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ITyX Solutions AG v. Kodak Alaris, Inc., 19-1658P (2020)

Court: Court of Appeals for the First Circuit Number: 19-1658P
Filed: Feb. 27, 2020
Latest Update: Feb. 27, 2020
Summary: United States Court of Appeals For the First Circuit No. 19-1658 ITYX SOLUTIONS AG, Plaintiff, Counter Defendant, Appellee, ITYX SYSTEMWICKLUNG OHG; ITYX TECHNOLOGY GMBH; SULEYMAN ARAYAN; HEIKO GROFTSCHIK, Counter Defendants, v. KODAK ALARIS, INC., Defendant, Counter Plaintiff, Appellant. APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MASSACHUSETTS [Hon. Allison D. Burroughs, U.S. District Judge] Before Howard, Chief Judge, Lynch and Barron, Circuit Judges. Pieter Van Tol, with
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          United States Court of Appeals
                       For the First Circuit


No. 19-1658

                         ITYX SOLUTIONS AG,

              Plaintiff, Counter Defendant, Appellee,

 ITYX SYSTEMWICKLUNG OHG; ITYX TECHNOLOGY GMBH; SULEYMAN ARAYAN;
                        HEIKO GROFTSCHIK,

                        Counter Defendants,

                                 v.

                        KODAK ALARIS, INC.,

              Defendant, Counter Plaintiff, Appellant.


          APPEAL FROM THE UNITED STATES DISTRICT COURT
                FOR THE DISTRICT OF MASSACHUSETTS

        [Hon. Allison D. Burroughs, U.S. District Judge]


                               Before

                        Howard, Chief Judge,
                 Lynch and Barron, Circuit Judges.


     Pieter Van Tol, with whom Garima Malhotra, Marisa H. Lenok,
Hogan Lovells US LLP, Paul R. Mastrocola, Andrea L. Martin, and
Burns & Levinson LLP were on brief, for appellant.
     Johnathan K. Levine, with whom Elizabeth K. Levine, Pritzker
Levine LLP, Scott R. Magee, and Morse, Barnes-Brown & Pendleton,
PC were on brief, for appellee.
February 27, 2020
           LYNCH, Circuit Judge.     This appeal primarily concerns

attacks on a verdict against Kodak Alaris, Inc. ("Kodak") based on

the jury finding that Kodak was in breach of its contractual

obligation to ITyX Solutions AG ("ITyX").        Judgment was entered

against Kodak in the sum of $9,211,699.20, including prejudgment

interest. Kodak also challenges whether ITyX had what Kodak called

"standing" to bring a breach of contract claim, the rulings the

district court made following the verdict, the district court's

calculation of prejudgment interest, and the denial of Kodak's

motion for a new trial.

           In brief, Kodak contracted with ITyX to sell ITyX's

intelligent document recognition ("IDR") software as part of a

Kodak-branded software.     The contract allowed either party to

terminate the agreement following a material breach by the other

party and also prohibited Kodak from reentering the IDR business

within two years of Kodak's "abandon[ing] the IDR market."           The

parties'   relationship   soon   soured,   and   Kodak   purported    to

terminate the contract and purported to exit the IDR business.

ITyX brought suit against Kodak for breach of contract and to

enjoin Kodak from reentering the IDR business.       After ITyX filed

this suit, and within two years of Kodak purporting to terminate

the agreement, Kodak partnered with a new IDR producer to market

and sell a new Kodak-branded IDR product.




                                 - 3 -
             The jury verdict awarded $7,466,045 in damages to ITyX.

Kodak disputed that the verdict actually found that Kodak had

breached     the       contract.       It   argued    that   the   jury   must      have

necessarily found that it was ITyX which breached, and that ITyX

had breached the covenant of good faith and fair dealing.                            The

district court correctly rejected this argument, as well as Kodak's

various "standing" and damages arguments. We reject all challenges

and affirm, except as to the calculation of prejudgment interest.

As to interest, we alter the date used and remand.

                                             I.

             We    describe      the    factual     background     of   the   parties'

claims, and then turn to the procedural history of the appeal.

A.      Factual Background

             ITyX, a German software company, produces IDR software,

which    interprets        and     extracts    text   from    documents       and   then

organizes such content for a user.                  ITyX is wholly owned by ITyX

Technology,        a    German     limited    liability      company.         A   German

partnership, ITyX OHG, owns the majority of ITyX Technology.                        ITyX

OHG is composed of partners Süleyman Arayan and Heiko Groftschik,

both citizens of Germany.              Arayan is also the CEO of ITyX.              Kodak

Alaris Holdings ("KAH") wholly owns Kodak, an American company.

