Filed: Sep. 08, 2006
Latest Update: Feb. 21, 2020
Summary: F I L E D United States Court of Appeals Tenth Circuit UNITED STATES CO URT O F APPEALS September 8, 2006 TENTH CIRCUIT Elisabeth A. Shumaker Clerk of Court CATV SERVICES, IN C., Plaintiff-Appellee, No. 04-1448 v. (D . of Colo.) ARG USS CO M M UNICA TIONS, D. C. No. 02-F-0879 (OES) IN C., Defendant-Appellant. OR D ER AND JUDGM ENT * Before KELLY, PO RFILIO , and TYM KOVICH, Circuit Judges. Defendant-Appellant Arguss Communications hired Plaintiff-Appellee CATV Services to liquidate leftover tele
Summary: F I L E D United States Court of Appeals Tenth Circuit UNITED STATES CO URT O F APPEALS September 8, 2006 TENTH CIRCUIT Elisabeth A. Shumaker Clerk of Court CATV SERVICES, IN C., Plaintiff-Appellee, No. 04-1448 v. (D . of Colo.) ARG USS CO M M UNICA TIONS, D. C. No. 02-F-0879 (OES) IN C., Defendant-Appellant. OR D ER AND JUDGM ENT * Before KELLY, PO RFILIO , and TYM KOVICH, Circuit Judges. Defendant-Appellant Arguss Communications hired Plaintiff-Appellee CATV Services to liquidate leftover telec..
More
F I L E D
United States Court of Appeals
Tenth Circuit
UNITED STATES CO URT O F APPEALS
September 8, 2006
TENTH CIRCUIT Elisabeth A. Shumaker
Clerk of Court
CATV SERVICES, IN C.,
Plaintiff-Appellee, No. 04-1448
v. (D . of Colo.)
ARG USS CO M M UNICA TIONS, D. C. No. 02-F-0879 (OES)
IN C.,
Defendant-Appellant.
OR D ER AND JUDGM ENT *
Before KELLY, PO RFILIO , and TYM KOVICH, Circuit Judges.
Defendant-Appellant Arguss Communications hired Plaintiff-Appellee
CATV Services to liquidate leftover telecommunications equipment worth over
$1 million. During the course of performance, Arguss sold some of the
equipment on its own, despite a provision in the agreement that gave CA TV the
exclusive right to sell the equipment. CATV sued Arguss for breach of contract,
claiming that Arguss failed to pay the commission on the sales.
*
This order is not binding precedent, except under the doctrines of law of
the case, res judicata, and collateral estoppel. The court generally disfavors the
citation of orders; nevertheless, an order may be cited under the terms and
conditions of 10th Cir. R. 36.3.
The case was tried to a jury, which found in favor of CATV on the primary
breach of contract claim. During trial, the district court resolved three legal
issues against Arguss: (1) a motion for judgment as a matter of law on the claims
in CATV’s favor, (2) a jury instruction on contract formation, and (3) a motion
for a new trial. Arguss appeals these three rulings, but we AFFIRM .
I. Background
Because this appeal comes to us after a jury verdict below, we state the
facts in the light most favorable to the jury’s decision. See, e.g., M acsenti v.
Becker,
237 F.3d 1223, 1242 (10th Cir. 2001); United Phosphorus, Ltd. v.
M idland Fumigant, Inc.,
205 F.3d 1219, 1226 (10th Cir. 2000).
Arguss is a telecommunications contractor. In 1998, Arguss contracted
with a predecessor of AT& T Broadband (“AT& T”) to help with a
telecom munications project A T&T was undertaking near Portland, Oregon. A s
part of this project, Arguss purchased equipment, using funds advanced by
AT& T. By August 2000, however, AT& T decided to discontinue the project, so
A rguss no longer needed a large quantity of unused equipment. Because A T& T
had advanced the funds to purchase the equipment in the first place, Arguss
wanted AT& T to take back the unused equipment. AT& T, on the other hand,
wanted Arguss to sell it.
In the past, AT& T had used a company called CATV Services to resell
equipment from prior projects and suggested Arguss hire CATV to sell the unused
-2-
equipment here. CATV was a telecommunications equipment broker. For years it
had been hired by telecommunications contractors to resell used and new
telecommunications equipment. CATV’s customary practice was to work with
the owner of the goods to prepare an inventory that would “define[] the
equipment that [CATV would] have a right to sell on an exclusive basis.” R. at
749–50. This inventory was important because it would be the basis of CATV’s
commission. CATV would then prepare the goods for sale, ship them to
purchasers, collect the proceeds, and then remit 60% to the client within thirty
days, keeping a 40% commission. CATV typically operated on an exclusive
basis, wherein it, not the equipment owner, would sell the goods.
