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Miller v. Joaquin

United States District Court, E.D. Michigan, Southern Division

December 17, 2019




         Plaintiff Richard Graf Miller sues Defendants Michael Eric Joaquin and Father and Sons Collectibles, Inc., (“Father and Sons”) for breach of contract, common law conversion, statutory conversion, and fraud. A trial was held on these counts and the jury found in favor of Miller and against Joaquin in the amount of $180, 000. (ECF No. 40, PageID.391-93.) Joaquin moves for judgment nontwithstanding the verdict (“JNOV”) and for a new trial. (ECF Nos. 54, 45) Joaquin also moves for sanctions and relief from judgment due to Miller's failure to sign answers to interrogatories. (ECF No. 52.) All three motions have been fully briefed. (ECF Nos. 51, 53, 57-60.) The court finds a hearing unnecessary. E.D. Mich. L.R. 7.1(f)(2). For the reasons provided below, the court will grant Joaquin's motion for JNOV. A new trial will be conditionally granted. Finally, Miller will be sanctioned for his failure to sign answers to interrogatories.

         I. BACKGROUND

         Miller was a coin collector who owned hundreds of gold and silver coins. Miller considered selling some of his coins. In February 2017, Miller met with Michael Joaquin of Father and Sons Collectibles, Inc., to discuss the potential sale of at least 256 coins. (ECF No. 47, PageID.493-94; ECF No. 42, PageID.405.) The exact number of coins Miller offered is uncertain.

         Miller and Joaquin entered into an oral agreement. Joaquin listed the coins one by one on a sheet of paper. (ECF No. 42, PageID.398-404.) The parties agreed that Joaquin would take the coins and sell them to third parties, potentially at coin shows. (ECF No. 47, PageID.546, 616-17.) Joaquin was to obtain fair market value for the coins. (Id., PageID.547, 577.) For any sales, Miller would be entitled to 80% of the proceeds while Joaquin would have a right to 20%. (Id.)

         Joaquin took possession of the coins and gave Miller a down payment of $5, 000. (Id., PageID.577, 547, 579.) Joaquin then sold the coins. (Id., PageID.620.) Joaquin testified to receiving $18, 000 for the coins, mostly from two companies, Eastern Numismatics and Numismatics Unlimited, not from coin shows. (Id., PageID.620, 628.) Miller and Joaquin dispute the amount of money Joaquin mailed to Miller after the sale of the coins. (Id., PageID.605.) Joaquin claims he gave Miller a total of $15, 000 in four checks including the down payment. (Id.) Three check stubs were introduced into evidence totaling $12, 000. (ECF No. 43, PageID.406-08.) Nonetheless, Miller maintained he received only $11, 000. (ECF No. 47, PageID.546.)

         Miller filed suit in federal court in May 2018 against both Joaquin and Father and Sons. (ECF No. 1.) Miller alleged that Joaquin's actions constituted fraud, statutory conversion, common law conversion, breach of contract, and unjust enrichment. (Id., PageID.4-8.) Miller sought other equitable remedies as well. (Id.) A four-day trial was held between May 27 and May 30, 2019. The jury returned a verdict in favor of Miller on breach of contract, common law conversion, statutory conversion, and fraud. (ECF No. 40, PageID.391-93.) The jury found Joaquin personally liable on all these claims and awarded Miller $180, 000. (Id.) The jury marked on the verdict form that Father and Sons was not liable for breach of contract, common law conversion, and statutory conversion. (ECF No. 40, PageID.391-92.) The jury did not mark whether Father and Sons was liable for fraud on the verdict form, but the jury foreman did announce only Joaquin liable, as he did for the other claims, when rendering the verdict in court. (Id.; ECF No. 48, PageID.732-33.)

