This opinion will be unpublished and

may not be cited except as provided by

Minn. Stat. 480A.08, subd. 3 (1996).

STATE OF MINNESOTA

IN COURT OF APPEALS

C0-97-1920

Engelhart & Swanson P.A.,

Respondent,

vs.

Marvin H. Levine,

Appellant.

Filed July 7, 1998

Affirmed

Schultz, Judge*

Ramsey County District Court

File No. C8-97-3670

Kathleen K. Goddard, 6150A Broadway Place West, 1300 Godward Street Northeast, Minneapolis, MN 55413 (for respondent)

Timothy H. Dodd, Davis, Dodd, Levine & Miller, Ltd., 1219 Marquette Avenue South, Suite 200, Minneapolis, MN 55403 (for appellant)

Considered and decided by Randall, Presiding Judge, Kalitowski, Judge, and Schultz, Judge.

*Retired judge of the district court, serving as judge of the Minnesota Court of Appeals by appointment pursuant to Minn. Const. Art. VI, 10.

U N P U B L I S H E D O P I N I O N

SCHULTZ, Judge

In an action arising out of the alleged breach of a contract, appellant contends the trial court abused its discretion in denying his motion for a new trial premised on surprise expert testimony, erroneous jury instructions, irregularities in proceedings due to juror misconduct, and an award of excessive damages. We affirm.

FACTS

Appellant Marvin H. Levine, a licensed public accountant with his own accounting practice, merged with respondent Englehart & Swanson, P.A. (E&S). E&S is a certified public accounting firm. Under the terms of the purchase agreement, in exchange for Levine's client base, Levine would be employed for five years at a fixed annual salary and also receive 23% of the professional fees E&S collected from its business with Levine's clientele. E&S also agreed to pay Levine an additional sum as consideration for signing a non-compete agreement.

Shortly after the merger, Levine contends he began receiving complaints from his former clients about the quality of service they were receiving from E&S. After investigating the situation, Levine became concerned that E&S's business practice would harm his former clients and ultimately cause them to seek tax services elsewhere, thus reducing his income and harming him financially.

Consequently, due to E&S's alleged problem performance, Levine informed E&S that he would complete the tax preparations for his former clients himself. E&S considered Levine's decision a de-merger.

E&S then brought this action against Levine, alleging breach of the purchase agreement, breach of the non-compete agreement, tortious interference with contractual relations and prospective economic relations, slander, fraud, conversion, and attachment. E&S sought damages for lost profits, as well as an injunction to prevent Levine from violating the non-compete. Levine filed a counterclaim, alleging fraud, breach of the purchase agreement, promissory estoppel, conversion, and unjust enrichment. The trial court issued an injunction against Levine.

In response to Levine's request for discovery, E&S's president and treasurer, Craig Swanson, prepared damages calculations, with supporting documents, and gave a deposition regarding his calculations. At the beginning of trial, Levine objected to Swanson testifying to his damage calculations, because E&S had not disclosed him as an expert during discovery. The trial court allowed Swanson's testimony. The court also allowed Levine to testify to the poor quality of work that E&S performed, even though he had not been disclosed as an expert either. The court gave the jury the standard instruction for expert witness testimony, without using the term "expert witness" or singling out any specific witness.

The jury returned a verdict in favor of E&S, finding that Levine had breached his non-compete agreement and caused E&S lost profits of $132,428 and expenses of $14,291. The jury also found that E&S had not breached its purchase agreement with Levine.

After trial, Levine's son reported that he had overheard jurors commenting about the case while in the elevator during trial. Unaware that juror discussions were prohibited, he did not mention this incident until after the trial had ended.

Levine moved for a new trial on several grounds. The trial court held a Schwartz hearing regarding the alleged jury misconduct. The trial court then denied the motion for a new trial in its entirety. Levine appeals.

D E C I S I O N

Generally, the decision to grant a new trial rests in the trial court's discretion and will not be overturned absent an abuse of that discretion. Halla Nursery v. Baumann-Furrie & Co., 454 N.W.2d 905, 910 (Minn. 1990). When reviewing the denial of a new trial, this court must let the verdict stand unless it is manifestly and palpably contrary to the evidence, when viewed in a light most favorable to the verdict. ZumBerge v. Northern States Power Co., 481 N.W.2d 103, 110 (Minn. App. 1992), review denied (Minn. Apr. 29, 1992).