        1.   The Master and PS Agreements

             In 2011, ITyX began business discussions with Eastman

Kodak Company ("EKC") and, on January 18, 2012, entered into a


                                            - 4 -
contract called the "Master Agreement."                   Just a day later, EKC

filed for bankruptcy.         In September 2013, Kodak assumed all of

EKC's rights and obligations under the Master Agreement.

             The Master Agreement defines the parties' contractual

relationship.        Its Preamble states that the parties "decided to

enter into a strategic partnership where ITyX [would] license [the

IDR software] to Kodak and Kodak [would] rebrand and market [such

software]."      The Agreement defines the Kodak-branded, IDR product

(the    "Kodak   Product")    as    "the       product,    product   family,   and

components of products, . . . that Kodak intends to distribute to

End Users and will include or incorporate the Licensed Software

. . .     supplied    by   ITyX    and    as     developed   pursuant   to     this

Agreement."

             The Master Agreement had an initial term of five years,

and the parties believed that it would take about three years to

bring the software to market.                  Unless terminated, the Master

Agreement automatically renewed in two-year increments.

             The Master Agreement provides that either Kodak or ITyX

could terminate the Master Agreement

        after a material breach by the other Party upon written
        notice to the defaulting party ("Default Notice")
        specifying the default in reasonable detail, unless the
        defaulting party cures the default within 30 days after
        receipt of the Default Notice or, if such default cannot
        be cured within such time, the defaulting Party does not
        promptly start diligently and continuously in good faith
        to cure the default.



                                         - 5 -
ITyX warranted that it either owned the copyright of the IDR

software or "ha[d] and [would] retain the authority to enter into

. . . this Agreement and to grant licenses . . . to Kodak."                The

Agreement also created various exclusivity obligations, including

that Kodak would be the sole distributor of the Kodak Product and

would not "develop a product functionally equivalent to the Kodak

Product," i.e., an IDR product that would compete with ITyX's

software.     Although the Master Agreement authorized Kodak to exit

"in its sole good faith business judgment" the IDR business (and

so discontinue the marketing and sale of the Kodak Product), Kodak

could not sell an IDR product not supplied by ITyX within two years

of the exit date.

             In the event of a breach, the Master Agreement allows,

but does not require, the non-breaching party to seek specific

performance from the breaching party.

             The Master Agreement provided that ITyX would "act as an

independent contractor" of Kodak.             The Master Agreement also

incorporates     any   "Statement[s]     of   Work"   creating    additional

"specifications and conditions" into which Kodak and ITyX would

enter   subsequently.       New   York    substantive    law     governs   the

Agreement.

             On June 25, 2015, Kodak and ITyX entered into another

contract, the Professional Services Transfer Pricing Agreement

("PS Agreement").      The parties then amended the PS Agreement on


                                   - 6 -
August       20,   2015   (the   "PS    Amendment").      Together,    these   "PS

Agreements" specified that Kodak would be solely responsible for

sales    and       marketing,    and   ITyX   would    provide   the   technology

necessary to deliver and support the software.

        2.     The Investment          Framework   Agreement     Among    Related
               Entities

               More than two years after Kodak and ITyX entered into

the Master Agreement, a group of related entities, KAH, ITyX OHG,

ITyX Technology, and Arayan entered into a June 2014 Investment

Framework Agreement ("IFA").              Under the IFA, KAH would acquire

25.1% of ITyX Technology. ITyX Technology, in turn, was to acquire

ITyX and another company and KAH would invest €12.6 million into

ITyX Technology via a series of payments over a sixteen-month

period. The IFA also authorized ITyX Technology, once per quarter,

to request up to two million euros in additional investment funds

from KAH to "support . . . acquisitions or similar strategic

investments."

               The IFA provides that if KAH failed to make a required

payment for more than thirty days, then ITyX OHG or ITyX Technology

could exercise a "call option."               The call option, if exercised,

would allow ITyX OHG or ITyX Technology to purchase all ITyX




                                         - 7 -
Technology shares held by KAH in return for a payment of one euro

and a waiver of KAH's outstanding IFA obligations.

     3.      KAH Purports to Terminate the IFA and Kodak Purports to
             Terminate the Master Agreement

             In June 2015, KAH did not make one of its required

payments at the required time.    In response, on November 23 or 24,

2015, ITyX OHG gave notice to KAH that it was exercising the call

option.   The notice stated that this decision was based on both

the missed payment and on an earlier refusal by KAH to invest

another two million euros into ITyX Technology pursuant the IFA.1

             On December 18, 2015, KAH sent to ITyX OHG and ITyX

Technology a letter stating that it would not comply with the call

option, and that it was terminating the IFA for cause and was

withdrawing as a shareholder of ITyX Technology.      Also on December

18, 2015, Kodak sent a letter to ITyX asserting that the exercise

of the call option effected a material breach of the Master

Agreement, and announced Kodak was terminating the Agreement.        The

letter also stated that, if the termination was ineffective, Kodak

was abandoning the IDR business for a two-year period following

the exit date.      A jury would later find that, by selling its

Actionable    Intelligence   Management   ("AIM")   platform,   an   IDR


     1    Kodak contends that it missed the payment inadvertently
and, immediately upon learning of this oversight, paid the required
amount.   The parties also dispute whether any such "strategic
investment[]" existed. These issues do not affect the resolution
of this appeal.


