VICKI MILES-LaGRANGE, Chief Judge.
Before the Court is defendants Star Fuel of Oklahoma, LLC, Lincoln O. Clifton, and David A. Selph's ("Moving Defendants") Renewed Motion for Judgment as a Matter of Law, filed November 16, 2012. On December 28, 2012, plaintiff filed its response, and on January 4, 2013, Moving Defendants filed their reply.
This case was tried to a jury from October 9, 2012 through October 29, 2012. After deliberation, the jury returned a verdict in favor of plaintiff and against defendant Star Fuel of Oklahoma, LLC ("Star Fuel") on plaintiff's claims for breach of implied contract
"Judgment as a matter of law is warranted only if the evidence points but one way and is susceptible to no reasonable inferences supporting the party opposing the motion. We do not weigh the evidence, pass on the credibility of the witnesses, or substitute our conclusions for that of the jury. However, we must enter judgment as a matter of law in favor of the moving party if there is no legally sufficient evidentiary basis with respect to a claim or defense under the controlling law." Mason v. Okla. Tpk. Auth., 115 F.3d 1442, 1450 (10th Cir.1997) (internal quotations and citations omitted). In considering a motion for judgment as a matter of law, the court should construe the evidence
Moving Defendants contend that the judgment entered for plaintiff on its breach of implied contract claim is barred by the statute of frauds. Specifically, Moving Defendants assert that the judgment on plaintiff's breach of implied contract claim is based solely upon an alleged implied agreement to purchase 840,000 gallons of unleaded gasoline for $2.8 million and that the damages awarded on plaintiff's implied contract claim related solely to Star Fuel's refusal to purchase 840,000 gallons for the alleged contract price of $3.35 per gallon.
In response, plaintiff contends that the statute of frauds does not bar judgment in its favor on its breach of implied contract claim. Specifically, plaintiff asserts that the implied risk-sharing agreement is not within the statute of frauds and, in any event, Moving Defendants are equitably estopped from relying on the statute of frauds to avoid liability for the losses caused by Star Fuel's wrongful acts.
Whether the statute of frauds bars certain of plaintiff's claims is not a new issue in this case. This Court previously granted summary judgment to Star Fuel on Musket's breach of contract claim based upon an unsigned Fuel Purchase Agreement, finding that the Fuel Purchase Agreement violated the statute of frauds and finding that based upon its terms, the Fuel Purchase Agreement never became an enforceable contract. See September 12, 2011 Order [docket no. 51]. Clifton and Selph also individually moved for summary judgment as to plaintiff's breach of implied contract claim, relying in part on the statute of frauds and this Court's prior ruling. In response, plaintiff contended that its breach of implied contract claim was not premised on Star Fuel's breach of the express obligation to purchase the 840,000 gallons of fuel pursuant to the unsigned gasoline contract but rather arose from Star Fuel's actual or implied agreement to share in the profits and losses on certain fuel transactions. In ruling on Clifton and Selph's motion for summary judgment, the Court found:
August 21, 2012, 2012 WL 3595048 Order [docket no. 175] at 10.
As set forth above, the Court, prior to and during trial, made a clear distinction between an implied agreement to share in the profits or losses on certain fuel transactions and an implied agreement to purchase 840,000 gallons of fuel. Additionally, plaintiff repeatedly relied upon this distinction in making its arguments as to why judgment should not be granted against it on its breach of implied contract claim, repeatedly emphasizing that its breach of implied contract claim arises from Star Fuel's implied agreement to share in the profits and losses on certain fuel transactions.
However, during the trial of this matter, plaintiff did not solely rely upon this implied agreement to share in the profits and losses on certain fuel transactions and did not seek damages from Star Fuel for its half of the losses it incurred on the 840,000 gallons of fuel, but instead relied upon and sought damages based upon Star Fuel's agreement to purchase the 840,000 gallons on a fixed-forward basis under the "second option" of the risk-sharing agreement. Specifically, plaintiff described the implied risk-sharing agreement as follows:
Plaintiff's Response to Defendants Lincoln Clifton and David Selph's Motion for Summary Judgment [docket no. 150] at 4, ¶ 8 (citing, in part, to the April 4, 2008 email from Luitwieler). Additionally, plaintiff's expert testified at trial that the measure of damages for plaintiff's breach of implied contract claim based on the 840,000 gallons of fuel was $1,631,700 based upon the "contract price" of $3.35 a gallon minus the amount of money plaintiff made when the fuel was disposed of on November 5, 2008 at about $1.41 a gallon. See testimony of David Payne at p. 47, lines 1-5, attached as Exhibit 5 to Plaintiff's Response and Objection to Defendants' Renewed Motion for Judgment as a Matter of Law.
