Cohee v. Global Horizons Inc.

UNPUBLISHED

UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT

No. 07-1848

JOHN M. COHEE, JR., trading as Cohee Farms; DIANA B. COHEE,
trading as Cohee Farms,

Plaintiffs - Appellees,

v.

GLOBAL HORIZONS INCORPORATED, doing business as AgriLabor,

Defendant - Appellant.

Appeal from the United States District Court for the District of
Maryland, at Baltimore. William D. Quarles, Jr., District
Judge. (1:05-cv-03359-WDQ)

Argued: December 3, 2008 Decided: February 6, 2009

Before NIEMEYER and MICHAEL, Circuit Judges, and Rebecca Beach
SMITH, United States District Judge for the Eastern District of
Virginia, sitting by designation.

Affirmed by unpublished per curiam opinion.

ARGUED: Matthew S. Gibbs, Los Angeles, California, for
Appellant. Craig Forrest Ballew, FERGUSON, SCHETELICH & BALLEW,
P.A., Baltimore, Maryland, for Appellees. ON BRIEF: Chrystal L.
Bobbitt, LITIGATION COUNSEL FOR GLOBAL HORIZONS, INC., Los
Angeles, California, for Appellant. Tracey Dallahan-McLauchlin,
FERGUSON, SCHETELICH & BALLEW, P.A., Baltimore, Maryland, for
Appellees.
Unpublished opinions are not binding precedent in this circuit.

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PER CURIAM:

Appellees John M. Cohee, Jr., and his wife, Diana B.

Cohee, operate Cohee Farms in Preston, Maryland. (We refer to

the appellees as “Cohee.”) The present dispute involves a

contract between Cohee and appellant Global Horizons, Inc.

(“Global”), in which Global agreed to provide Cohee a labor

force to harvest watermelon and sweet corn in 2005. Global

failed to furnish the promised labor because it could not find

housing in the area for its workers. Cohee sued Global for

breach of contract in state court, and the action was removed to

U.S. District Court on the basis of diversity jurisdiction. A

jury determined that the contract was breached and awarded Cohee

damages that included lost profits for 2005 and future profits

for 2006 and 2007. Global argues that it did not breach any

obligation to Cohee because it was not responsible for housing.

It also challenges the damages awarded to Cohee on several

bases. For the reasons below, we affirm.

I.

We recount the evidence, presented in a four-day

trial, in the light most favorable to Cohee, who obtained a

favorable verdict. Global is a California corporation that

provides foreign agricultural labor to farmers in the United

States. Foreign agricultural workers are eligible to enter the

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United States on a temporary basis through the H-2A visa

program. The process of securing H-2A visas is sufficiently

complex that Global has a customer base of farmers who are

willing to pay Global to navigate that process for them. In

late 2003 or early 2004 Global met with several Maryland farmers

to provide them information about the availability of H-2A labor

and about Global’s services. Cohee was among those in

attendance.

In need of labor, Cohee entered a contract with Global

for H-2A labor for his 2004 harvest, and Global provided the

laborers needed. In early 2005 Cohee again decided to use H-2A

labor furnished by Global for that year’s harvest. In March

2005 the parties executed the Farm Labor Contractor H-2A

Agreement (the Agreement), drafted by Global, that is at issue

in this case. Around April 1, 2005, Cohee began planting 55

acres of watermelon and 65 acres of sweet corn.

Under the Agreement Global committed to furnish labor

“at its own expense” to Cohee from June 25, 2005 through

September 10, 2005. J.A. 695. The Agreement left open the

number of workers required by Cohee, but Cohee requested ten

workers in a separate letter of intent that was signed the same

day as the Agreement. In return Cohee promised to pay Global an

agreed upon hourly wage for each worker plus a certain

surcharge. The Agreement provided that the surcharge would be

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35 percent if Cohee provided transportation and housing to the

workers; 40 percent if Global provided either transportation or

housing; and 45 percent if Global provided both transportation

and housing. Although Cohee had housed workers in a farmhouse

on the property and paid a surcharge of 35 percent in 2004, the

farmhouse was torn down after the 2004 harvest. Cohee says that

when he approached Global about providing his labor force for

the 2005 harvest, he informed Global that he could not provide

housing for the laborers during that harvest season. By

regulation, housing must be provided to H-2A workers at no cost

to the workers. See 20 C.F.R. § 655.102(b).

