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Landmark Infrastructure Hldg v. R.E.D. Investments, LLC, 18-2186 (2019)

Court: Court of Appeals for the Eighth Circuit Number: 18-2186 Visitors: 18
Filed: Aug. 09, 2019
Latest Update: Mar. 03, 2020
Summary: United States Court of Appeals For the Eighth Circuit _ No. 18-2186 _ Landmark Infrastructure Holding Company, LLC lllllllllllllllllllllPlaintiff - Appellee v. R.E.D. Investments, LLC; Bobby Van Stavern lllllllllllllllllllllDefendants - Appellants _ Appeal from United States District Court for the Western District of Missouri - Jefferson City _ Submitted: April 15, 2019 Filed: August 9, 2019 _ Before SMITH, Chief Judge, ARNOLD and KELLY, Circuit Judges. _ ARNOLD, Circuit Judge. This case involve
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                 United States Court of Appeals
                            For the Eighth Circuit
                        ___________________________

                                No. 18-2186
                        ___________________________

                Landmark Infrastructure Holding Company, LLC

                        lllllllllllllllllllllPlaintiff - Appellee

                                           v.

                  R.E.D. Investments, LLC; Bobby Van Stavern

                     lllllllllllllllllllllDefendants - Appellants
                                      ____________

                     Appeal from United States District Court
               for the Western District of Missouri - Jefferson City
                                 ____________

                            Submitted: April 15, 2019
                              Filed: August 9, 2019
                                  ____________

Before SMITH, Chief Judge, ARNOLD and KELLY, Circuit Judges.
                              ____________

ARNOLD, Circuit Judge.

      This case involves a billboard deal gone bad. Lamar Advertising maintained
and operated a billboard on land that it leased from R.E.D. Investments, LLC, and
Lamar paid R.E.D. $70,000 annually in rent (though that number was set to increase
over the life of the lease) plus a percentage of the revenue that the billboard
generated. Lamar had the right to terminate the lease at any time.
       About nine months into this arrangement, Landmark Infrastructure Holding
Company, LLC, contacted Bobby Van Stavern, who represented R.E.D. in its
business dealings, about purchasing R.E.D.'s interest in the lease. R.E.D. and
Landmark eventually executed an agreement under which Landmark agreed to pay
R.E.D. just over $900,000 in exchange for, among other things, the right to receive
rent from Lamar. In that agreement, Van Stavern, as R.E.D.'s "manager," represented
that Lamar had not requested to have the rent lowered and that R.E.D. had no "notice
of any fact, condition or circumstance" suggesting that Lamar might do so. But about
a month after R.E.D. and Landmark executed the agreement, Lamar informed
Landmark that it wanted to reduce the rent. Landmark and Lamar eventually entered
into a new lease containing a ten-year term with annual rental payments of $30,000
for the first five years and $36,000 for the five years after that, plus the same
percentage of the revenue as in the original lease.

       Because it came to believe that Van Stavern's representations had been false,
Landmark sued R.E.D. for breach of contract and sued R.E.D. and Van Stavern for
fraudulent and negligent misrepresentation. The case proceeded to trial, and a jury
found in Landmark's favor on its breach-of-contract and negligent-misrepresentation
claims, awarding $156,000 and $381,234.11 in damages, respectively. R.E.D. and
Van Stavern moved for a new trial, or in the alternative, a remittitur or merger of the
damages awards on the ground that they were duplicative, but the district court1
denied the motion. The district court also awarded Landmark approximately $200,000
in attorneys' fees.

       On appeal, R.E.D. and Van Stavern raise three primary issues. They say, first,
that the district court erred by excluding testimony from their proposed expert
witness. We review this evidentiary ruling "for clear and prejudicial abuse of


      1
      The Honorable Nanette K. Laughrey, United States District Judge for the
Western District of Missouri.

                                         -2-
discretion." See Am. Auto Ins. Co. v. Omega Flex, Inc., 
783 F.3d 720
, 722 (8th Cir.
2015). The appellants identified an expert who, as relevant, would opine that
Landmark had mistakenly thought that the billboard required government permits for
operation—a mistake that put Landmark at a significant disadvantage when
negotiating with Lamar over a new lease because Landmark felt obliged to negotiate
with Lamar (whom Landmark believed held the permits) rather than shop the market
for another tenant who would pay a higher rent. R.E.D. and Van Stavern contend that
this opinion was important because it related to the value of Landmark's billboard
interest (and thus affected the damages calculation) and, relatedly, substantiated their
defense that Landmark had failed to mitigate its damages, which Missouri law
requires of those who suffer from a breach of contract. See Hertz Corp. v. RAKS
Hosp., Inc., 
196 S.W.3d 536
, 548 (Mo. Ct. App. 2006).

