Guidance Endodontics, LLC v. Dentsply International, Inc. (749 F. Supp. 2d 1235, 2010)

United States District Court for the District of New Mexico 2010-10-14

Citations

Full opinion text

MEMORANDUM OPINION AND ORDER

JAMES 0. BROWNING, District Judge.

THIS MATTER comes before the Court on Dentsply/TDP’s Motion to Set Aside the Punitive Damages Award and the Breach of Implied Covenant Verdict and for Judgment Notwithstanding the Verdict, filed October 30, 2009 (Doc. 454). The Court held a hearing on this motion on March 22, 2010. The primary issues are: (i) whether the Court should vacate a punitive-damages verdict of $40,000,000.00 in a breach-of-contract suit under Delaware law because the independent tort, which permitted punitive damages in a breach-of-contraet action, was limited to $300.00 in punitive damages; (ii) whether the Court should vacate that punitive damages award because there was no tort claim upon which to base a punitive damages award, i.e., because neither Plaintiff Guidance Endodontics, LLC’s claim under the New Mexico Unfair Practices Act, NMSA 1978, §§ 57-12-1 through 57-12-26 (“NMUPA”), nor its claim for breach of the implied covenant of good faith and fair dealing, was a tort claim; (iii) whether the Court should vacate the jury’s verdict on Guidance’s breach-of-implied-covenant claim because Guidance failed to establish all the elements of that claim; and (iv) whether the Court committed harmful error by giving Instruction No. 37 to the jury. Many of the issues that the Defendants Dentsply International, Inc., and Tulsa Dental Products, LLC, raise have been forfeited or waived, and those that have been preserved lack a sound basis in the law or in the facts of this case. Those issues that have not been forfeited do not rise to the level of plain error. The Court will thus deny the Defendants’ motion.

FACTUAL BACKGROUND

This suit arises from a contract dispute that Guidance, a small endodontic-equipment company, has brought against the Defendants, who were both Guidance’s rivals and its suppliers. More background on the lawsuit is set forth in one of the Court’s earlier opinions. See Guidance Endodontics, LLC v. Dentsply Int’l, Inc., 633 F.Supp.2d 1257, 1260-67 (D.N.M.2008) (Browning, J.). The Defendants are manufacturers and suppliers of a variety of endodontic products that compete with Guidance’s products, including endodontic obturators, files, and ovens. Guidance and the Defendants were parties to a Manufacturing and Supply Agreement, which arose as a settlement of a separate intellectual-property dispute. The Supply Agreement required the Defendants to supply Guidance with endodontic files, obturators, and ovens, which Guidance would then sell to end-users.

Guidance began selling those endodontic products at extremely low prices compared to the prices that the Defendants charged for the same or similar products. Allegedly as a dirty business tactic to keep Guidance from underselling them in the marketplace, the Defendants stopped supplying endodontic obturators to Guidance. The Defendants told Guidance that they were ceasing to supply obturators because they heard that Guidance was telling its current and potential customers that the Defendants manufactured the products, which, they alleged, was in violation of the Supply Agreement. In addition to ceasing the supply of obturators, the Defendants refused to manufacture a new endodontic file — the V2 file — which Guidance intended to sell. The Defendants asserted that the Supply Agreement required Guidance to supply them with detailed engineering drawings before they were obligated to supply the V2 file. Guidance disputed that the Supply Agreement required it to provide engineering drawings as a prerequisite to the Defendants producing the V2. Finally, the Defendants initiated an organized marketing campaign to drive Guidance out of business, which included the Defendants’ sales staff falsely representing to actual and potential Guidance customers that Guidance was no longer able to supply endodontic files. Based on these three categories of conduct, Guidance filed this suit.

PROCEDURAL BACKGROUND

On November 21, 2008, Guidance filed a Verified Complaint and Demand for Jury Trial. In the Complaint, Guidance made seven claims for relief: (i) breach of contract based on the Defendants’ refusal to supply obturators, see Complaint ¶¶ 158-68, at 30-31; (ii) breach of contract based on the Defendants’ refusal to supply endodontic files, see Complaint ¶¶ 169-79, at 31-32; (iii) breach of the implied covenant of good faith and fair dealing, see Complaint ¶¶ 180-87, at 32-33; (iv) violation of the Delaware Deceptive Trade Practices Act, see Complaint ¶¶ 188-97, at 33-34; (v) violation of the NMUPA, see Complaint ¶¶ 198-207, at 34-35; (vi) violation of § 43(a)(1)(B) of the Lanham Act, see Complaint ¶¶ 208-16, at 35-36; and (vii) tortious interference with existing and prospective contractual relations, see Complaint ¶¶ 217-26, at 36-37. On the way to trial, the Court dismissed several of these claims.

1. Proposed Instructions and Verdict Form, and the Court’s Adoption Thereof.

On September 15, 2009, the Defendants filed a set of proposed jury instructions. One of those was an instruction on the Defendants’ claim against Guidance for a breach of the implied covenant of good faith and fair dealing. That instruction read:

Every contract, including the one in this case, contains an implied covenant of good faith and fair dealing. This covenant requires the parties to the contract to refrain from arbitrary or unreasonable conduct which has the effect of preventing the other party to the contract from receiving the fruits of the bargain. A party is liable for breaching the implied covenant of good faith and fair dealing if you find that its conduct frustrates the overarching purpose of the contract and that such action actually or nominally damaged the other party-

In this case, Guidance is liable for breach of the implied covenant of good faith and fair dealing if you find that it acted arbitrarily or unreasonably, its conduct prevented Dentsply and/or Tulsa Dental from receiving the fruits of the contract, and Guidance’s actions actually or nominally damaged Dentsply and/or Tulsa Dental.

Dentsply/TDP’s Proposed Jury Instructions, Instruction No. 8, at 9, filed September 15, 2009 (Doe. 330). The Defendants’ proposed jury instruction on punitive damages did not mention their implied-covenant claim. See Dentsply/TDP’s Proposed Jury Instructions, Instruction No. 45, at 51.

Shortly thereafter, on September 28, 2009, the Defendants submitted a proposed verdict form. See Dentsply/TDP’s Proposed Verdict Form for Claims Asserted by Dentsply/TDP, filed September 28, 2009 (Doc. 370). The proposed verdict form contains the following questions regarding punitive damages and breach of the implied covenant of good faith and fair dealing:

Breach of Implied Covenant of Good Faith and Fair Dealing

(6) Do you find that Guidance breached the implied covenant of good faith and fair dealing?

_YES__ NO

If your answer to Question No. 6 is “YES,” go on to Question No. 7. If your answer to Question No. 6 is “No,” go to Question No. 11.

(7) Do you find that Dentsply and/or Tulsa Dental have suffered actual or nominal damages as a result of Guidance’s conduct?

._YES_NO

If your answer to Question No. 7 is ‘TES,” go on to Question No. 8. If your answer to Question No. 7 is “No,” go on to Question No. 11.

(8) In a lump sum, state the amount of actual or nominal damages you award Dentsply and Tulsa Dental

$-

Go on to Question No. 9.