Based on AT& T’s recommendation, Arguss decided to explore the
possibility of working with CATV. The key players in the contract negotiations
were Richard Richmond, president of CATV; Steve Burrows, Vice President of
Arguss; and Randy Pierce, president of a construction company ow ned by Arguss.
Contract negotiations began in February 2001 and continued through April.
At the outset of negotiations, Richmond explained to Burrows how C ATV
typically operated. Arguss raised several concerns, which were resolved during
the negotiation process. Primarily, Arguss was concerned with the commission
and the time for payment. Because Arguss’s equipment was all new, CA TV
agreed to sell it at a 30% commission rather than its standard 40% . Also, CA TV
agreed to remit the balance w ithin fifteen, rather than thirty, days.
-3-
Another big concern for Arguss was the term of performance. Arguss was
paying thousands of dollars per month to rent space in Portland to warehouse the
equipment. When Pierce and Burrows asked how quickly CATV could liquidate
the goods, Richmond assured them it would probably take thirty to forty-five
days. In the event that liquidation extended beyond that period, Richmond
promised to ship the unsold equipment to his warehouse in Florida, where he
would continue trying to sell the equipment. At trial, Burrows testified that this
was his understanding as well— CATV “would take [any equipment that was not
sold in the 30 to 45 days] into [its] warehouse and sell it from there.” R. at 619.
As negotiations proceeded, the parties began to prepare for performance.
On M arch 4, 2001, CATV employee Ross Hunter traveled to the Portland
warehouse to assess the equipment CATV could end up selling. A month later, on
April 4 or 5, Richmond advised Arguss he would send an inventory team to
Portland the following M onday, April 9. Pierce testified that he would not have
allowed workers on site if a deal had not been struck, and Burrows testified at one
point that CATV and Arguss had reached a verbal agreement by this time.
Richmond, however, testified that he sent the inventory team because he was
confident that they would reach an agreement, although the terms had not yet
been finalized. Burrows himself testified that as of April 4, they “had a verbal
agreement where we were trying to go with this,” but “the deal wasn’t completed
by any stretch of the imagination at this point.” R. at 573.
-4-
On April 9 or 10, Richmond, Burrows, and Pierce finalized the agreement
during a three-way telephone conversation. By that time, both parties agreed that
a deal had been reached. However, one thing remained— Richmond told them he
would send a one-page document, putting in writing the final terms of the deal.
Pierce and Burrows said this was not a problem.
Richmond emailed the document to both Burrows and Pierce on April 11.
Although Burrows acknowledged that he received the email, he did not “really
recall” seeing the attached document. R. at 578. He claimed he probably did not
pay much attention to it because it was prepared for Pierce’s signature. Pierce
acknowledged that he saw the email on his computer screen and knew it was from
Richmond but insisted that he never opened the email, despite the fact that he
knew Richmond would be sending a one-page document reflecting their
agreement.
Later that day Richmond called Pierce to discuss the project. In that
conversation, he told Pierce he “needed to execute the document and have it
returned.” R. at 764. Pierce responded, “I’ve looked it over. I don’t have any
problem. I’ll get it signed and get it back to you.” R. at 764. Richmond
testified, “O nce M r. Pierce said he was going to sign and return the document, it
was a done deal for me,” even though he would never receive a signed copy of the
contract. R. at 765.
-5-
The document attached to the email was entitled simply “Brokerage Sales
Agreement.” Richmond testified that this contract used the same boilerplate
language as in all CATV contracts. Unlike CATV’s other contracts, however, this
document had been modified to include a 70-30 split of any proceeds (rather than
the ususal 60-40 split), which would be remitted within fifteen days (rather than
the usual thirty days). The contract further stated that the agreement was to run
from April 15, 2001, through October 15, 2001. M ost critical to this lawsuit, the
contract included an “Exclusivity” clause, which stated: “CATV Services, Inc.,
for the term of this agreement has the exclusive right to market the materials
defined as ‘included’ in [the inventory spreadsheet].” R. at 1480 (emphasis
added).
