In Feld Motor Sports, Inc. v. Traxxas , L.P., No. 16-40686 2017 U.S. App. LEXIS 11705 (5th Cir. June 30, 2017), the Fifth Circuit held for the first time that an appellate court can review a trial court’s legal conclusions in denying a summary judgment after a jury trial, if the issue is preserved in a Rule 50 motion.
Traxxas involved a contractual dispute over royalty payments under a licensing agreement. Feld claimed the contract required payment of royalties; Traxxas said it did not. Both moved for summary judgment, each arguing that the contract was unambiguous and supported their respective interpretations.
Finding the contract ambiguous, the district court denied both motions. At trial the jury found that Traxxas owed Feld royalties. Post-trial Traxxas filed a combined Rule 50 motion for judgment as a matter of law, motion for new trial, and motion to modify judgment. The district court denied all three.
On appeal, the Fifth Circuit considered whether it could review the district court finding that the contract was ambiguous. The court recognized the general rule that “an interlocutory order denying summary judgment is not to be reviewed when final judgment adverse to the movant is rendered on the basis of a full trial on the merits” and acknowledged that the only exception the Fifth Circuit had recognized was when “the case was a bench trial” because Rule 50 motions for judgment as a matter of law are not required to be made following a bench trial.
In Traxxas, the Fifth Circuit recognized a new exception, holding that “following a jury trial on the merits, this court has jurisdiction to hear an appeal of the district court’s legal conclusions in denying summary judgment, but only if it is sufficiently preserved in a Rule 50 motion.”
The Fifth Circuit found that Traxxas had sufficiently preserved its argument that the agreement was not ambiguous in its Rule 50 motion by stating that it “disagreed” with the district court’s determination of ambiguity.
Although the Fifth Circuit ultimately upheld the district court’s finding that the contract was ambiguous, the error was preserved.
