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Univ. of South Carolina School of Law

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Wednesday, June 16, 2010

Standard Deduction: Court Of Appeals Of North Carolina Precludes Jury Impeachment Regarding Incorrect Damages Being Awarded

North Carolina Rule of Evidence 606(b) provides that

Upon an inquiry into the validity of a verdict or indictment, a juror may not testify as to any matter or statement occurring during the course of the jury's deliberations or to the effect of anything upon his or any other juror's mind or emotions as influencing him to assent to or dissent from the verdict or indictment or concerning his mental processes in connection therewith, except that a juror may testify on the question whether extraneous prejudicial information was improperly brought to the jury's attention or whether any outside influence was improperly brought to bear upon any juror. Nor may his affidavit or evidence of any statement by him concerning a matter about which he would be precluded from testifying be received for these purposes.

So, let's say that a plaintiff seeks $50,000 in damages, and the defendant counterclaims. And let's say that the jury's verdict form appears to award the plaintiff $20,000 in damages and the defendant $30,000 in damages. And let's say that after the verdict is entered, jurors come forward and claim that the $20,000 in damages listed for the plaintiff was the net amount that they intended to award it, with the $30,000 allegedly awarded to the defendant was intended to be the amount deducted from the $50,000 sought by the plaintiff to reach the total final billing of $20,000. Will the jurors' testimony be admissible? According to the recent opinion of the Court of Appeals of North Carolina in Carolina Homes by Design, Inc. v. Lyons, 2010 WL 2367110 (N.C. App. 2010), the answer is "no."

In Lyons,

In September 2004, plaintiff, a duly licensed general contractor operating in North Carolina, and defendant entered into a contract for the construction of a home on defendant's property. On 3 August 2006, plaintiff filed a complaint against defendant, alleging that although plaintiff had substantially completed construction in July 2005, defendant had failed to make the final payment of $35,021.00. In response, defendant filed an answer denying the allegations and asserting counterclaims for breach of contract, breach of express warranty, breach of implied warranty of constructability, breach of implied warranty of good faith and fair dealing, negligence, constructive fraud and breach of fiduciary duty, and negligent misrepresentation.

The verdict form required the jury to provide answers to, inter alia, these issues:

ISSUE TWO: What amount is the Plaintiff, Carolina Homes by Design, Inc. entitled to recover from the Defendant for breach of contract?

ANSWER: $15,000.

ISSUE FIVE: What amount is the defendant, Lee Lyons entitled to recover from the Plaintiff for breach of contract?

ANSWER: $8,750.

ISSUE SEVEN: What amount is the defendant entitled to recover for damages proximately caused by the negligence of the plaintiff?

ANSWER: $6,527.

ISSUE TEN: What amount of money damages is the defendant entitled to recover from the plaintiff for breach of warranty?

ANSWER: $4,744

The trial court thereafter entered judgment in accordance with the verdict form. The plaintiff thereafter filed a “Motion to Amend Verdict and Judgment or, in the Alternative to Set Aside Verdict and for New Trial” and "asked, in the alternative, that the trial court set aside the judgment and grant a new trial because, plaintiff argued, the judgment was 'clearly inconsistent with the intention of the jury as stated in its verdict and explained in the attached affidavits, contrary to the verdict of the jury, and, if allowed to stand, defective and excessive, not justified by the evidence presented.'"  

The attached jury affidavits indicated, inter alia, that

3. It was the intention of the jury that Plaintiff recover the amount of $15,000.00 from the Defendant. The amount written in answer to the question on" [sic] Issue Two" is intended to be the net amount payable by Defendant to Plaintiff.

4. The amounts written in response to "Issue Five", "Issue Seven" and "Issue Ten" were understood by the jury to be amounts deducted from the total final billing of $35,021.00 submitted by Plaintiff to Defendant, resulting in the net payment by Defendant to Plaintiff of $15,000.00 as reflected in the answer to "Issue Two".

The affidavits further stated that "[i]t was not the intention of the jury that the Defendant be paid any amount by the Plaintiff."

The plaintiff failed to comply with some procedural requirements in bringing its motions, but the Court of Appeals of North Carolina found that, in any event, the affidavits would have been inadmissible under North Carolina Rule of Evidence 606(b). One of the cases cited by the court was Karl v. Burlington Northern R.R., 880 F.2d 68, 74 (8th Cir. 1989), in which the Eighth Circuit found that a district court erred in receiving jury testimony based upon the following facts: "The jurors did not state that the figure written by the foreman was different from that which they agreed upon, but indicated that the figure the foreman wrote down was intended to be a net figure, not a gross figure." According to the Eighth Circuit, "[r]eceiving such statements violates Rule 606(b) because the testimony relates to how the jury interpreted the court's instructions, and concerns the jurors' 'mental processes,' which is forbidden by the rule.”).

Now, it is important to note that, unlike North Carolina Rule of Evidence 606(b), Federal Rule of Evidence 606(b) was amended in 2006 so that it now allows post-verdict juror testimony on the issue of "whether there was a mistake in entering the verdict onto the verdict form." So, would Lyons have been decided differently under federal law? The answer is "no."

The Advisory Committee's Note to the Amendment to Federal Rule of Evidence 606(b) indicates that

In adopting the exception for proof of mistakes in entering the verdict on the verdict form, the amendment specifically rejects the broader exception, adopted by some courts, permitting the use of juror testimony to prove that the jurors were operating under a misunderstanding about the consequences of the result that they agreed upon....The broader exception is rejected because an inquiry into whether the jury misunderstood or misapplied an instruction goes to the jurors' mental processes underlying the verdict, rather than the verdict's accuracy in capturing what the jurors had agreed upon. See, e.g., Karl v. Burlington Northern R.R., 880 F.2d 68, 74 (8th Cir. 1989)....

-CM

http://lawprofessors.typepad.com/evidenceprof/2010/06/606b--carolina-homes-by-design-inc-v-lyonsslip-copy-2010-wl-2367110-tablencapp2010.html

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