Sonder USA, Inc v. 635 N. Scott, L.L.C.

UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF LOUISIANA

SONDER USA, INC. CIVIL ACTION

VERSUS NO. 18-13891

635 N. SCOTT ST., LLC SECTION: “G”

ORDER AND REASONS

In this litigation, Plaintiff Sonder USA, Inc. (“Plaintiff”) brought claims against Defendant

635 N. Scott St., LLC (“Defendant”) for failing to remedy maintenance issues in Defendant’s

apartments in violation of certain lease agreements.1 Defendant asserted counterclaims against

Plaintiff for breach of contract and a violation of the Louisiana Unfair Trade Practices Act.2 On

March 10, 2022, a jury found for Plaintiff, and the Court entered judgment on the verdict.3 Before

the Court is Defendant’s “Renewed Motion for Judgment as a Matter of Law, or, Alternatively,

New Trial.”4 Plaintiff opposes the motion.5 For the reasons explained below, the Court finds that

Defendant is not entitled to renewed judgment as a matter of law because the jury instructions

were consistent with Louisiana law and the jury’s verdict is supportable by a reasonable

interpretation of the evidence. Additionally, the Court finds that Defendant is not entitled to a new

trial because Defendant has not shown manifest injustice. Therefore, considering the motion, the

1 Rec. Doc. 1-2; Rec. Doc. 32.

2 Rec. Doc. 48. Although Defendant is also a Counter-Plaintiff, for clarity, the Court will refer to 635 N.

Scott St., LLC as “Defendant” throughout this Order.

3 Rec. Docs. 216, 219.

4 Rec. Doc. 226.

5 Rec. Doc. 248.

memoranda in support and in opposition, the record, and the applicable law, the Court denies the

motion.

I.Background

On March 7, 2022, this matter proceeded to trial before a jury.6 The trial lasted for four

days.7 After retiring to deliberate, the jury returned a verdict in favor of Plaintiff on March 10,

2022.8 Specifically, the jury found that Plaintiff was entitled to terminate twenty-five of the

twenty-six leases and awarded Plaintiff $222,489.00 in damages.9 As to Defendant’s counterclaim,

the jury further found that Plaintiff did not wrongfully abandon the remaining lease and that

Plaintiff did not engage in an unfair trade practice.10 The Court then entered judgment on the

verdict, awarding Plaintiff $222,489.00 in damages.11

On April 7, 2022, Defendant filed the instant motion for judgment as a matter of law or new

trial.12 Plaintiff filed its opposition on April 26, 2022.13 On May 3, 2022, with leave of Court,

Defendant filed a reply in further support of the motion.14

6 Rec. Doc. 211.

7 Rec. Docs. 211, 212, 213, 214.

8 Rec. Doc. 216.

9 Id.

10 Id.

11 Rec. Doc. 219.

12 Rec. Doc. 226.

13 Rec. Doc. 236.

14 Rec. Docs. 249, 250, 251.

II. Parties’ Arguments

A. Defendant’s Arguments in Support of the Motion

Defendant moves the Court to enter judgment as a matter of law in its favor on all of

Plaintiff’s claims and on its counterclaim.15 Defendant advances different arguments for each

claim. First, Defendant argues that it is entitled to judgment as a matter of law on Plaintiff’s claim

for cancellation of the leases.16 Defendant contends that Jury Charge Number 23 was inconsistent

with Louisiana law, leading the jury to render a verdict unsupported by the evidence.17 Defendant

asserts that “a mere breach” of the lease by the landlord does not entitle the tenant to cancel the

lease—instead, Defendant submits that the tenant must prove that the property was substantially

impaired, as reflected in Jury Charge Number 31.18 Defendant acknowledges that it did not object

to Jury Charge Number 23 during the charge conference.19 However, Defendant contends that its

objection “was properly preserved” because Defendant “addressed this issue at length in the

pretrial order.”20 Even if Defendant’s objection was waived, Defendant asserts that it is entitled to

plain error review.21 Defendant argues that “a party seeking cancellation of a lease has the burden

of proving it is ‘undoubtedly entitled to such a cancellation.’”22 Defendant contends that defects

that require “evacuation through condemnation” or “structural reconstruction” entitle a party to

15 Rec. Doc. 226-1 at 3.

16 Id. at 4.

17 Id.

18 Id. at 5–6.

19 Id. at 5.

20 Id.

21 Id.

22 Id. at 7 (quoting Doré Energy Corp. v. Prospective Inv. & Trading Co., 570 F.3d 219, 229 (5th Cir. 2009)).

cancel a lease, but defects “where it is feasible for the lessee to continue his occupancy” do not.23

Defendant submits that this alleged misstatement of law was “compounded” by the verdict

form, which instructed the jury to stop its deliberations if it found in favor of Plaintiff on its breach

of contract claims.24 Specifically, the verdict form instructed the jury to stop deliberations if it

found in favor of Plaintiff and had answered the damages question.25 Defendant notes that the

Court properly instructed the jury to complete the form and answer the remaining questions about

Defendant’s counterclaim.26 However, because the jury returned just five minutes later, finding in

favor of Plaintiff on Defendant’s counterclaim, Defendant argues “[t]he jury was obviously

confused.”27 Defendant asserts that the jury “failed to even consider” its counterclaim once it

determined that Defendant had breached the leases, including by failing to award Defendant

damages on Unit 18, which the jury found Plaintiff was not entitled to cancel.28 Defendant

contends this resulted in a jury verdict “wholly unsupported by the evidence.”29

Specifically, Defendant argues that Plaintiff did not meet its burden to show substantial

impairment.30 Defendant asserts that Plaintiff was required to show it was entitled to cancel each

individual lease.31 Defendant avers that Plaintiff “did not meet this burden on any” of the twenty-

