In Rebecca Broadway LP v. Thibodeau, Justice Andrea Masley of the Commercial Division denied plaintiff Rebecca Broadway Limited Partnership’s (“RBLP”) motion to set aside a damages verdict after it prevailed at trial against Defendant Marc Thibodeau (“Thibodeau”) on claims for breach of contract and tortious interference with business relationships.[1] The case raised issues of whether a jury’s damages verdict is supported by a rational interpretation of the trial evidence and the circumstances under which a retrial solely on the issue of damages is appropriate.

Factual Background

Producers Ben Sprecher and Louise Forlenza (collectively, “Producers”) formed RBLP to finance, produce, and manage the Broadway show Rebecca The Musical (the “Show”).[2] In 2008, the Producers hired Thibodeau to serve as the Show’s publicist.[3] During Thibodeau’s tenure as publicist from 2008 to 2012, the Producers had difficulty attracting investors and raising capital sufficient to finance the Show.[4] In 2012, after the Show’s production had been delayed because of insufficient capitalization, the Producers hired Mark Paul Hotton (“Hotton”) as a consultant to help engage prospective investors.[5] Hotton procured four investors, including Paul Abrams, who agreed to invest more than $4 million in the Show and became RBLP’s largest single investor.[6] However, the Producers were unable to collect on Abrams’s multi-million dollar pledge after Abrams allegedly died of malaria overseas.[7]

Following Abrams’s death, the Producers secured new investors, including Lawrence Runsdorf (“Runsdorf”), who agreed to invest $2.5 million in the Show, and DC Tours, which agreed to invest $1.3 million.[8] Both investments were conditioned on RBLP reaching a $12 million capitalization target.[9]

By the time of Abrams’s death, Thibodeau had grown skeptical of both Abrams and Hotton and began to investigate Hotton’s background. Through his investigation, Thibodeau discovered that Hotton had been sued for fraud, that Abrams was not a real person, and that Abrams’s investment was likely a scam.[10] Using the false names “Bethany Walsh” and “Sarah Finkelstein,” Thibodeau subsequently sent emails to Runsdorf and Runsdorf’s attorneys indicating that Abrams “was a fiction devised to defraud other investors” and warned Thibodeau against investing in the Show.[11] As a result, Runsdorf withdrew his investment, and the Show’s opening was canceled.[12]

Justice Masley’s Opinion

RBLP brought suit against Thibodeau for (i) breach of contract, (ii) tortious interference with business relationships, and (iii) defamation.[13] The case proceeded to trial in April 2017. The jury found Thibodeau liable for tortious interference and awarded RBLP $85,000 in compensatory damages, an award considerably lower than the approximately $10.5 million that RBLP sought on that claim.[14] Pursuant to CPLR 4404(a), RBLP moved for an order setting aside only the damages verdict on the tortious interference claim, leaving the liability verdict intact, and seeking a new trial on damages alone.[15] In its motion, RBLP argued that the $85,000 figure could not have been rationally derived from any of the evidence presented at trial. It contended that the jury could only have awarded either (i) one or some combination of the exact amounts that RBLP claimed as lost commitments and out-of-pocket expenses; or, (ii) no damages in accordance with Thibodeau’s defense that regardless of any interference, the minimum capitalization target would not have been reached, the Show would not have opened, and RBLP did not sustain any damages.[16]

The Court began its analysis by noting its obligation to “cautiously balance the great deference to be accorded to the jury’s conclusion . . . against the court’s own obligation to assure that the verdict is fair.”[17] The Court concluded that a fair interpretation of the evidence presented at trial supported the $85,000 damages award. The Court reasoned that there were multiple explanations for the jury’s award: (i) the jury could have found that Thibodeau’s tortious interference did not cause RBLP to lose the benefit of the Runsdorf or DC Tours investments, (ii) that Thibodeau’s interference caused damages to RBLP for only a limited period of time, or (iii) that Thibodeau’s interference caused only a portion of RBLP’s out-of-pocket expenses given RBLP’s difficulties in raising enough capital to sustain the show for years prior to Thibodeau’s emails to Runsdorf.[18]

After declining to set aside the verdict, the Court made two additional observations concerning the proposed remedy of a retrial solely on the issue of damages. First, the Court observed that even if it had held that the verdict was not rationally related to the trial evidence, a retrial on the issue of damages alone would not be appropriate.[19] When there is no evidence to support the jury’s award for damages, the entire verdict, including the determination of liability, would appear to be the product of an improper jury compromise.[20] Where an “inexplicably low” damages award signals an improper jury compromise on liability and damages, the proper remedy is a retrial on all issues.[21] However, the Court noted that the jury’s award in this case was not “inexplicably low” because “much of the trial evidence as to RBLP’s claimed $10.5 million of sustained damages was, variously, speculative, unsupported, and contradicted.”[22]

Second, the Court observed that a new trial on damages alone is not appropriate when the issues of liability and damages are “inextricably interwoven.”[23] The Court distinguished between the example of a personal injury case in which a defendant’s liability for an accident is typically distinct from the degree of injuries sustained by the plaintiff, and this case in which liability and damages are not readily distinguishable.[24] The Court reasoned that the damages that RBLP claimed extended beyond the Runsdorf investment with which Thibodeau interfered to other damages resulting from “the domino-effect” caused by the loss of the Runsdorf investment.[25]

Conclusion

Justice Masley’s opinion in Rebecca Broadway underscores the limitations placed on parties seeking to preserve a favorable verdict on the issue of liability while separately challenging a jury’s award of damages. Isolating the issue of damages from liability may sometimes prove difficult. Although the jury awarded RBLP damages in an amount significantly lower than the approximately $10.5 million sought by RBLP on its tortious interference claim, the Court held that a fair interpretation of the trial evidence supported the $85,000 award.