A. M ediaCom Sale
From the outset, however, the course of performance was troubled. The
first problem involved a sale of fiberoptic cable to a company called M ediaCom.
In M ay 2001, Richmond went to New York to sell fiberoptic cable. Eager to
make a sale, Richmond called Burrows to make sure they would be able to ship
the goods. Based on Burrows’s affirmative reply, Richmond completed the sale.
Subsequently, Burrows told Richmond that CATV was entitled only to the
difference betw een the selling price of the cable and Arguss’s purchase price. A t
the time, cable had been in demand and was selling for 130–150% of its original
-6-
value, so if CATV sold it at that rate, it could remit 100% of the original value to
Arguss and still take its standard commission.
Unfortunately, before Arguss made this demand, Richmond had already
agreed to sell the cable for less than the premium price. Because he had already
promised the cable to M ediaC om, Richmond was forced to ship the equipment to
protect his credibility, and to do this, he had to promise to pay Arguss full value,
rather than its usual 70% .
B. CableC om Sale
Another transaction that caused problems was a sale that Arguss negotiated
with a company called CableCom. Arguss had been negotiating this sale before
hiring CATV to resell the equipment, although the sale w as not completed until
M ay 8, 2001. By the time the sale was completed, however, CATV had
possession of the warehouse and equipment, so it inventoried, packaged, and
marked the goods but did not pay freight. In this case, CableCom paid Arguss
directly, and A rguss did not pay any commission to CATV.
C. AT& T Sale
For several months, CATV continued to liquidate the goods, but by August,
over 70% of the equipment remained at the warehouse. During this period,
Arguss had continued negotiations with A T& T, which finally agreed to purchase
the remaining equipment from Arguss. To facilitate the sale, Arguss needed
information from CATV about the status of the Portland warehouse and the
-7-
equipment because CATV had control of the warehouse. Richmond said he was
“running around in circles” to get the information Arguss needed to make the
sale, and he told Arguss that he would claim a commission on any sale to AT& T.
R. at 941.
On August 28, Richmond informed Arguss that the equipment was ready
for shipment to AT& T and that CATV was awaiting shipping instructions.
However, a few days later, Arguss evicted CATV from the Portland warehouse,
so CATV was unable to ship the equipment to AT& T. Arguss completed the sale
to A T& T but refused to give any commission to CATV.
*****
Based on these dealings, CATV sued A rguss for breach of contract. Arguss
raised several counterclaims, and the case was tried to a jury. Arguss requested
various instructions on contract formation, which the court refused to give. In the
end, the jury concluded that Arguss did not owe commission on the CableCom
sale, but it did owe commission on the M ediaC om and AT& T sales. After trial,
Arguss moved for judgment as a matter of law and for a new trial. Both motions
were denied, and this appeal followed.
II. Analysis
Arguss raises three arguments on appeal. First, it claims it was entitled to
judgment as a matter of law. Second, it claims the district court erred by refusing
to give requested jury instructions regarding contract formation. Finally, it claims
-8-
that evidence of jury confusion entitled it to a new trial. W e reject each claim in
turn.
A. Judgm ent as a M atter of Law
1. Standard of Review
W e review de novo a motion for judgment as a matter of law, applying the
same standard as the district court, and drawing all reasonable inferences in favor
of the nonmoving party. M iller v. Auto. Club of N.M ., Inc.,
420 F.3d 1098, 1131
(10th Cir. 2005). “Judgment as a matter of law is only appropriate w hen ‘a party
has been fully heard on an issue and there is no legally sufficient evidentiary
basis for a reasonable jury to find for that party on that issue.’”
Id. (quoting Fed.
R. Civ. P. 50(a)(1)). “Thus, a court may grant the motion only if the evidence
points but one way and is susceptible to no reasonable inferences which may
support the opposing party’s position.”
Id. (citations and internal quotation marks
omitted). Put otherwise, we ask, “Is there evidence in the record upon which the
jury could have properly relied in returning a verdict for the nonmoving party?”
Klein v. Grynberg,
44 F.3d 1497, 1506 (10th Cir. 1995). “A verdict is proper
only if supported by more than a scintilla of evidence.”
Id.
2. Contract Formation
At the heart of this case is the question of contract formation. W hen did
the parties reach an agreement, and what were the terms of that agreement?
