Full opinion text
MEMORANDUM & ORDER LUNGSTRUM, District Judge. Plaintiffs filed suit against defendants asserting various claims arising out of defendants’ acquisition of plaintiff Horizon Marine LC, an aluminum boat manufacturing company. Specifically, plaintiffs Horizon Holdings, LLC f/k/a Horizon Marine LC (hereinafter “Horizon”) and Geoffrey Pepper claimed that defendants breached both the express terms of the purchase agreement entered into between the parties and the duty of good faith and fair dealing implied in the purchase agreement. Plaintiffs Horizon and Mr. Pepper further claimed that defendants made a variety of fraudulent misrepresentations to them for the purpose of inducing plaintiffs to enter into the purchase agreement. In addition, plaintiffs Cassandra O’Tool and John O’Tool alleged that defendants breached the employment agreements signed by them. Ms. O’Tool further alleged that defendants discriminated against her on the basis of her pregnancy when they denied her a raise and when they terminated her employment. Finally, Ms. O’Tool and Mr. Pepper claimed that defendants unlawfully terminated their employment in retaliation for Ms. O’Tool’s and Mr. Pepper’s complaints of pregnancy discrimination. For a more thorough understanding of the facts of this case, please see the court’s order resolving defendants’ motions for summary judgment, Horizon Holdings, L.L.C. v. Genmar Holdings, Inc., 241 F.Supp.2d 1123 (D.Kan.2002). In November 2002, plaintiffs’ claims were tried to a jury and, at the conclusion of the trial, the jury returned a verdict in favor of plaintiffs Horizon and Mr. Pepper on their breach of contract claim in the amount of $2,500,000. The jury also found in favor of the O’Tools on their claims that defendants breached the O’Tools’ employment contracts and awarded Ms. O’Tool the sum of $63,200 and Mr. O’Tool the sum of $20,313. The jury found in favor of defendants on all other claims. This matter is presently before the court on three post-trial motions-plaintiffs’ motion to alter or amend the judgment (doc. # 197); plaintiffs’ motion for attorneys’ fees, costs and expenses (doc. # 198); and defendants’ renewed motion for judgment as a matter of law pursuant to Rule 50(b) or, in the alternative, motion for remittitur and/or new trial pursuant to Rule 59 (doc. # 199). As set forth in more detail below, plaintiffs’ motion to alter or amend the judgment is granted only to the extent that a typographical error in the judgment will be corrected and is otherwise denied; plaintiffs’ motion for attorneys’ fees, costs and expenses is granted in part and denied in part; and defendants’ renewed motion for judgment as a matter of law, for remit-titur and/or for a new trial is denied. I. Defendants’ Renewed Motion for Judgment as a Matter of Law, for Remittitur and/or for New Trial Defendants seek post-trial relief on all aspects of the jury’s verdict that are favorable to plaintiffs. The primary thrust of defendants’ post-trial motion concerns the jury’s verdict of $2.5 million in favor of Horizon and Mr. Pepper on the breach of contract claim. According to defendants, this award constitutes a windfall unsupported by the facts or the law. Defendants urge that plaintiffs, as a matter of law, are not entitled to recover any damages in the form of lost earn-out. In the alternative, defendants contend that the award must be remitted or a new trial must be granted on lost earn-out damages. Defendants also seek judgment as a matter of law on the jury’s liability finding on the breach of contract claim, asserting that plaintiffs failed to present legally sufficient evidence that defendants breached the express or implied terms of the purchase agreement. Similarly, defendants move for judgment as a matter of law on the O’Tools’ claims for breach of their respective employment agreements or for a re-mittitur of those verdicts. Finally, defendants assert that they are entitled to a new trial because the court erroneously admitted parol evidence and erroneously instructed the jury on the duty of good faith and fair dealing. A. The Jury’s Verdict in favor of Plaintiff’s Horizon and Geoff Pepper on their Breach of Contract Claim The court first addresses defendants’ argument that they are entitled to judgment as a matter of law on the jury’s liability finding with respect to Horizon and Mr. Pepper’s breach of contract claim. Judgment as a matter of law under Rule 50(b) “should be cautiously and sparingly granted,” Black v. M & W Gear Co., 269 F.3d 1220, 1238 (10th Cir.2001), and is appropriate only if the evidence, viewed in the light most favorable to the nonmoving party, “points but one way and is susceptible to no reasonable inferences supporting the party opposing the motion.” Sanjuan v. IBP, Inc., 275 F.3d 1290, 1293 (10th Cir.2002). In determining whether judgment as a matter of law is proper, the court may not weigh the evidence, consider the credibility of witnesses, or substitute its judgment for that of the jury. See Turnbull v. Topeka State Hosp., 255 F.3d 1238, 1241 (10th Cir.2001). In essence, the court must affirm the jury verdict if, viewing the record in the light most favorable to the nonmoving party, it contains evidence upon which the jury could properly return a verdict for the nonmoving party. See Roberts v. Progressive Independence, Inc., 183 F.3d 1215, 1219-20 (10th Cir.1999) (citing Harolds Stores, Inc. v. Dillard Dep’t Stores, Inc., 82 F.3d 1533, 1546 (10th Cir.1996)). Conversely, the court must enter judgment as a matter of law in favor of the moving party if “there is no legally sufficient evidentiary basis ... with respect to a claim or defense ... under the controlling law.” Deters v. Equifax Credit Information Servs., Inc., 202 F.3d 1262, 1268 (10th Cir.2000) (quoting Harolds, 82 F.3d at 1546-47). In their papers, defendants assert that, as a matter of law, they did not breach the express terms of the purchase agreement or the implied terms of the purchase agreement. The jury was instructed that they could find in favor of plaintiffs on plaintiffs’ breach of contract claim if they found that plaintiffs had proved a breach of one or more express terms or a breach of the implied duty of good faith and fair dealing. See Jury Instruction 12. Because the court concludes that there was ample evidence presented at trial to support a finding that defendants breached the implied covenant of good faith and fair dealing, the court declines to address defendants’ arguments concerning whether the evidence was sufficient to support a finding that defendants had breached any express terms of the purchase agreement. According to defendants, plaintiffs’ claim for breach of the implied covenant of good faith and fair dealing fails as a matter of law because it purports to “add wholly new terms to the contract” and “requires the court to rewrite or supply omitted provisions to the purchase agreement in contravention of Delaware law.” This is, of course, an accurate statement of Delaware law. See, e.g., Cincinnati SMSA Limited Partnership v. Cincinnati Bell Cellular Systems Co., 708 A.2d 989, 992 (Del.1998) (“Delaware observes the well-established general principle that ... it is not the proper role of a court to rewrite or supply omitted provisions to a written agreement.”). Nonetheless, principles of good faith and fair dealing permit a court to imply certain terms in an agreement so as to honor the parties’ reasonable expectations when those