Federal Circuits, 7th Cir. (September 09, 1998)
Docket number: 96-4236
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Arthur G. Muegler (argued), St. Louis, MO, for Joseph P. Caulfield & Associates, Inc.
Earl H. Munson (argued), Jeffrey Kassel, Lafollette & Sinykin, Madison, WI, for Litho Productions, Inc., Robert A. Steil and Jack D. Walker.Linda Vogt Meagher (argued), James G. Doyle, Schellinger & Doyle, Brookfield, WI, for William L. Hall.Philip C. Reid, Robert F. Johnson, Cook & Franke, Milwaukee, WI, for Regent Insurance Company.Before BAUER, KANNE, and DIANE P. WOOD, Circuit Judges.DIANE P. WOOD, Circuit Judge.Joseph P. Caulfield, through his company Joseph P. Caulfield & Associates, Inc. ("Caulfield Inc."), is in the business of helping people present claims to their insurance companies. Intermediaries like Caulfield Inc. sell their experience in adjusting insurance claims to policyholders who fear that, when catastrophe strikes, the insurers may be tempted to minimize allowable claims. This case arose out of Caulfield Inc.'s contract to adjust a fire insurance claim for Litho Productions, Inc., of Madison, Wisconsin ("Litho"). Halfway through the process, Litho fired Caulfield Inc. and finished settling its claim on its own (with the help of its lawyers). Caulfield Inc. sued everyone in sight, including Litho and its president, Robert Steil; Litho's insurer, Regent Insurance Company, and Regent's parent, General Casualty Insurance Company of Wisconsin ("the Insurers"); L.J. Shaw & Co., the adjusting contractor hired by the Insurers, and the individual adjuster, William L. Hall, who worked on the Litho case; and Litho's lawyers, Jack D. Walker and Joseph A. Melli, and their law firm, Melli, Walker, Pease & Ruhly, S.C. ("Melli, Walker firm"). The district court granted summary judgment in the defendants' favor on most of the claims, but allowed contract and quantum meruit claims to proceed against Litho. After a full trial, the jury rejected Caulfield Inc.'s contract theory but awarded it $35,000 in damages on the quantum meruit theory. Caulfield Inc. has raised objections on appeal to almost everything the district court did. Finding no error, we affirm.* On January 23, 1994, an accidental fire swept through Litho's commercial printing plant and seriously damaged the building and the inventory and equipment inside. Shortly after the fire, Litho began settlement negotiations with the Insurers. The Insurers retained Shaw & Co. to adjust the claim, which in turn assigned the case to one of its employees, William Hall. Hall was responsible for performing the on-scene estimate of the damages Litho had suffered. The Insurers quickly paid Litho $400,000 in undisputed losses, but significant valuation differences between Litho and the Insurers remained. This led Litho on March 3, 1994, to hire Caulfield Inc. to represent it in the process. Under the contract, Caulfield Inc. was to "negotiate, represent, and speak" on Litho's behalf with the Insurers. In exchange, Litho agreed to pay Caulfield Inc. 10% of "any settlement ... regardless by whomsoever consummated...."Caulfield Inc. went to work right away. Joe Caulfield prepared his own estimates of the fire damage on Litho's behalf, and in late April 1994 he submitted a partial claim for more than $4.5 million. (He labeled the claim "partial" because it excluded from the total some alleged damage to Litho's printing presses.) With respect to the loss amount, Hall had taken a far more modest view, with an initial estimate of $2.0 million. When he heard of Caulfield Inc.'s figure, Hall informed the Insurers that he regarded Caulfield Inc.'s claim as "borderline fraudulent." The Insurers took Hall's concerns very seriously. In the early summer of 1994, they told Litho that they were worried about the integrity of Caulfield Inc.'s work, and in June 1994 they exercised their right under the insurance contract to demand a "sworn proof of loss" from Litho that "no attempt to deceive" them had taken place. For its part, Litho was also displeased with the progress of its claim. Although in June 1994 it had signed a $4.9 million sworn proof of loss form to submit to the Insurers, around the same time it hired lawyers Jack Walker and Joseph Melli of the Melli, Walker firm to investigate the services Caulfield Inc. was providing. In mid-October 1994, the Insurers and their adjusters met with Litho's representatives and lawyers. Joe Caulfield, by express request of the Insurers, was not invited to the meeting and did not attend. Shortly after that meeting, the Insurers paid Litho $1.0 million for further undisputed claims.On November 7, 1994, Litho's president, Robert Steil, wrote a three-page letter to Joe Caulfield terminating the arrangement between Caulfield Inc. and Litho. Steil claimed that Caulfield Inc.'s estimates had been "inaccurate and misleading," that Joe Caulfield's "antagonistic and adversarial" interactions with the Insurers had weakened Litho's negotiating position, and that Litho had incurred substantial investigation costs in "trying to determine what parts, if any, of the proof of loss [could] ... be used in an amended" filing with the Insurers. Steil concluded that, under the circumstances, Caulfield Inc. was not entitled to any compensation under the contract and