Matrix Group Ltd. v. Rawlings Sporting Goods Co.

United States Court of Appeals
FOR THE EIGHTH CIRCUIT
___________

Nos. 05-4345/06-1033
___________

Matrix Group Limited, Inc., *
*
Plaintiff - Appellee/ *
Cross-Appellant, *
*
v. *
*
Rawlings Sporting Goods *
Company; K2, Inc., *
*
Defendants - Appellants/ *
Cross-Appellees. * Appeals from the United States
___________ District Court for the Eastern
District of Missouri.
Matrix Group Limited, Inc., *
a Florida Corporation with *
a principal place of business *
in Safety Harbor, County of *
Pinellas, State of Florida, *
*
Plaintiff - Appellee/ *
Cross-Appellant, *
*
v. *
*
Rawlings Sporting Goods *
Company, Inc., a Delaware *
Corporation with a principal *
place of business in Fenton, *
County of St. Louis, State *
of Missouri, *
*
 Defendant - Appellant/ *
Cross-Appellee. *
___________

Submitted: November 13, 2006
Filed: February 20, 2007
___________

Before MURPHY, ARNOLD, and BENTON, Circuit Judges.
___________

MURPHY, Circuit Judge.

After Rawlings Sporting Goods Company terminated an agreement granting an
exclusive license to Matrix Group Limited to sell its sports bags, the parties sued each
other for breach of contract. Matrix also asserted claims against Rawlings and K2,
Inc., Rawlings' parent corporation, under a Florida statute on deceptive trade practices
and a tortious interference claim against K2. The district court1 granted summary
judgment to Matrix on the contract, and a jury returned verdicts in favor of Matrix
against Rawlings and K2. Post trial motions were denied, except for Rawlings' motion
to reduce Matrix's compensatory damage award. Rawlings and K2 appeal the
judgment in favor of Matrix and the denial of post trial motions. Matrix appeals the
reduction of its damage award and the dismissal of its claims under the Florida statute
and for punitive damages. We affirm on all but one issue.

I.

Matrix, which is headquartered and incorporated in Florida, produces and sells
bags for sporting equipment. Rawlings, a Delaware corporation, makes sporting
equipment for use in baseball, softball, basketball and football. On July 31, 1996,

1
The Honorable E. Richard Webber, United States District Judge for the Eastern
District of Missouri.

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Rawlings and Matrix executed the contract which is the subject of this litigation.
Under that contract, Matrix had an exclusive license to use Rawlings' trademarks in
producing, marketing, and selling equipment bags, and the license was to continue so
long as certain conditions were satisfied. Matrix agreed to use its "best efforts to
foster and develop the products" and to maximize sales. It further agreed to meet
certain minimum average annual sales levels over a five year period. Rawlings agreed
not to produce or sell bags that competed with those of Matrix or to sell bags over a
certain size. A section entitled "Breach" provided that if either party "breache[d] any
of the provisions" of the contract, written notice of the breach had to be given to the
breaching party. The other party was entitled to terminate the contract if the breaching
party did not cure the breach within thirty days after the written notice. A separate
section entitled "Immediate Termination" stated that Rawlings, upon notice to Matrix,
could immediately terminate the agreement if Matrix became insolvent. The contract
was to be governed by the law of Delaware.

There was testimony at trial that annual sales of Rawlings bags were about
$300,000 at the time Matrix took over its sporting bag business. By 1999 sales had
reached $3 million per year, but in the next several years they declined and were at
about $865,000 in 2003. Nevertheless, Matrix met the contract's minimum sales
requirements at all times during the contract period.

In March 2003 K2 acquired Rawlings as a subsidiary, and then in September
it also acquired Worth, a competitor to Matrix in the sporting equipment bag industry.
K2 made plans to consolidate parts of the sales forces of Rawlings and Worth, and
Louis Orloff, the president of Matrix, wrote to Rawlings that such a consolidation
would violate the noncompete clause of the agreement between Matrix and Rawlings.

For some time Rawlings had been concerned with the decline in its bag sales
and believed that Matrix was uninterested in growing this business and was not using
its best efforts to foster and develop its products. In a meeting with Orloff in

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November 2003, Rawlings management expressed concern that the bag line was
stagnant. Rawlings was dissatisfied with Orloff's response to these concerns, which
it believed showed that Orloff considered Rawlings' bag line relatively unimportant
and that he had no desire to innovate. During that same month K2's consolidation
plans were carried out, and portions of the Rawlings and Worth sales forces were
combined.

