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Full Spectrum Software, Inc. v. Forte Automation Systems, Inc.

United States Court of Appeals, First Circuit

June 2, 2017

FULL SPECTRUM SOFTWARE, INC., Plaintiff, Appellee,
v.
FORTE AUTOMATION SYSTEMS, INC., Defendant, Appellant.

         APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MASSACHUSETTS [Hon. Timothy S. Hillman, U.S. District Judge]

          Torruella, Lynch, and Barron, Circuit Judges. Eric H. Loeffler, with whom Hinshaw & Culbertson LLP was on brief, for appellant.

          David M. McGlone, with whom Christian B.W. Stephens and Eckert, Seamans, Cherin & Mellott, LLC were on brief, for appellee.

          Before Torruella, Lynch, and Barron, Circuit Judges.

          BARRON, Circuit Judge.

         This appeal concerns a dispute between two businesses: Forte Automation Systems, Inc. ("Forte"), the defendant-appellant, and Full Spectrum Software, Inc. ("Full Spectrum"), the plaintiff-appellee. Their dispute requires us to resolve two distinct legal issues. The first turns on whether the evidence in the record suffices to sustain the jury's verdict and chiefly concerns the scope of the Massachusetts catch-all consumer protection statute, chapter 93A. See Mass. Gen. Laws ch. 93A. The other turns on whether Full Spectrum had a right to have its chapter 93A claim for damages tried by a jury in federal court at all. Because we decide both issues in favor of Full Spectrum, we affirm.

         I.

         The following facts are uncontested. This dispute dates back to June of 2011. At that time, Forte executed a contract with ProTom International, Inc. ("ProTom"). Under that contract with ProTom, Forte agreed to engineer specialized software for a proton radiation therapy station in a cancer treatment hospital. Full Spectrum became involved in the following way.

         After Forte secured the contract with ProTom, Forte executed a subcontract to complete the project with Medical Instruments, Co., doing business as Civco Medical Solutions ("Civco"). Civco, in turn, subcontracted software development services for the project to Full Spectrum. On or about April 16, 2012, however, Civco pulled out of the project. And, on April 16, a representative from Civco informed Full Spectrum, over email, that "starting today, all work performed on the product should be billed to Forte, " and that Forte would want a quote on the remaining work.

         The next day, April 17, the president of Full Spectrum, Andrew Dallas, emailed the president of Forte, Toby Henderson, to confirm that Forte would be taking over management of the project. In that email, Dallas told Henderson, "In order to make the transition, we'll need to get our Consulting Services Agreement (CSA) in place with Forte along with a Work Order for the project." Dallas attached the CSA, along with Full Spectrum's billing rates, to the email. No Work Order was attached. Forte's Project Manager, Ed Roman, replied on April 18, directing Full Spectrum to continue work on the project.

         In accord with Roman's email, Full Spectrum continued to work on the project over the next several weeks. Full Spectrum also billed Forte on April 30, May 7, and May 14, in the total amount of $133, 053.75. As we discuss in more detail below, the parties also continued to work out aspects of their commercial terms. On May 3, Forte and Full Spectrum signed the CSA. Full Spectrum then sent Forte the Work Order -- which contained specific details about the project -- and repeatedly requested that Forte sign it. On May 14, Forte presented Full Spectrum with a Purchase Order, which contained terms that were different from those in Full Spectrum's CSA and Work Order, and that were adverse to Full Spectrum.[1] On that same date, Full Spectrum terminated its involvement with the project. Forte subsequently refused to compensate Full Spectrum for the work that Full Spectrum had completed between April 16 and May 14.

         On August 10, 2012, Full Spectrum, which is based in Massachusetts, filed this diversity suit against Forte, which is based in Illinois, in federal court in the District of Massachusetts. In the complaint, Full Spectrum alleged various claims under Massachusetts law, only two of which remain at issue on appeal. These two claims are for breach of implied contract and violation of chapter 93A.

         Prior to trial, Full Spectrum moved to submit the chapter 93A claim to a binding jury, or, in the alternative, to an advisory jury. Forte objected under Rule 39 of the Federal Rules of Civil Procedure to submitting the claim to a binding jury, arguing that there is no right to a jury trial -- under state or federal law -- for claims under chapter 93A. The District Court granted Full Spectrum's motion without comment.

         At the close of evidence, Forte submitted a motion under Rule 50(a) of the Federal Rules of Civil Procedure for judgment as a matter of law. In its motion, Forte contended that there was not sufficient evidence to support a finding for Full Spectrum on either the implied contract or the chapter 93A claim. The District Court denied the motion without comment.

         Before the jury began deliberations, the District Court instructed the jury, "I have no opinion about what the facts are or what your verdict ought to be; that is solely and exclusively your duty and responsibility." The jury then was given a special verdict form and returned the following verdict. The jury found Forte liable for breach of implied contract and for knowing and willful violation of chapter 93A. The jury awarded Full Spectrum $133, 053.75 in actual damages, without specifying whether those damages arose from the breach of implied contract, from the violation of chapter 93A, or from some combination of the two. The jury also awarded Full Spectrum $350, 000 in punitive damages specifically based on the violation of chapter 93A.

         In entering the judgment, the District Court noted that the judgment reflected a jury verdict, rather than a decision by the District Court itself. Forte then renewed its motion for judgment as a matter of law pursuant to Rule 50(b) of the Federal Rules of Civil Procedure. The District Court denied the motion without comment.

         On appeal, Forte challenges the District Court's denial of Forte's motion for judgment as a matter of law on both Full Spectrum's implied contract claims and on its chapter 93A claims, contending that there was not sufficient evidence to support the jury's verdict on either claim. Forte also challenges the District Court's decision to submit Full Spectrum's chapter 93A claim to a jury notwithstanding Forte's objection under Rule 39.[2]

         II.

         We begin with Forte's challenge to the denial of Forte's motion for judgment as a matter of law based on insufficient evidence. Our review is de novo. Jones ex rel. U.S.v.Mass. Gen. Hosp., 780 F.3d 479, 487 (1st Cir. 2015). We "must affirm unless the evidence, together with all reasonable inferences in favor of the verdict, could lead a reasonable person to only one conclusion, namely, that the moving party was entitled to judgment." Astro-Med, Inc.v.Nihon Kohden Am., Inc., 591 F.3d 1, 13 (1st Cir. 2009) (citation omitted). We must refrain from passing judgment upon the credibility of witnesses, resolving ...


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