While the first option of the alleged risk-sharing agreement likely does not violate the statute of frauds, the Court finds that the second option of the alleged risk-sharing agreement — the option upon which plaintiff relied in relation to the 840,000 gallons of fuel and the option upon which the jury's damage award is based — does violate the statute of frauds. Oklahoma's statute of frauds addressing the sale of goods provides:
Okla. Stat. tit. 12A, § 2-201(1). Additionally, under Oklahoma law, "an implied contract... is no less within the statute of frauds than is an express contract...." GFF Corp. v. Assoc. Wholesale Grocers, Inc., 130 F.3d 1381, 1387 (10th Cir.1997).
The implied contract that resulted from Star Fuel's election of the second option of the risk-sharing agreement in relation to the 840,000 gallons of fuel clearly is an implied contract for the sale of goods (fuel) for the price of five hundred dollars or more ($2,805,600). It is also undisputed that there is no signed writing evidencing the implied contract. Accordingly, the Court finds that the implied contract for the purchase of 840,000 gallons of fuel, as developed during the trial of this matter, violates the statute of frauds. The Court, therefore, finds that unless Star Fuel is estopped from asserting the statute of frauds, it is entitled to judgment as a matter of law as to plaintiff's breach of implied contract claim.
Plaintiff contends that regardless of whether the implied risk-sharing agreement would otherwise fall within the statute of frauds, Moving Defendants are equitably estopped from relying on the statute of frauds in this case. "Under Oklahoma law, a defendant must make false representations or conceal facts before he will be estopped from asserting the statute of frauds as a defense to an oral agreement,...." Gibson v. Arnold, 288 F.3d 1242, 1245 (10th Cir.2002). The essential elements of equitable estoppel are:
Sellers v. Sellers, 428 P.2d 230, 240 (Okla. 1967) (internal quotations and citation omitted). "The representation or concealment... may arise from silence of a party under imperative duty to speak; and the intention that the representation or concealment be acted upon may be inferred from circumstances." Lacy v. Wozencraft, 188 Okla. 19, 105 P.2d 781, 783 (1940).
"A party who relies on estoppel must plead and prove the facts to establish the same." Sellers, 428 P.2d at 240. Additionally, under Oklahoma law, whether equitable estoppel applies is a mixed question of law and fact. See Southerland v. Granite State Ins. Co., 12 Fed.Appx. 712, 714 (10th Cir.2001). Finally,
St. Louis Trading Co. v. Barr, 168 Okla. 184, 32 P.2d 293, 295-96 (1934) (internal quotations and citations omitted).
Plaintiff alleges that it has presented ample evidence of all of the elements necessary to support estoppel by silence and affirmative misrepresentation/concealment. Specifically, plaintiff contends that while Star Fuel was enjoying all of the benefits of sharing the profits from numerous purchases and sales of millions of gallons of fuel, Star Fuel never contacted plaintiff to correct any misunderstanding and clearly communicate its position that it did not intend to share in potential losses. Additionally, plaintiff contends that Star Fuel never advised plaintiff that it did not believe the "August Fixed Price Gasoline Contract dated August 4, 2008" referenced in the Settlement Agreement existed and that it had no intention of performing that agreement if it did exist. Plaintiff further contends that Star Fuel made numerous affirmative statements of intent to perform that induced plaintiff to continue to hold the 840,000 gallons of fuel for Star Fuel's benefit while the market prices continued to decline. Finally, plaintiff contends that by finding in favor of plaintiff on the elements of fraud and constructive fraud, the jury necessarily found all of the elements required for equitable estoppel.