       In excluding this evidence, the district court held essentially that the expert's
opinions were not relevant because they were premised on facts that were not in the
record. See Lawrey v. Good Samaritan Hosp., 
751 F.3d 947
, 952–53 (8th Cir. 2014).
The expert's opinions here stemmed from his understanding that the billboard did not
require permits, but as the district court explained, the record did not support that
understanding. As the court noted, "whether a third party could erect a billboard at
the site is a legal question as to which there was no legal expert testimony or other
legal evidence," and none of the witnesses identified "has a legal understanding
sufficient to make their testimony reliable and useful to the jury." At trial, R.E.D. and
Van Stavern sought to cure this defect by making two offers of proof from witnesses
who testified that the billboard did not require permits. Believing that the lack of
evidentiary foundation was cured, R.E.D. and Van Stavern again requested that its
expert be allowed to testify. The district court declined, explaining essentially that the
gambit had come too late.

       R.E.D. and Van Stavern maintain on appeal that the district court abused its
discretion by not allowing the expert's testimony even after their offers of proof had

                                           -3-
undergirded his proffered opinion. We disagree. "Decisions concerning the admission
of expert testimony lie within the broad discretion of the trial court." See Neb.
Plastics, Inc. v. Holland Colors Ams., Inc., 
408 F.3d 410
, 415 (8th Cir. 2005). A court
acts within that broad discretion in excluding expert testimony when the basis of that
testimony, and thus its reliability and helpfulness to the jury, is not made clear in a
timely fashion. See Trost v. Trek Bicycle Corp., 
162 F.3d 1004
, 1008–09 (8th Cir.
1998). District court scheduling orders commonly feature deadlines for expert
disclosures, reports, and Daubert challenges. R.E.D. and Van Stavern have not
offered a substantial justification for their delay; they had ample time during years of
discovery to ensure that their expert's opinions had the necessary factual support. On
this record, affirmance would not result in "fundamental unfairness." See Wegener v.
Johnson, 
527 F.3d 687
, 690 (8th Cir. 2008).

       The second primary contention that R.E.D. and Van Stavern advance on appeal
is that the district court erred by denying their request to merge the two damages
awards into a single one. They maintain that the jury awarded Landmark duplicative
damages for the same injury. The district court began its consideration of this issue
by deciding that federal law was applicable, and thus that there was a presumption
that the damages awarded were not duplicative. See Matrix Grp. Ltd. v. Rawlings
Sporting Goods Co., 
477 F.3d 583
, 592 (8th Cir. 2007). R.E.D. and Van Stavern
contend that the court should have applied Missouri law instead.

       Even if, as appellants insist, Missouri law applies, all we have here is a false
conflict since there is no discernable difference between federal and Missouri law on
this matter. R.E.D. and Van Stavern take issue with presuming that damages awards
are not duplicative, which federal law requires, but Missouri law functionally requires
the same kind of deference to jury verdicts. Under that law, "verdicts should be
construed to give them effect if it can reasonably be done," and "the jury's intent is
to be arrived at by regarding the verdict liberally." See Morse v. Johnson, 
594 S.W.2d 610
, 616 (Mo. banc 1980). So in Missouri, courts are obligated to make every

                                          -4-
reasonable effort to reconcile a jury's verdicts before setting them aside, a rule that
does not differ materially from the federal rule we followed in Matrix.

        Turning to the merits, R.E.D. and Van Stavern insist that the awards should be
merged because they remedy the same injury. We first observe that, though not
dispositive, the fact that the jury awarded different amounts on each claim suggests
that the jury did not intend to duplicate the award. Cf. Sellers v. Mineta, 
350 F.3d 706
,
714 (8th Cir. 2003). More important, a careful examination of the verdicts does not
bear out the appellants' contention. After Landmark bought its interest in the
billboard, but before it had received word that Lamar might seek to reduce the rent,
it sold its interest to a private equity fund owned in part and managed by Landmark's
parent company for $1,246,177.55. Once it came to light that Lamar wanted to reduce
the rent, the parties to the sale rescinded it, and after Lamar and Landmark agreed on
the new lease with the lower rent, Landmark resold its interest for $521,124.00. So
the difference in value between what Landmark thought it would receive and what
it actually received was $725,053.55, which is the total amount Landmark asked the
jury to award. But the total damages that the jury awarded were much less. The jury's
aggregate award is well within the bounds of the evidence presented at trial, which
is consistent with the jury having "rationally allocate[d] damages between the two
different causes of action, one for breach of contract, and one for tort." See 
Matrix, 477 F.3d at 592
. And, for the reasons that follow, that may very well be what the jury
did here.

