[PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT FILED
________________________ U.S. COURT OF APPEALS
ELEVENTH CIRCUIT
JANUARY 27, 2010
Nos. 07-13536 & 07-15164
JOHN LEY
________________________ ACTING CLERK
D. C. Docket No. 06-80441-CV-DTKH
GOODMAN-GABLE-GOULD COMPANY, a Maryland
corporation d.b.a. Adjusters International,
Plaintiff-Appellee
versus
TIARA CONDOMINIUM ASSOCIATION, INC., a Florida
non-profit corporation, in its own name and as
Agent for and as Class Representative of all
Owners of Record of all individual condominium
parcels within the Tiara Condominium,
Defendant-Appellant,
BROAD AND CASSEL,
Defendant.
________________________
Appeals from the United States District Court
for the Southern District of Florida
_________________________
(January 27, 2010)
Before TJOFLAT and CARNES, Circuit Judges, and BOWEN,* District Judge.
TJOFLAT, Circuit Judge:
The dispute in this case arises out of a contract between an insurance
adjuster and a condominium located on Singer Island in Palm Beach County,
Florida. The condominium was heavily damaged in back to back hurricanes in
September 2004, and it hired an insurance adjuster to assess the loss and present
its claims to its insurance company. The condominium’s loss exceeded both the
insurance recovery and the policy limit.
Contending that the adjuster caused part of its loss by failing properly to
supervise the contractor hired to restore the building, the condominium refused to
pay the adjuster’s fee. The adjuster therefore sued the condominium. The
condominium counterclaimed, seeking recovery of the expenses the adjuster’s
negligence had allegedly caused. The case proceeded to trial, and the
condominium changed the theory of its counterclaim. It contended that the
adjuster was liable—on theories of fraudulent misrepresentation and delay in
performance—for the sums the condominium spent drying out the building. On
the adjuster’s motion, the district court struck the evidence the condominium
*
Honorable Dudley H. Bowen, United States District Judge for the Southern District of
Georgia, sitting by designation.
2
attempted to introduce to support these theories, and granted the adjuster judgment
as a matter of law on the counterclaim. The jury then found for the adjuster on its
claim and awarded it the fee it was seeking. The district court thereafter entered
judgment for the adjuster in conformance with the jury’s verdict.
The condominium now appeals, challenging both the district court’s
evidentiary and judgment as a matter of law rulings and requesting a new trial.
We affirm.
I.
A.
On September 4, 2004, Hurricane Frances hit Singer Island, seriously
damaging the Tiara Condominium (“Tiara”), a 320-unit, 42-story oceanfront
condominium tower. Tiara had an insurance policy with Citizens Property
Insurance Corporation (“Citizens”) having a per occurrence limit of approximately
$50 million. In the following days, Tiara retained Southern Services, Inc.
(“Southern”) to restore its building and Goodman-Gable-Gould
Company/Adjusters (“GGG”) to adjust its loss. Pursuant to a September 9, 2004
contract (the “Services Agreement”), GGG undertook to “measure and document
[Tiara’s] loss, and present [Tiara’s] claim to the insurance company(s) for damage
. . . occurring on or about 9/4/04.” Tiara agreed to pay GGG a percentage of the
3
amount it recovered from Citizens on a sliding scale, based on the total amount of
recovery.
Three weeks later, on September 25, Hurricane Jeanne hit Singer Island,
rendering the Tiara uninhabitable. The Services Agreement was orally modified
to include adjusting services for Jeanne, and GGG’s fee was proportionately
reduced to reflect the increased potential recovery. GGG and Tiara considered
Hurricane Jeanne a separate occurrence, such that the insurance policy provided a
maximum coverage of $100 million.
With the building uninhabitable, Tiara had the options of drying it out or
gutting it. Tiara had Southern dry out the building at a cost of about $100,000 per
day. Southern continued the dry-out effort from at least October 28, 2004, until
August 7, 2005, charging Tiara $30 million for the work. Tiara had Southern
cease the dry-out process when Citizens announced that it intended to treat the
hurricanes as one occurrence with a coverage limit of $50 million.