obligations were omitted, in the literal sense, from the text of the written agreement but can be understood from the text of the agreement. Id. In determining whether to imply terms in an agreement, the proper focus is on “what the parties likely would have done if they had considered the issue involved.” Id. Nothing in this court’s instructions to the jury would have permitted the jury to “rewrite” the purchase agreement or to inject into that agreement wholly new terms. In fact, the jury was instructed, entirely consistent with Delaware law, that they should consider “whether it is clear from what was expressly agreed upon by the parties that the parties would have agreed to prohibit the conduct complained of as a breach of the agreement had they thought to negotiate with respect to that matter.” See Jury Instruction 12. Defendants argue in their papers that Mr. Pepper did not demonstrate at trial that the parties would have agreed to prohibit the challenged conduct if they had thought to negotiate about such conduct. Of course, defendants also made this argument to the jury. The jury rejected the argument and there was more than sufficient evidence presented at trial to support that conclusion. For example, the jury could have readily concluded that, in light of the express agreement that plaintiffs would have an opportunity to realize up to $5.2 million in earn-out consideration (defined in the agreement itself as part of the “purchase price”), that the parties would have agreed, had they thought about it, that defendants would not be permitted to undermine Mr. Pepper’s authority as president of Genmar Kansas; to abandon the Horizon brand name entirely; to mandate production of Ranger and Crestliner brands at the Genmar Kansas facility to the detriment of the Horizon brand; or to reimburse Genmar Kansas at only “standard cost” for the manufacture of Ranger and Crestliner boats thereby impairing realization of the earn-out. If the jury concluded that defendants had engaged in such conduct (and there was sufficient evidence to draw such a conclusion), then the jury was free to conclude that such conduct was inconsistent with the spirit of the agreement concerning the earn-out consideration and that such conduct constituted a breach of the implied covenant of good faith and fair dealing. In short, there is evidence in the record upon which a jury could properly return a verdict for Horizon and Mr. Pepper on their breach of contract claim. Judgment as a matter of law, then, is not appropriate. Defendants also assert that they are entitled to judgment as a matter of law on Horizon and Mr. Pepper’s breach of contract claim because plaintiffs failed to present evidence upon which a reasonable jury could have concluded that defendants acted in bad faith. In support of this argument, defendants point to a Delaware Supreme Court decision defining “bad faith” as “the conscious doing of a wrong because of a dishonest purpose or moral obliquity; it is different from the negative idea of negligent in that it contemplates a state of mind affirmatively operating with furtive design or ill will.” See Desert Equities, Inc. v. Morgan Stanley Leveraged Equity Fund. II, L.P., 624 A.2d 1199, 1209 n. 16 (Del.1993). According to defendants, the evidence concerning defendants’ course of conduct demonstrates only that defendants were attempting to make a profit and that no evidence was presented that defendants were acting with any furtive design or ill will. As an initial matter, the jury was instructed that a “violation of the implied covenant of good faith and fair dealing implicitly indicates bad faith conduct.” See Jury Instruction 12. Thus, the court’s instruction certainly requires that defendants’ conduct reflect some element of bad faith. While the jury was not required to find specifically that defendants acted with furtive design or ill will in order to find that defendants had breached the covenant of good faith and fair dealing, defendants have not directed the court to any cases suggesting that proof of a breach of the duty of good faith and fair dealing is inadequate in the absence of proof of some furtive design or ill will. Certainly, the Desert Equities case does not suggest such a conclusion. There, the court defined “bad faith” only for purposes of contrasting the nature of that claim with a fraud claim in explaining why it was rejecting the defendants’ argument that a plaintiff must plead with particularity under Rule 9(b) a claim of bad faith. See 624 A.2d at 1208. The court, then, rejects defendants’ suggestion that evidence of some furtive design or ill will was necessary for a finding of liability on plaintiffs’ claim that defendants breached the covenant of good faith and fair dealing. See True North Composites, LLC v. Trinity Indus., Inc., 191 F.Supp.2d 484, 517-18 (D.Del.2002) (rejecting argument that claimant must prove that the other party acted “with furtive design or ill will” in order to prove a breach of the covenant of good faith and fair dealing). In any event, even assuming that plaintiffs were required to prove that defendants acted with furtive design or ill will in order to prove a breach of the covenant of good faith and fair dealing, copious evidence was presented at trial demonstrating that defendants acted with the requisite “dishonest purpose” or “furtive design.” There was ample evidence, for example, that defendants had ulterior motives for acquiring Horizon Marine, including the desire to remove a potentially significant competitor from the market and the desire to obtain a facility in the “southern” market dedicated primarily to the production of Ranger boats. There was also substantial evidence demonstrating that defendants’ course of conduct was intended to benefit defendants’ bottom line to the financial detriment of Mr. Pepper. In that regard, the jury could reasonably have concluded that defendants’ efforts to undermine Mr. Pepper’s authority as president of Genmar Kansas and their decisions to abandon the Horizon brand name entirely, to mandate the production of Ranger and Crestliner brands at the Genmar Kansas facility and to reimburse Genmar Kansas at only “standard cost” for the manufacture of Ranger and Crestliner boats were all designed to either force Mr. Pepper to quit his employment (thereby extinguishing Mr. Pepper’s right to collect any earn-out) or prevent Mr. Pepper from achieving the profit margins necessary to realize his earn-out (because the formula pursuant to which the earn-out was calculated was weighted heavily in favor of the production of Horizon boats). While defendants urge that such a characterization of the evidence simply makes no sense because defendants themselves made no money on the Horizon Marine acquisition (an argument that defendants presented at length to the jury), the eyidence was sufficient to support the conclusion that defendants believed (but were ultimately incorrect) that they could still turn a profit through the production of Ranger and Crestliner boats at Genmar Kansas while simultaneously preventing Mr. Pepper from realizing any earn-out by stifling the production of Horizon boats and reimbursing Genmar Kansas only at standard cost for the production of other boats. Simply put, ample evidence was presented from which the jury could reasonably conclude that defendants’ conduct, taken as a whole, was in “bad faith,” regardless of how that phrase is defined. In sum, the evidence presented at trial was more than adequate for the jury to conclude that defendants breached the implied covenant of good faith and fair dealing. Defendants’ motion on this issue is denied. B. The Jury’s Award of $2.5 Million for Lost Earn-Out Consideration Defendants contend that they are entitled to judgment as a matter of law on Horizon and Mr. Pepper’s claim for damages for two separate but related reasons. First, defendants assert that plaintiffs presented no evidence whatsoever for the jury to ascertain what position plaintiffs would have been in if the purchase agreement had been properly performed. Second, defendants assert that Delaware law precludes any recovery because Genmar Kansas was a new business with no profit history and no evidence was presented from which the jury could conclude that Genmar Kansas was reasonably certain to realize the gross profit margins necessary to achieve any earn-out under the agreement. In the alternative, defendants seek an order remitting the award to nominal damages of one dollar or a new trial on the issue of damages. 