Case Information
*1 Before: KEITH, MARTIN, and BOGGS, Circuit Judges.
PER CURIAM. Appellant BSC, Inc. (“BSC”) appeals the district court’s denial of its motion for judgment as a matter of law and its motion for a new trial. As a cross-appellee, it argues that the district court erroneously awarded and improperly calculated prejudgment interest. Appellee and cross-appellant Jack Henry & Associates, Inc. (“Jack Henry”), for its part, asserts that the district court erred in its award of postjudgment interest. For the reasons that follow, we affirm each of the district court’s rulings.
BACKGROUND
This is a breach of contract case. Jack Henry, a software developer and bank service- provider, filed a complaint alleging breach of contract against BSC. Under the Electronic Funds Transfer Agreement (“EFTA” or “contract”) into which the parties entered, Jack Henry promised to process ATM and debit transactions for customers of several banks serviced by BSC, formerly known as First Corbin Data. BSC terminated the contract prematurely and refused to pay an early- termination fee. Jack Henry sued to recover that fee.
BSC counterclaimed, alleging that Jack Henry’s products and services were defective and fell below industry standards. As a defense to Jack Henry’s claims, BSC asserted that it was not the real party in interest because it did not sign the EFTA. The EFTA identifies BSC by its former name, First Corbin Data; BSC’s president signed a modification to the EFTA; and First Corbin Bancservices (not First Corbin Data) executed the EFTA.
At trial, Jack Henry presented testimony regarding the ATM and debit transaction processing industry. This included one of Jack Henry’s experts, Suzanne Savage (“Savage”), who offered testimony, in relevant part, about industry standards. It also included testimony about the relationship between Jack Henry, BSC, and First Corbin Bancservices.
At the close of Jack Henry’s case, BSC moved for judgment as a matter of law on two grounds relevant to this appeal. First, it argued that Jack Henry could not recover under the EFTA because it did not prove performance in accordance with industry standards. Second, it argued that Jack Henry had not proved its case against BSC because BSC did not sign the EFTA. The district court reserved ruling on both arguments.
BSC then rested its case without introducing evidence. As a result, Jack Henry moved for judgment as a matter of law on all of BSC’s counterclaims, including its claim that Jack Henry’s services and products were defective. The district court dismissed BSC’s counterclaims.
As jury instructions were discussed, BSC repeatedly asserted its position that it was not a party to the EFTA and requested an instruction addressing the factual question of which entities were parties to the contract. Ultimately, the jury was presented with the following questions, which we paraphrase for clarity’s sake:
• Do you find by a preponderance of the evidence that Jack Henry fulfilled its obligations under the EFTA?
• Which defendants do you find by a preponderance of the evidence were parties to the EFTA?
• Do you find by a preponderance of the evidence that either defendant breached the EFTA and that the breach caused injury to Jack Henry?
The jury decided in Jack Henry’s favor, finding that Jack Henry performed its obligations under the EFTA, that both First Corbin Bancservices and BSC were parties to the EFTA, and that BSC breached the EFTA. BSC then renewed its motion for judgment as a matter of law. It also moved for a new trial, claiming that the district court had erroneously excluded the testimony of one of its experts, Dr. Andrew Cobb (“Cobb”). The district court denied BSC’s motions. This appeal followed.
DISCUSSION
I. BSC’s motion for judgment as a matter of law
BSC asserts that it is entitled to judgment as a matter of law on two grounds. The first ground concerns whether BSC is a party to the EFTA, and includes three arguments: (i) BSC never waived its statute-of-frauds defense; (ii) the record evidence does not satisfy the statute of frauds; and (iii) the EFTA bars Jack Henry’s recovery. The second ground concerns whether Jack Henry was entitled to a favorable verdict where, BSC argues, it produced insufficient evidence of industry standards. We address BSC’s arguments in turn.
We review a district court’s denial of a motion for judgment as a matter of law de novo.