Tiara responded to Citizens’s announcement by seeking a declaratory
judgment in a Florida state court1 that the hurricanes were separate occurrences
and that Citizens’s exposure was $100 million, a sum insufficient to cover Tiara’s
1
Tiara filed suit against Citizens in the Circuit Court of Palm Beach County, Florida.
4
losses.2 The lawsuit was resolved through mediation in early March 2006; Tiara
received about $89 million.
After the lawsuit settled, GGG presented Tiara with its final statement,
which showed a balance of $1,439,259 due on its fee. Tiara refused to pay it, and,
on May 2, 2006, GGG brought the present action.
B.
GGG’s complaint alleged that GGG had fully performed the Services
Agreement and that Tiara’s refusal to pay the outstanding balance on its fee
amounted to breach of contract.3 Tiara answered the complaint4 with a general
denial5 and twenty affirmative defenses and a two-count counterclaim for breach
of contract (the Services Agreement) and professional negligence.6 Both counts
2
GGG assessed Tiara’s losses at $69,194,000 from Hurricane Frances and $58,257,000
from Hurricane Jeanne for a total of $127,451,000.
3
In the alternative, GGG sought damages on theories of “Quantum Meruit,” or breach of
“Oral Agreement/Quasi Contract.” These theories are not relevant here because GGG prevailed
on its breach of contract claim.
4
The answer referred to in the text is Tiara’s amended answer.
5
In answering the complaint, Tiara admitted its existence as a Florida condominium and
that it was damaged in the September hurricanes, but it either denied or asserted that it lacked
sufficient information to respond to GGG’s breach of contract allegations.
6
Before filing its answer and counterclaims, Tiara moved the district court to dismiss the
complaint under Fed. R. Civ. P. 12(b)(6) on the ground that the Services Agreement was
unenforceable because it failed to comport with the Florida Administrative Code. The district
court denied its motion on October 12, 2006. Tiara challenges this ruling in this appeal. We
dispose of the challenge in note 21, infra.
5
centered on Southern’s performance of the restoration work. Tiara alleged that,
under the Services Agreement, GGG was responsible for Southern’s proper
performance of the restoration work, that Southern overcharged for the work, i.e.,
engaged in “price gouging,” and that GGG breached its duty to Tiara by
“allowing” Southern to do so (the “price gouging theory”).7
GGG replied to Tiara’s two-count counterclaim by denying the material
allegations of the breach of contract claim and by moving for judgment on the
pleadings on the negligence claim. The district court granted the motion and
struck the negligence claim from Tiara’s counterclaim. The case therefore
proceeded to trial before a jury on the issues framed by GGG’s complaint, Tiara’s
answer,8 and Tiara’s breach of contract counterclaim.
The trial began May 14, 2007. GGG’s case consisted of testimony and
documentary evidence of the work it had performed under the Services
Agreement. After GGG rested its case on May 23,9 Tiara proceeded with its
7
Tiara alleged that GGG had a “fiduciary duty or other duties” to ensure that Southern
did not overcharge for the work.
8
Evidence relating to some of Tiara’s 20 affirmative defenses was presented to the jury.
None of the affirmative defenses, however, were submitted to the jury under the court’s
instructions, and none are relevant here.
9
Tiara did not move the district court for judgment as a matter of law under Fed. R. Civ.
