Shingleton v. Armor Velvet Corp.

• Citation: 621 F.2d 180
• Decision Date: 10 July 1980
• Docket Number: No. 78-2454,78-2454
• Parties: 6 Fed. R. Evid. Serv. 685 Michael N. SHINGLETON et al., Plaintiffs-Appellees, v. ARMOR VELVET CORPORATION et al., Defendants-Appellants.
• Court: United States Courts of Appeals. United States Court of Appeals (5th Circuit)

Page 180

621 F.2d 180

6 Fed. R. Evid. Serv. 685

Michael N. SHINGLETON et al., Plaintiffs-Appellees, v. ARMOR VELVET CORPORATION et al., Defendants-Appellants.

No. 78-2454.

United States Court of Appeals Fifth Circuit.

July 10, 1980.

Ware & Otonicar, Jerome C. Ware, Atlanta, Ga., for defendants-appellants.

Neely, Freeman & Hawkins, Richard P. Schultz, Atlanta, Ga., for plaintiffs-appellees.

Appeal from the United States District Court for the Northern District of Georgia.

Before INGRAHAM, RONEY and THOMAS A. CLARK, Circuit Judges.

PER CURIAM:

Defendant Armor Velvet Corp., an Alabama firm, developed an electrostatic decorating service, which it offered to wholesale buyers in the form of regional distributorship agreements. In order to promote the distributorships, Armor Velvet displayed its process in an Atlanta, Georgia, trade show, and offered "the exclusive right to conduct a patented electrostatic service operation." Plaintiffs are various distributorship purchasers, who were victorious in the district court in an action for fraudulent misrepresentation and breach of contract. Except for a remittitur order reducing the jury verdict by $6,936.13, we affirm.

Armor Velvet and the individual Armor Velvet officers raise numerous issues on appeal, including a miscalculation of damages by the jury; lack of personal jurisdiction; improper admission of evidence relating to individual defendants' net worth; failure to give effect to a contractual provision requiring application of Alabama law, and requiring that suit be brought only in Alabama; error in holding the corporate officers individually liable; admission of evidence of one individual defendant's prior felony conviction; violation of a contractual arbitration provision; an erroneous award of attorney's fees; and an erroneous award of punitive damages.

Essentially this case was typically a case for the jury, and none of the arguments permits this Court to set aside the verdict or reverse the rulings of the district court. A skeletal recitation of the facts and a brief comment on each point on appeal will sufficiently disclose the Court's decision.

The first distributorship agreement was executed between Armor Velvet and three of the plaintiffs, Shingleton, Miner and Sloan, and was to include the Atlanta, Georgia, territory. The agreement, signed by the parties in Atlanta, was for the amount of $6,936.13. One month later, the three original purchasers plus a fourth, plaintiff MacRae, entered into a distributorship agreement covering the entire state of Georgia, for the amount of $25,500.00. Plaintiffs were apparently credited with the $6,936.13 already paid for the right to distribute the process in the Atlanta area, and paid the difference between that and the $25,500.00 fee for the entire state, or $18,563.87.

The four plaintiffs then entered into yet another distributorship agreement, this one covering three states, New York, New Jersey and Pennsylvania. These plaintiffs bought options for the purchase of the three additional distributorship areas, for a total of $95,210.00. An initial payment of $5,000.00 was agreed to, the balance of $90,210.00 to be due at a later time.

A fifth plaintiff, DeTemple, signed a distributorship agreement to cover two Virginia counties, and paid a $10,070.00 down payment on a $35,070.00 total contract.

Thus, the amounts actually expended by the various plaintiffs may be depicted as follows:

Shingleton, Sloan, Miner and MacRae:

$ 6,936.13 Atlanta contract

18,563.87 Difference between amount paid for Atlanta

contract and entire state of Georgia

contract ($25,500.00 less $6,936.13).

5,000.00 Option contract for New York, New Jersey

and Pennsylvania

$30,500.00 TOTAL PAID

DeTemple:

$10,070.00 Down payment for the two-county Virginia

---------- area Sometime later the plaintiffs, who had been attending a training school at Armor Velvet's Alabama corporate home, became dissatisfied with the program and brought this action in Georgia, claiming that defendants had falsely represented that the defendants held a patent on the process.

Shingleton, Sloan, Miner and MacRae were awarded a jury verdict of $37,436.13 compensatory damages, $20,000.00 punitive damages, and $9,600.00 attorney's fees. Plaintiff DeTemple was awarded $10,070.00 compensatory damages, $5,000.00 punitive damages, and $2,400.00 attorney's fees.

Defendants claim the jury miscalculated the actual damages suffered by Shingleton, Sloan, Miner and MacRae by precisely the amount paid by these plaintiffs for the Atlanta distributorship. Miner testified that when the state of Georgia contract was signed, he and the other three original plaintiffs paid the difference between $25,500.00, the cost of the Georgia distributorship rights, and $6,936.13, the previously paid cost of the Atlanta rights, or $18,563.87. The four plaintiffs were credited for the sum already paid for Atlanta and, together with the $5,000.00 option payment for the New York, New Jersey and Pennsylvania areas, actually paid $30,500.00 to Armor Velvet. Yet, the jury awarded compensatory damages of $37,436.13.

Although plaintiffs argue that evidence of other damages would support the verdict, it is apparent from the exact figures used that the jury failed to take into account the $6,936.13 credit afforded the three original plaintiffs, and miscalculated the amounts paid to Armor Velvet.

Although defendants first argue they are entitled to a new trial, their alternative argument is that they are entitled to a reduction of the judgment. Plaintiffs concede that if this point is decided against them, a remittitur would be appropriate.

This Court is empowered to enter a remittitur where "the error or oversight is patent and the correction mechanical." Stapleton v. Kawasaki Heavy Industries, Ltd., 608 F.2d 571, 574 n.7 (5th Cir. 1979); see Davis v. Safeway Stores, Inc., 532 F.2d 489, 491 (5th Cir. 1976). The Court's power in this respect is the same as the district court's. Howell v. Marmpegaso Compania Naviera, S.A., 536 F.2d 1032, 1035 (5th Cir. 1976); 11 C. Wright & A. Miller, Federal Practice and Procedure: Civil § 2820 at 133-34 (1973). "(I)f a remand would be mere wasted motion this court (may) recompute the award." Ferrero v. United States, 603 F.2d 510, 515 (5th Cir. 1979) (citing Simpson v. United States, 322 F.2d 688, 693 (5th Cir. 1963)).

Defendants further assert that the jury necessarily overstated the actual damages suffered by plaintiffs in the amount of a sales commission paid to Miner by Armor Velvet for selling the distributorship to DeTemple. This argument finds no support in the record. The jury was free to consider whether the sales commission should have been set off against plaintiffs' out of pocket expenses.

As to jurisdiction, the evidence indicates that defendant had sufficient contacts with the state of Georgia to permit jurisdiction under Georgia's long-arm statute. Ga.Code Ann. § 24-113.1(a), (b). Georgia's long-arm statute contemplates an exercise over nonresident parties to the maximum extent permitted by procedural due process. See Hollingsworth v. Cunard Line Ltd., 152 Ga.App. 509, 263 S.E.2d 190 (1979). Individual defendants, on behalf of Armor Velvet, participated in an Atlanta trade show for the purpose of disseminating information about the firm's process. See Brooks Shoe Manufacturing, Inc. v. Byrd, 144 Ga.App. 431, 241 S.E.2d 299, 301 (1977). Furthermore, it was unnecessary for the individual defendants actually to be present in the state at the time the fraudulent representations were made in order to be subject to...