Alpha Display Paging, Inc. v. Motorola Communications and Electronics, Inc.
| Citation | 867 F.2d 1168 |
| Decision Date | 17 February 1989 |
| Docket Number | No. 88-1447,88-1447 |
| Parties | 27 Fed. R. Evid. Serv. 628 ALPHA DISPLAY PAGING, INC., Appellant, v. MOTOROLA COMMUNICATIONS AND ELECTRONICS, INC.; Motorola, Inc., Appellees. |
| Court | United States Courts of Appeals. United States Court of Appeals (8th Circuit) |
J. Richard McEachern, St. Louis, Mo., for appellant.
Garrett B. Johnson, Chicago, Ill., for appellees.
Before McMILLIAN and BOWMAN, Circuit Judges, and HENLEY, Senior Circuit Judge.
Alpha Display Paging, Inc. (Alpha), appeals from a final judgment entered in the District Court 1 for the Eastern District of Missouri, upon a jury verdict, in favor of Motorola Communications and Electronics, Inc. and Motorola, Inc. (Motorola) on Alpha's complaint of breach of contract and fraud. For reversal, Alpha argues that the district court erred in (1) misstating the elements of fraud in the jury instructions and misreading the instructions; (2) admitting evidence as to the net worth of Alpha's shareholders, admitting evidence of Alpha's Subchapter S tax status, and allowing cross-examination of Alpha's expert concerning his alleged unethical conduct; (3) allowing Motorola to use leading questions in the cross-examination of one of its employees; and (4) denying its motion for new trial on the grounds that the jury verdict was against the clear weight of the evidence. For the reasons discussed below, we affirm the judgment of the district court.
Alpha is a Missouri corporation that operates a paging service on the 900 megahertz (MHz) frequency range, which became available in the St. Louis area in 1983. Motorola Communications and Electronics, Inc. is a subsidiary of Motorola, Inc. (Motorola). Motorola manufactures and sells paging equipment, among other products. Early in 1983 Alpha applied for and received a license from the Federal Communications Commission (FCC) to construct a radio paging system on the newly opened frequency.
Alpha planned to eventually provide its customers with alphanumeric pagers. An alphanumeric pager, unlike traditional tone and voice pagers, can receive, display, and store a full-text English language message. At the time Alpha received its license from the FCC, such pagers were available for the lower, more established frequencies, but none had been developed for the 900 MHz frequency. Nevertheless, Alpha's founder, Todd Kamp, chose the name "Alpha Display Paging, Inc." to suggest that the alphanumeric pager would be available to its customers. He also procured from Motorola a black and white photograph of one of its alphanumeric pagers to use in Alpha's yellow page advertisement.
On May 26, 1983, Alpha ordered a terminal, the necessary transmitters, and fifty Dimension 1000 tone and voice pagers from Motorola. Motorola sales representative Bob Bauer had told Kamp that the Dimension 1000 was the only 900 MHz pager Motorola manufactured at that time but that Motorola planned to develop a complete line of pagers for the 900 MHz frequency. At the same time, Bauer also informed Kamp that the future development of a 900 MHz alphanumeric pager would depend upon market demand. Alpha submitted a separate order to Motorola for the 900 MHz alphanumeric pager in an attempt to convince Motorola that demand for the non-existent product existed. Motorola never accepted the order for the 900 MHz alphanumeric pager.
In June 1983 Kamp met Bob Schwendeman from Motorola's paging division. When Kamp told Schwendeman about the order for the 900 MHz alphanumeric pagers, Schwendeman told Kamp that no delivery schedule for these pagers had been set. After the discussion with Schwendeman, Kamp placed both May 26, 1983, orders on hold.
Later that month Kamp wrote a letter to Motorola asking either for a firm commitment to manufacture the 900 MHz alphanumeric pager or for assurance that the previously-ordered Motorola terminal could be adapted to fit other manufacturers' 900 MHz alphanumeric pagers, should any be developed.
Ron Smith, a Motorola employee, responded to Kamp's inquiry in a letter explaining that Motorola still planned to produce the alphanumeric pager for the 900 MHz frequency and that the terminal Kamp had ordered could be adapted to signal other manufacturers' pagers. Motorola did in fact adapt Alpha's terminal as Alpha requested.
On August 23, 1983, Alpha submitted a new order for 900 MHz tone and voice paging equipment that Motorola had offered to Alpha at a special price. This order was accepted by Motorola, and Alpha built its paging system which became operational in the fall of 1984. However, Motorola subsequently suffered a loss on the lower frequency alphanumeric pagers that it had already produced for sale. For that reason, Motorola never completed its plans to produce the 900 MHz alphanumeric pager even though it had designed and built a prototype. Alpha filed suit alleging that it had lost two million dollars in profits because Motorola had breached a contract to produce the alphanumeric pager and had fraudulently represented that the alphanumeric pager would be developed.
Alpha argues that the district court incorrectly stated the law of fraud in the instructions given to the jury. The district court added this sentence to the instructions submitted by Alpha: "In order to find the defendant guilty of fraud, the jury must find the defendant made a false representation of a past or existing fact." Motorola argues that the instruction given correctly stated Missouri law on fraud because the "existing fact" in issue was Motorola's existing intent, or lack thereof, to develop the 900 MHz alphanumeric pager. We agree.
In Craft v. Metromedia, Inc., 766 F.2d 1205 (8th Cir.1985), cert. denied, 475 U.S. 1058, 106 S.Ct. 1285, 89 L.Ed.2d 592 (1986), this court held, "statements of present intent may be representations of fact, which, if false, will support fraud claims under Missouri law." Id. at 1218, citing Kansas State Bank v. Citizens Bank of Windsor, 737 F.2d 1490, 1498 (8th Cir.1984), White v. Mulvania, 575 S.W.2d 184, 188 (Mo.1978) (banc). The instruction as given correctly states Missouri law on fraud.
Alpha further argues that the district court erred reversibly in misreading the jury instruction on fraud. The district court twice mistakenly read "defendant" where "plaintiff" should have been read. Motorola argues that Alpha has waived objection to the mistaken reading by failing to object at trial. We agree.
Fed.R.Civ.P. 51 provides:
No party may assign as error the giving or the failure to give...
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