Plаintiff-appellant Richard Bright, a dairy distributor in Wisconsin, sued defendants-appellees Land O’Lakes, Inc. and Norris Creameries, Inc., both dairy processors, when his distributor’s agreement with them was cancelled. The parties stipulated that Land O’Lakes and Norris were liable for the cancellation under the Wisconsin Fair Dealership Law. 1 Bright appeals the district court’s decision on summary judgment that Wisconsin law did not allow recovery of punitive damages in connection with the termination of the distribution contract. The defendants cross-appeal the district court’s denial of their motion for judgment notwithstanding the verdict, in which they sought to exclude the testimony of Bright’s expert, and the district court’s award of attorney’s fees, expert witness expenses, and accountant fees to Bright under the WFDL. We affirm.
I. BACKGROUND
Bright distributed dairy products for a variety of dairy processors under the name of Augusta Dairies. In July 1981 Bright signed an agreement with defendant Land O’Lakes to distribute Land O’Lakes products in parts of the Wisconsin counties of Eau Claire and Jackson. Bright received compensation for hauling products from a Chippewa Falls, Wisconsin milk bottling plant to Land O’Lakes sub-distributors and for supplying Land O’Lakes products to Bright’s own retailers. This arrangement lasted five months until Land O’Lakes closed the Chippewa Falls plant and asked Bright to pick up dairy products from its St. Paul, Minnesota plant. Shortly thereafter, in December 1981, pursuant to an oral agreement, Land O’Lakes granted Bright another, and much larger, distribution area, which included forty-four new retailers. 2 With this influx of new business Bright bought additional trucks, trailers, freezers, and other equipment. His tax returns for 1981 and 1982 showed net losses.
In February 1983 Land O’Lakes sold the St. Paul plant to defendant Norris Creameries. Bright continued to pick up the Land O’Lakes branded products from Norris. By the first week of July, 1983, Norris Creameries had decided to terminate Bright’s distributorship. In the few days before Bright’s distributorship was terminated, and before Bright received notice of the termination, Norris Creameries repre
Finally, Norris Creameries advised Bright on the evening of July 6, 1983, that his distributorship was terminated, effective immediately. By this time, in addition to his twenty-six original customers and the forty-four customers he picked up at the time of the oral agreement, Bright had acquired another thirty-three new customers. Bright sued both Land O’Lakes and Norris Creameries in Wisconsin Circuit Court; the defendants removed the case to federal district court in the Western District of Wisconsin.
II. DISCUSSION
Punitive Damages
Bright аrgues that in addition to the damages the jury awarded him on his contractual and statutory claims, he is also entitled to punitive damages on his tort claim. In granting defendants’ motion for summary judgment, the district court held, however, that Bright’s claim for punitive damages could not succeed because Wisconsin does not recognize a right to punitive damages in connection with a breach of contract. When reviewing a district court’s grant of summary judgment, we must decide whether the documents in the record “show that there is no genuine issue as to any material fact and that the moving party is entitled tо a judgment as a matter of law.” Fed.R.Civ.P. 56(c);
see DeValk Lincoln Mercury, Inc. v. Ford Motor Co.,
Bright relies principally on a 1978 case decided by the Supreme Court of Wisconsin to support his claim of entitlement to punitive damages. In
Anderson v. Continental Ins. Co.,
By virtue of the relationship between the parties created by the contract, a special duty arises, the breach of which duty is a tort and is unrelated to contract damages. This tort of bad faith or malicious and intentional harassment by one party to a contract directed toward the other party, who seeks to assеrt his contract claim, has been referred to as a “tortious breach of contract.” While that term may be a convenient shorthand method of denominating the intentional conduct of a contracting party when it acts in bad faith to avoid its contract obligations, it is confusing and inappropriate, because it could lead one to believe that the wrong done is the breach of the contract. It obscures the fact that bad faith conduct by one party to a contract toward another is a tort separate and apart from a breach of contract per se and it fails to emphasize the fact that separate damages may be recovered for the tort and for the contract breach.
When it is recognized that recovery is sought for the tort and not for the breach of contract, the cliches which are relied upon by the defendants — e.g., “Punitive damages are not allowed for a mere breach of contract” — become irrelevant. The question whether punitive damages are permissible thus is not to be disposed of on grounds that what the plaintiffs assert is a breach-of-contract aсtion, but rather must be considered under a discussion of whether the facts surrounding the tort of bad faith evidence such conduct that punitive or exemplary damages are permissible....
