              United States Court of Appeals
                         For the Eighth Circuit
                     ___________________________

                             No. 17-1451
                     ___________________________

Ryan Data Exchange, Ltd.; Rydex Technologies, LLC, doing business as Rydex

                    lllllllllllllllllllllPlaintiffs - Appellees

                                        v.

                                   Graco, Inc.

                    lllllllllllllllllllllDefendant - Appellant
                      ___________________________

                             No. 17-1746
                     ___________________________

Ryan Data Exchange, Ltd.; Rydex Technologies, LLC, doing business as Rydex

                    lllllllllllllllllllllPlaintiffs - Appellants

                                        v.

                                   Graco, Inc.

                    lllllllllllllllllllllDefendant - Appellee
                     ___________________________

                             No. 17-1772
                     ___________________________

Ryan Data Exchange, Ltd.; Rydex Technologies, LLC, doing business as Rydex

                    lllllllllllllllllllllPlaintiffs - Appellees

                                        v.
                                      Graco, Inc.

                        lllllllllllllllllllllDefendant - Appellant
                                        ____________

                    Appeals from United States District Court
                  for the Southern District of Iowa - Des Moines
                                  ____________

                          Submitted: September 26, 2018
                             Filed: January 10, 2019
                                 ____________

Before COLLOTON, BEAM, and GRASZ, Circuit Judges.
                          ____________

BEAM, Circuit Judge.

       After a jury found in favor of Ryan Data Exchange (Rydex) in its breach of
contract claim against Graco,1 and against Graco in its counterclaims against Rydex,
Graco sought to set the jury's verdict aside, renewed its motion for judgment as a
matter of law, and moved for new trial, all of which the district court2 denied. The
district court further awarded $204,221.50 in attorney's fees to Rydex. Graco appeals.
Rydex also appeals, challenging the district court's reduction of its requested amount
of attorney's fees. We affirm.




      1
       The district court disposed of Rydex's claim for patent infringement against
Graco ruling on a motion in limine prior to trial.
      2
        The Honorable James E. Gritzner, United States District Judge for the Southern
District of Iowa.

                                           -2-
I.     BACKGROUND

        On September 13, 2005, Rydex and Graco entered into a Settlement and
License Agreement (Agreement) in which Rydex granted Graco a patent license. In
the instant action, the parties litigated three provisions of the Agreement at trial: (1)
the provision wherein Rydex granted Graco an exclusive license to make, have made,
use, and sell articles covered by the patent (§ 3.0); (2) the Agreement's provision that
if a third party were to infringe the patent, Rydex would have the initial choice and
obligation to prosecute the infringement (§ 11); and (3) a provision stating that Graco
would pay Rydex royalties of 5% of the net selling price of its product using the
patent (§ 4.1).

       Relevant to the instant litigation, in 2011, years after the parties entered into the
Agreement, Rydex initiated a lawsuit alleging patent infringement against Badger
Meter, Inc., Balcrank Corp., and Lincoln Industrial Corp. (collectively, Badger). The
district court found, and the trial evidence revealed, a unique set of circumstances
regarding Badger's infringement, in that at the time Rydex and Graco entered into the
2005 Agreement, both parties were aware that Badger was allegedly already
infringing the patent, and yet the Agreement purported to give Graco an exclusive
right to the patent. In 2012 Rydex and Badger filed a stipulation of dismissal and
agreed that Rydex's claims and Badger's counterclaims in the matter would be
dismissed with prejudice. This dismissal between Rydex and Badger is the source of
Graco's claim against Rydex for failure to prosecute infringement under the
Agreement.

      Graco stopped paying royalties to Rydex as of December 31, 2013, as Graco
believed that Rydex had breached the Agreement's exclusivity provision and the
patent infringement prosecution provision (§§ 3 and 11) by allowing Badger to
continue its infringement and by failing to fully prosecute the infringement claim
against Badger. In May 2014, Rydex filed the instant complaint alleging breach of
contract and patent infringement by Graco. Graco countersued, also alleging breach

                                            -3-
of contract and seeking declaratory judgments that the patent was invalid and that
Rydex had lost its right to receive royalty payments under the Agreement due to its
alleged breaches.