P. 50(a)(2) at the close of GGG’s case or later at the close of all the evidence.
6
counterclaim for breach of contract. It abandoned the theory of liability it had
pled—that GGG was liable for Southern’s price gouging—and advanced two new
theories of contract liability. The first was that GGG failed to perform timely its
contractual obligations, causing Tiara damages (the “delay theory”). The Services
Agreement provided that GGG would “measure,” “document,” and “present”
Tiara’s loss to Citizens. Tiara claimed that the presentation of the loss should
have occurred through the submission of a Proof of Loss. Tiara articulated the
claim this way: GGG should have filed a Proof of Loss with Citizens within ten-
to-twelve weeks after the second hurricane;10 if timely filed, the Proof of Loss
would have triggered a twenty-day deadline for Citizens to inform Tiara whether it
would treat Tiara’s loss as stemming from one or two occurrences; and had Tiara
timely received the information that Citizens would only pay for one occurrence, it
would have ceased the dry-out efforts immediately (and did so when it received
that information in August 2005). Instead, GGG did not start working on Tiara’s
claim until January 2005 because it “was busy on other projects.”
Tiara’s second theory of contract liability was that GGG improperly advised
Tiara regarding drying out the building. The district court labeled this theory a
10
Tiara’s expert testified that GGG could have submitted the Proof of Loss as early as
November 2004, but no later than 10 to 12 weeks following Hurricane Jeanne, which hit Singer
Island on September 25, 2004. Twelve weeks after this date was December 18, 2004.
7
“misrepresentation theory” with three permutations.11 First, Citizens never
required that the building be dried out, but GGG nonetheless represented to Tiara
that Citizens required the dry out. This representation forced Tiara to spend more
money to restore the building, which in turn increased the amounts of its loss, its
recovery from Citizens, and GGG’s fee.12 Second, Citizens recommended a dry
out, but GGG failed to inform Tiara that gutting the building instead would be less
expensive and just as effective.13 Third, regardless of whether Citizens required or
merely recommended that the building be dried out, GGG failed to inform Tiara
that drying the building would be a waste of money. Tiara sought the recovery of
its dry-out expenses under both of its new theories of breach of contract liability:
the delay theory and the misrepresentation theory.
When Tiara began introducing evidence in support of its misrepresentation
theory, GGG immediately objected pursuant to Federal Rule of Civil Procedure
37(c) on the ground that Tiara had not disclosed the facts constituting the
11
Although the district court identified three permutations, the second and third
permutations actually were breaches of contract, not misrepresentations.
12
Although the court did not express this first permutation as a claim of fraudulent
misrepresentation, it was just that: GGG deliberately misrepresented that Citizens required the
dry out to line its own pockets—the dry out would increase Tiara’s loss and insurance claim and
therefore GGG’s adjusting fee.
13
Implicit in this permutation was the notion that GGG had a duty to advise Tiara that
Citizens’s recommendation would lead to more expense than would be necessary to restore the
building.
8
misrepresentations in response to GGG’s interrogatories. GGG argued that Rule
37(c) authorized the court to exclude the introduction of evidence not properly
disclosed in accordance with Federal Rule of Civil Procedure 26, and urged the
court to impose that sanction.14 The district court sustained GGG’s objection and
excluded Tiara’s misrepresentation evidence the next morning, May 24. The court
noted that although GGG’s motion was “grounded in Rule 37 of the Federal Rules
of Civil Procedure,” the basis of the motion, as the court understood it, was
“somewhat broader than that” because there was an answer and a counterclaim,
both of which were very specific only on the price gouging theory. The court
therefore excluded the misrepresentation evidence on the additional ground that
the misrepresentation theory “ha[d] not been pled, that it ha[d] not been disclosed,
that there is extraordinary prejudice to the Plaintiff, that the case has totally
changed complexion.”15
Its misrepresentation theory having been foreclosed, Tiara proceeded with
its delay theory, presenting evidence of the expenses it incurred in drying out the
building, $30 million. After it rested its case and the evidence closed, on May 30,
14
See page 13 and note 22, infra, for explanations of Rule 37(c) and 26. The same day,
GGG augmented its objection by filing a written motion to exclude any testimony Tiara might
seek to introduce in support of such theory.
15
The court “exclude[d] the testimony on [all] three permutations” of Tiara’s
misrepresentation theory.
