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7th Circuit upholds jury award reduction

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The 7th Circuit Court of Appeals affirmed a District Court's grant of a motion for judgment as a matter of law on a breach of contract claim, finding a previously granted jury award of damages was based on speculation.

In John Wasson v. Peabody Coal Co., No. 07-2758, John Wasson appealed the decision by the U.S. District Court, Southern District of Indiana, New Albany Division, which overturned a $350,000 verdict in his favor following a bifurcated jury trial in a breach of contract suit with Peabody Coal Co. Wasson claimed the company underpaid royalties he was entitled to for coal mined on his property.

The District Court granted Peabody's motion for judgment as a matter of law and reduced the jury's award to less than $1,000. Wasson appealed, arguing the District Court erred in denying his motion for a continuance prior to trial, in barring his expert witness from testifying, and the court shouldn't have set aside the jury award for damages because there was ample evidence for the jury to find in his favor.

But the 7th Circuit disagreed with Wasson's arguments, finding him partly to blame for wanting more time to review requested records from Peabody. His interrogatories were very broad in scope, which may have expanded his original inquiries, wrote Judge Diane Wood. Wasson had ample time to review the documents to determine whether additional discovery was necessary before expiration of the discovery deadline, but he didn't act on the matter, wrote the judge.

Wasson's expert witness was his accountant, and his report claimed the coal price Peabody paid to Wasson was too low; however the accountant used data from a Federal Energy Regulatory Commission report, which he had never used before. The accountant even admitted he was unaware of how to use the data of the report. The accountant's opinion wasn't based on sufficient facts or data, nor was it a product of reliable principles or methods as is required by Fed. R. Evid. 702, wrote Judge Wood

The District Court was correct in ruling the jury's award of damages to Wasson must be set aside because they were based on nothing but speculation, wrote the judge. Review of a trial exhibit Wasson claimed supported his award was nothing but his scratch-paperwork guessing what his damages would be. The reduction of the award to $965.62 was the actual amount Peabody admitted to owing Wasson.

"The district court held that it could 'identify no reasonable basis in the evidence for the jury's $350,000 damage award to Mr. Wasson.' Neither can we," wrote Judge Wood.

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