Global investigated housing possibilities near Cohee

Farms during the spring and summer of 2005. In late spring

Global inquired about prices at local hotels and booked rooms at

the local Econo Lodge Motel, although Global representatives

later asserted that that arrangement was always intended to be

temporary. In late June Global sent a representative to Cohee

Farms and the surrounding area to search for an affordable place

to house the workers. Despite these efforts, Global contacted

Cohee in late June and, citing difficulties in securing housing,

asked to push back the start date from June 25 to July 1. Cohee

agreed to the postponement.

Global failed to furnish Cohee with any labor as of

July 1 or at any other point during the 2005 harvest. During

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Cohee’s multiple conversations with Global representatives in

June, July, and August about his pressing need for workers,

Global representatives informed Cohee that Global “had workers

ready to come, but they . . . didn’t have any housing.” J.A.

848.

Without his anticipated labor force, Cohee turned to

family and neighbors for help harvesting his crops. A cousin

was able to locate a source of labor in Delaware in mid-July,

and five to ten workers began traveling from Delaware to Cohee

Farms each day to help with the harvest. In mid- to late July

or August, a neighbor with a larger farming operation began

loaning Cohee between six and twenty-six workers, but only for a

few hours each morning. And through a different neighbor, Cohee

worked out an arrangement with a broker, C & L Packing, to

harvest part of the Cohee Farms watermelon crop in exchange for

a favorable price for the watermelons and a broker’s fee for the

neighbor who arranged the transaction. According to Cohee, the

assistance he received in harvesting “did not even come close”

to replacing the workers that Global had contracted to provide.

J.A. 855. Roughly fifty percent of his crop was left in the

field unharvested at the end of the season.

As a result, Cohee had “nowhere close” to enough sweet

corn or watermelon to satisfy his direct market and wholesale

customers. J.A. 862. Because of Cohee’s inability to meet

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customer demand in 2005, he lost some of his direct market and

wholesale customers. In the next season (2006) Cohee decided to

grow small grains instead of the more profitable watermelon and

sweet corn because of a combination of factors, including the

damage that Global had caused to his customer base and

independent concerns about the availability of labor that

season. Cohee’s profits in 2006 and 2007 were reduced as a

result, and a sweet corn packaging shed that Cohee had built was

rendered useless.

At the conclusion of Cohee’s evidence, Global moved

for judgment as a matter of law, and the motion was denied. The

jury found Global in breach of its contract with Cohee and

awarded Cohee $490,000 for lost profits in 2005, $37,186 for

unnecessary expenses in 2005, $150,000 for lost profits in 2006,

and $142,500 for lost profits in 2007. Following the verdict

Global renewed its motion for judgment as a matter of law and

alternatively moved for a new trial. Global also filed a motion

to alter or amend the judgment. The district court denied each

of these motions. Global now appeals.

II.

Global makes several arguments on appeal. First, it

argues that the jury improperly found that it breached the

Agreement. Second, it argues that any consequential damages

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awarded by the jury were improper because the terms of the

Agreement, which is governed by California law, prohibited

consequential damages. Third, Global argues that each of the

specified damages awards -- lost profits in 2005, 2006, and 2007

and unnecessary expenses incurred in 2005 -- were improperly

awarded.

We review de novo the district court’s denial of

Global’s motion for judgment as a matter of law. Adkins v.

Crown Auto, Inc., 488 F.3d 225, 231 (4th Cir. 2007); Brown v.