Arguss insists that the parties’ failure to agree on three material terms (necessity
-9-
of a written contract, term of performance, and exclusivity) precluded the
formation of a contract as a matter of law. To the extent the parties reached an
agreement, Arguss claims they did so verbally, prior to April 11, when Richmond
sent Pierce the Brokerage Sales Agreement. Because the question of timing is
necessary to a discussion of the other issues, we begin there.
The evidence to establish the precise moment of contract formation was
hotly disputed by the parties. For example, at one point Burrows testified that
they had reached a verbal agreement on April 4 or 5, when Richmond said he was
sending a team over to the warehouse. At another point, however, he testified
that by April 4, the parties “had a verbal agreement where we were trying to go
with this,” but “the deal wasn’t completed by any stretch of the imagination at
this point.” R. at 573.
In any event, the evidence supports a conclusion that the parties did not
reach a final agreement until Pierce accepted the terms Richmond sent him on
April 11. It was undisputed that a day or two earlier, Richmond had informed
Pierce and Burrows that a one-page, written agreement would follow. This
agreement did follow, in the form of the Brokerage Sales Agreement sent via
email on April 11. Both knew the document was coming, both admitted seeing
the email, but both denied having paid any attention to the contract.
That same day, Richmond told Pierce that they “needed to execute the
document and have it returned.” R. at 764. Pierce responded, “I’ve looked it
-10-
over. I don’t have any problem. I’ll get it signed and get it back to you.” R. at
764. Richmond testified, “O nce M r. Pierce said he w as going to sign and return
the document, it was a done deal for me,” even though he would never receive a
signed copy of the contract. R. at 765. Although these facts are not undisputed, a
jury could have relied on this evidence to conclude that the parties finally reached
an agreement at that time.
This view of the record obviates Arguss’s claim that the parties could not
be bound by a writing that follow ed an earlier, verbal agreement because, as a
matter of fact, the agreement was not entered until the terms in the draft
agreement were accepted. It also eliminates the need to consider how the draft
agreem ent might have served as an offer to modify the contract. Under this view ,
there was no agreement until Pierce and Richmond agreed over the phone that the
terms in the Brokerage Sales Agreement were acceptable.
3. Necessity of a Signed, Written Agreement
Arguss challenges this view on legal grounds, arguing that the undisputed
facts of formation were so deficient that a binding agreement was never reached.
In the first of these formation arguments, Arguss claims a verbal agreement was
insufficient to bind the parties because Richmond manifested an intention not to
be bound until a written document was executed. See, e.g., Club Eden Roc, Inc.
v. Tripmasters, Inc.,
471 So. 2d 1322, 1324 (Fla. Dist. Ct. App. 1985) (“W here
the parties intend that there will be no binding contract until the negotiations are
-11-
reduced to a formal writing, there is no contract until that time.”); Am. Web Press,
Inc. v. Harris Corp.,
596 F. Supp. 1089, 1092 (D. Colo. 1983) (holding that where
one party evidenced its intention to be bound only upon execution of a formal
writing, a signed document was a condition precedent to contract formation).
W e need not address the significance of Arguss’s authority because the
argument fails on factual grounds. The only evidence Arguss cites to support its
claim is Richmond’s statement to Pierce that, “regarding the contract, we need to
get that signed and get it back to me.” R. at 881. This statement, however, does
not express intent to be bound only by a written agreement. To the contrary,
Richmond testified that he believed the parties had made a verbal deal to work
together. M oreover, as noted above, the jury could have relied on Richm ond’s
testimony that “[o]nce M r. Pierce said he was going to sign and return the
document, it was a done deal for me.” R. at 765. The jury could have concluded
the signature was a mere formality in the shadow of an oral agreement to be
bound by the terms in the document.
Perhaps the most important evidence of the parties’ intent is the fact that
both parties began performing on the contract in the absence of a written
agreement. The fact that Richmond began performing based on an oral promise
rather than waiting for a signed document would allow a jury to conclude it was
not necessary to reduce the agreement to writing. Accordingly, a reasonable jury
-12-
could have properly found that neither party intended to be bound only by a
signed writing.
