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SJC-12688, Lynn Labkey v. Stored Healthcare System LLC.
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Mr. Ward, good morning?
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Good morning Your Honor.
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Mr. Chief Justice and may it please the Court
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the principal issue in this case is whether
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the measure of damages and a breach
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of contract action can include the replacement cost
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of property the plaintiff never expected to own,
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but only ever expected to use.
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Steward agrees--
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Implications of the bankruptcy decision about GRI on
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the assets of CCSB.
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So, to the extent that there was any dispute between
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the parties Your Honor and we understand the plaintiff
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to have waived any claim to the assets.
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That bankruptcy decision would have resolved it in
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an issue preclusive manner because what
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the bankruptcy court held, was that the grant funding
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in the equipment that made up the CCSB belonged
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to a third party belonged to GRI.
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And the bankruptcy court specifically enjoined plaintiff
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from seeking in this litigation any damages
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that really belonged to GRI.
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So in this case Steward agrees
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and we agree on appeal and we agreed below.
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That to the extent plaintiff actually proved
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her own financial losses.
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If she actually had put in evidence
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of her last future earnings potential, she would be able
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to recover that because that's personal to her.
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However what she what she cannot do
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is the only thing she did, which is try to put in evidence
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of harm to GRI of what it would cost to replace the CCSB,
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which was an asset of this other company, according
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to the bankruptcy court and again according
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to her own concessions in this case.
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By seeking damages in that amount
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and by the Superior Court awarding damages
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in an amount equal to the labs replacement cost.
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The court ran afoul of decades of this Court's precedents
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which state that you don't put plaintiff
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in a better place financially
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than if defendant had never breached
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and importantly in this case.
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Even though the law generally is that in breach
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of contract actions, you don't get any kind
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of emotional distress damages.
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Plaintiff in this case expressly waived any right
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to emotional distress damages or mental distress damages.
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And also waived any rights reputational harm.
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I think the plaintiff for trying to say as far
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as expectation that she'd be able to walk into a turnkey lab
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and continue her cancer research
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and that that's expectancy damages.
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And the financial component of that expectancy Your Honor
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is only her own salary, which is $425,000 a year or so
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for some number of additional years.
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And plaintiff herself identify this
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in her testimony at trial.
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If you look for example, at record appendix three pages 26
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to 27, plaintiff explain that the reason
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why she got paid $425,000 a year was that she was able
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to bring this turnkey lab, to other facilities
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and with all the grant money that flows from it.
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That's why she makes more than the other research--
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As she was able to bring the turnkey lab.
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Correct and so again, if you took, for example
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the six years that her counsel argued to the jury she might
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have continued working after the contract
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with Steward expired, multiply that times 425, you get
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a number that once you reduce it to a net present value
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is probably less than $2 million.
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It's not $10 million.
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Effectively what this appear, if you think about
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this functionally, if her expected future income from using
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the lab was likely something less than $2 million
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and she's getting $10 million from the Superior Court.
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Then that additional interest, whatever it is,
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is being valued at $8 million.
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What about the value of her research?
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The research may have had some value
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to the federal government.
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They may have been willing to pay.
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May have?
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Well I'm sure it did although it's--
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They have may have the problem isn't it may have.
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Well may have a probable at the end
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of the day nobody wanted those samples right, so--
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C'mon that's ridiculous.
Well, is that fair say?
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I think it is fair to say because
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the bankruptcy estate, offered them
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for free to whoever would take them
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and no other research institution wanted them.
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But put that aside the important point for--
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Its a the big putting aside, though isn't it?
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The important point for her damages Your Honor,
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is that her financial interest
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and she waived any other non financial interest,
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is less than $3 million.
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So tell me, what was the jury thinking then?
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Why do you think they went this route?
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Well the plaintiffs put in at trial evidence from
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the plaintiff that the cost to replace the lab
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would be $10 million.
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They then put in evidence of what it would cost to operate
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the lab and the amount of grant funding
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that was in place both in 2012 and in 2014.
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The problem and Steward has been arguing this
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from the beginning, is that those large numbers
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the 10 million replacement cost for the lab all
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the grant funds did not belong to the plaintiff personally.
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And in a breach of contract case.
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This Court has said again and again plaintiff is entitled
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to be put back in the position she would have been
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if there had been no breach--
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But there was categories of damages were not broken out.
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You didn't object to the jury instructions.
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We didn't object to the jury instructions because there
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was no need to.
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The jury instructions specifically said,
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that plaintiff only could recover for her own personal harm
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and not for harm to third parties.
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That's a Joint Appendix, our record appendix three
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269 to 70.
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The jury instructions also instructed the jury the plaintiff
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could not recover for her emotional distress injury.
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And before we even got to the point of jury instructions,
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this is at record appendix two page 179.
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The plaintiff waived any right to reputational harm.
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So all that was left was her financial harm.
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So why do you think the jury misunderstood that?
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I can't explain Your Honor.
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But the reason why we have things like Rule 59(e)
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and remittitur is precisely for situations like this one
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in which the jury here's some evidence and goes astray
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and awards categories of damages
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which you could not properly award.
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Can you go back and--
The problem I have
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with your argument is that you
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and your law firm are not the attorneys trial.
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I've read the closing, I read the jury instructions.
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The closing argument was simply that there was no causation.
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They didn't make any of the arguments
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that you're making before us today to the jury.
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They may not have made them to the jury
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but they certainly made them to the trial court.
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And if you look at the motion in limine
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if you look at the directed verdict motion
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and ha-ge-n-o-v brief, in every single location
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what trial counsel argued
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was that plan should be limited
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to her own personal financial losses.
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And that the cost of replacing the lab
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and of the grant funds did not fall into those categories.
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So what do we do with the fact that...
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I've read the motion in limine and I've read her rulings
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and I'm at closing argument your predecessor
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is arguing purely that there was no causation here
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and seems to imply that the issue
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is the destruction of the lab.
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And for purposes of preserving our arguments Your Honor.
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I don't believe we were required to make effectively
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a legal argument to the jury.
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This is not, the argument you're making is not
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a legal arguments, it's legal argument but also a...
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We have to why the jury went astray.
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The jury went astray because you never said
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to them, nobody ever said to them you can't give her money
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that you're required to give her the money
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that she otherwise would have earned herself.
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Your Honor the jury instructions told the jury that--
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The jury instructions did not.
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The jury instructions basically said that the damages
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are gonna be the amount foreseeable to Steward
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at the time of a contract.
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Your Honor, what the jury instructions told
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the jury again, this is 269 to 70
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in the record appendix three.
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Is that they were limited to providing her damages
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for injuries quote that she suffered
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and not for injuries incurred by any other person or entity.
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Okay, I understand that so what, but they also said
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that their damages that are foreseeable
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from by Steward at the time they entered into the contract.
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And damages foreseeable to Steward
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at the time they entered a contract
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and an action by Dr. Halackey would be limited to
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for example, some additional years of her salary after
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the contract had expired, because she
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could no longer use the lab.
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It would not include the cost of giving her a laboratory
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that she never expected to own in the first place.
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Argument never made to the jury.
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And again Your Honor, it comes in through
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the jury instructions which specifically say.
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Only give her damages for harm she suffered personally
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and not harm suffered by some third party.
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Okay, so what what if we were to say.
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And I'll ask your brother in a moment what he would say.
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What if we were to say well, the $200,000
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it's appropriate to go to her.
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I think you can see that point.
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We do.
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$10 million, she can't go and spend it
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on buying a house in Weston.
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That money would have to be remanding into the trial judge
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to hold the money in trust for the purpose of recreating
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the lab that she lost.
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And that that sounds to me, Your Honor almost, well
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there are two issues with that.
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One of them well sounds like an award
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of specific performance and she never saw
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a specific performance she you only ever brought an action
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for her own personal damages.
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The second problem is that it
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was never incumbent upon Steward to fund the lab
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in the first place beyond the $300,000 described
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in the contract--
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Probably not to destroy the lab, wasn't it?
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It was to support the lab, Your Honor.
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With the support not to destroy it the way
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it was destroyed.
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Because the lab is destroyed.
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Look we're not we're not contesting liability on appeal.
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All we're contesting is the proper measure
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of her personal damages which is what she was limited
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by the jury instructions to obtaining.
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Her personal damages were something less
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than $3 million, because that's all she would
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have earned at Steward had fully performed--
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Why isn't the value of her research, valuable to her
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as opposed to just the government.
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To the extent is valuable to her Your Honor.
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There's the financial value of it.
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Which again, is the $425,000 salary she earns
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by being able to--
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But there's more to it than that.
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It's her life's work, right.
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There's more to it than that, but that sounds
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in the nature of emotional or mental distress
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or reputational harm and she waived all of those things.
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That argument also proves too much.
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I assume judges and in big firm lawyers also valued
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their professions and the the businesses
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they built up over time.
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However the law is absolutely clear, you can go
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to this Court's decision in John Hancock.
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You don't award emotional distress damages
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in breach of contract cases, even if the impact
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of the breach of contract--
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But isn't this a little different.
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I'm not talking about her reputation or her profession.
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I'm talking about her life's work, what she created.
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And of some breach of contract cause
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the practice I built up to be destroyed I might
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be distressed by that.
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But the answer is not some kind of additional award
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and a breach of contract action.
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There are tort causes of action, you might have 93(a).
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If she hadn't waived emotional distress maybe we
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could be talking about that.
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But you don't take a contract in which
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the financial expectancy was two and a half million dollars
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and turn it into $10 million, much less $22 million.
265
00:11:23.220 --> 00:11:27.420
By positing some additional value to the plaintiff beyond
266
00:11:27.420 --> 00:11:29.550
the actual financial expectation--
267
00:11:29.550 --> 00:11:32.790
But you dispute what it would cost to rebuild a lab.
268
00:11:32.790 --> 00:11:33.910
Did you dispute that?
269
00:11:33.910 --> 00:11:35.630
We dispute that evidence was put into the record
270
00:11:35.630 --> 00:11:36.463
to support it.
271
00:11:36.463 --> 00:11:39.780
Plaintiff put in $10 million.
272
00:11:39.780 --> 00:11:43.070
The superior court initially as the court knows excluded
273
00:11:43.070 --> 00:11:45.380
that on the basis that it was too speculative
274
00:11:45.380 --> 00:11:48.040
and was unsupported by any kind of expert testimony.
275
00:11:48.040 --> 00:11:50.420
The superior court ultimately led it in on the basis
276
00:11:50.420 --> 00:11:51.750
that the door had been opened.
277
00:11:51.750 --> 00:11:54.140
But even when you have that one sentence of testimony
278
00:11:54.140 --> 00:11:56.670
in the record, we would say that's not enough.
279
00:11:56.670 --> 00:11:59.190
The plaintiff actually has to prove based upon
280
00:11:59.190 --> 00:12:00.640
that the preponderance of the evidence to
281
00:12:00.640 --> 00:12:03.670
a reasonable certainty, what the damages would have been.
