Unpublished Disposition, 879 F.2d 865 (9th Cir. 1989)

MEMORANDUM^* 

In this diversity action, plaintiff John Jay Casey ("Casey") appeals the district court's judgment notwithstanding the verdict setting aside an award of punitive damages against defendant Gordon Emery ("Emery"). Emery cross-appeals the district court's denial of his motion for a new trial. We affirm in part and reverse in part.

FACTS

In April 1985, Casey purchased 1738 head of cattle from Emery for $506,755. They agreed that the cattle would be pastured on Emery's ranch for a set price. During the grazing season, a dispute arose over Emery's responsibility to pasture and care for Casey's cattle. Emery claimed a statutory possessory lien on Casey's cattle and began foreclosure proceedings. Casey posted a $60,000 deposit for release of the cattle. Prior to the release of Casey's cattle, Emery kept some of the cattle hidden in a pasture approximately two miles north of his ranch. At the end of the 1985 grazing season, when the cattle were removed from Emery's property and counted, 106 cattle were missing. The parties estimated that death would account for 38 of these (2% of the entire herd), leaving 68 cattle unaccounted for.

Casey sued Emery for conversion of the missing cattle. Emery denied the conversion, and counterclaimed for amounts owed for pasturing and for labor and material expended on Casey's cattle. Judgment was on a special verdict. The jury found that Emery converted Casey's cattle, and calculated damages at $29,920. It found that Emery acted with malice or guilty intent and awarded an additional $25,000 in punitive damages. It found that Casey owed Emery $31,610 (at 9% interest) for use of Emery's grazing lands, and $15,000 for salt, hay and labor. The verdict resulted in a net judgment for Casey of $3,361.80.

Emery moved for JNOV or, in the alternative, a new trial. The district court found the evidence sufficient to find a conversion, but determined there was insufficient evidence to support an award of punitive damages. Emery's motion was otherwise denied.

ANALYSIS

JNOV is proper only when "the evidence and inferences, viewed in the light most favorable to the nonmoving party, can support only one conclusion: that the moving party was legally entitled to a favorable judgment." City of Phoenix v. Com/Systems, Inc., 706 F.2d 1033, 1036 (9th Cir. 1983).

The parties do not dispute that the district court correctly instructed the jury on punitive damages. The jury specifically found that Emery acted "with malice or guilty intent or other circumstances of aggravation and with lack of good faith." Nevertheless, the district court granted Emery JNOV on this issue, reasoning as follows:

This record does not reveal evidence of aggravating circumstances to support punitive damages. The plaintiff's evidence of conversion was minimal. Punitive damages cannot be based on speculation. The punitive damage award is stricken.

E.R. Tab 40, p 2.

JNOV on this issue was error. There is evidence in the record to support the jury's finding that Emery willfully converted Casey's cattle. Emery told Casey when the sale was made that three or four of the cattle belonged to his daughters and were not included in the sale. The daughters' testimony about the number of cattle they owned was vague, and they presented no written records. Emery moved a large number of cattle to a hidden pasture away from his ranch. When these cattle were counted, approximately 70 cattle had the daughters' 7V brand. Although these 70-odd cattle were all three to four years old, Emery's daughters testified their cattle varied in age. From this evidence, the jury could rationally infer that Emery was trying to take for himself Casey's younger cattle, branding them with his daughters' brand to avoid the Klamath Falls Production Credit Association's security interest in his own cattle. Such conduct would support an award of punitive damages.

Emery cross-appeals, arguing that the district court should have granted his motion for a new trial on three issues: conversion, value of the missing cattle, and expenses for care and feeding of the cattle. Our review of a district court's decision not to grant a new trial is more deferential than our review of JNOV: we review the district court only for abuse of discretion. Robins v. Harum, 773 F.2d 1004, 1006 (9th Cir. 1985). A new trial may be ordered by the district court if it believes the judgment on any issue to be clearly contrary to the weight of the evidence. Fed. R. Civ. P. 59.

We have carefully reviewed the record and conclude that the district court's denial of a new trial on these three issues was not an abuse of discretion. There was testimony that approximately 68 of Casey's steers were missing, and that this loss could not be explained by the average death rate in a herd. The evidence supporting Casey's claim that this loss was due to Emery's conversion has already been discussed. Emery concedes that there was evidence to support a verdict of $29,920 for the value of 68 missing steers. Even if the missing cattle were not all steers, the damages calculation had support in testimony that a herd can increase in value by increases in weight and by calving.

The jury found that Casey owed Emery for hay, salt and labor. They awarded Emery $15,000 on this claim. The district court noted that Emery testified these items were worth $19,687, and that this testimony was not refuted. Nevertheless, the district court concluded that the jury was entitled to weigh the evidence and therefore refused to grant a new trial. This was not an abuse of discretion. The jury could have thought the figures were inflated or might have reduced the figures for other reasons. For example, Emery's claim for the value of salt was based solely on his own estimate of reasonable value. In addition, although the $19,687 sought in the counterclaim included $6,919 for feed, Emery has not referred us to evidence supporting this figure.

CONCLUSION

The district court's grant of JNOV striking the award of punitive damages is reversed. There was evidence from which the jury could have concluded that Emery's conversion was in bad faith. The district court is affirmed in all other respects.

AFFIRMED IN PART, REVERSED IN PART.