Racine Hotel Partners (Racine) (defendant) hired Olympia Hotels Corporation (Olympia) (plaintiff) to build and operate a hotel. Olympia built the hotel, but it was not a successful business. Olympia brought suit against Racine, alleging breach of contract and civil conspiracy arising from Racine’s conduct after the contract was signed. Racine filed counterclaims for breach of contract and fraudulent inducement. Racine’s counterclaim alleged that Olympia had not used its best efforts to make the hotel a success, as the contract required. The district court judge severed Racine’s counterclaim for fraudulent inducement. The district court held a trial on Olympia’s contract and conspiracy claims and Racine’s contract counterclaim. The judge directed a verdict for Olympia on Racine’s contract counterclaim, and directed a verdict for Racine on Olympia’s conspiracy claim. The jury returned a verdict for Olympia on its contract claim. Both parties appealed.