23 Id. (citing Brunies v. Police Jury of Jefferson Par., 110 So. 2d 732, 737 (La. 1959)).

24 Id. at 9.

25 Id. See also Rec. Doc. 216.

26 Rec. Doc. 226-1 at 9.

27 Id. at 10.

28 Id.

29 Id.

30 Id.

31 Id.

six units, and that the jury unreasonably found that Plaintiff was entitled to cancel twenty-five of

the leases.32 Defendant asserts that Plaintiff’s use of the units was not substantially impaired

because Plaintiff “continued to rent each unit out at a profit,” and because Plaintiff did not prove

that any of the units had defects or mold.33 Defendant further asserts that Plaintiff did not prove

that Defendant failed to make necessary repairs, or that there was a pre-existing defect in the

units.34

Second, Defendant argues that it is entitled to judgment as a matter of law on Plaintiff’s

breach of contract and breach of warranty claims.35 Defendant asserts that Plaintiff did not provide

any evidence of a defect that Defendant refused to or failed to repair.36 Finally, Defendant argues

that it is entitled to judgment as a matter of law on its breach of contract counterclaim.37 Defendant

contends that Plaintiff “was not justified in its abandonment of the units” and is in breach of the

leases.38 Defendant asserts that Plaintiff inspected and accepted the units, and was under an

obligation to return them in the same or better condition at the end of the lease.39 Defendant asserts

that Plaintiff “unjustifiably abandoned the units and left the premises to deteriorate.”40 Defendant

moves the Court to enter judgment in its favor and award it accelerated rent in the amount of

32 Id. at 11.

33 Id. at 11–16 (discussing sufficiency of evidence of defects in various units).

34 Id. at 17–19.

35 Id. at 19.

36 Id.

37 Id. at 20.

38 Id.

39 Id.

40 Id.

$2,583,262.80.41

Defendant also moves the Court to order a new trial.42 Defendant argues that if the Court

grants its motion for judgment as a matter of law, it “is still entitled to a new trial on its Louisiana

Unfair Trade Practices Act” claim.43 Defendant re-asserts that the allegedly incorrect jury

instruction and the verdict form “resulted in the jury stopping its deliberations once it determined

that [Defendant] had breached the leases.”44 Defendant contends that this “mean[s] the jury did

not even consider . . . [Defendant]’s unfair trade practices claim.”45

Alternately, Defendant moves the Court for a new trial on all issues.46 Defendant argues

the Court must order a new trial “to prevent manifest injustice.”47 Defendant avers that “[i]t is

without question that the jury was confused by the erroneous jury instruction and verdict form.”48

Defendant asserts there is insufficient evidence that it breached all twenty-six leases and that

Plaintiff’s use was substantially impaired.49 Moreover, Defendant argues that the “Court should

grant a new trial to address several erroneous and prejudicial evidentiary rulings.”50 Defendant

asserts that the Court erroneously admitted: (1) emails from Basil Lohaza which stated that there

41 Id.

42 Id.

43 Id. at 21.

44 Id.

45 Id. at 21–22.

46 Id. at 22.

47 Id.

48 Id.

49 Id.

50 Id.

was mold in the units and included photographs of the air conditioning units, and (2) a “scientific

report” by Dan Paradela.51 Defendant argues these emails contained “hearsay within hearsay” and

were inadmissible.52 Defendant contends the Court “confused” the jury by instructing it that the

emails were not being introduced for their truth and, the next day, that the jury did not have to

accept that what the email stated was true.53 As to the Paradela report, Defendant objects that the

Court admitted it as a business record but “did not give explicit instructions to the jury regarding

how they should weigh this out-of-court scientific evidence.”54 Defendant argues “[t]hese

erroneous and confusing evidentiary rulings were extremely prejudicial.”55 Therefore, Defendant

seeks a new trial on all issues.56

B. Plaintiff’s Arguments in Opposition to the Motion

In opposition, Plaintiff submits that Defendant is not entitled to judgment as a matter of

law on any issue.57 As to Plaintiff’s claim for cancellation of the leases, Plaintiff makes three

arguments. First, Plaintiff argues that Defendant waived its objection to Jury Charge Number 23.58

Plaintiff asserts that, because Defendant’s Rule 50 motions at trial only addressed Plaintiff’s

purported failure to show breach of the leases, Defendant waived any right to move for renewed

51 Id. at 22–23.

52 Id. at 23–24.

53 Id. at 24.

54 Id.

55 Id.

56 Id. at 25.

57 Rec. Doc. 248 at 2.

58 Id. at 3.

judgment as a matter of law on the jury charge and verdict form.59 Additionally, Plaintiff asserts

that Defendant both failed to object and “affirmatively stated its agreement” with the instructions

and verdict form at the charge conference.60 Plaintiff further argues that, in any event, the jury

instructions and verdict form were proper. Plaintiff asserts that Defendant cannot satisfy the plain

error standard because Jury Charge Number 23 is a correct statement of the contents of article

1993 of the Louisiana Civil Code.61 Plaintiff argues that there is no plain error because, as

Defendant itself notes, the “proper” instruction on dissolution was found in Jury Charge Number

31.62 Similarly, Plaintiff contends that Defendant cannot show plain error concerning the verdict

form because Defendant failed to contemporaneously object to the verdict form and because the

Court corrected the error.63

Second, Plaintiff argues that it met its burden to cancel the leases.64 Plaintiff contends that

the evidence demonstrates its use of the units was substantially impaired.65 Plaintiff points to

Paradela’s testimony—and his report’s findings—of visible mold in most of the units, moisture

concerns associated with possible roof leaks or HVAC issues, and defects in the installation of

structural components of the units.66 Plaintiff also points to evidence of Plaintiff’s repeated reports

of issues with the air conditioning units, and Defendant’s refusal of responsibility for

59 Id.

60 Id. at 3–4 (emphasis omitted).

61 Id. at 5–6.

62 Id. at 6.

63 Id.

64 Id. at 7.

65 Id.

66 Id.

maintenance.67 Plaintiff argues that its continued presence in the units is evidence that it gave

Defendant ample opportunity to make the necessary repairs before ultimately terminating the

leases.68

Plaintiff submits that it presented expert testimony that the mold was caused by Defendant

and that the units were uninhabitable.69 In particular, Plaintiff submits that its expert, William

