Special Learning, Inc. v. Step by Step Academy, Inc.
708 F. App'x 842
| 6th Cir. | 2017Background
- Special Learning (software developer) contracted with Step by Step Academy (SBSA, non-profit) under a Custom Software Development Agreement (SDA) stating an “estimated total contract price” of $597,000.
- Special Learning believed the estimate was insufficient; Special Learning’s CEO (Chung) knew the budget was inadequate but did not inform SBSA’s board; SBSA paid over $640,000 but received no software.
- Special Learning sued SBSA for breach; SBSA counterclaimed. After an eight-day jury trial, the jury found SBSA breached the SDA but awarded Special Learning $0 in net damages.
- After verdict reading, neither party objected or sought polling; the district court entered the verdict. Special Learning later moved under Rule 59 claiming the verdict was inconsistent (breach but no damages).
- The district court denied the Rule 59 motion as waived under Fed. R. Civ. P. 49(b) for failing to object before the jury was discharged and alternatively found the verdict could be consistent because the jury was instructed to offset damages for plaintiff’s promissory fraud or failure to mitigate.
- The Sixth Circuit affirmed, holding Special Learning forfeited its objection by not raising inconsistency before the jury was discharged.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the jury’s finding of breach but awarding $0 damages is an inconsistent verdict allowing post-discharge relief | Finding breach necessarily required awarding unpaid invoices (about $243,754); $0 is inconsistent | Plaintiff waived challenge by failing to object before jury discharge; even on merits verdict could be consistent due to offsets for promissory fraud/failure to mitigate | Affirmed: objection forfeited under Rule 49(b); district court did not abuse discretion |
Key Cases Cited
- Radvansky v. City of Olmsted Falls, 496 F.3d 609 (6th Cir. 2007) (failure to object after special interrogatories waives challenge to inconsistency)
- Nolfi v. Ohio Ky. Oil Corp., 675 F.3d 538 (6th Cir. 2012) (Rule 49(b) waiver principles; appellate standard of review for Rule 59 rulings)
- Innovation Ventures, LLC v. N2G Distrib., Inc., 763 F.3d 524 (6th Cir. 2014) (waiver for not objecting to jury answers)
- Braun v. Ultimate Jetcharters, LLC, 828 F.3d 501 (6th Cir. 2016) (abuse-of-discretion standard for new-trial rulings)
- Anchor v. O'Toole, 94 F.3d 1014 (6th Cir. 1996) (defining abuse of discretion review)
- Fencorp, Co. v. Ohio Ky. Oil Corp., 675 F.3d 933 (6th Cir. 2012) (waiver of challenges to jury answers)
- El-Moussa v. Holder, 569 F.3d 250 (6th Cir. 2009) (issues not developed on appeal are waived)
- Estate of Quirk v. C.I.R., 928 F.2d 751 (6th Cir. 1991) (court will not consider arguments not presented to district court)