Jones v. Colonial Life ( 1999 )


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  • UNPUBLISHED
    UNITED STATES COURT OF APPEALS
    FOR THE FOURTH CIRCUIT
    JIMMY JONES,
    Plaintiff-Appellant,
    v.
    No. 98-1133
    COLONIAL LIFE & ACCIDENT
    INSURANCE COMPANY,
    Defendant-Appellee.
    JIMMY JONES,
    Plaintiff-Appellee,
    v.
    No. 98-1223
    COLONIAL LIFE & ACCIDENT
    INSURANCE COMPANY,
    Defendant-Appellant.
    Appeals from the United States District Court
    for the Eastern District of North Carolina, at Raleigh.
    Malcolm J. Howard, District Judge.
    (CA-95-361-5-1-H)
    Argued: March 2, 1999
    Decided: May 3, 1999
    Before WIDENER, WILLIAMS, and MICHAEL, Circuit Judges.
    _________________________________________________________________
    Affirmed by unpublished per curiam opinion.
    _________________________________________________________________
    COUNSEL
    ARGUED: William D. McNaull, Jr., Charlotte, North Carolina, for
    Appellant. John Lester Sarratt, KILPATRICK STOCKTON, L.L.P.,
    Raleigh, North Carolina, for Appellee. ON BRIEF: Karen F. Gray,
    KILPATRICK STOCKTON, L.L.P., Raleigh, North Carolina, for
    Appellee.
    _________________________________________________________________
    Unpublished opinions are not binding precedent in this circuit. See
    Local Rule 36(c).
    _________________________________________________________________
    OPINION
    PER CURIAM:
    Jimmy Jones brought breach of contract and state law deceptive
    practices claims against his former employer, Colonial Life & Acci-
    dent Insurance Company (Colonial Life). The district court dismissed
    the deceptive practices claim before trial. At trial, on the question of
    damages, the court excluded Jones's testimony regarding future lost
    earnings. A jury found for Jones on the breach of contract claim, but
    awarded no damages. Jones now appeals. Colonial Life cross-appeals
    the finding that it breached the contract. We affirm.
    I.
    Jimmy Jones began selling insurance for Colonial Life in 1962.
    Eventually, Jones entered into a formal Market Director Agreement
    (the Agreement) with Colonial Life. Among other things, the Agree-
    ment required Jones to recruit, train, and motivate new independent
    agents to sell Colonial Life insurance. As compensation, Jones
    received a commission on all premiums received on policies sold by
    the agents under him and a commission on each of these policies that
    was renewed. The Agreement provided that if Jones was terminated,
    he would no longer receive sales commissions. Nevertheless, Jones
    was entitled to the renewal commissions for the remainder of his life
    2
    or 20 years, whichever was longer, provided he did not compete with
    Colonial Life in the future.
    On January 2, 1995, Colonial Life terminated Jones on the grounds
    that his job performance was inadequate. Jones then sued, alleging
    that Colonial Life (1) breached the Agreement and (2) engaged in
    unfair or deceptive acts or practices in violation of North Carolina
    General Statutes § 75-1.1. He contended that his sudden difficulty in
    recruiting and motivating insurance agents was due to two actions
    taken by Colonial Life. First, the company began to pay to Statewide
    Benefits, Inc., a third-party broker, a 13 1/2 percent share of commis-
    sions on policies sold to state government agencies. Second, Colonial
    Life assigned all of the school teacher accounts in North Carolina to
    another Market Director. Jones also contended that these actions
    caused a substantial reduction in his potential future income.
    Colonial Life moved to dismiss the deceptive practices claim pur-
    suant to Federal Rule of Civil Procedure 12(b)(6), and the district
    court granted this motion. At trial on the remaining breach of contract
    claim, Jones testified about his past income under the Agreement.
    However, the court prevented him from testifying about his future
    expectations with regard to his renewal commissions. Ultimately, a
    jury found that Colonial Life breached the Agreement, but awarded
    no damages. Jones moved for a new trial on the question of damages,
    and the court denied that motion.
    Jones now appeals, contending that the district court improperly
    dismissed his deceptive practices claim. He further asserts that the
    court improperly excluded his testimony regarding future renewal
    commissions and erred by denying his motion for a new trial.* Colo-
    nial Life cross-appeals, contending that the jury's verdict finding a
    breach of contract was not supported by the evidence.
    _________________________________________________________________
    *We dismissed an initial appeal by Jones because the district court had
    not yet entered a final order. See 28 U.S.C.§ 1291. The district court has
    since disposed of the outstanding issues in the case, and Jones now
    appeals from a final order.
    3
    II.
    We affirm the district court's dismissal of Jones's deceptive prac-
    tices claim.
    North Carolina General Statutes § 75-1.1 outlaws unfair methods
    of competition and unfair or deceptive acts or practices in or affecting
    commerce. However, it does not apply to an "ordinary breach of con-
    tract," even if that breach was intentional. United Roasters, Inc. v.