         II. STANDARDS

         A. JNOV

         In the Sixth Circuit, “a federal court sitting in diversity must apply the standard for judgments as a matter of law of the state whose substantive law governs.” Lindenberg v. Jackson Nat'l Life Ins. Co., 912 F.3d 348, 360 (6th Cir. 2018) (quoting DXS, Inc. v. Siemens Med. Sys., Inc., 100 F.3d 462, 468 (6th Cir. 1996)). Miller brought his suit under diversity jurisdiction. (ECF No. 1, PageID.2, ¶ 4-5.) Miller's claims arise under state law, the parties are diverse, and Miller alleged an amount in controversy exceeding $75, 000 in good faith. See Charvat v. GVN Michigan, Inc., 561 F.3d 623, 628 (6th Cir. 2009).

         Michigan's JNOV functions in a very similar way to the federal system's judgment as a matter of law. See Fed. R. Civ. P. 50(b); Ford v. County of Grand Traverse, 535 F.3d 483 (6th Cir. 2008). Under Michigan law, “a party may move to have [a] verdict and judgment set aside, and to have judgment entered in the moving party's favor.” Mich. Ct. R. 2.610(A)(1). The court must “examine the testimony and all legitimate inferences that may be drawn in the light most favorable to the plaintiff. If reasonable jurors could honestly have reached different conclusions, the motion should be denied.” Matras v. Amoco Oil Co., 424 Mich. 675, 681-82 (1986); see also Wiley v. Henry Ford Cottage Hosp., 668 N.W.2d 402, 407 (Mich. Ct. App. 2003).

         B. New Trial

         “In a diversity case, the question of whether a new trial is to be granted is a federal procedural question and is to be decided by reference to federal law.” J.C. Wyckoff & Ass. V. Standard Fire Ins. Co., 936 F.2d 1474, 1487 n.20 (6th Cir. 1991) (quoting Toth v. Yoder Co., 749 F.2d 1190, 1197 (6th Cir. 1984)).

         Under Federal Rule of Civil Procedure 59(a) “[a] court may, on motion, grant a new trial on all or some of the issues . . . after a jury trial.” “[A] new trial is warranted when a jury has reached a ‘seriously erroneous result' as evidenced by: (1) the verdict being against the weight of the evidence; (2) the damages being excessive; or (3) the trial being unfair to the moving party in some fashion, i.e., the proceedings being influenced by prejudice or bias.” Holmes v. City of Masillion, 78 F.3d 1041, 1045-46 (6th Cir. 1996) (quoting Montgomery Ward & Co. v. Duncan, 311 U.S. 243, 251 (1940); CFE Racing Prods., Inc. v. BMF Wheels, Inc., 793 F.3d 571, 584 (6th Cir. 2015).


         Joaquin moves for judgment as a matter of law and a new trial on Joaquin's personal liability for breach of contract, Joaquin's liability for conversion and fraud, and on the extent of damages the jury awarded Miller. Joaquin's motion for judgment as a matter of law will be construed as a motion for JNOV under Michigan law. See Lindenberg, 912 F.3d at 360. Joaquin also seeks sanctions and relief from judgment for Miller's failure to provide signed answers to interrogatories. The court will address each issue in turn.

         A. Joaquin's Personal Liability for Breach of Contract

         “An agent who contracts with a third party on behalf of a disclosed principal is generally not liable to the third party in the absence of an express agreement to be held liable.” Howard & Howard Attorneys P.L.L.C. v. Jabbour, 880 N.W.2d 1, 1 (Mich. Ct. App. 2015) (citing Nat'l Trout Festival, Inc. v. Cannon, 189 N.W.2d 69, 70-71 (Mich. Ct. App. 1971)). A principal is disclosed if “a party transacting with the principal's agent has notice that the agent is acting for the principal and notice of the principal's identity.” Penton Pub., Inc. v. Markey, 538 N.W.2d 104, 105 (Mich. Ct. App. 1995) (citing Dodge v. Blood, 299 Mich. 364, 370 (1941)). “A characteristic of an agent is that he is a business representative. His function is to bring about, modify, accept performance of, or terminate contractual obligations between his principal and third persons, ” to the extent that the principal provides an agent with authority to do so. Uniprop, Inc. v. Morganroth, 678 N.W.2d 638, 641 (Mich. Ct. App. 2004).