       A jury trial was held in November 2016 on all of the contract claims then
pending. During trial Graco moved pursuant to Rule 50(a) for judgment as a matter
of law at the close of Rydex's case-in-chief, claiming in part that it had established
through cross-examination that Rydex had breached its duty under the Agreement to
prosecute the Badger litigation, and that Rydex had breached the exclusivity provision
of the Agreement. In ruling on Graco's motions from the bench, the district court held
as a matter of law that Rydex had breached its duty to prosecute infringement as of
the date of the dismissal of the Badger litigation in 2012, and that Rydex was in
breach of the exclusivity provision of the Agreement from the date of the dismissal
of the Badger litigation until the expiration of the patent on March 10, 2015.
Accordingly, the court granted Graco's Rule 50 motion to that extent. There was no
ruling by the court as to whether Rydex breached the Agreement by failing to provide
Graco an exclusive license from the date the parties entered into the Agreement in
2005 until the dismissal of the Badger litigation in 2012.

        In that same colloquy, the district court additionally ruled as a matter of law that
by way of Rydex's dismissal of the case against Badger and by failing to fully
prosecute the matter, Rydex necessarily created an implied license (i.e., there existed
a reasonable inference that Rydex consented to Badger's use of the patent), at the very
least, with regard to Badger's past infringement, at the time of the dismissal of the
litigation against Badger. In a seeming attempt to correct any potential
misunderstanding of its rulings, the district court clarified that despite the terms of the
Agreement, the record was clear that both parties operated under the Agreement with
the knowledge and understanding that there was some threat to either the validity of
the patent altogether, or the existence of potential infringing third parties, over a
period of several years before Rydex ever initiated the action against Badger. Because
of that knowledge on both sides, the court held it could not rule as a matter of law on

                                            -4-
the issue of Rydex's alleged breach of the Agreement at any time prior to the dismissal
of the Badger litigation. The court held that particular issue of contract interpretation
and breach was a matter for the jury.

       The parties discussed throughout, and after trial, how to "package" this case for
the jury in light of the court's Rule 50 rulings. Accordingly, the case was presented
to the jury for very particular determinations with a verdict form consisting of five
narrow questions for the jury. Instruction 7, titled "Elements of Breach of Contract,"
stated the elements required to prove a breach of contract under Iowa law, and also
instructed the jury regarding the district court's prior grant of judgment as a matter of
law in favor of Graco:

      Regarding the Rydex Parties' breach of contract claim, it is for you to
      decide whether Graco breached the License Agreement by failing to pay
      royalties to the Rydex Parties for the period ending December 31, 2013,
      through the date of the expiration of the '180 patent on March 10, 2015.

      Regarding Graco's breach of contract claim, the Court has found as a
      matter of law that the Rydex Parties were not required to commence an
      infringement action prior to the filing of the Badger Litigation. The
      Court has also found as a matter of law that the Rydex Parties were in
      breach of the duty to prosecute infringement as of the date of the
      dismissal of the Badger Litigation on August 15, 2012. The Court has
      further found as a matter of law that the Rydex Parties were in breach of
      the exclusivity provision of the License Agreement from the date of the
      dismissal of the Badger Litigation on August 15, 2012, until the
      expiration of the '180 patent on March 10, 2015. You must accept these
      facts as having been proved. It is for you to decide whether the Rydex
      Parties were in breach of the exclusivity provision of the License
      Agreement from the date the parties entered into that license agreement
      on September 13, 2005, through the dismissal of the Badger Litigation
      on August 15, 2012.