9
GGG moved the court to strike the evidence of the dry-out expenses. GGG also
moved the court to grant it judgment as a matter of law, pursuant to Federal Rule
of Civil Procedure 50(a)(2), on Tiara’s counterclaim for breach of contract. The
court granted both motions.16 The court found “that the issue of the dryout
expenses ha[d] never been pled initially in the Counterclaim nor was appropriate
disclosure made about that [by Tiara] in [its] first answers to [GGG’s]
Interrogatories or in the supplemental answers to the Interrogatories.” Allowing
Tiara to present evidence of dry-out expenses would constitute “a violation of due
process, a failure to comply with [Federal Rule of Civil Procedure 8(a)], a failure
to properly disclose information as required in answers to Interrogatories, et
cetera.”17 Finding that “but for the dryout issue, there are no damages before The
Court,” the court determined that Tiara had failed to establish an essential element
of its breach of contract counterclaim. Accordingly, it granted GGG’s Rule
50(a)(2) motion and dismissed the counterclaim.18
16
The court granted the motions on May 31, after reflecting on counsel’s arguments on
the motions the previous day.
17
The court went on to say that it was excluding evidence of the dry-out expenses for the
same reasons it excluded the misrepresentation testimony under Rule 37(c).
18
After the district court dismissed Tiara’s counterclaim, Tiara moved the court,
pursuant to Fed. R. Civ. P. 15(b), for leave to amend its counterclaim to conform to the proof.
That rule provides that “[t]he court should freely permit an amendment when doing so will aid in
presenting the merits and the objecting party fails to satisfy the court that the evidence would
prejudice that party’s action or defense on the merits.” Fed. R. Civ. P. 15(b)(1). The court found
10
On May 31, 2007, the jury returned a verdict in favor of GGG for
$1,446,849.96. On June 4, the district court entered a final judgment in that
amount.19 This appeal followed.20
II.
Tiara raises four arguments on appeal. Two merit discussion.21 First, the
that the requested amendment would cause “sufficient prejudice [to GGG] to justify” denying the
motion and therefore exercised its discretion to reject the proposed amendment.
We note that Tiara’s motion to amend its counterclaim was in essence a motion asking
the court to reconsider and reverse its rulings (1) excluding the evidence relating to GGG’s
alleged misrepresentations and the dry-out expenses and (2) granting GGG judgment as a matter
of law on the counterclaim, so that Tiara could reopen its case and present evidence of the
alleged misrepresentations.
19
On June 12, 2007, Tiara moved under Fed. R. Civ. P. 60(b)(6) for relief from the
judgment, alleging that the jury’s award of $1,446,849.96 exceeded the maximum judgment
permitted under the district court’s instructions to the jury. After GGG filed this lawsuit, Tiara
placed the sum of $1,439,259—the amount GGG claimed it was due—in escrow. When, during
its deliberations, the jury sent the court a note asking whether it could “(refer/use) to the number
in the escrow,” the court, after conferring with counsel, responded that “the parties have agreed
that the amount in escrow is the maximum that could be awarded by the jury. However, the
amount that you write on the verdict form should be the total amount you find the party is
entitled to receive.” The court denied Tiara’s Rule 60(b)(6) motion. Tiara does not challenge its
ruling here. On July 29, the district court denied Tiara’s motion for relief from the judgment.
Tiara is not challenging the denial in this appeal.
20
We have jurisdiction under 28 U.S.C. § 1291, which provides that “courts of appeals .
. . shall have jurisdiction of appeals from all final decisions of the district courts of the United
States.”
21
Tiara’s two other arguments are meritless and therefore require only brief discussion.