After the November 2003 meeting between Orloff and Rawlings management,
Orloff sent a letter to Rawlings referring to the parties' disputes and outlining Matrix's
positions on them. He reiterated his belief that consolidation of the Rawlings and
Worth sales forces would violate the parties' contract. Rawlings felt that this letter did
not satisfactorily respond to its concerns and its president, Robert Parish, discussed
the Matrix letter with Monte Baier, K2's general counsel, and decided to terminate the
license agreement.

On January 30, 2004, Matrix initiated its breach of contract action against
Rawlings in the United States District Court for the District of Maine, alleging breach
of the license agreement's noncompete duties. By letter dated February 2, 2004,
Rawlings informed Matrix that it would terminate the contract effective thirty days
from the date of the letter for Matrix's failure to use best efforts. The letter further
stated that the contract notice provision, requiring a thirty day period for cure of
breach, was inapplicable "because Rawlings has repeatedly requested that Matrix
comply with the terms of the Agreement requiring Matrix to use its best efforts ... and
Matrix has failed and refused to comply." On the same date as that letter, Rawlings
filed its action against Matrix in federal district court in the Eastern District of
Missouri for breach of Matrix's duty to use best efforts.

Matrix moved for a temporary restraining order and preliminary injunction
against Rawlings in the Maine case while Rawlings sought to transfer that action to

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the Eastern District of Missouri. The district court denied Matrix's motion2 and
transferred the Maine case to the Eastern District of Missouri where it was
consolidated with the action already filed there.

The cases were realigned, and additional claims were asserted. Matrix alleged
that Rawlings had wrongfully terminated the contract by failing to give it the required
thirty day period in which to cure its breach. Matrix also joined K2 as a party and
alleged that it and Rawlings had violated the Florida Deceptive and Unfair Trade
Practices Act, Fla. Stat. §§ 501.201-.23. In addition Matrix asserted that K2, by
acquiring Worth and consolidating the sales forces of Rawlings and Worth, had
caused Rawlings to breach the license agreement's noncompete clause and tortiously
interfered with that agreement in violation of Florida common law. Matrix sought
compensatory and punitive damages, as well as equitable relief to prevent
consolidation of the Rawlings and Worth sales forces and the selling or promoting of
competing bags.

Rawlings and K2 subsequently moved for dismissal of Matrix's Florida
statutory claim and for summary judgment on Matrix's contract and common law tort
claims. In its motion Rawlings raised an additional theory justifying its termination
of the contract on the ground that Matrix was insolvent and therefore in breach. To
support this theory it produced a balance sheet from 2004 showing that Matrix's
liabilities exceeded its assets. Matrix in turn moved for summary judgment both on
its claim that Rawlings had wrongfully terminated the license agreement and on
Rawlings' breach of contract claim.

In ruling on these motions, the district court concluded that Matrix's statutory
claim should be dismissed for failure to state a claim. Summary judgment was

2
The First Circuit later affirmed the denial of the temporary injunction. Matrix
Group Ltd. v. Rawlings Sporting Goods Co., 378 F.3d 29 (1st Cir. 2004).

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granted to Rawlings on the tortious interference claim against it, but denied to K2.
The district court also granted summary judgment to Matrix for wrongful termination
after concluding that Rawlings' notice had violated the contract's thirty day cure
provision and that there was insufficient evidence that Matrix had been insolvent.

The parties then went to trial on Matrix's claims against Rawlings for breach of
the license agreement's noncompete clause and against K2 for tortious interference.
As part of its compensatory damage claim, Matrix sought lost profits which it would
have gained from the license absent breach. Its expert witness, Donna Beck Smith,
split her calculation of lost profits into two segments: (1) the profits Matrix would
have gained from the license for the first ten years after termination, and (2) the
"terminal value" of the license or its residual value after those ten years. K2 and
Rawlings moved for a directed verdict on the license's terminal value, claiming such
damages were too speculative to be awarded, and K2 moved for judgment as a matter
of law on the tortious interference claim. The motions were denied, and the cases
were submitted to the jury by special verdict with instructions that if the jury found
for Matrix it was to award separate damages for the ten year period after termination
and for the terminal value of the license.

The jury returned a verdict in favor of Matrix and awarded damages against
Rawlings in the amounts of $4,096,312 for the ten year period and $2,053,688 for
terminal value. It also returned a verdict against K2 for $2,500,000. The district court
entered judgment on the jury verdicts. Rawlings and K2 filed post trial motions for
judgment or in the alternative for a new trial. The district court denied the motions
in large part, but it did grant Rawlings' motion in respect to the terminal value award,
and the judgment was amended to eliminate that portion of Matrix's award.

