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| So many puns, so little time |
By Elizabeth Kruska
This is a civil case concerning a breach of contract or contracts. There was a trial, the jury found for the plaintiff, and the defendant appealed. To skip ahead to the fun part, SCOV affirms most of it, but reverses a portion and remands the matter to the trial court to re-calculate pre-judgment interest.
Mr. Russell and Mr. Hernon decided in 2011 or so (probably before, but 2011 is the earliest date I see in the opinion) to develop commercial solar panel installations and possibly sell some solar tax credits. Mr. Russell was the Ideas Guy, and came up with the concept and acted as administrative head of the effort. He got the permits, found engineering support, and worked with Mr. Hernon and his lawyer and accountant to come up with information for prospective investors.
Mr. Hernon formed an LLC called Springfield Net Metering. For tax reasons it elected to be taxed as a subchapter “S” corporation. Because of this, it turned out that Mr. Russell didn’t have a tax basis, and therefore no direct investment. Therefore, they decided Mr. Russell would get paid in cash. But then he didn’t get paid in cash or in any other way, so he filed suit.
They had a trial on the matter. Mr. Russell argued that he was owed $28,500 based on an agreement from March 2013, and also an additional $21,000 from an oral agreement from August of 2011. Mr. Hernon and the LLC (who might be one and the same, but I can’t totally tell) argued there was never a breach of contract because the contract was continuously evolving. Then it did come out that there was an agreement to pay, but the defendants said this was a gift. There were also some other arguments.
I don’t do a lot of civil work. I have watched a lot of episodes of Judge Judy. “It was a gift” is a pretty common Judge Judy defense. It rarely works.
The jury found that there was a breach of the August 2011 contract and a May 2012 breach but Mr. Russell suffered no damages. The jury also found that there was a breach of the March 2013 contract and that Mr. Russell suffered damages in the amount of $28,500. The defendants appeal, citing a few causes of error.
I’m taking these out of order. There was an error alleged regarding some evidentiary issues with one of the contracts. SCOV sighs and says, “This wasn’t raised below, so it’s waived here.”
There is also an alleged error with the jury instructions. It’s somewhat unclear if this error was preserved below. SCOV says that even if it was, the error alleged is without merit. SCOV looks at the evidence below, and finds that the jury instructions were consistent with the evidence and the law, so they were okay.
The last objection has to do with the court’s calculation of prejudgment interest, and this does get reversed for a recalculation. The contract from March 2013, which gave rise to the $28,500 award didn’t have a clear due date for payment. A plaintiff has the right to prejudgment interest if the damages are “liquidated or readily ascertainable.” In order to calculate the interest, it’s necessary to know where that starts. Here the evidence shown that the payments were supposed to start in June of 2013, with a specific demand being made on June 14, 2013. The trial court calculated interest starting on May 1, 2013.
SCOV agrees with the defendants that interest should be calculated from the date of the specific demand rather than May 1. So, that gets remanded for re-calculation.
If you'd like to read another summary of the same case, just click here. Sometimes our editor forgets to update the case list properly, and you all get a two-for-one special. How's that for lucky?
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