                                 - 8 -
software, Kodak reentered the IDR business in violation of that

two-year period.

B.   Procedural History

             On February 15, 2016, ITyX filed suit against Kodak for

damages for breach of contract and for declaratory and injunctive

relief to the effect that the Master Agreement was still in effect

and Kodak could not develop or sell products that competed with

the Kodak Product. ITyX moved for a preliminary injunction against

Kodak to prevent it from selling various IDR products.          The

district court, finding no risk of irreparable harm, denied the

motion.

             On April 15, 2016, Kodak moved to dismiss the action or

stay the proceedings until two related lawsuits in Germany were

resolved.2    The district court denied the motion, noting that it

was not certain that parties and/or contracts in the German

proceedings were "sufficiently aligned," or that the legal issue

were sufficiently alike.

             On February 21, 2018, Kodak moved for summary judgment

on all claims, arguing primarily that ITyX lacked standing to bring




     2    ITyX represented to the district court that, on March
20, 2018, the District Court of Frankfurt am Main dismissed the
German lawsuit. Noting an ongoing appeal of that dismissal, the
district court did not treat the German decision as final.



                                 - 9 -
the suit.3         Kodak also argued that, in terminating the Master

Agreement on December 18, 2015, it had validly terminated the PS

Agreements.         It argued in the alternative that the purported

termination        of   the   Master    Agreement     started   a     twelve-month

notification period required to terminate PS Agreements.                        The

district court reasoned that, because the PS Agreement provided

for a minimum duration of twenty-four months and did not expressly

premise its duration on that of the Master Agreement, that the

plain language of the PS Agreement did not support Kodak's argument

and denied summary judgment.

               The parties then went to trial on November 5, 2018, and,

on November 26, 2018, the jury reached a verdict in ITyX's favor.

The jury made the following findings in response to special

questions as to ITyX's breach of contract claims:               (1) The "Master

Agreement [was] a valid contract between [Kodak] and [ITyX]"; and

(2) Kodak did not "breach the Master Agreement and/or PS Agreements

by terminating them on December 18, 2015."              On the other hand, the

jury       found   against    Kodak   that:     (3)   Kodak   under    the   Master

Agreement "reenter[ed] the IDR business represented by the Kodak



       3  Kodak also moved for partial summary judgment on various
issues and ITyX moved for both judgment on the pleadings and
partial summary judgment.     The district court granted summary
judgment on one minor, undisputed issue and denied summary judgment
and judgment on the pleadings as to the remaining issues.       For
brevity, we elaborate on only the summary judgment issues relevant
to the instant appeal.


                                       - 10 -
IDR Product within two years of abandoning that business on

December 18, 2015";4 (4) Kodak "breach[ed] the PS Agreements by

not making quarterly payments due during the minimum term of those

agreements from January 1, 2016 through at least June 1, 2017";

(5) Kodak's "breach of its contractual obligations [was not]

excused"; and (6) ITyX had "been damaged as a result of [Kodak's]

breach of its contractual obligations" and that $7,466,045 would

"fairly compensate ITyX . . . for its damages for [Kodak's] breach

of its contractual obligations."   The parties agree that this sum

in the verdict was the result of the addition of $872,529 in

damages for the breach of the Master Agreement and $6,593,516 in

damages for missed payments under the PS Agreements.

          As to Kodak's breach of contract counterclaim, the jury

found that ITyX did not "breach the Master Agreement, the PS

Agreements, and/or the Statements of Work by failing to comply

with the terms of those agreements."   The jury also found that no

fiduciary relationship existed between Kodak and ITyX.    The jury

rejected both of Kodak's tortious interference claims and awarded

no damages to Kodak on any of its claims.



     4    Because of the agreed-on verdict form, the jury did not
answer whether this violation of an explicit term of the Master
Agreement was a breach, but the district court found this violation
was a breach, ITyX Solutions, AG v. Kodak Alaris Inc., No. 16-cv-
10250-ADB, 
2019 WL 1005497
, at *4-5 (Mar. 1, 2019), and that
finding is supported by the sum of the jury's award, which included
sums for this breach.


