X

Thank you for sharing!

Your article was successfully shared with the contacts you provided.
Click here for the full text of this decision FACTS: After a trial in which the jury found for the plaintiff-appellee, DIJO Inc. and awarded it $8 million in damages, the defendants-appellants appeal. DIJO Inc. is a two-person company formed by Jo Bursley, a mortgage broker involved with developing hotel properties, and Jay Turner, a veteran developer of large, complex commercial real estate ventures. The defendants are Grand Casinos Inc., two subsidiaries, BL Development Corp. and BL Resorts I L.L.C., Hilton Hotels Corp. and Park Place Entertainment. Early in June, 1998, Grand’s subsidiary, BLR, granted a 49 year ground lease to DIJO covering land near Grand’s casino in Tunica, Mississippi. DIJO leased the property from BLR for the purpose of developing and constructing a Comfort Suites Hotel whose guests would primarily be Grand’s casino patrons. The lease provided that DIJO would pay rent based primarily on the hotel’s gross receipts. Less than one month after the lease was executed, Grand and Hilton announced that, effective Dec. 31, 1998, Grand’s non-Indian gaming interests and Hilton’s gaming interests would be contributed to a newly-formed corporate entity, Park Place, which would be owned by Grand and Hilton. This transaction was the product of confidential discussions between the companies which had commenced as early as fall 1997. Even so, Hilton did not learn of the lease until after the Park Place formation was announced. Shortly after that announcement, putative executives of the soon to-be-formed Park Place began reviewing Grand’s capital expenditures and decided that they were not interested in having DIJO’s hotel on the property. As a result, Grand offered to purchase DIJO’s interest in the lease. In initiating buyout negotiations with DIJO, Grand professed to be “ready, willing and able to proceed” with the deal, but nevertheless advised DIJO that the Project was no longer in Park Place’s “best interest.” Consequently, Grand wanted to reach an agreement with DIJO to cancel the lease and asked DIJO for a buyout figure. While discussions of the potential buyout were proceeding, the Project was placed on “hold.” After DIJO submitted an offer to sell its interest in the Lease for $1.15 million, however, Grand apparently reversed course, informing DIJO that proceeding with the Project as originally planned would be in Grand’s best interest. Grand advised DIJO that Grand would “issue an amendment to the lease to allow for the additional time to commence construction” as a consequence of the delay caused by the intervening buyout discussions. According to DIJO, though, irreparable damage had already been done. DIJO notified Grand that Grand’s conduct “cast a cloud over the project making it unsalvageable.” DIJO asserted further that Grand’s “adverse positions” constituted a breach of the Lease, jeopardizing the Project and causing DIJO substantial damage. The parties’ subsequent negotiations failed, and this litigation followed. The district court entered judgment on the basis of the jury’s verdict, and the defendants timely filed their notice of appeal. HOLDING: Affirm the judgment on the jury’s finding of liability but remand for a new trial on the issue of damages. The court finds that, even if the evidence supporting liability was thin, it certainly was not so lacking as to entitle the defendants to judgment as a matter of law. The court is loath to overturn a jury’s determination when, as here, a contract claim is submitted to the jury under a theory requiring the fact-finder to examine the totality of the circumstances surrounding a defendant’s actions. The defendants first argue that they were entitled to a Rule 50 judgment on the tortious interference claim. The defendants misconstrue the meaning of “malice,” which, in this context, is simply “the intentional doing of a harmful act without justification or excuse.” MacKenzie v. Chrysler Corp., 607 F.2d 1162 (5th Cir. 1979). The Mississippi Supreme Court has clarified that “[m]aliciousness does not necessarily mean actual malice or ill will, but the intentional doing of a wrongful act without legal or social justification.” Cranford v. Shelton, 378 So.2d 652 (Miss. 1980). Thus, the district court’s holding that Hilton’s actions were reckless as a matter of law can support DIJO’s tortious interference claim. The defendants’ second appellate point concerning the tortious interference claim is that, because it was impossible for Hilton to interfere with its own contract, “[a]llowing the jury to consider both instructions violates basic principles of law and constituted reversible error.” The jury instructions were clear that DIJO’s tortious interference claim was only against Hilton and that DIJO’s breach of contract claim was only against the other defendants. The defendants raise several issues on appeal regarding the jury’s $8 million damages award. The court holds that the trial court erroneously admitted opinion testimony from Kerry Skinner, one of DIJO’s lay witnesses on lost future profits; and that, because the court finds that Skinner’s improperly admitted testimony affected the defendants’ substantial rights, the jury’s damage award cannot stand. Federal Rule of Evidence 701 was amended in 2000 to prohibit lay witnesses from offering opinions based on “scientific technical or other specialized knowledge within the scope of Rule 702.” This court has previously recognized that “the amendment did not place any restrictions on the preamendment practice of allowing business owners or officers to testify based on particularized knowledge derived from their position.” Nevertheless, it has always been the rule that lay opinion testimony may be elicited only if it is based on the witness’s first-hand knowledge or observations. This foundational requirement helps to eliminate the risk that a party will circumvent the reliability requirements set forth in Federal Rule of Evidence 702 by adducing expert testimony in lay witnesses’ clothing. Based on his own admissions on the stand, Skinner simply did not have the requisite first-hand, personal knowledge about DIJO and the Project necessary to qualify as a Rule 701 opinion witness. OPINION: Wiener, C.J.

Want to continue reading?
Become a Free ALM Digital Reader.

Benefits of a Digital Membership:

  • Free access to 3 articles* every 30 days
  • Access to the entire ALM network of websites
  • Unlimited access to the ALM suite of newsletters
  • Build custom alerts on any search topic of your choosing
  • Search by a wide range of topics

*May exclude premium content
Already have an account?

 
 

ALM Legal Publication Newsletters

Sign Up Today and Never Miss Another Story.

As part of your digital membership, you can sign up for an unlimited number of a wide range of complimentary newsletters. Visit your My Account page to make your selections. Get the timely legal news and critical analysis you cannot afford to miss. Tailored just for you. In your inbox. Every day.

Copyright © 2020 ALM Media Properties, LLC. All Rights Reserved.