CSX Transp., Inc. 18 F.3d 245, 248 (4th Cir. 1994). “A court

may award judgment as a matter of law only if there is no

legally sufficient evidentiary basis for a reasonable jury to

find for the non-moving party.” Saunders v. Branch Banking &

Trust Co. of Va., 526 F.3d 142, 147 (4th Cir. 2008). And the

court must view the evidence in the light most favorable to the

nonmoving party, drawing all reasonable inferences in that

party’s favor. Dennis v. Columbia Colleton Medical Ctr. Inc.,

290 F.3d 639, 645 (4th Cir. 2002).

We review the district court’s decision not to order a

new trial for clear abuse of discretion, and we will not reverse

the decision absent exceptional circumstances. Id. at 650;

Bristol Steel & Iron Works v. Bethlehem Steel Corp., 41 F.3d

182, 186 (4th Cir. 1994). A new trial is only appropriate when

“an error occurred in the conduct of the trial that was so

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grievous as to have rendered the trial unfair.” Bristol Steel &

Iron Works, 41 F.3d at 182 (quoting DMI, Inc. v. Deere & Co.,

802 F.2d 421, 427 (Fed. Cir. 1986)).

We review the denial of a Rule 59(e) motion to alter

or amend judgment for abuse of discretion. Bogart v. Chapell,

396 F.3d 548, 555 (4th Cir. 2005). There are only three grounds

for granting such a motion: “(1) to accommodate an intervening

change in controlling law; (2) to account for new evidence not

available at trial; or (3) to correct a clear error of law or

prevent manifest injustice.” Pacific Ins. Co. v. Am. Nat’l Fire

Ins. Co., 148 F.3d 396, 403 (4th Cir. 1998).

A.

Global first argues that it did not breach the

Agreement with Cohee because it was not obligated under the

Agreement to provide housing to its H-2A workers. Rather,

Global contends that it had the option to provide housing, but

if it elected not to provide housing, Cohee was responsible for

providing it. In rejecting Global’s post-trial motions, the

district court determined that the Agreement “place[d] the

burden of securing worker housing squarely on Global Horizon’s

shoulders.” Cohee v. Global Horizons, Inc., No. WDQ-05-3359 (D.

Md. July 19, 2007); J.A. 1412. Under California law, which

governs here, “[i]f contractual language is clear and explicit,

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it governs.” Powerine Oil Co., Inc. v. Superior Court, 118 P.3d

589, 598 (Cal. 2005).

The language is sufficiently clear and explicit if it

is not reasonably susceptible to materially different meanings.

Hayter Trucking, Inc. v. Shell W. E&P, Inc., 18 Cal. App. 4th 1,

15 (Ct. App. 1993). Moreover, “[l]anguage in a contract must be

construed in the context of that instrument as a whole.” Bay

Cities Paving & Grading, Inc. v. Lawyers’ Mut. Ins. Co., 855

P.2d 1263, 1271 (Cal. 1993) (emphasis removed). We conclude as

a matter of law that the language of the Agreement, particularly

when construed as a whole, is sufficiently clear to obligate

Global to provide housing.

The Agreement is an H-2A labor agreement under which

Global committed to providing labor “at its own expense.” J.A.

695. The Agreement’s specific provisions make clear that it

allocated to Global the responsibility for all of the specific

expenses attendant to providing H-2A labor. There are no

exceptions to the expenses Global agreed to cover when it agreed

to provide labor “at its own expense,” much less an exception

that might reasonably be read as carving out responsibility for

housing costs. See J.A. 695. The Agreement provided that

Global was solely responsible for paying the salaries, benefits

and “all other expenses relating to [its] workers.” J.A. 696.

Global also agreed to “provide, at its sole expense, whatever

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ancillary support, equipment, supplies, transportation and

facilities as required by law and for its workers to adequately

and properly perform their respective tasks.” J.A. 696. These

laundry lists of expenses include a number of broad categories,

such as “ancillary support” and “facilities,” that, read in the

context of the Agreement as a whole, indicate that the agreement

was intended to include housing expenses. Moreover, Global

represented in the Agreement that it would comply with all

applicable laws and regulations, including H-2A visa program

regulations, which require that housing be provided to H-2A

workers at no cost to the workers. Global’s representations in

the Agreement that “[t]he housing provided to [its] workers[]

meets or exceeds all legal requirements,” J.A. 697, would be odd

if the Agreement did not also contemplate that Global was

responsible for housing.