                              - 11 -
             On March 1, 2019, the district court ruled on the

parties'     claims   for    declaratory      judgment    and     an   injunction

preventing Kodak from reentering the IDR business.                     The court

issued declaratory judgments that Kodak did not properly terminate

the Master or PS Agreements on December 18, 2015, and Kodak

materially    breached      the   Master   Agreement's     Exit    Provision   by

reentering the IDR business by marketing the AIM platform. Finding

that, following Kodak's breach, ITyX elected to terminate the

Agreements and seek damages, the court held that the Agreements no

longer bound both parties. Accordingly, the court denied the claim

for injunctive relief as moot.        On the same day, the district court

entered final judgment in favor of ITyX.                 In its judgment, the

court awarded $1,745,654.20 in prejudgment interest and post-

judgment interest at the rate of 2.55% on the total damages award.

             On March 25, 2018, Kodak moved for judgment as a matter

of law, or a new trial and/or amendment to the district court's

March 1 order.    Kodak raised what it called its standing argument

from its summary judgment motion.             As to its motion for judgment

as a matter of law, Kodak also argued that Kodak did not breach

any contract, ITyX breached the covenant of good faith and fair

dealing, and that the jury verdict supports this.                 As a fallback

argument, Kodak argued that the evidence was insufficient to

support the jury verdict that ITyX proved its claims of breach or

of the amount of damages.          Turning to its motion for a new trial


                                     - 12 -
on the merits (or, in the alternative, on damages), Kodak presented

the same arguments outlined above as well as arguments that the

verdict form confused the jurors and ITyX's counsel committed trial

misconduct.        The district court rejected Kodak's arguments and

denied the motion.      This appeal followed.

                                    II.

            We review questions of law, including the issue of

standing, de novo.       Katz v. Pershing, LLC, 
672 F.3d 64
, 70 (1st

Cir. 2012) (quoting Me. People's All. & Nat. Res. Def. Council v.

Mallinckrodt, Inc., 
471 F.3d 277
, 283 (1st Cir. 2006)).             A denial

of judgment as a matter of law is also reviewed de novo, but

applying the same standard as the district court.             That is, we

examine all evidence "in the light most favorable to the nonmoving

party, drawing all possible inferences in its favor. . . . We do

not consider the credibility of witnesses, resolve conflicts in

testimony, or evaluate the weight of the evidence."            CPC Int'l,

Inc. v. Northbrook Excess & Surplus Ins. Co., 
144 F.3d 35
, 42 (1st

Cir. 1998) (internal citations omitted).           We do not disturb the

jury verdict if, "viewing the evidence in the light most favorable

to the verdict, a rational jury could find in favor of the party

who prevailed."       Gillespie v. Sears, Roebuck & Co., 
386 F.3d 21
,

25   (1st   Cir.    2004).   The   determination    under   state    law   of

prejudgment interest is also reviewed de novo.              See Tobin v.

Liberty Mut. Ins. Co., 
553 F.3d 121
, 145–46 (1st Cir. 2009) (citing


                                   - 13 -
R.I. Charities Tr. v. Engelhard Corp., 
267 F.3d 3
, 5 (1st Cir.

2001)).

            The denials of the motion for a new trial and to amend

findings and/or the judgment are reviewed for abuse of discretion.

Cantellops v. Alvaro-Chapel, 
234 F.3d 741
, 744 (1st Cir. 2000);

Nat'l Metal Finishing Co. v. BarclaysAmerican/Commercial, Inc.,

899 F.2d 119
, 125 (1st Cir. 1990).

A.   Kodak's Attacks on District Court Rulings

     1.     Kodak's Argument that ITyX Lacked Standing to Bring the
            Suit Is Meritless

            Kodak    argues    that    ITyX    does   not    have   Article   III

standing, and so the district court erred by not granting summary

judgment or judgment as a matter of law in Kodak's favor, and erred

by deferring its decision on standing until after the jury decided

material, disputed facts about the meaning of the contract.                Kodak

argues that ITyX did not own or have the distribution rights to

the IDR software and so could not grant a license to Kodak, as

required by the Warranty of Title section in the Master Agreement.

In consequence, Kodak contends, ITyX could not enforce the Master

Agreement   and     so,   in   its   view,    it   follows   that   ITyX   lacked

standing.   Kodak is wrong for several reasons.

            Standing      requires    that     a   plaintiff   satisfy     "three

elements:     injury in fact, traceability, and redressability."




                                      - 14 -
Kerin v. Titeflex Corp., 
770 F.3d 978
, 981 (1st Cir. 2014) (citing

Lujan v. Defs. of Wildlife, 
504 U.S. 555
, 560–61 (1992)).

