The recent Nebraska Supreme Court case of VKGS v. Planet Bingo, et.al., 309 Neb. 950, ___ N.W.2d ___ (2021) addressed proper application of Nebraska’s post judgment interest statute and the propriety of bifurcating issues at trial.
Planet Bingo, LLC, (Planet Bingo) owns an electronic gaming software called EPIC. EPIC was developed in the late 1990’s by Planet Bingo’s wholly owned subsidiary, Melange Computer Services, Inc. (Melange). VKGS, LLC, (VKGS) and Planet Bingo, competitors in the bingo hall gaming industry, sued each other for breach of contract. Although they were competitors, Planet Bingo and VKGS maintained a contractual business relationship from approximately 2003 through 2012, which as of 2005 was protected by an extensive confidentiality provision drafted by VKGS.
In 2011, Planet Bingo sued VKGS for breach of contract for VKGS’s misuse of Planet Bingo’s confidential information -- by taking confidential EPIC information to develop its own competing software program called OMNI. VKGS in turn alleged that Planet Bingo breached contractual obligations and tortiously interfered with business relations by using pricing information and disparagement to influence customers. Two separate jury trials ensued.
A jury trial commenced in August 2018 on both parties’ claims. About halfway through the trial VKGS attempted to offer a Canadian Patent application that contained some description of EPIC’s source code. VKGS claimed that this public discourse of confidential information precluded Planet Bingo’s misuse of confidential information as a matter of law. But VKGS did not have a certified copy of the patent application and failed to otherwise authenticate it at trial. VKGS did not disclose the patent application as a trial exhibit. The district court sustained Planet Bingo’s objections and did not receive the exhibit into evidence.
Furthermore, the existence of the patent application raised issues about whether Planet Bingo could proceed with its case in chief. Thus, VKGS moved to dismiss Planet Bingo’s misuse claim. Because VKGS had not yet rested its case in chief, and because Planet Bingo had not yet presented evidence on its claims, the court instead bifurcated VKGS’s and Planet Bingo’s claims and proceeded on the VKGS claims only. About a year later, in June 2019, Planet Bingo’s claims were tried to a separate jury.
In the trial on VKGS’ claims, the jury found Planet Bingo liable for $558,405. In the second trial on Planet Bingo’s claims, the jury found VKGS liable for $2,990,000. After the second trial, the court offset the verdicts and entered one judgment in Planet Bingo’s favor, but also awarded VKGS post judgment interest on its 2019 verdict while still offsetting VKGS’ award.
VKGS appealed the court’s order bifurcating VKGS’ and Planet Bingo’s claims and also appealed the court’s decision to exclude the patent application from evidence in the first trial (the patent application was eventually received into evidence during the second trial of Planet Bingo’s claims). Planet Bingo cross appealed claiming that the court erred in awarding VKGS post-judgment interest on its verdict because the “verdict” was not a judgment for purposes of the post-judgment intertest statute.
As to the patent application, the Nebraska Supreme Court held that VKGS failed to authenticate the exhibit. Also, in noting that authentication is a condition precedent to a document’s admission into evidence the court said “Neb. Rev. Stat. § 27-901(1) (Reissue 2016) does not impose a high hurdle for authentication or identification of proffered evidence as a condition precedent to admissibility. ” Instead, authentication “may be satisfied by testimony that a matter is what it is claimed to be, and proper authentication may also be attained by evidence of appearance, contents, substance, internal patterns, or other distinctive characteristics, taken in conjunction with circumstances, sufficient to support a finding that the matter in question is what it is claimed to be. ” In fact, the Court noted that certified public records are self-authenticating under Neb. Rev. Stat. § 27-902(4) (Reissue 2016) but VKGS failed to even offer a certified copy of the application.
As to the bifurcation issue, the Court held bifurcation of a trial may be appropriate where “separate proceedings will do justice, avoid prejudice, and further the convenience of the parties and the court.” Additionally, the Court reaffirmed that trial courts have the inherent power over the general conduct of a trial and a decision to bifurcate will not be overturned absent an abuse of discretion. The Court held that no abuse of discretion occurred because the unauthenticated patent application was not properly offered in VKGS’ case in chief because its contents were irrelevant to VKGS’ tortious interference claim. Also, the potential effect of the application on Planet Bingo’s claims was a sufficient reason to bifurcate the trial. Thus, the Court dismissed VKGS’ appeal.
As to post judgment interest, Court agreed with Planet Bingo that VKGS’ trial verdict was not a “judgment’ for purposes of post judgment interest and that the lower court erred in awarding VKGS post judgment interest. Instead, the Court held that the two competing verdicts were required to be offset and interest could only accrue on the final judgement entered after the verdicts were offset. Thus, the Court reversed the trial court’s award of post judgment interest on VKGS’ verdict and held “Final judgment in this case occurred after all of the parties’ claims were adjudicated and both jury verdicts were accepted by the district court. As post judgment interest accrues only on judgments, and [Neb. Rev. Stat.] § 25-1316 contemplates only one ‘judgment,’ the district court erred in awarding VKGS post judgment interest when interest had not begun to accrue on VKGS’ claim and Planet Bingo’s claim exceeded VKGS’ claim.”