Underground Vaults & Storage, Inc. v. Cintas Corporation
6:11-cv-01067
D. Kan.Sep 8, 2014Background
- UVS and Cintas formed a joint venture to bid for Boeing document storage; the case was tried to a jury in 2014.
- Jury found UVS and Cintas formed a joint venture, that Cintas breached it, and UVS’ fiduciary duty claim succeeded.
- Jury awarded UVS $2,892,053 in compensatory damages and $8,000,000 in punitive damages.
- Cintas moved for judgment as a matter of law, a new trial, and to amend the judgment; the court ruled on these motions.
- Cintas presented a challenge to the burden of proof for the joint venture; the court adhered to a preponderance standard rather than clear and convincing.
- Trial spanned seven days with twelve witnesses; verdict issued May 14, 2014.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Existence of a joint venture between UVS and Cintas | UVS asserts joint venture based on multiple factors showing cooperation | Cintas argues lack of sufficient proof of joint venture, especially profit-sharing | Denied: jury could find a joint venture under the five-factor framework |
| Breach of the joint venture agreement | UVS showed performance and breach by Cintas | Cintas contends evidence not overwhelmingly in UVS's favor | Denied: substantial evidence supports formation and breach |
| Breach of fiduciary duty by Cintas | UVS claims Cintas breached loyalty and good faith | Cintas argues Kansas Partnership Act duties do not apply to joint ventures | Denied: jury correctly instructed; breach found and supported by evidence |
| Punitive damages | Punitive damages warranted if independent tort caused additional injury | No additional injury proven beyond breach of joint venture/fiduciary duty | Granted: punitive damages improper where no independent tort injury established |
| Burden of proof instruction | UVS argues for clear and convincing standard | Cintas supports heightened standard | Denied: trial court properly instructed preponderance of the evidence |
Key Cases Cited
- Meyer v. Christie, 634 F.3d 1152 (10th Cir. 2011) (five Modern Air factors are not exclusive; not outcome-determinative)
- Terra Venture, Inc. v. JDN Real Estate-Overland Park, L.P., 443 F.3d 1240 (10th Cir. 2006) (supports non-exclusive Modern Air factors)
- Modern Air Conditioning, Inc. v. Cinderella Homes, Inc., 226 Kan. 70 (Kan. 1979) (establishes joint venture factors; can consider influence of factors collectively)
- Osgood v. State Farm Mut. Auto. Ins. Co., 848 F.2d 141 (10th Cir. 1988) (punitive damages not allowed in breach of contract without independent tort injury)
- Cornwell v. Jespersen, 238 Kan. 110 (Kan. 1985) (injury must flow from independent tort for punitive damages)