United States District Court, District of Columbia
MEMORANDUM OPINION
Royce
C. Lamberth United States District Court Judge
Defendant
Wical Limited Partnership (“Wical”) has moved to
strike plaintiff Whole Foods Market Group, Inc.'s
(“Whole Foods”) damages claims for: (1) cost of
repairs and improvements; (2) lost profits; (3) loss of
employees; (4) harm to goodwill and reputation; (5) value of
future leasehold; (6) relocation expenses; and (7)
disgorgement of amounts to which Wical has been unjustly
enriched. ECF No. 68. For the reasons set forth below, the
Court will deny Wical's motion to strike.
LEGAL
STANDARD
Both
parties in this case previously moved for summary judgment.
The Court denied both motions, finding that there is a
genuine dispute of material fact regarding whether Whole
Foods was responsible for the rodent infestation. ECF No.
100. Wical still argues that Whole Foods is not entitled to
damages for the aforementioned categories. Under District of
Columbia law, the plaintiff must establish both “the
fact of damage and a reasonable estimate.” Bedell
v. Inver Hous., Inc., 506 A.2d 202, 205 (D.C. 1986)
(quoting W.G. Cornell Co. v. Ceramic Coating Co.,
626 F.2d 990, 933 (D.C. Cir. 1980)). Although “damages
are not required to be proven with mathematical certainty,
there must be some reasonable basis on which to estimate
damages.” Romer v. District of Columbia, 449
A.2d 1097, 1100 (D.C. 1982).
The
Federal Rules of Civil Procedure (“Fed. R. Civ.
P.”) also set forth certain requirements regarding
damages claims. Fed.R.Civ.P. 26(a)(1)(A)(iii) says that a
party must provide “a computation of each category of
damages claimed” and “make available for
inspection . . . the documents or other evidentiary material
. . . on which each computation is based.” Parties also
have the responsibility of updating and correcting their
disclosures “in a timely manner” throughout the
litigation. Fed.R.Civ.P. 26(e)(1)(A). Furthermore,
Fed.R.Civ.P. 37(c)(1) states, “If a party fails to
provide information . . . as required by Rule 26(a) or (e),
the party is not allowed to use that information . . . unless
the failure was substantially justified or is
harmless.”
In
considering Wical's motion, it is important to note that
striking damages claims at this stage of the litigation is
disfavored. In Magdalene Campbell & Fort Lincoln
Civic Ass'n v. Ford Lincoln New Town Corp., Inc..,
the Court found that it would be “premature”
prior to trial “to say as a matter of law” that
appellants could not meet their burden to show damages. 55
A.3d 379, 388-89 (D.C. 2012). Proof of damages is seldom
“mathematically precise, ” so “definitive
and precise proof of damages is rarely possible and not
required.” Id. at 388 (quoting Trs. Of the
Univ. of D.C. v. Vossoughi, 963 A.2d 1162, 1177-78 (D.C.
2009)). A damages award may be based on “probable and
inferential considerations as well as direct and positive
proof.” Id. (quoting Vossoughi, 963
A.2d at 1175). This is especially true where damages are
continuing, meaning that a final computation of damages
cannot be completed until after a decision on the merits.
With this in mind, the Court finds that it would be
inappropriate to grant Wical's motion to strike at this
time.
Although
the Court will deny Wical's motion, nothing in this
Memorandum Opinion should be construed to mean that the Court
will even reach the question of damages following its
decision on the merits. All of these damages claims are
entirely contingent upon Whole Foods' success on the
merits, as resolving the dispute in Wical's favor would
make the claims discussed below irrelevant. Even a decision
for Whole Foods on the merits does not guarantee recovery on
all damages claims, as Whole Foods would still have the
burden to prove that it deserves each category of damages to
which it claims it is entitled. This Memorandum Opinion
stands merely for the proposition that Whole Foods has
provided sufficient information to make striking any damages
claims improper at this time.
ANALYSIS
Wical
makes four primary arguments regarding Whole Foods'
various damages claims and why each one should be stricken.
These arguments are addressed below in the order that Wical
presented them.
I.
Wical is Incorrect in Arguing that All Consequential Damages
are Barred under the Lease Agreement.
Wical
argues that this Court should strike all of Whole Foods'
claims for consequential damages, including the cost of
repairs and improvements, lost profits, loss of employees,
harm to goodwill and reputation, value of future leasehold,
and relocation expenses. Wical claims that under the lease,
Whole Foods cannot recover consequential damages arising from
its own failure to continuously operate the store. This
argument is only valid, however, if Whole Foods' closure
of the store was not excused under the force majeure
clause. This reasoning is more fully explained in the
Court's Memorandum Opinion denying both parties'
motions for summary judgment. ECF No. 100. It would be
inconsistent with the Court's order denying summary
judgment to decide whether Whole Foods is barred from
recovering consequential damages under the lease before
determining whether Whole Foods or Wical was the first party
to materially breach the lease. If it becomes clear at trial
that Whole Foods was the first one to materially breach the
lease, Whole Foods will lose on the merits and damages will
become irrelevant. If, however, Wical was the first to
materially breach the lease, Whole Foods may be able to
recover some or all of its claimed consequential damages
depending on the evidence that it presents. Either way, this
Court finds that consequential damages are not categorically
barred under the lease.
II.
Wical is Incorrect in Arguing that Whole Foods Failed to
Provide Proper Computations for its Claims Regarding Loss of
Employees, Harm to Goodwill and Reputation, Value of Future
Leasehold, Relocation Expenses, and Disgorgement from
Wical.
Wical's
second argument is that the Court should preclude Whole Foods
from recovering damages in any category for which it did not
provide the proper computations or underlying analyses. Wical
asserts that Whole Foods failed to make the requisite showing
for the following categories: loss of employees, harm to
goodwill and reputation, value of future leasehold,
relocation expenses, and disgorgement from Wical. Wical's
assertion is incorrect, as Whole Foods did provide
computations and supporting documents for these categories.
What
Wical provided is sufficient for this stage of the
litigation. Whole Foods produced emails and spreadsheets
listing the Whole Foods' employees who lost their jobs at
the store upon its closure. Scott Allhouse also testified at
his deposition that (as best he recalled), approximately 150
employees worked at the Georgetown store at the time it
closed. Harm to goodwill and reputation is inherently a bit
less precise of a claim, but numerous newspaper articles
demonstrate the community's feelings about the
infestation and the store's subsequent closure. The value
of future leasehold claim simply refers to Whole Foods being
denied the opportunity to exercise its future options
“on the backside of the current lease” meaning
that there is “a value for [Whole Foods] that [it]
would be denied because of this action.” Allhouse
Deposition at 67:14-20. It would be premature to calculate
that amount at this time. Similarly, relocation expenses
cannot currently be calculated because Whole Foods has not
yet moved the store, so this category of damages will only
become relevant should Whole Foods decide to move the store.
As for the disgorgement claim, Whole Foods appears simply to
be asking for repayment of the money that it believes Wical
wrongfully obtained. This should be fairly straightforward,
as Whole Foods has been ...