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Estate of Petersen v. Bitters

United States District Court, D. Nebraska

November 2, 2018



          Robert F. Rossiter, Jr. United States District Judge

         This matter is before the Court on (1) plaintiff Estate of Joyce Rosamond Petersen's (“estate”) Motion to Alter and Obtain Relief from Aspects of Judgment and for New Trial on Certain Issues (Filing No. 291) and (2) defendant William E. Bitters's (“Bitters”) Motion for Judgment as a Matter of Law, or in the Alternative, Motion for New Trial (Filing No. 289). The deadline for briefing on these matters has passed and the motions are now ripe for decision. For the reasons stated on the record at trial as supplemented below, the parties' post-trial motions are denied.

         I. BACKGROUND

         In 2006, Joyce Rosamond Petersen (“Petersen”), then a resident of Omaha, Nebraska, [1] met Bitters, a financial advisor based in Sioux City, Iowa. Bitters sold several financial products to Petersen over the years, and, in 2008, prepared a promissory note for a $150, 000 unsecured loan from Petersen to defendant John L. Henry (“Henry”)-another of Bitters's clients. Petersen died on October 20, 2013. Henry never repaid the loan.[2]

         On December 1, 2014, the estate, alleging diversity jurisdiction, filed suit in the United States District Court for the Eastern District of Texas against Bitters, Henry, and Robert W. Boland (“Boland”), [3] for damages arising out of the unpaid loan. The case was transferred to this district on April 25, 2016. The lawsuit had a long and troubling history of unprofessional conduct between counsel in the case.[4] Throughout the case, counsel were, at best, discourteous to each other and to the magistrate judge, [5] who literally spent days refereeing some real but mostly unnecessary discovery disputes. A review of the many sidebar conferences at trial, most of which were requested by Gaudet, provides ample evidence of the constant interruptions and argumentative nature of Gaudet's behavior throughout the trial.

         On June 22, 2018, the Court granted in part Bitters's Motion for Summary Judgment (Filing No. 184). Even though the Court had made it clear that the matter was proceeding to trial, the parties were not prepared for the final pretrial conference. Again, the magistrate judge spent days trying to put together an Order on Final Pretrial Conference (Filing No. 234). This Court entered a Supplemental Order on Final Pretrial Conference (Filing No. 243) setting forth the issues to be tried.[6] Neither party timely objected to the issues as framed by this Court.

         At trial, the Court instructed the jury on the estate's claim against Henry for breach of contract and the estate's timely claims against Bitters for fraudulent misrepresentation and breach of fiduciary duty.[7] The jury found in favor of the estate against Henry and calculated the estate's damages to be $356, 619.30. The jury also found in favor of the estate against Bitters on both claims and calculated the estate's damages for those claims to be the identical amount of $356, 619.30.

         Significantly, the estate's expert testified at trial that $356, 619.30 was the current value of the unpaid loan under the terms of the promissory note. The jury awarded no other damages.

         During the trial, it was discovered that the estate had an undisclosed and disconcerting agreement with Henry (Exhibit 216). That agreement provided for the dismissal of the estate's claim against Henry after trial in exchange for Henry's “truthful” testimony on certain specified topics, with such truthfulness to be determined solely by estate's counsel. Consistent with that agreement, after the Court instructed and submitted the matter to the jury, the estate moved to dismiss the case against Henry. See Fed. R. Civ. P. 41(a)(2). The Court took that motion under advisement, stated its concern about the estate's gamesmanship, and denied the motion after the jury reached its verdict (Filing No. 281).[8]


         A. Standards of Review

          The estate seeks relief pursuant to Federal Rule of Civil Procedure 59(e), Federal Rule of Civil Procedure 60(a)-(b) and (d), and, alternatively, Rule 59(a). Bitters renews his motion for judgment as a matter of law under Federal Rule of Civil Procedure 50(b), Nassar v. Jackson, 779 F.3d 547, 551 (8th Cir. 2015), and seeks other relief under Rule 59(a).

