United States v. 2007-06-25 | 05-16438 | NITCO HOLDING CORP. VBOUJIKIAN | precedential | opinion |

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
 NITCO HOLDING CORP.,
Plaintiff-Appellant, No. 05-16438
v. D.C. No.
 CV-02-01631-KJDZAREH BOUJIKIAN; JAMES B.
MURRAY, OPINION
Defendants-Appellees. 
Appeal from the United States District Court
for the District of Nevada
Kent J. Dawson, District Judge, Presiding
Submitted April 17, 2007*
San Francisco, California
Filed June 25, 2007
Before: David R. Thompson, Andrew J. Kleinfeld, and
Sidney R. Thomas, Circuit Judges.
Opinion by Judge Thomas
*This panel unanimously finds this case suitable for decision without
oral argument. See Fed. R. App. P. 34(a)(2).
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COUNSEL
Samuel B. Benham, Hunterton & Associates, Las Vegas,
Nevada, for the appellant.
Frank J. Cremen, Las Vegas, Nevada, for the appellees.
OPINION
THOMAS, Circuit Judge:
In this appeal, we consider the implications of the Supreme
Court’s recent decision in Unitherm Food Systems, Inc. v.
Swift-Eckrich, Inc., 546 U.S. 394 (2006). Applying Unitherm,
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we conclude that a party procedurally defaults a civil appeal
based on the alleged insufficiency of the evidence to support
the verdict if it fails to file a post-verdict motion for judgment
notwithstanding the verdict, under Fed. R. Civ. P. 50(b). We
further conclude under Unitherm that a procedurally barred
sufficiency challenge is not subject to plain error review but
is considered forfeited. Because a Rule 50(b) motion was not
filed in this case, we affirm the judgment of the district court.
I
Real estate agents Zareh Boujikian and James B. Murray
entered into oral contracts with a third party, Dr. Dennis
Streeter, for the payment of real estate commissions, to com-
pensate for their assistance with a land transaction. Nitco
Holding Corporation (“Nitco”), which had loaned a substan-
tial amount of money to Streeter, sought and obtained a power
of attorney that allowed it to act as Streeter’s agent in all
negotiations related to the relevant land sale. After extended
negotiations, the parties finalized the sale, and Boujikian and
Murray requested their commissions. Nitco, however, refused
to pay the commissions on the ground that it had no proof of
their contracts. Streeter also failed to pay the promised com-
missions. When Boujikian and Murray insisted that Nitco was
responsible for paying them, Nitco sought a declaratory judg-
ment that it bore no such responsibility. Boujikian and Murray
filed a cross-claim, suing Nitco for tortious interference with
their contractual relationship with Streeter. Nitco voluntarily
dismissed the declaratory judgment action, but Boujikian and
Murray continued to pursue their cross-claim for tortious
interference with their contract.
Before the trial court and before the jury, Nitco argued that
it could not have interfered with the contract because it was,
at all times, acting as Streeter’s agent, not as a third party. It
also argued that there was no evidence that it had any motive
or intent to interfere with the contract, pointing out that
motive and intent are necessary elements of the tort.
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At the close of cross-claimants’ evidence, Nitco orally
entered a motion under Fed. R. Civ. P. 50(a), seeking judg-
ment as a matter of law on the ground that it was, as Streeter’s
agent, legally incapable of interfering with Streeter’s contract.
The court denied the motion. At the close of all evidence,
Nitco renewed the motion on the same ground, and the court
again denied the motion.
The jury then returned a verdict for Boujikian and Murray,
awarding them compensatory damages in the amount of the
commissions. After the verdict was entered, Nitco did not
move for judgment notwithstanding the verdict under Fed. R.
Civ. P. 50(b). At no time did Nitco file a motion for judgment
as a matter of law on the ground that Boujikian and Murray
had failed to establish Nitco’s motive or intent to interfere in
the appellees’ contractual relationships.
On appeal, Nitco argues that there was insufficient evi-
dence introduced at trial to support the jury’s conclusions that
Nitco was acting outside the scope of its agency when it failed
to pay the commissions, and it argues that there was no evi-
dence introduced at trial to support the conclusion that Nitco
had a motive and intent to interfere with the contract between
appellees and Streeter. Nitco’s arguments on appeal relate
only to insufficiency of the evidence.