Feaheny, testified about the elevated moisture and humidity in the units.70 Additionally, Plaintiff

points to Paradela’s testimony that he found visible mold, including aspergillus and penicillium,

in the units.71 Plaintiff asserts that Defendant’s expert, Brent Driskill, agreed that these types of

mold can cause negative health effects, including death.72 Plaintiff contends that Defendant’s

argument that Paradela’s report was not admitted for its truth is wrong for two reasons. First,

Plaintiff asserts that Paradela’s report was admitted during Plaintiff’s corporate representative

Stacy Dejan’s testimony for the sole purpose of proving notice to Plaintiff.73 Second, Plaintiff

avers that Paradela testified at trial to his own conclusions, which were admitted for their truth.74

Plaintiff also contends that Basil Lohaza’s email and photographs support that the units were

uninhabitable.75 Plaintiff asserts that the proper standard for a Rule 50 motion is whether “any

67 Id. at 8.

68 Id. at 9.

69 Id.

70 Id.

71 Id. at 10.

72 Id.

73 Id.

74 Id.

75 Id.

reasonable jury could reach the same verdict” based on the evidence and “inferences from the

evidence.”76 Plaintiff submits that, even if Lohaza’s email and photographs were not admitted for

their truth, a reasonable jury could infer from Plaintiff’s receipt of the reports “that there was mold

in the air-conditioning units.”77

Further, Plaintiff avers that the evidence established that Defendant refused to make

repairs.78 Plaintiff highlights Stacy Dejan’s testimony that Defendant “was quick to respond

verbally to requests for repairs,” but that Defendant did not follow through.79 Plaintiff points to

several exhibits that it contends show that Defendant refused to address requests for repairs and

would instead deflect or threaten.80 Relatedly, Plaintiff contends it established the defects in the

units predated their occupancy.81 Plaintiff argues that the work order history, detailing complaints

by tenants at the property, establishes that the defects pre-existed Plaintiff’s occupancy.82 Plaintiff

asserts this exhibit was admitted as a business record without objection.83 Plaintiff further asserts

that Defendant’s own notations in the work order history are admissible as non-hearsay party

admissions and establish the truth of the defects reported.84 Moreover, Plaintiff argues that the

76 Id. at 10–11 (quoting Long v. Faenas Transp., LLC, No. 21-40268, 2021 WL 5119717, at *4–5 (5th Cir.

Nov. 3, 2021)).

77 Id. at 11.

78 Id.

79 Id.

80 Id. at 11–12.

81 Id. at 13.

82 Id.

83 Id. at 14.

84 Id.

jury’s verdict can be upheld even if it did not show a breach of the lessor’s warranty under

Louisiana law.85 Plaintiff asserts that “[a] reasonable jury could have concluded that defects

existed in the apartments before [Plaintiff]’s tenancy based on the evidence that leaks,

‘discoloration,’ and other issues were reported to [Defendant] by prior tenants.”86

Third, Plaintiff argues that Defendant is not entitled to renewed judgment as a matter of

law on its counterclaim because Defendant did not so move at trial.87 Plaintiff further argues that

Defendant points to no evidence to support judgment as a matter of law on its counterclaim, and

therefore cannot meet its burden to show that the evidence “points so strongly and

overwhelmingly” in its favor that no reasonably jury could reach a contrary conclusion.88

Regarding Defendant’s motion for a new trial, Plaintiff argues Defendant is not entitled to

a new trial on its Louisiana Unfair Trade Practices Act (“LUTPA”) claim.89 Plaintiff submits that

Defendant’s argument for a new trial on its LUTPA claim rests on Defendant’s assertion that the

jury instructions were erroneous and that the jury was “confused” by the verdict form.90 Plaintiff

reiterates its arguments from above that Defendant waived its objection to the instruction and that

the instructions are in fact consistent with Louisiana law.91 Plaintiff also argues that because

Defendant “has no information as to what the jury considered in its nearly six hours of

85 Id. at 14–15.

86 Id. at 15.

87 Id.

88 Id. at 16 (quoting Collins v. Benton, No. 18-7465, 2022 WL 656199, at *7 (E.D. La. Mar. 4, 2022) (Brown,

C.J.)).

89 Id.

90 Id. at 16–17.

91 Id. at 17.

deliberations,” Defendant’s argument that the jury did not even consider its LUTPA claim “is

wrong.”92

Additionally, Plaintiff argues that Defendant is not entitled to a new trial on all issues.93

Plaintiff asserts that Defendant “points to no new law or evidence” to support its entitlement to a

new trial on all issues.94 Plaintiff re-iterates its above arguments that there is substantial evidence

to support the jury’s verdict, and that neither the jury instructions nor the verdict form were

erroneous.95 Additionally, Plaintiff argues that the allegedly erroneous or prejudicial evidentiary

rulings do not warrant a new trial.96 Plaintiff asserts that Defendant’s objection to the Lohaza

photographs is not a hearsay objection—because photographs are non-assertive in nature—but is

an authenticity objection that Defendant failed to raise at trial and is therefore waived.97 Likewise,

Plaintiff contends that the Paradela report was properly admitted as business records, and that the

Court properly issued a limiting instruction to the jury.98

C. Defendant’s Arguments in Further Support of the Motion

In reply, Defendant argues that it is entitled to judgment as a matter of law because Plaintiff

failed to show substantial impairment in each unit.99 Defendant asserts that Plaintiff’s reliance on

Paradela’s report and testimony, Feahney’s testimony, and Lohaza’s photographs and emails is

92 Id.

93 Id.

94 Id.

95 Id. at 17–18.

96 Id. at 18.

97 Id.

98 Id. at 18–19 (discussing Brauninger v. Motes, 260 Fed. App’x 634 (5th Cir. 2007)).

99 Rec. Doc. 251 at 1–2.

insufficient to support the jury’s verdict.100 Defendant argues that Paradela was not offering expert

testimony and therefore could not testify about the cause of the mold.101 Additionally, Defendant

asserts that Paradela’s report found elevated levels of mold in only nine of the twenty-six units,

which “cannot support” a verdict that the entire building was infested with mold.102 Defendant

contends that Feahney’s testimony was “based entirely on conjecture and speculation” because he

relied on Paradela’s findings from months before Feahney tested the units.103 And Defendant

argues that Plaintiff’s opposition demonstrates that Lohaza’s photographs were “always intended

to [be] rel[ied] on [for their] truth.”104 Defendant submits that Plaintiff’s assertion that the jury was

allowed to rely on this “purely speculative evidence” “is based on nothing but conjecture.”105

