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Brown v. K & L Tank Truck Service, Inc.

United States District Court, D. Kansas

March 21, 2018

JOHN BROWN and BARBARA BROWN, Plaintiffs,
v.
K & L TANK TRUCK SERVICE, INC., et al., Defendants.

          MEMORANDUM AND ORDER

          J. THOMAS MARTEN, JUDGE

         Plaintiffs John and Barbara Brown filed this lawsuit against defendants K & L Tank Truck Service, Inc. (“K & L”), Alfonso Martinez, president of K & L, and Tom Herrell. Plaintiffs claimed that Martinez breached a contract in which John Brown promised to assist and make certain guarantees for a loan to buy K & L's stock back from an Employee Stock Ownership Program (“ESOP”), and assist in convincing K & L's employees to sell their stock back to K & L to facilitate Martinez's ability to purchase the majority of K & L's stock. Plaintiffs claim that in exchange, Martinez, on behalf of K & L as its president, agreed to employ and provide health insurance to plaintiffs for the rest of their lives.

         Following defendants' motion for summary judgment-which Judge Lungstrum granted in part and denied in part-a jury heard evidence from November 28, 2017, to December 18, 2017. Defendants moved for judgment as a matter of law at the close of plaintiffs' case, and the court granted their motion as to plaintiffs' unjust enrichment claim. Following deliberations, the jury found that Martinez did not enter into a contract with John Brown for lifetime employment with K & L. However, the jury concluded that Martinez and Herrell breached a contract when they failed to pay John Brown after he agreed to sell his two shares of stock in exchange for twenty percent (20%) of the total shareholder bonus distributed in 2013. The jury awarded plaintiffs damages of $20, 000 against Martinez and $20, 000 against Herrell.

         The matter is now before the court on plaintiffs' motion for a partial new trial pursuant to Federal Rule of Civil Procedure 59(a) on all issues except whether there was a breach of contract for the 2013 shareholder bonus (Dkt. 181).[1] Plaintiffs argue that there was sufficient evidence to present their unjust enrichment claim to the jury. Plaintiffs allege that they were prejudiced when defendants produced relevant documents in the middle of trial that were not disclosed during discovery. Plaintiffs also criticize two jury instructions and the court's charge to the jury preceding its deliberations. For the reasons stated below, plaintiffs' motion is denied.

         I. Legal Standards

         A motion for new trial under Rule 59(a) may be granted “for any reason for which a new trial has heretofore been granted in an action at law in federal court . . . .” Fed.R.Civ.P. 59(a)(1)(A). Such motions, which are committed to the discretion of the trial court, are not regarded with favor and are granted only with great caution. Paradigm All., Inc. v. Celeritas Techs., LLC, 722 F.Supp.2d 1250, 1258 (D. Kan. 2010). They are generally granted only “when the court believes the verdict is against the weight of the evidence, prejudicial error has occurred, or substantial justice has not been done.” Wirtz v. Kan. Farm Bureau Servs., Inc., 311 F.Supp.2d 1197, 1226 (D. Kan. 2004). A party seeking to set aside a jury verdict “bear[s] the heavy burden of demonstrating that the verdict was clearly, decidedly, or overwhelmingly against the weight of the evidence.” Util. Trailer Sales of Kansas City, Inc. v. MAC Trailer Mfg., Inc., 734 F.Supp.2d 1210, 1216 (D. Kan. 2010), aff'd, 443 F. App'x 337 (10th Cir. 2011).

         II. Undisclosed Documents

         Plaintiffs claim that they were unfairly prejudiced when defendants failed to disclose documents from Charles Claar, K & L's accountant. The documents consist of Claar's notes and emails regarding the parties' 2004 buyout of the ESOP and other matters about the case. Defendants deny any intentional nondisclosure and say they were under the impression that all the documents from Claar and/or his accounting firm Lewis, Hooper & Dick (“LHD”) had been turned over to plaintiffs in accordance with their discovery request and subpoena. Defendants assert that the breakdown was with the third-party scanning company that scanned the documents from LHD and provided them to plaintiffs. Still, it is undisputed that plaintiffs were unaware of the existence of these documents until Claar's testimony at trial.

         Claar's 2004 documents

         Plaintiffs assert that Claar's notes and emails addressing the 2004 ESOP buyout are highly relevant to their claims that the parties entered into an express and/or implied lifetime employment agreement. Plaintiffs reviewed the documents prior to the close of their case and acknowledge that they were able to admit certain documents during trial. But plaintiffs allege that the late production resulted in substantial and unfair prejudice that was not cured.

         Plaintiffs argue that they lost credibility with the jury because they asked Claar whether he had created documents regarding defendants' inquiries into repurchasing the stock from the ESOP expecting him to answer no. But Claar answered “yes.” Plaintiffs contend they looked like they were not prepared or were trying to trick Claar. Plaintiffs also believe the jury was under the impression that they were hiding information from it because they did not show the documents to the jury.

         Plaintiffs further argue that they were prejudiced when the court did not allow them time to examine the documents before continuing direct examination of Claar. Plaintiffs state that they lacked knowledge about the information within these unproduced documents to question and/or impeach Claar. And even though the court informed defendants that they could not use the unproduced documents, defendants continued to elicit testimony from Claar about these documents over plaintiffs' objection. Plaintiffs contend that the court's instruction to the jury to disregard any discussions concerning these documents did not cure the prejudice because it failed to inform the jury that these documents were not produced pursuant to plaintiffs' subpoena and request for production. Consequently, the jury-plaintiffs believe-was left with the impression that plaintiffs were at fault.

         Although plaintiffs were surprised, they were not unduly prejudiced so as to warrant a new trial. See Util. Trailer Sales, 734 F.Supp.2d at 1228 (“A showing of prejudice, however, is essential.”).

It is well settled that Rule 59 provides a means of relief in cases in which a party has been unfairly made the victim of surprise. 11 Wright & Miller, Federal Practice and Procedure § 2805 at 38 (1973). The surprise, however, must be “inconsistent with substantial justice” in order to justify a grant of a new trial.[2]

Conway v. Chem. Leaman Tank Lines, Inc., 687 F.2d 108, 111 (5th Cir. 1982).

         Defendants were not allowed to introduce these documents until plaintiffs had reviewed them. The jury was also given a curative instruction. The “central assumption of our jurisprudence is that juries follow the instructions they receive.” Wirtz, 311 F.Supp.2d at 1228-29. There is no evidence in the record ...


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