Global argues that the Agreement’s integration clause

precluded the introduction of any extrinsic evidence that might

have indicated that the parties intended for Global to provide

housing. The integration clause states that the Agreement is

the “entire agreement between the parties hereto, and there have

been no oral or written representations affecting this

Agreement, or the provisions hereof, except as set forth

herein.” J.A. 699. Of course, in the case of an ambiguity,

California law allows the admission of extrinsic evidence when

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it “is relevant to prove a meaning to which the language of the

instrument is reasonably susceptible.” Dore v. Arnold

Worldwide, Inc., 139 P.3d 56, 60 (Cal. 2006); Pac. Gas & Elec.,

Co. v. G.W. Thomas Drayage & Rigging Co., 442 P.2d 641, 644

(Cal. 1968). Even if we assumed an ambiguity with respect to

the obligation to provide housing, the extrinsic evidence at

trial permitted a reasonable finding that at the relevant times

Global interpreted the Agreement as assigning to it the housing

obligation.

The notice of deposit requirement that Global drafted

and required Cohee to sign revealed that Cohee was responsible

for paying a deposit calculated using an anticipated surcharge

of “45% (housing and transportation).” J.A. 27 (emphasis

added). Further, Cohee sent Global’s president a letter to

confirm several details pertaining to the Agreement. That

letter included the following sentence: “The workers will be

recruited, housed, transported, paid, and supervised by Global

Horizons, Inc.” J.A. 28 (emphasis added). Global negotiated

with a local Econo Lodge to provide housing for the workers. In

late June 2005 Global sent a representative to Maryland to look

for additional housing possibilities for its workers. Finally,

Global sought Cohee’s permission to delay the arrival of the

workers until it was able to secure housing. Insofar as the

Agreement leaves any room for ambiguity, extrinsic evidence was

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admissible, and that evidence makes clear that both parties

understood that Global would provide housing under the 2005

Agreement.

Global contends that one provision in the contract,

paragraph 8(iv) reserved to it the option to determine whether

or not it would provide housing. That paragraph provides that

if transportation or housing is provided by Global, Cohee would

pay a 40 percent surcharge (instead of 35 percent) against the

applicable wage rate. The surcharge is 45 percent if Global

provided both transportation and housing. Read in the context

of the other contractual provisions that assigned to Global the

ultimate responsibility to provide housing, paragraph 8(iv)

simply gave Cohee the option to provide housing, an option he

exercised in the 2004 season. Before the Agreement was signed,

Cohee advised Global that he could not provide housing in 2005.

We conclude that the district court did not err when

it concluded that the Agreement made Global responsible for

providing H-2A labor and for satisfying the attendant expenses

of making that labor available. This responsibility, the

district court properly determined, included the ultimate

responsibility to provide housing. There was sufficient

evidence to support the jury’s finding that Global breached the

agreement to provide housing.

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 B.

Global also argues that the jury should not have been

permitted to award consequential damages because the Agreement

expressly precluded liability for such damages. For this

argument Global relies on paragraph 8(g) of the Agreement, which

provides as follows:

If the CLIENT is delayed in making any payments due to
[Global] hereunder, [Global] reserves the right to
remove its workers and cease providing Services
hereunder, until such balance has been paid by CLIENT.
Payment for work performed and hours lost will be the
responsibility of the CLIENT. In no event shall
[Global] be held responsible or liable for any
consequential or incidental damages, including without
limitation any lost profits that CLIENT may suffer as
a result of [Global]’s actions under this Agreement.

J.A. 698. Global argues that the last sentence of paragraph

8(g) limits its liability. Global is correct that “limitation

of liability provisions have long been recognized as valid in

California.” Markborough Cal., Inc. v. Superior Court, 227 Cal.

App. 3d 705, 714 (Ct. App. 1991). Here, however, the last

sentence of paragraph 8(g) is not a broad limitation of

liability.

As noted above, “the context in which a term appears

is critical.” Century Transit Sys., Inc. v. Am. Empire Surplus

Lines Ins. Co., 42 Cal. App. 4th 121, 126 (Ct. App. 1996)

(emphasis in original). Like the district court, we conclude

that the context in which the liability limitation provision

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appears indicates that it has narrow applicability. If the

parties intended a broad liability limitation, paragraph 8(g)

was not the appropriate place in this agreement for it.