We emphasize at this juncture only that the tort of bad faith is not a tortious breach of contract. It is a separate intentional wrong, which results from a breach of duty imposed as a consequence of the relationship established by contract.
Norris and Land O’Lakes correctly point out that Anderson’s holding is limited to a very narrow range of cases — those involving insurance companies and their insureds. Defendants contend that Anderson recognized a tort claim for breach of the duty of good faith in a breach of contract situation only becausе an insurance company owes a duty to its insured based on the fiduciary relationship between the two. Without that fiduciary relationship, a duty, specifically the duty of good faith, never arises in the typical contract situation. Norris and Land O’Lakes argue that the relationship here, one between processor and distributor, is not a fiduciary relationship, but contractual only, and consequently a duty of good faith was never created.
Bright contends that the underlying claim or relationship, whether or not it be of the fiduciary type, is irrelevant to whether punitive damages may be awarded. He quotes
Brown v. Maxey,
[W]e hold that the availability of a punitive damage award is not dependent upon the classification of the underlying cause of action, but, rather, upon proof of the requisite “outrageous” conduct. We stress that punitive damages are in the nature of a remedy and should not be confused with the concept of a cause of action.
“Whether compensatory damages, special damages, or punitive damages are sought as a matter of remedy or relief is immaterial to the cause of action itself.” Wussow v. Commercial Mechanisms, Inc.,97 Wis.2d 136 , 146,293 N.W.2d 897 (1980).
In addition to his bad faith argument, Bright also laced several mentions of tortious interference with contract throughout his “outrageousness” argument. According to Bright, a reasonable juror could have found that the defendants’ representative told the four customers that Bright was out of the dairy business and not just out of the business of distributing Land O’Lakes products. Allegedly this interfered with Bright’s ability to keep the four as future customers. His scant treatment of the issue requires little analysis. Bright states that “[u]nder Wisconsin law, dissemination of truthful information does not constitute improper interference with a contract.” Therefore, applying Bright’s articulation of Wisconsin law, if the statements were nothing more than that he was terminated from Land O’Lakes, his tortious interferenсe claim fails because these were accurate statements. This was the finding of the trial court, and rightfully so, because the facts properly before the district court showed only that the statements concerned the Land O’Lakes relationship, and nothing more. Bright’s alternative and what might have been a potentially plausible coloring of the statements was not before the district court because he failed to submit findings of fact and conclusions of law as directed by the court pursuant to its local rules. At oral argument Bright’s attorney agreed that he did not submit the findings requested by the district court. Conversely, defendant Norris did make the invited submission; therefore, the district court adopted these as the findings of fact for its summary judgment determination, again pursuant to the local rules. It is clear that the district court did not abuse its discretion in applying a rule of which Bright was fully aware. “The Federal Rules of Civil Procedure, as well as local rules of court, give ample notice to litigants of how to properly conduct themselves.”
Hal Commodity Cycles Management Co. v. Kirsh,
Expert Testimony
In a cross-aрpeal defendants argue that the district court improperly denied their motion for judgment notwithstanding the jury’s verdict on damages for the contractual and statutory claims. Subsumed within the appeal of the judgment notwithstanding the verdict denial is defendants’ argument that the district court improperly admitted the evidence Bright presented to prove damages because “there was no credible foundation to support [Bright’s witness’s] exaggerated estimates of future profits.” According to the defendants, Bright's expert witness, Dr. Behr, determined the gross revenue per capita earned by Bright in his original distribution area, a market equivalent to Eau Claire County in size, about $3.38 per person, and assumed that Bright would earn the same per capita amount in the expanded territory. This,
The defendants objected to [the expert’s] qualifications because he did not explain the procedures he used to determine market value nor the geographic locality of his expertise. The district court ruled that plaintiff had established an adequate foundation, and that any questions regarding Alexander’s methodology or particular area of expertise were more appropriately addressed during cross-examination. This was hardly error. Experience and knowledge establish the foundation for an expert’s testimony; the accuracy of such testimony is a matter of weight and not admissibility. See Robinson v. Watts Detective Agency, Inc.,685 F.2d 729 , 739 (1st Cir.1982), cert. denied,459 U.S. 1105 ,103 S.Ct. 728 ,74 L.Ed.2d 953 and459 U.S. 1204 ,103 S.Ct. 1191 ,75 L.Ed.2d 436 (1983)....