First, Tiara argues that the district court erred in denying its motion to dismiss GGG’s complaint
under Fed. R. Civ. P. 12(b)(6) because the Services Agreement failed to comply with consumer
protections provisions of Florida law and was therefore unenforceable. Florida law requires
public adjusting contracts to be in writing and include, among other terms, the adjuster’s “Florida
Department license number,” the address and a “brief description of the loss,” the “insured’s
insurance company name and policy number, if available,” the date the contract was signed, and
compensation. 69 Fla. Admin. Code Ann. r. 69B-220.051(6), (7) (2009). Emergency Rule
11
district court abused its discretion in granting GGG’s Rule 37(c) motions to
exclude evidence based on Tiara’s discovery violations. Second, the district court
erred in granting GGG’s Rule 50 motion for judgment as a matter of law on
Tiara’s breach of contract counterclaim. We consider these arguments in turn.
A. The district court excluded Tiara’s evidence of the misrepresentation theory
and the dry-out expenses because the evidence had not been discovered. A district
court’s evidentiary rulings are reviewed for abuse of discretion. Proctor v. Fluor
Enters., Inc., 494 F.3d 1337, 1349 n.7 (11th Cir. 2007). “A district court abuses its
69BER04-13(5)(e) also requires that “[a] public adjuster’s contract with a client shall be
revocable or cancelable by the insured or claimant, without penalty or obligation, for at least 14
business days after the contract is entered into” and that the public adjuster disclose this right.
Tiara claims the Services Agreement is unenforceable because it fails to identify the
insurer of the condominium and the policy number and to state that Tiara had the right to revoke
or cancel the Services Agreement within 14 business days. This argument fails because the
insured’s insurance company name and policy number are only required if available and because
the Services Agreement stated that “[GGG] complies with all terms and provisions of any
emergency orders or rules issued by the Florida Department of Financial Services . . . all of
which have been disclosed to [Tiara] and are incorporated therein.”
Tiara also claims that because the Services Agreement has to be in writing, the oral
modification of the contract to also include adjusting services for the second hurricane, Hurricane
Jeanne, is unenforceable. The regulation, however, does not specify that modifications must be
in writing, and more importantly, neither party disputes that GGG rendered services for
Hurricane Jeanne.
Second, Tiara argues that the district court abused its discretion by mismanaging the
litigation, substantially prejudicing Tiara’s ability to defend itself and to prove its counterclaim.
In particular, Tiara complains that it was not given sufficient time for discovery because the
district court’s scheduling order was issued during the five months its motion to dismiss GGG’s
complaint was pending and that the court abused its discretion in refusing to grant its motion to
extend the discovery deadline. Tiara ignores the fact that the motion to dismiss was decided only
one month after the scheduling order was entered, still permitting Tiara over six months’
discovery.
12
discretion when it misapplies the law in reaching its decision or bases its decision
on findings of fact that are clearly erroneous.” Arce v. Garcia, 434 F.3d 1254,
1260 (11th Cir. 2006).
The ruling on the misrepresentation theory was explicitly granted under
Rule 37(c). Under that rule, a district court may preclude a party from introducing
evidence that was not disclosed as required by Rule 26(a), (e)(1), or (e)(2) unless
the failure was harmless or there was substantial justification for the failure.22
Here, the alleged discovery violation was of Rule 26(e)(2), which, at the time
discovery was conducted in this case, provided that
[a] party is under a duty seasonably to amend a prior response to an
interrogatory, request for production, or request for admission if the
party learns that the response is in some material respect incomplete
or incorrect and if the additional or corrective information has not
otherwise been made known to the other parties during the discovery
process or in writing.
22
At the time discovery was conducted in this case, Rule 37(c) provided:
(c) Failure to Disclose; False or Misleading Disclosure; Failure to Admit
(1) A party that without substantial justification fails to disclose
information required by Rule 26(a) or 26(e)(1), or to amend a prior response to
discovery as required by Rule 26(e)(2), is not, unless such failure is harmless,
permitted to use evidence at a trial, at a hearing, or on a motion any witness or
information not so disclosed. In addition to or in lieu of this sanction, the court
. . . may impose other appropriate sanctions. In addition to requiring payment of
reasonable expenses, including attorney’s fees, caused by the failure, these
sanctions may include any of the actions authorized under Rule 37(b)(2)(A), (B),
and (C) and may include informing the jury of the failure to make the disclosure.