Furthermore, Defendant argues that Plaintiff cannot show substantial impairment because Plaintiff

had all of the units cleaned and repaired prior to its alleged abandonment of the units.106

Next, Defendant re-iterates that Plaintiff was not substantially impaired in its use of the

property because it “remained in possession of the units and continued to rent them out at a profit

throughout 2018.”107 Defendant asserts that there is no evidence in the record that Plaintiff

complained about any of the issues with the units during 2018.108 Defendant contends that its

100 Id. at 2–3.

101 Id. at 3.

102 Id.

103 Id. at 4.

104 Id. at 5 (emphasis omitted).

105 Id. (emphasis omitted).

106 Id. (citing Gray v. Kanavel, 508 So. 2d 970, 972 (La. App. 4 Cir. 1987)).

107 Id. at 6 (emphasis omitted).

108 Id.

expert, Driskill, provided the only testimony about the condition of the units in November of 2018

and that this is the “only” opinion on which the jury could rely.109

Further, Defendant argues that it did not waive any of the arguments identified by

Plaintiff.110 First, Defendant asserts that it “necessarily” requested judgment as a matter of law on

its counterclaim by moving for judgment as a matter of law that Plaintiff failed to meet its burden

to cancel the leases.111 Defendant argues that “if [Plaintiff] failed to prove it was entitled to

cancellation of the leases, then [Plaintiff] wrongfully abandoned the leases.”112 Second, Defendant

explains that it does not request judgment as a matter of law that the jury instructions and verdict

form were plain error.113 Instead, Defendant contends that, under the correct standard, no

reasonable jury could have found that Plaintiff was substantially impaired in its use of the units.114

Defendant notes that it alternatively requests a new trial on the grounds that the errors in the

instructions and verdict form were so pervasive that they affected the jury’s deliberations and

deprived Defendant of a fair trial.115 Defendant also asserts it would have been “impossible” to

move for judgment as a matter of law on the instructions and verdict form because they had not

been presented to the jury when Defendant made its Rule 50 motions.116

Defendant next addresses the Court’s evidentiary rulings. As to the work order history,

109 Id. at 6–7 (emphasis omitted).

110 Id. at 7.

111 Id.

112 Id.

113 Id.

114 Id.

115 Id.

116 Id. at 8.

Defendant contends it was not offered for its truth.117 Defendant asserts the Court properly issued

a limiting instruction to the jury that the reports from prior tenants were not admitted for their

truth.118 Defendant re-iterates that the Paradela report and Lohaza emails are not business records

and were inadmissible.119 Defendant asserts that “it is ‘not enough to say that as a general business

matter, [the company] receive[s] and send[s] emails as part of their business model.”120 Defendant

contends that admitting this evidence “was extremely prejudicial” and that without it, Plaintiff

“wholly failed to prove its claims.”121

Finally, Defendant argues that under the plain error standard it is entitled to a new trial.122

Defendant “reiterate[s] its arguments” that Jury Charge Number 23 is inconsistent with the law of

cancellation of leases.123 Defendant contends that it was “plain and obvious” error to instruct the

jury on both the rule of subsequent breaches and cancellation of leases because it rendered the jury

instructions “internally inconsistent” and that “a rational verdict cannot be envisioned.”124

III. Legal Standard

A. Judgment as a Matter of Law Under Federal Rule of Civil Procedure 50(b)

Federal Rule of Civil Procedure 50(a) governs motions for judgment as a matter of law.

117 Id.

118 Id.

119 Id. at 12.

120 Id. (quoting Marine Power Holding, LLC v. Malibu Boats, LLC, No. 14-912, 2016 WL 4218217, at *6

(E.D. La. Aug. 8, 2016) (Africk, J.)).

121 Id. at 13.

122 Id. at 8.

123 Id. at 9.

124 Id. at 10.

Under Rule 50(a)(1):

If a party has been fully heard on an issue during a jury trial and the court finds that

a reasonable jury would not have a legally sufficient evidentiary basis to find for

the party on the issue, the court may:

(A) resolve the issue against the party; and

(B) grant a motion for judgment as a matter of law against the party on a

claim or defense that, under the controlling law, can be maintained or

defeated only with a favorable finding on that issue.

Motions under Rule 50(a)(1) may be renewed after trial pursuant to Rule 50(b), which states:

If the court does not grant a motion as a matter of law under Rule 50(a), the court

is considered to have submitted the action to the jury subject to the court’s later

deciding the legal questions raised by the motion. No later than 28 days after the

entry of judgment—or if the motion addresses a jury issue not decided by a verdict,

no later than 28 days after the jury was discharged—the movant may file a renewed

motion for judgment as a matter of law and may include an alternative or joint

request for a new trial under Rule 59. In ruling on the motion, the court may:

(1) allow judgment on the verdict, if the jury returned a verdict;

(2) order a new trial; or

(3) direct the entry of judgment as a matter of law.

The Fifth Circuit has emphasized that “the two basic purposes of this rule are to enable the

trial court to re-examine the question of evidentiary sufficiency as a matter of law if the jury returns

a verdict contrary to the movant, and to alert the opposing party to the insufficiency before the

case is submitted to the jury.”125

A motion pursuant to Rule 50(b) “in an action tried by jury is a challenge to the legal

sufficiency of the evidence supporting the jury’s verdict.”126 Therefore, under Rule 50(b),

“judgment as a matter of law is proper after a party has been fully heard by the jury on a given

125 Scottish Heritable Tr., PLC v. Peat Marwick Main & Co., 81 F.3d 606, 610 (5th Cir. 1996) (internal

citation and quotation marks omitted).