Liquid Air Corp. v. Rogers,
The defendants argue that the motion for judgment notwithstanding the verdict must be granted because the jury rendered a verdict on mere speculation, ignoring that within the expanded territory Bright lost $7,500 in 1981 and $14,000 in 1982 and that Bright’s sales decreased in the second half of 1982, “historically the best half of the year for dairy products.” The defendants also challenge Dr. Behr’s revision during trial of a 1984 report he prepared, in which he estimated damages between $500,000 and $600,000. His revision brought damages to the figure Bright argued for at trial, an amount exceeding $900,000. In denying the motion for judgment notwithstanding the verdict the district court stated that the defendants demonstrated that many of Behr’s “conclusions were controversial, [but] they did not establish that those conclusions were so lacking in foundation as to fall below the threshold requirement for proof of damages, which is that the amount of damages be proven with reasonable certainty and not rest on mere guesswork.” We review a district court’s denial of a motion for judgment notwithstanding the jury’s verdict
de novo. Collins v. Illinois,
we examine whether there is substantial evidence to support the jury verdict. We determine whether the evidence presented, combined with all reasonable inferences that may be drawn from it, is sufficient to support the verdict when viewed in the light most favorable to the party winning the verdict.
Christie v. Foremost Ins. Co.,
Because the relevant features of the new market are approximately the same as the old market in terms of income levels, urban/rural mix, number of grocery stores, schools, hospitals and the like, relative to the size of the population and all that sort of thing, and because Mr. Bright had penetrated his old tеrritory from a much smaller start in about 1975 and had gotten up to the $3.38 figure, it seemed to me reasonable, especially in the light of the fact that he was indeed doing it rather well in 1982, [sic] would penetrate the new market to approximately the same degree [, selling] $3.38 to the new market....
Behr determined that full penetration of the new market would occur by the end of 1986. He determined that no further penetration would occur after 1986, and the earnings he projected for subsequent years varied only according to the rate of inflation. These differing figures presented the jury a сlassic battle of the experts, in which the jury chose who to believe.
Whether or not Bright’s methodology included reliance on questionable economic assumptions, his analysis derived from figures arguably descriptive of the Augusta Dairy business and therefore relevant to the jury’s decision. Furthermore, the defendants had ample opportunity, which they utilized, to cross-examine Dr. Behr in an attempt to undermine his conclusions and analysis. They seem to have succeeded, at least in part. “Only if the award is ‘monstrously excessive,’ a product of passion or prejudice, or if there is no rational connection between it and the evidence may the court disturb it.”
Matter of Innovative Constr. Sys., Inc.,
Fees and Costs
Defendants claim that the district court improperly awarded attorney’s fees to Bright based on his success on the contractual and statutory claims. “The district court, in its discretion may set the amount of attorney’s fees awarded.”
Freeman v. Franzen,
The district court abused its discretion, according to the defendants, when it “arbitrarily deducted $4,000 from plaintiff’s claim ‘as a rough approximation of the time that would reasonably have had to be devoted to the tort and punitive damages claims.’ ” The defendаnts claim error because the district court gave no reason for its apportionment and plaintiff failed to meet its burden of proving entitlement to attorney’s fees. The record indicates that Bright requested fees and that the defendants argued that the portion of the fees incurred litigating the tort and punitive damage claims was not recoverable. The court agreed with the defendants, subtracting $4,000 after Bright was unable to separate the recoverable from the non-recoverable fees. It is not true, as the defendants claim, that the district court gave no reason for its apportionment. The court made it clear that attorney’s fees incurred in the unsuccessful claims were not recoverable. It deducted its reasonable estimate as to the fees associated with the unsuccessful claims. Our sole inquiry then is whether no reasonable person could find that $4,000 was the proper amount deducted. We are not persuaded that just because Bright could not apportion the fees the attorney’s fee award is flawed.
In [some] cases the plaintiff’s claims for relief will involve a common core of factsor will be based on related legal theories. Much of counsel’s time will be devoted generally to the litigation as a whole, making it difficult to divide the hours expended on a claim-by-claim basis. Such a lawsuit cannot be viewed as a series of discrete claims. Instead the district court should focus on the significance of the overall relief obtained by the plaintiff in relation to the hours reasonably expended on the litigation.