      Instruction 8 informed the jury as to how to interpret the contract, including
how to consider the intent of the parties gleaned from surrounding circumstances and


                                          -5-
the contract language itself, how to give meaning to the contract language, and how
to handle potentially ambiguous language, etc. Additionally, Instruction 11 instructed
the jury on the definition of an implied license, and specifically instructed that "the
Court has ruled an implied license was created as to the Badger litigation when that
case was dismissed with prejudice on August 15, 2012, as to any Badger use of the
'180 Patent prior to that date." There was no direct discussion of materiality in the
jury instructions or verdict form.

       Upon deliberation, the jury found, first, that Rydex proved at trial that Graco
breached the Agreement by failing to pay royalties to Rydex from December 31, 2013,
through the date of the expiration of the patent on March 10, 2015; and awarded
Rydex $313,000 in damages. Next, in response to the query regarding the amount of
damages due Graco as a result of Rydex's breaches already determined by the court
as a matter of law and laid out for the jury in Instruction 7 (i.e., its breach of duty to
prosecute infringement and the breach of the exclusivity provision of the Agreement
at the time of the Badger litigation dismissal), the jury answered "$0.00." As to the
question to the jury as to whether Graco proved that Rydex breached the Agreement
by failing to provide Graco an exclusive license from the date the parties entered into
the Agreement on September 13, 2005, until the dismissal of the Badger litigation on
August 15, 2012, the jury answered "no."

       Post-trial, Graco, pursuant to Rule 50(b), renewed its motion for judgment as
a matter of law, asking the district court to grant judgment in its favor and to rule that
Rydex was not entitled to damages given the court's earlier ruling that Rydex breached
the Agreement. In its order on the post-trial requests, the district court made clear that
although it had determined as a matter of law that Rydex breached the Agreement, it
had not made any determination as to materiality–the legal finding the court held was
necessary in order to preclude Rydex's recovery of the royalty payments. The court
clarified that the materiality of a breach is a factual issue for the jury and reviewed the
instructions given the jury, the evidence presented at trial, and the verdict itself to
arrive at its determination that the jury necessarily determined that Rydex had not

                                           -6-
materially breached the Agreement, as Rydex's breaches did not deprive Graco of a
benefit it justifiably expected. Too, the court additionally noted that evidence of
Graco's continued use of the patent after Rydex's breaches in 2012 supported the jury's
verdict, as Graco's continued exploitation of its license after what it now claims was
a breach of the terms of the Agreement, precluded Graco's nonperformance in
withholding royalty payments from Rydex. The district court likewise denied Graco's
motions to alter or amend the judgment, its motion for new trial, and its motion for
remittitur upon similar reasoning. The district court subsequently awarded attorney's
fees. These appeals ensued.

II.   DISCUSSION

       We review the district court's denial of Graco's motion for judgment as a matter
of law de novo, viewing the record in a light most favorable to the verdict. Sturgis
Motorcycle Rally, Inc. v. Rushmore Photo & Gifts, Inc., 908 F.3d 313, 322 (8th Cir.
2018). "We review a motion for new trial for abuse of discretion." Washington v.
Denney, 900 F.3d 549, 558 (8th Cir. 2018) (quoting Smiley v. Gary Crossley Ford,
Inc., 859 F.3d 545, 552 (8th Cir. 2017)). "[T]he law places a high standard on
overturning a jury verdict because of the danger that the jury's rightful province will
be invaded when judgment as a matter of law is misused." Id. (alteration in original)
(quoting Bavlsik v. Gen. Motors, LLC, 870 F.3d 800, 805 (8th Cir. 2017), cert.
denied, 138 S. Ct. 1991 (2018)). "We are hesitant 'to interfere with a jury verdict,' as
reflected in the 'analysis for considering renewed JML motions.'" Id. (quoting
Bavlsik, 870 F.3d at 805, cert denied, 138 S. Ct. 1991 (2018)).