126 Flowers v. S. Reg’l Phys. Servs., Inc., 247 F.3d 229, 235 (5th Cir. 2001) (quoting Ford v. Cimarron Ins.

Co., 230 F.3d 828, 830 (5th Cir. 2000)).

issue, and there is no legally sufficient evidentiary basis for a reasonable jury to have found for

that party with respect to that issue.”127 In evaluating a Rule 50(b) motion, a court must “consider

all of the evidence, drawing all reasonable inferences and resolving all credibility determinations

in the light most favorable to the non-moving party.”128 Because all reasonable inferences and

credibility determinations should be resolved in favor of the non-movant in a Rule 50(b) motion,

“judgment as a matter of law should not be granted unless the facts and inferences point so strongly

and overwhelmingly in the movant’s favor that reasonable jurors could not reach a contrary

conclusion.”129

B. New Trial Under Federal Rule of Civil Procedure 59

Federal Rule of Civil Procedure 59 governs motions for a new trial brought within twenty-

eight days after the entry of judgment.130 Rule 59(a) provides:

The court may, on motion, grant a new trial on all or some of the issues—and to

any party—as follows:

(A) after a jury trial, for any reason for which a new trial has heretofore been

granted in an action at law in federal court; or

(B) after a nonjury trial, for any reason for which a rehearing has heretofore

been granted in a suit in equity in federal court.

A renewed motion for judgment as a matter of law may be joined in the alternative with a motion

for new trial under Rule 59, but the motions have distinct functions and are governed by different

standards. “The trial court’s power to grant a new trial [under Rule 59(a)] on the basis of the court’s

firm belief that the verdict is clearly contrary to the weight of the evidence has . . . long been

127 Id. (internal citation and quotation marks omitted).

128 Id. (internal citation and quotation marks omitted).

129 Id. (internal citation and quotation marks omitted).

130 Fed. R. Civ. P. 59.

regarded as an integral part of trial by jury.”131 “In making this determination, the district court

weighs all the evidence, but need not view it in the light most favorable to the nonmoving party.”132

The Fifth Circuit has instructed that district courts should “respect the jury’s collective wisdom

and must not simply substitute its opinion for the jury’s,” but “if the trial judge is not satisfied with

the verdict of a jury, [s]he has the right—and indeed the duty—to set the verdict aside and order a

new trial.”133

IV. Analysis

Defendant moves for renewed judgment as a matter of law under Rule 50.134 Defendant

alternatively moves for a new trial under Rule 59.135 The Court addresses each motion in turn.

A. Renewed Motion for Judgment as a Matter of Law Under Rule 50

At the close of Plaintiff’s case-in-chief, Defendant moved for judgment as a matter of law

on three issues: (1) Plaintiff’s claim for cancellation of the leases, (2) Plaintiff’s breach of warranty

claims, and (3) Plaintiff’s breach of contract claims.136 Defendant renewed these three motions at

the close of its case-in-chief.137 Defendant now moves the Court for renewed judgment as a matter

of law on three issues: (1) Plaintiff’s claim for cancellation of the leases, (2) Plaintiff’s breach of

131 Smith v. Transworld Drilling Co., 773 F.2d 610, 613 (5th Cir. 1985).

132 Id.

133 Id. (internal quotations omitted).

134 Rec. Doc. 226.

135 Id. Motions for renewed judgment as a matter of law may be joined with a request for a new trial. See Fed.

R. Civ. P. 50(b).

136 See, e.g., Rec. Doc. 213.

137 Id.

contract claims, and (3) Defendant’s counterclaim.138 The Court addresses each request in turn.

1. Plaintiff’s Claim for Cancellation of the Leases

Defendant’s argument in support of its request for judgment as a matter of law on Plaintiff’s

claim for cancellation of the leases rests on its assertion that the jury instructions were inconsistent

and the verdict form confused the jury. Defendant further argues that under the proper standard

Plaintiff failed to show substantial impairment. Plaintiff argues that Defendant waived any

objection to the jury instruction, and that it nevertheless demonstrated substantial impairment.

a. Defendant’s Objection to Jury Charge Number 23 and Verdict Form

As a preliminary matter, the Court must consider whether Defendant waived any objection

to Jury Charge Number 23 or the verdict form. Defendant itself concedes that it “did not explicitly

object to Jury Charge Number 23 during the . . . charge conference.”139 Federal Rule of Civil

Procedure 51 provides that “[n]o party may assign as error the giving . . . [of] an instruction unless

the party objects thereto before the jury retires to consider its verdict, stating distinctly the matter

objected to and the grounds of the objection.” A party’s failure to object to an instruction may be

excused where “the party’s position previously has been made clear to the trial judge.”140 Here,

Defendant filed a memorandum of law with the parties’ pretrial order briefing the Court on its

position that a “mere breach of a lease by the lessor . . . does not automatically dissolve a lease.”141

Although Defendant’s memorandum does not address the rule that in contracts with reciprocal

obligations, a party’s subsequent breach is excused if the other party is in breach, it does contend

138 Rec. Doc. 226.

139 Rec. Doc. 226-1 at 5.

140 Russel v. Plano Bank & Tr., 130 F.3d 715, 720 (5th Cir. 1997) (quoting Wright & Miller, Federal Practice

and Procedure § 2553 (2d ed. 1995)).

141 Rec. Doc. 139-2 at 17.

that Plaintiff was not entitled to dissolution of the leases as a result of Defendant’s breach.142

Therefore, the Court will assume Defendant has not waived its objection to Jury Charge Number

23.

However, the Court is not persuaded that the jury instructions are internally inconsistent or

confusing. The Fifth Circuit will reverse a district court where “jury instructions [are] both

erroneous as a matter of law and so internally inconsistent that a rational verdict cannot be

envisioned.”143 Here, Jury Charge Number 23 reads:

When a contract contains reciprocal obligations, which means that each party to the

contract owes an obligation to the other, a party cannot assert a claim for breach of

contract unless that party has performed its own obligations under the contract. In

other words, if one party is the first to breach a contract, the other party’s subsequent

breach is excused.144

This is a correct statement of the law of article 1993 of the Louisiana Civil Code.145 Moreover,

Defendant concedes that the jury was instructed on “the proper, more-specific instruction” on

dissolution of leases in Jury Charge Number 31.146 These two instructions are consistent. Plaintiff

asserted claims for both breach of contract and for dissolution of the leases. Jury Charge Number

23 contained the proper instruction specific to breaches of contracts with reciprocal obligations,

while Jury Charge Number 31 instructed the jury on the standard to apply to obtain dissolution of

the leases.