Hensley v. Eckerhart,
Next the defendants submit that their offer of judgment served to cut off any claims for costs beyond the time the offer was submitted to Bright. Pursuant to Federal Rule of Civil Procedure 68, Norris and Land O’Lakes served Bright with an offer of judgment in the amount of $225,000. Depending on how the damage award is characterized, Bright won either $250,000 or $226,608.91, which is the $250,-000 amount less the $23,391.09 counterclaim won by Norris. Either amount is greater than the offer of judgment amount. However, since the actual damage award came “surprisingly close” to the offer of judgment, Norris and Land O’Lakes argue that the district court should have exercised its discretion and reduced or denied Bright’s claim for post-offer costs. The text of Rule 68 reads that “[i]f the judgment finally obtained by the offeree is not more favorable than the offer, the offeree must pay the costs incurred after the making of the offer.” Fed.R.Civ.P. 68 (emphasis added). The clear language of the rule, as defendants admit, does “not mandate an outright denial of post-offer attorneys’ fees and expenses in this case,” but they argue that “the strong federal pоlicy of encouraging voluntary settlements and avoiding unnecessary and costly litigation should have been a factor in the District Court’s determination.” Clearly, Rule 68 denies an award of costs where the judgment is less favorable than the offer of judgment. That is not the situation here.
Norris and Land O’Lakes cite several cases to support the broad application of Rule 68 that they seek. However, these cases offer little support. In
Delta Air Lines, Inc. v. August,
The defendants also challenge the amоunt of the expert witness fee taxed to them, claiming that the federal statutory allowance set by §§ 1821,
4
1920(3),
5
and
Instead the defendants argue that the federal statute preempts the state statute in a case brought in federal court under the diversity statute. This is like the case left open by Chicago College, except here the expert witness fees are not lumped in with attorney’s fees but are considered actual costs. The difference is not material, and we answer the question left unanswered by Chicago College and hold that in federal court § 135.06’s authorization of fee shifting of actual costs to a prevailing plaintiff under the Wiscоnsin Fair Dealership Law is not restricted by the federal fee statute, § 1821. The district court’s award of expert witness fees was proper.
Lastly, the defendants challenge the accountant’s fees awarded by the district court. This court has interpreted attorney fee shifting statutes to include an award of “out-of-pocket expenses in preparation for trial.”
Henry v. Webermeier,
As to plaintiff’s use of an accountant to help to clarify the tangled financial relationships of the parties, I am satisfied this expense was necessary to an analysis of plaintiff’s financial condition as a dealer and to his claim for future damages. Had the defendants’ billings been more straightforward such an expense might well have been unnecessary. Under the circumstances as they actually existed, however, no lawyer or economist could have undertaken an accurate evaluation of plaintiff's case without eithеrperforming the accounting work him or herself or hiring a professional accountant to do it. It was reasonable for plaintiffs counsel to choose to have the work done by an accountant and it was reasonable for the accountant to devote 633 hours to the task of analyzing plaintiff’s accounts and attempting to square plaintiffs figures with those of defendant.
The district court’s award of the accountant’s fees was not unreasonable, and we will not disturb the court’s decision.
III. CONCLUSION
Bright has failed to demonstrate that Land O’Lakes’s or Norris’s actions were in any manner tortious, which eliminates any basis for Bright’s claim to punitive damages. Nevertheless the compensatory damage award stands; the defendants’ challenges to the testimony of Bright’s expert, Dr. Behr, are unpersuasive. Finally, the district court did not abuse its discretion in awarding attorney’s fees, expert witness fees, or accountant fees under the Wisconsin Fair Dealership Law. Each party will bear its own costs of appeal. The order of the district court is
Affirmed.
Notes
. Wis.Stat.Ann. §§ 135.01-.07 (West 1974 & West Supp.1987).
. When Bright began working for Land O’Lakes as a distributor he had only his own twenty-five to thirty retail customers.
.
Accord Jack Walters & Sons Corp. v. Morton Bldg., Inc.,
. 28 U.S.C.A. § 1821 (West Supp.1987).
. 28 U.S.C.A. § 1920(3) (West 1976).
. 28 U.S.C.A. § 1920(6) (West Supp.1987).
. Wis.Stat.Ann. § 135.06 (West 1974).