         Here, the evidence is overwhelming that Joaquin was acting as an agent to Father and Sons when he made an oral contract with Miller to sell Miller's coins. Even drawing legitimate inferences in favor of Miller, no reasonable juror could find Joaquin personally liable for a breach of contract. Matras, 424 Mich. at 681-82.

         First, Miller was made aware of Joaquin's status as agent to Father and Sons. The indexing of the coins at issue were written, with the understanding and agreement of Miller, on paper with the letterhead of Father and Sons. (ECF No. 42, PageID.398-404; ECF No. 47, PageID.496, 544.) This list of coins served as the initial basis of the contract. (ECF No. 47, PageID.496, 503, 545.) It listed the subject matter of the contract, namely each coin Miller wished to sell, and Joaquin's first attempt at providing a valuation for the coins. (ECF No. 42, PageID.398-404.) Joaquin signed each page at the bottom. (ECF No. 42, PageID.398-404.) Miller testified that Joaquin made the list and presented it to Miller at the time of their negotiations. (ECF No. 47, PageID.545.). In fact, Miller stated that “the only list I went off of [with regards to the coins at issue] was the one that [Joaquin] provided me.” (Id.) If Miller was not already aware of Joaquin's business relationship from their contacts to arrange their in-person meeting in February 2017, Miller was certainly put on notice that Father and Sons existed as an entity and that Joaquin was acting as agent for Father and Sons. Markey, 538 N.W.2d at 105.

         Second, Henry Benjamin, a close confidant of Miller who was deeply involved in the creation of the contract, observed that Joaquin was acting as an agent of Father and Sons. Benjamin hosted the negotiations, advising Miller and allowing the contract discussions to take place in his office. (ECF No. 47, PageID.495.) Benjamin admitted that he “helped negotiate the deal” and was “basically acting as [Miller's] agent in [the] transaction.” (Id., PageID.496, 507.) Given his extensive personal experience with the contracting process, it is notable that when asked what he “under[stood] the relationship [was] between [Joaquin] and Father [and] Sons, ” Benjamin responded that “[Joaquin] represented Father and Sons.” (Id., PageID.505.)

         Third, all checks made payable to Miller for his coins were written from Father and Sons, not Joaquin personally. (ECF No. 43, PageID.406-08.) After negotiations in which major documents were written on Father and Sons' paper and a knowledgeable observer understood Joaquin to be representing Father and Sons, it was Father and Sons who followed through with payment. Michigan law recognizes that the parties' course of performance can assist the court in interpreting a contract. In cases where the terms of a contract are ambiguous, “the practical interpretation given to [the] contract[] by the parties . . . while engaged in their performance and before any controversy has arisen concerning them, is one of the best indications of their true intent.” Klapp v. United Ins. Group Agency, Inc., 468 Mich. 459, 479 (2003) (quoting People v. Mich. Ctr. R. Co., 145 Mich. 140, 166 (1906)). Here, the course of performance strongly supports the intent of Father and Sons and Miller to be bound by the contract. Father and Sons delivered the money to Miller. This money served as the only real consideration in the agreement for Miller's coins. In response, Miller read the check, understood its significance, and accepted the money. (See ECF No. 47, PageID.546-47.) Significantly, this course of conduct began only hours after the formation of the contract when Joaquin provided Miller with a down payment of $5, 000, on a Father and Sons' check. (ECF No. 43, PageID.406; ECF No. 47, PageID.577, 547, 579.)

         Fourth, Joaquin provided uncontradicted testimony that he was acting on behalf of Father and Sons throughout the course of his business interactions with Miller. Joaquin claimed at trial that “all [his coin] business” is “[done] through Father [and] Sons.” (ECF No. 47, PageID.593.). In contrast, Miller has presented no evidence to contradict Joaquin or to otherwise subject this testimony to doubt. Miller himself never testified to any belief that he was contracting personally with Joaquin. In fact, Miller was asked about Father and Sons only once. Miller was ...

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