      In ruling on a motion for [judgment as a matter of law], the district court
      must (1) consider the evidence in the light most favorable to the
      prevailing party, (2) assume that all conflicts in the evidence were
      resolved in favor of the prevailing party, (3) assume as proved all facts
      that the prevailing party's evidence tended to prove, and (4) give the
      prevailing party the benefit of all favorable inferences that may
      reasonably be drawn from the facts proved. That done, the court must

                                          -7-
      then deny the motion if reasonable persons could differ as to the
      conclusions to be drawn from the evidence.

Id., 900 F.3d at 558-59 (alteration in original) (quoting Haynes v. Bee-Line Trucking
Co., 80 F.3d 1235, 1238 (8th Cir. 1996)).

      A.     Materiality Requirement under Iowa Contract Law

       On appeal, Graco argues, as it did to the district court in its Rule 50(a) and
50(b) motions, that under Iowa law when a party breaches a contract it cannot enforce
the terms of the agreement or recover any damages under a breach of contract claim.
Graco focuses on the element in Instruction 7–that to establish a breach of contract,
the party alleging breach must prove that it has done what the contract
requires–claiming that because it is undisputed that Rydex breached two provisions
of the Agreement (its duty to provide exclusivity, and its duty to prosecute the
infringement), and that it did so prior to Graco's alleged breach on December 31,
2013, (when it stopped making royalty payments), Rydex is not entitled to damages
because it failed to prove it had "done what the contract requires." Accordingly,
Graco claims that the district court's finding of Rydex's breaches should have
precluded recovery for Rydex under Iowa law. Rydex counters that under Iowa law,
for a breach to excuse the performance of the non-breaching party and preclude
recovery, the breach must be material.

       This issue of materiality, as well as Graco's choice to continue receiving
benefits under the Agreement despite Rydex's breaches, were raised at myriad times
throughout this litigation including, but not limited to, the parties' pre-trial summary
judgment filings, during trial by the district court and the parties in the discussion
regarding Graco's motion for judgment as a matter of law at the close of Rydex's case-
in-chief, and again post-trial in Graco's renewed motions. Too, on multiple occasions,
the district court discussed the unusual set of circumstances resulting from the facts
presented in this case. We agree with the court's assessment. Despite the terms of the

                                          -8-
Agreement, the record established that from the outset the parties were operating
under this Agreement with the knowledge and understanding that there was some
threat to either the validity of the patent or the existence of potential infringing third
parties over a period of several years before the Badger litigation ensued, Rydex
breached the Agreement when it failed to fully prosecute the Badger litigation matter
after it filed suit, and there was a continuing period of time when Graco stopped
making royalty payments and yet functioned under the Agreement with regard to the
use of the patent. These various points in time during the relationship of these
contracting parties were delineated by the district court's rulings, drove the parties'
closing arguments to the jury, and were the focus of the verdict form adopted by the
parties.

      Under Iowa law, only a material breach could excuse Graco's nonperformance.
Kelly v. Iowa Mut. Ins. Co., 620 N.W.2d 637, 641 (Iowa 2000); Van Oort Constr. Co.
v. Nuckoll's Concrete Serv., Inc., 599 N.W.2d 684, 692 (Iowa 1999). Indeed, in Van
Oort, a similar question presented itself when a party to a contract discontinued
making agreed-upon payments based on its belief that the other contracting party had
breached, thereby excusing performance. 599 N.W.2d at 687-88. Thus, the only
remaining dispute for the court was whether the breach at issue was material. Id. at
692. "[Subject to an exception not applicable here], it is a condition of each party's
remaining duties to render performances to be exchanged under an exchange of
promises that there be no uncured material failure by the other party to render any
such performance due at an earlier time." Id. (alteration in original) (quoting
Restatement (Second) of Contracts, § 237, at 215 (1981)). In Van Oort, the court,
reviewing materiality as a mixed question of law and fact, held that the breach at issue
was material and thus the party was justified in suspending its performance under the
contract until such time when the breach was cured. 599 N.W.2d at 693.