4. Term of Performance
Arguss’s remaining arguments dealing with contract formation rest on the
principle that “[w]hen there is no mutual assent to a material term of a contract,
rescission is the proper remedy.” Brush Creek Airport, L.L.C. v. Avion Park,
L.L.C.,
57 P.3d 738, 745 (Colo. App. 2002) (citing Bejmuk v. Russell,
734 P.2d
122 (Colo. App. 1986)). Specifically, Arguss argues that the term of performance
and exclusivity were material terms for which there was no meeting of the minds
and, therefore, no contract. However, the record contains sufficient evidence
upon which a reasonable jury could have found a meeting of the minds on these
points. W e first address the term of performance.
The record is undisputed that Pierce and Burrows wanted the goods to be
liquidated within thirty days and that Richmond emphatically stated his belief that
they could liquidate the goods within thirty to forty-five days. Notwithstanding
Arguss’s initial preference, a jury could have found that through the course of
negotiations, the parties agreed to a longer term. M ost importantly, the Brokerage
Sales Agreement made clear that the contract was for six months. Regardless of
any preference for a shorter term, Pierce’s assent to the terms of the agreement
included assent to the six-month term.
-13-
Additionally, the jury heard Burrows and Pierce testify that the liquidation
could take longer than thirty days. Specifically, Burrows told the jury that any
equipment that “w asn’t sold in the 30 to 45 days” w ould be taken to CATV’s
warehouse and sold from there. R. at 619. It would be natural for the jury to
conclude that the marketing relationship w ould continue until the goods were
liquidated, but if any goods remained past thirty days, Richmond w ould be
responsible for marketing them from his Florida warehouse. 1
Based on these facts, a jury could reasonably conclude that the parties
agreed to a six-month term.
5. Agreement as to Exclusivity
Arguss further claims there was no binding agreement because the parties
did not reach a meeting of the minds as to exclusivity. In support of this
argument, Arguss cites cases such as Iraola & CIA., S.A. v. Kimberly-Clark
Corp.,
325 F.3d 1274 (11th Cir. 2003), which held at summary judgment that an
exclusivity clause was void for lack of a meeting of the minds where plaintiff
witnesses testified inconsistently as to what discussions had transpired, and
defense witnesses testified they would not have entered into the exclusivity clause
at issue. Arguss emphasizes that the clause here was never discussed, and
1
Although the liquidation was not completed within this time frame, the
record reflects that the parties agreed it was not economical to ship the unsold
equipment to Florida, so the parties agreed to keep the equipment in the Portland
warehouse, and CATV would pay half the rent.
-14-
Burrows and Pierce both testified they never agreed to such a clause and would
never have done so.
The jury, however, was not obligated to accept this testimony, and other
record evidence supports a contrary view. Richmond testified CATV had
exclusive rights to sell the goods. Pierce accepted the terms of the draft
agreement, which gave CATV “the exclusive right to market the materials
defined” in the joint inventory. R. at 764, 1480. In contrast to Iraola, a jury
could rely on this fact to conclude that Pierce and Burrows overstated their
position and that Pierce did, in fact, accept the exclusivity provision. Indeed, the
jury likely disbelieved Pierce’s testimony that he never opened the email
containing the Brokerage Sales Agreement, especially when he knew a draft
agreement was forthcoming. Under this view of the evidence, the jury would
have concluded Arguss entered the agreement knowing an exclusivity clause was
in place. It may be that the clause was ambiguous, as discussed below, but on
this record, a jury could properly conclude that the parties agreed to be bound by
this language.
Other aspects of the agreement, which are not in dispute, also support this
view. First, for example, the agreement states: “The proceeds received from the
sales of excess equipment will be divided on a Seventy/Thirty percent basis”
without regard to who consummated the sale. R. at 1480. The contract also made
clear that CATV “will be solely responsible for any testing and/or repair costs
-15-
deemed necessary by the Broker” and “will absorb all costs relating to the
shipment and sale of all materials.”
Id. This clause does not distinguish between
goods sold by Arguss and goods sold by CATV. If CATV was to be liable for all
costs associated with the sales, it is reasonable to conclude it was entitled to all
commissions associated w ith the sales. 2
Second, the record supports a view that Arguss knew about the exclusivity
requirement before the Brokerage Sales Agreement was sent. Several aspects of
the trial testimony emphasized that this was an exclusive process. All witnesses
agreed that the verified inventory was critical because it specified the scope of
what CATV could sell for a commission. Other w itnesses w ho had worked with
CATV in the past confirmed that in their prior dealings, only CATV would sell
the equipment on that inventory. It was undisputed that from the outset,
Richmond explained the process to Burrows, and Burrows himself testified that
he was familiar with the usual process. From this evidence, a jury could properly
conclude that Arguss knew enough about the process to realize that CA TV
expected to sell the goods on an exclusive basis.