         A new trial is required under Rule 59(a) “when a miscarriage of justice occurred in the first trial.” Larson v. Farmers Coop. Elevator, 211 F.3d 1089, 1095 (8th Cir. 2000). “[A] movant should not use Rule 59 merely to relitigate previously-decided matters.” Am. HealthNet, Inc. v. Westside Cmty. Hosp., Inc., No. 8:04CV9, 2006 WL 3063481, *1 (D. Neb. Oct. 24, 2006) (quotation omitted).

         “Rule 59(e) motions serve the limited function of correcting ‘manifest errors of law or fact or to present newly discovered evidence.'” United States v. Metro. St. Louis Sewer Dist., 440 F.3d 930, 933 (8th Cir. 2006) (quoting Innovative Home Health Care, Inc. v. P.T.-O.T. Assocs., 141 F.3d 1284, 1286 (8th Cir. 1998)). Such motions are not devices to “introduce new evidence, tender new legal theories, or raise arguments which could have been offered or raised prior to entry of judgment.” Id. (quoting Innovation Home Health Care, 141 F.3d at 1286). Rule 60(b) and Rule 59(e) motions are analyzed identically, id. at 933 n.3, and will be considered together for this motion.

         Under Rule 60(a), “a court may correct a judgment so as to reflect what was understood, intended and agreed upon by the parties and the court.” Kocher v. Dow Chem. Co., 132 F.3d 1225, 1229 (8th Cir. 1997) (quoting United States v. Mansion House Ctr. Redev. Co., 855 F.2d 524, 527 (8th Cir. 1988) (per curiam)). Simply put, Rule 60(a) “allows relief from a judgment based on clerical mistakes in the record.” Alpern v. UtiliCorp United, Inc., 84 F.3d 1525, 1538-39 (8th Cir. 1996).

         Rule 60(d) permits the Court to set aside judgments for fraud on the Court but relief “is only available where it would be ‘manifestly unconscionable' to allow the judgment to stand.” Superior Seafoods, Inc. v. Tyson Foods, Inc., 620 F.3d 873, 878 (8th Cir. 2010). Fraud on the Court “is narrowly defined as fraud which is directed to the judicial machinery itself and is not fraud between the parties or fraudulent documents, false statements or perjury.” United States v. Smiley, 553 F.3d 1137, 1144 (8th Cir. 2009).

         “A court reviewing a Rule 50(b) motion is limited to consideration of only those grounds advanced in the original, Rule 50(a) motion.” Nassar, 779 F.3d at 551. Judgment as a matter of law is appropriate “only when no reasonable juror, taking all reasonable inferences in the light most favorable to the opposing party, could find against the movant.” Estate of Snyder v. Julian, 789 F.3d 883, 887 (8th Cir. 2015).

         B. The Estate's Motion to Alter and Obtain Relief from Aspects of the Judgment and for New Trial on Certain Issues

         The estate seeks relief under Rules 59 and 60 on the following issues: (1) general and compensatory damages in the judgment; (2) punitive damages and attorney fees under Texas law; and (3) liability for Bitters for negligence, negligent misrepresentation, and breach of contract, and “co-liability” for Bitters and Henry for civil conspiracy. The estate simply reargues issues that have already been decided in this case and attempts to inject issues in the case following the jury's verdict. All of the estate's objections were carefully considered and resolved in this Court's prior rulings on dismissal (Filing No. 121), summary judgment (Filing No. 221), the Order on Final Pretrial Conference and Supplement thereto (Filing Nos. 234 and 243), Rule 50 motion (Filing No. 286), the Jury Instruction Conference (Filing No. 287), and the Memorandum and Order (“Verdict Order”) (Filing No. 281).

         The estate has not pointed to any newly discovered evidence or manifest errors, clerical mistakes, fraud on the Court, or miscarriage of justice. Instead, it simply rehashes previous arguments. While there appears little reason to revisit these issues, the Court will nonetheless provide a brief discussion in order to remove any doubt that the estate's motion must fail.

