United States District Court, N.D. Texas, Dallas Division
MEMORANDUM OPINION AND ORDER
Lindsay United States District Judge.
the court is Defendants' Rule 50 Motion for Judgment as a
Matter of Law, or in the Alternative, for New Trial under
Rule 59 (Doc. 302), filed October 25, 2017. Having considered
the motion, response, reply, record, evidence adduced at
trial, jury verdict rendered on July 19, 2017, and applicable
law, the court denies Defendants' Rule
50 Motion for Judgment as a Matter of Law, or in the
Alternative, for New Trial under Rule 59 (Doc. 302).
The Lawsuit and the Parties' Contentions
21, 2104, Plaintiff Radio Networks, LLC (“Radio
Networks” or “Plaintiff”) filed this action
against Defendants Michael Baisden (“Mr.
Baisden”) and Baisden Enterprises, Inc.
(“BEI”) (collectively, “Defendants”).
The lawsuit arose from a contractual dispute between the
parties as to whether Radio Networks overpaid BEI and Mr.
Baisden by approximately $1, 000, 000 under an agreement
entered into by Radio Networks and BEI on November 12, 2008,
for the production and delivery of radio programs featuring
Mr. Baisden (the “Agreement”). Radio Networks
contended that, because of an accounting error, it overpaid
Defendants under the terms of the Agreement by approximately
$1, 000, 000, and that Defendants were required by law to
return the overpayment. Radio Networks brought claims for
breach of contract or, in the alternative, money had and
received, and for fraudulent transfers from BEI to Mr.
Baisden under the Texas Uniform Fraudulent Transfer Act
contended that Radio Networks could not establish that it
overpaid Defendants under the Agreement. Defendant BEI
further contended and counterclaimed that Radio Networks and
its parent company, Cumulus Media, Inc.
(“Cumulus”), which was joined as a third-party
Defendant, breached the Agreement by obstructing its ability
to conduct an audit permitted under the Agreement and by
failing to use efforts consistent with normal commercial
practices to market and distribute the Michael Baisden show.
According to Defendants, a proper audit would have revealed
that they were not overpaid, and may have been underpaid.
Further, BEI contended that, had Radio Networks and Cumulus
used efforts consistent with normal commercial practices to
market and distribute the Michael Baisden show, Defendants
would have reached or exceeded the threshold amount in the
Agreement, which would have entitled them to the $1, 000,
000. Radio Networks and Cumulus asserted several defenses to
BEI's breach of contract counterclaims. Defendants
asserted several defenses to Radio Networks' three
The Court's Ruling on the Parties' Summary Judgment
20, 2017, in an amended memorandum opinion and order, the
court granted in part and denied in part Radio Networks and
Cumulus's Motion for Partial Summary Judgment, and denied
Mr. Baisden and BEI's Motion for Summary Judgment.
See Am. Mem. Op. & Order (Doc. 211). As a result
of this decision, remaining for trial were: Radio
Networks' claim for breach of contract; alternative claim
for money had and received; and fraudulent transfer claim; as
well as BEI and Mr. Baisden's counterclaim for breach of
The Trial and Jury Verdict
civil action was tried over a period of twelve days from June
22, 2017, to July 19, 2017. The jury rendered its verdict on
July 19, 2017. See Court's Charge to the Jury
(“Jury Charge”) (Doc. 281).
Plaintiff's breach of contract claim, the jury found (in
response to Question Nos. 1 through 4 of the Jury Charge)
that Defendants breached the Agreement by failing to return
an overpayment of “approximately one million
dollars.” See Doc. 281 at 11-12. The jury also
found (in response to Question No. 5 of the Jury Charge) that
Mr. Baisden was personally liable for BEI's obligations
under the Agreement pursuant to a guaranty. Id. at
13. Finally, the jury found (in response to Question No. 10
of the Jury Charge) that $800, 000 would fairly and
reasonably compensate Plaintiff for its damages resulting
from Defendants' breach of the Agreement. Id. at
respect to Plaintiff's claim for restitution and money
had and received, which Plaintiff pled in the alternative to
its breach of contract claim, the jury found in response to
Question No. 6 of the Jury Charge that BEI or Mr. Baisden
received money from Plaintiff that in equity and good
conscience belonged to Plaintiff. Id. at 14. The
jury also found (in response to Question No. 11 of the Jury
Charge) that the amount Defendants received that in equity
and good conscience belonged to Plaintiff was $1, 000, 000.