1. Judgment as a Matter of Law The jury was instructed that if they found that defendants had breached the purchase agreement and that plaintiffs sustained damages as a result of that breach, then Horizon and Mr. Pepper were entitled to compensation “in an amount that [would] place them in the same position they would have been in if the purchase agreement had been properly performed.” See Jury Instruction 13. According to defendants, plaintiffs made no effort to explain to the jury how, assuming defendants had performed their contractual obligations in good faith, Genmar Kansas would have ever met the requisite gross profit margins or generated the gross revenues necessary to entitle them to substantial earn-out payments. Stated another way, defendants urge that there was simply no evidence presented at trial that Genmar Kansas would have been profitable absent defendants’ breach of the purchase agreement. The evidence presented at trial, however, was more than sufficient to permit the jury to conclude that Genmar Kansas would have been profitable absent defendants’ breach. Mr. Pepper, for example, testified on the second day of his direct examination that, in his mind, the requisite 13 percent gross profit margin was reasonable and obtainable based on his prior experience with other industry boat companies. According to Mr. Pepper, he had worked for other companies where the gross profit margins ranged from 15 percent to 30 percent, so the 13 percent figure seemed “low” to him. Mr. Pepper further testified that during the time that he was responsible for directing Lowe’s manufacturing operations, Lowe achieved gross profit percentages in the range of 30 percent. Mr. Pepper cautioned, however, that he needed a certain level of autonomy with respect to the management of Genmar Kansas to ensure that Genmar Kansas would realize the profits and revenues necessary for Mr. Pepper to obtain the earn-out. Specifically, Mr. Pepper testified on the first day of his direct examination that he sought (and received) assurances from Mr. Oppegaard and Mr. Cloutier that they would “allow [him] to do what is necessary in managing the company to obtain that earn-out.” According to Mr. Pepper, Mr. Oppegaard further assured him that he would be in control of Genmar Kansas’ operations and that he would be able to make the “operation decisions necessary” to obtain the earn-out. The evidence presented at trial was also sufficient from which the jury could conclude that Horizon Marine, just prior to defendants’ acquisition, was about to “break into the black” and turn a profit. Mr. Pepper, for example, testified on the first day of his direct examination that Horizon Marine was enjoying significant progress in late 1997 and the first six months of 1998. Mr. Pepper fully expected Horizon Marine to start making a profit in 1998. Indeed, the opinions and perspectives of other people associated with the acquisition lent additional credence to Mr. Pepper’s beliefs. Mr. Pepper testified on direct examination, for example, that Bill Ek, a consultant for defendants who visited the Horizon Marine facility in November 1997, was “amazed” at “how far [Horizon Marine] had come in such a short period of time.” Mr. Oppegaard testified on cross-examination that Mr. Ek had advised him that Mr. Pepper was “the best product development person in the industry.” Similarly, the jury heard testimony on the first day of Mr. Pepper’s direct examination that Mr. Oppegaard was impressed and excited about what Mr. Pepper had been able to accomplish with Horizon Marine in a short period of time. In fact, Mr. Oppegaard, after meeting Mr. Pepper and visiting Horizon Marine for the first time, sent an internal memorandum to his executive team in which he described Mr. Pepper and the Horizon product as “a major competitor if left alone to grow.” Mr. Oppegaard also testified on cross-examination that he anticipated that Horizon Marine would grow very fast. From this evidence, a reasonable jury could infer that if defendants had allowed Mr. Pepper to direct the daily operations of Genmar Kansas, then Mr. Pepper would have been able to achieve the requisite gross profit margins to realize the earn-out. See Harrington v. Hollingsworth, 1992 WL 91165, at *4 (Del.Super.Ct. Apr. 15, 1992) (in breach of contract case, lost income damages not speculative where commercial fisherman testified that had the defendant constructed his larger commercial fishing boat on time, he would have been able to catch more sea bass and double his annual income; fisherman’s testimony was sufficient to establish damages with reasonable probability where his projections were based on bass fishing industry, an industry with which plaintiff was familiar and in which he had participated for 20 years). Moreover, defendants attempted to demonstrate at trial-through both argument and the examination of witnesses-that plaintiffs’ claim for damages based on the earn-out was unreasonable because it was uncertain whether the company would have been able to meet the requisite profit margins and revenues. Defendants’ efforts in that regard apparently had some impact-the jury awarded only half of the total earn-out consideration. Presumably, then, the jury concluded that plaintiffs had not proved loss of the total earn-out amount with reasonable certainty. Finally, any doubt concerning the amount of damages sustained by plaintiffs is resolved against defendants. As the breaching party, defendants “should not be permitted to reap advantage from [their] own wrong by insisting on proof which by reason of [their] breach is unobtainable.” See E. Allan Farnsworth, Contracts § 12.15 at 922 (2d ed.1990); accord Restatement (Second) of Contracts § 352 cmt. a (Any doubts in the proof of damages are resolved against the party in breach because “[a] party who has, by his breach, forced the injured party to seek compensation in damages should not be allowed to profit from his breach where it is established that a significant loss has occurred.”). In a related argument, defendants contend that they are entitled to judgment as a matter of law on plaintiffs’ claim for damages because, under Delaware law, “a new business with no profit history cannot obtain lost profit damages.” See Defs. Br. at 7. On its face, then, defendants’ argument is premised on the idea that plaintiffs’ damages for lost earn-out consideration is the equivalent of an award for damages based on lost profits. Given the nature of the earn-out consideration at issue in this case, however, it is simply not appropriate to subject plaintiffs’ claim for damages to a traditional lost profits analysis. To be sure, Genmar Kansas’ profitability was an important component of the earn-out formula. However, unlike those cases in which one party seeks to recover lost profits when the issue of whether that party could reasonably expect such profits is in dispute, the -parties here agreed at the outset of their relationship that it was reasonable for Mr. Pepper to expect an additional $5.2 million in earn-out consideration pursuant to a formula developed by defendants. Indeed, the parties agreed that the earn-out consideration was part of the total purchase price for the acquisition-an agreement that is reflected in Article 2 of the contract, which states that the “Cash Consideration and. the Earn-Out Consideration described in Section 2.2 below are referred to in this Agreement in the aggregate as the ‘Purchase Price.’ ” See Trial Ex. 227a § 2.1. As Mr. Pepper explained on the second day of his direct examination, defendants initially proposed the earn-out consideration as “more of an incentive-type thing” separate and apart from the purchase price. However, after multiple discussions during which Mr. Pepper, Mr. Oppegaard and Mr. Cloutier all agreed that the earn-out was obtainable and that Mr. Pepper would be given the requisite autonomy to obtain the earn-out, defendants ultimately agreed to include the earn-out as part of the purchase price. While both parties agreed at trial that the earn-out was not a “guarantee,” ample evidence was presented that all parties believed there to be “reasonable probability” that Mr. Pepper would realize the full amount of the earn-out. Indeed, on his direct examination, Mr. Pepper testified that both Mr. Cloutier and Mr. Oppegaard assured him that the earn-out was obtainable. On his cross-examination, Mr. Pepper testified that he advised his investors in writing that “the management of Horizon believes there is a reasonable probability that ... the earn-out consideration will be achieved.” Similarly, Mr. Cloutier testified on direct examination that he he believed at the time of the transaction that Mr. Pepper had a “very realistic” opportunity to achieve the earn-out. Moreover, on cross-examination, Mr. Cloutier testified that he believed that the earn-out portion of the purchase agreement was achievable based in part on defendants’ own internal projections. In their papers, defendants now characterize their assurances and beliefs that the earn-out was obtainable as mere “pre-eon-tractual guesswork” and contend that to permit plaintiffs to recover damages based on such guesswork without considering Genmar Kansas’ “actual performance” is to provide plaintiffs with an “unwarranted windfall.” This argument, however, ignores the significance of the jury’s implicit finding-that Genmar Kansas’ actual performance would have been different (indeed, it would have been profitable) had defendants performed their obligations under the purchase agreement consistent with plaintiffs’ reasonable expectations. In other words, the jury apparently found that defendants’ conduct, including undermining Mr. Pepper’s managerial authority and requiring increased production of multiple models of Ranger boats, had the effect of rendering Mr. Pepper unable to perform as he had planned, unable to operate Gen-mar Kansas appropriately and ultimately unable to succeed in achieving any earn-out consideration. For these reasons, defendants’ reliance on the actual performance of Genmar Kansas as a basis for judgment as a matter of law is misplaced. In sum, the court rejects defendants’ attempt to analyze plaintiffs’ claim for damages as one for lost profits. The jury’s award of $2.5 million is not speculative and is supported by evidence that Genmar Kansas would have been profitable and that the earn-out would have been obtainable if defendants had performed in good faith their obligations under the purchase agreement. 2. Remittitur As an alternative to their argument that they are entitled to judgment as a matter of law on plaintiffs’ claim for damages in the form of lost earn-out, defendants maintain that this court should enter a remittitur reducing the $2.5 million verdict to nominal damages of one dollar in light of the “utterly speculative nature” of the lost earn-out damages. Of course, the court has already concluded that the jury’s award of $2.5 million was not speculative, so the motion for remittitur is denied. In any event, under Delaware law, the court may order a remittitur only if the verdict “is so grossly out of proportion as to shock the Court’s conscience.” See Gillenardo v. Connor Broadcasting Delaware Co., 2002 WL 991110 at *10 (Del.Super.Ct. Apr.30, 2002) (citing Mills v. Telenczak, 345 A.2d 424, 426 (Del.1975)); see also Century 21 Real Estate Corp. v. Meraj Int’l Investment Corp., 315 F.3d 1271, 1281 (10th Cir.2003) (in assessing measure of damages awarded pursuant to contract containing choice of law provision, district court must follow chosen state’s law-absent any argument that choice of law provision is unenforceable-including that state’s law concerning remittitur). Again, the jury had before it sufficient evidence to conclude that plaintiffs would have realized a significant portion of the earn-out consideration had defendants performed in good faith their obligations under the contract. The $2.5 million verdict represents exactly half of the entire earn-out portion of the purchase agreement and exactly half of what the plaintiffs sought to recover on their breach of contract claim. The award is not excessive, it is not unreasonable, it does not shock the court’s conscience and, thus, it will not be remitted. See id. at 1282-83 (affirming district court’s refusal to remit $700,000 verdict on breach of contract claim, despite concerns about reliability of testimony concerning lost profits and “unrealistic” projections; district court reviewed award under “shock the conscience” standard). 3. New Trial Defendants’ final arguments with respect to the jury’s verdict on plaintiffs’ breach of contract claim is that they are entitled to a new trial because the verdict is against the weight of the evidence and the result of passion and prejudice. Delaware law permits a district court to set aside a verdict and order a new trial only if “the evidence preponderates so heavily against the jury verdict that a reasonable jury could not have reached the result.” See Gannett Co. v. Re, 496 A.2d 553, 558 (Del.1985). For the reasons set forth above in connection with defendants’ motion for judgment as a matter of law, the court concludes that evidence presented at trial was sufficient for the jury to have reached the result that it did. Similarly, for the reasons explained above, the court cannot conclude that the verdict is so clearly excessive as to indicate that it was the result of passion or prejudice. See Yankanwich v. Wharton, 460 A.2d 1326, 1332 (Del.1983) (“A verdict will not be disturbed as excessive unless it is so clearly so as to indicate that it was the result of passion, prejudice, partiality, or corruption; or that it was manifestly the result of disregard of the evidence or applicable rules of law.”). The jury’s verdict of $2.5 million on plaintiffs’ breach of contract claim will stand. C. The Jury’s Verdicts in favor of Cassandra O’Tool and John O’Tool The jury also found in favor of Cassandra O’Tool and John O’Tool on their claims that defendants breached the O’Tools’ employment contracts. The jury awarded Ms. O’Tool the sum of $63,200 and Mr. O’Tool the sum of $20,313. Defendants assert that they are entitled to judgment as a matter of law on the O’Tools’ claims for breach of their employment contracts or, in the alternative, that they are entitled to a remittitur reducing the damages awarded to the O’Tools. For the reasons explained below, defendants’ motion is denied. 