(9) Do you find that Guidance’s breach of the implied covenant of good faith and fair dealing was in bad faith?

_YES_NO

If your answer to Question No. 9 is “YES,” go on to Question No. 10. If your answer to Question No. 9 is “No,” go to question No. 11.

(10)In a lump sum, state the amount of punitive damages you award Dents-ply and Tulsa Dental.

$-

Dentsply/TDP’s Proposed Verdict Form for Claims Asserted by Dentsply/TDP at 3. This set of jury questions would allow the jury to award punitive damages to the Defendants based solely on a bad-faith breach of the implied covenant of good faith and fair dealing.

The Court adopted the Defendants’ proposed jury questions into its First and Second Proposed Verdict Forms. See Court’s First Proposed Verdict Form at 7, filed October 1, 2009 (Doc. 393); Court’s Second Proposed Verdict Form at 3, 6, filed October 6, 2009 (Doc. 424). The Court’s Second Proposed Verdict Form adopted the Defendants’ questions as a predicate for punitive damages with respect to both Guidance’s implied-covenant claim against the Defendants, and the Defendants’ implied-covenant counterclaim against Guidance:

Predicate for Punitive Damages for Breach of Implied Covenant of Good Faith and Fair Dealing

12. Do you find Dentsply and/or Tulsa Dental’s breach of the implied covenant of good faith and fair dealing was in bad faith?

* * * *

Predicate Question for Punitive Damages for Breach of Implied Covenant of Good Faith and Fair Dealing.

30. Do you find that Guidance’s breach of the implied covenant of good faith and fair dealing was in bad faith?

Court’s Second Proposed Verdict Form at 3, 6.

2. The Court’s Instructions on Punitive Damages and Breach of the Implied Covenant of Good Faith and Fair Dealing.

The Court included in the Final Jury-Instructions an instruction setting forth the elements of a claim for breach of the implied covenant of good faith and fair dealing. That instruction stated:

For Guidance to prove that Dentsply and/or Tulsa Dental breached the implied covenant of good faith and fair dealing, Guidance must prove each of the following elements by a preponderance of the evidence:

First, Dentsply and/or Tulsa Dental acted arbitrarily or unreasonably by using its status as Guidance’s exclusive manufacturer of products to develop a brochure that disparages those products;

Second, that conduct prevented Guidance from receiving the fruits of the contract; and

Third, Dentsply and/or Tulsa Dental’s actions injured Guidance.

Court’s Final Jury Instructions (Given), Instruction No. 27, at 28, filed October 8, 2009 (Doc. 430). The Court explained that instruction in a following instruction, which stated:

A party is liable for breaching the implied covenant of good faith and fair dealing if you find that its conduct frustrates the overarching purpose of the contract and that such actions actually or nominally damaged the other party. The implied covenant is breached when it is clear from the writing that the parties would have agreed to prohibit the act complained of had they thought to negotiate with respect to that matter or when one party frustrates the purpose of the agreement by taking advantage of its position to control implementation of the agreement’s terms.

Court’s Final Jury Instructions (Given), Instruction No. 28, at 29. The Court also included an instruction setting forth the elements of a NMUPA claim; it stated:

For Guidance to prove that Dentsply and/or Tulsa Dental violated the New Mexico Unfair Practices Act, Guidance must prove each of the following elements by a preponderance of the evidence:

First, Dentsply and/or Tulsa Dental made an oral or written statement that was false or misleading;

Second, the false or misleading statement was knowingly false;

Third, the false or misleading statement was made in connection with the sale of goods or services in the regular course of Dentsply’s and/or Tulsa Dental’s trade or commerce; and

Fourth, the false or misleading statement may, tends to, or does deceive or mislead any person.

Court’s Final Jury Instructions (Given), Instruction No. 31, at 32.

Finally, the Court instructed the jury on punitive damages, borrowing from the parties’ proposed instructions and reacting to various objections. Relevant to this motion, that instruction stated:

In this case, Guidance seeks to recover punitive damages from Dentsply and/or Tulsa Dental. You may consider punitive damages only if you find that Guidance should recover compensatory damages for the breach of contract and nominal damages for violation of the New Mexico Unfair Practices Act.

If you decide to award compensatory damages to Guidance on its breach of contract claims against Dentsply and/or Tulsa Dental, or on its claim that Dents-ply and/or Tulsa Dental breached the implied covenant of good faith and fair dealing, you must determine whether Dentsply and/or Tulsa Dental are liable to Guidance for punitive damages.

Guidance may only recover punitive damages from Dentsply’s and/or Tulsa Dental’s breach of contract if you find one of the following: (a) that Dentsply’s and/or Tulsa Dental’s breach of the contract was accompanied by fraudulent conduct; (b) that Dentsply’s and/or Tulsa Dental’s breach of contract also constituted a violation of the New Mexico Unfair Practices Act because they failed to deliver the quality or quantity of goods or services required by the Manufacturing and Supply Agreement.

Guidance may only recover punitive damages for Dentsply’s and/or Tulsa Dental’s breach of implied covenant of good faith and fair dealing if you find that Dentsply’s and/or Tulsa Dental’s breach of the implied covenant was in bad faith.

You may award punitive damages to punish Dentsply and/or Tulsa Dental for their outrageous conduct and to deter them, and others like them, from engaging in similar conduct in the future if you find by a preponderance of the evidence that Dentsply and/or Tulsa Dental acted intentionally or recklessly.

Court’s Final Jury Instruction (Given), Instruction No. 37, at 39-40.

3. Before the Jury Began Deliberations, the Court Dismissed the Defendants’ Claim for Breach of the Implied Covenant of Good Faith and Fair Dealing.

The Defendants filed several counterclaims against Guidance. One of those claims was for a breach of the implied covenant of good faith and fair dealing. The Court granted Guidance’s motion for summary judgment as to the Defendants’ implied-covenant claim, however, because the claim overlapped with the Defendants’ breach-of-contract claim. See Guidance Endodontics, LLC v. Dentsply Int’l, Inc., 708 F.Supp.2d 1209, 1234-38 (D.N.M.2010) (Browning, J.). The Court thus removed from the verdict form questions asking the jury to find whether Guidance breached the implied covenant, including the questions which would allow the Defendants to receive punitive damages if the jury found a bad-faith breach of the implied covenant.

4. The Jury’s Verdict and the Court’s Judgment.

The Court held a three-week jury trial from September 21, 2009 through October 9, 2009. See Clerk’s Minutes Before the Honorable James O. Browning at 1, filed September 21, 2009 (Doc. 439). On Wednesday, October 7, 2009, the Court read the instructions to the jury. See id. at 40. Those instructions included Guidance’s claims for breach of contract, breach of the implied covenant of good faith and fan-dealing, violation of the NMUPA, and violation of the Lanham Act. See Court’s Final Jury Instructions (Given), Instruction No. 18, at 18, filed October 8, 2009 (Doc. 430). The Court had dismissed the other claims before trial.