282
00:12:03.670 --> 00:12:07.610
The superior court tried in a sense back-filling support
283
00:12:07.610 --> 00:12:10.840
for the 10 million by walking through equipment costs
284
00:12:10.840 --> 00:12:13.480
and what operating costs were, but there was no witness
285
00:12:13.480 --> 00:12:16.820
a trial not even Dr. Halackey, certainly not an expert.
286
00:12:16.820 --> 00:12:18.250
Who actually said that the way
287
00:12:18.250 --> 00:12:20.300
the Superior Court went about explaining
288
00:12:20.300 --> 00:12:23.167
the $10 million, made any sense and was reasonable
289
00:12:23.167 --> 00:12:27.050
as a matter of valuing lab creation costs.
290
00:12:27.050 --> 00:12:31.390
Yeah, but on that issue, you take the position
291
00:12:31.390 --> 00:12:36.110
that the value of lab can be determined
292
00:12:36.110 --> 00:12:38.130
by Dr. Halackey's testimony because
293
00:12:38.130 --> 00:12:41.780
it's really, expert testimony but
294
00:12:41.780 --> 00:12:45.160
in the guise of lay testimony.
295
00:12:45.160 --> 00:12:49.240
But, isn't another reason that that evidence could come in
296
00:12:49.240 --> 00:12:53.530
because the door was opened rather than the limitation
297
00:12:53.530 --> 00:12:56.430
on expert testimony through lay witnesses.
298
00:12:56.430 --> 00:12:58.370
Even if it came in our position is that
299
00:12:58.370 --> 00:13:02.450
that one single sentence without any explanation for it
300
00:13:02.450 --> 00:13:05.430
is insufficient to support a $10 million for it.
301
00:13:05.430 --> 00:13:07.850
You can't, if this actually had been an expert
302
00:13:07.850 --> 00:13:10.300
and the expert had provided the ultimate conclusion
303
00:13:10.300 --> 00:13:11.530
and nothing else.
304
00:13:11.530 --> 00:13:12.970
That would be an insufficient basis
305
00:13:12.970 --> 00:13:16.480
and there should be no less of a standard for lay witnesses
306
00:13:16.480 --> 00:13:19.800
who are in effect testifying as experts.
307
00:13:19.800 --> 00:13:22.850
But generally when somebody makes an assertion
308
00:13:22.850 --> 00:13:25.410
of that consequence, there's cross examination attempting
309
00:13:25.410 --> 00:13:27.380
to attack its foundation.
310
00:13:27.380 --> 00:13:28.950
And there was none here.
311
00:13:28.950 --> 00:13:31.130
There was not cross examination but again, ultimately
312
00:13:31.130 --> 00:13:34.530
the burden is on the plaintiff to prove up the damages case.
313
00:13:34.530 --> 00:13:36.700
And what we would say is that if she had shown up
314
00:13:36.700 --> 00:13:39.830
and just offered that one sentence and sat back down
315
00:13:39.830 --> 00:13:41.070
and we hadn't cross examined her
316
00:13:41.070 --> 00:13:43.400
that would be an insufficient basis to support
317
00:13:43.400 --> 00:13:46.450
a damages award plaintiff would not have carried her burden
318
00:13:46.450 --> 00:13:48.930
of explaining why the $10 million is
319
00:13:48.930 --> 00:13:51.560
a reasonably certain figure to the jury.
320
00:13:51.560 --> 00:13:54.750
And then in closing argument, there's no argument
321
00:13:54.750 --> 00:13:58.550
that jury never hears that that's an insufficient basis
322
00:13:58.550 --> 00:13:59.940
for the $10 million.
323
00:13:59.940 --> 00:14:01.330
That's not argued as part of
324
00:14:01.330 --> 00:14:03.640
the closing argument by Steward.
325
00:14:03.640 --> 00:14:06.010
I do not believe that we were required to make--
326
00:14:06.010 --> 00:14:09.440
I understand that, but you're basically saying to us.
327
00:14:09.440 --> 00:14:11.760
We're asking us to undo a jury verdict
328
00:14:11.760 --> 00:14:15.690
or a judge's mediator with regard to a jury's verdict
329
00:14:15.690 --> 00:14:19.380
for arguments never made to a jury.
330
00:14:19.380 --> 00:14:21.810
Not not made to the jury, but there are legal arguments
331
00:14:21.810 --> 00:14:26.190
which were made repeatedly to the trial court judge.
332
00:14:26.190 --> 00:14:28.270
And I will note that the plaintiff made some kind
333
00:14:28.270 --> 00:14:31.480
of waiver argument below the trial court rejected it.
334
00:14:31.480 --> 00:14:34.780
This appears at I believe it's page 324 to 25
335
00:14:37.800 --> 00:14:39.230
in record appendix one.
336
00:14:39.230 --> 00:14:42.820
So that the trial court understood that the key legal issue
337
00:14:42.820 --> 00:14:45.530
in this case, which is whether plaintiff can recover
338
00:14:45.530 --> 00:14:48.370
an award based upon amounts that belong to a third party
339
00:14:48.370 --> 00:14:49.212
was front and center throughout this case--
340
00:14:49.212 --> 00:14:51.340
Which third party. Who was the third party here.
341
00:14:51.340 --> 00:14:54.870
The third party is GRI who the bankruptcy court held
342
00:14:54.870 --> 00:14:55.703
was the actual--
343
00:14:55.703 --> 00:14:56.960
GRI was the creation of Steward.
344
00:14:56.960 --> 00:14:59.343
GRI was the creation of Steward Your Honor.
345
00:15:00.300 --> 00:15:04.217
And GRI was the spin off of Steward Research
346
00:15:04.217 --> 00:15:07.320
and Specialty Projects Corporation the bankruptcy court held
347
00:15:07.320 --> 00:15:09.710
in a decision which is no longer subject to appeal.
348
00:15:09.710 --> 00:15:11.867
That it owned the CCSB his assets
349
00:15:11.867 --> 00:15:13.040
and that of plaintiff wanted them she had
350
00:15:13.040 --> 00:15:14.530
to go ask GRI for.
351
00:15:14.530 --> 00:15:17.460
I understand that you're arguing she's not entitled
352
00:15:17.460 --> 00:15:20.660
to a windfall and that this presents a windfall
353
00:15:20.660 --> 00:15:24.270
but, going into this contract and coming out
354
00:15:24.270 --> 00:15:25.730
of this contract, she's in
355
00:15:25.730 --> 00:15:30.610
a substantially lesser position than she was going in
356
00:15:30.610 --> 00:15:33.610
because of the loss of her research and equipment.
357
00:15:33.610 --> 00:15:37.230
And again Your Honor why we agree that if she were asking
358
00:15:37.230 --> 00:15:40.650
for, her future lost earnings potential.
359
00:15:40.650 --> 00:15:43.530
Her own personal damages, she would be able to obtain that.
360
00:15:43.530 --> 00:15:46.280
Because she no longer has this lab, which she testified
361
00:15:46.280 --> 00:15:50.240
is the reason why she can make $425,000 a year.
362
00:15:50.240 --> 00:15:54.120
You do not however value, the emotional reputational
363
00:15:54.120 --> 00:15:56.360
whatever these other nebulous interests are
364
00:15:56.360 --> 00:15:58.013
at the replacement cost of the lab
365
00:15:58.013 --> 00:15:59.880
because that's effectively treating her
366
00:15:59.880 --> 00:16:01.230
as if she's the owner.
367
00:16:01.230 --> 00:16:03.230
It simply makes no sense to say that someone
368
00:16:03.230 --> 00:16:05.950
with two and a half million dollars in financial losses
369
00:16:05.950 --> 00:16:09.390
can get seven and a half million or 20 or $20 million
370
00:16:09.390 --> 00:16:11.480
in additional damages on top of that.
371
00:16:11.480 --> 00:16:12.680
Because of some nebulous interest,
372
00:16:12.680 --> 00:16:14.560
which this court repeatedly has say you don't get
373
00:16:14.560 --> 00:16:15.960
in breach of contract cases.
374
00:16:17.170 --> 00:16:18.003
And she waived.
375
00:16:18.003 --> 00:16:20.533
Prior to the creation of GRI by Steward,
376
00:16:21.860 --> 00:16:23.900
who owned the assets?
377
00:16:23.900 --> 00:16:24.937
It would have been Steward Research
378
00:16:24.937 --> 00:16:26.223
and Specialty Projects Corporation.
379
00:16:26.223 --> 00:16:28.030
They owned the assets?
380
00:16:28.030 --> 00:16:29.930
Right, because under federal law we walk through this
381
00:16:29.930 --> 00:16:31.130
in our reply brief.
382
00:16:31.130 --> 00:16:34.460
Title to assets is held by the sponsoring institution
383
00:16:34.460 --> 00:16:36.530
which in this case would be a non-profit.
384
00:16:36.530 --> 00:16:40.410
So it's either SRSPC or GRI.
385
00:16:40.410 --> 00:16:41.410
They grant finance--
386
00:16:41.410 --> 00:16:44.920
If she wanted to move, Steward did not own
387
00:16:44.920 --> 00:16:47.310
the ma-ni-fe-sion that they couldn't, they could refuse
388
00:16:47.310 --> 00:16:48.520
to transfer them.
389
00:16:48.520 --> 00:16:51.180
The way it would work is, we would argue it out
390
00:16:51.180 --> 00:16:54.100
in front of the federal grant funding agency.
391
00:16:54.100 --> 00:16:55.440
But what's absolutely clear is
392
00:16:55.440 --> 00:16:57.020
the plaintiff herself did not own them.
393
00:16:57.020 --> 00:16:58.380
She could not, take it--
394
00:16:58.380 --> 00:17:01.580
But this arguing, wherever she want they would go, right.
395
00:17:01.580 --> 00:17:03.740
She argues that but the testimony was unambiguous
396
00:17:03.740 --> 00:17:06.710
in the record and we walk through this in our reply brief.
397
00:17:06.710 --> 00:17:10.000
If there's a dispute between the then current institution
398
00:17:11.150 --> 00:17:12.940
and the principal investigator
399
00:17:12.940 --> 00:17:15.110
then the federal government decides who at the end
400
00:17:15.110 --> 00:17:16.170
of the day gets to take it.
401
00:17:16.170 --> 00:17:18.213
She did not have an absolute right to bring in all
402
00:17:18.213 --> 00:17:19.100
that she wanted--
403
00:17:19.100 --> 00:17:21.750
Why did Steward would seem?
404
00:17:21.750 --> 00:17:22.850
I'm sorry, what's that Your Honor?
405
00:17:22.850 --> 00:17:25.270
No would Steward have an absolute right to retain it?
406
00:17:25.270 --> 00:17:27.690
It's a funny kind of ownership done.
407
00:17:27.690 --> 00:17:29.250
Yeah you're basically holding it in trust.
408
00:17:29.250 --> 00:17:30.083
Yes that's right--
409
00:17:30.083 --> 00:17:31.220
But the question still remains
410
00:17:31.220 --> 00:17:33.620
what's her financial benefit from
411
00:17:33.620 --> 00:17:35.670
that beneficial interest she hasn't it?
412
00:17:35.670 --> 00:17:38.430
And her financial interest is 425 times some number
413
00:17:38.430 --> 00:17:39.590
of additional years.