1. Judgment as a Matter of Law At trial, Cassandra and John O’Tool argued that defendants breached the express terms of their respective employment agreements. Specifically, the O’Tools maintained that, pursuant to the express language of their employment agreements, defendants could not discharge Mr. or Ms. O’Tool prior to the end of an initial three-year employment period except in four narrow circumstances and that they were not discharged for any of those four reasons. In support of their argument, the O’Tools highlighted for the jury section 3 and section 7 of their employment agreements: 3. Term of Employment. This Agreement shall have a term of three (3) years, subject to earlier termination pursuant to the provisions of Section 7 hereof. % í¡5 í¡í S-C Jfc 7. Termination and Severance. (a) This Agreement may-be terminated prior to the end of the three (3) year term by Genmar Kansas for (i) cause, (ii) lack of adequate job performance as determined by Genmar Kansas’ President and the President of Genmar Holdings, (iii) death of Employee, or (iv) disability of Employee. (b) In the event Genmar Kansas terminates Employee’s employment for any reason other than termination for cause, death or disability Employee shall be entitled to six (6) months of severance pay at the base salary Employee is earning on the date of such termination. Defendants attempted to convince the jury, and now the court, that the O’Tools were terminated for “lack of adequate job performance” consistent with section 7 of their employment contracts. The jury clearly rejected defendants’ argument and, in finding that defendants breached the O’Tools’ employment contracts, concluded that the O’Tools were not terminated for inadequate job performance or any other reason set forth in section 7. Indeed, ample evidence was presented at trial to support the jury’s conclusion. In that regard, the jury could have concluded (and presumably did conclude) that the O’Tools were terminated not because of any performance issues but because of their familial ties with Geoff Pepper, the key individual with whom defendants were attempting to sever their relationship. In other words, the jury could have easily concluded from the evidence presented at trial that defendants terminated Mr. and Mrs. O’Tool because defendants believed it would be awkward to retain the O’Tools after terminating Geoff Pepper. Another possibility, equally supported by the evidence, is that the jury concluded that the O’Tools were terminated for inadequate job performance but that the assessment of their job performance was not, as required by section 7, “determined by Genmar Kansas’ President and the President of Genmar Holdings.” Specifically, the jury could have concluded that Mr. Pepper was still serving as the president of Genmar Kansas during the relevant time period and that Mr. Pepper had not determined that his daughter and son-in-law were performing inadequately. Moreover, the jury could have concluded from the evidence presented at trial that Mr. Oppegaard, the president of Genmar Holdings, had simply not made an assessment of the O’Tools’ job performance. In fact, Mr. Oppegaard testified at trial that he had never discussed with Mr. Pepper the adequacy of the O’Tools’ job performance and that he did not make the decision to terminate the O’Tools. Defendants also reiterate their argument (made at the summary judgment stage, to the court at the close of plaintiffs’ case and to the jury throughout the trial) that Section 12 of the O’Tools’ employment agreements eviscerates any notion that the O’Tools were guaranteed employment for a three-year term. Section 12 of the agreement, entitled “Miscellaneous,” contains the following sentence: “This Agreement shall not give Employee any right to be employed for any specific time or otherwise limit Genmar Kansas’ right to terminate Employee’s employment at any time with or without cause.” As the court noted in its summary judgment order, however, any ambiguity created when sections 3 and 7 are read together with section 12 was for the jury to resolve and defendants certainly are not entitled to judgment as a matter of law on the O’Tools’ breach of contract claims based on the language of section 12. See Horizon Holdings, L.L.C. v. Genmar Holdings, Inc., 241 F.Supp.2d 1123, 1146 (D.Kan.2002). Moreover, the jury could have concluded that section 12, read literally, gives only Genmar Kansas the right to terminate an employee for any reason whatsoever and that, in contrast, Genmar Holdings and Genmar Industries are bound by the language of sections 3 and 7. In sum, the court certainly cannot conclude as a matter of law that the O’Tools were terminated for lack of adequate job performance consistent with section 7 of them employment agreements or that the O’Tools were not guaranteed any specific term of employment. The record contains more than sufficient evidence upon which the jury could properly return a verdict for the O’Tools on their breach of contract claims. 2. Remittitur In the alternative, defendants urge that the damages awarded by the jury to the O’Tools are excessive and against the weight of the evidence and, as a result, they ask the court to enter an order of remittitur reducing the awards. The court begins with defendants’ arguments concerning the jury’s award of $63,200 to Ms. O’Tool. According to defendants, Ms. O’Tool’s lost wages for the relevant time period were only $52,000 and thus, the jury must have awarded Ms. O’Tool more than $11,000 in lost MIP earnings (a bonus pursuant to defendants’ Management Incentive Program). Defendants urge that the $52,000 in lost wages must be reduced because the jury failed to deduct from this amount any wages that Ms. O’Tool could have earned if she had made reasonable efforts to obtain other employment. Of course, the burden was on defendants to prove that Ms. O’Tool failed to mitigate her damages. See Leavenworth Plaza Assocs., L.P. v. L.A.G. Enterprises, 28 Kan.App.2d 269, 272, 16 P.3d 314 (2000) (citing Kelty v. Best Cabs, Inc., 206 Kan. 654, 659, 481 P.2d 980 (1971); Rockey v. Bacon, 205 Kan. 578, 583, 470 P.2d 804 (1970)). Defendants spent very little time on this issue at trial. They presented no evidence regarding any specific jobs that might have been available to Ms. O’Tool and, in contrast, plaintiffs presented evidence reflecting that Ms. O’Tool did, in fact, attempt to find alternative employment but was unsuccessful. Ultimately, defendants simply failed to carry their burden on the mitigation issue. Defendants further contend that the jury’s calculation of Ms. O’Tool’s lost MIP earnings was inaccurate. Consistent with the evidence presented by plaintiffs at trial, the jury apparently awarded Ms. O’Tool approximately $11,000 in lost MIP earnings, representing 20 percent of Ms. O’Tool’s salary. Significantly, defendants do