Fed. R. Civ. P. 37(c) (2006) (amended 2007).
13
Fed. R. Civ. P. 26(e)(2) (2006) (amended 2007).
In granting the Rule 37(c) motion to exclude evidence on Tiara’s
misrepresentation theory, the court initially observed that Tiara did not disclose
the misrepresentation theory in the allegations of its counterclaim. The court then
stated that
when the first Interrogatories were served on Tiara, [Tiara was] asked
to list with particularity how [GGG] failed in their contractual
obligations, and Tiara was asked to identify all witnesses to the same.
Now, Tiara did not comply with . . . listing the witnesses . . . .
However, when Tiara filed supplemental answers to its
Interrogatories on April 17, 2007, which parenthetically happened to
be the last day for discovery, Tiara listed various people who would
testify and also specified in a shorthand fashion what they would
testify about.
Nowhere in that is there any mention of either a
misrepresentation by [GGG that] Citizens never said to dry out the
building, but [GGG] made that misrepresentation, either because they
made a mistake, or worse, that they were doing it simply to pad their
own pockets. That is just not there.
Also, nowhere in any of this information is there a suggestion
that [GGG] failed to explain to the Board that they had an option.
Record, vol. 20 at 1740-41.
The district court also granted GGG’s motion to strike the evidence of
Tiara’s dry-out expenses for the same reason it struck the misrepresentation
evidence.23 It found that “the issue of the dryout expenses has never been pled
23
The court treated GGG’s motion as a motion addressing the dry-out issue. The dry-out
issue is essentially whether Tiara could have saved money by gutting the building instead of
14
either initially in the Counterclaim nor was appropriate disclosure made about that
in [Tiara’s] first answers to Interrogatories or in the supplemental answers to
Interrogatories.”
The district court did not abuse its discretion in excluding the evidence
Tiara sought to introduce at trial on its misrepresentation theory and the dry-out
expenses based on Tiara’s discovery violations.24 In its initial response to GGG’s
interrogatories on November 10, 2006, Tiara only disclosed the price gouging
theory. Tiara did not mention the misrepresentation theory or dry-out expenses.25
drying it out. Even if Tiara could have demonstrated that gutting the building would have been
less expensive than the dry out, Tiara would have needed to show that GGG could be held liable
under the Services Agreement for the dry-out decision. Because the court had already excluded
evidence on the misrepresentation theory, at that point in the trial, the only theory under which
GGG could be held accountable for the dry out was the delay theory.
24
In deciding that this evidence should be excluded, the district court initially considered
Tiara’s answer, counterclaim, initial responses to interrogatories (November 10, 2006), and
supplemental responses to interrogatories (April 17, 2007). The district court was provided
Tiara’s initial responses as an exhibit to GGG’s December 7, 2006, motion to compel discovery.
The district court was provided Tiara’s supplemental responses as an exhibit to Tiara’s May 23,
2007, response in opposition to GGG’s motion to preclude testimony. The district court
additionally considered the deposition of Tiara’s representative, Louis Brindisi, a copy of which
Tiara gave to the district court on May 23.
25
In its eleventh interrogatory, GGG asked if Tiara contended that GGG “failed to abide
by its contractual commitments . . . in connection with the insurance claims made in connection
with Hurricanes Frances and/or Jeanne, identify with particularity how [GGG] failed in this
regard and identify all witnesses to the same.” Tiara objected to the interrogatory’s broadness,
but responded in relevant part that GGG
knowingly accept[ed] invoices for excessive demolition and other costs submitted
by Southern . . . fail[ed] to adequately supervise and monitor the reconstruction . .
. fail[ed] to properly advise Tiara as to industry standards and customs concerning
hurricane renovation, fail[ed] to notify Tiara of the proper amount of insurance
15
Thus, Tiara had a duty to supplement these answers if it would introduce evidence
on the misrepresentation theory and dry-out expenses at trial.
