CORBIS CORPORATION v. STONE
Court of Appeals of Washington, Division One.
Filed: March 26, 2012.
Corbis moves pursuant to CR 50 to reduce the damage award to $1 million; alternatively, Corbis moves for a new trial under CR 59, unless InfoFlows consents to remit the verdict to $1 million. Essentially, Corbis relies on section 13(c) of the Development Agreement that sets forth how InfoFlows would be paid in the event Corbis terminated the contract without cause.
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The difficulty with Corbis' CR 50 argument is that it was not made prior to instructing the jury — indeed, its $1 million theory was never argued; Corbis did not except to the jury instructions on this basis; Corbis actually proposed "benefit of the bargain" fraud damage instructions, and proposed a verdict form with separate lines for contract and fraud damages.
We respectfully disagree with the trial court on this issue. As is described above, Corbis did, in fact, raise these concerns before the jury was instructed. Not only that, but InfoFlows indicated it understood Corbis' concerns, and suggested that the trial court handle any discrepancy after the jury verdict:
Mr. Quackenbush: I delivered this — deliverables that you should have accepted them, and pay me what I was owed. In other words, I should have gotten the benefit of the bargain. There were also — it also seems to me like what we're setting up here is a potential for double recovery, because you can't have both. You can't have the damages for accepting the contract and performing under it and then say, well, but I wouldn't have accepted the contract, and I would have had other contracts or I would have had better business deals, et cetera. Those two are mutually exclusive. It seems like what we're setting up here is potential for double recovery. I don't see how you could avoid that.
If you say the value of business opportunities lost, right What if the jury says, yes, Corbis breached the contract, and InfoFlows is owed a million dollars. Then there is no business opportunity lost. The business opportunity is realized, right?
The Court: Right.
1. Although InfoFlows now argues it "never claimed" it should be awarded damages for "lost profits", or for lost opportunities, counsel did argue during closing that the jury could award damages for lost business opportunities on the inducement claim.
2. Corbis' argument that damages award for fraudulent misrepresentation is inconsistent with the award for fraudulent inducement is also well taken. The instructions permitted the jury to award InfoFlows damages for fraudulent inducement to compensate InfoFlows other business opportunities it would have had had it not entered into the Development Agreement with Corbis. But the jury also awarded InfoFlows damages for the value of the company had Corbis and InfoFlows coordinated on patent applications, including patents for the Jazz Service. The award for misrepresentation "admits" the existence of Jim Mitchell's promise to work together on patents, while the award for fraudulent inducement "denies" the existence of the promise, given Stone testified he would not have entered into an agreement with Corbis had he known about the secret patent. See Batcheller, 9 Wn.2d at 404. Thus, these two awards are also "inconsistent" and amount to a double recovery. Melby, 13 Wn. App. at 749.
3. Stone's deposition testimony regarding InfoFlows' damages for its lost business opportunities was read to the jury as follows:
Q: I asked you a question a line four, `Have any of the misrepresentations you told me, told me about this afternoon, caused money damages to InfoFlows?"
There's an objection by Mr. Willey.
And you say, `If I — had I known that Corbis had filed a patent, I would have terminated the relationship. I would have gone a different direction. Instead of a relationship with Corbis funding the jazz service, I would have probably gone the investment route. I would have developed or InfoFlows would have developed a company. In that fashion it's hard to project where we'll be two and a half years later, this being mid 2008, us terminating the relationship in early 2006.
"`So I believe we would be materially further ahead. Where on that plan we would be right now, it's hard for me to gauge'"
I say, `All right [sic], can you quantify this, where the difference between where you are now and where you would have been if you'd never entered into the development agreement in money and dollars?' There's another objection.
You say, `I haven't done that analysis yet. I could probably quantify it, but I don't have a number right now.'
I ask you, `How would you go about it?'
`I would need to think about how I would go about it, so I don't want to know right off — I don't know right off the top of my head.'
`So had you not continued the relationship with Corbis, you think you would have been funded by one of the venture groups that you visited with?'
Answer: `I believe so, yes.'
`Which one?' There's another objection.
`It's unknown to me which one, I don't know.'"
4. See Response Brief at 47 (citing Ali v. Fastners for Retail, Inc., 544 F.Supp.2d 1064 (E.D. CA 2008).