Noble v. Brinkler Int’l, Inc.
,
A. Determining the parties to the Agreement
1. Waiver of the statute of frauds
Missouri’s statute of frauds provides, in relevant part, that “an agreement that is not to be
performed within one year from the making thereof” is not enforceable “unless the agreement upon
which the action shall be brought, or some memorandum or note thereof, shall be in writing and
signed by the party to be charged
.” Mo. Rev. Stat. § 432.010 (emphasis added). Although the
statute of frauds is a state-law defense, whether it was waived is a question of federal law.
See
Montgomery v. Wyeth
,
Federal Rule of Civil Procedure (50)(a)(2) requires that a motion for judgment as a matter
of law “specify the judgment sought and the law and facts that entitle the movant to the judgment.”
Fed. R. Civ. P. 50(a)(2). A post-verdict motion for judgment as a matter of law “may not advance
additional grounds that were not raised in the pre-verdict motion.”
Kusens v. Pascal Co. Inc.
, 448
F.3d 349, 361 (6th Cir. 2006). And judgment as a matter of law “is not available at anyone’s request
on an issue not brought before the court prior to submission of the case to the jury.”
Am. & Foreign
Ins. Co. v. Bolt
,
BSC argues that it preserved its statute-of-frauds defense by using language from the statute in its pre-verdict motion for judgment as a matter of law. This, it argues, put Jack Henry and the court “on notice” of its statute-of-frauds defense. Specifically, BSC stated that the EFTA was “signed by the party to be charged,” i.e., not by BSC. It also argues that its pre-verdict motion should be construed liberally in light of the rule’s purposes. We disagree.
BSC never actually raised the statute of frauds in its pre-verdict motion or otherwise at trial, and thereby waived that defense. Indeed, by the trial’s conclusion, the statute was specifically mentioned only twice: once in BSC’s Answer and Counterclaims, and once by the court. The latter occurred after BSC rested, during discussions regarding BSC’s motion for a directed verdict on the basis that it was not a party to the EFTA. During a colloquy between the district court and Jack Henry’s counsel, the court asked whether the EFTA was subject to the statute, and counsel for Jack Henry acknowledged that it was. Notably, BSC did not attribute what it now characterizes as a quotation of the statute to the statute. There is a difference between merely using words from a law and actually making arguments that reference and rely on that law and case law. Further, there are two statutes of frauds in Missouri—one for sales under the Uniform Commercial Code (“UCC”), Mo. Rev. Stat. § 400.2-201, and one for all other transactions, id. § 432.010. The statute of frauds governing UCC sales contains three exceptions that the general statute lacks, including for specially- manufactured goods, partial payment and performance, and acknowledgment of a contract in pleadings or testimony in court. § 400.2-201(3). Because it failed to mention or cite the statute of frauds in general, much less which of the two Missouri statutes it purportedly relied upon, we think it is clear that BSC’s failed to “specify . . . the law and facts” entitling it to judgment. Fed. R. Civ. P. 50(a)(2).
Whether BSC’s pre-verdict motion should nevertheless be liberally construed as having put
the court and opposing counsel “on notice” of its would-be statute-of-frauds defense is a closer call.
“Although Rule 50(a) requires a motion for judgment as a matter of law to state its ‘specific
grounds,’ the rule does not define how specific the grounds must be.”