Moving Defendants contend that the doctrine of equitable estoppel has no application to this case. First, Moving Defendants contend that plaintiff's alleged injury was not "unjust or unconscionable." Specifically, Moving Defendants contend that Star Fuel's perceived failure to keep its oral promise in the circumstances of this case cannot be said to rise to a level of unconscionability warranting the application of equitable estoppel. Further, Moving Defendants contend that the fact this Court removed the issue of punitive damages from the jury's consideration evidences the Court's belief that there was insufficient evidence of malicious conduct by the Moving Defendants. Finally, Moving Defendants contend the jury's verdict on plaintiff's fraud claims was for only $11,000 each, reflecting the jury's sentiment that plaintiff's contractual damages were unrelated to its fraud allegations.
Having carefully reviewed the parties' submissions, and having heard the evidence presented during the trial of this case, the Court finds that the doctrine of equitable estoppel does not apply to the circumstances involved in this case. Specifically, the Court finds that equitable estoppel is an extraordinary remedy and
Accordingly, the Court finds that the implied contract for the purchase of 840,000 gallons of fuel, as developed during the trial of this matter, violates the statute of frauds and that Star Fuel is entitled to judgment as a matter of law as to plaintiff's breach of implied contract claim. Additionally, because Clifton and Selph's liability is based upon Star Fuel's liability as to plaintiff's breach of implied contract claim, the Court also finds that Clifton and Selph are entitled to judgment as a matter of law on the guaranty claims against them.
Star Fuel contends that there was no evidence of misappropriation of trade secrets or unfair competition and that it is entitled to judgment as a matter of law as to these claims.
"To prove misappropriation of a trade secret, [a plaintiff] must show (i) the existence of a trade secret, (ii) misappropriation of the secret by defendants, and (iii) use of the secret to [the plaintiff's] detriment." MTG Guarnieri Mfg., Inc. v. Clouatre, 239 P.3d 202, 209 (Okla.Civ.App. 2010). Star Fuel contends that plaintiff failed to adequately establish the information at issue constitutes trade secrets, presented no evidence that Star Fuel misappropriated them, and failed to establish that Star Fuel used the trade secrets to plaintiff's detriment. Viewing the evidence and inferences in the light most favorable to plaintiff, the Court finds there is a legally sufficient evidentiary basis to support the jury's finding in favor of plaintiff on its misappropriation of trade secrets claim against Star Fuel. Specifically, the Court finds that there is a legally sufficient evidentiary basis for finding the existence of a trade secret, that Star Fuel misappropriated the trade secret(s), and that Star Fuel used the trade secret(s) to plaintiff's detriment. The Court would note that in its oral Rule 50(a) motion, Star Fuel specifically conceded that plaintiff raised an issue of fact as to the existence of a trade secret. See Unofficial Excerpts of October 29, 2012 hearing at p. 8, lines 5-8, attached as Exhibit 7 to Plaintiff's Response and Objection to Defendants' Renewed Motion for Judgment as a Matter of Law. Additionally, the Court finds that there is a legally sufficient evidentiary basis for the jury's damages award. Accordingly, the Court finds that judgment as a matter of law should not be granted in favor of Star Fuel on plaintiff's misappropriation of trade secrets claim.
Star Fuel also contends that plaintiff presented no evidence of unfair competition. Specifically, Star Fuel contends that plaintiff did not present sufficient evidence that plaintiff and Star Fuel were competitors and that plaintiff did not show that Star Fuel used any of its trade secrets or that plaintiff lost any customers as a result of the use of its trade secrets. Viewing the evidence and inferences in the light most favorable to plaintiff, the Court finds there is a legally sufficient evidentiary basis to support the jury's finding in favor of plaintiff on its unfair competition claim against Star Fuel. Specifically, the
Star Fuel further contends that the jury's verdict is irreconcilably inconsistent and that it is entitled to a new trial on plaintiff's misappropriation of trade secrets and unfair competition claims. Specifically, the jury found in favor of Luitwieler on plaintiff's misappropriation of trade secrets and unfair competition claims but found against Star Fuel on plaintiff's misappropriation of trade secrets and unfair competition claims, despite the fact that these claims were premised solely on the actions of Luitwieler. In response, plaintiff asserts that its misappropriation of trade secrets and unfair competition claims were not based solely on the actions of Luitwieler. Plaintiff further asserts that Star Fuel waived its challenge to the jury verdict by failing to raise it before the jury was discharged.
