Virginia Lawyers Weekly VA Lawyers Weekly
Where a company argued it was entitled to $396,832.59 in damages, instead of the $59,000 it was awarded after a jury found a former employee breached his duty of loyalty, the company’s arguments were rejected. There was no evidence the jury neglected to consider the evidence or was influenced by prejudice, passion or other improper considerations.
Background
GMS Industrial Supply Inc. filed a complaint against various defendants alleging that, while employed by GMS, defendants solicited GMS sales agents and customers to sell for competing companies and misappropriated trade secret information, breaching their fiduciary duty of loyalty.
Relevantly here, the jury found that Wesley Greer breached his duty of loyalty to GMS, and awarded GMS $59,000 in damages for the breach. GMS has now filed a motion for additur, or in the alternative, a new trial. It asserts that on Count One of the third amended complaint, the jury should have awarded GMS $396,832.59 – the undisputed amount of Westly Greer’s compensation between Sept. 15, 2017, and when he became a GMS sales agent in 2019, not the $59,000 the jury actually awarded. In the alternative, the plaintiff seeks for a new trial as to the damages for the breach of loyalty claim.
Additur
GMS argues that state substantive law – in this case, Colorado state law – governs challenges to the amount of a jury award. In essence, GMS argues that additur is substantive, not procedural, and cites McMonigle v. Walton as the authority for this proposition.
An examination of GMS’s authority reveals that GMS is asking the court to extend McMonigle past its holding. The court in McMonigle explained that, as an introductory matter, “although remittitur is generally available in federal court, additur is not.” McMonigle cites Gasperini v. Ctr. for Humanities, 518 U.S. 415 (1996) and GMS reads Gasperini as allowing federal district courts to use state law in “addressing excessive or inadequate jury verdicts to have effect without detriment to the Seventh Amendment.”
But even if the court were to adopt this expansive reading of Gasperini — instructing federal courts sitting in diversity to apply state law in determining additur — additur is still not justified under Colorado state law. Colorado courts grant additur in limited circumstances, finding it within the court’s discretion to increase a verdict in cases when the court finds the amount in question to be undisputed. Further, Colorado courts show a reluctance to overturn a jury decision unless the damages are “completely unsupported by the record.”
The court is similarly reluctant to alter the jury’s verdict in this case. After a seven-day trial, the jury deliberated for two days before returning with the verdict. The jury was instructed that it must consider a variety of factors, only one of which was the compensation received by Westly Greer when he was an employee of GMS. The jury considered all of the factors outlined in its instructions and awarded GMS $59,000 in damages, an amount not unsupported by the evidence presented to the jury during the trial. Neither the jury instruction nor the verdict form required the jury to award GMS the full compensation GMS paid to Greer. Given that GMS’s damages from Greer’s breach of the duty of loyalty were not “undisputed,” the court declines to increase the amount of damages the jury awarded to GMS.
GMS next argues that the court should award additur under federal law. GMS points to the three exceptions when a court may increase a jury verdict under federal law: (1) mayhem, (2) upon a writ of inquiry (3) or “where the amount of plaintiff’s demand was certain, as, for example, in an action of debt.” The court declines to grant GMS additur under federal law.
New trial
In the alternative, GMS argues that the court should award a “new trial on the issue of the appropriate amount of damages.” The court does not find the verdict so small as to “indicate clearly and definitely that the jury neglected to consider the evidence or was influenced by prejudice, passion, or other improper considerations” and declines to find that the $59,000 the jury awarded to GMS in Count One is inadequate as a matter of Colorado law.
Plaintiff’s motion for additur, or in the alternative, for a new trial denied.
GMS Industrial Supply Inc. v. G&S Supply LLC, Case No. 2:19-cv-324, Oct. 17, 2022. EDVA at Norfolk (Young). VLW 022-3-471. 11 pp.
