against Versen and for a new trial pursuant to Rule 50(b) and Rule 59(a) contending, among other things, the punitive damages awards are excessive as a matter of law. Sivak moved for entry of judgment in her favor on the Second Claim for declaratory relief regarding the ownership of copyrights to certain interviews she conducted while affiliated with Blue Sky. In addition, the parties identified at the hearing a dispute over the accrual of post-judgment interest. The parties have provided the court with subsequent letter briefs on that issue. Brian M. Grossman, Esq. appeared on behalf of Sivak. Robert S. Besser, Esq. appeared on behalf of Versen and Blue Sky (collectively "Defendants"). The court issued rulings on the record, as memorialized herein, but reserved on the declaratory relief and the post-judgment interest issues.

With respect to Defendants' Motion For Judgment As A Matter Of Law (Dkt No. 72), a Rule 50 motion can be "renewed" after judgment if a Rule 50 motion was made and denied at the close of all evidence in the case.*fn1 The court finds Defendants' Rule 50 motion at the close of evidence was stated as applying to the entire case, preserving their right to renew the motion. See Freund v. Nycomed Amersham, 347 F.3d 752, 761 (9th Cir. 2003). "In ruling on a renewed motion, the court may: (1) if a verdict was returned: (A) allow the judgment to stand, (B) order a new trial, or (C) direct entry of judgment as a matter of law; or (2) if no verdict was returned: (A) order a new trial, or (B) direct entry of judgment as a matter of law." Rule 50(b).

Defendants move for Rule 50 relief on the breach of contract and unjust enrichment claims against Versen. The post-trial dispute as framed in the Motion on the breach of contract issue is not over the amount of damages, but rather over the evidentiary support for a finding Versen was the contracting party as opposed to Blue Sky. Viewing the evidence in the light most favorable to Sivak, the court finds the existence of a contract with Blue Sky does not exclude the possibility of a side agreement existing between Sivak and Versen as alleged in the Complaint, separate from the company's contract with her, and a reasonable jury could (and did) so find. On the unjust enrichment claim, the court cannot conclude the jury's result should be disturbed without impermissibly substituting its own view of the evidence for that of the jury. The court accordingly finds the jury's unjust enrichment awards must also remain undisturbed as they were based on substantial evidence. All the claims tried were imbued with credibility issues, and the jury exercised its prerogative to credit Sivak's version of events. For all the reasons recited on the record and herein, Defendants' Rule 50 motion is DENIED.

Defendants also filed a Motion For New Trial on grounds the jury's special verdicts were the result of passion and prejudice, the awards of punitive damages are excessive as a matter of law, the special verdicts are inconsistent, and they are against the weight of the evidence. Dkt No. 71. The court finds it may not consider the jury's calculations attached to the verdict forms for purposes of deciding whether a new trial must be granted, as such materials constitute unsolicited marginalia. See Tanno v. S.S. President Madison Ves, 830 F.2d 991, 993 (9th Cir. 1987) (holding that statements written on the special verdict form in parenthesis to explain damages "is surplusage and must be disregarded" for purpose of deciding whether a new trial must be granted, even though those statements, if taken into account, established a substantial inconsistency in the jury's damage awards). In any event, the court finds the two measures of economic damages the jury applied can be reconciled as reflecting different compensable harms, requiring both verdicts be upheld. See Atlantic & Gulf Stevedores, Inc. v. Ellerman Lines, Ltd., 369 U.S. 355, 364 (1962) ("Where there is a view of the case that makes the jury's answers to special interrogatories consistent, they must be resolved in that way"); Gallick v. Baltimore & O.R. Co., 372 U.S. 108, 119 (1963) ("We therefore must attempt to reconcile the jury's findings by exegesis if necessary, . . . before we are free to disregard the jury's special verdict and remand the case for a new trial"); Floyd v. Laws, 929 F.2d 1390, 1396 (9th Cir. 1991) (following Gallick). In opposition to the motion, Sivak refers to Jury Instruction Nos. 16 and 17 (damages instructions for breach of contract) and No. 29 (damages instruction for fraud) to illustrate the jury was instructed to use differing methodologies, and therefore could properly award a greater sum for the fraud tort ($125,000) than it did for breach of contract ($75,250). The motion is DENIED on all but the punitive damages issue.

With respect to punitive damages, the court GRANTS that portion of Defendants' Motion For New Trial. Initially, the court acknowledges the jury has considerable discretion to award punitive damages, and its award, if supportable, will not be lightly disturbed. See Browning-Ferris Indus. v. Kelco Disposal, Inc., 492 U.S. 257, 279 (1989). "When a jury awards punitive damages based on state law, 'the role of the trial judge is to determine whether the jury's verdict is within the confines set by state law, and to determine, by reference to federal standards developed under Rule 59, whether a new trial or remittitur should be ordered.'" White v. Ford Motor Co., 312 F.3d 998, 1026 (9th Cir. 2002), quoting Cooper Industries, Inc. v. Leatherman Tool Group, Inc., 532 U.S. 424, 433 (2001) (citation omitted). In making this judgment, the court has considered Supreme Court and Ninth Circuit authority identifying relevant factors to weigh in determining whether a punitive damages award is excessive or inadequate, for purposes of "imposing a sufficiently definite and meaningful constraint on the discretion of fact-finders in awarding punitive damages:"

(a) whether there is a reasonable relationship between the punitive damages award and the harm likely to result from the defendant's conduct as well as the harm that actually has occurred; (b) the degree of reprehensibility of the defendant's conduct, the duration of that conduct, the defendant's awareness, any concealment, and the existence and frequency of similar past conduct; (c) the profitability to the defendant of the wrongful conduct and the desirability of removing that profit and of having the defendant also sustain a loss; (d) the "financial position" of the defendant; (e) all the costs of litigation; (f) the imposition of criminal sanctions on the defendant for its conduct, these to be taken in mitigation; and (g) the existence of other civil awards against the defendant for the same conduct, these also to be taken in mitigation.

Hopkins v. Dow Corning Corp., 33 F.3d 1116, 1127 (9th Cir. 1994), quoting Pacific Mut. Life Ins. Co. v. Haslip, 499 U.S. 1, 21-22 (1991); see also TXO Production Corp. v. Alliance Resources Corp., 509 U.S. 443, 457 (1993) (punitive damages awards are "the product of numerous, and sometimes intangible, factors; a jury imposing a punitive damages award must make a qualitative assessment based on a host of facts and circumstances unique to the particular case before it").

Although, concededly, there was enough evidence presented at trial to support a punitive damages award, the court finds the amounts awarded are not warranted either under the evidence or by law. When reviewing punitive damages, special principles apply. "For instance, a court is not limited to considering the proportionality of the punitive award to actual damages sustained, but may also consider the magnitude of the harm that potentially could have occurred and the potential gain to the defendant." Hopkins, 33 F.3d at 1127; TXO Production, 509 U.S. at 457 ("while proportionality to actual damages sustained is relevant in ...

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