Resolution Trust Corp. v. Stone, 998 F.2d 1534, 1545 (10th Cir.1993) (internal citations omitted).
In the case at bar, the verdicts rendered by the jury are clearly general verdicts rather than special verdicts; the verdict form simply provided for the jury to find in favor of a specific party and then, if applicable, award an amount of damages. It is also undisputed that Star Fuel did not object to the jury's verdict on the ground of inconsistency before the jury was discharged. The Court, therefore, must determine whether the verdict is inconsistent on its face such that the entry of judgment upon the verdict is plain error.
Having carefully reviewed the parties' submissions, as well as the evidence presented at the trial, the Court finds that the verdict is not inconsistent on its face and that Star Fuel waived its challenge to the jury verdicts on plaintiff's misappropriation of trade secrets and unfair competition claims by failing to raise said objection before the jury was discharged. While a large portion of plaintiff's claims for misappropriation of trade secrets and unfair competition relied on the actions of Luitwieler, plaintiff did present some evidence from which a jury could infer trade secret use by other Star Fuel employees. Thus, it is entirely possible that the jury could have concluded that Luitwieler was not personally liable for trade secret misappropriation and unfair competition but that he did engage in a wrongful act or acts attributable to Star Fuel such that these acts, in conjunction with other acts of other Star Fuel employees, rendered Star Fuel liable for trade secret misappropriation and unfair competition. The Court, therefore, finds that the jury's verdict is not inconsistent on its face. Accordingly, the Court finds that Star Fuel is not entitled to a new trial as
Star Fuel contends that it is entitled to judgment as a matter of law as to plaintiff's fraud claims. Specifically, Star Fuel contends that it is entitled to judgment as a matter of law because plaintiff's fraud claims are based upon Star Fuel's refusal to purchase the 840,000 gallons of fuel and Star Fuel cannot be held liable for fraud for refusing to perform an agreement, express or implied, that is unenforceable under the statute of frauds. Star Fuel also contends that plaintiff failed to show any actionable misrepresentation by Star Fuel during the parties' relationship. Star Fuel further contends that there was no evidence of constructive fraud. Finally, Star Fuel contends that plaintiff's reliance on Luitwieler's statements concerning the 840,000 gallons of fuel was unjustified and unreasonable.
Having carefully reviewed the parties' submissions and the evidence at trial, and viewing the evidence and inferences in the light most favorable to plaintiff, the Court finds Star Fuel is not entitled to judgment as a matter of law as to plaintiff's fraud claims. First, the Court finds that plaintiff's fraud claims are not based upon either the unsigned Fuel Purchase Agreement or the implied agreement based upon the second option of the risk-sharing agreement — agreements that this Court has found violate the statute of frauds — but are based upon Star Fuel's misrepresentations regarding its intent to share in profits and losses under the parties' risk-sharing agreement and Star Fuel's false representations on and after September 12, 2008, concerning its intent to purchase and take possession of the 840,000 gallons of fuel, which induced plaintiff to continue to hold the fuel. The fact that plaintiff's fraud claims are not based upon the agreement which served as the basis for plaintiff's breach of implied contract claim, and which this Court has found violates the statute of frauds, is shown by the damages awarded by the jury — the jury awarded plaintiff $1,631,700 in damages in relation to its breach of implied contract claim and awarded $11,130 in damages in relation to each of plaintiff's fraud claims. The Court further finds that plaintiff presented legally sufficient evidence to support a finding that Star Fuel made false material misrepresentations, that there is a legally sufficient evidentiary basis for finding Star Fuel committed constructive fraud, and that plaintiff presented legally sufficient evidence to support a finding that plaintiff's reliance was justified and reasonable. Accordingly, the Court finds that Star Fuel is not entitled to judgment as a matter of law as to plaintiff's fraud claims.
For the reasons set forth above, the Court GRANTS IN PART and DENIES IN PART Moving Defendants' Renewed Motion for Judgment as a Matter of Law [docket no. 334] as follows: