Landmark Infrastructure Holding Company, LLC Plaintiff - Appellee
R.E.D. Investments, LLC; Bobby Van Stavern Defendants - Appellants
Submitted: April 15, 2019
from United States District Court for the Western District of
Missouri - Jefferson City
SMITH, Chief Judge, ARNOLD and KELLY, Circuit Judges.
ARNOLD, CIRCUIT JUDGE.
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.
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.
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 courtdenied the motion. The
district court also awarded Landmark approximately $200, 000
in attorneys' fees.
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
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).
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.
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 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).
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.
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 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.
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.
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 on very ...