142 Id. at 19.

143 Aero Int’l, Inc. v. U.S. Fire Ins. Co., 713 F.2d 1106, 1108 (5th Cir. 1983).

144 Rec. Doc. 214-2 at 25.

145 La. Civ. Code art. 1993 (“In case of reciprocal obligations, the obligor of one may not be put in default

unless the obligor of the other has performed or is ready to perform his own obligation.”). See also id. art. 2022

(“Either party to a commutative contract may refuse to perform his obligation if the other has failed to perform . . . .”).

Commutative contracts contain reciprocal obligations. Id. art. 1911.

146 Rec. Doc. 226-1 at 6.

Nor is the Court persuaded that the jury was confused by the verdict form. In fact, the jury’s

verdict strongly suggests that the jury was perceptive, attentive, and detailed in their deliberations.

The verdict form instructed the jury to stop answering questions if it answered yes to Question 2

or 3 and the jury had answered Question 5 regarding damages.147 That is precisely what the jury

did. Defendant argues that, because the jury stopped answering questions, it must not have

considered Defendant’s counterclaim. The Court disagrees. The jury deliberated for nearly six

hours.148 Defendant offers no reason to believe that in that time the jury did not consider whether

Plaintiff had wrongfully abandoned the leases.

Moreover, the jury’s verdict demonstrates just how carefully it reviewed the jury

instructions and the evidence. The jury was instructed that an abandonment is the voluntary

relinquishment of property with the intent of terminating one’s possession.149 In its verdict, the

jury specifically excised Unit 18, because the parties stipulated that Plaintiff never took possession

of that unit.150 The jury was also instructed to award damages only for expenses the prevailing

party actually incurred.151 The jury then reviewed Plaintiff’s evidence of lost profit and

appropriately reduced the award to prevent awarding Plaintiff lost profit on Unit 18, which it never

rented out.152 When the Court realized that the jury still needed to answer the questions regarding

Defendant’s counterclaim, the jury retired to finish completing the verdict form. The jury

147 Rec. Doc. 216.

148 Rec. Doc. 214.

149 Rec. Doc. 214-2 at 34.

150 Rec. Doc. 202 at 6; Rec. Doc. 216 at 2.

151 Rec. Doc. 214-2 at 40.

152 Rec. Doc. 216 at 2.

completed the form in a manner consistent with its findings on Plaintiff’s claims. Namely, the jury

found that Plaintiff had not wrongfully abandoned the leases—which is consistent with the jury’s

understanding that Plaintiff never took possession of Unit 18—and that Plaintiff had not engaged

in an unfair trade practice. Given the obvious care and attention with which the jury came to this

verdict, the Court is not persuaded by Defendant’s argument that they did not consider the

counterclaim because they only deliberated for five additional minutes when the Court instructed

them to return to the jury room to finish completing the verdict form. As discussed above, the jury

previously deliberated for nearly six hours in total, and Defendant offers nothing to suggest that

the jury did not consider the counterclaim during the deliberations.

b. Evidence of Substantial Impairment

Relatedly, Defendant argues that it is entitled to judgment as a matter of law on Plaintiff’s

claim for cancellation of the leases because Plaintiff did not meet its burden to show substantial

impairment of each unit.153 A Rule 50(b) motion should not be granted “unless the facts and

inferences point so strongly and overwhelmingly in the movant’s favor that reasonable jurors could

not reach a contrary conclusion.”154 A court must also “draw[] all reasonable inferences and

resolv[e] all credibility determinations in the light most favorable to the non-moving party.”155

The Court finds that there is a legally sufficient evidentiary basis to support the jury’s

verdict. The parties stipulated that Plaintiff operated the units as short-term rentals.156 At trial,

Paradela testified about his firsthand observations of visible mold in most of the apartments.

153 Rec. Doc. 226-1 at 10.

154 Flowers, 247 F.3d at 235 (internal citation and quotation marks omitted).

155 Id. (internal citation and quotation marks omitted).

156 Rec. Doc. 202 at 5.

Paradela explained why environmental conditions might cause low readings of mold in the air

even when there is visible mold on the walls. Paradela testified that he found evidence of toxic

black mold in many of the units. Paradela further testified about his concerns regarding the elevated

moisture levels in multiple apartments and defects in structural components. Paradela noted that

he recommended mold remediation for the units. Defendant’s expert Driskell also testified to the

dangerous health effects of certain molds that were found in elevated levels in the units. The jury

also heard evidence that Defendant was on notice of various complaints in every single unit. Based

on this evidence, the jury could have reasonably concluded that Plaintiff carried its burden to show

by a preponderance of the evidence that mold was present in each of the units.

Given that Plaintiff rented these units as short-term rentals, the jury was free to conclude

that toxic and dangerous conditions inside the units substantially impaired Plaintiff’s use of the

units for their intended purpose. Plaintiff also presented evidence of Defendant’s responses to

Plaintiff’s complaints of mold in the units. The jury, as finder of fact, was tasked with deciding

whether to credit Plaintiff’s assertion that Defendant failed to perform its obligations, or to credit

Defendant’s assertion that it timely complied with all requests for maintenance. The jury was

likewise free to conclude that Defendant’s alleged unwillingness to provide necessary maintenance

to the units substantially impaired Plaintiff’s use by failing to remedy harmful conditions to

Plaintiff’s customers. Construing this evidence in the light most favorable to the non-moving party,

the Court finds that the facts and inferences do not “point so strongly and overwhelmingly” in

Defendant’s favor that “reasonable jurors could not reach a contrary conclusion.”157

2. Plaintiff’s Claim for Breach of Warranty and Breach of Contract

Next, Defendant moves for judgment as a matter of law on Plaintiff’s breach of warranty