        The jury awarded Landmark $381,234.11 on its negligent-misrepresentation
claim. This amount corresponds (to the penny) to Landmark's out-of-pocket loss, that
is, the difference between what Landmark bought the interest for and what Landmark
sold it for. As it happens, this is the proper measure for rescission damages in an
action for negligent misrepresentation, see Frame v. Boatmen's Bank of Concord Vill.,
824 S.W.2d 491
, 495–97 (Mo. Ct. App. 1992), though the jury was not explicitly told
that. But the main point is that the jury's precision makes it clear that it had focused

                                          -5-
on very specific evidence in fixing the damages for negligent misrepresentation. That
fact alone makes it unlikely that the award for breach of contract is duplicative.

       The jury awarded Landmark a round $156,000.00 on its contract claim.
Landmark had hoped to recover another $343,819.44 for the lost benefit of its bargain
with R.E.D. and Van Stavern, which Missouri law recognizes as the proper measure
of damages in a breach-of-contract action, see Dierkes v. Blue Cross & Blue Shield
of Mo., 
991 S.W.2d 662
, 669 (Mo. banc 1999), though the jury was not explicitly told
that. As the district court pointed out, there may have been good reason for the jury
to award less than Landmark requested since its "lost profits were valued solely on
the basis of transactions with an affiliated entity" without "external validation."

      All this makes for a reasonable explanation of what the jury did, but to uphold
the awards it is not necessary for us to conclude that the jury actually took this path.
The only issue here is whether there is some reasonable possibility that the jury's
awards were not duplicative. In other words, because of the deference we owe to the
verdicts, we cannot set the awards aside unless there is a necessary inference, not
merely a permissible one, that they were duplicative. Because there is no showing
here that the jury's awards necessarily overlapped or were duplicative, we reject
R.E.D. and Van Stavern's contention along with the related one that they are entitled
to a remittitur. To the extent they argue that the jury acted out of passion and
prejudice, we reject that argument as well because there is no evidence that it did.

        For their final point, R.E.D. and Van Stavern maintain that the district court
abused its discretion by awarding Landmark $207,704.74 in attorneys' fees. They
believe that the district court erroneously concluded that the contract between the
parties allowed the recovery of attorneys' fees in this instance. Of course, if a contract
provides for the payment of attorneys' fees incurred in enforcing an agreement, the
trial court must award those fees, DocMagic, Inc. v. Mortg. P'ship of Am., L.L.C., 
729 F.3d 808
, 812 (8th Cir. 2013), and the contract here specifically provides that the

                                           -6-
prevailing party is entitled to attorneys' fees "[i]n any action or proceeding brought
to enforce" the agreement. Appellants suggest that this action sounded essentially in
tort, not in contract, and thus fees are not recoverable. But the case was tried on both
a tort and contract theory, the jury awarded damages for breach of contract, and the
court entered judgment on that award. So it is evident that Landmark is entitled to
fees attributable to the prosecution of its contract claim. Perhaps the appellants mean
to say that the suit against them was not brought to enforce the agreement since
Landmark sought damages and not specific performance. But a suit for damages for
breach of contract, no less than a suit for specific performance, is a suit brought to
enforce a contract; in each, a court gives legal force to the parties' agreement against
a party in breach. We observe that at least one Missouri court has recognized this
logic and has awarded fees in actions for damages based on a contract with language
materially identical to the language at issue here. See Evans v. Werle, 
31 S.W.3d 489
,
491, 493 (Mo. Ct. App. 2000).

       R.E.D. and Van Stavern correctly point out that if Landmark is entitled to fees,
it can recover only for work done in furthering the contract claim. But R.E.D. and
Van Stavern do not identify any specific charges in the attorneys' billing records that
the district court should have disallowed, despite plenty of opportunity (and prodding
by the district court and Landmark) to do so. Further, we have explained that "[w]hen
a plaintiff has prevailed on some claims but not on others, the plaintiff may be
compensated for time spent on unsuccessful claims that were related to his successful
claims" as, for instance, when they "involve a common core of facts or are based on
related legal theories." See Emery v. Hunt, 
272 F.3d 1042
, 1046 (8th Cir. 2001). The
claims here were virtually inseparable, all of them being based on the same
misrepresentations. There is no abuse of discretion here.

      Affirmed.
                        ______________________________



                                          -7-

Source:  CourtListener

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