not contest that Ms. O’Tool’s employment agreement provided that her MIP compensation would be 20 percent of her salary assuming that both Genmar Holdings and Genmar Kansas met their operating profit goals. Moreover, defendants do not contest that 20 percent of Ms. O’Tool’s salary over the relevant 15-month period at issue (the time of her termination through the time when Ms. O’Tool’s employment contract would have expired) would be roughly $11,000. Rather, defendants urge that the jury incorrectly assumed that both Genmar Holdings and Genmar Kansas would have met their operating profit goals during the relevant time frame-an assumption that defendants characterize as “clearly erroneous” in light of the fact that Genmar Kansas never reached the operating profits necessary to generate MIP payments. Similarly, defendants contend that the jury improperly calculated Mr. O’Tool’s lost MIP earnings when it awarded him $20,313. In that regard, the jury’s verdict represents only lost MIP earnings as it was undisputed that Mr. O’Tool earned more money in his subsequent job than he would have earned if he had stayed at Genmar Kansas. Defendants do not dispute that Mr. O’Tool’s employment contract provided that his MIP compensation would be 25 percent of his salary (assuming that both Genmar Holdings and Genmar Kansas met then- operating profit goals). Defendants also do not dispute that the jury’s verdict of $20,313 represents almost to the penny 25 percent of Mr. O’Tool’s annual salary of $65,000 over the course of 15 months. Again, defendants maintain only that the jury incorrectly assumed (or wildly speculated) that both Genmar Holdings and Genmar Kansas would have met their operating profit goals during the relevant time frame and that, in fact, Genmar Kansas never met the requisite profit goals. Of course, defendants had the opportunity to make this argument to the jury and did, in fact, make this argument to the jury. The jury, as it was entitled to do, rejected this argument and plainly adopted plaintiffs’ theory, thoroughly developed at trial, that Genmar Kansas would have reached its operating profit goals but for defendants’ breach of their obligations under the purchase agreement, including their duty of good faith and fair dealing. In short, the jury’s award of $63,200 to Ms. O’Tool and $20,313 to Mr. O’Tool does not shock the conscience of this court and, thus, no remittitur will be issued. See Dougan v. Rossville Drainage Dist., 270 Kan. 468, 486, 15 P.3d 338 (2000) (court has the power to issue a remittitur where a verdict is so manifestly excessive that it shocks the conscience of the court); see also Century 21 Real Estate Corp. v. Meraj Int’l Investment Corp., 315 F.3d 1271, 1281 (10th Cir.2003) (in assessing measure of damages awarded pursuant to contract containing choice of law provision, district court must follow chosen state’s law-absent any argument that choice of law provision is unenforceable-including that state’s law concerning remittitur). D. Remaining Arguments in Support of New Trial Finally, defendants assert that they are entitled to a new trial pursuant to Federal Rule of Civil Procedure 59(a) in light of two “substantial errors of law” committed by the court. Specifically, defendants contend that the court erred in admitting parol evidence of the parties’ negotiations prior to the execution of the purchase agreement and that the court erred in its instruction to the jury regarding the appropriate standard for determining whether defendants breached the implied covenant of good faith and fair dealing. The court addresses each of these arguments in turn and, as explained below, rejects both arguments. 1. Admission of Parol Evidence In their motion, defendants initially argue that the court erred when it admitted, over defendants’ objection, parol evidence of the parties’ negotiations to support plaintiffs’ claim that they were fraudulently induced into executing the purchase agreement. Curiously, defendant concedes (in the same paragraph) that the law permits such evidence to prove fraudulent inducement. What defendants are really arguing is that parol evidence is inadmissible to prove bad faith in a breach of contract claim and that the jury should not have been permitted to consider evidence of the parties’ negotiations (and, more specifically, oral assurances made to plaintiffs by defendants pri- or to the execution of the agreement) in connection with plaintiffs’ claim that defendants breached the implied duty of good faith and fair dealing. While defendants objected at trial to the admission of parol evidence concerning the parties’ negotiations, they did not, once the court ruled that such evidence was clearly admissible with respect to plaintiffs’ fraud claim, request a limiting instruction or even raise the issue of whether such evidence was admissible with respect to plaintiffs’ breach of contract claim. In fact, defendants concede, as they must, that they failed to request a limiting instruction. Defendants, however, urge that parol evidence is a rule of substantive law that is not waived by the failure to object to its admission. See Carey v. Shellburne, Inc., 224 A.2d 400, 402 (Del.1966). While this is certainly true, there is nonetheless an evidentiary objection-relevance under Federal Rules of Evidence 401 and 402-that defendants should have made (and did not) if they desired to preclude the jury from considering such evidence with respect to plaintiffs’ breach of contract claim. Because defendants failed to raise a timely objection to the admission of such evidence on that basis and request a limiting instruction, the court reviews the admission of the evidence under the “plain error” standard. See Fed.R.Evid. 103(d). The court readily concludes that the admission of evidence concerning the parties’ negotiations prior to executing the purchase agreement was not plain error. In fact, the point largely is moot because the court, even if defendants had brought the issue to the court’s attention at trial, would have permitted the jury to consider such evidence in connection with plaintiffs’ claim that defendants breached the implied covenant of good faith and fair dealing. In other words, the court would have overruled any objection that defendants might have made in this regard. The parol evidence rule requires the court to exclude “extraneous evidence that varies or contradicts the terms of a unified written instrument.” True North Composites, LLC v. Trinity Indus., Inc., 191 F.Supp.2d 484, 514 CD.Dd.2002) (citation omitted). Because defendants have not shown (much less argued) that the evidence presented at trial concerning the parties’ negotiations varied or contradicted the terms of the purchase agreement, such evidence simply does not require invocation of the parol evidence rule. Moreover, because the purchase agreement was silent with respect to the majority of the issues discussed by the parties prior to the execution of the agreement (e.g., the number of Ranger boats that Genmar Kansas would be expected to produce or whether Gen-mar Kansas would be expected to produce any sister-brand boats at all), evidence concerning the parties’ pre-acquisition negotiations is entirely appropriate to provide context for plaintiffs’ claim that defendants breached their duty of good faith and fair dealing. See id. at 514-15 (denying motion for new trial based on court’s alleged error in admitting parol evidence of transaction