157 Flowers, 247 F.3d at 235.

and breach of contract claims.158 Defendant asserts that “[t]he evidence is clear that [Plaintiff] did

not maintain the units in good condition, but instead unjustifiably abandoned the units and left the

premises to deteriorate.”159 The jury, as finder of fact, was tasked with weighing the credibility of

the witnesses. In this case, Plaintiff contended that the leases obligated Defendant to make certain

repairs, and that Defendant failed to do so. Stacy Dejan testified on behalf of Plaintiff as to

Defendant’s responses to Plaintiff’s reports of issues in the units. Defendant offered competing

testimony about its responses to Plaintiff’s complaints. The jury weighed this evidence and

concluded that Plaintiff had met its burden to show that Defendant breached its obligations under

the leases. A court should not disturb a jury’s verdict unless the “inferences point so strongly and

overwhelmingly in the movant’s favor that reasonable jurors could not reach a contrary

conclusion.”160 The evidence here does not strongly and overwhelmingly indicate that Plaintiff

was in breach of the leases. Therefore, the Court will not disturb the jury’s verdict on these claims

and denies Defendant’s motion for judgment as a matter of law on these issues.

3. Defendant’s Counterclaim

Finally, Defendant moves for judgment as a matter of law on its counterclaim. Under Rule

50(b), a party may renew its motion for judgment as a matter of law. Because this is a renewal of

an earlier motion, “[i]f a party fails to move for [judgment as a matter of law] under Rule 50(a)

after all the evidence has been presented, then ‘that party waives . . . its right to file a renewed

post-verdict Rule 50(b) motion.’”161 The Fifth Circuit applies a narrow exception to this rule where

158 Rec. Doc. 226-1 at 20.

159 Id.

160 Id. (internal citation and quotation marks omitted).

161 Alonso, 920 F.3d at 883–84 (quoting Flowers, 247 F.3d at 238).

“a party makes a Rule 50(a) motion on a substantially similar issue adequate to give notice of the

perceived insufficiency [of evidence].”162 At trial, Defendant did not move for judgment as a

matter of law on its counterclaim.163 However, the Fifth Circuit “routinely excuse[s] technical

noncompliance” with Rule 50(b) by applying a “de minimis exception” where “the court and the

plaintiff are alerted to the grounds on which the defendant contends the evidence is insufficient.”164

Defendant argues that it did not waive this issue because it “necessarily” moved for

judgment as a matter of law on its counterclaim by moving for judgment as a matter of law that

Plaintiff was not entitled to cancel the leases. The Court agrees. If Plaintiff failed to carry its burden

to show cancellation of the leases, then Defendant was entitled to judgment in its favor on its

counterclaim for wrongful abandonment.165 Nevertheless, for the reasons explained above, the

Court concludes that the jury’s finding that Plaintiff was entitled to cancellation of the leases is

supportable by a reasonable interpretation of the evidence. The facts and inferences do not “point

so strongly and overwhelmingly” in Defendant’s favor that “reasonable jurors could not reach a

162 Foreman v. Acceptance Indem. Co., 730 Fed. App’x 191, 195 (5th Cir. 2018) (citing Navigant Consulting,

Inc. v. Wilkinson, 508 F.3d 277, 288–89 (5th Cir. 2007); Bay Colony, Ltd. v. Trendmaker, Inc., 121 F.3d 998, 1003

(5th Cir. 1997)).

163 Rec. Doc. 213.

164 Taylor Publ’g Co. v. Jostens, Inc., 216 F.3d 465, 472 (5th Cir. 2000) (quoting Greenwood v. Societe

Francaise De, 111 F.3d 1239, 1244–45 (5th Cir. 1997)).

165 This is not true, however, for Unit 18. As explained above, the parties stipulated that Plaintiff never took

possession of Unit 18. Additionally, the jury was instructed that an “[a]bandonment is the voluntary relinquishment

of property by its holder, with the intent of terminating its possession and control.” Rec. Doc. 214-2 at 34. Given that

the parties stipulated that Plaintiff never took possession of Unit 18, no reasonable jury could conclude that Plaintiff

intended to terminate its possession. Nor does it follow that Plaintiff breached the lease as to Unit 18. Indeed, “[a]

lessor can be found in breach of the lease agreement based on his failure to place the lessee in actual possession of the

thing leased, which the lessor is obliged to do.” Keller Williams Realty v. Melekos, 2015-0679, p. 4 (La. App. 1 Cir.

11/9/15); 2015 WL 6951406 (emphasis added) (citing La. Civ. Code art. 2682; Moore v. Cameron Par. Sch. Bd., 563

So. 2d 347, 349 (La. App. 3 Cir. 1990)). At trial, the parties did not introduce any evidence about why Plaintiff never

took possession of Unit 18. In the absence of any evidence, the jury reasonably concluded that neither party carried

its burden as to Unit 18, and Defendant is not entitled to judgment as a matter of law.

contrary conclusion.”166 Therefore, Defendant is not entitled to judgment as a matter of law on its

counterclaim.

B. Motion for New Trial

Defendant moves for a new trial on its Louisiana Unfair Trade Practices Act claim.

Alternately, Defendant moves for a new trial on all issues.

1. Louisiana Unfair Trade Practices Act Claim

Defendant’s argument in favor of a new trial on its LUTPA claim is premised on its

assertion that the allegedly incorrect jury instructions and verdict form led the jury to never even

consider its counterclaims. As explained in detail above, the jury’s verdict reflects its careful and

thorough consideration of the evidence and of the jury instructions. Defendant offers no reason to

believe that the jury did not ever consider its LUTPA claim during its nearly six hours of

deliberating. Given the jury’s clearly meticulous and attentive verdict, the Court “respect[s] the

jury’s collective wisdom,” and is “satisfied with the verdict.”167 Therefore, the Court denies

Defendant’s request for a new trial on its LUTPA claim.

2. All Issues

Finally, Defendant moves the Court for a new trial on all issues “to prevent manifest

injustice.”168 Defendant makes three arguments in support of its entitlement to a new trial. First,

Defendant reiterates its argument that the jury was confused by the instructions and the verdict

form.169 As noted above, the Court disagrees and finds that the instructions are consistent and that

166 Flowers, 247 F.3d at 235.

167 Smith, 773 F.2d at 613 (internal quotations omitted).

168 Rec. Doc. 226-1 at 22.

169 Id.

the jury was not confused. Second, Defendant argues it is entitled to a new trial because there is

insufficient evidence that Plaintiff’s use of the units was substantially impaired.170 Again, as noted

above, the Court disagrees and finds that a reasonable jury could have concluded that Plaintiff’s

use was substantially impaired.

