Mears v. Nationwide Mutual Insurance. Co., 91 F.3d 1118

United States Court of Appeals, Eighth Circuit

1996

Chapter

20

Title

Contract Remedies

Page

774

Topic

Limitations on Recovery of Expectation Damages

Quick Notes

o         An employee won contest and was trying to recover for direct losses.   In order to be binding, a contract must be reasonably certain as to its terms and requirements.  A contract is sufficiently certain if it provides a basis for determining the existence of a breach and for giving an appropriate remedy.  Courts will not enforce a contract where the determination of damages is left to speculation and conjecture.

Book Name

Contracts Cases, Discussions, and Problems.  Blum Bushaw, Second Edition.  ISBN:  978-0-7355-7069-6.

Issue

o         Whether a contest that does not specify the basis for a breach and its remedy is a contract?  Yes.

Procedure

Trial

o         Jury Granted Mears $60,000

District

o         Reversed verdict because the contest was not a contract since the terms were not nearly definite enough to be enforced and there is simply no reasonable certain basis for giving an appropriate remedy.

o         Granted a new trial on the grounds that the evidence was insufficient to substantiate the amount of damages

Appeals

o         Reversed, find that there was sufficient evidence to support the jury verdict and [there is] inadequate basis for a new trial

Facts

Rules

Reason

Pl - Mears

Df - Nationwide Mutual Insurance

What happened?

o         Mears worked as a claims adjuster for Nationwide from Oct 1985 to Sept 1993.

o         Nationwide has regional convention every 3 years to boost employee moral.

o         They needed to come up with a theme for the convention.

o         In order to come up with a theme, Nationwide sponsored a contest that would award the employee whose theme was chosen.

o         Several months after Mears submitted his theme it was chosen.

Notification

o         Peterson, a committee member, notified Mears that his theme was chosen.

Dispute

o         Mears claims Peterson told him that he won the two Mercedes; however, Peterson disputes.

Trial Jury

o         Granted Mears $60,000.

District Court

o         Reversed verdict because the contest was not a contract since the terms were not nearly definite enough to be enforced and there is simply no reasonable certain basis for giving an appropriate remedy.

o         Granted a new trial on the grounds that the evidence was insufficient to substantiate the amount of damages.

Court of Appeals

o         Reversed, finding that there was sufficient evidence to support the jury verdict and [there is] inadequate basis for a new trial.

Mears Claims

o         Peterson told him that he had won two Mercedes.

Committee Member Peterson Disputes

o         Peterson warned him that he might not receive the automobiles for three reasons: first, Nationwide might change the convention theme; second, Mears was no longer employed by Nationwide; and third, the contest was a joke.

Committee Member Handy (Communication to Mears)

o         Handy informed Mears that Nationwide never intended to award the two [cars], and offered Mears a restaurant gift certificate instead.

Mears sued Nationwide

o         Breach of contract.

Nationwides Response

o         Admitted that the contest was legitimate.

o         Argued that Mears was not entitled to the two Mercedes-Benz automobiles as a prize.

Jurys Verdict

o         Found in favor of Mears to $60,000.

District Court

o         The court held that "the 'contract' sued on herein was simply not a contract because the terms are not nearly definite enough to be enforced and there is simply no reasonably certain basis for giving an appropriate remedy."

o         Granted a new trial on the grounds that the evidence was insufficient to substantiate the amount of damages.

Mears Appealed

o         Challenging both the judgment as a matter of law and the contingent new trial.

Court of Appeals (Look to substantive law of the State of Arkansas)

o         Judgment as a matter of law was NOT justified in this instance.

Binding Rule

o         In order to be binding, a contract must be reasonably certain as to its terms and requirements.

Sufficient Certain Contract Rule

o         A contract is sufficiently certain if it provides a basis for determining the existence of a breach and for giving an appropriate remedy. 

o         The law does not favor the destruction of contracts because of uncertainty.

Contest Prize offering (Analysis)

o         Gave no indication of which prize the winning theme submitter would receive.

o         However, a contract that is facially ambiguous can be made certain by the subsequent actions or declarations of the parties.

Evidence

o         At trial, both Peterson and Mears testified that she told him that he had won two Mercedes while at a dinner attended by many Nationwide employees.

o         It appears that others around Mears also believed that he had won the automobiles.

Uncertainty Of Type Mercedes (Analysis)

o         Contract terms are interpreted with strong consideration for what is reasonable.

o         Under a reasonable interpretation of the contest contract, the jury could expect the automobiles to be new.

When Minor Ambiguity Exists in a contract

o         Allows the complaining party to insist on the reasonable interpretation that is least favorable to him.

o         A contract that specified only the make of the automobile had enough certainty to be enforceable.

Rule

o         Courts will NOT enforce a contract where the determination of damages is left to speculation and conjecture.

Plaintiffs Burden

o         The burden rests with the plaintiff to present evidence sufficient to fix damages in dollars and cents.

Mears Research

o         Supplied invoices from a Mercedes Dealership of $31,450.

Court of Appeals (Mears Research)

o         Damages need not be proven with absolute, mathematical certainty.

o         The damages are the value of the automobiles.

Court of Appeals (Abuse of Discretion)

o         The price of the Mercedes takes the award out of the field of conjecture.

o         Reversed

o         Reinstate Jury's Verdict for $60,000.

Contest

Contest

SPECIAL ANNOUNCEMENT!

    The 1994 SOCRO Claims Convention plans are being developed and we need your creativity. We don't know where. We don't know when. And we don't have a theme. That's where you come in. A contest is hereby announced to create a theme. Here's what you could win:

    His and Her's Mercedes.

    An all expense paid trip for two around the world.

    Additional prize to be announced.

    (All prizes subject to availability)

    Only two rules apply:

    1. The slogan is limited to not more than eight words.

    2. All entries must be submitted to Linda McCauley, Regional Office by August 1, 1993.

Class Notes