414
00:17:39.590 --> 00:17:41.910
It's not 10 million it's not 22 million.
415
00:17:41.910 --> 00:17:43.970
I know my time is expired I would like to address
416
00:17:43.970 --> 00:17:46.370
their cross appeal briefly if I may, Your Honor.
417
00:17:48.870 --> 00:17:49.933
Before you do that.
418
00:17:51.570 --> 00:17:55.930
What if we agreed with the majority
419
00:17:55.930 --> 00:17:58.781
in the Pennsylvania case is it fa-rr-a?
420
00:17:58.781 --> 00:17:59.614
FIRREA.
421
00:17:59.614 --> 00:18:03.100
FIRREA yeah, if we agreed with majority in FIRREA.
422
00:18:03.100 --> 00:18:05.360
Would that mean you lose who can be distinguished
423
00:18:05.360 --> 00:18:07.260
from this situation?
424
00:18:07.260 --> 00:18:09.850
Even if you, FIRREA is a complicated case
425
00:18:09.850 --> 00:18:12.570
because they are the plaintiff actually.
426
00:18:12.570 --> 00:18:15.600
Being a tenured professor kept getting paid throughout
427
00:18:15.600 --> 00:18:17.300
the time of the investigation.
428
00:18:17.300 --> 00:18:19.210
And so my own sense is that the court felt he
429
00:18:19.210 --> 00:18:20.970
should get something and so gave him the cost
430
00:18:20.970 --> 00:18:24.890
of the lab over the vehement dissent of two of the justices.
431
00:18:24.890 --> 00:18:27.960
So we think that's wrongly decided for several reasons.
432
00:18:27.960 --> 00:18:29.535
If you decide nonetheless
433
00:18:29.535 --> 00:18:33.290
that researchers university professors
434
00:18:33.290 --> 00:18:35.670
who are wrongfully suspended maybe whose research
435
00:18:35.670 --> 00:18:37.670
is disbanded, can get more than just
436
00:18:37.670 --> 00:18:40.730
their last financial interest can get 10s of millions
437
00:18:40.730 --> 00:18:43.450
of dollars for other reasons.
438
00:18:43.450 --> 00:18:46.980
Then we would screw it still be stuck with the the problem
439
00:18:46.980 --> 00:18:50.910
that the $10 million figure in this case is not supported
440
00:18:50.910 --> 00:18:55.270
by competent evidence and is essentially unexplained.
441
00:18:55.270 --> 00:18:57.240
I will know they did try plaintiff to try
442
00:18:57.240 --> 00:18:59.980
to provide additional explanation for the $10 million.
443
00:18:59.980 --> 00:19:01.763
The superior court kept that out.
444
00:19:02.680 --> 00:19:05.710
So it's not as if the expectation was,
445
00:19:05.710 --> 00:19:08.420
it was entirely up to us to to cross examine
446
00:19:08.420 --> 00:19:10.820
and figure out the basis for the 10 million.
447
00:19:10.820 --> 00:19:13.290
We also know what the basis for the 10 million is
448
00:19:13.290 --> 00:19:16.100
from the supplemental interrogatory responses
449
00:19:16.100 --> 00:19:18.200
which are part of the record on appeal.
450
00:19:18.200 --> 00:19:20.240
Because they were part of our motion in limine
451
00:19:20.240 --> 00:19:22.930
and the explanation Dr. Halackey gave for the $10 million
452
00:19:22.930 --> 00:19:25.260
in their supplemental interrogatory responses.
453
00:19:25.260 --> 00:19:27.640
There's no resemblance whatsoever to what
454
00:19:27.640 --> 00:19:29.810
the superior court judge ultimately concluded
455
00:19:29.810 --> 00:19:32.720
was evidence backstopping, 10 million.
456
00:19:32.720 --> 00:19:34.820
So there's there's no witness who ever did say
457
00:19:34.820 --> 00:19:36.800
why $10 million made sense.
458
00:19:36.800 --> 00:19:39.710
And there's certainly no evidence and there was no witness
459
00:19:39.710 --> 00:19:41.820
who was prepared to either.
460
00:19:41.820 --> 00:19:44.210
Before you move on one more question.
461
00:19:44.210 --> 00:19:47.810
Their contracts, basically said the federal regulation
462
00:19:47.810 --> 00:19:50.710
the real property equipment, intangible property
463
00:19:50.710 --> 00:19:52.840
and debt instruments that are acquired or improved
464
00:19:52.840 --> 00:19:55.460
with federal funds shall be held by recipient
465
00:19:55.460 --> 00:19:58.870
and trip by the interest by the recipient as trustee
466
00:19:58.870 --> 00:20:00.420
that's what you're referring to, right?
467
00:20:00.420 --> 00:20:01.460
Correct Your Honor.
468
00:20:01.460 --> 00:20:04.670
So is that her being the recipient
469
00:20:04.670 --> 00:20:05.583
are you saying Steward is the recipient.
470
00:20:05.583 --> 00:20:07.200
No Steward is the recipient.
471
00:20:07.200 --> 00:20:09.320
So under under federal regulations recipient
472
00:20:09.320 --> 00:20:11.260
is defined as an institution.
473
00:20:11.260 --> 00:20:16.170
And so, Steward Research Specialty Projects later GRI
474
00:20:16.170 --> 00:20:18.550
is as a matter of federal law of the recipient.
475
00:20:18.550 --> 00:20:20.760
The recipient holds it and trust and the recipient
476
00:20:20.760 --> 00:20:24.530
is expressly charged by the same federal regulations, only
477
00:20:24.530 --> 00:20:26.200
to allow the assets in grant funds--
478
00:20:26.200 --> 00:20:29.113
Separate cause of action under that,
479
00:20:29.113 --> 00:20:31.190
that could have been brought?
480
00:20:31.190 --> 00:20:32.720
Well, at the end of the day Steward
481
00:20:32.720 --> 00:20:34.170
and GRI reached a settlement.
482
00:20:34.170 --> 00:20:36.190
So Steward continued.
483
00:20:36.190 --> 00:20:38.940
Again, we're not contesting liability for the appeal.
484
00:20:38.940 --> 00:20:41.450
But Steward did provide continue providing substantial
485
00:20:41.450 --> 00:20:43.840
support to GRI even after the spin-off.
486
00:20:43.840 --> 00:20:45.540
Steward put a claim in bankruptcy
487
00:20:45.540 --> 00:20:48.170
for close to $10 million against GRI
488
00:20:48.170 --> 00:20:51.810
because GRI had never paid Steward back for the support
489
00:20:51.810 --> 00:20:53.300
that Steward was providing
490
00:20:53.300 --> 00:20:56.540
and that those claims are ultimately settled.
491
00:20:56.540 --> 00:20:59.590
So in a fact what she's saying is, rebuild me
492
00:20:59.590 --> 00:21:02.410
this laboratory give me these grant funds
493
00:21:02.410 --> 00:21:05.690
that I could see belong to a third party.
494
00:21:05.690 --> 00:21:07.790
That entered a settlement with Steward
495
00:21:07.790 --> 00:21:09.640
and waive any claims that itself may
496
00:21:09.640 --> 00:21:11.160
have against Steward.
497
00:21:11.160 --> 00:21:15.130
It's not me, as as Chief Justice Gants
498
00:21:15.130 --> 00:21:16.720
was saying before it would be in trust
499
00:21:16.720 --> 00:21:20.600
for the lab itself.
500
00:21:20.600 --> 00:21:21.433
In award of--
501
00:21:21.433 --> 00:21:23.860
She could spend it on a house in Weston as he says.
502
00:21:23.860 --> 00:21:26.080
An award of damages, Your Honor, to her personally
503
00:21:26.080 --> 00:21:27.410
could be spent on whatever she wants.
504
00:21:27.410 --> 00:21:28.960
She has never asked for the relief
505
00:21:28.960 --> 00:21:31.200
that Chief Justice Gants suggested.
506
00:21:31.200 --> 00:21:33.423
And I'm not sure at this point that the court--
507
00:21:33.423 --> 00:21:34.850
Also legal argument can be made
508
00:21:34.850 --> 00:21:36.560
at anytime according to you.
509
00:21:36.560 --> 00:21:38.410
Well, no Your Honor that's not true.
510
00:21:38.410 --> 00:21:40.410
Again, I could walk through I have an entire page
511
00:21:40.410 --> 00:21:41.660
which I can hand up to the court of
512
00:21:41.660 --> 00:21:44.020
where we preserved our various arguments.
513
00:21:44.020 --> 00:21:45.680
But throughout the case starting with the motion
514
00:21:45.680 --> 00:21:47.720
in limine through the directed verdict motion,
515
00:21:47.720 --> 00:21:49.050
through the GNOV.
516
00:21:49.050 --> 00:21:52.130
At every time there was an opportunity to argue, we argued
517
00:21:52.130 --> 00:21:54.870
that she was limited to her own personal recovery.
518
00:21:54.870 --> 00:21:56.960
We should not include amounts that were owned
519
00:21:56.960 --> 00:22:01.843
by the CCSB Which was part of, of GRI.
520
00:22:03.340 --> 00:22:05.450
I'll give you three minutes more to argue
521
00:22:05.450 --> 00:22:06.700
with regard to the cross appeal.
522
00:22:06.700 --> 00:22:07.640
Thank you, Your Honor.
523
00:22:07.640 --> 00:22:09.220
With respect to the cross appeal, obviously
524
00:22:09.220 --> 00:22:11.110
that's an abuse of discretion standard.
525
00:22:11.110 --> 00:22:13.300
And what this Court has said is that
526
00:22:14.921 --> 00:22:15.754
a remittitur is so seldom overturned as
527
00:22:16.640 --> 00:22:18.300
to almost never occur.
528
00:22:18.300 --> 00:22:19.157
In this case, it could not have been
529
00:22:19.157 --> 00:22:21.040
in the abuse of discretion.
530
00:22:21.040 --> 00:22:23.310
For the Superior Court to set plaintiffs damages
531
00:22:23.310 --> 00:22:26.320
at $10 million on a remittitur, when $10 million
532
00:22:26.320 --> 00:22:28.120
is the value plaintiff herself
533
00:22:28.120 --> 00:22:31.310
and her counsel, repeatedly identified as
534
00:22:31.310 --> 00:22:33.890
the cost of reestablishing the laboratory.
535
00:22:33.890 --> 00:22:37.870
We cited two instances of this and our reply brief.
536
00:22:37.870 --> 00:22:41.360
Both plaintiff's own testimony that would cost $10 million
537
00:22:41.360 --> 00:22:43.730
to quote, get a functional lab together.
538
00:22:43.730 --> 00:22:46.700
Get people together and redo the projects.
539
00:22:46.700 --> 00:22:48.560
We cited ha-ge-n-o-v brief
540
00:22:48.560 --> 00:22:52.660
in which council identified $10 million as the amount.
541
00:22:52.660 --> 00:22:54.290
But there were several other examples too.
542
00:22:54.290 --> 00:22:57.770
So for example, plaintiffs counsels closing arguments
543
00:22:57.770 --> 00:22:59.200
of the jury.