The jury deliberated for about two days. On October 9, 2009, the jury returned a verdict largely in favor of Guidance. The jury found that the Defendants breached the Supply Agreement with regard to its failure to supply obturators and its failure to produce the V2 file, and found that breach caused Guidance damages. See Verdict Form ¶¶ 2^4, at 2, filed October 9, 2009 (Doc. 441). The jury also found that the Defendants breached the implied covenant of good faith and fair dealing, and violated the NMUPA, and found that both infractions caused damages to Guidance. See id. ¶¶ 5-12, at 2-3. The jury awarded Guidance $500,000.00 in compensatory damages for past harm that the breach of contract related to the V2 caused, and $3,580,000.00 in future damages related to that breach. See Verdict Form ¶¶ 15-16, at 4. The jury also found that Guidance was entitled to nominal damages of $200,000.00 for the Defendants’ unlawful conduct. See Verdict Form ¶¶ 17-21, at 4-5. Finally, based on the breach of the implied covenant and violation of the NMUPA, the jury awarded Guidance punitive damages of $40,000,000.00. See Verdict Form ¶¶ 22-23, at 5-6.

The jury did not, however, completely absolve Guidance of fault. It found that Guidance breached the Supply Agreement and willfully engaged in false advertising in violation of the Lanham Act, 15 U.S.C. § 1125. See Verdict Form ¶¶ 24-27, at 6-7. As a result, the jury awarded the Defendants $93,000.00 in compensatory damages. See id. ¶ 35, at 8.

On October 22, 2009, Guidance filed a motion asking the Court to enter a final judgment in conformity with the jury’s verdict. See Motion for Entry of Final Judgment, filed October 22, 2009 (Doc. 450). The Court granted the motion in part, see Order, filed March 31, 2009 (Doc. 537), and entered a judgment similar to the judgment that Guidance sought, see Final Judgment, filed March 31, 2010 (Doc. 538).

5. The Motion and Arguments.

The Defendants filed this motion on October 30, 2009, asking the Court “to set aside the jury’s punitive damages award and the breach of the implied covenant verdict pursuant to Rule 59 of the Federal Rules of Civil Procedure.” Motion at 1. They present four separate bases, each of which they assert entitles them to such relief. See id. First, the Defendants argue that, under Delaware law, a plaintiff may recover punitive damages on a breach of contract claim only when the breaching conduct constitutes an independent tort which would, itself, justify the award of punitive damages. See Motion at 2-6. They assert that Guidance’s punitive damages for the Defendants’ breach of contract are limited to $300.00, because $300.00 is the maximum amount of punitive damages to which Guidance would be entitled if it had brought its sole tort claim — a claim for violation of the NMUPA — by itself. See Motion at 2-4. They then argue that New Mexico law does not permit a plaintiff to recover punitive damages beyond the $300.00 treble-damages award under the NMUPA unless it can prove a separate and independent tort, and, because Guidance only established one tort claim, New Mexico law limits it to $300.00 in treble damages. See Motion at 4-6.

Second, the Defendants argue that Guidance cannot recover punitive damages under Delaware law because Guidance did not prove that the breach of contract rose to the level of an independent tort. Rather, the Defendants now insist that the NMUPA claim on which Guidance bases its entitlement to punitive damages is in the nature of a contract claim and not a tort claim. See Motion at 6-10. Thus, without the required tort predicate, Guidance cannot recover punitive damages for the Defendants’ breach of contract. See id. at 10.

The Defendants’ third and most in-depth argument is that the Court erred by potentially allowing Guidance to recover punitive damages based on a bad-faith breach of the implied covenant of good faith and fair dealing. See Motion at 10-22. They make two separate arguments on this issue: (i) that Delaware law does not allow a plaintiff to recover punitive damages for a bad-faith breach of the implied covenant, see id. at 10-14; and (ii) that Guidance failed as a matter of law to establish two of the elements of its implied-eovenant claim, see id. at 14-22. The two elements for which the Defendants insist Guidance failed to produce sufficient evidence were the breach of a specific implied contractual obligation, see id. at 14-20, and actual damages, see id. 20-22.

As their fourth and final point, the Defendants argue that Jury Instruction No. 37 — the punitive-damages instruction— was flawed in several respects. See Motion at 22-27. First, they argue that the fourth paragraph of Instruction 37 was flawed because it permitted the jury to award Guidance punitive damages if the Defendants’ breach of contract was “accompanied by fraudulent conduct,” even though Guidance did not bring a common-law fraud claim. Motion at 23-24. Second, they argue the fourth paragraph was flawed because it allowed the jury to find a violation of the NMUPA solely based on the Defendants’ “failure to deliver the quality or quantity of goods.” Motion at 24. Third, the Defendants assert that the fifth paragraph of Instruction No. 37 was flawed because it allowed the jury to award punitive damages for a mere bad-faith breach of the implied covenant of good faith and fair dealing. See Motion at 25. Fourth, the Defendants assert that the third paragraph was flawed because it instructed the jury to determine whether the Defendants were liable for punitive damages if it awarded Guidance compensatory damages on the implied-eovenant claim, where the jury was not allowed to award compensatory damages on the implied-covenant claim. See Motion at 25. Finally, the Defendants generieally argue that, taken as a whole, Instruction No. 37 “could not have served as an adequate guide for jury deliberation.” Motion at 26.

In response, Guidance begins by chiding the Defendants for failing to address post-trial-motion standards or error preservation. See Plaintiff Guidance’s Response in Opposition to Defendants’ Motion to Set Aside the Punitive Damages Award and the Breach of Implied Covenant Verdict and for Judgment Notwithstanding the Verdict [Doc. 454] at 1, filed December 7, 2009 (Doc. 482) (“Response”). Guidance asserts that, although the Defendants’ motion cites rule 59 in its opening paragraph, the Defendants appear to seek judgment as a matter of law under rule 50(b), see Response at 1-2, and to assert error in a jury instruction under rule 51, see Response at 2-3. Finally, it asserts that the Defendants either failed to preserve the errors they now assert, or affirmatively invited them, resulting in a heightened burden on post-trial review or a complete waiver of post-trial review. See id. at 3^1.

Guidance argues that the Court was correct in allowing it to recover punitive damages. After first arguing that the Defendants waived and/or failed to preserve their various arguments, Guidance asserts that it met a higher standard than Delaware law required for receiving punitive damages. See Response at 4-11. It contends that, contrary to the Defendants’ arguments, its punitive damages for the Defendants’ breach of contract is not limited to the punitive damages recoverable under its NMUPA claim. See Response at 11-13. Guidance also argues that the NMUPA — including the theory relating to the Defendants’ breach of contract — is a tort claim and thus a proper predicate for breach-of-contract punitive damages under Delaware law. See Response at 14-16.