Kusens
,
Kusens —a case on which BSC relies—is illustrative but, ultimately, does not help BSC. In Kusens , we found a judgment not withstanding the verdict properly granted where Defendant’s pre- verdict motion “was a general argument made orally that [the] plaintiff failed to argue his public policy claim, at all.” Id. at 362. Counsel for the defense stated, “The public policy claim was not argued, not mentioned in the opening statement. Therefore, at that point in time, I was actually entitled to make a directed verdict [motion] . . . and . . . I am doing that at this point now, because there’s been no reference to it in this case.” Id. at 362-63 (alterations in original). The district court “expressly acknowledged” that Defendant was correct and there had been “no argument regarding the public policy claim.” Id. at 354 (alteration omitted). Defendant’s post-verdict motion, “which was made in writing and was fully briefed, presented the failure to establish a public policy claim with specificity.” Id . at 362. Upon considering these facts, we found that “[d]efense counsel’s argument and the court’s on-the-record statements and ruling were sufficient to alert Plaintiff to the evidentiary insufficiency alleged by Defendant—his failure to plead and prove his cause of action.” Id. at 363. It was “a close question,” but we nevertheless found “no error” in the district court’s conclusion that Defendant’s pre-verdict motion sufficiently preserved the issue raised in its post- verdict motion. Id. Yet Kusens does not help BSC: even if BSC need not use technical specificity [1]
in its pre-verdict arguments,
Kusens
shows that it must at least
make
an argument, even a general
one. Like
Kusens
, this case arguably is a close call; but the closest BSC’s pre-verdict motion came
to making even a general argument was using a bit of language that appears in two similar statutes,
i.e., that the EFTA was “signed by the party to be charged,” not by BSC. This did not put the court
and Jack Henry on notice regarding a defense tied to one of the state’s two statutes of frauds, and
without notice, “technical noncompliance” need not be excused.
Kusens
,
BSC also directs this court to an Eastern District of New York case in support of its “notice”
argument,
Hamptons Locations, Inc. v. Rubens
,
the general question of duty of care (raised in the pre-verdict motion) was “inextricably intertwined”
with the specific question regarding the duty of care (raised in the post-verdict motion.)
Id.
at 362.
As such, the later argument encompassed the earlier argument.
See id.
Just as in
Kusens
, however,
the defendant in
Rockport Pharmacy
did, in fact,
make an argument,
including references to
controlling law, in its pre-verdict motion, to wit: that under controlling law, there must be a duty of
care owed to the plaintiff and that a mere breach of contract did not establish that duty.
See Rockport
Pharmacy
,
In light of the foregoing, we conclude that just as BSC’s failure to cite the statute of frauds and argue it affirmatively resulted in a waiver of that defense, it also resulted in a lack of notice to the district court and Jack Henry.
2. Satisfying the statute of frauds and the EFTA as written In addition to arguing that it preserved its statute-of-frauds defense, BSC argues that the record evidence does not satisfy the statute anyway. BSC argues that it did not sign the EFTA, and that this alone is dispositive because the statute requires contracts to be signed by the party to be charged. BSC further asserts that documents outside the EFTA cannot be used to satisfy the statute because, since BSC struck its name and changed the signatory to First Corbin Data before Jack Henry signed the contract, the contract “clearly” shows that BSC was not a party. Its arguments are meritless and we reject them.
“To satisfy the statute of frauds, it is not essential that a writing be a single document.”
In
re Estate of Looney
,
In this case, there are at least three documents that, taken together and in context, satisfy the statute: (i) the EFTA; (ii) the termination letter; and (iii) the Deconversion Agreement, in which Jack Henry agreed to assist BSC in switching its processing to software owned by another vendor. The EFTA itself memorializes the terms of the agreement. Although BSC did not sign the EFTA, BSC did sign two other documents that specifically acknowledge that BSC was a party to the EFTA. The first sentence in the Deconversion Agreement recites: “Whereas, Jack Henry & Associates, Inc. (JHA) and BSC INC. formerly FIRST CORBIN DATA, 2400 S. MAIN ST, CORBIN KY 40701 (Client) entered into an Electronic Funds Transfer Processing Services Agreement . . . .” The termination letter begins with a similar acknowledgment, and is written on BSC stationary. Mark Terry, President of BSC, signed both the Deconversion Agreement and the termination letter. These documents show that the parties understood the contractual relationship with Jack Henry to extend, in relevant part, to BSC.