All parties have appealed. Rawlings argues that the district court erred in
granting summary judgment to Matrix on its wrongful termination claim. K2 asserts
that the jury instructions on Matrix's tortious interference claim were faulty and that

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it should have been granted judgment as a matter of law on that claim. Both Rawlings
and K2 argue in the alternative that they are entitled to a new trial because the verdicts
were against the weight of the evidence. On its cross appeal Matrix argues that its
claim under the Florida statute should not have been dismissed, that the jury should
have been allowed to consider whether to award punitive damages against K2, and
that the district court erred in setting aside the jury's award of damages for the
license's terminal value.

II.

A.

In challenging the district court's summary judgment decision, Rawlings argues
that it was excused from complying with the contract's thirty day notice and cure
provision because Matrix had already materially breached the contract by failing to
use its best efforts. According to Rawlings, this prior breach is a complete defense to
Matrix's breach of contract action because a plaintiff must demonstrate substantial
compliance with all contractual provisions before receiving relief. Matrix responds
that the contract must be enforced according to its own terms and that it
unambiguously required notice of breach and provided a thirty day period to cure. We
review a grant of summary judgment de novo, viewing the record in the light most
favorable to the nonmoving party. Hope v. Klabal, 457 F.3d 784, 790 (8th Cir. 2006).
A district court's interpretation of state law is also reviewed de novo. Id.

The contract provided for Delaware law to control, and Rawlings argues that
under that law a party need not give notice of termination if there is a material breach
of the contract by the other party. We have found no decision of the Delaware
Supreme Court on this point of law, and Rawlings cites none. Rawlings does cite
dicta in one chancery case, see A.R. Dervaes Co. v. Houdaille Indus., Inc., 1982 WL
17883 at *2 (Del. Ch. Jan. 14, 1982), and also a trial court decision interpreting a

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statutory notice provision, see Braxton v. Adirondack Group, Inc., 2003 WL
22938542 at *5 (Del. C.P. Aug. 11, 2003). Matrix cites a federal district court case
that directly contradicts Rawlings' position, however. Harper v. Del. Valley Broad.,
Inc., 743 F. Supp. 1076 (D. Del. 1990), aff'd mem., 932 F.2d 959 (3d Cir. 1991). In
Harper, the district court applied Delaware law to hold that one party's alleged failure
to perform adequately under a consulting agreement did not excuse the other party's
failure to follow a fifteen day notice and cure provision. Id. at 1084.

While the case on which Matrix relies is more apposite than those cited by
Rawlings, none is conclusively determinative of Delaware law. See Comm'r v. Estate
of Bosch, 387 U.S. 456, 465 (1967). What should determine the outcome here is the
more fundamental principle that the unambiguous language of a contract must be
given its plain meaning and full effect. Westfield Ins. Group v. J.P.'s Wharf, Ltd., 859
A.2d 74, 76 (Del. 2004). As the Delaware Court of Chancery has explained, "Where
contract language speaks to a particular dispute, the Court gives those privately
negotiated and agreed upon terms their full and plain meaning." Cont'l Ins. Co. v.
Rutledge & Co., 750 A.2d 1219, 1228 (Del. Ch. 2000).

Here, the license agreement's thirty day notice and cure provision speaks
directly to this dispute. The unambiguous text of that provision applies to "any"
breach (other than those addressed in the immediate termination provision). The thirty
day provision does not exclude "material" breaches from its required notice and cure
period. If only nonmaterial breaches required notice, the word "any" would be
nullified. Rawlings was thus not excused from giving Matrix notice and the period
to cure.

The principle that unambiguous text governs contractual interpretation also
persuades us that an alleged breach of the contract's best efforts provision is not a
defense to Matrix's breach of contract action. It is precisely when a party is not in
substantial compliance with the contract that the notice and cure provision mandates

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the giving of thirty days' notice. In similar circumstances the Eleventh Circuit has
come to the same conclusion while applying the law of Pennsylvania. See Alliance
Metals, Inc. v. Hinely Indus., Inc., 222 F.3d 895, 903 (11th Cir. 2000) (it would
otherwise "effectively render meaningless contractual 'notice and cure' requirements").
The district court did not err by granting summary judgment to Matrix on these
defenses of Rawlings to the breach of contract action.