Id. at 22.
Plaintiff's fraudulent transfer claim, the jury found (in
response to Question Nos. 7 through 9 of the Jury Charge)
that BEI fraudulently transferred money to Mr. Baisden, at
his direction, and that these transfers were made when BEI
was insolvent. Id. at 15-17. The undisputed evidence
produced at trial, including Defendants' bank records and
interrogatory answers, established that the transfers made
after March 1, 2013-when Plaintiff first demanded that
Defendants return the $1, 000, 000-totaled $700, 000.
See Ex. 1 to App. in Supp. of Pl.'s Brief in
Supp. of Mot. for J.M.O.L. (Doc. 291) (Pl.'s Ex. 50,
Resp. to Interr. No. 3). At trial, Defendants disputed
liability, arguing that the transfers were made in good
faith, but they never denied or challenged the amount of the
transfers. Defendants did not object to the admission of
Plaintiff's Exhibit 50, insofar as it lists the amount of
each transfer after March 1, 2013, which transfers total
$700, 000. Moreover, Defendants did not produce any evidence
to dispute the amount of the transfers, which the jury found
to be fraudulent. Notwithstanding these findings, the jury
found (in response to Question No. 12 of the Jury Charge)
that the amount of money or property transfers found to be
fraudulent was “$0.00.” Id. at 23.
exemplary damages to be awarded in connection with the
fraudulent transfer claim, the jury found (in response to
Question No. 14 of the Jury Charge) that Plaintiff had
established, by clear and convincing evidence, that it
suffered harm resulting from Defendants' malice or fraud
and awarded Plaintiff $1, 000, 000 in exemplary damages
jointly against Defendants. Id. at 24-25.
the jury's verdict, Defendants requested that the court
vacate the jury's award of exemplary damages because, in
response to Question No. 12 of the Jury Charge, with respect
to the amount of fraudulent transfers, the jury answered
“$0.00.” Under Texas law, exemplary damages may
only be awarded if actual damages are awarded relating to a
claim for which exemplary damages are recoverable. Tex. Civ.
Prac. & Rem. Code §41.004(a); Mullins v.
TestAmerica, Inc., 564 F.3d 386, 417 (5th Cir. 2009). In
light of the jury's response to Question No. 12, and
Defendants' request that the court vacate the jury's
award of exemplary damages, rather than enter judgment
pursuant to the jury's verdict, the court directed the
parties to submit legal briefs addressing the issue of
exemplary damages raised by the jury's answer to Question
No. 12 of the Jury Charge. See Order (Doc. 285).
26, 2017, Plaintiff filed its Motion to Enter Judgment as a
Matter of Law as to Damages Consistent with the Evidence
Adduced at Trial (Doc. 289), asking the court to: (1)
increase the jury's damages award on its breach of
contract claims from $800, 000 to $999, 999.95; and (2)
increase the jury's damages award on its fraudulent
transfer claim from $0 to $700, 000. Radio Networks also
filed a Motion Regarding Recovery of Punitive Damages (Doc.
292), asking the court to enforce the jury's award of
exemplary damages in the amount of $1, 000, 000 by granting
its Motion to Enter Judgment as a Matter of Law as to Damages
Consistent with the Evidence Adduced at Trial. On November 7,
2017, the court issued its memorandum opinion and order
denying the motion insofar as it requested that the court
increase the jury's damages award on its breach of