We also conclude that, because the EFTA was ambiguous, the court properly admitted
extrinsic evidence, and a reasonable jury could conclude from that evidence that BSC was a party
to the agreement. Under Missouri law, a contract is ambiguous “if its terms are susceptible to more
than one meaning so that reasonable persons may fairly and honestly differ in the their construction
of the terms.”
PlaNet Prods. v. Shank
, 119 F.3d 729, 731-32 (8th Cir. 1997). “In construing
ambiguous contracts the objective is to ascertain and render effective the mutual intent of the
parties.”
Busch & Latta Painting Corp. v. State Highway Com.
,
There was no error in considering extrinsic evidence because the EFTA is ambiguous
regarding whom it binds. The EFTA identifies BSC by its former name, First Corbin Data; BSC’s
president signed a modification to the EFTA; and First Corbin Bancservices (not First Corbin Data,
the name under which BSC formerly did business) executed the EFTA. Because “the contract [was]
ambiguous, and extrinsic evidence [was] proper, . . . construction of the agreement [was] for the jury
under proper instructions from the court.”
Id.
(internal quotation marks omitted). Making all
reasonable evidentiary inferences in Jack Henry’s favor—as we must—we conclude that a jury could
find BSC was a party to the contract. We therefore cannot say that there is “a complete absence of
probative facts to support” the jury’s conclusion.
Erdman
,
B. Industry Standards
BSC next argues that Jack Henry failed to establish that it provided processing services under the EFTA that were consistent with industry standards. To prevail on its breach of contract claim [2]
against BSC, Jack Henry indeed must prove that it “performed in accordance with the terms of the
contract,”
S. G. Adams Printing & Stationary Co. v. Cen. Hardware Co.
,
As an initial matter, BSC erroneously places the burden of proof on Jack Henry. In the “Warranties” section of the EFTA, Jack Henry promised “to provide the Processing Services . . . in a competent manner consistent with industry standards.” Under Missouri law, breach of warranty [3]
is either a counterclaim or an affirmative defense that the defendant—BSC—must plead and prove.
See Kallenbach v. Varner
,
But even if Jack Henry had borne that burden, it introduced sufficient evidence from which
a jury could discern the industry standard and also determine that Jack Henry performed consistent
with that standard. BSC’s primary argument on this issue is that Jack Henry did not meet its burden
(which, as discussed above, was actually BSC’s burden for all intents and purposes) because Savage,
Jack Henry’s expert, relied on data she obtained from Jack Henry, measured Jack Henry’s
performance against a similar company’s operating rules, and conceded on cross-examination that
there are no “unanimous standards,” such as those created by trade groups. But determining what
the industry standard is and whether it has been violated are questions for the jury.
See Kveragas
,
on a formalized, industry-wide standard goes only to the weight of her evidence. Based on its verdict in this case, the jury clearly found it sufficient.
What is more, the jury could have concluded that, even if Jack Henry did breach the contract
by failing to meet industry standards, the breach was not material.
See Guidry v. Charter Commc’ns,
Inc.
,
For the foregoing reasons, viewing the “evidence and all reasonable inferences therefrom in
the light most favorable to the plaintiff,” it is difficult if not impossible to say that “there is a
complete absence of probative facts to support” the jury’s conclusion that Jack Henry’s performance
was consistent with industry standards.
Erdman
,
II. BSC’s motion for a new trial
After the jury verdict, BSC filed a motion for judgment as a matter of law or, in the alternative, for a new trial. BSC’s theory regarding a new trial is that the district court improperly excluded its expert witness, Cobb. Specifically, it argues that Cobb’s testimony was reliable based on his experience and education, his reliance on “best practices,” and his consideration of alternate explanations for the various problems in Jack Henry’s systems. We disagree.
We review a trial court’s refusal to grant a motion for a new trial for an abuse of discretion.