Next Guidance argues that the Court did not err in instructing the jury that it could award punitive damages for a bad-faith breach of the implied covenant of good faith and fair dealing. See Response at 16-28. First, it argues that the Defendants waived any error by inviting it when they submitted a jury instruction on their own implied-covenant claim. Guidance contends that the Defendants’ proposed instruction allowed them to recover punitive damages upon showing a bad-faith breach of the implied covenant, and that the Defendants never objected to the instruction or verdict form on the grounds now asserted. See Response at 16-20. Guidance then argues that it established more than mere bad faith and that Delaware law allows recovery of punitive damages on the showing of “culpably tortious state of mind” that Guidance made. Response at 20-21. Guidance asserts that the Defendants waived the sufficiency-of-the-evidence arguments made in this motion, because they failed to make a rule 50(a) motion for judgment as a matter of law on these elements of the implied-covenant claim; Guidance further argues that there was sufficient evidence to sustain the jury’s verdict. See Response at 21-27. Finally, Guidance argues that, even if the Court found that there was insufficient evidence to sustain the jury’s verdict on Guidance’s implied-covenant claim, the punitive damages award should still stand. See id. at 27-28.

In response to the Defendants’ attacks on Jury Instruction No. 37, Guidance asserts that each of the arguments were either waived or forfeited. See Response at 28-29. Guidance then walks through each of the Defendants’ arguments and asserts that each is meritless, as well as being waived and/or forfeited. See id. at 30-34.

In their reply brief, the Defendants first argue that all of the issues they raise in the motion were preserved at trial, and are not waived or forfeited. See Dents-ply/TDP’s Reply in Support of Their Motion to Set Aside the Punitive Damages Award and the Breach of Implied Covenant Verdict and for Judgment Notwithstanding the Verdict at 2-9, filed January 14, 2010 (Doc. 497) (“Reply”). They also assert that, regardless what standard of review applies to their various arguments, they should prevail. See id. at 9-12. The Defendants then reiterate the arguments in their motion. See Reply at 12-22.

6. Arguments at the Hearing.

R. Ted Cruz, the Defendants’ post-trial counsel, conceded during the hearing that, in his view, E.I. DuPont de Nemours & Co. v. Pressman is the controlling precedent on this issue. See Transcript of Hearing at 7:23-8:3 (taken Mar. 22, 2010), filed May 4, 2010 (Doc. 558) (“Tr.”) (Cruz). They conceded that they have found no case applying Delaware law which specifically limits breach-of-eontract punitive damages with the standard that applies to the underlying tort that opened the door to breach-of-contract punitive damages. See Tr. at 31:1-32:7 (Court, Cruz). They also conceded that they have found no commentator that has construed Delaware law the way that they propose. See Tr. at 31:1-32:7 (Court, Cruz).

Mr. Cruz presented substantial argument that, if the Court allows Guidance to recover substantial punitive damages based only on a breach of contract plus a willful violation of the NMUPA — an arguable tort that would allow Guidance to recover, at most, $300.00 in damages — it would run afoul of the principle of efficient breach. See, e.g., Tr. at 9:16-21 (Cruz). Mr. Cruz also explained the concept of efficient breach, to which the Supreme Court of Delaware has ascribed over the past several decades. See id. at 9:16-14:12 (Cruz); id. at 20:19-23:4 (Cruz). He asserted that there is only one sensible way to read E.I. DuPont de Nemours & Co. v. Pressman, and that is to require a separately pleaded and proven tort, which would support the punitive damages award standing alone, to open the door to punitive damages for breach of contract. See Tr. at 11:17-12:12 (Cruz). Mr. Cruz then addressed whether the NMUPA claim that appears to have opened the door to punitive damages was a tort or a contract action; he contended that, while most grounds for asserting an NMUPA claim would constitute a tort claim, the one upon which Guidance bases its entitlement to punitive damages was a contract action. See Tr. at 42:12-47:20 (Court, Cruz).

Mr. Cruz then addressed Guidance’s implied-covenant claim. He argued that breach of the implied covenant plus bad faith, without more, cannot support an award of punitive damages. See id. at 47:23-49:25 (Court, Cruz). He conceded that a breach-of-implied-covenant claim, which is a form of contract claim under Delaware law, has the same rules for deciding when punitive damages are available as do contract claims. See Tr. at 49:8:16 (Court, Cruz); id. at 62:4-15 (Cruz). Because of this principle, he asserted, the Court’s Jury Instruction No. 37 was flawed. See Tr. at 50:11-22 (Cruz). Otherwise, the Defendants’ arguments did not materially differ from the arguments put forth in their briefs.

Donald DeCandia argued for Guidance. He began by giving a brief recital of the facts of the case, see Tr. at 67:10-69:11 (DeCandia), and otherwise relied upon arguments very similar to those made in Guidance’s response brief. He argued that the Defendants failed to preserve all of the issues they now raise, that they cannot meet the onerous burden necessary to prove plain error, see id. at 69:12-70:18 (DeCandia), and that the Defendants even affirmatively waived many of the issues, see id. at 70:19-72:18 (DeCandia); id. at 108:9:110:16 (Court, DeCandia). See also id. at 72:19-77:24 (DeCandia). Mr. De-Candia then addressed the merits of most of Mr. Cruz’ arguments, see id. at 77:24-83:1 (DeCandia), and asserted that a prePressman case from the Supreme Court of Delaware and its progeny suggest that breach of contract plus an appropriate mental state is enough for punitive damages, with or without it arising to the level of an independent tort, see id. at 83:2-24 (DeCandia). Like Mr. Cruz, Mr. DeCandia conceded that the rules for receiving punitive damages for a breach of contract are the same as those for receiving punitive damages for a breach of the implied covenant. See id. at 93:9-97:8 (Court, De-Candia).

Mr. DeCandia also conceded that, if the jury must find common-law fraud to award punitive damages for a breach of contract accompanied by fraudulent conduct, the instructions given were insufficient to show a finding of common-law fraud. See Tr. at 113:2-18 (Court, DeCandia). Rather, he asserted that the only requirement is “fraudulent conduct” — not “fraud” — and that the Defendants’ willful violation of the NMUPA fulfilled that requirement. See Tr. at 112:20-114:13 (DeCandia).

After Mr. DeCandia’s argument, the Court asked Mr. Cruz to clarify the procedural basis for the Defendants’ motion. Mr. Cruz clarified that, in all of their post-trial motions, they seek judgment as a matter of law initially and, in the alternative, a new trial. See Tr. at 117:13-24 (Court, Cruz). He then conceded that the Defendants initially asked, erroneously, for punitive damages for a breach of the implied covenant of good faith and fair dealing on the basis of bad faith alone. See id. at 118:22-119:8 (Court, Cruz). Mr. Cruz also conceded that, at the time of trial, both parties agreed on the elements of an implied-eovenant claim. See id. at 128:3-130:11 (Cruz).

RELEVANT LAW REGARDING RULE 50

Rule 50 presents two ways a party may secure a judgment in its favor after a trial has begun. Rule 50(a) allows a movant to, in effect, bring a motion for summary judgment on the trial record. Such motions raise a legal issue of the sufficiency of the non-moving party’s evidence on an issue. Rule 50(b) allows a movant to attack the sufficiency of the evidence after the trial has ended.