      Applying Iowa law in the instant case, the district court's finding that Rydex
had, indeed, breached the contract did not end the inquiry as Graco now argues.
Rather, it is ultimately the materiality of the breaches that was determinative of the

                                           -9-
issue and, indeed, is necessarily the reason the matters were presented to the jury
despite the district court's previous rulings. Although the jury was not presented with
an instruction on materiality, given the parties' discussions throughout the trial, the
district court's rulings on the various motions throughout these proceedings, the
evidence presented, the arguments made to the jury, and the jury instructions read in
their entirety, the verdict can be characterized as one determining materiality. The
materiality concept was front and center in Rydex's closing arguments; and in fact, the
parties discussed issues obviously addressing materiality throughout trial and
submitted the district court's holdings regarding Rydex's breaches to the jury,
indicating in fact that those holdings did not carry the day in the contract dispute. The
jury's conclusion that Graco be awarded $0.00 in damages as a result of Rydex's
breaches, viewed under our favorable standard of review lens, indicates the jury did
not find a material failing on the part of Rydex.3

       While Graco argues that the findings by the district court as a matter of law
resolve this case in its favor, it is the jury's determinations in the face of these rulings
that determinatively resolve the materiality issue. These factual determinations were
uniquely in the jury's purview and will not be upset on appeal. There was no error.4




       3
         A fortiori, even with the district court's determination as a matter of law that
Rydex gave Badger an implied license to this patent from the date of the Agreement
until the date the Badger litigation was dismissed, the jury still held that Rydex did not
breach the Agreement's exclusivity provision. As to that particular breach of contract
claim, the matter of materiality does not arise because the jury found no breach in the
first instance.
       4
       Given our de novo review and finding no error in the district court's denial of
Graco's motion for judgment as a matter of law, it is axiomatic the district court did
not abuse its discretion in denying Graco's motion for new trial for the same reasons.
Despite Graco's insistence the jury should have ruled differently, there was no
miscarriage of justice. Washington, 900 F.3d at 558.

                                           -10-
      B.     Jury Instructions

       Graco additionally argues that the district court erred by failing to give
additional jury instructions it requested at conference, particularly its proffered
"conditions precedent-definition," which would have included directions regarding
materiality, and a "duty of good faith and fair dealing" instruction. This court's review
is limited on jury instructions, reviewing only whether, taken as a whole, the
instructions given fairly and adequately represented the evidence and applicable law
in light of the issues presented to the jury in a particular case. Zebley v. Heartland
Indus. of Dawson, Inc., 625 F.3d 449, 455 (8th Cir. 2010). "[A] district court's
decision to reject a proposed jury instruction also is reviewed for an abuse of
discretion." Retz v. Seaton, 741 F.3d 913, 919 (8th Cir. 2014). We reverse "when the
errors misled the jury or had a probable effect on the jury's verdict." United States v.
Thompson, 686 F.3d 575, 579 (8th Cir. 2012) (quoting United States v. Slagg, 651
F.3d 832, 848 (8th Cir. 2011)). "A district court has broad discretion in instructing
the jury, and jury instructions do not need to be technically perfect or even a model
of clarity." United States v. Garcia-Gonon, 433 F.3d 587, 591 (8th Cir. 2006)
(quoting United States v. Gianakos, 415 F.3d 912, 920 (8th Cir. 2005)).

       Graco did not object to the district court's exclusion of the two particular
instructions now discussed. Even if it had, after reviewing the arguments presented
on appeal in light of the manner in which this case was submitted to the jury, the
instructions on whole were an adequate statement of the law, reflected the theories of
recovery argued to the jury, and fairly and adequately represented the evidence and
applicable law. Although a particular instruction regarding materiality was not
presented to the jury, the arguments made to the jury accurately reflected Iowa
contract law and any error in omitting such an instruction, were we to assume error
occurred at all, did not mislead the jury or effect the jury's verdict in this instance.