Rawlings raises an additional point in addressing the only contractual exception
to the notice and cure provision. It argues that because it presented uncontroverted
evidence that Matrix was insolvent, the license agreement's "Immediate Termination"
provision gave it the right to terminate Matrix immediately upon notice. That
provision states that "Rawlings shall have the immediate right to terminate this
Agreement upon written notice to Matrix in the event that ... Matrix becomes or is
declared insolvent." Matrix disputes Rawlings' reading of the agreement and contends
that it incorrectly interprets the term "insolvent" to mean balance sheet insolvency,
when in actuality the term refers to equitable insolvency. Matrix also argues that
Rawlings waived its insolvency defense by failing to state in its written notice to
Matrix that it was terminating the contract due to insolvency. The district court agreed
with Matrix's interpretation, and we review its construction of the contract de novo.
Oak River Ins. Co. v. Truitt, 390 F.3d 554, 557 (8th Cir. 2004).

Matrix argues that Rawlings cannot now rely on an insolvency defense because
it failed to mention insolvency in its notice of termination. A party may justify its
termination of an agreement, however, "'by proving that there was, at the time, an
adequate cause, although it did not become known to him until later.'" Brywil, Inc.
v. STP Corp., 1980 WL 77945 at *10 (Del. Ch. July 15, 1980), quoting Coll. Point
Boat Corp. v. United States, 267 U.S. 12, 16 (1925) (Brandeis, J.); see also Barisa v.
Charitable Research Found., Inc., 287 A.2d 679, 682 (Del. Super. Ct.), aff'd, 299 A.2d
430 (Del. 1972). Rawlings is entitled to argue insolvency.

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 Insolvency carries two distinct meanings. Balance sheet insolvency, the
interpretation which Rawlings urges for the contract term, occurs when an entity's
liabilities exceed its assets. See Geyer v. Ingersoll Publ'ns Co., 621 A.2d 784, 788
(Del. Ch. 1992). Matrix argues on the other hand that what is intended by the
agreement is equitable or cash flow insolvency. That type of insolvency is understood
under Delaware law to mean (1) "a deficiency of assets below liabilities with no
reasonable prospect that the business can be continued in the face thereof," or (2) "an
inability to meet maturing obligations as they fall due in the ordinary course of
business." Prod. Res. Group, L.L.C. v. NCT Group, Inc., 863 A.2d 772, 782 (Del. Ch.
2004).

Both parties cite cases which discuss the fiduciary duties owed by corporate
directors to creditors. Compare U.S. Bank N.A. v. U.S. Timberlands Klamath Falls,
L.L.C., 864 A.2d 930, 947-48 (Del. Ch. 2004) (using the equitable definition), vacated
on other grounds, 875 A.2d 632 (Del. 2005), with Geyer, 621 A.2d at 788 (using the
balance sheet definition). To support its interpretation of insolvent, Rawlings points
to cases employing the balance sheet definition decided under the Delaware
Fraudulent Conveyances Act. E.g., Harrington v. Hollingsworth, 1994 WL 374313
at *3 (Del. Ch. July 6, 1994). Matrix relies on decisions which use the equitable
definition and deal with the appointment of corporate receivers. E.g., NCT Group,
863 A.2d at 782.

None of these cited cases deals with the interpretation of a contract containing
the term "insolvent." The cases simply show that "insolvent" is reasonably susceptible
of different interpretations and is therefore an ambiguous term. See Rhone-Poulenc
Basic Chems. Co. v. Am. Motorists Ins. Co., 616 A.2d 1192, 1196 (Del. 1992).
Delaware law directs us to look at the meaning of insolvent in the particular context
in which it appears. The question is what reasonable persons in the position of the
parties would have interpreted the ambiguous term to mean. See Kaiser Aluminum
Corp. v. Matheson, 681 A.2d 392, 395 (Del. 1996). To aid our inquiry we look to the

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parties' acts and statements, the business context, any prior dealings, and relevant
customs in the industry. In re Explorer Pipeline Co., 781 A.2d 705, 714 (Del. Ch.
2001).