Tiara argues that through the deposition of its corporate representative,
Louis Brandisi, and its supplemental responses to GGG interrogatories, it put
GGG on notice that it planned to proceed with its misrepresentation theory. We
agree with the district court that “while it is true that one can garner a phrase here
or there from Mr. Brandisi’s deposition where he mentions these issues, many
times they are phrased in the Brandisi deposition in terms of his sense of upset as
to the excessive costs that were being generated by Southern Construction, and
others.”26 In Tiara’s supplemental responses to GGG’s interrogatories, submitted
needed to remedy the hurricane damage, fail[ed] to notify Tiara of [Southern’s]
price gouging, support[ed] [Southern’s] price gouging practices, and fail[ed] to
properly assemble and obtain a claim that properly reflects the true costs of the
repair hurricane damage.
In its fourteenth interrogatory, GGG asked Tiara to “[d]escribe all facts to support [Tiara’s]
contention, if any, that [GGG] breached its contract and/or agreement with [Tiara] in connection
with the insurance claims made in connection with Hurricane Frances and/or Jeanne” and to
include when the breach occurred and how Tiara was damaged. Tiara responded, “Please see
Answer to Interrogatory No. 11. Further answering, discovery is ongoing and Tiara will
supplement this Answer with additional information that is gleaned through the course of further
discovery.”
26
Tiara cites the following statements in Brandisi’s deposition as evidence that it had
properly disclosed the theories it would argue at trial:
! There’s several reasons why me, in particular decided not to
pay [GGG]. One was the drying out of the building . . . . You know, they [Citizens] should not be
the building, so I think it’s incumbent upon our professionals to protect us not to just build up a
bill so they can get a commission.
16
on the final day of discovery, Tiara noted the identity and planned testimony of its
witnesses. These responses reveal no indication that Tiara had abandoned the
price gouging theory in favor of the misrepresentation and delay theories. Most of
the witness and testimony disclosures do not even tangentially relate to the
misrepresentation theory.27
In the supplemental responses, Tiara alleged that GGG “failed to advise
! The board made a decision to dry out the building based upon
representations that were made to them by our professionals that that’s
what Citizens wanted them to do. I’m telling you as part of the mediation
process, Citizens denied that. They never authorized anyone to dry out the
building. That was the position of Citizens.
! [In response to why Tiara says it does not have to pay GGG,] I think
Goodman and [GGG] should have stepped in and told the board this [dry-
out] is not working. If they were going to get $700,000 a week from
Citizens they should have had something in writing from Citizens . . . .
Every time Phil [a GGG employee] would get up at a meeting . . . don’t
worry the insurance company is going to pay for it. . . . Well, the
insurance company didn’t pay for it and all those representations were not
factual. There’s a whole series of things that they did.
These statements are insufficient to put GGG on notice that Tiara had abandoned its price
gouging theory and would instead be seeking to recover from GGG on the misrepresentation or
delay theories.
27
In support of its argument that its disclosures were adequate, Tiara highlights its
disclosure that Norm Adams would testify to “Plaintiff’s failure to confirm the amount of
insurance coverage, Plaintiff’s failure to obtain a scope/estimate of the loss prior to the
commencement of reconstruction and prior to the incurrence of substantial costs, and the
financial impact on, and damages suffered by, Tiara from GGG’s failure to properly perform”
and that Louis Brandisi would testify to “the amount of dry-out expenses that Tiara unnecessarily
incurred, and the financial impact of the GGG’s failures to properly perform on Tiara.” Again,
these responses do not clearly identify Tiara’s intention to pursue the misrepresentation theory or
the delay theory, or to abandon the price gouging theory.
