DP Solutions, Inc. v. Rollins, Inc.

353 F.3d 421, 2003 U.S. App. LEXIS 26431, 2003 WL 22938477
CourtCourt of Appeals for the Fifth Circuit
DecidedDecember 31, 2003
Docket02-41357
StatusPublished
Cited by94 cases

This text of 353 F.3d 421 (DP Solutions, Inc. v. Rollins, Inc.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Fifth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
DP Solutions, Inc. v. Rollins, Inc., 353 F.3d 421, 2003 U.S. App. LEXIS 26431, 2003 WL 22938477 (5th Cir. 2003).

Opinion

EMILIO M. GARZA, Circuit Judge:

Rollins, Inc. appeals from a jury verdict in favor of DP Solutions, Inc. (“DPS”) awarding DPS damages for breach of contract and tortious interference with contract. Rollins originally hired DPS to develop a new computer system. In July 1998 the parties signed the Professional Services Agreement, the contract governing the overall relationship between the parties. This contract provided that the parties would sign engagement agreements at a later date to govern the actual work that Rollins wanted DPS to perform. The first phase of the agreement was for DPS to assess Rollins’ business and determine what capabilities Rollins needed in a new computer system.

After this initial analysis phase, in October 1998, Rollins engaged DPS to actually develop the new computer system. Rollins chose not to enter into a fixed price engagement agreement where specifications for the new system would be determined before development began. Instead, Rol *426 lins chose to retain more control over the development phase, and signed an engagement agreement where it would pay DPS a monthly fee in exchange for the provision of personnel proficient in the use of a specific software writing tool. The development of the new system proved more complex than the parties originally anticipated, and therefore took longer to complete. The parties signed the final engagement agreement in June 2000. This agreement named the personnel DPS would provide and the specific fee for each remaining month in 2000. The parties deviated from this written engagement agreement, and the personnel DPS provided along with the monthly rate it charged remained at the July 2000 level for the rest of that year.

In the months leading up to December 2000, Rollins fell behind in its payments to DPS. DPS contacted Rollins concerning these past due payments. On Friday, December 15, 2000, Rollins informed DPS that Rollins would make no further payments, but that Rollins expected DPS to complete the development of the system. The parties agree that Rollins had paid around seven million dollars in fees and expenses to DPS up to that point for the computer system, which was still incomplete. In response to Rollins’s refusal to pay its bills, DPS removed its personnel from the project site on Monday, December 18, 2000. DPS performed no additional work on the project after that date. DPS then filed the original complaint in this lawsuit in federal district court based upon diversity jurisdiction.

After January 18, 2001, Rollins discussed employment opportunities with two former DPS employees who had worked on the development project. DPS spent approximately $29,300 in attorneys’ fees to prevent these employees from working for Rollins in violation of the employees’ non-compete agreements with DPS. DPS then amended its complaint to include a tortious interference claim against Rollins. Rollins’ response to the amended complaint claimed that DPS breached the contract, that DPS committed fraud on Rollins, that DPS’s performance under the contract was so deficient that it excused Rollins from further performance, and that Rollins was privileged to interfere with DPS’s relationship with its former employees. This case was eventually tried before a jury.

The jury found that Rollins breached its contract with DPS and awarded DPS $486,000 in damages for the months of November and December 2000. The jury also found that Rollins failed to comply with the thirty-day notice requirement for termination included in the contract, and awarded DPS $243,000 in damages for the month of January 2001. The jury awarded DPS $27,000 in damages for Rollins’ tor-tious interference with DPS’s non-compete agreements. The jury found that DPS did not breach the contract and that DPS did not commit fraud. Finally, the jury found that DPS’s performance under the contract did not excuse Rollins from its performance, and that Rollins was not justified in interfering with DPS’s non-compete agreements with its former employees. The jury awarded no damages to Rollins.

After the verdict, Rollins renewed its motion for judgment as a matter of law pursuant to Fed.R.Civ.P. 50(b) regarding DPS’s breach of contract and tortious interference claims. Rollins also filed a motion for a new trial under Fed.R.CivP. 59 alleging the closing argument by DPS was prejudicial and invalidated the jury award. The district court denied both motions. The district judge then awarded DPS $337,073 in attorneys’ fees under state law and $9,775.03 in costs, as well as prejudgment interest at ten percent and post- *427 judgment interest at 1.75 percent. This appeal followed.

On appeal, Rollins raises eight claims. These claims break down as follows: four claims concern the sufficiency of the evidence supporting the jury’s breach of contract damages award; one claim regarding the tortious interference damage award; one claim that DPS’s closing argument was prejudicial; a claim that the attorneys’ fee award to DPS was improper; and a claim that the award of costs to DPS was improper. DPS raises four additional claims on cross-appeal. These claims concern the district court’s interpretation of the pretrial order; the prejudgment and post-judgment interest rates awarded by the district court; the award of attorneys’ fees to DPS for this appeal; and the district court’s modification of DPS’s attorneys’ fee award to account for the jury’s award to DPS for tortious interference damages.

I

Rollins raises four issues regarding the sufficiency of the evidence supporting the breach of contract damages: 1) the documents governing the parties’ relationship terminated by their own terms on December 31, 2000; 2) the thirty-day notice period included in the contract was discretionary rather than mandatory; 3) the judgment includes an award that exceeds the proper amount for a thirty-day notice of cancellation provision; and 4) DPS failed to present legally sufficient evidence regarding the proper measure for the breach of contract damages. Rollins claims the proper damage measure for a breach of contract is net damages and that DPS failed to present evidence of expenses it avoided.

We review the denial of a motion for judgment as a matter of law de novo, using the same standard the district court used. Ford v. Cimarron, 230 F.3d 828, 830 (5th Cir.2000). “Judgment as a matter of law is proper after a party has been fully heard by the jury on a given issue, and ‘there is no legally sufficient evidentia-ry basis for a reasonable jury to have found for that party with respect to that issue.’ ” Foreman v. Babcock & Wilcox Co., 117 F.3d 800, 804 (5th Cir.1997) (quoting Fed. R. Crv. P. 50(a)). When evaluating the denial of Rollins’ motion for judgment as a matter of law, we must consider all the evidence in the light most favorable to DPS, drawing all factual inferences in favor of DPS, while “leaving credibility determinations, the weighing of the evidence, and the drawing of legitimate inferences from the facts to the jury.” Foreman, 117 F.3d at 804 (citing Anderson v. Liberty Lobby, Inc.,

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353 F.3d 421, 2003 U.S. App. LEXIS 26431, 2003 WL 22938477, Counsel Stack Legal Research, https://law.counselstack.com/opinion/dp-solutions-inc-v-rollins-inc-ca5-2003.