While this agreement called for Matrix to keep records necessary for the
calculation of royalties payable under it, it did not require Matrix to furnish Rawlings
with general data on its financial condition. This omission indicates that under the
contract, insolvency was intended to mean an inability to continue business in the face
of mounting liabilities or the inability to pay its bills as they became due. Rawlings
would learn about such occurrences without access to Matrix's balance sheets or
income statements. Since Rawlings admits that it was unaware of the Matrix balance
sheet on which its insolvency argument relies until after litigation had begun, it
apparently did not consider it necessary to monitor the company's balance sheets. See
Artesian Water Co. v. State, 330 A.2d 441, 443 (Del. 1974) (parties' own actions "of
great weight" in determining contract's meaning and lead court "to presumptively
correct interpretation"). Moreover, due to costs of replacing Matrix with another
licensee, it is questionable that Rawlings would have only been concerned with a
temporary state of Matrix's balance sheet. In a contract of indefinite duration like this
one, Rawlings would have been more likely concerned with Matrix's long term
financial health and its ability to pay its bills and grow its business. Interpreting the
contract to refer to equitable rather than balance sheet insolvency is the more
reasonable and therefore preferable interpretation. See Holland v. Nat'l Automotive
Fibres, Inc., 194 A. 124, 127 (Del. Ch. 1937). Because it is undisputed that Matrix
was not equitably insolvent, we conclude that summary judgment was correctly
granted to Matrix on this issue.

B.

K2 argues on appeal that Matrix did not establish a submissible case of tortious
interference with a business relationship because it failed to prove an essential element

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of its claim: namely, that K2 had intentionally and unjustifiably interfered with the
license agreement between Matrix and Rawlings. K2 contends that its consolidation
of the Rawlings and Worth sales forces was justified by its interest in its own business
and its competitive position in the sporting goods industry. Furthermore according
to K2, Matrix did not show that its actions were specifically intended to interfere with
the license agreement and the damages awarded against it were duplicative of those
awarded for Rawlings' breach of contract. We review de novo a denial of a motion
for judgment as a matter of law and draw all reasonable inferences in favor of Matrix,
without making credibility assessments or weighing the evidence. Battle v. United
Parcel Serv., Inc., 438 F.3d 856, 861 (8th Cir. 2006).

The elements of a claim for tortious interference with a business relationship
under Florida law are (1) the existence of a business relationship, (2) the defendant's
knowledge of that relationship, (3) the defendant's intentional and unjustified
interference with that relationship, and (4) damage to the plaintiff as a result of the
breach of the relationship. Ethan Allen, Inc. v. Georgetown Manor, Inc., 647 So. 2d
812, 814 (Fla. 1994).3 At trial there was testimony that K2 was aware of the contract
between Rawlings and Matrix and its provisions and that president Parish of Rawlings
had discussed a key letter from Matrix president Orloff with K2's general counsel.
That letter had warned Rawlings that K2's plan to consolidate the Rawlings and Worth
sales forces would breach the contract. Because K2 nonetheless went ahead with
consolidation, the jury was entitled to infer that K2 "intended to procure a breach of
the contract." Chi. Title Ins. Co. v. Alday Donaldson Title Co. of Fla., 832 So. 2d
810, 814 (Fla. Dist. Ct. App. 2002). Purposely causing a breach of contract is an
"improper means" of interference, McCurdy v. Collis, 508 So. 2d 380, 383-84 (Fla.
Dist. Ct. App. 1987), and using improper means to interfere with a business
relationship constitutes unjustifiable interference, Ethyl Corp. v. Balter, 386 So. 2d

3
The district court applied Florida law to Matrix's tortious interference claim
against K2; neither party challenges that choice.

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1220, 1225 (Fla. Dist. Ct. App. 1980). The jury was entitled to find from the evidence
that K2 had used improper means of interference and that it had intentionally and
unjustifiably interfered with the license agreement.

Also unavailing is K2's argument that the damages awarded against it were
duplicative. Damages for breach of contract and tortious interference are not
coextensive, and a jury may award damages under both claims. See Montage Group,
Ltd. v. Athle-Tech Computer Sys., Inc., 889 So. 2d 180, 191-92 (Fla. Dist. Ct. App.
2004). Matrix's expert witness testified that it suffered a total of $12,797,893 in
damages, but the damages which the jury awarded against both Rawlings and K2
totaled only $8,650,000. The jury's aggregate award was thus well within the bounds
of the evidence presented at trial, and a jury may rationally allocate damages "between
the two different causes of action, one for breach of contract, and one for tort." Indu
Craft, Inc. v. Bank of Baroda, 47 F.3d 490, 497 (2d Cir. 1995).