2
Indeed, the costs of marketing the equipment w ere not insignificant.
Richmond explained that marketing was a costly, involved process. CATV would
purchase magazine advertisements and create an interactive CD that could be
distributed to potential customers. Richm ond testified, “I obviously wouldn’t
produce something of this nature with the expense incurred by my corporation
had I believed the material could have simply been removed from my ability to
sell it.” R. at 861.
-16-
Finally, the course of conduct suggested a mutual understanding that
CATV’s right to sell was exclusive of Arguss. For one thing, Arguss forwarded
to CA TV the only inquiry it received. 3 During the course of performance, CA TV
had sole access to the warehouse and the inventory. Arguss could not have
performed any sale it made without going through CATV. Indeed, in the final
moments of the relationship, Arguss relied on CATV to provide it information
about the goods to facilitate the sale back to AT& T.
In light of the Brokerage Sales Agreement, the evidence that Arguss knew
how CATV operated, and the course of performance on the contract, a jury could
properly conclude that Arguss understood the agreement gave CA TV an exclusive
right to sell the equipment.
6. Exclusivity and Ambiguity
In addition to these questions challenging contract formation, Arguss raises
two issues that go to contract interpretation. It first argues that if the exclusivity
provision applies, it should have been construed against the drafter, CATV,
because it was ambiguous. Under this reading, the provision would mean that
A rguss could not hire other brokers, not that Arguss itself could not sell its own
goods. W hile Arguss is right as a matter of contract interpretation, the
3
Only one purchaser contacted Arguss about purchasing equipment, and it
was undisputed at trial that Arguss directed this buyer to CATV to handle the
sale.
-17-
significance of the provision was an issue of fact that was properly resolved by
the jury.
The fact that the contract was ambiguous does not mean we must accept
Arguss’s interpretation. It is true that ambiguities should be resolved against the
drafter. Holiday Hom es of St. John, Inc. v. Lockhart,
678 F.2d 1176, 1186 (3d
Cir. 1982); see also Nicholas v. Bursley,
119 So. 2d 722, 728 (Fla. Dist. Ct. App.
1960) (“[I]t is a general rule that a contract will be construed against the party
who drew it or chose the language and any ambiguity will be construed strongly
against the party making use of such language.”). But from this legal principle it
does not follow as a matter of law that the term cannot mean what the drafter says
it means: “the interpretation of the terms of a particular contract is, being a matter
of fact, primarily within the province of the district court.” Holiday
Homes, 678
F.2d at 1183. W e have likewise stated, “once a contract is determined to be
ambiguous, the meaning of its terms is generally an issue of fact to be determined
in the same manner as other disputed factual issues.” Anderson v. Eby,
998 F.2d
858, 865 (10th Cir. 1993) (applying Colorado law).
Here, the jury heard testimony that would allow it to find that the parties
understood Arguss would not have the right to sell the equipment on the joint
inventory. The same evidence that supports a meeting of the minds on this issue
supports a finding that both parties understood that this provision gave CA TV an
exclusive right to sell the equipment, even to the exclusion of Arguss itself.
-18-
7. Applicability of Contract to Sale of Fiberoptic Cable
Arguss’s final breach of contract claim regards the sale of fiberoptic cable
to M ediaCom. Arguss claims this cable was different from the other items CA TV
was selling, so CATV owed 100% of the value of the cable, rather than the usual
70% . Because there was no contractual basis for distinguishing cable from the
rest of the inventory, a reasonable jury could properly conclude that CATV was
entitled to a 30% commission.
Arguss claims it informed CATV during the course of negotiations that
since fiberoptic cable w as selling for a premium, CATV was required to remit
100% of the cable’s value. Around that time, cable was selling for rates as high
as 130–150% of its value. At these rates, CATV should have been able to remit
100% of the value and still receive its usual commission.
The problem w ith Arguss’s logic is that it is not supported by the
Brokerage Sales Agreement, which specified that all proceeds w ould be split
70/30. Arguss’s claim would bear out only if fiberoptic cable was not part of the
verified inventory, a point Arguss has never maintained. To the contrary, Arguss
admits the cable was stored at the same w arehouse where CATV had exclusive
control. Nothing in the record distinguishes fiberoptic cable from any other
goods in the inventory.