1. Rule 50(a).

Judgment as a matter of law is proper where “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 that issue.” Fed.R.Civ.P. 50(a)(1). This standard for a directed verdict mirrors the standard for summary judgment. See Anderson v. Liberty Lobby, 477 U.S. 242, 250, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986); Wiles v. Michelin N. Am., Inc., 173 F.3d 1297, 1303 (10th Cir.1999); Morales v. E.D. Etnyre & Co., 382 F.Supp.2d 1278, 1280-81 (D.N.M.2005) (Browning, J.) (“This [rule 50(a) ] standard is identical to that the court must employ when ruling on motions for summary judgment under rule 56.”). A court may grant judgment as a matter of law, however, even though it has denied summary judgment, because the parties have been able to address all relevant, available evidence. See Lee v. Glessing, 51 Fed.Appx. 31, 32 (2d Cir.2002).

In determining whether to grant judgment as a matter of law, a court may not weigh the evidence or make its own credibility determination, see Shaw v. AAA Eng’g. & Drafting, 213 F.3d 519, 529 (10th Cir.2000), and must draw all reasonable inferences in favor of the nonmoving party, see Thompson v. State Farm Fire & Cas. Co., 34 F.3d 932, 941 (10th Cir.1994). Such a judgment is warranted if the evidence permits only one rational conclusion. See Crumpacker v. Kan. Dep’t of Human Resources, 474 F.3d 747, 751 (10th Cir.2007). In other words, “[t]he question is not whether there is literally no evidence supporting the [nonmoving] party ... but whether there is evidence upon which the jury could properly find [for that party].” Century 21 Real Estate Corp. v. Meraj Int’l Inv. Corp., 315 F.3d 1271, 1278 (10th Cir.2003) (some alterations in original). See Morales v. E.D. Etnyre & Co., 382 F.Supp.2d at 1280-81 (“If ... the evidence points but one way and is susceptible to no reasonable inferences that support the opposing party’s position, the court should grant judgment as a matter of law.”).

Moreover, rule 50(a) “expressly requires a motion for a directed verdict to ‘state the specific grounds therefor.’ ” First Sec. Bank of Beaver v. Taylor, 964 F.2d 1053, 1056 (10th Cir.1992). On the other hand, “[technical precision is not necessary in stating grounds for the motion so long as the trial court is aware of the movant’s position.” United States v. Fenix & Scisson, Inc., 360 F.2d 260, 266 (10th Cir.1966). See First Sec. Bank of Beaver v. Taylor, 964 F.2d at 1056. “When a movant fails to state the specific grounds for its [rule 50(a) ] motion, our case law requires the moving party to demonstrate the trial court was aware of the moving party’s position.” First Sec. Bank of Beaver v. Taylor, 964 F.2d at 1056 (holding that an objection to the sufficiency of the evidence failed to inform the trial judge of the party’s objection to the uncertainty or enforceability of an oral agreement).

2. Rule 50(b).

“Rule 50(b) ... sets forth the procedural requirements for renewing a sufficiency of the evidence challenge after the jury verdict and entry of judgment.” Unitherm Food Sys., Inc. v. Swifb-Eckrich, Inc., 546 U.S. 394, 400, 126 S.Ct. 980, 163 L.Ed.2d 974 (2006). The rule states:

Renewing the Motion After Trial; Alternative Motion for a New Trial. If the court does not grant a motion for judgment as a matter of law made 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 ... 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 renewed 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.

Fed.R.Civ.P. 50(b). Much like a rule 50(a) motion, “[a] renewed motion for judgment as a matter of law under Rule 50(b) ... must state the grounds on which it was made.” 9B C. Wright & A. Miller, Fed. Prac. & Proc. Civ. § 2537, at 604-05 (3d ed. 2008).

The standard for ruling on a rule 50(b) motion is similar to that for ruling on a rule 50(a) motion — whether there was sufficient evidence upon which a reasonable jury could have arrived at the verdict that the jury returned. See Wagner v. Live Nation Motor Sports, Inc., 586 F.3d 1237, 1244 (10th Cir.2009) (“A party is entitled to JMOL only if the court concludes that ‘all of the evidence in the record ... [reveals] no legally sufficient evidentiary basis for a claim under the controlling law.’ ”) (quoting Hysten v. Burlington N. Santa Fe Ry. Co., 530 F.3d 1260, 1269 (10th Cir.2008)). “In ruling on such a motion, the court should disregard any jury determination for which there is no legally sufficient evidentiary basis enabling a reasonable jury to make it.” Fed.R.Civ.P. 50(b) advisory committee’s note. See Hysten v. Burlington N. Santa Fe Ry. Co., 530 F.3d at 1269 (“A party is entitled to judgment as a matter of law ‘only if the evidence points but one way and is susceptible to no reasonable inferences which may support the opposing party’s position.’ ”). The court, however, much like in ruling on a motion for summary judgment, must draw all reasonable inferences in favor of the non-moving party. See Wagner v. Live Nation Motor Sports, Inc., 586 F.3d at 1244 (“[W]e ... will reverse the district court’s denial of the motion for JMOL ‘if the evidence points but one way and is susceptible to no reasonable inferences supporting the party opposing the motion.’ ”) (quoting Hardeman v. City of Albuquerque, 377 F.3d 1106, 1112 (10th Cir.2004)); Hysten v. Burlington N. Santa Fe Ry. Co., 530 F.3d at 1269. It is not the court’s province to “weigh evidence, judge witness credibility, or challenge the factual conclusions of the jury.” Hysten v. Burlington Northern Santa Fe Ry. Co., 530 F.3d at 1269.

A prerequisite to a rule 50(b) motion, and one implicit in its nature as a renewed motion for judgment as a matter of law, is that the moving party have made a rule 50(a) motion for judgment as a matter of law during trial and that the party raise in the rule 50(a) motion all issues it seeks to raise in the subsequent rule 50(b) motion. See M.D. Mark, Inc. v. Kerr-McGee Corp., 565 F.3d 753, 762 (10th Cir.2009) (“Kerr-McGee did not assert these arguments in its Rule 50(a) motion at the close of Mark’s case-in-chief, and is thus precluded from relying on them as a basis for Rule 50(b) relief.”); Marshall v. Columbia Lea Regional Hosp., 474 F.3d 733, 738 (10th Cir.2007) (noting that raising a particular defense in a “pre-verdict Rule 50(a) motion ... is a prerequisite to a post-verdict motion under Rule 50(b).”); United Int’l Holdings, Inc. v. Wharf (Holdings) Ltd., 210 F.3d 1207, 1229 (10th Cir.2000) (“[Mjerely moving for directed verdict is not sufficient to preserve any and all issues that could have been, but were not raised in the directed verdict motion.”); First Sec. Bank of Beaver v. Taylor, 964 F.2d at 1057 (“[A] party is precluded from relying upon grounds in a [rule 50(b) ] motion for judgment notwithstanding the verdict that were not previously raised in support of the [rule 50(a) ] motion for a directed verdict.”) (citing Karns v. Emerson Elec. Co., 817 F.2d 1452, 1455 n. 2 (10th Cir.1987)); 9B C. Wright & A. Miller, supra, § 2537, at 603-04 (“[T]he district court only can grant the Rule 50(b) motion on the grounds advanced in the preverdict motion, because the former is conceived of as only a renewal of the latter.”); 9B C. Wright & A. Miller, supra, § 2537, at 603-04 (“[T]he case law makes it quite clear that the movant cannot assert a ground that was not included in the earlier motion.”). The advisory committee notes to the 1991 amendment state that “[a] post-trial motion for judgment can be granted only on grounds advanced in the pre-verdict motion.” Fed.R.Civ.P. 50 advisory committee’s note (citing Kutner Buick, Inc. v. Am. Motors Corp., 868 F.2d 614 (3d Cir.1989)).