Because a reviewing court's role under the Seventh Amendment "is to reconcile
and preserve whenever possible" a jury verdict, we must start with a presumption that
the damages awarded were not duplicative. Id. Moreover, the acts committed by
Rawlings and those committed by K2 were different. While Rawlings breached the
contract by improperly terminating Matrix without a period of cure, K2 ordered the
sales forces of Worth and Rawlings to consolidate, thus causing a breach of the license
agreement's noncompete clause. The jury apparently intended to apportion damages
between the defendants for these separate acts. In light of these points and K2's
failure to raise the issue in timely fashion, we conclude that the damages awarded
against K2 should be affirmed and that the district court did not err in denying K2's
motion for judgment as a matter of law. See Jackson v. City of St. Louis, 220 F.3d
894, 898 (8th Cir. 2000).

K2 also argues that the district court's instructions on tortious interference were
an abuse of discretion, but K2 never made a specific objection to the instructions

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before submission of the case to the jury. It stated only that "the instruction as
proposed is far broader than the issues as framed by the pleadings and the evidence."
This objection to the district court was too general to preserve the specific objections
that K2 argues on appeal, and the instructions will be reviewed for plain error only.
Dupre v. Fru-Con Eng'g Inc., 112 F.3d 329, 333 (8th Cir. 1997).

K2 claims that the court erred in instructing that one of the elements of a
tortious interference claim was "existing business relationships" without specifying
what those relationships were. No specification was necessary, however, since the
trial focused on Matrix's relationship with Rawlings. The instructions were also
faulty, K2 argues, in failing to define "interference," thus allowing the jury to
understand the term more broadly than does Florida law. K2 overlooks the fact that
the instructions correctly stated Florida law by excluding from "interference" any
action that was justified or that did not employ improper means.4 There was no plain
error in the jury instructions.

C.

Rawlings and K2 contend that the district court erred by denying their motion
for a new trial. Rawlings asserts that the lost profits award was against the weight of
the evidence because Matrix's expert testimony was unreliable, and K2 claims that the
verdict against it was a miscarriage of justice. The denial of a new trial motion based
on the argument that the jury verdict was against the weight of the evidence "is

4
K2 also challenges an instruction relating to breach of contract which stated
that if the jury found for Matrix, it had to award "such sum as ... will fairly and justly
compensate plaintiff for any damages [directly resulting from] the breach or breaches
of the parties' contract, mentioned in the evidence." K2 believes that the reference to
"breach or breaches" authorized Matrix to recover under a theory that K2 directed
Rawlings to terminate the contract, but the specific instruction on tortious interference
included no reference to such a theory.

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virtually unassailable on appeal," however. Grogg v. Mo. Pac. R.R. Co., 841 F.2d
210, 214 (8th Cir. 1988). Rawlings never made a challenge under Daubert v. Merrell
Dow Pharmaceuticals, Inc., 509 U.S. 579 (1993), to the expert testimony whose
calculations it now attacks, and neither Rawlings nor K2 has shown that the verdicts
were against the weight of the evidence or that there was a miscarriage of justice. The
district court did not abuse its discretion in denying the motion for a new trial.

III.

A.

Matrix challenges the district court's post trial elimination of the jury award for
terminal value damage. The district court set aside those damages as speculative, but
Matrix argues that terminal value is a well accepted concept under the law. Even if
its expert's projections were optimistic, Matrix argues, there was nonetheless a
reasonable basis for the award. While the jury valued the license agreement's terminal
value at only about $2 million, the expert testimony set it at $8.7 million. Rawlings
responds that speculation is necessarily involved in estimating terminal value because
revenue lost over an infinite period could be included.

We review a grant of judgment as a matter of law de novo, applying the same
standard as the district court. We view the evidence in the light most favorable to the
nonmovant, give it the benefit of every reasonable inference, and resolve all factual
disputes in its favor. If the evidence viewed according to this standard would permit
reasonable jurors to differ in the conclusions they draw, judgment as a matter of law
cannot be granted. See Smith v. Chase Group, Inc., 354 F.3d 801, 806 (8th Cir. 2004).
Delaware law disapproves of speculative damages, see Scotton v. Wright, 121 A. 180,
185 (Del. Super. Ct. 1923), but damages need only have a reasonable basis, they need
not be absolutely certain. Bomarko, Inc. v. Int'l Telecharge, Inc., 794 A.2d 1161,
1184 (Del. Ch. 1999).

