Bonelli v. Volkswagen of America, Inc.

• Citation: 421 N.W.2d 213,166 Mich.App. 483
• Decision Date: 07 April 1988
• Docket Number: 91865,Docket Nos. 91864
• Parties: J.B. BONELLI, Plaintiff-Appellee/Cross-Appellant, v. VOLKSWAGEN OF AMERICA, INC., and James Neal Harvey Advertising, Inc., Defendants-Appellants/Cross-Appellees, and Amateur Hockey Association of the United States, Defendant-Appellee/Cross-Appellee.
• Court: Court of Appeal of Michigan (US)

Page 213

421 N.W.2d 213

166 Mich.App. 483

J.B. BONELLI, Plaintiff-Appellee/Cross-Appellant, v. VOLKSWAGEN OF AMERICA, INC., and James Neal Harvey

Advertising, Inc., Defendants-Appellants/Cross-Appellees,

and

Amateur Hockey Association of the United States,

Defendant-Appellee/Cross-Appellee.

Docket Nos. 91864, 91865.

Court of Appeals of Michigan.

Submitted Oct. 15, 1987.

Decided Feb. 17, 1988.

Released for Publication April 7, 1988.

Kohl, Secrest, Wardle, Lynch, Clark & Hampton by John R. Secrest, Thomas E. Keenan and Janet G. Callahan, Farmington Hills, and Gromek, Bendure & Thomas by Mark R. Bendure, Detroit, and Ronald M. Abend, Inc. by James D. Devereaux, Walnut Creek, Cal., for plaintiff-appellee/cross-appellant.

Vandeveer, Garzia, Tonkin, Kerr, Heaphy, Moore, Sills & Poling, P.C. by Michael M. Hathaway and Robert D. Brignall, Detroit, and Satterlee & Stephens, Attys. of Counsel by Robert Callagy, Mark Fowler and David Curran, New York City, for defendants-appellants/cross-appellees Volkswagen of America, Inc., and James Neal Harvey Advertising Agency, Inc.

Kerr, Russell & Weber by Robert R. Florka, Detroit, for Amateur Hockey Ass'n of the U.S.

Before WAHLS, P.J., and SAWYER and SIMON, ^* JJ.

PER CURIAM.

This dispute concerns conflicting claims to the right to sell or distribute posters of the gold-medal-winning 1980 United States Olympic Hockey Team. On January 21, 1986, an Oakland County jury returned a verdict in favor of plaintiff, J.B. Bonelli, and against defendants Volkswagen of America, Inc. (VW), and James Neal Harvey Advertising, Inc. (JNHA), on a count of tortious interference with an advantageous business relationship based on their interference with plaintiff's exclusive rights to sell posters of the hockey team. A judgment was entered against VW and JNHA for $1.6 million plus prejudgment interest and costs. A verdict of no cause of action, however, was returned in favor of defendant Amateur Hockey Association of the United States (AHAUS) on counts of tortious interference with a business relationship, intentional misrepresentation, breach of contract and fraud. After VW and JNHA's motion for new trial or judgment notwithstanding the verdict was denied by the Oakland Circuit Court on March 26, 1986, they filed this appeal as of right, claiming that the trial court erred by: (1) denying their request for judgment notwithstanding the verdict on plaintiff's claim of tortious interference with an advantageous business relationship; (2) excluding from evidence the deposition testimony of two of their witnesses on the basis that the depositions had been taken before AHAUS was joined as a codefendant; (3) refusing to give a requested jury instruction explaining New York law as it applied to their contract with AHAUS; (4) refusing to dismiss the claims against JNHA based on lack of personal jurisdiction; and (5) refusing to set aside or reduce the damage award, which they alleged to be speculative and excessive. Plaintiff filed a cross-appeal challenging the directed verdict entered in favor of defendants by the trial court on the claim of intentional infliction of emotional distress. We affirm the trial court's decisions in toto.

FACTS

On February 22 and 24, 1980, the United States Olympic Hockey Team, an underdog in the competition, defeated teams from the Soviet Union and Finland to win the gold medal for hockey at the Winter Olympic Games held at Lake Placid, New York. The marketing potential of the hockey team for product advertising purposes was immediately recognized by advertisers in the United States--a country whose morale was then diminished to some extent by the lengthy Iran-hostage crisis. The financially strapped AHAUS, which owned the exclusive rights to the advertising and promotional activities of the hockey team, including its signs, logos and symbols, also recognized that the team's victory had produced a unique fund-raising opportunity.

