Opinion
Editorial Note:
This opinion appears in the Federal reporter in a table titled "Table of Decisions Without Reported Opinions". (See FI CTA9 Rule 36-3 regarding use of unpublished opinions)
Argued and Submitted Aug. 12, 1998.
Appeal from the United States District Court for the District of Arizona, Stephen M. McNamee, District Judge, Presiding.
Before BRUNETTI, TASHIMA, and GRABER, Circuit Judges.
This disposition is not appropriate for publication and may not be cited to or by the courts of this circuit except as provided by Ninth Circuit Rule 36-3.
Wollmann Engineering, Inc. ("WEI"), brought this action against Mactronix, Inc., alleging that Mactronix had breached their contract for the purchase of WEI's assets and liabilities. Mactronix appeals from the judgment of the district court for $1,106,202, following a jury trial, in favor of WEI. WEI cross-appeals from the district court's reduction of the jury's damages award by $114,000. We affirm on the appeal and on the cross-appeal.
FACTUAL AND PROCEDURAL HISTORY
This case is before the court for the second time. In Wollmann Eng'g, Inc. v. Mactronix, Inc., 46 F.3d 1149, 1995 WL 11141 (9th Cir.1995) (unpublished disposition) (Wollmann I ), we set out the relevant facts. We then held that the district court had erred by granting summary judgment to Mactronix. 1995 WL 11141, at *4.
On remand, the jury found Mactronix liable for breach of contract and awarded damages to WEI, totaling $1,220,202. Of that sum, $1,106,202 compensated WEI for (1) the unpaid base purchase price, (2) the liabilities that WEI had paid during its liquidation, and (3) the net operating losses that WEI had suffered as a result of the breach. The district court also awarded prejudgment interest on the base purchase price.
A fourth component of the jury's award, totaling $114,000, represented the jury's estimate of the percentage of gross sales that WEI would have received had Mactronix performed its side of the bargain. After hearing post-trial motions, the district court vacated that portion of the jury's award, on the ground that it was based on speculation and was not supported by the evidence.
MACTRONIX'S APPEAL
A. Personal jurisdiction
Mactronix first contends that, because it did not have the requisite "minimum contacts" with the forum state, Arizona, the district court improperly exercised personal jurisdiction over it. We review de novo the denial of a motion to dismiss for lack of personal jurisdiction where, as here, the underlying facts are undisputed. See Roth v. Marquez, 942 F.2d 617, 619 (9th Cir.1991) (stating that standard of review).
Following Supreme Court precedents, this court uses a three-part test for determining whether contacts with a forum state are sufficient to enable that state to exercise jurisdiction over a nonresident defendant: "(1) the nonresident defendant must have purposefully availed himself of the privilege of conducting activities in the forum by some affirmative act or conduct; (2) plaintiff's claim must arise out of or result from the defendant's forum-related activities; and (3) exercise of jurisdiction must be reasonable." Id. at 620-21 (emphasis added).
Arizona's long-arm statute is coextensive with federal due process requirements. Ariz. Rule of Civ. P. 4.2(a) (1998). Therefore, "the jurisdictional inquiries under state law and federal due process merge into one analysis." Roth, 942 F.2d at 620.
As to the first part of the test, Mactronix's contract negotiations with WEI in Arizona, as well as the terms of the contract itself for the purchase of an Arizona business, supplied the requisite contacts with the forum state for the district court to exercise personal jurisdiction. This court recently observed that "[c]ontract negotiations are classic examples of the sort of contact that can give rise to in personam jurisdiction." Peterson v. Highland Music, 140 F.3d 1313, 1320 (9th Cir.1998). Second, the "arising out of" requirement is satisfied because, but for the purchase agreement, WEI would not have had any claim against Mactronix. Third, the exercise of jurisdiction was reasonable. See id. (reaching the same conclusion under similar facts). The district court properly exercised jurisdiction over Mactronix.
B. Refusal to amend pretrial order
At trial, Mactronix moved to strike certain testimony or, in the alternative, to amend the pretrial order. Mactronix argues that the district court's denial of that motion was an abuse of discretion. See Byrd v. Guess, 137 F.3d 1126, 1131 (9th Cir.1998) (holding that a refusal to amend a pretrial order is reviewed for an abuse of discretion).
Federal Rule of Civil Procedure 16(e) provides that a pretrial order "shall be modified only to prevent manifest injustice." A review of the trial transcripts shows that the district court did not abuse its discretion in denying Mactronix's Rule 16(e) motion. We therefore conclude that the district court committed no prejudicial error.
C. Batson challenge
During jury selection, WEI used a peremptory strike to exclude a person presumed by both parties to be of Chinese descent. Mactronix's president and primary witness also is of Chinese descent. Mactronix challenged WEI's peremptory strike based on Batson v. Kentucky, 476 U.S. 79, 106 S.Ct. 1712, 90 L.Ed.2d 69 (1986), and Edmonson v. Leesville Concrete Co., 500 U.S. 614, 111 S.Ct. 2077, 114 L.Ed.2d 660 (1991), which extended Batson to civil cases. Mactronix argued that the juror had been excluded impermissibly because of her race. WEI's counsel justified the exclusion on the ground that, because the juror was underemployed relative to her level of education, she could have harbored a bias against Wollmann, who had become a successful business person without having completed college. Counsel noted that he had excluded another potential juror, not of Chinese descent, for the same reason.
