Meterlogic v. KLT , 368 F.3d 1017 ( 2004 )

United States Court of Appeals
FOR THE EIGHTH CIRCUIT
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No. 03-2289
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Meterlogic, Inc., a Florida *
Corporation, *
*
Appellant. *
*
v. *
*
KLT, Inc., a Missouri Corporation; *
KLT Telecom, Inc., a Missouri * Appeal from the United States
Corporation; Copier Monitoring * District Court for the
Systems, LLC; Copier Solutions, LLC; * Western District of Missouri.
Telemetry Solutions, LLC, *
*
Appellees. *
*
_________________ *
*
Meterlogic, Inc., a Florida *
Corporation, *
*
Appellant, *
*
v. *
*
Copier Solutions, Inc., a Missouri *
limited liability company; Telemetry *
Solutions, LLC, a Delaware limited *
liability company; KLT, Inc., *
*
Appellees. *
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Submitted: January 15, 2004
Filed: May 24, 2004
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Before WOLLMAN, MORRIS SHEPPARD ARNOLD, and COLLOTON, Circuit
Judges.
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WOLLMAN, Circuit Judge.
Meterlogic, Inc. appeals from the district court’s1 entry of summary judgment
in favor of KLT, Inc. We affirm.
This case arises out of a contractual arrangement whereby Meterlogic and KLT
agreed to cooperate to sell remote monitoring and metering technology and services
for business machines. Meterlogic alleges that KLT made certain misrepresentations
during the course of negotiations preceding execution of their agreement, resulting
in substantial financial injury to Meterlogic. The district court entered summary
judgment on counts I, IV, V, VI, and VII because they were entirely dependent on the
damages-related testimony of Meterlogic’s proffered expert, Lawrence Redler, which
the district court excluded as unreliable. The district court also entered summary
judgment on Meterlogic’s remaining fraud claims because Meterlogic had failed to
produce any evidence of legally cognizable damages. On appeal, Meterlogic argues
(1) that Redler’s testimony was erroneously excluded and (2) that it is entitled to
recover all money lost as a result of KLT’s alleged fraud.
1
The Honorable Scott O. Wright, United States District Judge for the Western
District of Missouri.
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Summary judgment is appropriate where there are no issues of material fact in
dispute, such that no reasonable juror could return a verdict in favor of the non-
moving party. Boerner v. Brown & Williamson Tobacco Corp., 260 F.3d 837, 841
(8th Cir. 2001) (citing Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986)). Thus,
where the moving party can point to the absence of any evidence satisfying a
necessary element of a claim, such as damages, and the non-moving party fails to
produce any such evidence, summary judgment is properly entered. Id. (“The moving
party is ‘entitled to a judgment as a matter of law’ because the non-moving party has
failed to make a sufficient showing on an essential element of her case with respect
to which she has the burden of proof.”) (quoting Celotex Corp., 477 U.S. at 323); In
re Temporomandibular Joint (TMJ) Implants Products Liability Litigation, 113 F.3d
1484, 1497 (8th Cir. 1997).
We review for abuse of discretion the district court’s decision to exclude
Redler’s testimony. Children’s Broadcasting Corp. v. Walt Disney Co., 357 F.3d 860,
864 (8th Cir. 2004). The district court must exclude expert testimony if it is “so
fundamentally unreliable that it can offer no assistance to the jury,” otherwise, the
factual basis of the testimony goes to the weight of the evidence. Id. at 865 (quoting
Bonner v. ISP Techs., Inc., 259 F.3d 924, 929-30 (8th Cir. 2001), and Hose v.
Chicago N.W. Transp. Co., 70 F.3d 968, 974 (8th Cir. 1995)). Redler was to testify
regarding the discounted present value of Meterlogic’s now-defunct business of
providing remote monitoring and metering services for business machines. He
predicted financial results ten years into the future even though the parties’ contract
extended only two years and allowed for termination at any time; he assumed that
Meterlogic would be the sole representative of the appellees, even though the contract
was a non-exclusive agreement; he assumed that the parties would have 30% market
share in the remote monitoring and metering market, but admitted that he had no
market research to support that estimate; he assumed 15% annual growth without any
data indicating that the estimate was realistic; he admitted to having no data on how
many remote monitoring and metering devices would be sold; and he admitted that
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he based his analysis on the so-called Metzler report, which was prepared for KLT
only as an investment-planning tool.
Given the nature of Redler’s methodology, the district court concluded that his
testimony was so unreliable as to be of no value to the finder of fact and therefore
excluded it. The district court’s observations that Redler failed to perform a market
survey, send questionnaires to potential customers seeking to validate the Metzler
report, or in any way attempt to account for what had occurred in the remote
monitoring and metering market since the first quarter of 1999 lend credence to its
conclusion. Additionally, the district court found that the Metzler report itself (upon
which Redler premised his analysis) was based, in large part, on speculation about the
potential for profit in the remote monitoring business, rather than on any substantiated
facts.
Meterlogic attempts to salvage Redler’s testimony by arguing that it is
admissible because the Metzler report is an admission of a party opponent. However,
KLT’s commission of a study, the purpose of which was to investigate the potential
of a new product market, does not, in and of itself, allow Meterlogic to bootstrap
Redler’s expert opinion testimony into evidence when KLT has demonstrated
substantial, legitimate problems with his methodology. Children’s Broadcasting
Corp., 357 F.3d at 865.
We conclude that the district court did not abuse its discretion by excluding
Redler’s testimony. The district court’s entry of summary judgment on count’s I, IV,
V, VI, and VII must therefore be affirmed because Meterlogic had no other evidence
of damages. Boerner, 260 F.3d at 841 (holding that the non-moving party must make
a sufficient factual showing as to each essential element of its claim to survive
summary judgment).
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We turn next to the district court’s entry of summary judgment on Meterlogic’s
fraud claims. Notwithstanding the fact that Meterlogic failed to provide any
admissible evidence of the present value of its lost future business opportunities, it
argues that it should be able to recover at least the entire amount invested in its
business (by itself or other entities) and lost as a result of KLT’s alleged fraud. Under
Missouri law, however, special damages in a fraud case are limited to those “incurred
solely by reason of the fraud.” In re Usery, 123 F.3d 1089, 1096 (8th Cir. 1997)
(quoting Miller v. Higgins, 452 S.W.2d 121, 125 (Mo. 1970)). Often, this is money
that is “plowed into” the business in reliance on the misrepresentation or money that
is spent to mitigate the damage. Id. Here, Meterlogic has pointed to no losses it
incurred, or money it plowed into the business, in reliance on KLT’s alleged
misrepresentation. Indeed, its tax returns demonstrate no losses for the years in
question. Accordingly, the district court appropriately entered summary judgment for
KLT on these claims.
The judgment is affirmed.
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