544
00:22:59.200 --> 00:23:02.530
He said, quote, the CEO of this company told you
545
00:23:02.530 --> 00:23:04.290
it's going to take $10 million to put
546
00:23:04.290 --> 00:23:05.683
this lab back together.
547
00:23:06.770 --> 00:23:08.620
Plaintiff's counsel at the jury instruction hearing
548
00:23:08.620 --> 00:23:11.680
this is page 203 and record appendix two.
549
00:23:11.680 --> 00:23:14.650
Halackey testified it was 10 million or so for the lab.
550
00:23:14.650 --> 00:23:17.210
I could go on and on there's a few more examples.
551
00:23:17.210 --> 00:23:20.850
Ultimately, in her briefing on appeal, she never argues
552
00:23:20.850 --> 00:23:24.700
that $10 million is too low for replacing the lab.
553
00:23:24.700 --> 00:23:27.070
What she basically argues is that $10 million
554
00:23:27.070 --> 00:23:29.500
to replace the lab, plus some additional years
555
00:23:29.500 --> 00:23:32.180
of operating revenue on top of that
556
00:23:32.180 --> 00:23:34.250
but there are several big problems with that.
557
00:23:34.250 --> 00:23:37.670
First, she explicitly disclaimed during her trial testimony.
558
00:23:37.670 --> 00:23:41.010
Any right to grant funding and any right to
559
00:23:41.010 --> 00:23:43.413
the operating funds and she expressly said
560
00:23:43.413 --> 00:23:45.670
that the only grants and operating funds that
561
00:23:45.670 --> 00:23:48.930
whatever belonged to her personally, were her own salary.
562
00:23:48.930 --> 00:23:53.050
That's record appendix three, page 191 and 199.
563
00:23:53.050 --> 00:23:56.000
We also have our basic windfall point, which is that
564
00:23:56.000 --> 00:23:58.710
if Steward had performed these operating funds never
565
00:23:58.710 --> 00:24:00.410
would have flowed to her personally.
566
00:24:00.410 --> 00:24:03.010
Instead, the evidence at trial was that the lab
567
00:24:03.010 --> 00:24:05.500
had about 3 employees and had many vendors
568
00:24:05.500 --> 00:24:06.890
and equipment suppliers.
569
00:24:06.890 --> 00:24:08.500
In fact, it also entered into contracts
570
00:24:08.500 --> 00:24:11.400
with other laboratories that farmed off some of the research
571
00:24:11.400 --> 00:24:12.600
to other entities.
572
00:24:12.600 --> 00:24:15.020
What she's effectively asking this court to do
573
00:24:15.020 --> 00:24:19.690
is to give her $10 million for the lab, plus in effect
574
00:24:19.690 --> 00:24:24.690
the gross revenue for the CCSB.
575
00:24:24.760 --> 00:24:27.570
But if this were any other type of business
576
00:24:27.570 --> 00:24:29.360
and plaintiff for self described it as a business
577
00:24:29.360 --> 00:24:30.930
of which she was the CEO, he
578
00:24:30.930 --> 00:24:34.460
would never award gross revenue to the owner of
579
00:24:34.460 --> 00:24:36.870
the business, she would award them their profit.
580
00:24:36.870 --> 00:24:39.900
Law couldn't be clearer that you subtract out expenses
581
00:24:39.900 --> 00:24:42.570
that were saved as a result of the defendants breach.
582
00:24:42.570 --> 00:24:44.600
And so here in effect, plaintiffs profit
583
00:24:44.600 --> 00:24:47.240
from this laboratory was her own salary.
584
00:24:47.240 --> 00:24:49.247
So you don't you would never get from $10 million
585
00:24:49.247 --> 00:24:51.840
to $22 million based upon
586
00:24:51.840 --> 00:24:54.850
the gross grant revenues gross operating expenses
587
00:24:54.850 --> 00:24:56.410
of the laboratory.
588
00:24:56.410 --> 00:24:59.310
Plaintiff also sometimes points to grants
589
00:24:59.310 --> 00:25:02.730
that were still awarded but had not yet been used
590
00:25:02.730 --> 00:25:05.063
as of December 2012.
591
00:25:06.010 --> 00:25:08.840
They put the dollar figure of $24 million on that.
592
00:25:08.840 --> 00:25:10.510
There's a big problem with that too.
593
00:25:10.510 --> 00:25:12.910
The evidence was undisputed at trial that by 2014,
594
00:25:12.910 --> 00:25:14.670
that had almost all been used up
595
00:25:14.670 --> 00:25:18.550
and there was not $24 million left in grant revenue.
596
00:25:18.550 --> 00:25:20.130
Okay, can I ask another question chief?
597
00:25:20.130 --> 00:25:20.963
Sure.
598
00:25:22.170 --> 00:25:23.960
I think that the problem we're having is that
599
00:25:23.960 --> 00:25:25.900
it seems to me like you admit my ability
600
00:25:25.900 --> 00:25:28.890
but then you say that there is no remedy for that.
601
00:25:28.890 --> 00:25:32.393
Really no remedy for that other than, you destroy her lab.
602
00:25:33.500 --> 00:25:36.283
The value of recreating it is at least $10 million.
603
00:25:37.260 --> 00:25:39.790
But somehow that's not your responsibility.
604
00:25:39.790 --> 00:25:44.790
So there's a cause of action without any any remedy to it.
605
00:25:46.450 --> 00:25:50.240
And it's not something that law usually allows.
606
00:25:50.240 --> 00:25:52.840
That's not that's not correct, Your Honor.
607
00:25:52.840 --> 00:25:53.673
Tell me why.
608
00:25:53.673 --> 00:25:55.010
There was several remedies that we admit
609
00:25:55.010 --> 00:25:56.330
could have been awarded here.
610
00:25:56.330 --> 00:25:59.710
First, we admit that she, if she'd actually put in evidence
611
00:25:59.710 --> 00:26:01.900
of her own future lost earnings potential.
612
00:26:01.900 --> 00:26:03.330
An amount that and our motion
613
00:26:03.330 --> 00:26:05.650
in limine briefing we said might be 2 million.
614
00:26:05.650 --> 00:26:07.320
Maybe it's between two and three.
615
00:26:07.320 --> 00:26:08.700
She could have recovered that.
616
00:26:08.700 --> 00:26:10.580
That would put her back in the position she
617
00:26:10.580 --> 00:26:12.950
would have been financially if Steward had performed--
618
00:26:12.950 --> 00:26:15.290
I think you said if she had but she didn't.
619
00:26:15.290 --> 00:26:16.690
She didn't and she admitted she didn't
620
00:26:16.690 --> 00:26:18.590
in her post trial briefing.
621
00:26:18.590 --> 00:26:21.070
Isn't there a fallacy in saying she's put back
622
00:26:21.070 --> 00:26:23.530
in the position she would have been in
623
00:26:23.530 --> 00:26:25.130
if she can never be put back in
624
00:26:25.130 --> 00:26:28.440
that position since her research samples were destroyed.
625
00:26:28.440 --> 00:26:30.810
And breach of contract law, Your Honor, awards
626
00:26:30.810 --> 00:26:32.290
financial expectation and trust.
627
00:26:32.290 --> 00:26:37.240
It does not award for all these other values like
628
00:26:37.240 --> 00:26:40.870
the mental enjoyment or reputation particularly where
629
00:26:40.870 --> 00:26:43.110
in a case like this one plaintiff waived those.
630
00:26:43.110 --> 00:26:45.350
And it's undisputed that plaintiff admits twice
631
00:26:45.350 --> 00:26:48.400
in her opening brief in this case that she waived any claim
632
00:26:48.400 --> 00:26:50.180
for emotional or mental distress.
633
00:26:50.180 --> 00:26:51.447
And before trial this
634
00:26:51.447 --> 00:26:56.447
is page record appendix two 179 plaintiff waived any rights
635
00:26:59.510 --> 00:27:00.870
to reputational harm.
636
00:27:00.870 --> 00:27:03.540
So all of these other values are just out of
637
00:27:03.540 --> 00:27:05.750
this case we're left with financial injury.
638
00:27:05.750 --> 00:27:07.870
And again even if they were in the case should have
639
00:27:07.870 --> 00:27:10.470
to get past this Court's decision in John Hancock.
640
00:27:10.470 --> 00:27:11.930
You'd have to get past the fact that
641
00:27:11.930 --> 00:27:13.030
it's simply proves too much
642
00:27:13.030 --> 00:27:16.320
and again, every hopefully most people find fulfillment
643
00:27:16.320 --> 00:27:17.350
in their job.
644
00:27:17.350 --> 00:27:19.020
Most people think they're building something
645
00:27:19.020 --> 00:27:22.140
and getting more out both giving more and getting more
646
00:27:22.140 --> 00:27:23.870
than their own personal salary.
647
00:27:23.870 --> 00:27:26.520
But there is not a single example of the court
648
00:27:26.520 --> 00:27:28.900
as a result of that giving an employee even
649
00:27:28.900 --> 00:27:31.100
a highly placed employee, even an employee
650
00:27:31.100 --> 00:27:33.150
who drives business, something more
651
00:27:33.150 --> 00:27:35.340
than their own lost financial interest.
652
00:27:35.340 --> 00:27:36.450
Which is what they're asking here.
653
00:27:36.450 --> 00:27:38.710
And it's not, we talk about
654
00:27:38.710 --> 00:27:41.180
the dollar figures $7 million under
655
00:27:41.180 --> 00:27:45.510
the Superior Courts award 20 million under the juries award.
656
00:27:45.510 --> 00:27:47.100
Those are amounts that sometimes you don't see
657
00:27:47.100 --> 00:27:48.670
in wrongful death cases.
658
00:27:48.670 --> 00:27:50.220
And I hate to draw the analogy,
659
00:27:50.220 --> 00:27:51.930
but this is not a wrongful death case.
660
00:27:51.930 --> 00:27:52.850
This is a case of--
661
00:27:52.850 --> 00:27:54.820
Cancer Research though.
662
00:27:54.820 --> 00:27:57.310
She was a cancer researcher, but the fact that the court
663
00:27:57.310 --> 00:27:58.730
should not come up with a special rule
664
00:27:58.730 --> 00:28:00.100
that gives cancer researchers
665
00:28:00.100 --> 00:28:02.700
or employees of nonprofits generally more
666
00:28:02.700 --> 00:28:06.110
than they would get if they worked for a profit corporation.
667
00:28:06.110 --> 00:28:07.227
There's no precedent for that.
668
00:28:07.227 --> 00:28:09.950
And it would open set an extremely dangerous precedent
669
00:28:09.950 --> 00:28:12.560
it would destroy the certainty which is the hallmark
670
00:28:12.560 --> 00:28:13.940
of breach of contract law.
671
00:28:13.940 --> 00:28:16.200
If plaintiff wants more than financial expectation
672
00:28:16.200 --> 00:28:17.957
and trusts, that's why we have tort law.
673
00:28:17.957 --> 00:28:20.430
That's why we have 93(a).
674
00:28:20.430 --> 00:28:22.800
We do not have breach of contract law
675
00:28:22.800 --> 00:28:27.110
to set sort of boundless damages awards
676
00:28:27.110 --> 00:28:28.610
for non-financial interest--
677
00:28:28.610 --> 00:28:31.341
So was a mistake just bringing us as a contract action
678
00:28:31.341 --> 00:28:32.720
as opposed to a tort action.
