Kagan Stern Attorneys Help Client Attain Partial Victory in Federal Jury Trial, Then Prevail on Motion for New Trial
September 23, 2024
In a hotly contested case filed by David Boshea against Compass Marketing, Inc., where Boshea alleged that he had entered into a written employment agreement that called for the payment of $540,000 in severance, Compass Marketing (represented by Kagan Stern attorneys Stephen Stern and Shannon Hayden) prevailed in a federal jury trial in February 2024, arguing that the alleged employment agreement was forged and no such agreement was ever entered into. However, while making a motion for judgment at the conclusion of trial after the close of all the evidence, the court allowed Boshea to amend his complaint to include a claim for breach of an alleged oral contract, and the jury ruled in Boshea’s favor on the breach of oral contract claim, awarding Boshea $540,000, plus prejudgment interest at the rate of 6% on the sum of $193,000 dating from March 3, 2020. Compass Marketing subsequently filed a renewed motion for judgment as a matter of law or, in the alternative, motion for a new trial, and, on August 7, 2024, in a 42 page opinion, the United States District Court for the District of Maryland granted Compass Marketing’s motion for a new trial (while denying the motion for judgment as a matter of law) in Boshea v. Compass Marketing, Inc., Case No. 1:21-cv-00309-ELH, 2024 U.S. Dist. LEXIS 140812, 2024 WL 3729105 (D. Md. Aug. 7, 2024).
The renewed motion for judgment as a matter of law or, in the alternative, motion for new trial argued: (1) the court erred by allowing Boshea to amend his complaint to include a claim for breach of oral contract after the close of all the evidence; (2) Boshea failed to present evidence establishing an oral contract between Boshea and Compass Marketing; (3) Boshea did not establish the applicability of the Maryland Wage Payment and Collection Law (“MWPCL”), a claim that sought treble damages and attorneys’ fees by claiming the alleged severance constituted “wages” under the MWPCL; and (4) Compass Marketing was prejudiced by the testimony of Boshea’s handwriting expert, Donna Eisenberg, because she relied on a supplemental report that had not been disclosed to Compass Marketing prior to Eisenberg’s trial testimony.
With respect to the late amendment to include a claim for breach of an alleged oral contract, the court agreed with Compass Marketing’s argument that “[t]he timing of th[e] amendment, coupled with the nature of the amendment, substantially prejudiced Compass Marketing and it was an error for the [c]ourt to allow the amendment.” Among other things, Compass Marketing argued that it “prepared for and elicited testimony at trial based on the claims set forth in” the second amended complaint, which concerned “only an alleged written contract.” “Had Compass Marketing been aware that what it believed to be negotiations related to Boshea’s written contract claim would later form the basis for Boshea’s oral contract claim, it would have taken additional discovery and asked Boshea about this alleged oral contract at his deposition (and at trial), and argue differently about the relevance of such negotiations at trial, which it did not get the opportunity to do.” In addition, Compass Marketing argued that it was prejudiced by being “precluded from fully examining Boshea about the negotiations of the alleged [oral] agreement, as the [c]ourt ruled that Compass Marketing could only examine Boshea about negotiations related to the alleged severance [provision], not other items that were part of the negotiations or other alleged contract terms.” Specifically Compass Marketing noted that a 2007 memo written by Boshea with some of his handwritten notes on it was excluded from evidence and, as a result, it “was unable to fully illustrate to the jury or have Boshea explain his request for six months of salary (as specifically reflected in the memo), which stands in contrast to the three years of salary (as severance) he ultimately testified about.”
In response to Compass Marketing’s arguments, the court noted that the original complaint was filed in February 2021 and amended twice thereafter without ever including a claim for breach of an alleged oral contract until after the close of all the evidence at trial approximately three years after the case was first filed. Boshea countered that it filed an untimely motion for leave in July 2022 to file a motion for summary judgment and, in that motion for summary judgment attached to the motion for leave, Boshea made arguments about the statute of frauds and promissory estoppel, which he claimed put Compass Marketing on notice of his intent to rely on an oral contract theory. Boshea also argued that one of the court’s preliminary jury instructions that explained a contract may be oral or written was sufficient to place Compass Marketing on notice and he also argued that he alluded to an oral contract in his opening statement.
The court rejected each of Boshea’s arguments, finding that, although Compass Marketing’s “lawyer has left no stone unturned in his defense of this case[,]” “Boshea engaged in trial by ambush[,]” Boshea turned “[t]rial in federal court [into] a game of ‘gotcha[,]’” and “Compass [Marketing] was entitled to prepare for trial and to expect to try the case only on claims that were asserted in the [Second Amended Complaint].” The court also found that, although oral and written contract claims are related, “the elements of the two claims are distinct and the defense understandably was focused on disputing the validity of the written [contract]” while it “had no reason to challenge alleged shortcomings in the proof of an oral contract.” With respect to the untimely motion for summary judgment that Boshea attached to a motion for leave, the court agreed with Compass Marketing that such a filing does not constitute notice of an intent to add a claim and found that it “cuts against plaintiff, not defendant” because, if Boshea “wanted to add an oral contract claim, he should have sought leave to amend his suit, well before trial, not after the conclusion of evidence at the trial.” As for the preliminary jury instruction, the court found that a “boilerplate explanation of the fact that contracts can be oral or written hardly constitutes a basis on which to find that defendant was alerted to the existence of an oral contract claim.” Likewise, with respect to Boshea’s opening statement, the court found Boshea’s “vague reference to an oral contract during his opening statement” was “hardly notice of a new claim, so as to preclude Compass [Marketing] from later challenging the belated amendment.”
As for the 2007 memo, the court noted that it was included on Boshea’s exhibit list, but Boshea elected not to introduce it into evidence. The court also noted that Compass Marketing did not properly identify it on its exhibit list in the pretrial order submitted to the court, but did so only in a supplemental submission to the courtroom deputy a few days before trial without specifically noting that the 2007 memo was included as an exhibit. Nevertheless, the court further found that, “had [the court] known of the oral contract claim when [it] ruled, [it] likely would have concluded that any prejudice to Boshea from use of an exhibit not listed by the defense gives way to the prejudice to the defendant if introduction of the exhibit is barred for a technical reason.” And that prejudice was even more pronounced in this case “given that Compass [Marketing] obtained the exhibit from Boshea” and “as Compass [Marketing] argue[d], a ‘picture is worth a thousand words and the jury was denied the opportunity to see Boshea’s own written notes about the contract negotiations.”
Despite the court’s finding that “allowing Boshea to amend his suit after the presentation of evidence, to add an oral contract claim, resulted in a miscarriage of justice,” the court denied Compass Marketing’s motion for judgment as a matter of law and ruled that Boshea could file an amended complaint that includes a claim for breach of oral contract because he “presented a viable claim for an oral contract.” To that end, the court vacated the jury’s verdict and granted Compass Marketing’s motion for a new trial, not only with respect to the oral contract claim, but the written contract claim (and MWPCL claim) as well.
Although Compass Marketing believes allowing a new amendment and vacating the verdict on the written contract claim each constitute error, it still views the court’s decision as a significant victory, as it rectifies the error of allowing the amendment at trial and it relates to a larger series of cases involving the company. And Compass Marketing has sought reconsideration of the court’s rulings on the issues it considers to be incorrectly decided.