          ITyX's complaint alleged the existence of             contracts to

which it was a party, and a concomitant breach, and damages.               ITyX

was a party to the contract.        That Kodak defends, on the grounds

that it believed ITyX breached the Warranty provision and that the

contract did not afford ITyX a right to enforce it, does not create

an issue of Article III standing.           Kodak does not cite any cases

that a defense that a party to a contract has violated a provision

of that contract precludes Article III standing.

          The   only    standing    cases     Kodak     cites   involve    very

different facts, in which non-parties sought to sue on contracts

as third-party beneficiaries.       See Miree v. DeKalb Cty., 433 U.S

25, 29 (1977) ("The relevant inquiry is a narrow one:                whether

petitioners as third-party beneficiaries of the contracts have

standing to sue respondent."); AT&T Mobility, LLC v. Nat'l Ass'n

for Stock Car Auto Racing, Inc., 
494 F.3d 1356
, 1359–61 (11th Cir.

2007) (deciding whether a "non-party" had suffered an injury in

fact by looking to whether it had a "legally protected interest"

that was invaded).     ITyX is not a non-party.

          Traceability     requires    "'a     causal    connection'      . . .

between the injury and the challenged conduct."            Belsito Commc'ns,

Inc. v. Decker, 
845 F.3d 13
, 21 (1st Cir. 2016) (quoting 
Lujan, 504 U.S. at 560
–61)).      Here, the evidence adequately supported


                                   - 15 -
ITyX's allegation that Kodak discontinued contractual payments and

reentered the IDR market which caused ITyX financial injury.

Redressability requires "that the injury will likely be redressed

by a favorable decision."          
Id. (alteration and
quotation marks

omitted) (quoting 
Lujan, 504 U.S. at 560
–61)).                  Money damages

redress the economic injury ITyX alleged, and so this prong is

met.    See 24 Richard A. Lord, Williston on Contracts § 64:1 (4th

ed. 2019) ("The primary if not the only remedy for injuries caused

by the nonperformance of most contracts is an action for damages

for the breach . . . .").         ITyX plainly had Article III standing

to bring this suit.

       2.   We Reject Kodak's Appellate         Arguments       About    the    PS
            Agreements' Minimum Duration

            Kodak argues that the district court also erred in

holding "that the PS Agreements remained in effect for two years

after inception," that is, until at least June 1, 2017.                       This

argument is both waived and meritless.

            In its Rule 50(a) motion, Kodak did not object to the

district    court's     summary    judgment   conclusion        that    the    PS

Agreements had a minimum term of twenty-four months.                   Kodak has

waived this argument.      At most, Kodak made the different argument

that ITyX could not show damages and no damages existed.                      That

different   argument     concerned    the   sufficiency    of    evidence      of

damages,    not   the   district   court's    interpretation      of     the   PS




                                   - 16 -
Agreement.     See Ji v. Bose Corp., 
626 F.3d 116
, 127-28 (1st Cir.

2010).

             Even   assuming    dubitante    that   Kodak      preserved    this

argument, the argument still fails.          The PS Agreements remained in

effect until at least June 1, 2017.          The PS Agreements state that

"[t]he [PS] [A]greement has a minimum term of 24 months and is

automatically renewable for another year unless a cancellation

notice is given."       The cancellation language on which Kodak's

argument turns does not alter the contracts' plain language as to

the minimum term.

B.    Kodak's Attacks on the Jury Verdict and Denial of Judgment as
      a Matter of Law

             To prove a breach of contract claim under New York law,

a party must show:     "[1] formation of a contract, [2] performance

by one party, [3] failure to perform by another, and [4] resulting

damage."      N.Y. State Workers' Comp. Bd. v. SGRisk, LLC, 
983 N.Y.S.2d 642
, 648 (App. Div. 2014).          Kodak contends that ITyX did

not   sufficiently    show     breach   under   either   the    Master     or   PS

Agreements and that the jury verdict is inconsistent.

      1.     Kodak Misunderstands the Jury's Findings of Breach of
             Contract as to the Master Agreement

             Kodak argues that the district court erred in denying

its motion for judgment as a matter of law because Kodak reads the

jury finding that Kodak did not breach "by terminating [the Master




                                    - 17 -
and/or PS Agreements] on December 18, 2015" to mean that Kodak

validly terminated the Agreements in December 2015.5

                First, this argument is forfeited, as Kodak "did not

raise       a   claim   of    inconsistency    before    the   [district]    court

discharged the jury."             Correia v. Fitzgerald, 
354 F.3d 47
, 56–57

(1st Cir. 2003).