Under Batson and its progeny, courts apply a three-step analysis to determine whether a juror has been excluded impermissibly on the basis of race. First, the challenging party must make a prima facie case of discrimination, which requires a showing "that the circumstances surrounding the peremptory strike of the juror raised an inference of purposeful discrimination." Johnson v. Campbell, 92 F.3d 951, 953 (9th Cir.1996). Second, the burden shifts to the striking party to offer a race-neutral explanation for the exclusion. Purkett v. Elem, 514 U.S. 765, 767, 115 S.Ct. 1769, 131 L.Ed.2d 834 (1995) (per curiam). Third, if a race-neutral explanation is offered, the court must determine whether the challenging party has carried its burden of showing purposeful racial discrimination. Id . We accord "substantial deference to the findings of fact underlying a district court's ruling on racial discrimination in jury selection and will overturn [those] findings only to correct clear error." Turner v. Marshall, 121 F.3d 1248, 1250 (9th Cir.1997), cert. denied, 522 U.S. 1153, 118 S.Ct. 1178, 140 L.Ed.2d 186 (1998).
Mactronix contends that the district court's Batson determination was clearly erroneous, because it failed to conduct the final step of the inquiry. We disagree. The district court conducted a proper inquiry. See Turner, 121 F.3d at 1251-52 (noting that comparing jurors is a well-established tool for determining pretext for discrimination).
Mactronix next argues that, even if the trial court properly conducted the Batson inquiry, its acceptance of WEI's race-neutral explanation was clearly erroneous. On this record, we are not persuaded. The Supreme Court has made clear that the proponent of the peremptory strike need not offer a race-neutral explanation "that is persuasive, or even plausible." Purkett, 514 U.S. at 767. Instead, the explanation need only be facially valid. Id. Here, it was.
D. Statute of Frauds defense
Mactronix next asserts that the district court should have entered judgment as a matter of law in favor of Mactronix, based on the Arizona Statute of Frauds, Ariz.Rev.Stat. § 44-101(4). Alternatively, Mactronix contends that the district court committed reversible error by refusing to instruct the jury on that statute and by refusing to grant a new trial based on that alleged error.
We review de novo a district court's denial of a motion for judgment as a matter of law. McClaran v. Plastic Indus., Inc., 97 F.3d 347, 354 (9th Cir.1996). We also review de novo a district court's refusal to give a jury instruction. United States v. Herenandez-Escarsega, 886 F.2d 1560, 1570 (9th Cir.1989). A district court's denial of a motion for new trial is reviewed for an abuse of discretion. Gillette, 979 F.2d at 1346.
To satisfy the Statute of Frauds, "a memorandum must state with reasonable certainty the identity of the parties, the subject matter of the agreement, and the essential terms." Western Chance # 2, Inc. v. KFC Corp., 957 F.2d 1538, 1542 (9th Cir.1992) (applying Arizona state law). "The parties need not intend the writing to be the full and final expression of their agreement; an informal letter setting forth the required information may suffice." Id.
Mactronix claims that the writings underlying the contract to purchase WEI fail to satisfy the Statute of Frauds, as a matter of law, because Wollmann's offer letter failed to set forth two essential terms with reasonable certainty: (1) the time for performance, and (2) a description of the goods to be purchased. That argument, as well as the arguments for a Statute of Frauds jury instruction and new trial, are foreclosed by the law of the case.
For the law-of-the-case doctrine to apply, "the issue in question must have been decided explicitly or by necessary implication in the previous disposition." Disimone v. Browner, 121 F.3d 1262, 1266 (9th Cir.1997) (internal citation and quotation marks omitted) (emphasis added). In Wollmann I, this court made two basic holdings: (1) Wollmann's offer letter contained a sufficient number of essential terms, and (2) those terms were certain enough to form a binding agreement. 1995 WL 11141, at *2-4.
In reaching that conclusion, this court rejected Mactronix's argument that a binding contract had not been formed because the offer letter lacked, among other things, "a date for closing of the sale and purchase" and was ambiguous as to the "assets" and "liabilities" to be received by Mactronix. Id. at *1. Those are the very same "missing" terms that Mactronix now attacks on this second appeal, this time under the rubric of the Statute of Frauds. With respect to the time of performance, this court held that it was not an essential term for purposes of contract formation. Id. at *2-3. Because the Statute of Frauds demands only that the essential terms of an agreement be in writing, Western Chance, 957 F.2d at 1542, that term need not have been in the offer letter. Similarly, with regard to the subject matter of the agreement, this court held that the terms of the offer letter met Arizona's requirement that the contract terms be defined with "reasonable certainty." Wollmann I, 1995 WL 11141, at *2-3. Because the Statute of Frauds likewise requires that terms be described with "reasonable certainty," Western Chance, 957 F.2d at 1542, the agreement's subject matter term, which was in writing, satisfies the Statute of Frauds.
