## Facts

- John Pavone, an experienced gaming-industry professional, formed Signature Management Group, L.L.C. (SMG) to pursue casino management opportunities in Iowa.
- Gerald M. Kirke and a co-founder formed Wild Rose Entertainment, L.L.C. (Wild Rose) to obtain Iowa gaming licenses and develop casinos, despite lacking gaming-industry experience.
- In April 2004, Pavone and Wild Rose entered a consulting agreement under which Pavone would assist Wild Rose in obtaining gaming licenses and, if a license were obtained, Wild Rose would negotiate in good faith with SMG for casino management.
- During mid-2004 discussions, Pavone and Kirke discussed a broader, ongoing relationship in which SMG would manage Wild Rose casino projects; the parties disputed the specificity and finality of these discussions.
- In October 2004, the parties executed a written agreement describing their intended ownership and management relationship for casino projects in Iowa, including management rights and a contemplated minority ownership interest for SMG, subject to contingencies and later project-specific contracting.
- Wild Rose pursued casino development (including the Emmetsburg project) but later asserted the October agreement had terminated and proceeded without SMG as manager/minority owner.
- Pavone and SMG sued Kirke and Wild Rose for breach of contract and related claims based on Wild Rose’s exclusion of SMG from projects allegedly covered by the agreement.

## Issues

1. Whether sufficient evidence supported submitting plaintiffs’ breach-of-contract claims to the jury (i.e., whether a directed verdict for defendants was required).
2. Whether the jury could award damages, including lost profits, projected over a period of up to thirty years.
3. Whether alleged trial errors required a new trial.

## Decision

- The Iowa Supreme Court vacated the court of appeals decision that had reversed the judgment for plaintiffs.
- The Court affirmed the district court judgment reinstating the jury’s $10 million verdict for Pavone and SMG.
- The Court held the district court did not err in denying defendants’ motion for directed verdict on the breach-of-contract claims.
- The Court held the district court did not err in permitting the jury to consider damages extending up to thirty years.
- The Court held the district court did not abuse its discretion in denying defendants’ motion for a new trial based on alleged trial errors.

## Legal Principles

- A breach-of-contract claim may be submitted to the jury when the record contains sufficient evidence of mutual assent and reasonably definite essential terms, even if the parties dispute their understandings and some contingencies remain.
- Appellate review generally defers to the jury’s resolution of disputed facts and credibility when evidence supports the verdict.
- Lost-profit damages are recoverable when proven with reasonable certainty and not rendered impermissibly speculative solely because they extend into the future; the permissible time horizon depends on the evidence of the expected duration of the contractual relationship.
- A new trial is not warranted absent prejudicial error; trial-management and evidentiary rulings are reviewed for abuse of discretion.

## Conclusion

The Iowa Supreme Court reinstated and affirmed a $10 million jury verdict for breach of a casino management/ownership agreement, concluding there was sufficient evidence of an enforceable contract and breach, that long-term lost-profit damages up to thirty years could be considered on the record presented, and that alleged trial errors did not justify a new trial.


Pavone v. Kirke, 801 N.W.2d 477 (Iowa 2011)