                Second, Kodak's argument, even if preserved, reads too

much into this finding.              This jury finding non-breach in this

respect does not contradict the jury finding that Kodak breached

by a different action and/or on some other date.                 The jury found

that Kodak had reentered the IDR business within two years of

purporting to abandon the business and that Kodak had breached the

PS Agreements.          Such reentry is a different breach of the Master

Agreement.        The jury then awarded damages to ITyX (and no damages

to Kodak).         "Where there is a view of the case that makes the

jury's answers to special interrogatories consistent, they must be

resolved that way."           Atlantic & Gulf Stevedores, Inc. v. Ellerman

Lines, Ltd., 
369 U.S. 355
, 364 (1962).                  Here, that view is that

Kodak, through reentry within two years, breached the Master

Agreement, Kodak breached the PS Agreements, and ITyX did not

breach      the   terms      of   these   Agreements,    including   the   implied


        5 We do not address Kodak's arguments that are premised on
the notion that the jury found it had breached the Master Agreement
by terminating the contract. The jury found that Kodak did not so
breach the Master Agreement.


                                          - 18 -
covenant of good faith and fair dealing.           The jury's findings are

internally    consistent,    and   sufficient      evidence   supports    its

finding that Kodak breached the Master Agreement and PS Agreements,

but did not do so by purporting to terminate the Agreements on

December 18, 2015.

             Next, Kodak argues both that the damages awarded were

"speculative and lacked evidentiary support."          Both arguments lack

merit.

             As to its "speculative" damages argument, Kodak asserts

that ITyX improperly calculated damages by factoring in the sales

figures of products they argue were irrelevant, and the jury

impermissibly     relied    on   these   product    calculations.        ITyX

presented evidence of its calculation of its damages under the

Master Agreement as forty percent of Kodak's AIM Platform sales.

The evidence was that the AIM Platform sales were a reasonable

proxy for the sales the Kodak Product would have accrued but for

Kodak's breach, of which forty percent belonged to ITyX under the

Master Agreement.    Kodak's argument takes two forms:         (1) that the

jury could rely only on figures related to the Kodak Product's

sales; and (2) that the AIM Platform figures include the sales of

products the district court had held not to compete with the Kodak

Product.

             Kodak's first argument, that the jury could not rely on

the sales figures of the AIM platform, misreads the applicable


                                   - 19 -
law. Kodak relies on the rule that "[d]amages awarded for a breach

of contract must be 'specific to those goods for which the parties

had contracted.'"      Mongiello's Italian Cheese Specialties, Inc. v.

Euro Foods Inc., No. 14-cv-2902 (DF), 
2018 WL 4278284
, at *46

(S.D.N.Y. Mar. 30, 2018) (quoting David v. Glemby Co., 
717 F. Supp. 162
, 170 (S.D.N.Y. 1989)).           Because the jury awarded damages for

the Kodak Product revenues ITyX lost as a result of the breach,

and not for some other ITyX product, the award complied with the

rule.

              Next, Kodak argues that the AIM Platform sales figures

comprised revenues from products that would not compete with the

Kodak Product and that the AIM Platform was not analogous to the

Kodak Product because it was sold to "different customers, in a

different market, in a different geographic area, and under a

different price structure."          Nothing compelled the jury to accept

this view or to reach a different damages sum.

              Under New York law, "the non-breaching party need only

provide   a    'stable      foundation    for   a   reasonable    estimate     [of

damages]'     before   an    award   of   general    damages     can   be   made."

Tractebel Energy Mktg., Inc. v. AEP Power Mktg., Inc., 
487 F.3d 89
, 110–11 (2d Cir. 2007) (alteration in original) (quoting Freund

v. Wash. Square Press, Inc., 
314 N.E.2d 419
, 421 (N.Y. 1974)).

Here, ITyX did just that by providing the sales figures of the

product that Kodak marketed in place of ITyX's.                  That Kodak can


                                     - 20 -
point to factors which tend to show that the estimate was too high

(just as ITyX can point to factors suggesting it was too low) does

not violate New York's "stable foundation" rule.    Under New York

law, only the existence, not the amount, of general damages must

be "reasonably certain" to prove a breach of contract claim.   
Id. at 110
(quoting Wakeman v. Wheeler & Wilson Mfg. Co., 
4 N.E. 264
,

266 (N.Y. 1886)).

     2.    Kodak's Attack Fails as to the Jury's Finding of Breach
           of Contract as to the PS Agreements

           Kodak first argues that, following Kodak's December 2015

purported termination, ITyX failed to perform its contractual

obligations under the PS Agreements and so could not prove it had

met the performance element.    Specifically, Kodak contends that

ITyX stopped identifying which employees provided services related

to the Kodak Product, issuing relevant invoices, and refunding

from each invoice the amount allocated to employees on Kodak's

payroll.   These actions, Kodak argues, were conditions precedent

to Kodak making quarterly payments under the PS Agreements.     In

response, ITyX argues the PS Agreement obliged it to maintain

capacity and, by doing so, ITyX performed.   This was a matter for

the jury to resolve.