Arguss also maintains that Richmond knew before he sold the cable that it
was different from the rest of the inventory. Richmond squarely rejected this
-19-
view, testifying that he learned about Arguss’s demands only after he had already
promised to sell the cable to M ediaCom at the going rate. He testified that he
only acquiesced to Arguss’s demand to remit 100% of the value because he had
already promised the cable to M ediaC om at a certain price and had to maintain
the business relationship. Richmond w ent forward with the deal, not because he
agreed to the terms, but because he had already committed to M ediaC om and his
reputation was on the line.
On this record, a reasonable jury could find that CATV acquiesced to remit
the full value of the cable only because it believed it had no other choice,
although it was not contractually obligated to do so.
*****
For these reasons, we conclude the district court did not err in denying
Arguss’s motion for judgment as a matter of law. A reasonable jury could have
concluded there was no meeting of the minds until Pierce told Richmond the
Brokerage Sales Agreement was acceptable. Such agreement would encompass
acceptance of all the document’s terms, including exclusivity and term of
performance, and could begin without a signed writing. Because nothing in the
document distinguished fiberoptic cable from other goods, proceeds from the sale
to M ediaCom should have been distributed at the contract rate. Accordingly, w e
affirm.
B. Jury Instructions
-20-
Arguss next claims the district court erroneously refused to instruct the jury
on contract formation principles by denying four of its requested instructions. W e
find the instructions as a whole to be adequate and affirm on this issue.
W e review the failure to tender a proposed jury instruction for abuse of
discretion, and review de novo “whether the instructions as a whole adequately
apprised the jury of the issues and the governing law.” United States v. Wolny,
133 F.3d 758, 765 (10th Cir. 1998). “Even if the district court erred, we will
affirm as long as the error is harmless in the context of the trial as a whole.”
World Wide Ass’n of Specialty Programs v. Pure, Inc.,
450 F.3d 1132, 1139 (10th
Cir. 2006). “The error is harmless when the erroneous instruction could not have
changed the result of the case.” Lusby v. T.G.&Y. Stores, Inc.,
796 F.2d 1307,
1310 (10th Cir. 1986).
Here, the district court refused to give Arguss’s Proposed Instructions
17–20. These instructions would have taught the jury about offer, acceptance,
consideration, and mutual agreement to specified terms. For the most part, this
information was not particularly technical and comported with the common usage
of these notions. Proposed Instruction 17 would have instructed jurors that
“[e]ach party to the contract must have understood and agreed to the essential
terms of the claimed contract.” R. at 104. Proposed Instruction 20 would have
told the jury, “W hen parties to a contract attach different meanings to a material
-21-
term of the contract, no meeting of the minds has occurred, and there is no valid
contract.” R. at 107.
Instead, the district court gave the following guidance in Instruction 12:
In order for the plaintiff to establish its claim of breach of contract, it
has the burden of proving the following essential elements by a
preponderance of the evidence:
1. The defendant entered into a contract with the plaintiff to sell
equipment owned by the defendant in Portland, Oregon, and this
contract (1) gave the plaintiff the exclusive right to sell the
equipment, (2) provided for a division of sale proceeds 70
percent to the defendant and 30 percent to the plaintiff in all
cases, regardless of who sold the equipment, and (3) required the
plaintiff to pay the costs of performing an inventory and
shipping;
2. The defendant failed to honor the contract terms set forth
above; and
3. The plaintiff substantially performed its part of the contract
or the plaintiff was excused from performance.
R. at 170.
It may be that the court did not walk the jurors through contract formation
step by step. However, the specific findings required by Instruction 12 ensured
that the jury would find the necessary offer, acceptance, and consideration.
Arguss, moreover, did not object to Instruction 2, which told the jury an
“agreement” had been reached, and that Arguss “asserts that the parties entered
into an oral agreement that did not contain the terms that the plaintiff claims.”
Instruction 13 also told the jury that it could look at the course of conduct
between the parties in determining the meaning of the contract.
-22-
Arguss argues that the parties failed to agree on three material terms:
(1) necessity of a writing, (2) term of performance, and (3) exclusivity. We
disagree. For example, Instruction 12 adequately apprised the jury of the need to
find an agreement (or meeting of the minds) on the key terms of the contract, and
the trial testimony exhaustively debated these points. The jury resolved the
debate over the contract terms in favor of CATV. W hile perhaps additional
instructions could have been helpful, we look to the instructions “as a whole,” and
as long as the instruction “adequately states the law, the refusal to give a
particular instruction is not an abuse of discretion.” M cKenzie v. Benton,
388
F.3d 1342, 1348 (10th Cir. 2004).