Paragraph 8 addresses the subject of Global’s “compensation,”

and paragraph 8(g), where the liability limitation appears, is a

narrow provision that addresses the consequences when Cohee is

delayed in making payments to Global. If the parties had

intended a broad provision limiting liability for damages, the

proper place for it would have been paragraph 9. Paragraph 9 is

entitled “Governing Law and Waiver,” and it contains three

stand-alone provisions that are broadly applicable to all

litigation and legal disputes arising under the Agreement: (a)

California law governs the Agreement, (b) the prevailing party

in any litigation with respect to the Agreement will be entitled

to costs and expenses, including reasonable attorneys’ fees, and

(c) Cohee may not deduct damages from amounts owed on Global

invoices. On the other hand, paragraph 8, which includes the

liability limitation sentence, is titled “Compensation,” and its

provisions are essentially limited to that topic. Its

provisions address such issues as Global’s rates and fees and

when billing invoices become due. If the parties had agreed on

a broadly applicable liability limitation, common sense dictates

that it would appear in paragraph 9. The fact that the

limitation on liability provision was the third sentence of

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paragraph 8(g) -- relating to Global’s right to withdraw workers

in the event of delay in the payment of its compensation --

suggests that the provision has a narrow application.

The provisions in paragraph 8 that surround paragraph

8(g) fit a pattern that further supports the narrow reading of

the liability limitation. The previous paragraph, 8(f),

provides that Global will submit a bill every Tuesday and that

Cohee must pay all undisputed amounts within two days of the

billing date. But in the event of a dispute “arising from the

billing statements,” the final sentence of paragraph 8(f)

provides: “the parties shall meet and use their best efforts to

resolve the matter in question.” J.A. 698. Paragraph 8(h)

provides for a two percent finance charge for overdue invoices.

It then provides for the possibility that “said percentage [is]

considered under any applicable law to be usurious or otherwise

illegal.” J.A. 698. In that event, according to the last

sentence of paragraph 8(h), “the percentage shall be

automatically adjusted to the maximum rate allowed by law.”

J.A. 698. Both paragraphs 8(f) and 8(h) state the parties’

intentions with respect to an aspect of or obligation related to

compensation and then provide for the possibility and resolution

of a dispute as to that specific aspect or obligation.

Especially given the incongruity of appending a broad

limitation on liability to a narrow compensation-related

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provision, paragraph 8(g) ought to be read to follow the same

pattern as paragraphs 8(f) and 8(h). Like the final sentences

in paragraphs 8(f) and 8(h), the final sentence of paragraph

8(g) provides for the possibility of a dispute concerning the

obligations contained earlier in the same paragraph -- a dispute

arising from Global’s removal of workers due to a delayed

payment. In that event alone, Global is not “responsible or

liable for any consequential or incidental damages, including

without limitation any lost profits that [Cohee] may suffer as a

result of [Global’]s actions under this Agreement.” J.A. 698.

Because the dispute here did not involve the situation

contemplated by paragraph 8(g) -- Global’s removal of workers

due to late payment by Cohee -- consequential damages were

available.

C.

Global also separately challenges each of the specific

categories of damages awarded on the grounds that the evidence

was insufficient and that certain damages were too speculative

and were not reasonably foreseeable to Global.

1.

With respect to the $490,000 awarded for lost profits

in 2005, Global argues that these damages were “speculative

because they were based solely on the hypothetical value of what

plaintiff might have earned if he had been able to harvest all

17
of his crops.” Appellant Br. at 21. Global does not question

whether the evidence submitted as to the expected yield or

prices for watermelon and sweet corn were ascertainable with

reasonable certainty in 2005, the standard for determining

whether damages are speculative or not. See Parlour Enters.,

Inc. v. Kirin Group, Inc., 152 Cal. App. 4th 281, 287-88 (Ct.