           The jury heard testimony and saw evidence supporting

both Kodak's and ITyX's arguments as to such performance and the

alleged breach of the PS Agreements.     The jury expressly found




                               - 21 -
that Kodak breached the PS Agreements by not making these payments

and that ITyX had not breached the PS Agreements.          The jury had an

adequate evidentiary basis for its verdict and its verdict was

rational.6

             Kodak next argues that ITyX failed to prove damages

incurred by any alleged breach of the PS Agreement.          This too was

an issue for the jury, and its conclusion is both supported and

rational.     ITyX provided witness testimony about the manner of

calculating    its   costs   of   maintaining   capacity    under   the   PS

Agreements, and explaining the PS Agreements, which provide a table

of the quarterly payments Kodak was obligated to make.              Kodak's

argument fails.7




     6    While we have addressed Kodak's argument on the merits,
Kodak seems to have waived this performance argument by not raising
it in its Rule 50(a) motion. Kodak argued that, because "there[]
[was] no list of the people who were on the ITyX Solutions payroll
who [were] doing any work[,] . . . [ITyX] [could not] prove
damages."    This preserves Kodak's argument as to the damages
element, but not as to the performance element, i.e., ITyX's
purported non-performance of the PS Agreements.

     7    Employing the same arguments, Kodak appeals the district
court's denial of Kodak's motion to amend the district court's
declaratory judgments to hold that the Master Agreement was
terminated on December 18, 2015, and so Kodak did not breach any
contract.   The declaratory judgments are consistent with, and
nearly identical to, the jury verdict. The district court clearly
did not abuse its discretion.


                                   - 22 -
       3.   Prejudgment Interest on the Damages Under the Master
            Agreement Should Be Computed from January 1, 2017

            The district court calculated a prejudgment interest

award of $1,745,654.20 at the New York prescribed rate of nine

percent.    See N.Y. C.P.L.R. § 5004; see also Analysis Grp., Inc.

v. Cent. Fla. Invs., Inc., 
629 F.3d 18
, 24 (1st Cir. 2010) (stating

that substantive state law governs the prejudgment interest award

in    diversity   actions).    The   district   court    calculated   the

prejudgment interest on the $872,529 in damages awarded for breach

of the Master Agreement from the date the complaint was filed.8

Kodak appeals only the date used for computation of damages under

the Master Agreement.

            Under New York Law,

       [t]he date from which interest is to be computed shall
       be specified in the verdict, report or decision. If a
       jury is discharged without specifying the date, the
       court upon motion shall fix the date, except that where
       the date is certain and not in dispute, the date may be
       fixed by the clerk of the court upon affidavit.       The
       amount of interest shall be computed by the clerk of the
       court, to the date the verdict was rendered or the report
       or decision was made, and included in the total sum
       awarded.

N.Y. C.P.L.R. § 5001(c).      Because the jury did not fix the date,

the district court was thus authorized on motion to fix the date.

Id. The parties
offered two potential dates:         Kodak argued for



       8  The district court calculated the prejudgment interest
on the separate breach of the PS Agreement from the date each
missed payment was due.


                                  - 23 -
January 1, 2017, the beginning of the first year of AIM Platform

sales.       ITyX argued for the date of the filing of the complaint,

February 15, 2016.       The district court chose the earlier date of

filing, but gave no statement of reasons.

               Under New York law, the date chosen depends on there

being both a breach and damages.           See N.Y. C.P.L.R. § 5001(b)

("Interest shall be computed from the earliest ascertainable date

the cause of action existed, except that interest upon damages

incurred thereafter shall be computed from the date incurred.");

N.Y. State       Workers' Comp. 
Bd., 983 N.Y.S.2d at 648
(discussing

the elements for contract breach cause of action); see also Gelco

Builders & Burjay Contr. Corp. v. Simpson Factors Corp., 
301 N.Y.S.2d 728
, 730-31 (Sup. Ct. 1969) (requiring proof of damages

on the date from which prejudgment interest runs).            The jury

verdict here, for breach of the Master Agreement, awarded damages

equivalent to the licensing fees owed for the breach. Kodak argues

that, because such damages were for license fees, the proper date

for the running of interest is January 1, 2017, as Kodak did not

make any new sales for which it would have owed fees before this

date.       We think Kodak's position is the correct one under New York

law, for the reasons stated above.9



        9 Kodak did not argue that the damages occurred at various
times and so should be computed "from a single reasonable
intermediate date." N.Y. C.P.L.R. § 5001(b).