Finally, “Rule 50(b) allows a motion for a new trial under Rule 59 to be joined in the alternative with a renewed motion for judgment as a matter of law; subdivisions (c) and (d) make elaborate provision for when the two motions are made in the alternative.” 9B C. Wright & A. Miller, supra, § 2521, at 222. The rule states: “[T]he 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.” Fed.R.Civ.P. 50(b). Even if no rule 50(a) motion was made and therefore the court cannot grant a rule 50(b) motion for judgment as a matter of law, the court is still permitted to entertain a rule 59 motion for new trial on the basis that the verdict was based on a quantum of evidence that is insufficient as a matter of law. See Fed. R.Civ.P. 59. As Professors Charles Wright and Arthur Miller state:

[I]f the verdict winner’s evidence was insufficient as a matter of law but no motion for judgment as a matter of law was made under Rule 50(a), even though the district court cannot grant judgment as a matter of law under Rule 50(b) for the party against whom the verdict is rendered, it can set aside the verdict and order a new trial.

9B C. Wright & A. Miller, supra, § 2537, at 604.

RELEVANT LAW REGARDING RULE 51

Rule 51 governs the procedures that a party must follow when requesting particular jury instructions, objecting to certain jury instructions, and preserving any alleged error in the jury instructions for post-trial review. Under rule 51(d)(1)(A), “a party may assign as error in an instruction actually given, if that party properly objected.” Rule 51 also explains how one makes a proper objection. “A party who objects to an instruction or the failure to give an instruction must do so on the record, stating distinctly the matter objected to and the grounds for the objection.” FecLR.Civ.P. 51(c)(1). In post-trial motions and on appeal, therefore, claims of error are forfeited if there was not a proper objection made at trial. See Royal Maccabees Life Ins. Co. v. Choren, 393 F.3d 1175, 1179 (10th Cir.2005) (“To preserve the objection, a party must proffer the same grounds raised on appeal, with sufficient clarity to render the grounds ‘obvious, plain, or unmistakable.’ ”) (quoting Comcoa, Inc. v. NEC Tels., Inc., 931 F.2d 655, 660 (10th Cir.1991)) (internal citation omitted); Medlock v. Ortho Biotech, 164 F.3d 545, 553 (10th Cir.1999) (“Because the purpose of the objection is to give the court an opportunity to correct any mistake before the jury enters deliberations, an excessively vague or general objection to the propriety of a given instruction is insufficient to preserve the issue for appeal.”) (citation omitted). In determining whether a party made a proper objection, of course, it is important that the court not rewrite the case’s history.

There are, however, some errors that may be raised post-trial, even though there was no timely, specific objection made about them at trial. See Williams v. W.D. Sports, N.M., Inc., 497 F.3d 1079, 1094 (10th Cir.2007) (“[WJhen a party does not object to an instruction before the district court ..., we can review the district court’s decision to administer the instruction only for plain error.”). Rule 51 refers to these as “plain” errors. The rule states: “A court may consider a plain error in the instructions that has not been preserved as required by Rule 51(d)(1) if the error affects substantial rights.” Fed. R.Civ.P. 51(c). The language of the rule, however, is not very helpful in determining what constitutes a plain error.

“To mount a successful plain error challenge, a party must demonstrate (1) an error, (2) that is plain or obvious under existing law, and (3) that affects substantial rights.” Royal Maccabees Life Ins. Co. v. Choren, 393 F.3d 1175, 1181 (10th Cir.2005). The court should review the instructions as a whole to determine whether the jury might have been misled and should uphold the verdict unless there is “substantial doubt that the jury was fairly guided.” Royal Maccabees Life Ins. Co. v. Choren, 393 F.3d at 1181 (quoting Beaudry v. Corr. Corp, of Am., 331 F.3d 1164, 1168 (10th Cir.2003)). The Rules Advisory Committee commented, in response to the 2003 amendments to rule 51, on the factors that should influence a court’s plain-error analysis. The committee stated:

The court’s duty to give correct jury instructions in a civil action is shaped by at least four factors.

The factor most directly implied by a “plain” error rule is the obviousness of the mistake. The importance of the error is a second major factor. The costs of correcting an error reflect a third factor that is affected by a variety of circumstances. In a case that seems close to the fundamental error line, account also may be taken of the impact a verdict may have on nonparties.

Fed.R.Civ.P. 51 advisory committee’s note (2003).

The Tenth Circuit has said that a court need not consider a jury-instruction error to be “plain error” unless the error was “patently, plainly erroneous and prejudicial.” Williams v. W.D. Sports, N.M., Inc., 497 F.3d at 1094 (quoting Johnson ex rel. Estate of Cano v. Holmes, 455 F.3d 1133, 1141 (10th Cir.2006)). The Tenth Circuit will not reverse a district court for failure to address an unpreserved error in the jury instructions under the plain-error rule except “in an exceptional circumstance, where the error was patently erroneous and prejudicial and where fundamental injustice would otherwise occur.” Abuan v. Level S Commc’ns, Inc., 353 F.3d 1158, 1173 (10th Cir.2003). Plain-error review of jury instructions “presents an extraordinary, nearly insurmountable burden” on the party challenging the jury’s verdict. Royal Maccabees Life Ins. Co. v. Choren, 393 F.3d 1175, 1182 (10th Cir.2005).

MOTIONS FOR NEW TRIAL UNDER RULE 59

Rule 59 governs motions for new trial. That rule states that, after a jury trial, “[t]he court may, on motion, grant a new trial on all or some of the issues — and to any party — ... for any reason for which a new trial has heretofore been granted in an action at law in federal court.” Fed. R.Civ.P. 59(a). Case law has fleshed out the rule. Seventy years ago, the Supreme Court of the United States determined that

[t]he motion for a new trial may invoke the discretion of the court in so far as it is bottomed on the claim that the verdict is against the weight of the evidence, that the damages are excessive, or that, for other reasons, the trial was not fair to the party moving; and may raise questions of law arising out of alleged substantial errors in admission or rejection of evidence or instructions to the jury-

Montgomery Ward & Co. v. Duncan, 311 U.S. 243, 251, 61 S.Ct. 189, 85 L.Ed. 147 (1940). Such a motion can be granted based on any error so long as “the district court concludes the ‘claimed error substantially and adversely’ affected the party’s rights.” Henning v. Union Pac. R. Co., 530 F.3d 1206, 1217 (10th Cir.2008) (quoting Sanjuan v. IBP, Inc., 160 F.3d 1291, 1297 (10th Cir.1998)).