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 Matrix called Donna Beck Smith, a certified public accountant and valuation
analyst, as an expert witness to establish the amount of its economic losses. Rawlings
made no Daubert challenge to her testimony. Smith gave her expert opinon about
Matrix's damages after having examined its past and present financial data, as well as
projections about the sporting goods industry's future performance. First, she assessed
damages for the present value of revenue Matrix would have gained from the license
agreement over the first ten years after termination. Next, she assessed the license's
"terminal value" or market value of the license agreement after those ten years, which
she described as "what somebody would be willing to pay for the right to have this
contract." In her valuation Smith used what is called the "constant growth" or
"Gordon growth" model, which assumes constant growth of an asset and then
discounts this value to arrive at the present value of the terminal value.

Calculating the value of an asset at liquidation or disposition is a necessary part
of discounted cash flow analysis, which the Delaware courts have recognized as "the
preeminent valuation methodology" in the financial community. Neal v. Ala. By-
Products Corp., 1990 WL 109243 at *7 (Del. Ch. Aug. 1, 1990), aff'd, 588 A.2d 255
(Del. 1991); see also Kleinwort Benson Ltd. v. Silgan Corp., 1995 WL 376911 at *7
(Del. Ch. June 15, 1995) (discounted cash flow analysis "requires the experts to set
a value for [the asset] at the end of the period, which is labeled a terminal value").
The constant growth model which Smith employed has been specifically recognized
as an accepted way to determine terminal value. See Prescott Group Small Cap, L.P.
v. Coleman Co., 2004 WL 2059515 at *14 (Del. Ch. Sept. 8, 2004). Rawlings argues
that the cases in which recovery for terminal value was allowed are distinguishable
because they involved statutory stock appraisal. The agreement here, however, like
shares in a corporation, was expected to generate income for an indefinite period.
Rawlings gives no reason why the financial principles applied to one revenue
producing asset like stock should not be applied to another like a license agreement.

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Rawlings points to two cases from other jurisdictions which it says reject the concept
of terminal value. The Second Circuit held in a contract case under New York law
that the plaintiff could recover "the market value of an income-producing asset,"
instead of a discounted income stream of lost profits, Schonfeld v. Hilliard, 218 F.3d
164, 177 (2d Cir. 2000), because that accounted for "the chance to earn the speculative
profits." Id. (emphasis omitted). After examining Schonfeld, the Fifth Circuit decided
that lost asset damages from breach of a license agreement were "determined by
considering what a hypothetical buyer would pay for the chance to earn future
profits." Fluorine on Call, Ltd. v. Fluorogas Ltd., 380 F.3d 849, 860 (5th Cir. 2004)
(award reversal). Because the expert had failed to do "any of the calculations that
distinguish a lost asset damage model from a straightforward lost-profits one," the
award was reversed. Id. at 861.

Here in contrast, Smith testified that the purpose of her terminal value
calculation was to ascertain what a buyer would pay for the license agreement ten
years into the future by "determin[ing] the value of an asset and not lost profits year
after year after year into infinity." The constant growth model is entirely different
from calculating damages based on an infinite series of periodic cash flows, for its
formula is meant to estimate the cash available from a disposition of the asset. See
Samuel C. Thompson, Jr., A Lawyer's Guide to Modern Valuation Techniques in
Mergers and Acquisitions, 21 J. Corp. L. 457, 489-92 (1996). We conclude for these
reasons that the district court erred by eliminating the award for terminal value.

B.

Matrix claims that the district court erred by deciding that as a matter of law
Matrix could not ask the jury to award punitive damages against K2 for its tortious
interference. K2 replies that Florida law precludes any award of punitive damages
here.

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 A Florida statute governing the award of punitive damages in civil actions
provides that punitive damages are available "only if the trier of fact, based on clear
and convincing evidence, finds that the defendant was personally guilty of intentional
misconduct or gross negligence." Fla. Stat. § 768.72(2). Because punitive damages
are "reserved for particular types of behavior which go beyond mere intentional acts,"
Weinstein Design Group, Inc. v. Fielder, 884 So.2d 990, 1001 (Fla. Dist. Ct. App.
2004), the level of culpability which this statute demands is higher than that which is
demanded by tortious interference. "Proof of the elements of tortious interference
may be established even though the evidence may not justify an award of punitive
damages." Air Ambulance Prof'ls, Inc. v. Thin Air, 809 So. 2d 28, 30 (Fla. Dist. Ct.
App. 2002). In order to recover punitive damages Matrix would have had to prove
more than just the elements of a claim for tortious interference.