679
00:28:32.720 --> 00:28:34.440
It very well may have been a mistake on their part
680
00:28:34.440 --> 00:28:36.380
but right now we have a breach of contract action
681
00:28:36.380 --> 00:28:38.060
in which plaintiff waived reputational
682
00:28:38.060 --> 00:28:39.910
emotional mental distress harms.
683
00:28:39.910 --> 00:28:42.620
Waived any claim for harm to third parties
684
00:28:42.620 --> 00:28:46.030
and admits that she did not own all of these assets.
685
00:28:46.030 --> 00:28:48.240
Hence, her only financial interest
686
00:28:48.240 --> 00:28:50.530
was her own last future earnings potential,
687
00:28:50.530 --> 00:28:53.490
which plaintiff as a tactical decision decided not to put
688
00:28:53.490 --> 00:28:54.550
in front of the jury.
689
00:28:54.550 --> 00:28:57.030
Because plaintiff did not want mirror
690
00:28:57.030 --> 00:28:58.560
low-single-digit millions.
691
00:28:58.560 --> 00:29:01.710
Plaintiff swung for the fences asked me for 20 to 30
692
00:29:01.710 --> 00:29:05.520
or more million millions of dollars and the fact that
693
00:29:05.520 --> 00:29:09.460
that is a legally invalid theory of damages.
694
00:29:09.460 --> 00:29:11.877
And as a result, she may be down to 200,000.
695
00:29:11.877 --> 00:29:13.680
And we think actually would be fair for the court
696
00:29:13.680 --> 00:29:16.840
to remand at the Superior Court to address our point
697
00:29:16.840 --> 00:29:18.880
that, she didn't put in evidence
698
00:29:18.880 --> 00:29:20.820
of personal financial losses in the first instance.
699
00:29:20.820 --> 00:29:22.870
But the fact that she swung for the fences
700
00:29:22.870 --> 00:29:26.760
on a legally valid theory should not drive this court
701
00:29:26.760 --> 00:29:28.513
to set a dangerous precedent.
702
00:29:30.930 --> 00:29:33.530
Before you leave one fast question, you've made reference
703
00:29:33.530 --> 00:29:37.530
to a supplemental interrogatories of Dr. Halackey.
704
00:29:37.530 --> 00:29:40.300
I assume that those were done before trial.
705
00:29:40.300 --> 00:29:42.330
Those were done in the midst of, I believe
706
00:29:42.330 --> 00:29:43.560
in the midst of trial.
707
00:29:43.560 --> 00:29:46.970
Because there was the bifurcation the...
708
00:29:46.970 --> 00:29:48.540
No it was before a trial.
709
00:29:48.540 --> 00:29:50.900
It then came in, in our motion in limine.
710
00:29:50.900 --> 00:29:52.480
So when we're arguing about
711
00:29:52.480 --> 00:29:54.490
what maybe we meant by 2 million or the fact
712
00:29:54.490 --> 00:29:56.190
that we preserved things.
713
00:29:56.190 --> 00:29:58.610
Those are part of the appellate record before the court--
714
00:29:58.610 --> 00:30:01.350
I guess more precisely when there was cross examination
715
00:30:01.350 --> 00:30:05.021
of Dr. Halackey after she gave the $10 million figure.
716
00:30:05.021 --> 00:30:07.160
Did you have access to
717
00:30:07.160 --> 00:30:09.800
those supplemental interrogatory answers?
718
00:30:09.800 --> 00:30:10.633
We did, Your Honor.
719
00:30:10.633 --> 00:30:13.860
Okay, thank you.
720
00:30:13.860 --> 00:30:15.073
Thank you, Your Honors.
721
00:30:16.490 --> 00:30:17.323
Mr. Beerwith.
722
00:30:19.480 --> 00:30:22.900
Mr. Chief Justice and may it please the Court.
723
00:30:22.900 --> 00:30:24.540
I wanna start with the bankruptcy decision
724
00:30:24.540 --> 00:30:26.180
because that came up a couple of times
725
00:30:26.180 --> 00:30:27.920
and I just wanna clarify things there.
726
00:30:27.920 --> 00:30:30.530
So the bankruptcy court did not decide
727
00:30:30.530 --> 00:30:32.210
the issue of ownership.
728
00:30:32.210 --> 00:30:34.150
There's this procedure in the bankruptcy court
729
00:30:34.150 --> 00:30:36.660
where if there's a bonafide dispute as the ownership
730
00:30:36.660 --> 00:30:39.710
and the trustee is in possession of the assets
731
00:30:39.710 --> 00:30:43.220
the court can order the sale or disposition of the assets
732
00:30:43.220 --> 00:30:45.750
and the money's taken into the bankruptcy estate
733
00:30:45.750 --> 00:30:48.500
and held in escrow and that's what occurred here.
734
00:30:48.500 --> 00:30:49.333
So the judge at
735
00:30:49.333 --> 00:30:51.040
the bankruptcy court did not decide ownership
736
00:30:51.040 --> 00:30:55.610
and certainly did not decide, the validity or propriety
737
00:30:55.610 --> 00:30:58.503
of Doctor Halackey's contract claims.
738
00:30:59.610 --> 00:31:01.823
With respect to the ownership issue.
739
00:31:03.210 --> 00:31:07.890
Justice Cipher you're correct that the non-profit under
740
00:31:07.890 --> 00:31:12.380
the regulations holds the federal funding and the assets
741
00:31:12.380 --> 00:31:15.530
in trust for the benefit of the program.
742
00:31:15.530 --> 00:31:18.670
Ultimately, the beneficiary is the public good.
743
00:31:18.670 --> 00:31:21.740
But they hold their title as trustee.
744
00:31:21.740 --> 00:31:25.060
That's it, it's not ownership lock, stock and barrel
745
00:31:25.060 --> 00:31:26.780
of all of the assets.
746
00:31:26.780 --> 00:31:31.030
But in the end, the ownership is really a red herring.
747
00:31:31.030 --> 00:31:33.570
The plaintiff have never claimed that she owned
748
00:31:33.570 --> 00:31:36.160
this laboratory or this research program.
749
00:31:36.160 --> 00:31:39.470
And we're not seeking to recover for destruction
750
00:31:39.470 --> 00:31:42.160
of the lab based upon ownership.
751
00:31:42.160 --> 00:31:44.210
We're seeking to recover based upon breach
752
00:31:44.210 --> 00:31:47.330
of contract and unexpressed...
753
00:31:47.330 --> 00:31:50.800
There were two promises two reasonable expectations
754
00:31:50.800 --> 00:31:53.420
that Dr. Halackey had arising from
755
00:31:53.420 --> 00:31:55.370
this contract relationship.
756
00:31:55.370 --> 00:31:57.290
The first was for his support.
757
00:31:57.290 --> 00:31:59.060
And we haven't talked about support yet
758
00:31:59.060 --> 00:32:02.170
but support is an explicit term in the contract
759
00:32:02.170 --> 00:32:04.230
it's in page two of the contract.
760
00:32:04.230 --> 00:32:07.920
And there was testimony that that support runs
761
00:32:07.920 --> 00:32:11.080
to the benefit of the individual researcher.
762
00:32:11.080 --> 00:32:15.420
That was testimony from Dr. Kalam, from Steward.
763
00:32:15.420 --> 00:32:19.030
And that support, there was testimony also that entails all
764
00:32:19.030 --> 00:32:21.410
of the business operations of running a research program.
765
00:32:21.410 --> 00:32:22.920
So that's what Steward's obligation.
766
00:32:22.920 --> 00:32:26.010
Why isn't the remedy for that specific performance?
767
00:32:26.010 --> 00:32:27.930
Well Your Honor it's a choice, right.
768
00:32:27.930 --> 00:32:29.590
So a plaintiff in this situation
769
00:32:29.590 --> 00:32:32.010
can bring specific performance claims or can bring
770
00:32:32.010 --> 00:32:33.680
a claim for damages.
771
00:32:33.680 --> 00:32:36.980
By the time that the claim was brought in, certainly by
772
00:32:36.980 --> 00:32:39.550
the time of trial in 2017.
773
00:32:39.550 --> 00:32:44.550
Specific performance was not available to Steward's actions
774
00:32:45.570 --> 00:32:47.450
and ultimately, the destruction of the lab.
775
00:32:47.450 --> 00:32:51.090
But then why aren't the damage is limited to
776
00:32:51.090 --> 00:32:54.540
who actually owns the property?
777
00:32:54.540 --> 00:32:58.340
Well, because what the jury did here is they followed
778
00:32:58.340 --> 00:33:00.550
the jury instructions and the jury instructions
779
00:33:00.550 --> 00:33:04.080
were to put Dr. Halackey, the plaintiff
780
00:33:04.080 --> 00:33:06.530
in the same position that she would have been prior
781
00:33:06.530 --> 00:33:07.760
to the breach.
782
00:33:07.760 --> 00:33:10.460
So the jury determined that in order to do that
783
00:33:10.460 --> 00:33:13.800
they needed to provide damages that were adequate
784
00:33:13.800 --> 00:33:17.850
to recreate the lab and to provide three years
785
00:33:17.850 --> 00:33:19.343
of operational support.
786
00:33:20.500 --> 00:33:24.360
The alternative remedy that's proposed by the defendant
787
00:33:24.360 --> 00:33:26.740
of Sa-la-ri-o-ni would be inadequate
788
00:33:26.740 --> 00:33:30.310
it wouldn't put Dr. Halackey back into the position
789
00:33:30.310 --> 00:33:31.237
that she was, and--
790
00:33:31.237 --> 00:33:33.360
I guess the problem is as from the Chief got out it
791
00:33:33.360 --> 00:33:34.193
with his question.
792
00:33:34.193 --> 00:33:36.490
I guess the problem with that is, why would
793
00:33:36.490 --> 00:33:39.080
that go to Dr. Halackey?
794
00:33:39.080 --> 00:33:41.600
That money wouldn't be hers to be able
795
00:33:41.600 --> 00:33:43.960
to have a turnkey lab.
796
00:33:43.960 --> 00:33:48.780
That money belongs to every family that's craving
797
00:33:48.780 --> 00:33:51.740
as a cure for cancer.
798
00:33:51.740 --> 00:33:54.600
That's correct, Your Honor and what that money is intended
799
00:33:54.600 --> 00:33:57.790
to do is to get Dr. Halackey back into the place
800
00:33:57.790 --> 00:34:01.050
where she can have an intact lab.
801
00:34:01.050 --> 00:34:03.770
That she can continue to use that she has control over
802
00:34:03.770 --> 00:34:06.700
as she had prior to the breach and that she can continue
803
00:34:06.700 --> 00:34:10.040
to use to advance the science and therefore benefit
804
00:34:10.040 --> 00:34:11.200
the public good.