Although motions for a new trial are generally committed to a Court’s discretion, they are disfavored and should be granted with “great caution.” Richins v. Deere and Co., 231 F.R.D. 623, 625 (D.N.M.2004) (Browning, J.). “In considering a motion for a new trial on the grounds of prejudicial error, the alleged trial court errors must be clearly erroneous, as well as prejudicial and must have affected the substantial rights of the parties.” Atencio v. City of Albuquerque, 911 F.Supp. 1433, 1437 (D.N.M.1995) (Vazquez, J.) (quoting Rasmussen Drilling, Inc. v. Kerr-McGee Nuclear Corp., 571 F.2d 1144, 1148-49 (10th Cir.1978), cert. denied, 439 U.S. 862, 99 S.Ct. 183, 58 L.Ed.2d 171 (1978)). The party asserting the error bears the burden of showing clear error and prejudice to substantial rights. See Blanke v. Alexander, 152 F.3d 1224, 1236 (10th Cir.1998); United States v. Mitchell, 113 F.3d 1528, 1532 (10th Cir.1997); K-B Trucking Co. v. Riss Int’l Corp., 763 F.2d 1148, 1156 (10th Cir.1985); Atencio v. City of Albuquerque, 911 F.Supp. at 1437. The moving party also must prove that the “jury would likely have reached a contrary result” absent the error. Richins v. Deere and Co., 231 F.R.D. at 625.

Furthermore, similar to the rule 50(b) motion, a party must lay the necessary predicate to a motion for new trial during the trial. “[A] new trial will not be granted on grounds not called to the court’s attention during the trial unless the error was so fundamental that gross injustice would result.” 11 C. Wright, A. Miller & M. Kane, Fed. Prac. & Proc. Civ. § 2805, 57-58 (2d ed. 1995). See Cottman v. Aurora Pub. Schs., 85 Fed.Appx. 83, 88 (10th Cir.2003) (affirming a district court’s rejection of a motion for new trial where the movant “had not objected at trial ... nor ‘shown that the fundamental fairness of the trial was affected by the proceedings.’ ”); Nissho-Iwai Co. v. Occidental Crude Sales, Inc., 848 F.2d 613, 619 (5th Cir.1988) (reversing the district court’s conditional grant of a new trial where movant waived argument by failing to object at trial). Rule 59 may not be used to “seek a second trial on the basis of a theory not urged at the first trial.” 11 C. Wright, A. Miller, & M. Kane, Fed. Prac. & Proc. Civ. § 2805, at 58-59 (2d ed. 1995).

THE INVITED-ERROR DOCTRINE

“The invited error doctrine prevents a party from inducing action by a court and later seeking reversal on the ground that the requested action was error.” United States v. Edward J., 224 F.3d 1216, 1222 (10th Cir.2000) (quoting United States v. Johnson, 183 F.3d 1175, 1178 n. 2 (10th Cir.1999)). See Morrison Knudsen Corp. v. Ground Improvement Techniques, Inc., 532 F.3d 1063, 1072 (10th Cir.2008) (finding that the defendant invited error where the district court entered a judgment that was the same as that proposed by the defendant). For example, “[a] party who requests an instruction invites any error contained therein and, absent an objection before the instruction is given, waives appellate review of the cor rectness of the instruction.” Aves By and Through Aves v. Shah, 997 F.2d 762, 766 (10th Cir.1993) (quoting Gilchrist v. Jim Slemons Imports, Inc., 803 F.2d 1488, 1493 (9th Cir.1986)) (declining to apply the plain-error standard where a defendant raised an error in a jury instruction that the defendant proposed and did not object to before it was given to the jury). The rationale of this rule is clear: a party should not be able to secure a post-trial reversal by persuading the court to take an erroneous action before or during the trial. Inviting an error results in waiver of the right to raise that error post-trial. See United States v. Cruz-Rodriguez, 570 F.3d 1179, 1183 (10th Cir.2009); United States v. Zubia-Torres, 550 F.3d 1202, 1205 (10th Cir.2008) (“We typically find waiver in cases where a party has invited the error that it now seeks to challenge[.]”).

NEW MEXICO CHOICE-OF-LAW RULES

Where a plaintiff invokes a federal district court’s diversity jurisdiction, the district court looks to the forum state’s choice-of-law rules to .determine which state’s substantive law to apply. See Klaxon Co. v. Stentor Elec. Mfg. Co., 313 U.S. 487, 496-97, 61 S.Ct. 1020, 85 L.Ed. 1477 (1941); Pepsi-Cola Bottling Co. v. PepsiCo, Inc., 431 F.3d 1241, 1255 (10th Cir.2005). The first step in a New Mexico choice-of-law analysis is to characterize the claim by “area of substantive law — e.g., torts, contracts, domestic relations — to which the law of the forum assigns a particular claim or issue.” Terrazas v. Garland & Loman, Inc., 140 N.M. 293, 296, 142 P.3d 374, 377 (Ct.App.2006). There are only a few categories within which claims might fall — “[t]ort cases, i.e. all ‘civil wrongs,’ are one class; contracts, i.e., every kind of enforceable promise, is another single class.” J. McLaughlin, Conflict of Laws: the Choice of Law Lex Loci Doctrine, the Beguiling Appeal of a Dead Tradition, Part One, 93 W. Va. L. Rev. 957, 989 (1991) (describing the categories as “tort, contract, or some other”). The court is then to apply the New Mexico choice-of-law rule applicable to that category of claim to determine what state’s substantive law to apply.

When a claim sounds in contract, New Mexico will generally apply the choice-of-law rule of lex loci contractus— the law of the place of contracting. See Ferrell v. Allstate Ins. Co., 144 N.M. 405, 421, 188 P.3d 1156, 1172 (2008). Like most states, however, “New Mexico respects party autonomy; [therefore] the law to be applied to a particular dispute may be chosen by the parties through a contractual choice-of-law provision.” Fiser v. Dell Computer Corp., 144 N.M. 464, 467, 188 P.3d 1215, 1218 (2008) (citing NMSA 1978, § 55-1-301(A)). See United Wholesale Liquor Co. v. Brown-Forman Distillers Corp., 108 N.M. 467, 470, 775 P.2d 233, 236 (1989). “[WJhen application of the law chosen by the parties offends New Mexico public policy,” however, a New Mexico court “may decline to enforce the choice-of-law provision and apply New Mexico law instead.” Fiser v. Dell Computer Corp., 144 N.M. at 467, 188 P.3d at 1218. “New Mexico.courts will not give effect to another state’s laws where those laws would violate some fundamental principle of justice.” Fiser v. Dell Computer Corp., 144 N.M. at 467, 188 P.3d at 1218 (internal quotations omitted). Where the plaintiff has invoked the federal district court’s diversity jurisdiction, the court will accept New Mexico’s law regarding whether to honor a contractual choice-of-law provision. See MidAmerica Constr. Mgmt., Inc. v. MasTec N. Am., Inc., 436 F.3d 1257, 1260 (10th Cir.2006) (“In cases like this one, where subject matter jurisdiction is based on diversity of citizenship, federal courts must look to the forum state’s choice-of-law rules to determine the effect of a contractual choice-of-law clause.”).