Plaintiff was one of those persons who hoped to capitalize on the excitement surrounding the hockey team's victory. On Monday, March 3, 1980, he contacted Harold Trumble, the executive director of AHAUS, and by March 7, 1980, according to plaintiff, he and Trumble had come to a verbal understanding that plaintiff would purchase the exclusive rights to sell posters of the team in exchange for payment of $100,000 plus ten percent of the gross sales receipts. On March 13, 1980, plaintiff and Trumble signed contracts which provided, among other things, that plaintiff was to have the "exclusive print and poster rights Unbeknownst to plaintiff, at the same time the terms of his contracts were being firmed up Trumble and other AHAUS representatives were negotiating with personnel from VW and its advertising agent, JNHA, about the use of the hockey team in an advertisement campaign promoting the sale of VW vehicles. On Monday, February 25, 1980, the day after the hockey team's victory over the team representing Finland, Fred Campbell, the president of the sports marketing firm which had been secured in October, 1979, as AHAUS's nonexclusive agent to obtain corporate sponsors, contacted James Neal Harvey, chairman of the board of JNHA, and left a phone message encouraging JNHA to consider using the hockey team as part of an advertising campaign for one of its clients. At that time, JNHA was the advertising agent for one of VW's vehicles, the Vanagon. A tentative agreement was reached, under the terms of which VW would pay $50,000 to AHAUS for use of the hockey team to promote VW's Vanagon. The men met shortly thereafter, apparently on February 27, 1980, to discuss the project, but the actual content of the advertising package proposed by Harvey at this initial meeting was disputed at trial. According to JNHA attorney Stephen Froling, who was not personally present at the meeting, Campbell and other AHAUS representatives were made aware that VW intended to support its use of the hockey team in television commercials with the free distribution of team photographs at local VW automobile dealerships. Campbell and Trumble, on the other hand, testified that there had been no discussion of a poster or team-photo giveaway at the meeting.

                to the 1980 U.S. Hockey Team" and the "exclusive license to use the Names and Logos in connection with the sale and marketing of prints and posters."   On the same date, plaintiff also signed a letter of agreement in which he agreed to purchase advertisements in the upcoming twelve consecutive monthly issues of a magazine published by AHAUS.  Consistent with the prior verbal understanding between plaintiff and Trumble, the contracts required plaintiff to pay $100,000 plus ten percent of the gross receipts from the sale of "prints and posters." 1
                

According to Campbell, a second meeting was held two days after the first, at which Campbell showed John Slavin, the advertising manager for VW, some proposed layouts for television commercials and commercial print material, but no mention was made of a poster giveaway. Campbell further testified that Slavin was so impressed with the advertising package that he decided to use the hockey team to promote the entire VW line of automobiles rather than just the Vanagon, thus causing a doubling of the fee payable to AHAUS from $50,000 to $100,000.

On February 29, 1980, an article appeared in the New York Times stating that VW had "pulled off the advertising coup of the season by signing up the United States Olympic Hockey Team." According to the article, "[p]rint ads and television commercials for the whole line of Volkswagen products will offer color posters of the team." A similar story appeared in a March 3, 1980, article in Adweek. The Adweek article explained that VW would be reinforcing its television, newspaper and magazine advertisements with an "offer of a giveaway poster featuring a color photo of the team members." Trumble, AHAUS outside counsel Donald Parson, and plaintiff all testified that they had not read either article when published and did not become aware of their contents until, at the very earliest, several weeks later. Campbell acknowledged at trial that he had read the New York Times article on February 29, 1980, but that at the time he dismissed the comment about a color poster giveaway as the product of an overzealous public relations person who threw in the idea as a "possibility." Trumble testified that Also on February 29, 1980, Trumble arrived in New York and spoke with Campbell and Scott Weeker, a JNHA executive in charge of the VW account. According to Trumble, the two men informed him that during the following few days a ticker-tape parade would be held for the hockey team and a television commercial involving the team would be made, but not that a poster giveaway program was planned. On Tuesday, March 4, 1980, a meeting took place in Harvey's New York office with James Harvey, JNHA attorney Stephen Froling, JNHA account executive Scott Weeker, AHAUS agent Fred Campbell, and AHAUS executive director Harold Trumble. Trumble and Campbell testified that a poster giveaway was not mentioned to them at this meeting.

Campbell never mentioned the article to him.

Later in the day on March 4, 1980, at a hockey rink in New Jersey, JNHA personnel were filming a television commercial involving the hockey team. Trumble testified that while watching the filming, JNHA executive Scott Weeker asked him for a team picture. When asked what kind of picture he needed, Trumble said that Weeker responded, "Just a team picture that we can give out to the people that come into the showrooms, to look at Volkswagens." Trumble asserted that he was not told how many of the pictures would be distributed or that VW intended to use the pictures as part of a poster, stating, "If they had mentioned the poster, it would have been a red flag to me," since during that time period he was negotiating with other people regarding the rights for the sale of posters of the hockey...