See Mike’s Train House, Inc. v. Lionel, LLC
,
The district court denied BSC’s motion for a new trial, stating that it had “explained its
reasons for excluding [Cobb’s] testimony” in a previous order, and it “decline[d] to rehash this
already heavily-litigated issue.” The previous order was issued after a hearing on Jack Henry’s
motion to suppress Cobb’s testimony, at which the district court questioned Cobb extensively.
Ultimately, the district court found that the
Daubert
factors weighed in favor of excluding Cobb’s
testimony.
See Daubert
,
When performing a
Daubert
analysis, a district court must “determine whether the evidence
‘both rests on a reliable foundation and is relevant to the task at hand.’”
Ky. Speedway, LLC v. Nat’l
Ass’n of Stock Car Auto Racing, Inc.
,
(1) whether a theory or technique can be or has been tested; (2) whether it has been subjected to peer review and publication; (3) whether a technique has a known or potential rate of error and the existence of standards controlling its operation; and (4) whether the theory or technique enjoys general acceptance in a relevant scientific community.
Mike’s Train House
,
In granting Jack Henry’s motion to exclude, the district court focused on four aspects of Cobb’s reports prepared for the trail: (i) his definition of “defect”; (ii) his “criticality” scale; (iii) whether Cobb considered alternative explanations for the problems about which he was opining; and (iv) his analysis and conclusions. Regarding Cobb’s definition of “defect,” the district court observed that Cobb’s report did not define the term, and he provided no authoritative support for the definition he proffered at the hearing. Indeed, he defined a defect merely as a problem that Jack Henry corrected. Thus, his definition did not “distinguish between actual defects and actions taken by [Jack Henry] in response to customer complaints based on something other than a software defect.” At the hearing, Cobb conceded that his definition had not been peer-reviewed. He also admitted that he did not use the sources he relied upon in his rebuttal report, including a leading book in the software field, in formulating his definition of “defect.” Because it had not been subject to peer review, tested, or widely accepted in the scientific community, the district court determined that Cobb’s definition of “defect” was unreliable under the Daubert inquiry.
Cobb’s “criticality” scale, which he used to evaluate the seriousness of the alleged defects,
also failed
Daubert.
First, Cobb admitted that it was not subject to peer review. Second, Cobb
defined the scale as an “amalgamation of best practices from academia to different organizations,”
but BSC did not show that the combined methodologies themselves satisfied
Daubert.
When an
“expert offers an opinion that is based on a combination of two methodologies, each methodology
must meet the
Daubert
criteria, and the combined methodology must meet those criteria also.”
Ky.
Speedway, LLC v. Nat’l Ass’n of Stock Car Auto Racing, Inc.
, No. 05-138,
Regarding Cobb’s failure to consider alternate explanations, the district court noted that the
report only addressed “what he considered to be [Jack Henry-caused] defects. It did not contain any
alternate explanations for the alleged issues that [BSC] encountered” with Jack Henry’s products.
At the hearing, Cobb also admitted that he did not consider alternate explanations for some of the
issues. The district court observed that the Federal Rules of Evidence instruct the court to consider
“whether the expert has adequately accounted for obvious alternate explanations.” Fed. R. Evid.
702, Advisory Comm. Note. Consideration of alternate explanations is not a
Daubert
factor, and
BSC correctly notes that the test does not require an expert to take into account
all
alternate
explanations. But that does not mean the district court abused its discretion by considering factors
that, though outside the strict confines of
Daubert
, are relevant to determining whether methodology
is reliable: the
Daubert
factors are “neither definitive, nor exhaustive.”
Nelson
,
Finally, the district court found that Cobb’s analysis and four conclusions were unreliable.
Cobb’s first conclusion, that Jack Henry did not follow basic design and programming principles
necessary for reliable transactions systems, was unreliable because his definition of “defect” and his
criticality scale (on which the conclusion was based) were unreliable. Cobb’s second conclusion,
that Jack Henry’s “system was not sufficiently tested . . . before deployment” was unreliable because
Cobb “admitted at the hearing that he did not know what testing procedures [Jack Henry] actually
used.”
