Allen v. Mac Tools, Inc.
| Decision Date | 08 February 1996 |
| Docket Number | Nos. 92-CA-00840-SCT and 92-CA-01027-SCT,s. 92-CA-00840-SCT and 92-CA-01027-SCT |
| Parties | Mark M. ALLEN v. MAC TOOLS, INC., Ernie Christmas, Individually and as Agent, Servant and Employee of Mac Tools, Inc.; and Ronald M. Jenkins, Individually, and as Agent, Servant and Employee of Mac Tools, Inc.; and Nick Tremonte, Individually, and as Agent, Servant and Employee of Mac Tools, Inc. Mark M. ALLEN v. MAC TOOLS, INC.; Ernie Christmas, Individually and as Agent, Servant and Employee of Mac Tools, Inc.; and Ronald M. Jenkins, Individually and as Agent, Servant and Employee of Mac Tools, Inc.; and Nick Tremonte, Individually and as Agent, Servant and Employee of Mac Tools, Inc. and Mac Tools, Inc. v. Mark M. Allen and Sherry A. Allen. |
| Court | Mississippi Supreme Court |
James W. Nobles, Jr., Jackson, for appellant.
Ross E. Henley, John H. Henley, Henley Lotterhos & Henley, Jackson, for appellee.
Before SULLIVAN, P.J., and McRAE and JAMES L. ROBERTS, Jr., JJ.
On or about October 2, 1990, Mark M. Allen (Allen), filed a complaint in the Circuit Court of the First Judicial District of Hinds County, Mississippi. The complaint alleged that Mac Tools, Inc. (Mac Tools), Ernie Christmas (Christmas), Ronald M. Jenkins (Jenkins), and Nick Tremonte (Tremonte), as individuals, willfully, intentionally, maliciously, and wantonly made misrepresentations to him inducing him to enter into a distributorship, and later continue the distributorship for Mac Tools. The complaint demanded judgment for $376,200.00 in actual damages and $5,000,000.00 in punitive damages. On November 29, 1990, Defendants filed their response denying liability. In addition, Mac On May 29, 1992, Defendants filed their Motion for Summary Judgment or in the Alternative for Partial Summary Judgment, seeking judgment in favor of Defendants on all of Allen's claims and judgment in favor of Mac Tools on its counterclaim.
Tools filed a counterclaim seeking a judgment for approximately $12,000.00 due from Allen for goods he purchased while he was a Mac Tools distributor. On February 28, 1992, Mac Tools filed an Amended Counterclaim joining Mark's wife, Sherry A. Allen (Sherry), as a party to the counterclaim.
On June 15, 1992, the trial court granted a Partial Summary Judgment in favor of the Defendants on Allen's claims against Mac Tools, basing its decision on fraudulent inducement. However, the lower court felt that there were material issues of fact with regard to the counterclaim, and set the counterclaim for trial. Allen filed a Motion for Reconsideration of Entry of Summary Judgment on Behalf of Defendants, which the trial court by order denied. The counterclaim of Mac Tools, went to trial on July 20, 1992. The jury returned a verdict and judgment in favor of Mac Tools against Allen and Sherry for $2,805.00. The lower court entered the judgment on July 21, 1992.
On July 30, 1992, pursuant to Rules 50 and 59, Mac Tools filed its Motion for Judgment Notwithstanding the Verdict (JNOV), and its Motion to Amend Judgment to Include Cost of Collection and Pre-Judgment Interest. On September 3, 1992, the trial court entered its order denying Mac Tools' Motion for Judgment Notwithstanding the Verdict. On September 4, 1992, the trial court entered its order awarding attorneys' fees for $9,584.05 to Mac Tools.
On August 12, 1992, before the trial court ruled on Mac Tools' post-trial motions, Allen filed his first Notice of Appeal. This Notice of Appeal designated the orders appealed from as the "Judgment granting defendants' Motion for Summary Judgment dated June 15, 1992, and the Order denying plaintiff's Motion to Reconsider the Entry of the judgment sustaining the Motion for Summary Judgment." On September 28, 1992, Allen filed his second appeal entitled Notice of Appeal from Judgment Awarding Defendant Attorneys Fees. This notice designated the Order appealed from as the Order dated September 4, 1992, awarding attorney fees to Mac Tools, Inc. On October 9, 1992, Mac Tools filed its Notice of Cross-Appeal.