Defendant’s remaining argument is that the “Court should grant a new trial to address

several erroneous and prejudicial evidentiary rulings.”171 Pursuant to Federal Rule of Civil

Procedure 61, “[u]nless justice so requires, no error in admitting or excluding evidence . . . is

ground for granting a new trial.” In reviewing a district court’s evidentiary rulings, “[the Fifth

Circuit] will only reverse a district court where there has been a clear abuse of discretion,” “and

the ruling has harmed the complaining party.”172

Defendant asserts that the Court erroneously admitted emails and photographs from Basil

Lohaza arguing that these emails contained hearsay within hearsay.173 Defendant argues that “it is

‘not enough to say that as a general business matter, [the company] receive[s] and send[s] emails

as part of their business model.”174 However, that is not what occurred here. The underlying

rationale behind the business records exception “is the reliability of records that the organization

plans to rely on at a later time.”175 The Fifth Circuit has explained that “[t]he issue of admissibility

170 Id.

171 Id.

172 Nicholas v. Homelite Corp., 780 F.2d 1150, 1155 (5th Cir. 1986) (first quoting McNeese v. Reading &

Bates Drilling Co., 749 F.2d 270, 274 (5th Cir. 1985), and then quoting Farace v. Indep. Fire Ins. Co., 699 F.2d 204,

211 (5th Cir. 1983)).

173 Rec. Doc. 226-1 at 22–23.

174 Id. (quoting Marine Power Holding, 2016 WL 4218217, at *6).

175 Wright & Miller, Federal Practice and Procedure § 6864 (5th ed. 2019).

under Rule 803(6) is chiefly a matter of trustworthiness.”176 Here, Stacy Dejan testified that it is

Plaintiff’s standard practice to report maintenance issues to landlords via email. Dejan also

testified that Plaintiff made the decision “to try to clean” the units on the basis of Lohaza’s email,

so there is little reason to doubt its trustworthiness. Additionally, the Court issued a limiting

instruction that the statements within the email could not be relied on for their truth. The Court is

not persuaded that the jury was confused by its later instruction that the jury would eventually have

to determine the truth of Plaintiff’s complaints of mold.

To the extent that Defendant argues the photographs attached to the email are also

inadmissible hearsay, the Court disagrees. Under Federal Rule of Evidence 801, hearsay is an out

of court statement by the declarant introduced for the truth of the matter asserted. The rule defines

a “statement” as “a person’s oral assertion, written assertion, or nonverbal conduct.”177 Further,

the rule provides that the “declarant” is “the person who made the statement.”178 Ordinarily

photographs are non-assertive in nature and are not hearsay.179 Therefore, the photographs attached

to Lohaza’s email are not hearsay because they do not make an assertion. Moreover, the Court

instructed the jury that it could not accept Lohaza’s statements within the email as evidence that

the photographs depicted mold. Instead, the Court instructed the jury it had to reach that conclusion

if it was supported by other evidence and inferences drawn therefrom. To the extent Defendant

argues the photographs are untrustworthy because Lohaza was not present to authenticate them,180

176 Miss. River Grain Elevator, Inc. v. Bartlett & Co., 659 F.2d 1314, 1319 (5th Cir. 1981).

177 Fed. R. Evid. 801(a) (emphasis added).

178 Fed. R. Evid. 801(b) (emphasis added).

179 United States v. Oaxaca, 569 F.2d 518, 525 (9th Cir. 1978). See also CDx Holdings, Inc. v. Heddon, No.

12-126, 2012 WL 13018986 (N.D. Tex. Nov. 9, 2012).

180 Rec. Doc. 226-1 at 23.

the fact that a person who took a photo is not available to authenticate “go[es] only to the

evidentiary weight of [the] exhibit . . . rather than to its admissibility.”181 Therefore, the Court

finds no abuse of discretion in the admission of the Lohaza email and photographs.

Likewise, Defendant objects to the Court’s admission of the Paradela report as hearsay

within hearsay.182 Even assuming Paradela’s report was inadmissible as a business record,

Paradela testified live at trial about his firsthand observations of the units and the results of his

testing. This testimony was not hearsay because it was not an out-of-court statement and it

concerned Paradela’s personal observations and conclusions. Defendant objects that the Court “did

not give explicit instructions to the jury regarding how they should weigh” Paradela’s report.183

However, because Paradela testified at trial about his observations, the jury was free to assess his

credibility and needed no additional limiting instruction. Additionally, the jury was properly and

thoroughly instructed on its role in weighing the testimony of witnesses in the Court’s preliminary

and general instructions.184 Based on the record before it, the Court is not left with the “firm belief

that the verdict is clearly contrary to the weight of the evidence.”185 Accordingly, the Court denies

Defendant’s motion for a new trial on all issues.

181 United States v. Clayton, 643 F.2d 1071, 1074 (5th Cir. Unit B Apr. 1981).

182 Rec. Doc. 226-1 at 22–23.

183 Id.

184 See 214-2 at 2 (Jury Charge Number 1), 6 (Jury Charge Number 4), 7 (Jury Charge Number 5), 9 (Jury

Charge Number 7), 11 (Jury Charge Number 9), 41 (Jury Charge Number 38).

185 Smith, 773 F.2d at 613.

VY. Conclusion

Considering the foregoing reasons, the Court finds that the jury’s verdict 1s supportable by

a reasonable interpretation of the evidence. Accordingly,

IT IS HEREBY ORDERED that Defendant 635 N. Scott St., LLC’s “Renewed Motion

for Judgment as a Matter of Law or, Alternatively, New Trial”!®° is DENIED.

NEW ORLEANS, LOUISIANA, this 16th day of May, 2022.

NANNETTE JOLIVETTE BROWN

CHIEF JUDGE

UNITED STATES DISTRICT COURT

186 Rec. Doc. 226.

30