805
00:34:11.200 --> 00:34:14.050
But the recreation of the lab,
806
00:34:14.050 --> 00:34:16.150
which was destroyed at Steward's hand
807
00:34:16.150 --> 00:34:18.920
and the operational support to get the lab back on its feet
808
00:34:18.920 --> 00:34:22.130
to get to the pre-breach position is a predicate to getting
809
00:34:22.130 --> 00:34:24.640
to the point that you're stalking about justice.
810
00:34:24.640 --> 00:34:27.610
So let me ask you the question I asked your brother.
811
00:34:27.610 --> 00:34:31.410
What would you say if we were to remand
812
00:34:31.410 --> 00:34:33.700
to the superior court judge with instructions
813
00:34:33.700 --> 00:34:36.780
that $200,000 go, I know you want the 22 put
814
00:34:36.780 --> 00:34:37.730
that aside for now.
815
00:34:40.000 --> 00:34:42.923
Given the remittitur $200,000 goes to her.
816
00:34:43.920 --> 00:34:46.470
The judge would then put the other $10 million
817
00:34:46.470 --> 00:34:49.000
in a trust for the sole purpose of recreating
818
00:34:49.000 --> 00:34:51.640
the lab so that she could not go and use that money
819
00:34:51.640 --> 00:34:54.700
to buy a new house in Weston.
820
00:34:54.700 --> 00:34:58.180
Your Honor, I can tell you and it's not binding upon
821
00:34:58.180 --> 00:35:00.300
the court or it doesn't isn't really relevant
822
00:35:00.300 --> 00:35:02.350
to the legal questions before the court but I can tell you
823
00:35:02.350 --> 00:35:04.720
that Dr. Halackey wants to use these funds
824
00:35:04.720 --> 00:35:07.670
to benefit the science drive the science.
825
00:35:07.670 --> 00:35:11.510
Further her life's work in cancer research without a doubt.
826
00:35:11.510 --> 00:35:14.030
Good but right now, there's no constraint upon
827
00:35:14.030 --> 00:35:16.693
how she would how she would use the money.
828
00:35:17.735 --> 00:35:21.810
That's a function of an award of damages in contract law.
829
00:35:21.810 --> 00:35:24.340
So, she is the counterparty to the contract.
830
00:35:24.340 --> 00:35:27.200
She is the person to whom Steward made this promise
831
00:35:27.200 --> 00:35:28.740
of support, right.
832
00:35:28.740 --> 00:35:31.770
She was the person who had a reasonable expectation
833
00:35:31.770 --> 00:35:34.960
this gets to one of justice lengths points of being able
834
00:35:34.960 --> 00:35:39.340
to transport this lab to another institution,
835
00:35:39.340 --> 00:35:41.560
if and when she she wants to do that.
836
00:35:41.560 --> 00:35:43.820
And that was the custom and practice in the industry and
837
00:35:43.820 --> 00:35:45.500
that was proven at trial.
838
00:35:45.500 --> 00:35:50.321
It wasn't unambiguous that Steward had a right to mix that.
839
00:35:50.321 --> 00:35:53.850
The testimony in trial from Dr. Halackey and also
840
00:35:53.850 --> 00:35:56.710
from Dr. Robnick, who is another researcher
841
00:35:56.710 --> 00:36:00.060
who testified, was that the the custom
842
00:36:00.060 --> 00:36:02.990
in the industry was that the funds follow the researcher.
843
00:36:02.990 --> 00:36:05.140
The federal government and the grant making institutions
844
00:36:05.140 --> 00:36:08.350
are interested in the science as it is being conducted by
845
00:36:08.350 --> 00:36:11.200
the director, the individual researcher.
846
00:36:11.200 --> 00:36:13.733
The funds follow the science, the director
847
00:36:13.733 --> 00:36:16.180
of the research program.
848
00:36:16.180 --> 00:36:18.680
If they want to approach another institution
849
00:36:18.680 --> 00:36:20.240
they have to be able to bring that
850
00:36:20.240 --> 00:36:22.110
and that is customarily done.
851
00:36:22.110 --> 00:36:24.910
And the reason is because no institution.
852
00:36:24.910 --> 00:36:27.590
No nonprofit institution that conducts research wants
853
00:36:27.590 --> 00:36:32.120
to be known, as the entity that doesn't allow free movement
854
00:36:32.120 --> 00:36:33.740
of clinical researchers.
855
00:36:33.740 --> 00:36:37.540
But your brother is correct that if she were to have
856
00:36:37.540 --> 00:36:40.800
if there had been no breach and she had remained
857
00:36:40.800 --> 00:36:43.290
and she had gotten the support she did.
858
00:36:43.290 --> 00:36:46.080
The money but the money that would have been provided to her
859
00:36:46.080 --> 00:36:48.720
would not have been for her own personal benefit.
860
00:36:48.720 --> 00:36:51.500
The money that would be provided to either the 10 million
861
00:36:51.500 --> 00:36:53.460
or the 22 million under the jury award
862
00:36:53.460 --> 00:36:55.400
would not be available for personal benefit
863
00:36:55.400 --> 00:36:56.650
and she wouldn't need it.
864
00:36:56.650 --> 00:36:59.290
She would have what she had prior to the breach.
865
00:36:59.290 --> 00:37:01.950
She would have control of the research program,
866
00:37:01.950 --> 00:37:05.000
the ability to move it and the reasonable expectation
867
00:37:05.000 --> 00:37:07.470
of support from her host institution.
868
00:37:07.470 --> 00:37:11.350
When she contracted with Steward, she testified at trial.
869
00:37:11.350 --> 00:37:15.630
But this contract, there are employment provisions
870
00:37:15.630 --> 00:37:19.240
within this contract it provides for $425,000
871
00:37:19.240 --> 00:37:22.157
to Dr. Halackey, but Dr. Halackey testified
872
00:37:22.157 --> 00:37:25.660
and the jury was entitled to rely on this testimony
873
00:37:25.660 --> 00:37:27.800
that the primary thing she was seeking
874
00:37:27.800 --> 00:37:30.200
was safety, stability, security
875
00:37:30.200 --> 00:37:32.930
at a host institution in order to drive the science.
876
00:37:32.930 --> 00:37:34.270
That is her life's work.
877
00:37:34.270 --> 00:37:38.250
She's been at this for 25 years working seven days a week.
878
00:37:38.250 --> 00:37:41.290
There is value there and that was testified too
879
00:37:41.290 --> 00:37:46.090
by Dr. Robnick as well, to support Dr. Halackey's testimony.
880
00:37:46.090 --> 00:37:48.450
There's no more noble profession than what she's doing
881
00:37:48.450 --> 00:37:50.290
but that doesn't change the fact that
882
00:37:50.290 --> 00:37:52.800
the grant awards don't belong to her.
883
00:37:52.800 --> 00:37:55.400
They belong to the institution, so why did
884
00:37:55.400 --> 00:37:57.520
the damages belong to her?
885
00:37:57.520 --> 00:38:00.680
So, it's not the funding.
886
00:38:00.680 --> 00:38:05.680
It's not the grant funding, which comprises the Jury Award.
887
00:38:05.760 --> 00:38:10.260
So the Jury Award was comprised we believe of two elements.
888
00:38:10.260 --> 00:38:13.990
And I do wanna speak to the the new trial and remittitur
889
00:38:13.990 --> 00:38:16.640
but we believe that the Jury Award was comprised
890
00:38:16.640 --> 00:38:18.930
of two elements, Dr. Halackey testified that
891
00:38:18.930 --> 00:38:21.820
there would be $10 million required in order to get
892
00:38:21.820 --> 00:38:23.140
a minimally functioning lab.
893
00:38:23.140 --> 00:38:25.963
So think of that as the lab space with the equipment.
894
00:38:27.160 --> 00:38:30.540
The research program sort of intact but static
895
00:38:30.540 --> 00:38:32.000
at one point in time.
896
00:38:32.000 --> 00:38:34.670
That's not where she was prior to the breach.
897
00:38:34.670 --> 00:38:36.610
So prior to the breach, she had
898
00:38:36.610 --> 00:38:39.840
a fully functioning research program that was competitive
899
00:38:39.840 --> 00:38:41.410
for federal grants a of history bringing
900
00:38:41.410 --> 00:38:46.080
in federal grants $24.5 million in committed funds
901
00:38:46.080 --> 00:38:49.570
in federal grants to get up even close to that level.
902
00:38:49.570 --> 00:38:52.690
We believe the jury was entitled to look at the contract
903
00:38:52.690 --> 00:38:55.260
which contains three years of support and grant
904
00:38:55.260 --> 00:38:57.840
to her damages which were reflective of those three years
905
00:38:57.840 --> 00:39:01.270
of support and she testified a trial without objection,
906
00:39:01.270 --> 00:39:05.640
that the support that ran through the program
907
00:39:05.640 --> 00:39:07.090
was $4 million a year.
908
00:39:07.090 --> 00:39:09.260
So three times four gets you to 12.
909
00:39:09.260 --> 00:39:12.290
That 12 added to the tend to build out the framework
910
00:39:12.290 --> 00:39:15.220
of a minimum a functioning lab gets the jury
911
00:39:15.220 --> 00:39:17.210
to where they were at $22 million.
912
00:39:17.210 --> 00:39:19.600
So what do we do with the turning to
913
00:39:19.600 --> 00:39:24.130
the record appendix, Volume two page 168
914
00:39:24.130 --> 00:39:25.323
the motion in limine.
915
00:39:27.180 --> 00:39:29.620
Judge green has a motion limine with regard
916
00:39:29.620 --> 00:39:33.900
to your again you didn't try the case either.
917
00:39:33.900 --> 00:39:36.270
Your predecessors desire to offer an evidence
918
00:39:36.270 --> 00:39:40.540
that there was $24.4 million loss and future grant spending.
919
00:39:40.540 --> 00:39:42.560
The judge says I'm not gonna allow that in
920
00:39:42.560 --> 00:39:46.160
it's speculative and it's not supported by expert testimony.
921
00:39:46.160 --> 00:39:48.310
And moreover, if she had gotten those grants she
922
00:39:48.310 --> 00:39:51.130
would not be the actual recipient of the funds.
923
00:39:51.130 --> 00:39:53.458
She's just the principal investigator.
924
00:39:53.458 --> 00:39:58.458
So, essentially the jury sort of gave her precisely
925
00:40:00.060 --> 00:40:02.940
the funds which the judge said should not come in evidence
926
00:40:02.940 --> 00:40:04.920
because they would be speculative
927
00:40:04.920 --> 00:40:06.425
and she wouldn't be entitled to them.
928
00:40:06.425 --> 00:40:08.800
Well, I would disagree certainly, Your Honor
929
00:40:08.800 --> 00:40:10.000
with respect to the $10 million.
930
00:40:10.000 --> 00:40:12.000
To see you point--
931
00:40:12.000 --> 00:40:13.740
I'm referring to the future grant funding.
932
00:40:13.740 --> 00:40:15.820
Which is the basis for her remittitur.
933
00:40:15.820 --> 00:40:17.910
Right and the point there, Your Honor
934
00:40:17.910 --> 00:40:22.040
on the motion in limine is that Dr. Halackey was
935
00:40:22.040 --> 00:40:25.210
the effort was to try to qualify Dr. Halackey as an expert
936
00:40:25.210 --> 00:40:28.750
to testify as to future funding the $24 million.