17
Tiara of the claims options available under the policy.” When listing the damages
it suffered, it included
a. the incurrence of excessive and/or unnecessary costs submitted by
Southern Construction and/or other subcontractors, including but not
limited to:
(1) Dryout Process - in excess of $20 million was wasted in a
failed attempt to dry-out the building. The drying out process
should have been between 14-28 days at a cost of $2.5 million.
Standards establish that the building should have been dry in
that one month time frame, and if it was not, then the dryout
attempts should have ceased. Instead, GGG allowed Southern
to bill Tiara over $29 million in a failed dryout that lasted for
over six months[.]
Although Tiara finally refers to the dry-out expenses in this response, given the
context in which Tiara identified them, GGG could reasonably infer that Tiara was
merely complaining that GGG allowed Southern to charge Tiara too much for the
dry out in accordance with the price gouging theory. Therefore, we conclude that
Tiara did not mention the misrepresentation theories or dry-out expenses in its
answer, counterclaim, and initial interrogatory responses, nor did it ever
supplement its initial disclosures to indicate to GGG that it was abandoning the
price gouging theory in favor of the misrepresentation and delay theories and
seeking dry-out expenses as damages. Accordingly, the district court did not
abuse its discretion in granting GGG’s Rule 37(c) motions to exclude evidence
18
supporting Tiara’s misrepresentation theory or the claim for dry-out expenses.28
B.
Having concluded that the district court did not abuse its discretion in
granting GGG’s motions to exclude evidence on the misrepresentation and dry-out
issues, we turn next to the question of whether the district court erred in granting
GGG’s Rule 50 motion for judgment as a matter of law on Tiara’s counterclaim
for breach of contract. Rule 50(a)(1) authorizes a district court, in a jury trial, to
grant a motion for judgment as a matter of law on a claim if “a party has been fully
heard on [the claim] . . . and the court finds that a reasonable jury would not have a
legally sufficient evidentiary basis to find for the party on [the claim].”29
The district court granted GGG’s motion at the close of all the evidence,
28
We can quickly dismiss Tiara’s arguments that even if it committed a discovery
violation, its evidence should not be excluded under Rule 37(c) because the violation was not
knowing and the inadequacy was harmless because GGG had actual knowledge of Tiara’s
theories and was not prejudiced. First, Tiara claims that it learned in the course of its litigation
with Citizens that GGG, not Citizens, had ordered the dry out, giving rise to this suit and the
misrepresentation theory. Given that Tiara did not file its amended answer and counterclaim
until November 30, 2006—more than eight months after the resolution of the lawsuit with
Citizens—Tiara had an obligation to plead properly its misrepresentation theory and reveal the
theory in its discovery if it wanted to advance the theory. Second, as GGG indicated to the court,
GGG “would have had people from Citizens, and probably a damage expert if [GGG] knew what
the damages were.” Instead, because GGG thought that Tiara was pursuing a price gouging
claim, GGG brought the auditor of its billings to testify.
29
We review the granting of a Rule 50 motion de novo. Thorne v. All Restoration
Servs., Inc., 448 F.3d 1264, 1266 (11th Cir. 2006).
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after granting GGG’s motions to exclude the evidence regarding Tiara’s
misrepresentation theory and dry-out expenses. The court found that “but for the
dryout issue, there are no damages before The Court, and therefore the Counter
Plaintiff has failed to establish an essential element of its counterclaim.
Accordingly, I grant judgment as a matter of law on the counterclaim in favor of
the Counter Defendants.”
On appeal, Tiara argues that the district court erred in granting the Rule 50
motion because it had introduced sufficient evidence on both of its theories of
GGG’s liability—the misrepresentation theory and the delay theory—to reach the
jury. The only damages claimed under these theories, however, were the dry-out
expenses. Because the court excluded the evidence of these expenses—and
rightfully so, as discussed in part II.A, supra—no damages were proven, and there
was nothing for the jury to decide. The court therefore ruled correctly in
dismissing the breach of contract counterclaim from the case.
III.
For the foregoing reasons, the district court’s judgment is
AFFIRMED.
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