See Daubert
,
The district court did not abuse its discretion, and so we need not determine whether the
excluded testimony would have been outcome determinative.
Nida
,
III. Prejudgment interest
Following the jury verdict, the district court awarded Jack Henry prejudgment interest on its damages, calculated at a rate of 18% pursuant to its analysis under Missouri law.
BSC argues that, in so doing, the district court erred for three reasons: (i) Kentucky law should have governed because Kentucky was the “forum state”; (ii) Jack Henry’s damages were not liquidated; and (iii) the EFTA does not provide an 18% interest rate to prejudgment interest. We disagree.
We review a trial court’s award of prejudgment interest for an abuse of discretion. See Scotts
Co. v. Garden & Pet Co.
,
A. Governing Law
The parties agree that “prejudgment interest is a substantive aspect of damages in a diversity
case and is thus properly viewed as a matter of state law.”
Diggs v. Pepsi-Cola Metro. Bottling Co.
,
Jack Henry asserts that Missouri law applies because, when assessing prejudgment interest,
courts look to the law of the state that governs the cause of action.
See FDIC v. First Heights Bank,
FSB
,
The case law does not address this issue head-on, but we find Jack Henry’s argument
persuasive.
Peabody
, on which BSC relies, is an unpublished opinion that discusses prejudgment
interest in just two sentences. It relies on
Rhea v. Massey-Ferguson, Inc.
,
Our decision in
First Heights
(on which Jack Henry relies) indicates that courts look to the
law of the state that governs the cause of action when assessing prejudgment interest. In that case,
the law of the forum state was not the law that governed the cause of action, and we applied the law
governing the action (Texas law) to the prejudgment-interest question.
First Heights
,
B. Liquidation
Under Missouri law, prejudgment interest is available for contract damages if those damages
are liquidated, meaning they are “fixed and determined or readily ascertainable by computation or
a recognized standard.”
Jablonski v. Barton Mut. Ins. Co.
,
The EFTA provides the formula for calculating the early-termination fee that the jury
awarded Jack Henry. The fee equals “the average monthly billing exclusive of pass through cost . . .
for the past twelve months multiplied by the number of months . . . remaining in the contract term.”
The EFTA also provides that the early-termination fee is “immediately due and payable” upon
“receipt of [BSC’s] intention to” terminate Jack Henry’s processing services. Thus, at the time of
BSC’s breach, either party could have used the EFTA agreement and the billing records to determine
the amount of the early-termination fee. It was therefore “readily ascertainable by computation” and,
as such, liquidated.
Jablonski
,
BSC argues that, the foregoing notwithstanding, its assertion of a counterclaim for breach
of the EFTA means, ipso facto, that the claim was
not
liquidated. This is wrong: under Missouri
law, if the amount of damages is readily ascertainable, then neither disputing liability nor filing a
counterlcaim or a crossclaim renders the damages unliquidated.
See Jerry Bennett Masonry, Inc. v.
Crossland Constr. Co.
,
C. The EFTA’s provisions
BSC’s final argument is that, even if an award of prejudgment interest is proper, it was error for the district court to use an 18% interest rate. That rate, it argues, applies only to outstanding charges for products and processing services, not to the early-termination fee. We disagree.
The EFTA provides the same interest rate for all payments, whether for products, services, early-termination fees, or anything else: 18%. Section 9 of the EFTA is entitled “Payments.” It provides:
Client agrees to pay upon presentation by [Jack Henry] of an electronic funds transfer debit for such amount, the then applicable charges for the Products covered thereby. Unless specified otherwise, all amounts are due when the Processing Services have been completed or other Products provided. [Jack Henry] shall provide an invoice to the Client for review prior to initiation of the electronic funds transfer debit. Set- up fees and annual fees will be invoiced and are payable in advance. Amounts outstanding after the due date are subject to an interest charge to date or payment of the lesser of 18% per annum or the highest legally allowable rate.