                                  - 24 -
           We vacate the award of prejudgment interest on the

$872,529 in damages under the Master Agreement, and remand with

instructions to calculate prejudgment interest from January 1,

2017.

C.   The District Court Did Not Abuse Its Discretion in Denying
     Kodak's Motion for a New Trial

           Kodak presents three arguments that the district court

abused its discretion in denying Kodak's motion for a new trial:

(1) the verdict was against the great weight of the evidence; (2)

the verdict form confused the jury; and (3) misconduct by ITyX's

trial counsel tainted the proceedings.   We address each argument

in turn.

           The verdict was most certainly not against the great

weight of the evidence, nor was the verdict an injustice to Kodak.

Although the district court has a much "broader" power to grant

new trial than judgment as a matter of law, it "'cannot displace

a jury's verdict merely because [it] disagrees with it' or because

'a contrary verdict may have been equally . . . supportable.'"

Jennings v. Jones, 
587 F.3d 430
, 436 (1st Cir. 2009) (second

alteration in original) (quoting Ahern v. Scholz, 
85 F.3d 774
, 780

(1st Cir. 1996)).   A district court may "independently weigh the

evidence," but can only order a new trial when the verdict is

against the weight of the evidence or when a new trial is necessary

to prevent injustice.   
Id. Kodak here
offers substantially the




                              - 25 -
same arguments we have already rejected and so we cannot say there

was any abuse of discretion.

             Next, Kodak argues that the verdict form confused the

jury, rehashing its argument that the jury must have been confused

because it found that Kodak did not breach the Master Agreement

but    nonetheless      assessed    damages    for   that   breach.      At    oral

argument, Kodak offered a new variation of its jury confusion

argument:     that the district court and parties agreed that, if the

jury found that Kodak did not breach "by terminating [the Master

and/or PS Agreements] on December 18, 2015," then Kodak validly

terminated the Master Agreement on that date, so the Exit Provision

would no longer have any force.

             We earlier rejected these inconsistency arguments as

forfeited under 
Correia, 354 F.3d at 56
–57, and meritless under

Atlantic & Gulf Stevedores, 
Inc., 369 U.S. at 364
, and do so again

here    in   response    to   the   argument.        Moreover,   Kodak   did    not

sufficiently develop the latter jury confusion argument on appeal,

and so it is doubly waived.10          United States v. Zannino, 
895 F.2d 1
, 17 (1st Cir. 1990).         To the extent this is a belated attack on

the verdict form or the jury instructions, the arguments are



       10 In its appellate briefing, Kodak merely states its view
that the parties and district court had agreed in a colloquy
outside the presence of the jury that "an answer in the negative
to Question 2 meant that the Master Agreement was validly
terminated and the Exit Provision ceased to have effect."


                                      - 26 -
waived.    Kodak objected to neither.         See Kavanaugh v. Greenlee

Tool Co., 
944 F.2d 7
, 11 (1st Cir. 1991); Moore v. Murphy, 
47 F.3d 8
, 11 (1st Cir. 1995).

           Finally,   Kodak   argues   that    purported   misconduct   by

ITyX's counsel "tainted the proceedings" and warrants a new trial.

The purported misconduct, as Kodak would have it, is that the

plaintiff's counsel made efforts to portray ITyX as David against

Kodak as Goliath.     Counsel for ITyX referenced the relative sizes

of the parties on two occasions:         (1) it elicited testimony on

Kodak's revenues; and (2) ITyX, in its closing, characterized Kodak

as a "large company taking advantage of a smaller company."         Even

if these comments were inappropriate, and we do not say they were,

the court's instructions clearly offset any such suggestions,

stating:

     You should consider and decide this case as a dispute
     between persons of equal standing in the community, of
     equal worth, and holding the same or similar stations in
     life. A corporation is entitled to [a] . . . fair trial
     . . . regardless of its absolute size or its size
     relative to any other party in the case.

And nothing in the jury's verdict leads even to a suspicion that

the jury ignored this instruction.     See Río Mar Assocs., LP, SE v.

UHS of P.R., Inc., 
522 F.3d 159
, 163 (1st Cir. 2008) ("[J]urors

are presumed to follow the trial court's instructions.").

           There was nothing unfair or inappropriate as to the

jury's verdict or the district court's rulings.




                                - 27 -
                               III.

          We affirm the rulings of the district court in all

respects except its award of prejudgment interest on damages under

the Master Agreement.   As to that prejudgment interest award, we

vacate and remand with instructions to recalculate that interest

from the date of January 1, 2017.     Costs   are   awarded   to   ITyX

Solutions AG.




                              - 28 -

Source:  CourtListener

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