On January 25, 1993, Allen filed with this court a Motion by Appellant to Consolidate Appeals. On January 29, 1993, Appellees filed their Motion to Dismiss Appeal seeking to dismiss Allen's initial appeal of the Partial Summary Judgment and filed an objection to the consolidation of Allen's appeals on the grounds that Allen's Notice of Appeal was prematurely filed. By order entered on March 25, 1993, this Court denied Mac Tools motion to dismiss and consolidated Allen's appeal.
Mac Tools, Inc. manufactures and distributes all types of hand and power tools and related products for users in the automotive after market, including service stations, independent garages, car and truck dealerships, and various non-automotive accounts. To market its products to the user, Mac Tools contracts with independent distributors. The primary customers of these distributors are mechanics. Each distributor agrees to display Mac Tools' products and sell the products from a truck approved by Mac Tools. Usually they assign each distributor a territory and are given a current list of potential customers and stops when they sign the original contract. However, that is not true here, as they did not give the assignment sheet to Allen until several months after Allen had signed the contract. Mac Tools requires that distributors purchase products from Mac Tools in an amount equal to at least 80% of the National Distributor Average and that each distributor service the needs, such as broken tools, of the customers of his route weekly.
Before becoming a distributor Allen had been employed as a mechanic at Tune Up Clinic in Jackson, Mississippi for ten years. Allen was recruited to be a distributor by Nick Tremonte during the first part of 1986. Tremonte was the District Sales Manager (DSM) for Mac Tools for an area covering During pre-contract negotiations, there was one face-to-face meeting which involved Allen, his wife, and Tremonte. Then on January 31, 1986, Allen submitted to Mac Tools his application to become a distributor.
most of Mississippi and small parts of Arkansas and Louisiana. After Allen became a distributor, Tremonte continued as the DSM until the end of 1986. He was succeeded as DSM by Ernie Christmas who himself was succeeded in March 1989 by Ronald Jenkins.
On February 24, 1986, Allen executed a Mac Tools Distributor Agreement, in which Mac Tools authorized Allen to sell Mac Tools' equipment, tools, and tool boxes to customers in designated stops. The contract also stated that "[a] current list of potential customers or accounts in Distributor's Territory and the Territory Boundaries are set forth in Appendix A hereto." Mac Tools attached no such appendix to the agreement. Allen states that it was not until August 7, 1986 that Mac Tools furnished the territory assignment and list of stops to him. Allen states that Tremonte, the DSM, made representations to Allen before he entered the contract that there would be at least 250 stops or customers per week available for sales and based on experience, that the average sale per week at each stop was $20.00.
On the same date as they entered the contract, February 24, 1986, Allen purchased an initial inventory package, which Mac Tools financed. Allen and his wife Sherry, in connection with the initial inventory package and the van type truck required by Mac Tools to be purchased by its distributors, executed an agreement entitled Purchase Order and Security Agreement. To acquire additional and replacement inventory for his distributor business, Mac Tools extended Allen a Tool Purchase Account. On February 25, 1986, Allen and Mac Tools also entered a third agreement entitled Financing Agreement Between Mac Tools Distributor and Mac Tools, Inc. where Mac Tools agreed to purchase qualifying accounts from Allen at a discount of nine percent. On April 12, 1986, a new financing agreement known as the Mac Cap Financing Agreement, replaced the previous financing agreement. Under the Mac Cap Agreement, distributors would decide to extend credit to customers based upon a credit report; Mac Tools would extend the credit, and they would require that the distributor collect the payments. If the customer failed to make the payments as required, Mac Tools could "recourse" the distributor for the amounts unpaid. Thus, Mac Tools and Allen established several different accounts. The first was the secured agreement for the initial inventory and truck, which Sherry Allen co-signed. Next, there was the Tool Purchase Account, which allowed Allen to purchase additional inventory. Lastly, there was the Mac Cap Financing Agreement.
When Allen executed all the necessary paper work, he and Tremonte traveled together. Tremonte showed the stops that were in Allen's territory to him when Allen started working. Mac Tools mailed Allen's Official Territory Assignment to him on August 7, 1986.
During 1986, 1987, 1988 and 1989, Allen had several meetings with the different sales managers from Mac Tools, Christmas, Jenkins, and Tremonte, regarding the representation that they would at least provide 250 customers or stops to him. Allen asserts that each of these DSMs assured him that they would assign the additional territory and customers to him. When Allen ventured over into another territory to attempt to make larger sales, Jenkins and Tremonte called and told him in that he would have additional stops added to his territory.
Allen worked as a Mac Tools distributor for three years and eight months from February 24, 1986 until October 26, 1989, when his agreement with Mac Tools was...
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