App. 2007). Instead, Global argues that the jury calculated

damages assuming that Cohee would have harvested all 120 acres

of watermelon and sweet corn planted if Global had not breached,

yet there was not sufficient evidence to establish that 120

acres of the two crops would have been harvested. Global failed

to raise this argument before the district court, and we decline

to find error, much less plain error. First, the jury did not

necessarily assume that all 120 acres would have been harvested

but for Global’s breach. The verdict form reflected the jury’s

determination that Cohee suffered $490,000 in lost profits in

2005, but not how the jury determined that figure. The evidence

supports a finding of $490,000 in damages even absent a

determination that 120 acres of sweet corn and watermelon would

have been harvested but for the breach. Cohee’s expert

calculated $492,811 in lost profits in 2005, using conservative

estimates with respect to corn prices and watermelon yield.

Further, there was sufficient evidence for a

reasonable juror to conclude that all 120 acres would have been

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harvested absent Global’s breach. Cohee indicated to Global his

need for ten H-2A workers on March 28, 2005. Cohee then began

planting his sweet corn and watermelon crops “by the last of

March or the 1st of April.” J.A. 807. There was thus a basis

for the jury to find that Cohee would not have planted more

acres than he would be able to harvest with the ten-person labor

force he anticipated. This is true even though Cohee was unable

to harvest 120 acres despite ultimately getting between five and

ten workers each day from Delaware and between five and twenty-

six workers for several hours each day from a neighbor. These

workers became available late in the harvest season, and the

laborers that Cohee secured from his neighbor only worked for

several hours a day. We have no basis for concluding that the

$490,000 damages award for 2005 amounted to plain error.

2.

Global also challenges the damages awarded for future

lost profits in 2006 and 2007 as speculative and unsupported by

the evidence. Global raised these arguments before the district

court in its post-trial motions. Global first argues that the

evidence is not sufficient to support the jury’s implicit

finding that Global’s breach caused Cohee to stop growing sweet

corn and watermelon. According to Global, the evidence shows

that Cohee decided to stop growing those crops because he was

concerned about the availability of a labor force, not because

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he had lost his customer base. While the record does contain

some evidence from which a juror could make such a finding, the

jury in this case obviously made a different finding. It found

that Cohee stopped growing sweet corn and watermelon because of

Global’s breach and the consequences of that breach.

There was sufficient evidence to support the jury’s

finding. Three farmers, including Cohee, testified that direct

market and wholesale customers will not give a farmer who “drops

the ball” a second chance. J.A. 945. A gap in a farmer’s

product supply will likely result in direct market and wholesale

customers buying elsewhere. Indeed, Cohee testified that he was

not prepared to grow sweet corn or watermelon in 2006 because of

a combination of factors including the damage that Global had

caused to his direct market and wholesale customer base. The

jury was free to credit this testimony rather than certain other

evidence relied upon by Global.

Global also argues that the damages awarded for lost

profits in 2007 were overly speculative because Cohee’s expert

did not quantify a damages estimate for 2007. But California

courts have upheld damages awarded for future lost profits in

the case of an established business.

Where an established business’s operation is prevented
or interrupted, “damages for the loss of prospective
profits that otherwise might have been made from its
operation are generally recoverable for the reason
that their occurrence and extent may be ascertained

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 with reasonable certainty from the past volume of
business and other provable data relevant to the
probable future sales.”

Parlour Enters., Inc., 152 Cal. App. 4th at 287 (quoting Kids’

Universe v. In2Labs, 95 Cal. App. 4th 870, 883 (Ct. App. 2002)).

Cohee Farms is an established business, and Cohee

introduced evidence about his “past volume of business and other

provable data relevant to the probable future sales.” Parlour

Enters., Inc., 152 Cal. App. 4th at 288. There was evidence

that Cohee planted about 55 acres of watermelon per season,

produced an average yield of 40,000 pounds of watermelon per

acre, received at least 10 cents per pound, and paid around

$1,800 per acre for labor. Similarly, the record contains

evidence that Cohee planted about 65 acres of sweet corn per

season; produced an average yield of 1,500 dozen ears of sweet

corn per acre, received $2 per dozen ears, and paid $1,200 per

acre for labor. Using these average yields and prices, Cohee’s

expert was able to estimate the damages that Cohee suffered by

planting less profitable crops in 2006. Using the same data,

the jury could itself estimate damages for 2007.