         1. General and Compensatory Damages in the Judgment

         Pursuant to Rule 59(e) and Rule 60(b), the estate seeks to alter the amount of damages in the judgment. The estate also moves under Rule 60(b) for the Court to award it damages for pain and suffering, or, alternatively, for the Court to grant a new trial on that issue under Rule 59(a). The requests are denied on all grounds.

         The Court carefully considered and explained the damage award in the Verdict Order. The only damages awarded by the jury were the amount of the original note plus interest set forth in the note and that is the only amount sufficiently supported by the evidence in this case.[9] The estate is not entitled to recover that amount from both Bitters and Henry and double its recovery to an amount unsupported by the evidence. See Tolliver v. Visiting Nurse Ass'n, 771 N.W.2d 908, 916 (Neb. 2009) (“[A] party may not have double recovery for a single injury.”). As the Court noted at both the Rule 50 hearing and the jury-instruction conference, because there is insufficient evidence of any damages beyond the monetary damages awarded, it follows that the estate's request for damages for pain and suffering must also be denied on all grounds.

         The estate's request for a more detailed Judgment and Memorandum and Order under Rule 60(a) is baseless. The Judgment (Filing No. 282) entered in this case was clear and thorough and without clerical mistakes.

         2. Punitive Damages and Attorney Fees under Texas Law

          The estate seeks relief pursuant to Rule 59(e), asking for punitive damages and attorney fees under Texas law. However, Nebraska law-not Texas law-applies in this case.[10] As the Court noted in its Supplemental Order on Final Pretrial Conference, Nebraska law is clear that neither punitive damages nor attorney fees are available in this case. See O'Brien v. Cessna Aircraft Co., 903 N.W.2d 432, 458 (Neb. 2017) (finding punitive damages contravene Article VII, § 5 of the Nebraska Constitution); Parkert v. Lindquist, 693 N.W.2d 529, 531 (Neb. 2005) (recognizing that under Nebraska law contract provisions like the one in the promissory note in this case “requiring that in the event of litigation the prevailing party will be entitled to attorney fees [are] contrary to public policy and void”). To the latter point, during a sidebar at trial, the estate conceded the attorney fees provision in the note was unenforceable under Nebraska law and attempted to elicit as much from its expert to indicate that Bitters was negligent for including such an unenforceable provision. The estate's request for punitive damages and attorney fees is denied.

         3. Negligence, Negligent Misrepresentation, Breach of Contract, and Civil Conspiracy

         The estate urges this Court to hold Bitters liable for negligence, negligent misrepresentation, and breach of contract, and to hold Henry and Bitters liable for civil conspiracy despite the fact that the Court did not instruct the jury on those issues. The estate seeks relief under Rule 59(e) or, alternatively, a new trial pursuant to Rule 59(a) and Rule 60(d).

         After due consideration, the negligence and breach-of-contract claims against Bitters were dismissed at the Rule 50 hearing. On the negligence claim, the Court echoed its decision on summary judgment, finding that under the facts alleged the claim was duplicative of the breach-of-fiduciary-duty claim, see Renner v. Wurdeman, 434 N.W.2d 536, 542 (Neb. 1989) (affirming a dismissal of a redundant claim on summary judgment), and barred by the applicable statute of limitations, see Neb. Rev. Stat. § 25-207 (creating a four-year statute of limitations for torts). The breach-of-contract claim fails because there was no evidence of a written contract between Petersen and Bitters and any oral-contract claim is barred by the applicable four-year statute of limitations.[11] See Neb. Rev. Stat. § 25-206. Accordingly, the estate is not entitled to relief on these issues.

         The estate's negligent-misrepresentation and civil-conspiracy claims also fail. As the Court has noted in earlier rulings, neither claim was included as controverted issues for trial in the Court's Supplemental Order on Final Pretrial Conference and the estate did not timely object to the exclusion.[12] The negligent-misrepresentation claim was dismissed on summary judgment. And though the estate used the term “civil conspiracy” in passing in the Amended Complaint (Filing No. 99), the estate did not plead it as a distinct theory of recovery.[13] For those reasons, the estate's incredible request for the Court to simply assign liability for claims that were never tried is denied.

         C. Bitters's Motion for Judgment as a Matter of Law, or in the ...

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