937
00:40:28.750 --> 00:40:31.840
The 24.5 million, which I just spoke of
938
00:40:31.840 --> 00:40:34.780
was a fact it was committed funds.
939
00:40:34.780 --> 00:40:37.430
It's in Dr. Hunfield's testimony.
940
00:40:37.430 --> 00:40:39.740
There were funds committed from Department
941
00:40:39.740 --> 00:40:44.740
of Energy, NASA, NIH which amounted to $24.5 million.
942
00:40:45.170 --> 00:40:48.730
So the jury could look at the contract terms
943
00:40:48.730 --> 00:40:51.850
the three years know that the funds were there, intact
944
00:40:51.850 --> 00:40:53.340
at the time of breach.
945
00:40:53.340 --> 00:40:55.840
Available to pay so it's not speculation
946
00:40:55.840 --> 00:40:59.470
it's not topic for expert testimony about future funding.
947
00:40:59.470 --> 00:41:02.430
Its operating which were committed under the contract
948
00:41:02.430 --> 00:41:06.450
and which were available to be funded that money was there
949
00:41:06.450 --> 00:41:08.450
in the pipeline to fund the research.
950
00:41:08.450 --> 00:41:12.993
Again not, I read you the closing of your predecessors.
951
00:41:14.110 --> 00:41:15.763
No argument about anything other than
952
00:41:15.763 --> 00:41:17.673
the $10 million in closing.
953
00:41:19.193 --> 00:41:21.670
There was argument, Your Honor about
954
00:41:21.670 --> 00:41:26.110
the various components of figures damaged figures
955
00:41:26.110 --> 00:41:30.900
which got into evidence and, again Dr. Halackey testified
956
00:41:30.900 --> 00:41:35.900
it was 3.7 to $4 million of support that was
957
00:41:37.720 --> 00:41:41.130
of support funds that were run through
958
00:41:41.130 --> 00:41:43.023
the program every year.
959
00:41:43.023 --> 00:41:45.160
But are you saying that that was argued in closing?
960
00:41:45.160 --> 00:41:47.040
I believe it was mentioned in closing.
961
00:41:47.040 --> 00:41:49.650
I'm not sure if there, I know that there
962
00:41:49.650 --> 00:41:51.840
was not a calculation, so--
963
00:41:51.840 --> 00:41:55.401
So why did the judge then abuse her discretion
964
00:41:55.401 --> 00:41:58.450
in deciding that the $10 million was
965
00:41:58.450 --> 00:42:01.280
the only supportable figure.
966
00:42:01.280 --> 00:42:03.500
Well, three things, Your Honor--
967
00:42:03.500 --> 00:42:06.400
Well not the only supportable figure it's that's,
968
00:42:06.400 --> 00:42:08.850
of the standard was the appropriate figure.
969
00:42:08.850 --> 00:42:12.440
Right, so we would point to the fact that
970
00:42:12.440 --> 00:42:16.410
the judge really focused on only one potential methodology
971
00:42:16.410 --> 00:42:19.100
that she believe she assumed that the jury had used.
972
00:42:19.100 --> 00:42:22.150
And what she believed was that the jury had looked
973
00:42:22.150 --> 00:42:25.720
at this support $4 million a year, carried it out
974
00:42:25.720 --> 00:42:29.050
for six years, got to 24 million close enough
975
00:42:29.050 --> 00:42:30.860
to 22 million.
976
00:42:30.860 --> 00:42:34.523
And judge Green decided that that was a windfall.
977
00:42:35.750 --> 00:42:39.410
First error, legal error on that decision was
978
00:42:39.410 --> 00:42:41.230
that she didn't explain her reasons why.
979
00:42:41.230 --> 00:42:45.090
In the turnpike motors case says that a trial judge
980
00:42:45.090 --> 00:42:48.030
in reducing a Jury Award needs to explain
981
00:42:48.030 --> 00:42:50.850
for the appellate courts, why that remittitur
982
00:42:50.850 --> 00:42:52.210
is being put in place.
983
00:42:52.210 --> 00:42:54.040
Now the defendant points out that
984
00:42:54.040 --> 00:42:58.290
there were other damaged figures that were discussed
985
00:42:58.290 --> 00:43:00.570
in judge Green's decision.
986
00:43:00.570 --> 00:43:03.500
But if you look at it she's really using those figures
987
00:43:03.500 --> 00:43:06.480
to support the 10 million, as opposed to reducing
988
00:43:06.480 --> 00:43:08.710
the 22 million from the 10.
989
00:43:08.710 --> 00:43:09.750
That's the first legal error.
990
00:43:09.750 --> 00:43:14.150
Second legal error is her job is to, the trial judge's job
991
00:43:14.150 --> 00:43:17.160
is to look at all of the evidence and see it from anywhere
992
00:43:17.160 --> 00:43:20.290
in the evidence, obviously, the jury could come up
993
00:43:20.290 --> 00:43:21.530
with the 22 million.
994
00:43:21.530 --> 00:43:25.057
And we've put forward this rationale.
995
00:43:25.057 --> 00:43:28.150
$10 million, three times four is 12.
996
00:43:28.150 --> 00:43:30.100
That gets the jury to $12 million.
997
00:43:30.100 --> 00:43:33.560
It was not considered by the judge at the time
998
00:43:33.560 --> 00:43:35.820
and therefore we think of that as the second error.
999
00:43:35.820 --> 00:43:38.710
The third legal error and this gets to the FIRREA case
1000
00:43:38.710 --> 00:43:43.710
which the judge relied on considerably for the award
1001
00:43:43.820 --> 00:43:46.800
of damage, generally and we believe that was proper.
1002
00:43:46.800 --> 00:43:49.660
But the judge misread the FIRREA case to believe
1003
00:43:49.660 --> 00:43:53.530
that operational support was not something that was awarded
1004
00:43:53.530 --> 00:43:55.140
in that case, but it was.
1005
00:43:55.140 --> 00:43:58.400
If you look at the FIRREA decision, you'll see that
1006
00:43:58.400 --> 00:44:01.830
there's reference to fringe benefits and salaries
1007
00:44:01.830 --> 00:44:04.810
of the employees, maintenance of the animals, the animals
1008
00:44:04.810 --> 00:44:07.000
were basically the specimens in that case.
1009
00:44:07.000 --> 00:44:08.460
So those are forward looking.
1010
00:44:08.460 --> 00:44:11.530
There's some runway and there's actually
1011
00:44:11.530 --> 00:44:15.960
an affidavit that's in the record at RA 1362
1012
00:44:15.960 --> 00:44:19.200
from the expert who testified in the FIRREA case.
1013
00:44:19.200 --> 00:44:22.580
And the affidavit makes playing that the Jury Award
1014
00:44:22.580 --> 00:44:25.460
of the $2.9 million in that case was comprised
1015
00:44:25.460 --> 00:44:30.190
of startup costs and uninterrupted support for five years.
1016
00:44:30.190 --> 00:44:34.940
So three legal errors from the trial judge and considering
1017
00:44:34.940 --> 00:44:37.880
the remittitur and, frankly Your Honor
1018
00:44:37.880 --> 00:44:41.210
a failure to defer to the fact finding
1019
00:44:41.210 --> 00:44:43.200
and to the discretion of the jury.
1020
00:44:43.200 --> 00:44:47.130
And we believe that the evidence and the arguments support
1021
00:44:47.130 --> 00:44:51.060
this and that's a reasonable Award, given the nature
1022
00:44:51.060 --> 00:44:53.690
of the damage caused by Stuart here.
1023
00:44:53.690 --> 00:44:56.540
The prejudgment interest actually cuts into
1024
00:44:56.540 --> 00:44:58.113
a serious amount of money.
1025
00:44:59.070 --> 00:45:04.070
Doesn't the plaintiff have to prove the breach date.
1026
00:45:04.360 --> 00:45:07.510
It's not enough for the judge to instruct the jury
1027
00:45:07.510 --> 00:45:10.630
that December 31st is the breach date.
1028
00:45:10.630 --> 00:45:12.850
So why you're entitled to the prejudgment interest
1029
00:45:12.850 --> 00:45:13.879
from that day.
1030
00:45:13.879 --> 00:45:17.613
Under the statute, the date needs to be established.
1031
00:45:18.520 --> 00:45:21.520
So, here we had a situation where
1032
00:45:22.720 --> 00:45:26.070
the judge instructed the jury, as you point out
1033
00:45:26.070 --> 00:45:29.090
that Steward, I'm sorry Dr.Halackey is alleging
1034
00:45:29.090 --> 00:45:32.747
that Steward breached the contract on December 31 2012.
1035
00:45:32.747 --> 00:45:34.740
And it was undisputed.
1036
00:45:34.740 --> 00:45:36.570
First, there was no objection to that instruction
1037
00:45:36.570 --> 00:45:40.400
but secondly, there was undisputed that that was the day
1038
00:45:40.400 --> 00:45:44.270
when Steward withdrew as the sole member of the non-profit
1039
00:45:44.270 --> 00:45:47.390
and at that point in time under Steward's own testimony,
1040
00:45:47.390 --> 00:45:49.300
they abandoned the research.
1041
00:45:49.300 --> 00:45:52.620
They had no more connection or relationship
1042
00:45:52.620 --> 00:45:54.120
with Dr. Halackey.
1043
00:45:54.120 --> 00:45:59.120
So, the jury was asked them to check the box yes
1044
00:45:59.240 --> 00:46:02.440
if it determined that Steward breached and it did.
1045
00:46:02.440 --> 00:46:05.160
So, the breach is explained to the jury
1046
00:46:05.160 --> 00:46:06.700
as occurring on a specific date.
1047
00:46:06.700 --> 00:46:09.290
They check the box, yes, the jury is presumed
1048
00:46:09.290 --> 00:46:11.270
to follow the jury instructions.
1049
00:46:11.270 --> 00:46:15.218
So then it's presumed that there's a finding by the jury
1050
00:46:15.218 --> 00:46:17.110
of a certain date.
1051
00:46:17.110 --> 00:46:19.830
And we would direct the court to the Morgan case.
1052
00:46:19.830 --> 00:46:22.130
Recognizing it's a case from the Appellate Division
1053
00:46:22.130 --> 00:46:25.210
but I think it's the most analogous case because there
1054
00:46:25.210 --> 00:46:28.910
there was an implied finding and the court makes it plain
1055
00:46:28.910 --> 00:46:31.820
that the trial judge there was a bench trial.
1056
00:46:31.820 --> 00:46:35.330
There was only one possible date of breach
1057
00:46:35.330 --> 00:46:36.650
which was the date of the closing
1058
00:46:36.650 --> 00:46:39.100
in the real estate transaction, which was the same here.
1059
00:46:39.100 --> 00:46:41.970
There's only one possible date. It was undisputed.
1060
00:46:41.970 --> 00:46:45.440
And when the judge found liability and found a breach
1061
00:46:45.440 --> 00:46:46.990
the Appellate Division said that that was
1062
00:46:46.990 --> 00:46:48.870
an implied finding that it occurred on
1063
00:46:48.870 --> 00:46:50.690
that one possible date.