    Colgate-Palmolive Co., 
    649 F.2d 985
    , 992 (4th Cir. 1981). Section
    75-1.1 only covers actions that are "actually deceptive or approach
    deception." 
    Id.
     We have also concluded that for this statute to apply,
    the deception must have taken place at the time the contract was
    made. 
    Id.
    Jones contends that Colonial Life violated § 75-1.1 when it (1)
    began paying a portion of sales commissions to Statewide Benefits for
    policies sold to state government agencies and (2) transferred the
    accounts of teachers in North Carolina to another Market Director.
    These claims, however, involve allegations of ordinary breach of con-
    tract on the part of Colonial Life. Furthermore, these actions by Colo-
    nial Life occurred after the formation of the Agreement; Jones does
    not allege any deception at the time the contract was made. Therefore,
    § 75-1.1 does not apply to Colonial Life's conduct. Even if all facts
    are construed in Jones's favor, the deceptive practices claim fails to
    state a claim upon which relief may be granted.
    III.
    We conclude that the district court did not abuse its discretion in
    excluding testimony by Jones regarding his predictions of future
    renewal commissions.
    On direct examination Jones testified about his past earnings under
    the Agreement and about the components of that income. He also esti-
    mated, based on his past experience, the rate at which policy renewals
    decline over time. However, the court sustained Colonial Life's
    objection when Jones was asked about "his personal expectation or
    perception of his renewals in the future, given the present state of the
    situation. In other words, with his not being with the company."
    4
    Federal Rule of Evidence 701 requires that lay opinion testimony
    be "rationally based on the perception of the witness." In other words,
    the testimony must be based on the firsthand knowledge of the wit-
    ness, including "relevant historical or narrative facts that the witness
    has perceived." MCI Telecommunications Corp. v. Wanzer, 
    897 F.2d 703
    , 706 (4th Cir. 1990) (quoting Teen-Ed, Inc. v. Kimball Interna-
    tional, Inc., 
    620 F.2d 399
    , 403 (3d Cir. 1980)). The district court
    properly allowed Jones to testify on matters within his firsthand
    knowledge -- his past income and past experience with renewals.
    However, Jones's predictions regarding future renewals would have
    been entirely speculative and outside his firsthand knowledge.
    Jones contends that MCI Telecommunications supports the admis-
    sibility of his testimony. In that case, this court ruled that the opinion
    testimony of a non-party bookkeeper (who was not designated as an
    expert) was admissible. MCI Telecommunications , 
    897 F.2d at 706
    .
    The testimony involved her calculations of her company's profits dur-
    ing the three years prior to trial. We based our decision on the book-
    keeper's firsthand knowledge of the company's underlying financial
    records and the fact that her calculations were based on these records.
    
    Id.
     Here, however, Jones's testimony would have involved predic-
    tions of future events, not estimates of amounts that had already
    accrued before trial. As a result, it would have been more speculative
    than the evidence in MCI Telecommunications. Therefore, we cannot
    say that the district court abused its discretion in excluding this evi-
    dence.
    IV.
    The district court did not abuse its discretion by denying Jones's
    motion for a new trial on the question of damages. The fact that the
    jury found a breach of the Agreement but awarded no damages is
    unremarkable. See, e.g., City of Richmond v. Madison Mgmt. Group,
    Inc., 
    918 F.2d 438
    , 456-58 (4th Cir. 1990). The jury may simply have
    concluded that although Colonial Life breached the Agreement, there
    was insufficient evidence of damages. Alternatively, there was ample
    evidence for a reasonable jury to find that Jones failed to mitigate his
    damages. He continued to earn renewal commissions after he was ter-
    minated (he received more than $150,000 in 1995). He admitted that
    he did no work at all in 1995, nor did he seek any other employment.
    5
    He also rejected the position of Sales Director that Colonial Life
    offered him.
    The jury's decision to award no damages was therefore supported
    by the evidence. Accordingly, the district court's denial of Jones's
    motion for a new trial on the question of damages was not an abuse
    of discretion.
    V.
    Colonial Life cross-appeals, contending that the evidence was
    insufficient to support the jury's finding that the company breached
    the Agreement. We disagree.
    The Agreement gave Colonial Life the right to terminate Jones for
    "just cause." Colonial Life contends that Jones was terminated
    because he failed to fulfill his contractual duty to recruit, train, and
    motivate sales representatives. Although his performance numbers
    were decreasing, Jones offered evidence that his decline in perfor-
    mance was due to Colonial Life's agreement with Statewide Benefits.
    Several rebuttal witnesses confirmed this story. This evidence was
    sufficient for a reasonable jury to conclude that Colonial Life
    breached the Agreement.
    VI.
    For the reasons stated above, the judgment of the district court is
    AFFIRMED.
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