Opinion
Nos. 05-0939-cv (L) 05-1502-cv (XAP).
August 27, 2007.
Appeal from the United States District Court for the Southern District of New York (Baer, J.).
ON CONSIDERATION WHEREOF, IT IS HEREBY ORDERED, ADJUDGED, AND DECREED that the judgment of said District Court be and it hereby is AFFIRMED in part, VACATED in part, and REMANDED.
For Plaintiffs-Counter-Defendants-Appellees-Cross-Appellants: Roger B. Mead, Folger Levin Kahn LLP, San Francisco, CA (Richard Keenan, Folger Levin Kahn LLP, San Francisco, CA and Alan R. Glickman, Schulte Roth Zabel LLP, New York, NY, on the brief).
For Defendant-Counterclaimant-Appellant-Cross-Appellee: Kenneth L. Bressler, Blank Rome LLP, New York, NY (Jennifer S. Smith, Hans H. Chen, Blank Rome LLP, New York, NY and Douglas F. Broder, Kirkpatrick Lockhart Nicholson Graham LLP, New York, NY, on the brief).
Present: ROSEMARY S. POOLER, SONIA SOTOMAYOR, Circuit Judges.
The Honorable James L. Oakes was originally a member of this panel but has since retired. This appeal is decided by the remaining members of the panel pursuant to Section 0.14(b) of the Rules of the United States Court of Appeals for the Second Circuit.
Plaintiffs-counter-defendants-appellees-cross-appellants Valjean Mfg., Inc. and Martin Gruber (collectively "Valjean") and defendant-counterclaimant-appellant-cross-appellee Michael Werdiger, Inc. ("MWI") had previously appealed from portions of a judgment awarding damages to Valjean for breach of contract. Following a remand from this Court, see Valjean Mfg., Inc. v. Michael Werdiger, Inc., 164 Fed. Appx. 7, No. 05-0939-cv, 2005 U.S. App. LEXIS 29003 (2d Cir. Dec. 6, 2005), the district court issued a new order reducing Valjean's damage award to approximately $4.7 million. Valjean and MWI again appeal portions of that award. We assume the parties' familiarity with the facts, procedural history, and specification of issues on appeal.
Interest Credit
We affirm the district court's decision to award MWI interest for Cash Advances, but remand for reconsideration of the amount awarded. We find no clear error in the district court's finding that the advance payments of compensation were requested by Valjean as a Cash Advance under the terms of the Manufacturing and Security Agreement ("MSA"). However, we remand such that the district court can further explain why interest accrued for the entirety of the contractual relationship between the parties. The district court found that MWI had underpaid Valjean the amounts it owed under the MSA over the course of several years. The MSA provides that both the principal and the interest owed on Cash Advances are subtracted from the monthly Valjean Payments. MSA § 5.1(2)-(3). It is not clear, however, whether the district court accounted for the admitted underpayments when calculating the interest credit. Thus, we remand for further explanation of why these underpayments did not reduce the amount of the outstanding principal, and correspondingly, the amount of interest owed.
Prejudgment Interest
We affirm the district court's decision to award prejudgment interest from the date of the filing of the complaint. The district court has wide discretion in choosing a reasonable intermediate date when the date of breach is unknown.See N.Y. C.P.L.R. § 5001. Given the circumstances surrounding this case, it was within the district court's discretion to choose the date of filing of the complaint as a reasonable intermediate date.
Sales Commissions
We affirm the district court's credit to MWI for sales commissions "paid or payable" to the non-Van Lightener Sales Forces. We reject Valjean's argument that the district court erred in admitting the computer-generated summary prepared by Arnold Freiman.
We review the district court's decision to admit summary evidence under Rule 1006 for abuse of discretion. United States v. Walker, 191 F.3d 326, 336 (2d Cir. 1999);see also Phoenix Assocs. III v. Stone, 60 F.3d 95, 100 (2d Cir. 1995) (equating this standard with "manifestly erroneous"). "Summary evidence is admissible as long as the underlying documents also constitute admissible evidence and are made available to the adverse party."Tamarin v. Adam Caterers, Inc., 13 F.3d 51, 53 (2d Cir. 1993).
