Hallmark Cards v. Janet Murley
703 F.3d 456
| 8th Cir. | 2013Background
- Hallmark sued former employee Murley for breach of a separation agreement; district court entered judgment for Hallmark at $860,000.
- Murley’s separation agreement barred 18 months' non-compete, disclosure of confidential information, and other restrictive acts; Hallmark paid severance and benefits.
- Murley disclosed Hallmark confidential information to RPG; Hallmark later learned of deletions on Murley’s computer before trial.
- Hallmark sought an adverse inference instruction for spoliation; district court gave Instruction No. 12 over Murley’s objection.
- Murley challenged both the adverse-inference instruction and the amount of the verdict; the court denied post-trial motions.
- Court remanded to reduce the award by $125,000 to reflect RPG payment that Hallmark cannot recover under Missouri law.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Adverse inference instruction whether proper | Murley—requires explicit bad-faith and prejudice findings | Hallmark—findings implicit enough given trial record | Harmless error; no new trial required |
| Excessiveness of damages award | Hallmark entitled to full severance refund of $735,000 plus RPG amount | $125,000 RPG share not recoverable; only severance refund justified | Remand to reduce award by $125,000; otherwise affirmed with modification |
Key Cases Cited
- Stevenson v. Union Pacific R.R. Co., 354 F.3d 739 (8th Cir. 2004) (adverse-inference sanctions require explicit bad-faith finding in pre-litigation spoliation)
- Morris v. Union Pac. R.R., 373 F.3d 896 (8th Cir. 2004) (explicit intent required for adverse-inference instruction)
- Menz v. New Holland N. Am., Inc., 440 F.3d 1002 (8th Cir. 2006) (finding of bad faith necessary before adverse inference instruction)
- Lowe v. Taylor Steel Products Co., 373 F.2d 65 (8th Cir. 1967) (harmless error standard for jury instructions)
- Pulla v. Amoco Oil Co., 72 F.3d 648 (8th Cir. 1995) (Rule 59 abuse of discretion standard; weight of the evidence)
- Giddens v. Kansas City S. Ry. Co., 29 S.W.3d 813 (Mo. 2000) (Missouri law on damages review in contract cases)
- Synergetics, Inc. v. Hurst, 477 F.3d 949 (8th Cir. 2007) (deferral to jury on damages absent misconduct)
- England v. Gulf & Western Mfg. Co., 728 F.2d 1026 (8th Cir. 1984) (damages against weight of the evidence)