In summary, Mactronix's Statute of Frauds argument is barred by the law of the case. Accordingly, the district court did not err by denying Mactronix's motions that were based on the Statute of Frauds.
E. Factual basis for the jury's damages award
The district court denied Mactronix's motion for a new trial. Mactronix now makes three basic arguments with respect to that motion: (1) The jury's damages award was based on speculation; (2) the award for the full base purchase price was excessive, because it failed to account for the value of the assets that WEI retained and used after the date of breach; and (3) the award compensating WEI for its payment of "mentioned liabilities" was not supported by sufficient evidence. This court reviews a district court's denial of a motion for new trial for an abuse of discretion. Del Monte Dunes at Monterey, Ltd. v. City of Monterey, 95 F.3d 1422, 1434-35 (9th Cir.1996), cert. granted, 523 U.S. 1045, 118 S.Ct. 1359, 140 L.Ed.2d 509 (1998). Substantial deference must be given to a jury's finding of the appropriate amount of damages. Id. at 1434-35. The jury's finding must be upheld "unless the amount is grossly excessive or monstrous, clearly not supported by the evidence, or based only on speculation or guesswork." Id.
The base purchase price was the sum that WEI would have received but for Mactronix's breach. That award required no speculation or guesswork to compute.
The fact that the jury did not deduct from that amount the value of the assets that WEI retained and used was a result of Mactronix's own failure to request such an instruction. That omission cannot be remedied on appeal. See EEOC v. Pape Lift, Inc., 115 F.3d 676, 683 (9th Cir.1997) (holding that the failure to request a jury instruction constitutes waiver on appeal).
Additionally, the jury's award for the liabilities paid by WEI was supported by substantial evidence. That is likewise true of the jury's award for the net operating loss that WEI suffered as a result of Mactronix's breach. We conclude that the district court did not err when it denied Mactronix's motion for a new trial.
F. Prejudgment interest
Under Arizona law, whether a party is entitled to prejudgment interest depends on whether its claim is "liquidated." Schade v. Diethrich, 158 Ariz. 1, 14, 760 P.2d 1050, 1062 (Ariz.1988). "A claim is liquidated if the evidence furnishes data which, if believed, makes it possible to compute the amount with exactness, without reliance upon opinion or discretion." Id. (internal citations and quotation marks omitted). If a claim is liquidated, then prejudgment interest is awarded as a matter of right. Id.
The district court awarded prejudgment interest to WEI based on the base purchase price and made that award retroactive to February 27, 1991, the date on which WEI filed this action. Mactronix asserts that the district court's award was erroneous on two grounds: (1) WEI's claim was not liquidated, because it was not capable of precise calculation; and (2) even if it was liquidated, the district court erred in making the award, because it failed to take into account the fact that the contract called for Wollmann to be paid over seven years. We review a district court's award of prejudgment interest for an abuse of discretion. Hayes v. Palm Seedlings Partners-A (In re Agric. Research and Tech. Group, Inc., 916 F.2d 528, 533 (9th Cir.1990).
The district court did not abuse its discretion here. The contract damages were precisely calculable, without resort to speculation or opinion. Thus, they were liquidated, thereby entitling WEI to prejudgment interest.
Mactronix did not raise the second (timing) issue before the district court. Therefore, we decline to consider it. See Woods v. Saturn Distribution Corp., 78 F.3d 424, 430 (9th Cir.1996) (noting that, as a general rule, the court does not consider issues raised for the first time on appeal).
WEI'S CROSS-APPEAL
The district court's judgment after trial vacated the portion of the jury's award for lost percentage of gross sales, $114,000, on the ground that those damages were speculative and lacked a sufficient evidentiary basis. WEI cross-appeals, contending that there was substantial evidence from which the jury could have concluded that WEI would have received a percentage of Mactronix's future sales, but for Mactronix's breach. We review de novo a district court's grant of a judgment as a matter of law. Acosta v. City & County of San Francisco, 83 F.3d 1143, 1145 (9th Cir.1994). Judgment as a matter of law is proper if the evidence, construed in the light most favorable to the nonmoving party, permits only one reasonable conclusion, and that conclusion is contrary to the jury's. Del Monte Dunes, 95 F.3d at 1430.
WEI's argument does not withstand record scrutiny. The evidence falls short of the "reasonably certain" level of proof necessary to calculate WEI's lost proceeds from future sales. See Rhue v.. Dawson, 173 Ariz. 220, 229, 841 P.2d 215, 224 (Ariz.App.1992) (under Arizona law, to prove lost profits, a party must establish a reasonably certain factual basis to compute those profits). Therefore, the district court did not err when it vacated that portion of the jury's award.
AFFIRMED.