he announced that Litho was terminating the arrangement. In keeping with that position, Litho did not pay Caulfield Inc.'s bill for $140,000, which represented 10% of the total of $1.4 million the Insurers had paid up to that time. Litho has also not paid Caulfield Inc. any commission relating to additional payments from the Insurers, which by the time the summary judgment record was compiled included at least another $475,000. (Significantly, Litho's contract with Caulfield Inc. originally provided that Litho could terminate the agreement for any reason and without penalty within 30 days of signing the contract. A Litho employee testified at trial that when he expressed concern to Caulfield Inc. about the lack of tangible results after 30 days, Caulfield Inc.'s employee, Joseph Hinkson, orally agreed to extend the termination-at-will guarantee indefinitely.)So matters stood by early 1995. On February 15, 1995, believing that Litho had taken its work product, turned it over to the Melli, Walker firm, and evaded its contractual obligations to pay a commission, Caulfield Inc. sued the defendants described above in the federal district court for the Eastern District of Missouri, invoking the diversity jurisdiction. (Caulfield Inc. is a Missouri corporation with its principal place of business in that state, while the rest of the defendants are either citizens of states other than Missouri or non-Missouri corporations with their principal places of business in either Wisconsin or Illinois. Joe Caulfield did not sue individually.) Some time later, the Missouri court transferred the case to the Western District of Wisconsin under 28 U.S.C. 1404(a), which is why we now have the appeal.Caulfield Inc.'s claims fall into five broad legal theories: (1) tortious interference with the Caulfield Inc.-Litho contract, (2) civil conspiracy, (3) fraud, (4) breach of contract, and (5) quantum meruit. The following chart shows which defendants were sued under which theories:----------------------------------------------------------------------------: Claim No. : Theory of Liability : Defendant(s) :----------------------------------------------------------------------------: 1 : Tortious interference with contract : all except Litho :----------------------------------------------------------------------------: 2 : Civil conspiracy : all defendants :----------------------------------------------------------------------------: 3 : Fraud : Litho and Steil :----------------------------------------------------------------------------: 4 : Breach of contract : Litho :----------------------------------------------------------------------------: 5 : Quantum meruit : Litho :---------------------------------------------------------------------------- In an order dated August 26, 1996, the district court granted summary judgment for defendants Litho, Steil, Walker, Melli, and the Melli, Walker firm on Caulfield Inc.'s claims of tortious interference with the contract (# 1), civil conspiracy (# 2), and fraud (# 3). In a later order dated September 4, 1996, it granted summary judgment for Hall, Shaw & Co., and the Insurers on the tortious interference claims (# 1) and the civil conspiracy claims (# 2). (We note in passing that the district court's September 4, 1996, opinion granting partial summary judgment expresses some uncertainty on whether Litho was insured by Regent, its parent General Casualty, or both. Caulfield Inc.'s broadly phrased complaint (and appellate briefing) shed no light on whether it sought to hold General Casualty liable for a wrongful act committed in its own capacity, or merely for Regent's acts. If Caulfield Inc.'s theory of liability were the latter, this would simply provide another basis to support the district court's dismissal of the claims against General Casualty. See IDS Life Ins. Co. v. SunAmerica Life Ins. Co., 136 F.3d 537, 540 (7th Cir.1998) (although parent company necessarily exercises some control over subsidiary's actions, parent cannot be held liable for subsidiary's wrongs unless basis exists for piercing corporate veil).)This left for trial only Caulfield Inc.'s breach of contract and quantum meruit claims against Litho. At the jury trial, Caulfield Inc. portrayed the Insurers and Hall as determined to avoid coverage they properly should have furnished under the policy. Joe Caulfield testified that Litho had hired him to "stand up" to Hall. He claimed that Hall had made various errors that undercalculated Litho's losses and that Hall had actually ordered parts of the fire-damaged facility to be repaired superficially so that more serious damage would be concealed. Joe Caulfield also testified that in order to prepare Litho's claim, he had hired an accountant to help him calculate Litho's "business interruption losses," and had hired a metallurgist to test Litho's printing presses for damage that might have come from hydrochloric acid released by the fire and smoke. Joe Caulfield admitted that the accountant's estimate of Litho's "business interruption loss" was overstated, but he insisted that any errors were the result of faulty information Litho provided to the expert, not of any mistakes or misrepresentations either he or the expert committed. This proved, in his eyes, that Caulfield Inc. had performed in a professional