Jankins v. TDC Management Corp.

21 F.3d 436, 305 U.S. App. D.C. 342, 1994 WL 118169
CourtCourt of Appeals for the D.C. Circuit
DecidedApril 12, 1994
DocketNos. 92-7068, 92-7097
StatusPublished
Cited by11 cases

This text of 21 F.3d 436 (Jankins v. TDC Management Corp.) is published on Counsel Stack Legal Research, covering Court of Appeals for the D.C. Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Jankins v. TDC Management Corp., 21 F.3d 436, 305 U.S. App. D.C. 342, 1994 WL 118169 (D.C. Cir. 1994).

Opinion

Opinion for the Court filed by Circuit Judge WILLIAMS.

STEPHEN F. WILLIAMS, Circuit Judge:

T. Conrad Monts, a District of Columbia real estate developer, asked Lawrence R. Jankins to work for him preparing budgets and negotiating construction contracts, particularly on two large renovations of subsidized housing in the District, projects known as “Southern Gardens” and “Jeffrey Gardens”. According to Jankins’s testimony, Monts asked him to consider a “minimum number” per month that it would take for Jankins to survive and pay his current obligations.- Jankins calculated that he would need $6,800 per month net income, which amounted to “approximately $100,000 a year” (or $8,333.33 per month). Monts also offered “additional compensation” of “18 percent of the profits earned” on “any property that [Jankins] worked on”. Joint Appendix (“J.A.”) 160-61. His salary was to be paid biweekly, and the 18% profit would be “earned” “when [Jankins] completed [his] task of putting together the job, bringing in the contractors, completing the budgets and the engineering”. J.A. 190. As profits could not be calculated at all accurately at that stage, we understand “earned” to refer to the vesting of Jankins’s 18% share.

Although Monts employed Jankins for 13 months, from August 1986 to September 1987, Jankins received no payment for his services until approximately nine months after starting. The first payment — $20,000— came on April 28, 1987, just as the first funding became available for Jeffrey Gardens. The second and only other payment— also for $20,000 — came on September 1,1987, [438]*438the day after construction financing for the first phase of Jeffrey Gardens came through.

On September 15, 1987, the day that Monts “clos[ed]” on the “purchase” of Southern Gardens, Trial Transcript (“Tr”) at VI-9-10, Jankins demanded payment of his “back salary” — then presumably about $68,-000 ($8338.33 x 13 [about $108,333], minus $40,000 already paid).1 J.A. 199. According to Jankins, Monts agreed to pay, but said that “it would be monies paid from December and not from August, when I actually started my employment.” J.A. 207. Conceivably this may have been Monts’s way of asserting credit for the $40,000 already paid, but Jan-kins regarded it as an attempted renegotiation of his contract, id,., and decided he could not remain in Monts’s employ. Jankins did not find satisfactory alternative employment until about 10 months later, in June 1988. Construction on Jeffrey Gardens began soon after his departure and was completed by April or May of 1990. Southern Gardens had not been completed even at the time of trial.

Jankins brought suit in district court, asserting not only breach of contract through Monts’s failure to pay, but also fraud. He also sued Monts’s wife,- who was granted a directed verdict and is no longer a party, as well as a number of corporations owned or controlled by the Montses — TDC Management Corporation, Transnational Venture Capital Development Corporation, and District Contracting Corporation. The jury found for Jankins, awarding compensatory damages of $456,990 (presumably unpaid wages plus the 18% share of profits), plus punitive damages of $50,000. In addition, the district court ordered the defendants to pay $70,699.50 in attorneys’ fees as part of its sanctions for recalcitrance in discovery.

We affirm in part and reverse in part. First, although plaintiffs fraud theories evolved rather confusedly, we reject defendants’ contention that the district judge erred in letting the fraud claim go to the jury. Second, we find that the court erred in two evidentiary rulings relating to the fraud claim — (1) admitting evidence of Monts’s later conduct toward subcontractors as evidence of fraudulent intent and (2) refusing to permit defendants to impeach a key plaintiffs witness with a prior inconsistent statement. Accordingly, we must reverse and remand for a new trial on the fraud count, on which plaintiffs entitlement to punitive damages depends. Third, there are errors in the calculation of compensatory damages. Because the contract was at will, lost wages may include only the period during which Jankins was actually employed. Further, because Jankins offered no adequate evidence as to “profits”, no recovery is permissible under that heading. Fourth and finally, we affirm the imposition of discovery sanctions.

1. Refusal to grant judgment for defendants on the fraud claim

Jankins’s fraud claim rests on two alternative theories. The first is that Monts fraudulently induced Jankins to enter into the contract, intending at the outset not to pay Jankins all that he promised him; the second is that after Jankins started work Monts induced him to continue doing so, despite lack of full payment, babying him along with false representations that he would pay as soon as he had money to do so.

The first theory does not fare well when measured against Jankins’s amended complaint. It alleged that Monts “falsely and fraudulently represented to Mr. Jankins that he would be paid the agreed upon salary on a biweekly basis out of funds which defendants would receive from the District of Columbia government ... for work on the Jeffrey Gardens project and other projects”, J.A. 13 (emphasis added), and that he “continued to falsely - and fraudulently represent to Mr. Jankins that defendants would receive funds for work on Jeffrey Gardens and other projects and that Mr. Jankins would be paid the agreed upon salary out of such funds Id. [439]*439at 14 (emphasis added). Although a trial court ruling (issued as a discovery sanction) established that the “defendants had sufficient funds to pay whatever was owed to Mr. Jankins” during his period of employment,2 J.A. 149, it is not clear to what extent Monts received funds of the type Jankins alleged were earmarked for his salary, much less whether they exceeded Monts’s payments to Jankins. Each of the two $20,000 payments came precisely when funds relating to Jeffrey Gardens became available. Of course it may be that with more information about what “projects” were covered by the alleged contract, and about the sums paid with respect to each project and possible claims on them, Jankins might have made out a breach even on the earmarked funds théory, and conceivably even fraud. But if the record contains such evidence, plaintiff has pointed us to none of it.

At trial, Jankins’s proof took a rather different turn. He testified in essence that Monts promised to pay him when cash was available from any source, and that Monts tried to justify non-payment entirely by saying he didn’t have the money. For example, Jankins testified that Monts told him that “there were some properties that were going to be liquidated in other parts of the country [ ... and] that my pay would start on a regular basis soon.” J.A. 194; see also id. at 195, 199. Given the trial court’s ruling that Monts “had the money to pay whatever the salary terms were”, id. at 147; see also id. at 149, this would establish intentional deceit. Jankins also testified that he kept on working because he believed Monts’s misrepresentations, J.A. 208, so the jury could have found the reliance necessary to establish fraud. See Higgs v. Higgs, 472 A.2d 875, 876 (D.C.1984) (setting forth elements of fraud); BWX Electronics, Inc. v. Control Data Corp.,

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21 F.3d 436, 305 U.S. App. D.C. 342, 1994 WL 118169, Counsel Stack Legal Research, https://law.counselstack.com/opinion/jankins-v-tdc-management-corp-cadc-1994.