Thus, the “Payments” section of the EFTA discusses numerous types of payments, sometimes defining the payment and sometimes not. It mentions products, processing services, set-up fees, and annual fees—but it also discusses payment “amounts outstanding” in general. The most natural reading of the provision as a whole and the final sentence in particular is that it pertains, as it is labeled, to payments of whatever type. BSC asserts that “the early termination fee is addressed in an entirely different section of the EFTA,” i.e., Section 3. That section indeed discusses the fee, but provides no interest rate. BSC seems to argue that only Section 3 applies where the fee is at issue, but the more reasonable reading of the contract is that Section 3 and Section 9 discuss the early- termination fee—the former in general, and the latter with regard to how that fee is treated under the contract’s payment scheme.
In light of the foregoing, we affirm the district court’s award and calculation of prejudgment interest on the early-termination fee.
IV. Postjudgment interest
Following the jury’s verdict, the district court awarded postjudgment interest at .22%, compounded annually, pursuant to 28 U.S.C. § 1961. On appeal, Jack Henry asserts that § 1961 does not apply, and that the interest rate should have been 18% (equivalent to the prejudgment interest rate under the EFTA). Jack Henry is wrong.
We review a district court’s determination of postjudgment interest for an abuse of discretion, unless it raises an issue of statutory interpretation, in which case we review de novo. See Scotts , 403 F.3d at 788. Here, there is no question of statutory interpretation because the issue is whether the EFTA itself circumvents federal law.
The default rule is that, “in diversity cases in this Circuit, federal law [i.e., § 1961] controls
postjudgment interest” even while state law governs awards of prejudgment interest.
Estate of
Riddle v. S. Farm Bureau Life Ins. Co.
,
As with prejudgment interest, the case law is less than dispositive. We note, however, that
at least one sister circuit directly addressed this issue, holding that federal law controls despite a bare
choice-of-law provision like the EFTA’s.
See FCS Advisors, Inc. v. Fair Fin. Co.
,
For these reasons, we affirm the district court’s award and calculation of postjudgment interest.
CONCLUSION
For the foregoing reasons, we AFFIRM the district court’s judgment regarding BSC’s motion for judgment as a matter of law, BSC’s motion for a new trial, and prejudgment and postjudgment interest.
Notes
[1] The
Kusens
Court relied on the Eighth Circuit case
Rockport Pharmacy, Inc. v. Digital
Simplistics, Inc.
,
[2] As a preliminary matter, what an industry standard is, and whether a party performed in
conformity with that standard, are questions of fact for the jury.
See Kveragas v. Scottish Inns, Inc.
,
[3] The parties’ intent “is presumed to be expressed by the natural and ordinary meaning of the
language in the contract.”
Parker v. Pulitzer Publ’g Co.
,
[4] BSC cites multiple cases for the proposition that industry standards must be adopted by the
industry as a whole or else are invalid. None of the cases is jurisdictionally controlling, and none
is analogous enough to be useful. Indeed, the majority of them are
Daubert
cases in which the court
excluded expert testimony as unreliable because, among other reasons, the expert did not base his
or her opinion on identifiable industry standards.
See Daubert v. Merrel Dow Pharm., Inc.
, 509
U.S. 579 (1993). But whether an expert’s testimony is reliable under
Daubert
is a different question
from whether a jury could reasonably deduce an industry standard from the evidence before it. The
cases are even less persuasive when viewed through the lens of appellate review, where this court
should only overturn the jury’s decision if, drawing all “reasonable inferences” from the evidence
in the light most favorable to Jack Henry, there is a “complete absence of probative facts” to support
that decision.
Erdman
,
[5] Other cases seeming to articulate the
Peabody
principle are also factually distinguishable:
neither
Diggs
,