On the other hand, if the underlying claim is categorized as a tort, “New Mexico courts follow the doctrine of lex loci delicti comonissi — that is, the substantive rights of the parties are governed by the law of the place where the wrong occurred.” Terrazas v. Garland & Loman, Inc., 140 N.M. at 296, 142 P.3d at 377. The lex loci delicti rule defines the state where the wrong occurred as “the state where the last event necessary to make an actor liable for an alleged tort takes place.” Zamora v. Smalley, 68 N.M. 45, 47, 358 P.2d 362, 363 (1961); see Restatement (First) Conflicts of Law § 377 & cmt. a (1934). Where the elements of the underlying claim include harm, the place of the wrong is the place where the harm occurred. See First Nat’l Bank in Albuquerque v. Benson, 89 N.M. 481, 482, 553 P.2d 1288, 1289 (Ct.App.1976) (referring to the rule as requiring application of “the law of the State of injury”); Guidaoice Endodontics, LLC v. Dentsply Int’l, Inc., 663 F.Supp.2d 1138, 1150-51 (D.N.M.2009) (Browning, J.).

RELEVANT LAW OF THE NMUPA

The NMUPA makes unlawful any “[u]n-fair or deceptive trade practices [or] unconscionable trade practices in the conduct of any trade or commerce.” NMSA 1978, § 57-12-3. The NMUPA defines the term “unfair or deceptive trade practice” as

an act specifically declared unlawful pursuant to the Unfair Practices Act, a false or misleading oral or written statement, visual description or other representation of any kind knowingly made in connection with the sale, lease, rental or loan of goods or services ... by any person in the regular course of his trade or commerce, which may, tends to or does deceive or mislead any person[.]

NMSA 1978, § 57-12-2(D). The statute also provides examples of conduct that could potentially violate the NMUPA. See NMSA 1978, §§ 57 — 12—2(D)(1)—(18) (stating that “ ‘unfair or deceptive trade practice’ means ... and includes:”) (emphasis added). See also Stevenson v. Louis Dreyfus Corp., 112 N.M. 97, 100, 811 P.2d 1308, 1311 (1991) (“After defining an unfair trade practice, the statute then ... list[s] examples of conduct which may constitute an unfair trade practice.”). Relevant to this opinion are the following:

(8) disparaging the goods, services or business of another by false or misleading representations;

(15) stating that a transaction involves rights, remedies or obligations that it does not involve; [and]

* * * *

(17) failure to deliver the quality or quantity of goods or services contracted for[.]

NMSA 1978, § 57-12-2(D).

New Mexico law has now established that a claim under the NMUPA has four elements.

First, the complaining party must show that the party charged made an “oral or written statement, visual description or other representation” that was either false or misleading. Second, the false or misleading representation must have been “knowingly made in connection with the sale, lease, rental or loan of goods or services in the extension of credit or ... collection of debts.” Third, the conduct complained of must have occurred in the regular course of the representer’s trade or commerce. Fourth, the representation must have been of the type that “may, tends to or does, deceive or mislead any person.”

Stevenson v. Louis Dreyfus Corp., 112 N.M. at 100, 811 P.2d at 1311. See Lohman v. Daimler-Chrysler Corp., 142 N.M. 437, 439, 166 P.3d 1091, 1093 (Ct.App.2007), cert. denied 141 N.M. 762, 161 P.3d 259 (2007). “The ‘knowingly made’ requirement is met if a party was actually aware that the statement was false or misleading when made, or in the exercise of reasonable diligence should have been aware that the statement was false or misleading.” Stevenson v. Louis Dreyfus Corp., 112 N.M. at 100-01, 811 P.2d at 1311-12. Notably, a plaintiff need not prove detrimental reliance upon the defendant’s representations. See Lohman v. Daimler-Chrysler Corp., 142 N.M. at 444, 166 P.3d at 1098; Smoot v. Physicians Life Ins. Co., 135 N.M. 265, 270-71, 87 P.3d 545, 550-51 (Ct.App.2003).

The NMUPA provides for compensatory damages for any violation that causes harm and for treble damages for any violation willfully committed. Specifically, the statute states:

Any person who suffers any loss of money or property, real or personal, as a result of any employment by another person of a method, act or practice declared unlawful by the Unfair Practices Act may bring an action to recover actual damages or the sum of one hundred dollars ($100), whichever is greater. Where the trier of fact finds that the party charged with an unfair or deceptive trade practice or an unconscionable trade practice has willfully engaged in the trade practice, the court may award up to three times actual damages or three hundred dollars ($300), whichever is greater, to the party complaining of the practice.

NMSA 1978, § 57-12-10(B). The Supreme Court of New Mexico has concluded that this treble-damages award constitutes a form of punitive damages. See Hale v. Basin Motor Co., 110 N.M. 314, 320, 795 P.2d 1006, 1012 (1990) (“Multiplication of damages pursuant to statutory authority is a form of punitive damages.”).

ANALYSIS

The Defendants ask the Court to set aside the jury’s punitive-damages verdict and set aside the jury’s finding on breach of the implied covenant of good faith and fair dealing. They take several approaches to reach this end. They argue that the punitive damages should be limited to $300.00, because that is the maximum amount of punitive damages that the jury could award to Guidance for the predicate tort claim which entitled Guidance to breach-of-contract punitive damages. They argue that the predicate tort claim was not a tort at all, but a contract claim, and therefore Delaware law would not permit Guidance to recover punitive damages. They argue that the Court erred in instructing the jury that it could award punitive damages for bad-faith breach of the implied covenant of good faith and fair dealing, and that the jury lacked sufficient evidence to reasonably find a bad-faith breach of the implied covenant. Finally, they argue that the Court erred in several ways in constructing Jury Instruction No. 37. Guidance responds that the Defendants have waived or failed to preserve all of their arguments and that, to the extent that they are properly preserved, the arguments lack merit. The Court agrees that the Defendants failed to preserve their most vigorous arguments, and that the ones that have been preserved lack a sound basis in the law or in the facts of this case. The Court will deny the Defendants’ motion.

First, the Court notes that — as they have in all of their post-trial motions — the Defendants repeatedly emphasize the size of the punitive-damages verdict, referring to it as “unlimited punitive damages.” Motion at 6 (“Guidance’s claim for unlimited punitive damages ... fails for a second, independent reason.”); Reply at 9 (complaining about “unlimited punitive damages”); Tr. at 14:2-4 (Cruz) (“... liable for potentially unlimited punitive damages, $40 million in punitive damages.... ”); Tr. at 24:3-6 (Cruz) (“If you get to an award that would support a penny of punitive damages, it’s, Katie bar the door, unlimited punitive damages are possible.”); Tr. at 32:3-4 (Cruz) (“[T]hat opens the door to unlimited punitive damages[.]”); Tr. at 66:8-11 (Cruz) (“[T]he plaintiffs have cited this Court to not a single case in Delaware, at any time, that has allowed a tort that would su