underlying written agreement because evidence provided context to good-faith-and-fair-dealing claims and testimony did not vary or contradict the terms of the agreement). In other words, evidence concerning what the parties discussed prior to executing the agreement, to the extent such evidence, as here, does not contradict the agreement, is entirely relevant to whether defendants breached the covenant of good faith and fair dealing because the parties’ reasonable expectations at the time of the contract formation determine the reasonableness of the challenged conduct. See id. at 516 (evidence concerning course of dealings between the parties prior to execution of agreement was relevant to claim that party breached the covenant of good faith and fair dealing because such evidence illuminated the parties’ expectations of each other at the time of contract formation). To conclude, then, defendants have not shown that the parol evidence rule required exclusion, at least for purposes of plaintiffs’ breach of contract claim, of evidence concerning the parties’ negotiations prior to the execution of the purchase agreement. The court rejects defendants’ contention that it erred by allowing the jury to consider such evidence. 2. The Good Faith and Fair Dealing Instruction Defendants’ final argument in support of their motion for a new trial is that the court erred in its instruction to the jury concerning the duty of good faith and fair dealing. In its instructions, the court explained the duty, under Delaware law, as follows: [T]he law imposes a duty of good faith and fair dealing in every contract. This duty is a contract term implied by courts to prevent one party from unfairly taking advantage of the other party. This duty includes a requirement that a party avoid hindering or preventing the other party’s performance. The implied covenant of good faith and fair dealing emphasizes faithfulness to an agreed common purpose and consistency for the justified expectations of the other party. The parties’ reasonable expectations at the time of the contract formation determines the reasonableness of the challenged conduct. A violation of the implied covenant of good faith and fair dealing implicitly indicates bad faith conduct. In determining whether defendants breached the implied covenant of good faith and fair dealing, you may consider whether it is clear from what was expressly agreed upon by the parties that the parties would have agreed to prohibit the conduct complained of as a breach of the agreement had they thought to negotiate with respect to that matter. See Jury Instruction 12. The court’s instruction, in large part, was based on an instruction given by another federal court applying Delaware law concerning the duty of good faith and fair dealing, True North Composites, LLC v. Trinity Indus., Inc., 191 F.Supp.2d 484 (D.Del.2002). In True North, the court, faced with a motion for a new trial based an alleged errors in the good faith and fair dealing instruction, reviewed its instruction and found it to be “consonant with Delaware law.” Id. at 517-18. Specifically, the court noted that its instruction “tracks the language of § 205(a) of the Restatement (Second) of Contracts (1979), which has been used by Delaware courts to explain the duty of good faith.” Id. at 518. In short, the court readily concluded that its instruction on the duty of good faith and fair dealing was not in error. Id. Defendants urge, as they did at the instruction conference, that any proper instruction on the duty of good faith and fair dealing under Delaware law must require a finding that the conduct at issue involved “fraud, deceit or misrepresentation.” Defendants’ proposed instruction, for example, contained the following sentence that the court expressly rejected: “To prove defendants breached the implied duty of good faith and fair dealing in the Purchase Agreement, plaintiffs must demonstrate that defendants engaged in conduct of fraud, deceit or misrepresentation.” See Def. Proposed Instruction 5. This proffered language is derived from Corporate Property Associates 6 v. Hallwood Group Inc., 792 A.2d 993 (Del.Ch.2002), a trial court decision from the Court of Chancery in Delaware. In that case, a commercial dispute, the Vice Chancellor stated that a claimant seeking to prove a breach of the implied covenant of good faith and fair dealing “must also demonstrate that the conduct at issue involved ‘an aspect of fraud, deceit or misrepresentation.’ ” Id. at 1003. At the instruction conference, defendants relied solely on the Corporate Property case to support their proffered instruction. Indeed, defendants did not direct the court to any other Delaware case-much less a Delaware Supreme Court case or a federal case interpreting Delaware law-in which a court required a finding of fraud, deceit or misrepresentation to support a breach of the covenant of good faith and fair dealing in the context of a commercial transaction. As the court explained at the conference, the trial court in Corporate Property cites only to Merrill v. Crothall-American, Inc., 606 A.2d 96, 101 (Del.1992) in support of the “fraud, deceit or misrepresentation” language. The Merrill case involved an employment-at-will contract and the court held that when the conduct of an employer in the employment-at-will context rises to the level of fraud, deceit or misrepresentation, then the employer will have violated the implied covenant of good faith and fair dealing. Id. Interestingly, the Merrill court, in turn, relies on two cases from two other state courts in support of its conclusion that an element of fraud, deceit or misrepresentation must be present before an employer violates the covenant of good faith and fair dealing. Id. Those cases, Magnan v. Anaconda Indus., Inc., 37 Conn.Supp. 38, 429 A.2d 492 (1980) and A. John Cohen Ins. v. Middlesex Ins. Co., 8 Mass.App.Ct. 178, 392 N.E.2d 862 (1979), both arise in the employment-at-will context. In the limited and unique context of employment-at-will, requiring an employee to prove that his or her employer’s conduct amounted to fraud in order to show a breach of the duty of good faith and fair dealing is entirely consistent with the notion of an at-will employment relationship. For in the absence of a showing of fraud, the covenant of good faith and fair dealing could not operate in the employment-at-will context without wholly defeating the benefit for which the parties bargained-the employer’s ability to discharge the employee and the employee’s ability to quit his or her employment for good reason, bad reason or no reason at all. Stated another way, parties to an at-will employment relationship are generally not subjected to any good faith standard. On the other hand, in the context of a commercial transaction like the one presented here, the implied covenant of good faith and fair dealing-as it is typically applied (ie., without a requirement of fraud)-does not conflict with the benefit for which parties to a commercial transaction generally bargain. For these reasons, the court reiterates its belief that the trial court in Corporate Property incorrectly incorporated into the commercial context the “fraud, deceit or misrepresentation” language from the employment-at-will context of Merrill. Defendants, for the first time, now also cite to a Delaware Supreme Court case that they assert rejects the distinction that this court has drawn between the commercial context and