1064
00:46:50.690 --> 00:46:51.890
Two questions on that.
1065
00:46:52.890 --> 00:46:57.890
The judge said that you allege that it was 12/31/2012.
1066
00:47:00.240 --> 00:47:01.990
Which was true you did allege that.
1067
00:47:02.940 --> 00:47:05.430
Why should they object to with characterization
1068
00:47:05.430 --> 00:47:07.030
of what you allege?
1069
00:47:07.030 --> 00:47:10.050
Well, because it imports that date.
1070
00:47:10.050 --> 00:47:13.940
It imports that date into the jury instruction so that
1071
00:47:13.940 --> 00:47:16.360
if it's true and it's undisputed, perhaps it's just
1072
00:47:16.360 --> 00:47:17.960
the flip side of saying it's undisputed
1073
00:47:17.960 --> 00:47:18.960
that they didn't object it--
1074
00:47:18.960 --> 00:47:20.910
But is that that's a second question.
1075
00:47:22.080 --> 00:47:25.810
If they had left, they continued
1076
00:47:25.810 --> 00:47:29.563
to provide substantial funds after they left Steward.
1077
00:47:30.440 --> 00:47:33.410
Took a while before Steward backed off.
1078
00:47:33.410 --> 00:47:38.410
So, is it so clear that that is the pertinent date
1079
00:47:39.160 --> 00:47:43.510
when the issue is whether they stopped supporting it
1080
00:47:43.510 --> 00:47:45.820
and it seems a little bit less clear to me
1081
00:47:45.820 --> 00:47:48.190
when they stopped supporting it as opposed to when
1082
00:47:48.190 --> 00:47:52.899
they no longer were a member of the nonprofit?
1083
00:47:52.899 --> 00:47:54.930
So there were there were two counts remember.
1084
00:47:54.930 --> 00:47:57.430
So it's breach of contract and breach of the covenant
1085
00:47:57.430 --> 00:47:59.160
of implied good faith and fair dealing.
1086
00:47:59.160 --> 00:48:02.820
So the breach of contract we alleged occurred at the time
1087
00:48:02.820 --> 00:48:05.620
of the removal, that's when Steward cut off the support.
1088
00:48:06.865 --> 00:48:08.310
The damages--
1089
00:48:08.310 --> 00:48:10.810
That's when they left that's when they withdrew.
1090
00:48:10.810 --> 00:48:12.633
That's when they withdrew as I remember--
1091
00:48:12.633 --> 00:48:13.890
Then you agree that they did continue
1092
00:48:13.890 --> 00:48:16.840
to provide substantial funds even after they left?
1093
00:48:16.840 --> 00:48:19.060
They did through GRI, correct.
1094
00:48:19.060 --> 00:48:22.523
Okay, so support is little less clear.
1095
00:48:23.940 --> 00:48:26.890
Understood, Your Honor, I look at the conduct
1096
00:48:26.890 --> 00:48:31.890
which occurred after December 31 2012 as really exacerbating
1097
00:48:32.160 --> 00:48:35.750
the damages, but not the date of the breach.
1098
00:48:35.750 --> 00:48:39.550
So if a date of a breach a data breach has to be fixed
1099
00:48:39.550 --> 00:48:42.600
in a contract case, one way or the other.
1100
00:48:42.600 --> 00:48:47.290
And the breach here occurred when they withdrew
1101
00:48:47.290 --> 00:48:51.190
as the member, the damages got worse because
1102
00:48:51.190 --> 00:48:52.840
as you know the breach of the covenant good faith
1103
00:48:52.840 --> 00:48:55.380
and fair dealing speaks to the performance of the contract
1104
00:48:55.380 --> 00:48:59.290
and they without a doubt, barred
1105
00:48:59.290 --> 00:49:03.730
or thwarted Dr. Halackey's efforts to obtain the fruits
1106
00:49:03.730 --> 00:49:06.570
of the contract by their conduct after
1107
00:49:06.570 --> 00:49:07.520
the date of the breach.
1108
00:49:07.520 --> 00:49:08.960
So I think that that would speak to that
1109
00:49:08.960 --> 00:49:12.220
but the date of the breach of the contract, we allege
1110
00:49:12.220 --> 00:49:15.463
and the jury was instructed, it was a date specific.
1111
00:49:16.320 --> 00:49:18.880
Let me ask you a question that Mr. Martin raises
1112
00:49:18.880 --> 00:49:22.203
which is a, point that worries me too.
1113
00:49:23.680 --> 00:49:27.110
We have a number of cases and I expect we'll have more
1114
00:49:27.110 --> 00:49:30.940
in which members involved in important research
1115
00:49:30.940 --> 00:49:35.510
at various academic institutions are terminated
1116
00:49:35.510 --> 00:49:38.683
or caused to lose their support,
1117
00:49:40.010 --> 00:49:43.053
either because of sexual harassment or other sources.
1118
00:49:44.310 --> 00:49:49.290
Difficult cases, when that happens in every case
1119
00:49:49.290 --> 00:49:53.140
when that happens, can the professor who ultimately says
1120
00:49:53.140 --> 00:49:56.330
well, they actually were not fair in doing that to me
1121
00:49:56.330 --> 00:49:59.840
are they going to be able to obtain damages of the sort
1122
00:49:59.840 --> 00:50:02.320
that you describe the benefit of all
1123
00:50:02.320 --> 00:50:03.963
of their research funding.
1124
00:50:05.250 --> 00:50:06.990
Which could become millions of dollars
1125
00:50:06.990 --> 00:50:08.740
and if that's the case, is that gonna mean
1126
00:50:08.740 --> 00:50:13.740
that we've raised the stakes to remove professors
1127
00:50:13.810 --> 00:50:16.660
who may be engaged in sexual harassment or other conduct
1128
00:50:16.660 --> 00:50:19.800
which may warrant the removal?
1129
00:50:19.800 --> 00:50:21.340
Your Honor, it's a fair question.
1130
00:50:21.340 --> 00:50:25.351
I think that this is a very unique case.
1131
00:50:25.351 --> 00:50:29.280
And it turns on what Dr. Halackey brought
1132
00:50:29.280 --> 00:50:33.803
to the program and what her expectation was, so.
1133
00:50:37.146 --> 00:50:39.580
It took her years to develop this lab.
1134
00:50:39.580 --> 00:50:41.620
25 years worth of work.
1135
00:50:41.620 --> 00:50:43.383
She brought that to the contract.
1136
00:50:45.300 --> 00:50:50.300
This is the type of situation where the remedy that
1137
00:50:50.370 --> 00:50:54.680
the jury reached here is the only remedy
1138
00:50:54.680 --> 00:50:56.270
because the alternative to that Your Honor
1139
00:50:56.270 --> 00:50:59.890
is some lesser remedy of the salary.
1140
00:50:59.890 --> 00:51:02.210
But the remedy here is the only one which
1141
00:51:02.210 --> 00:51:07.210
would put Dr. Halackey back into the position she was prior
1142
00:51:07.240 --> 00:51:08.152
to the breach.
1143
00:51:08.152 --> 00:51:09.660
What about the Tort Claims?
1144
00:51:09.660 --> 00:51:13.050
So, Your Honor, I don't--
1145
00:51:13.050 --> 00:51:15.010
Beg only remedy what about a tort claim.
1146
00:51:15.010 --> 00:51:20.010
So a tort claim, of what tortious interference
1147
00:51:20.070 --> 00:51:23.030
with contract you can interfere with your own contract.
1148
00:51:23.030 --> 00:51:26.370
I'm not sure what tort remedy there may be.
1149
00:51:26.370 --> 00:51:31.370
But in any event, we're faced with a substantial
1150
00:51:31.450 --> 00:51:34.720
and serious breach of contract and substantial damages
1151
00:51:34.720 --> 00:51:36.670
that flow from that breach of contract.
1152
00:51:38.220 --> 00:51:40.010
And with the same remedy be appropriate
1153
00:51:40.010 --> 00:51:42.760
if she had been terminated for some alleged misconduct?
1154
00:51:44.270 --> 00:51:48.760
Well, that wouldn't be a breach of
1155
00:51:48.760 --> 00:51:50.410
the obligation to support--
1156
00:51:50.410 --> 00:51:51.400
What if it were determined
1157
00:51:51.400 --> 00:51:56.400
that the termination was ultimately found to be unjust
1158
00:51:56.900 --> 00:51:58.590
because of a failure of proof or
1159
00:51:58.590 --> 00:52:00.130
whatever else which happens--
1160
00:52:00.130 --> 00:52:03.540
Well, Your Honor, I think this gets to also that
1161
00:52:03.540 --> 00:52:06.020
it's not just the use of the lab, right.
1162
00:52:06.020 --> 00:52:09.110
The use of the lab isn't the only right
1163
00:52:09.110 --> 00:52:10.920
that Dr. Halackey has.
1164
00:52:10.920 --> 00:52:14.140
Again, she brought this lab to the program, she
1165
00:52:14.140 --> 00:52:17.830
had control over this over this research program.
1166
00:52:17.830 --> 00:52:19.880
She was the one who applied for the grants.
1167
00:52:19.880 --> 00:52:24.880
And she had the right to transport this program with her if
1168
00:52:25.010 --> 00:52:26.760
and when she wanted to change jobs.
1169
00:52:26.760 --> 00:52:28.730
I don't think that that would always be the case.
1170
00:52:28.730 --> 00:52:33.630
It's not just a research scientist who's engaged
1171
00:52:33.630 --> 00:52:34.790
in lab work.
1172
00:52:34.790 --> 00:52:37.290
This is not just an employment contract.
1173
00:52:37.290 --> 00:52:39.760
It's much more and the jury was entitled to find that.
1174
00:52:39.760 --> 00:52:41.560
It's really an affiliation agreement.
1175
00:52:41.560 --> 00:52:43.060
She's bringing her research program.
1176
00:52:43.060 --> 00:52:44.940
She brought a research program
1177
00:52:44.940 --> 00:52:48.340
to Steward's predecessor seven years earlier.
1178
00:52:48.340 --> 00:52:51.940
And this contract was as a result of negotiation
1179
00:52:51.940 --> 00:52:56.250
and again, to her having that state stability and security
1180
00:52:56.250 --> 00:52:58.520
in a research institution was critical.
1181
00:52:58.520 --> 00:53:01.090
I don't think those facts are going
1182
00:53:01.090 --> 00:53:02.877
to present themselves all the time.
1183
00:53:02.877 --> 00:53:06.450
No, Your Honor these facts having to do with the breach
1184
00:53:06.450 --> 00:53:09.670
and Steward's purposeful and egregious conduct
1185
00:53:09.670 --> 00:53:12.750
here are not going to reappear time and time again.
1186
00:53:12.750 --> 00:53:16.550
So the magnitude of the destruction here which drives
1187
00:53:16.550 --> 00:53:19.410
the size of the Jury Award, I don't think it's something
1188
00:53:19.410 --> 00:53:21.260
that the court is going to see often.
1189
00:53:23.460 --> 00:53:24.840
Okay, thank you.
1190
00:53:24.840 --> 00:53:25.790
Thank Your Honor.