1. Expert witness testimony

Levine alleges that the admission of E&S's expert testimony was erroneous and entitled him to new trial because he was not given advance notice. Levine bases his argument on the element of surprise, contending he was not aware that Swanson would testify about the damage calculations until the first morning of the trial. An order denying a motion for new trial on the basis of surprise will not be disturbed absent an abuse of discretion. Schiro v. Raymond, 237 Minn. 271, 277, 54 N.W.2d 329, 333 (1952).

Although E&S did not identify any expert witnesses during discovery, it did list Swanson as a general witness. The record shows that Levine knew of the substance of Swanson's testimony because he had submitted his written damage calculations to Levine in response to discovery and had testified about his calculations in a deposition. A party's knowledge of what testimony will or will not be presented precludes a claim for new trial based on surprise. Swanson v. Williams, 303 Minn. 433, 435, 228 N.W.2d 860, 862 (1975).

Levine argues that he had listed an expert witness, but did not call him because he believed there was no expert testimony to rebut. Even assuming that Levine learned on the first day of trial that Swanson would be testifying about the damages, the trial lasted several days, so Levine had the opportunity to call his own expert on the issue, but failed to do so. On this record, Levine's argument regarding surprise fails.

Levine also challenges Swanson's foundation to give opinion testimony as an expert. Swanson did not label himself an "expert," nor did the court, but his opinion regarding damage calculations was informed and based on his expertise. Expert testimony is not always necessary to prove lost profits if the plaintiff is an expert in the field. Cardinal Consulting Co. v. Circo Resorts, Inc., 297 N.W.2d 260, 269 (Minn. 1980).

Swanson testified as a CPA, president, treasurer, and shareholder of E&S. The law assumes that an owner knows the value and quality of what he owns and, therefore, is competent, without any additional proof of qualifications, to give opinion testimony about the property's value. Lehman v. Hansord Pontiac Co., 246 Minn. 1, 6, 74 N.W.2d 305, 309 (1955). Furthermore, corporate shareholders who are officers of a closely held business and have done the books may testify to the value of the business. Carlson Equip. Co. v. International Harvester Co., 710 F.2d 481, 484 (8th Cir. 1983). Because of Swanson's profession and his role with E&S, he was intimately aware of the value of his company and the purported damage that arose from Levine's departure. The paramount concern of the owner's familiarity with the property is satisfied here. L'Evesque v. Rognrud, 254 Minn. 55, 58, 93 N.W.2d 672, 676 (1958). Swanson's testimony was admissible.

2. Jury instructions

Levine argues the court's erroneous jury instruction on expert testimony warranted a new trial.[1] The decision to grant a new trial on the basis of erroneous jury instructions rests in the trial court's discretion and will not be disturbed absent an abuse of that discretion. Smits v. E-Z Por Corp., 365 N.W.2d 352, 354 (Minn. App. 1985). Errors in jury instructions are fundamental and require reversal if they destroy the substantial correctness of the entire jury charge, create a miscarriage of justice, or lead to substantial prejudice of a party. Lindstrom v. Yellow Taxi Co., 298 Minn. 224, 229, 214 N.W.2d 672, 676 (1974).

The trial court here gave the instruction for expert witnesses from 4 Minnesota Practice, CIVJIG 22 (1986). Levine argues that, in giving this instruction, the court effectively designated Swanson as an expert despite the fact that E&S had not given Levine proper notice. The record does not support this argument.

Neither party nor the court identified Swanson as an "expert" or afforded him or his testimony any special status during trial. In fact, both Levine and Swanson testified from their experience and technical background at trial. Swanson testified to the specifics of his business and E&S's lost profits; Levine testified about proper and acceptable accounting practices in an effort to explain why he left E&S to serve his former clients. Further, the trial court did not mention any names, or refer to any witnesses, when it gave the jury instruction on expert witnesses. The court simply read the instruction, amidst other instructions regarding witness credibility and weight of evidence. Finally, the instruction was a correct statement of the law.

Based on these facts and the trial record, the jury instruction did not destroy the substantial correctness of the entire jury charge, create a miscarriage of justice, or lead to substantial prejudice of a party, so as to warrant a new trial.