Global correctly notes that the expert witness did not

himself calculate estimated lost profits for 2007, but the

expert testified that “there is a strong probability that

[Cohee’s] earnings have been adversely affected prospectively

[beyond 2006].” J.A. 995. He also testified that his analysis

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for 2006 was relevant to future years. This testimony is

sufficient to demonstrate the occurrence of lost profits in

2007, and the data relating to average yield and pricing

provided the data necessary to calculate the extent of those

damages to a reasonable certainty.

3.

Global’s final argument is that the award of $37,186

for unnecessary expenses incurred in 2005 should be reversed.

Cohee recovered damages for the unnecessary expenses he incurred

because the sweet corn packaging facility he built in 2004

suffered diminished utility as a result of Global’s breach.

Global argues on appeal that this damages award was improper for

two reasons: (1) there was insufficient evidence of a causal

connection between Global’s breach and the damages awarded and

(2) those damages were not reasonably foreseeable to Global.

Because Global failed to raise these arguments before

the district court, we review for plain error. In this analysis

we inquire whether “(1) there is an error; (2) the error is

plain; (3) the error affects substantial rights; and (4) . . .

the error seriously affects the fairness, integrity or public

reputation of judicial proceedings.” Celotex Corp. v. Rapid Am.

Corp., 124 F.3d 619, 630-31 (4th Cir. 1997). We find no plain

error with respect to Global’s challenge to the sufficiency of

the evidence as to causation. For the same reasons the evidence

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bore out a causal connection between Global’s breach and lost

profits in 2006 and 2007, the evidence establishes a causal

connection between the breach and the alleged damage due to

unnecessary expenses. Cohee was forced to stop growing sweet

corn and watermelon as a result of Global’s breach, thereby

diminishing the utility of Cohee’s sweet corn packaging

facility. The evidence supporting these determinations is

sufficient to withstand plain error review.

We also decline to find plain error with respect to

whether the diminished utility of the packaging facility was

reasonably foreseeable to Global at the time of formation of the

Agreement.

[S]econdary or derivative losses arising from
circumstances that are particular to the contract or
to the parties . . . are recoverable if the special or
particular circumstances from which they arise were
actually communicated to or known by the breaching
party (a subjective test) or were matters of which the
breaching party should have been aware at the time of
contracting (an objective test).

Lewis Jorge Constr. Mgmt., Inc. v. Pomona Unified Sch. Dist.,

102 P.3d 257, 261 (Cal. 2004). There is no evidence that Cohee

in fact informed Global that he had constructed a sweet corn

packaging shed -– evidence which would have satisfied the

subjective test. The question is thus whether Global ought to

have been aware that Cohee would suffer losses to sweet corn-

specific investments by its breach. It is not a stretch to

23
conclude that anyone (such as Global) supplying labor to harvest

sweet corn would know that a packing shed would be a routine

expense for the grower.

But even if we assume that these losses were not

reasonably foreseeable, that it was plain error for the district

court to submit the foreseeability issue to the jury, and that

the error affected Global’s substantial rights, we decline to

conclude that any error “seriously affect[ed] the fairness,

integrity or public reputation of judicial proceedings.”

Celotex Corp., 124 F.3d at 631; see also Matco Mach & Tool Co.

v. Cincinnati Milacron Co., 727 F.2d 777, 781 (8th Cir. 1984)

(declining to find that error in damages instruction to jury

“seriously affected the fairness of the proceedings”). Not only

did Global fail in district court to argue lack of

foreseeability as a matter of law, it failed to raise factual

arguments about foreseeability during the trial. The jury found

by a preponderance of the evidence that “both parties could have

reasonably foreseen the harm as the probable result of the

breach.” J.A. 761 (Jury instruction no. 14). As a result, we

perceive no serious effect on the fairness of the proceedings.

We thus conclude that it was not plain error for the district

court to submit the issue of packing shed damages to the jury.

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 * * *

The judgment is

AFFIRMED.

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