                                          -11-
      C.     Attorney's Fees

       There are two standards of review at play on the issue of attorney's fees. On the
one hand, this court reviews de novo a district court's "prevailing party" determination
in a contractual context. Johnson Reg'l Med. Ctr. v. Halterman, 867 F.3d 1013, 1020
(8th Cir. 2017). On the other hand, the court of appeals reviews an award of attorney's
fees for an abuse of discretion, which review occurs when the district court commits
a clear error of judgment in weighing the relevant factors. Id.; FutureFuel Chem. Co.
v. Lonza, Inc., 756 F.3d 641, 649-50 (8th Cir. 2014). So, the determination as to who
prevails is reviewed de novo and "how much" is reviewed for an abuse of discretion.

       The award of attorney's fees in this case arises from the Agreement itself, which
provided that "[i]f litigation under this Agreement ensues because of a material
breach, the prevailing party shall be awarded its reasonable attorney's fees." "[S]tate
law governs the availability of attorney fees in diversity cases where no conflicting
federal statute or court rule applies." Burlington N. R.R. Co. v. Farmers Union Oil
Co. of Rolla, 207 F.3d 526, 534 (8th Cir. 2000). The Iowa Code provides: "When
judgment is recovered upon a written contract containing an agreement to pay an
attorney fee, the court shall allow and tax as a part of the costs a reasonable attorney
fee to be determined by the court." Iowa Code Ann. § 625.22. An applicant for
attorney's fees has the burden to prove that the services were reasonably necessary and
that the charges were reasonable in amount. Ales v. Anderson, Gabelmann, Lower &
Whitlow, P.C., 728 N.W.2d 832, 842 (Iowa 2007). In making this reasonableness
determination, the district court considers the time necessarily spent, the nature and
extent of the service, the amount involved, the difficulty of handling and importance
of the issues, the responsibility assumed and results obtained, the standing and
experience of the attorney in the profession, and the customary charges for similar
services. Id. "Reductions may be made . . . for such things as partial success,
duplicative hours or hours not reasonably expended." Boyle v. Alum-Line, Inc., 773
N.W.2d 829, 833 (Iowa 2009) (quoting Sherman v. Kasotakis, 314 F. Supp. 2d 843,
881 (N.D. Iowa 2004)). Reductions may also be made for "block billing" or poor

                                         -12-
record-keeping. Sherman, 314 F. Supp. 2d at 881. In the end, however, the award of
attorney's fees rests in the sound discretion of the trial court.

      After trial, the district court determined that Rydex was the prevailing party
and, based upon its analysis of the bills presented, awarded $204,221.50. In its
reasonableness determination, the district court attributed the reduction of the
remaining attorney's fees to its

       inability to discern separation between the infringement and contract
       claims, lack of sufficient billing records to precisely grasp the nature of
       work done, [Rydex's] success solely on a portion of the contract claim,
       the amount of the judgment in relation to amounts claimed, the
       complexity of the case which was essentially a straight forward contract
       dispute, and the Court's understanding of customary charges in the
       jurisdiction, in search of the 'reasonable attorney's fee' contemplated by
       the license Agreement.

Reviewing the district court's analysis of the Agreement as to attorney's fees in light
of the filings by the parties and briefing on appeal as well as the jury verdict, we agree
with the court's determination that Rydex prevailed in this action and find no clear
error of judgment in the court's application of Iowa law in arriving at the adjusted
figure awarded. Contrary to Rydex's claim, nothing in our review of the record
indicates the district court applied an arithmetically simplistic fee or mathematical
formula, nor are we persuaded by Graco that a further reduction is warranted. Too,
we decline the invitation to apply a cap based on the alleged contingent fee agreement
between Rydex and its counsel as advanced by Graco. While the record contains an
acknowledgment that such an agreement exists, Iowa courts have not yet spoken on
the matter as presented. Applying a review of reasonableness as our guide, there was
no abuse of discretion and the attorney's fees awarded stand as calculated.

III.   CONCLUSION

       For the reasons stated herein, we affirm.
                        ______________________________

                                          -13-