3. Procedural irregularities/juror misconduct

Levine contends the jurors' conversation about the case was an irregularity and constituted juror misconduct that required a new trial. See Minn. R. Civ. P. 59.01(a), (b) (party may be entitled to new trial on basis of irregularity in proceedings or misconduct of jury). The trial court has the discretion to determine whether an irregularity in the proceedings deprived the moving party of a fair trial and warranted a new trial. Moran v. Northern Pac. Ry. Co., 225 Minn. 373, 377, 31 N.W.2d 37, 39 (1948).

This issue arises from juror D.S.'s remark in the elevator, "It won't take long to decide this case." Once informed of the incident, the court held a Schwartz hearing to investigate. The court took testimony of the three jurors involved. D.S. said he could not remember what, if any, comment he made on the elevator. M.J. said he did not hear the alleged statement. P.K. said D.S. began to speak about the case in the elevator, but stopped quickly when P.K. gestured to be quiet. She could not remember exactly what he had said, but she said he made no further attempts to discuss the case after that. All three jurors said that neither they nor the other jurors discussed the case at any other time during the trial. Based on this information, the trial court found that the jurors' interaction did not rise to the level to mandate a new trial.

Whether the juror's conduct was prejudicial to the case is a question of fact that rests with the sound discretion of the trial court and will not be reversed absent an abuse of that discretion. Briggs v. Chicago Great W. Ry. Co., 248 Minn. 418, 425, 80 N.W.2d 625, 632 (1957). The trial court had the benefit of examining the jurors and the trial before determining that the incident was contained and no prejudice occurred. Levine has not shown an abuse of discretion here.

4. Excessive damages

Levine contends the jury's damage award was excessive, unsupported by the evidence, and warrants a new trial. See Minn. R. Civ. P. 59.01(e) (allowing court to grant new trial when excessive damages appear to have been awarded under influence of passion or prejudice). The trial court's decision to grant or deny a new trial on the issue of excessive damages will not be set aside on appeal absent an abuse of discretion. Advanced Training Sys., Inc. v. Caswell Equip. Co., 352 N.W.2d 1, 11 (Minn. 1984).

When considering if a verdict is excessive, the trial court must evaluate all the evidence, the parties' demeanors, and the circumstances of the trial. Johnson v. Washington County, 518 N.W.2d 594, 602 (Minn. 1994). This court will only reverse a jury's damage award if the failure to do so would be shocking and cause a "plain injustice." Hughes v. Sinclair Mktg., 389 N.W.2d 194, 199 (Minn. 1986).

Swanson testified that E&S lost $170,000 in profits and had $22,000 in expenditures as a result of Levine's decision to leave E&S and breach the non-compete agreement. Although those figures may seem excessive, we may not supplant our judgment for that of the jury. See M.L. v. Magnuson, 531 N.W.2d 849, 856 (Minn. App. 1995) (court proceeds with caution when reviewing verdict so as not to substitute court's judgment for that of jury), review denied (Minn. July 20, 1995). Our sole inquiry is whether the record supports the jury verdict. See Imperial Developers, Inc. v. Seaboard Sur. Co., 518 N.W.2d 623, 626 (Minn. App. 1994) (appellate court may overturn damage award only if it is manifestly and palpably contrary to evidence in record), review denied (Minn. Aug. 24, 1994).

In addition to witnesses who testified to the breach and damage to E&S, Levine had the opportunity to present witness testimony to refute the damage figures. The jury could believe E&S's witnesses and disbelieve Levine's witnesses. See Melina v. Chaplin, 327 N.W.2d 19, 20 (Minn. 1982) (jury's function is to determine witness credibility). The jury found that Levine had breached the non-compete agreement when he left and took his former clients with him. The jury then awarded E&S $132,428 in lost profits and $14,291 in expenditures. These figures are less than Swanson presented. The jury's damages award cannot be shocking or a plain injustice when they are based on the evidence presented at trial. The trial court did not abuse its discretion by denying a new trial on the basis of excessive damages.

Affirmed.

[1] E&S contends Levine has waived this issue on appeal because he failed to object to the jury instructions at trial. See Minn. R. Civ. P. 51 (no one may assign error to jury instruction unless that party has objected, stating the specific ground for objection, before the jury retires). E&S admits, however, that Levine's attorney objected to the instruction during the initial conference between counsel and the court when discussing the jury instructions. The trial court fully addressed Levine's argument in the motion for new trial and made no reference to a lack of objection. We may address the issue.