and competent manner and had been terminated wrongfully.In support of its quantum meruit claim, at trial Caulfield Inc. tendered as Exhibit 291 a four-page summary of its alleged out-of-pocket expenses incurred under the contract from March 3 through November 7, 1994, together with over 200 pages of invoices and other records that purported to document the expenses. Exhibit 291 claimed that Caulfield Inc. had spent over $166,000 preparing the claim. The trial court refused to admit the exhibit for the truth of the matter asserted, however, on the ground that it was hearsay and that Caulfield Inc. had not brought it within any recognized exception to the hearsay rules. Later, Caulfield Inc. also objected to quite a few of the trial court's instructions, including (as Caulfield Inc. disjointedly puts it in its brief on appeal) "the contract essential element, mutual assent, integrated contract, not enforceable, breach and repudiation jury instructions," and "the Hinkson agency 'appearances,' apparent authority and implied authority jury instructions."IIWe begin first with the alleged evidentiary and jury instruction errors that Caulfield Inc. raises. The district court found that Caulfield Inc. failed to lay a proper foundation for admitting Exhibit 291 under the business records exception, which requires testimony from "the custodian or other qualified witness" about the regular record-keeping practices of Caulfield Inc. See Fed.R.Evid. 803(6). Because the foundational witness, Joe Caulfield, did not provide such testimony, the district court did not abuse its discretion in refusing to admit Exhibit 291. Cf. Collins v. Kibort, 143 F.3d 331, 337 (7th Cir.1998). Caulfield Inc.'s array of challenges to the jury instructions can be dispatched just as rapidly. With respect to the first group of objections about the contract, Caulfield Inc.'s principal argument appears to be that the instructions erroneously submitted a question of law to the jury (which we assume must be the question whether a contract actually existed between Litho and Caulfield Inc., and perhaps also how that contract should have been interpreted). With respect to the second group of objections about agency, Caulfield Inc. argues in a conclusory fashion that there was no consideration for Hinkson's promise to modify the termination provision of the contract and that the evidence did not support the instructions the court gave. Neither of these arguments is coherent, let alone developed, however, and we have repeatedly said perfunctory arguments are not enough to preserve an appeal. Otto v. Variable Annuity Life Ins. Co., 134 F.3d 841, 854-55 (7th Cir.1998); Miksis v. Howard, 106 F.3d 754, 762 n. 5 (7th Cir.1997). The jury's verdict therefore stands.We consider below the balance of Caulfield Inc.'s arguments, all of which relate to the district court's rulings on summary judgment. Before moving seriatim through those claims, however, we make a threshold observation about the unacceptable way in which Caulfield Inc. has presented the facts in its briefs. As it was entitled to do, Caulfield Inc. appealed both from the rulings on summary judgment and from the final result of the jury trial. Its presentation of the facts, however, makes no distinction between the facts that were before the court on the summary judgment motions and the facts that were presented during the trial. This is impermissible; our review of a grant of summary judgment is limited to the record presented to the district court at that time, and we do not rely on evidence later introduced at trial. See U.S. East Telecommunications, Inc. v. U S West Telecommunications Services., Inc., 38 F.3d 1289, 1301 (2d Cir.1994); Lippi v. City Bank, 955 F.2d 599, 604 (9th Cir.1992). Granted, we take the record at summary judgment in the light most favorable to the nonmoving party. Nevertheless, if a party who has lost on a partial summary judgment believes that additional facts have come to light that entitle it to a trial, the proper procedure is to file a motion to vacate the partial summary judgment and to request either that the issue be added to the trial or that it be resolved as a matter of law in favor of the moving party. Cf. United States v. Rode Corp., 996 F.2d 174, 179 (7th Cir.1993). Otherwise, partial summary judgment rulings cannot serve the important functions of narrowing issues for trial and requiring parties to come forward with substantial evidence in accordance with the schedule the trial judge has set.Even putting aside Caulfield Inc.'s unhelpful mixing of trial facts and the summary judgment record, its handling of the summary judgment motions must have tried the district judge's patience. When answering the defendants' proposed findings of fact, most of Caulfield Inc.'s objections were either non-responsive or argumentative. Many were based on Joe Caulfield's deposition and affidavit testimony on issues where he plainly lacked personal knowledge. (For example, he testified about what "really" occurred at the October 1994 meeting to which he had not been invited--testimony that was necessarily speculative and lacking in foundation.) This too is insufficient. See Haywood v. North American Van Lines, Inc.,Try vLex for FREE for 3 days
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