Although an award of punitive damages for tortious interference requires "an
illicit scheme to put [the plaintiff] out of business," or fraud or malice, id. at 31,
Matrix points to no evidence from which a reasonable jury could infer that K2 was
guilty of fraud or acted out of a bare desire to harm Matrix. While there is evidence
that K2 acted to harm Matrix's relationship with Rawlings, there is no evidence of
fraud, malice, or desire to destroy Matrix. Cf. IBP, Inc. v. Hady Enters., Inc., 267 F.
Supp. 2d 1148, 1170 (N.D. Fla. 2002) (punitive damages awarded in tortious
interference case where defendant's scheme involved contamination of meat, thereby
"consciously disregard[ing] the health and safety of the ... public"). The district court
did not err in declining to put the issue of punitive damages before the jury.

C.

Matrix contends that the district court erred by dismissing its Florida statutory
claim against Rawlings and K2 on the pleadings. The Florida Deceptive and Unfair
Trade Practices Act prohibits "[u]nfair methods of competition, unconscionable acts
or practices, and unfair or deceptive acts or practices in the conduct of any trade or

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commerce." Fla. Stat. § 501.204(1). Before a 2001 amendment, the statute allowed
only "a consumer" to pursue an action under it. After the amendment, the statute
permits "a person who has suffered a loss as a result of a violation" to bring an action.
Id. § 501.211(2) (emphasis added). Matrix relies on that amendment to bring its
action and claims that Florida courts routinely permit corporations to sue under the
statute. Appellants respond that the consumer protection purpose of the statute is
unchanged and that Matrix therefore lacks standing to pursue its claim. Even if
Matrix did have standing, they add, its complaint asserted no violation of the statute.

Statutory text and case law foreclose the argument that Matrix lacks standing
because it is a corporation. Under Florida law "persons" include "corporations." Id.
§ 1.01(3). Moreover, we are obliged to give effect to the 2001 amendment, for
"[w]hen the Legislature makes a substantial and material change in the language of a
statute, it is presumed to have intended some specific objective or alteration of law."
Mangold v. Rainforest Golf Sports Ctr., 675 So. 2d 639, 642 (Fla. Dist. Ct. App.
1996). Several courts have given effect to that amendment by allowing "a broader
base of complainants," including corporations, to pursue actions under the statute.
Niles Audio Corp. v. OEM Sys. Co., 174 F. Supp. 2d 1315, 1320 (S.D. Fla. 2001);
accord Beacon Prop. Mgmt., Inc. v. PNR, Inc., 890 So. 2d 274 (Fla. Dist. Ct. App.
2004) (on remand from Florida Supreme Court, affirming jury verdict in favor of
plaintiff corporation).

Matrix cannot prevail simply because it has standing, however. See Moore v.
PaineWebber, Inc., 189 F.3d 165, 169 n.3 (2d Cir. 1999) (distinguishing lack of
standing from failure to state a claim on which relief may be granted). Matrix's
complaint alleges that Rawlings violated the statute by intentionally breaching the
contract and that K2 did so by intentionally causing Rawlings to breach the contract.
These allegations are insufficient to state a claim under the statute. The Florida
Supreme Court has cautioned that breaches of contract, without more, are insufficient
to state a claim under the statute. See PNR, Inc. v. Beacon Prop. Mgmt., Inc., 842 So.

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2d 773, 777 n.2 (Fla. 2003). We have found no case in which mere intentional breach
of contract or interference with that contract have been found to constitute a violation
of the deceptive practices statute.

The cases involving corporate plaintiffs upon which Matrix principally relies
have quite different facts. In one, the defendant was alleged to have continually lied
to the plaintiff about its duties under a property management agreement. Id. at 774.
In another, the plaintiff alleged that the defendant intentionally infringed its trade
dress. Niles Audio Corp., 174 F. Supp. 2d at 1317. And in yet another, the plaintiff
alleged that the defendant had entered into a transaction with bad faith and sought to
drive the plaintiff out of business entirely. Hanson Hams, Inc. v. HBH Franchise Co.,
2003 WL 22768687 (S.D. Fla. Nov. 7, 2003). In those cases the corporate plaintiffs
alleged significant deception or malice. Here in contrast, Matrix alleged only that the
appellants wanted to get Rawlings out of the license agreement and intentionally
caused a breach of that agreement. There were no allegations of bad faith negotiations
or deception during the life of the contract, or allegations that could give rise to an
inference that the appellants wanted to ruin Matrix totally. The district court did not
err by dismissing Matrix's claim under the Florida statute.

IV.

For these reasons we reverse the order of the district court striking Matrix's
damages for the license's terminal value but affirm the judgment in all other respects.
We grant the motion by Matrix to supplement the record on appeal and remand for
entry of judgment consistent with this opinion.

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