It is true that Instruction 12 does not specifically require the jury to find a
meeting of the minds on whether the contract had to be reduced to a signed
writing, or how long CATV had to perform. But any omission in this regard is
harmless because an adverse finding on these issues was inherent in an adverse
finding on exclusivity. The primary evidence that would support a finding of
exclusivity was the Brokerage Sales Agreement. Thus, a finding of exclusivity
entails a finding that the parties agreed to the terms of the draft agreement, which
includes a finding of a six-month term and an intent to be bound in the absence of
a signed w riting. In this way, any error was harmless.
C. M otion for a New Trial
Arguss’s final argument is that the district court erred in denying its motion
for a new trial. In general, such a ruling is discretionary and should only be
-23-
reversed where “the trial court made a clear error of judgment or exceeded the
bounds of permissible choice in the circumstances.” Weese v. Schukman,
98 F.3d
542, 549 (10th Cir. 1996). However, where a jury verdict “is inconsistent,
indicating either confusion or abuse on the jury’s part, a motion for a new trial is
not discretionary and a new trial must be granted.” Global Van Lines, Inc. v.
Nebeker,
541 F.2d 865, 868 (10th Cir. 1976). Similarly, a new trial is appropriate
where “it is patent from the instructions that the jury’s award disregards the
court’s clear direction.” Chicago, R. I. & P. R. Co. v. Speth,
404 F.2d 291, 295
n.4 (8th Cir. 1968).
Arguss makes three points that it claims require a new trial. First, it claims
the verdict was inconsistent. On the one hand, the jury found in favor of CA TV
on the AT& T sale (which entailed a finding of exclusivity) and ruled in favor of
Arguss on the CableCom sale (which presumably entailed a finding of non-
exclusivity).
But this is not the only reasonable view of the facts. The negotiations of
this arrangement occurred before the agreement was formed. The record also
establishes that CATV was obligated to pay for shipping in order to receive the
comm ission, and it was undisputed at trial that CATV did not pay for shipping on
the CableCom sale. This fact could have been a basis for the jury to find that
CATV was not obligated to pay commission on the CableCom transaction.
In response to this analysis, Arguss points out that failure to pay shipping
costs does not resolve the inconsistency because CATV did not pay shipping costs
-24-
on the AT& T sale either. However, prior to that sale, Arguss had forced CA TV
out of the warehouse, preventing it from performing under the contract, which by
its terms continued through October 15, 2001. On these facts, we cannot find that
the verdict w as so inconsistent as to require the district court to exercise its
discretion to grant a new trial.
Second, Arguss claims that jury polling made clear the jury was confused.
W hen the jury was polled, one juror asked, “Yes or no. One word?” R. at 1214.
The court told him he had to choose, and the juror said, “Yes.”
Id. Arguss argues
that this colloquy demonstrates the juror’s reservation about the jury verdict.
However, if the juror had reservations at some point, we can only assume he
resolved them before affirming the verdict to the court.
Finally, Arguss claims the jury ignored Instruction 13 4 and the “undisputed
and unimpeached testimony . . . that CATV and Arguss did not in any way
discuss the exclusivity clause at issue, and that Arguss never agreed to that clause
and, indeed, would not have agreed to that clause.” Aplt. Br. at 55. W e have
4
This instruction reads as follow s:
The statements or conduct of the parties before any dispute arose
between them is an indication of w hat the parties intended at the time
that the contract was formed. To determine what the parties intended
the terms of the contract to mean, you may also consider the parties’
negotiations of the contract, any earlier dealings between the parties,
any reasonable expectations the parties may have had because of the
promises or conduct of the other party, and any other facts and
circumstances that existed at the time that the contract was formed.
R. at 199.
-25-
already explained how the jury could have viewed the testimony regarding the
negotiations and contract formation consistent with its verdict. Because none of
these reasons required the district court to grant the motion for a new trial, we
cannot say the district court abused its discretion in denying the motion.
III. Conclusion
For these reasons, we AFFIRM .
Entered for the Court.
Timothy M . Tymkovich
Circuit Judge
-26-