The Freiman affidavit indicates that the computer program used to create the summary extracted data from MWI's records and then performed mathematical computations on them. The underlying documents used to obtain these records would have been admissible as business records of MWI, and, as the district court noted, these records were produced to Valjean approximately one week before trial. While Valjean understandably objects to the lateness of the production, it was within the district court's discretion to find this sufficient to satisfy Rule 1006's requirement that the records be made available at a "reasonable time and place."
We also disagree with Valjean's contention that the Freiman summary constituted expert evidence. A lay witness could have testified to each of the numbers depicted on each sales record and then performed the required mathematical computations on them. The purpose of Rule 1006 is to eliminate such tedious testimony and present material in a more efficient manner.See Walker, 191 F.3d at 336 (research specialist's testimony of the contents of approximately 1300 asylum applications was properly admitted under Rule 1006 and did not constitute expert testimony because the witness "simply summarized and commented on the contents of the applications"). Furthermore, the fact that the summary was created using a computer program does not automatically transform the evidence into "expert" testimony. MWI presented testimony that Freiman's numbers could be checked manually by doing a line-by-line check with each invoice. As long as the summary prepared by Freiman was within the competence of a lay person, the fact that Freiman used a computer to aid in the process does not render his testimony expert evidence.
Finally, Valjean's argument that Freiman did not adequately explain the computer program more properly goes to weight, not admissibility, of this evidence. Evidentiary matters are committed to the sound discretion of the district court, and on this record, we will not disturb the district court's decision to admit this evidence.
Diamond Value for Indian-made jewelry
We vacate the judgment of the district court with regard to the calculation of the Diamond Value for diamonds contained in Indian-made jewelry. Valjean argued before the district court that the Indian-made jewelry was "generic jewelry," and the district court accepted that contention. Thus, the Indian-made jewelry is now categorized as "NOVA/MWI Diamonds" under the MSA. The MSA provides that for certain types of loose diamonds that MWI "does not regularly inventory," MWI shall purchase those diamonds on the open market "and establish a Diamond Value based on its cost for each category after assortment plus a profit margin averaging 15%." There is no dispute that the district court's damage award did not include a 15%-profit for diamonds contained in the Indian-made jewelry. Valjean contends this is proper because the diamonds contained in the Indian-made jewelry were not purchased on the "open market," since these diamonds were not purchased separately but as part of a finished piece of jewelry. MWI responds that because the jewelry itself was purchased on the open market, the diamonds contained within them were also purchased on the open market within the meaning of the MSA. The language of the MSA would not preclude such a finding. The district court did not explain why it did not include the 15% profit for diamonds contained in Indian-made jewelry. Accordingly, we must vacate this portion of the district court's decision and remand for further proceedings.
Post-Termination Sales
We affirm the district court's award of post-termination sales. The district court did not err in concluding that the parties during on-going litigation agreements had committed to apply Section 5.1 of the MSA to all Valjean sales whether pre- or post-termination up to the date of trial. Accordingly, the district court properly awarded Valjean sales proceeds for the entirety of this period.
Trade Show Expenses
Section 3.4 of the MSA states that MWI "shall pay for advertising, trade shows and customer marketing programs in an amount, for the period from the date of this Agreement through December 31, 1995, of not less than $200,000 and thereafter, as determined by Nova/MWI." Pursuant to this provision, the district court awarded Valjean trade show expenses of $200,000 for the pre-1996 time period. The record indicates, however, that MWI spent $194,021 on trade show expenses in 1995. The district court does not appear to account for this number, nor does it explain why Valjean should be awarded an additional $200,000 if MWI has in fact already spent $194,021 on trade show expenses during this time period. Accordingly, we must vacate this portion of the district court's damage award and remand for further clarification.
Conclusion
For the foregoing reasons, the judgment of the district court is affirmed in part, vacated in part, and remanded for further proceedings consistent with this order.