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Headfirst Baseball LLC v. Elwood

United States District Court, District of Columbia

March 3, 2017

HEADFIRST BASEBALL LLC, et al., Plaintiffs,
v.
ROBERT ELWOOD, Defendant. ROBERT ELWOOD, Counterclaim Plaintiff,
v.
BRENDAN V. SULLIVAN III, et al., Counterclaim Defendants. HEADFIRST PROFESSIONAL SPORTS, CAMPS LLC, Counterclaim Plaintiff,
v.
ROBERT ELWOOD, Counterclaim Defendant.

          MEMORANDUM OPINION

          REGGIE B. WALTON, UNITED STATES DISTRICT JUDGE

         This civil case, which involves a myriad of claims and counterclaims asserted by multiple parties, including two former friends and business associates, is nearing its resolution, following the first half of a bifurcated jury trial on the issue of liability with respect to each claim and counterclaim, with the damages phase of the trial scheduled to commence on March 28, 2017. Currently pending before the Court are three inter-related motions that will determine which claims remain for the damages phase of trial. See generally Headfirst Professional Sports Camps LLC's Motion for Judgment and Proposed Findings of Fact and Conclusions of Law, ECF No. 244 (“Headfirst Prof'l's Mot.”); Elwood's Motion for Judgment on Partial Findings as to Headfirst Professional Sports Camps LLC's Counterclaim and Memorandum in Support, ECF No. 222 (“Elwood's Rule 52 Mot.”); Brendan Sullivan III and Headfirst Professional Sports Camps LLC's Motion for Judgment as a Matter of Law Regarding Damages, ECF No. 246 (“Pls' Damages Mot.”). Upon careful consideration of the parties' submissions, [1] the Court concludes that Headfirst Professional Sports Camps LLC's (“Headfirst Professional”) motion for judgment and Elwood's Rule 52 motion must be granted in part and denied in part, and that Brendan Sullivan and Headfirst Professional's motion regarding damages must be granted.

         I. BACKGROUND

         The Court's detailed findings of fact are set forth herein, infra Part III.A.1; however, for purposes of resolving the several pending motions, an overview of the history of this dispute prior to this Court's involvement, and a summary of the jury's verdict in the liability phase of the trial, are useful.

         A. Proceedings in Superior Court

         On May 3, 2013, Headfirst Professional filed a lawsuit against Robert Elwood (“Elwood”) in the Superior Court of the District of Columbia (“Superior Court”), which included a motion for a preliminary injunction. See Docket Sheet, Headfirst Professional Sports Camps LLC v. Robert Elwood, Case No. 2013 CA 003108 B. On July 10, 2013, Headfirst Professional voluntarily dismissed that lawsuit, and simultaneously filed a new lawsuit in the Superior Court, but did not seek injunctive relief in the new case. See Docket Sheet, Headfirst Professional Sports Camps LLC v. Robert Elwood, Case No. CA 004682 B; Feb. 2, 2017 Hearing Tr. at 25:2-4.[2]

         Meanwhile, Brendan Sullivan III (“Sullivan”), Headfirst Camps LLC (“Headfirst Camps”), and Headfirst Baseball LLC (“Headfirst Baseball”), initiated this lawsuit against Elwood on April 21, 2013. Complaint, ECF No. 1 (Apr. 21, 2013). Elwood then filed a counterclaim against Sullivan and Headfirst Professional, thus bringing Headfirst Professional into this lawsuit as a party. See generally Elwood's Am. Countercl. The Superior Court case initiated by Sullivan and Headfirst Professional was stayed and has remained in that status pending the resolution of the parties' dispute in this Court. See Docket Sheet, Headfirst Professional Sports Camps LLC v. Robert Elwood, Case No. CA 004682 B.

         B. The Jury's Liability Phase Verdict

         Of utmost relevance to the resolution of the pending motions are the following jury findings: First, the jury found in favor of Elwood on his claim that a Headfirst partnership existed between him and Sullivan and that each owns a 50% share in that partnership. Verdict Form (Questions 3 & 4 and the jury's verdict). The jury also found that by excluding Elwood from managing Headfirst Professional in December 2012, Sullivan and Headfirst Professional breached their obligations owed to Elwood under the Headfirst Professional operating agreement. Id. (Questions 10 & 11 and the jury's verdict). However, the jury determined that Elwood's conversion of Headfirst Baseball's and Headfirst Camps' funds, which occurred prior to Elwood's termination, constituted a breach of the Headfirst Professional operating agreement's implied covenant of good faith and fair dealing. Id. (Question 12 and the jury's verdict). Finally, the jury also concluded that Sullivan and Headfirst Professional violated the District of Columbia Limited Liability Company Act by excluding Elwood from the management of Headfirst Professional. Id. (Questions 13 & 14 and the jury's verdict).

         II. STANDARDS OF REVIEW

         A. Rule 50 Motions

         Pursuant to Federal Rule of Civil Procedure 50(a), the Court may grant a motion for judgment as a matter of law if “a reasonable jury would not have a legally sufficient evidentiary basis to find for the party on that issue.” Fed.R.Civ.P. 50(a)(1). “[A] court may not assess the credibility of witnesses or weigh the evidence” when considering such a motion, Hayman v. Nat'l Acad. of Scis., 23 F.3d 535, 537 (D.C. Cir. 1994), and the Court must consider the evidence in the light most favorable to the non-moving party, see McGill v. Munoz, 203 F.3d 843, 845 (D.C. Cir. 2000) (“Judgment as a matter of law is appropriate only if ‘the evidence and all reasonable inferences that can be drawn therefrom are so one-sided that reasonable men and women could not' have reached a verdict in [the non-moving party's] favor.” (quoting Duncan v. Wash. Metro Area Transit Auth., 201 F.3d 482, 485 (D.C. Cir. 2000))).

That is not to say, however, that a mere scintilla of evidence will defeat a Rule 50 motion. “The question is not whether there is literally no evidence supporting the party against whom the motion is directed but whether there is evidence upon which the jury might reasonably find a verdict for that party.”

Robinson v. Wash. Metro. Area Transit Auth., 941 F.Supp.2d 61, 67 (D.D.C. 2013) (quoting 9B Wright & Miller, Federal Practice and Procedure § 2524 (3d ed. 2008)), aff'd, 774 F.3d 33 (D.C. Cir. 2014).

         B. Rule 52 Motions

         Federal Rule of Civil Procedure 52 provides that

[i]n an action tried on the facts without a jury or with an advisory jury, the court must find the facts specially and state its conclusions of law separately. The findings and conclusions may be stated on the record after the close of the evidence or may appear in an opinion or a memorandum of decision filed by the court.

Fed. R. Civ. P. 52(a). Further,

[i]f a party has been fully heard on an issue during a nonjury trial and the court finds against the party on that issue, the court may enter judgment against the party on a claim or defense that, under the controlling law, can be maintained or defeated only with a favorable finding on that issue.

Fed. R. Civ. P. 52(c). “A judgment on partial findings must be supported by findings of fact and conclusions of law as required by Rule 52(a).” Id. “In its determination of a motion made in accordance with Rule 52(c), ‘a district court may not draw any special inferences in favor of the non-movant'; rather, ‘the court must weigh the evidence, resolve any conflicts in it, and decide where the preponderance lies.'” Burke v. Record Press, Inc., 951 F.Supp.2d 26, 31 (D.D.C. 2013) (quoting United States ex rel. Ervin & Assocs. v. Hamilton Sec. Grp., 298 F.Supp.2d 91, 92-93 (D.D.C. 2004)).

         III. ANALYSIS

         A. Headfirst Professional's Rule 52(a) and ...


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