employment-at-will context. Specifically, defendants rely on Cincinnati SMSA Limited Partnership v. Cincinnati Bell Cellular Systems Co., 708 A.2d 989 (Del.1998) and contend that in Cincinnati Bell the Delaware Supreme Court “made clear that the same standard applied by the Delaware court in Merrill should also be applied in the commercial contract context.” Defendants’ characterization of the Cincinnati Bell ease is simply inaccurate; in fact, that case supports this court’s conclusion that any requirement that a party prove fraudulent conduct to demonstrate a violation of the duty of good faith and fair dealing is limited to the employment-at-will context. In Cincinnati Bell, the Delaware Supreme Court reviewed a decision by the Court of Chancery dismissing, pursuant to Rule 12(b)(6), a good faith and fair dealing claim arising in the context of a limited partnership agreement. Id. at 990. Specifically, the Delaware Supreme Court affirmed the lower court’s conclusion that the implied covenant of good faith and fair dealing could not provide a basis for implying additional noncompete obligations in a limited partnership agreement where the agreement’s noncompete clause was unambiguous. Id. at 993-94. In so holding, the Cincinnati Bell court emphasized that “implying obligations based on the covenant of good faith and fair dealing is a cautious enterprise.” Id. at 992. Tracing the development of the implied covenant under Delaware law, the court in Cincinnati Bell noted that the Merrill case was the first case in which the court “first recognized the limited application of the covenant to inducement representations in at-will employment contracts.” Id. The Cincinnati Bell court further noted that in Merrill, the court “was careful to heed the legal right of employers to pursue a certain amount of self-interest in the creation of contractual relationships” and “held that, to plead properly a claim for breach of an implied covenant of good faith and fair dealing in the inducement of employment, a plaintiff must allege ‘an aspect of fraud, deceit or misrepresentation.’ ” Id. at 992-93 (quoting Merrill, 606 A.2d at 101-02). The court in the Cincinnati Bell case then stated, “[t]his Court should be no less cautious or exacting when asked to imply contractual obligations from the written text of a limited partnership agreement.” Id. at 993. Defendants argue that this single sentence clearly illustrates an intent by the Delaware Supreme Court to incorporate the fraud standard of the employment-at-will context into the commercial transaction context. A full reading of Cincinnati Bell, however, indicates that the court was simply stressing the narrow scope of the implied covenant and that application of the covenant is a “cautious enterprise.” Id. at 992-93. There is no indication in Cincinnati Bell that the court utilized the fraud standard of Merrill in resolving the appeal. In short, Cincinnati Bell in no way suggests that the jury in this case should have been instructed that plaintiffs were required to prove that defendants acted fraudulently in order to prove a breach of the implied covenant and, more importantly, the court believes that the Delaware Supreme Court, if faced with the issue, would refuse to adopt such a requirement. Moreover, defendants’ construction of Delaware law on good faith and fair dealing is illogical as it would render a good faith and fair dealing claim entirely dupli-cative of a fraud claim. In fact, defendants essentially contend that plaintiffs’ good faith and fair dealing claim should be converted into one of fraud. Under defendants’ theory, then, plaintiffs could not prevail on their good faith and fair dealing claim without also prevailing on their fraud claim. Any distinction, then, between the two claims would be lost. Such a result would be untenable, as the Delaware Supreme Court obviously recognizes a distinction between the two claims. See Desert Equities, Inc. v. Morgan Stanley Leveraged Equity Fund, II, L.P., 624 A.2d 1199, 1207-08 (Del.1993) (distinguishing claim of fraud from allegations of bad faith). Finally, defendants contend that the court’s instruction on the duty of good faith and fair dealing was erroneous because it failed to inform the jury that plaintiffs were required to show affirmative acts of bad faith on the part of defendants. The court’s instruction advised the jury that a violation of the implied covenant of good faith and fair dealing “implicitly indicates bad faith conduct.” While defendants may have preferred different language concerning bad faith, they have not identified how the court’s instruction departs from or incompletely portrays Delaware law. Moreover, defendants have not demonstrated why plaintiffs’ proof of a breach of the duty of good faith and fair dealing is inadequate without further proof of affirmative acts of bad faith conduct. The court, then, rejects defendants’ argument that the instruction was erroneous. See True North, 191 F.Supp.2d at 517-18 (rejecting argument that instruction was erroneous because it failed to advise that the claimant must prove that the other party acted in bad faith where movant failed to show how the court’s instruction was inconsistent with Delaware law). 11. Plaintiffs’ Motion to Alter or Amend the Judgment The judgment entered on November 21, 2002 states that plaintiffs Horizon and Mr. Pepper shall recover on their breach of contract claim “the sum of $2,500,000.00, with interest thereon at the rate of 1.46 percent per annum as provided by law.” Plaintiffs move to alter or amend the judgment to reflect the parties’ contractually agreed interest rate of 2 percent per month. In that regard, the relevant section of the purchase agreement executed by the parties states as follows: In the event that the Non-Defaulting Party is entitled to receive an amount of money by reason of the Defaulting Party’s default hereunder, then, in addition to such amount of money, the Defaulting Party shall promptly pay to the Non-Defaulting Party a sum equal to interest on such amount of money accruing at the rate of 2% per month (but if such rate is not permitted under the laws of the State of Delaware, then at the highest rate which is permitted to be paid under the laws of the State of Delaware) during the period between the date such payment should have been made hereunder and the date of the actual payment thereof. See Purchase Agreement, Section 13.2(b) (Trial Exhibit 227a). Defendants oppose plaintiffs’ motion for three reasons. According to defendants, the contractual rate of interest specified in the purchase agreement is preempted by the standard rate contained in 28 U.S.C. § 1961; plaintiffs have waived their right to have the judgment accrue interest at- the parties’ contractually agreed rate; and the contractually agreed rate is not permitted under Delaware law. As set forth below, the court concludes that parties are free to contract for a rate other than that specified in 28 U.S.C. § 1961 and, thus, the federal statute does not supersede the parties’ agreement. Nonetheless, because the court concludes that plaintiffs have waived their right to assert the rate set forth in the purchase agreement by not preserving their claim of entitlement to such rate in the pretrial order and by failing to raise the issue until after the entry of judgment, the court denies plaintiffs’ motion to alter or amend the judgment to the extent plaintiffs seek to enforce the rate establis