Because this case arose under the district court’s diversity
jurisdiction, 28 U.S.C. § 1332, we apply state substantive law,
but we apply federal procedural law. Hawthorne Savings
F.S.B. v. Reliance Ins. Co. of Illinois, 421 F.3d 835, 841 (9th
Cir. 2005).
II
[1] In order to preserve a challenge to the sufficiency of the
evidence to support the verdict in a civil case, a party must
make two motions. First, a party must file a pre-verdict
motion pursuant to Fed. R. Civ. P. 50(a). Yeti by Molly Ltd.
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v. Deckers Outdoor Corp., 259 F.3d 1101, 1109 (9th Cir.
2001); Patel v. Penman, 103 F.3d 868, 878 (9th Cir. 1996);
Benigni v. City of Hamlet, 879 F.2d 473, 476 (9th Cir. 1988);
United States v. 33.5 Acres of Land, 789 F.2d 1396, 1400 (9th
Cir. 1986).
[2] Second, a party must file a post-verdict motion for judg-
ment as a matter of law or, alternatively, a motion for a new
trial, under Rule 50(b). Saman v. Robbins, 173 F.3d 1150,
1154 (9th Cir. 1999). As we noted in Saman, “[t]he Supreme
Court has held that Rule 50(b) is to be strictly observed, and
that failure to comply with it precludes a later challenge to the
sufficiency of the evidence on appeal.” Id. (citing Johnson v.
New York, New Haven & Hartford R.R. Co., 344 U.S. 48, 50
(1952); Cone v. West Virginia Pulp & Paper Co., 330 U.S.
212, 217-18 (1947); Desrosiers v. Flight Int’l of Fla., Inc.,
156 F.3d 952, 956-57 (9th Cir. 1998)).
Although it failed to file a Rule 50(b) post-verdict motion,
Nitco contends that we may still review the sufficiency of the
evidence to support the verdict under a plain error review.
There is support in our circuit precedent for this proposition.
See, e.g., Patel, 103 F.3d at 878 (reviewing the sufficiency of
the evidence to support the verdict absent the filing of a Rule
50(a) motion under a plain error standard).
[3] However, Unitherm precludes even plain error review
when a party fails to file a Rule 50(b) motion. In Unitherm,
the Supreme Court held that a post-verdict motion under Rule
50(b) is an absolute prerequisite to any appeal based on insuf-
ficiency of the evidence. 546 U.S. 394, 126 S.Ct. 980. The
Court reasoned that a district court will make a better first-
instance decision as to the necessity of a new trial or a judg-
ment notwithstanding the verdict because the district court
will have seen and heard all of the relevant evidence. Id. at
985-86. A party that has not provided the district court with
the opportunity to make that first-instance decision, the Court
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held, has provided “no basis for review of [a] sufficiency of
the evidence challenge in the Court of Appeals.” Id. at 989.
[4] Even though the parties before the Supreme Court had,
at trial, been operating under a Tenth Circuit rule that did not
require Rule 50(b) motions, the Court applied the rule retroac-
tively to the parties before it. Because the Court applied the
rule retroactively, we are required, under Reynoldsville Casket
Co. v. Hyde, 514 U.S. 749 (1995), to treat the rule as gener-
ally retroactive, applying it “to all pending cases, whether or
not those cases involve predecision events,” id. at 752. Thus,
even though Unitherm was decided after the verdict in this
case had been returned, its holding applies to this case.
[5] Under Unitherm, Nitco has waived its challenge to the
sufficiency of the evidence because it did not renew its pre-
verdict Rule 50(a) motion by filing a post-verdict Rule 50(b)
motion, and we are precluded from exercising our discretion
to engage in plain error review. To the extent that our prior
decisions permitted a discretionary plain error review, we
must overrule those decisions as in conflict with controlling
Supreme Court authority. See Miller v. Gammie, 335 F.3d
889, 900 (9th Cir. 2003) (en banc) (holding that three-judge
panels should “reject the prior opinion[s] of this court as hav-
ing been effectively overruled” if those opinions are clearly
irreconcilable with “intervening Supreme Court authority”).
For these reasons, we affirm the judgment of the district
court without reaching the merits of Nitco’s argument.
AFFIRMED.
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