Coughlin v. Capitol Cement Co.

• Decision Date: 10 April 1978
• Docket Number: No. 76-4387,76-4387
• Parties: 1978-1 Trade Cases 61,957, 3 Fed. R. Evid. Serv. 490 Frank COUGHLIN, Padre Concrete Corporation, A. W. Van Cleave, Jr. and Allied Crushed Stone Company, Plaintiffs-Appellants, v. CAPITOL CEMENT CO. et al., Defendants-Appellees.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 290

571 F.2d 290

1978-1 Trade Cases 61,957, 3 Fed. R. Evid. Serv. 490

Frank COUGHLIN, Padre Concrete Corporation, A. W. Van Cleave, Jr. and Allied Crushed Stone Company Plaintiffs-Appellants, v. CAPITOL CEMENT CO. et al., Defendants-Appellees.

No. 76-4387.

United States Court of Appeals Fifth Circuit.

April 10, 1978.

Emmett Cole, Jr., Victoria, Tex., J. Dan Bohannan, Logan Ford, Dallas, Tex., for plaintiffs-appellants.

Stanley E. Neely, Nathan L. Hecht, Dallas Tex., Robert W. Wachsmuth, San Antonio, Tex., for Capitol Aggregates.

Marvin Sloman, Robert H. Mow, Jr., Stephen L. Elliott, Dallas, Tex., for Kaiser Cement & Gypsum Corp.

Appeal from the United States District Court for the Western District of Texas.

Before TUTTLE, COLEMAN and RONEY, Circuit Judges.

TUTTLE, Circuit Judge:

This is an appeal in a private antitrust action instituted by two individual and two corporate plaintiffs pursuant to 15 U.S.C. § 15. ¹ The original complaint alleged that defendants-appellees, Capitol Aggregates, Inc. (hereinafter "Capitol") and Kaiser Cement & Gypsum Corporation (hereinafter "Kaiser"), ² and several non-party entities ³ had engaged in a concerted refusal to sell bulk cement to plaintiffs-appellants, in violation of section 1 of the Sherman Act. ⁴ Following an 11-day trial, the district court denied defendants' motions for directed verdict and submitted the case to the jury, which held for the defendants. ⁵ Plaintiffs' motion for a new trial, which alleged 115 errors during the course of trial, was denied, and this appeal followed. On appeal, a 4000-page record and eighteen separate enumerations of error are presented for review. We shall "(b)egin at the beginning . . . go on till (we) come to the end," ⁶ then affirm.

I. BACKGROUND

The plaintiffs here are two individuals, Frank Coughlin and A. W. Van Cleave, Jr., and two corporations, Padre Concrete Corporation (hereinafter "Padre") and Allied Crushed Stone Company (hereinafter "Allied"). Both before and during the period in question, Coughlin was the president and majority stockholder of Padre, while Van Cleave was the president and sole stockholder of Allied. To place the substantive aspects of the case in the proper context, it is first necessary for us briefly to outline the relationship among these four parties and their efforts to enter the San Antonio, Texas concrete market.

Frank Coughlin spent almost his entire adult life in the ready-mix concrete business. He initially entered the field by way of his father's ready-mix business in Corpus Christi, Texas, and subsequently was a partner in Coast Materials Concrete and an employee of the Alamo Lumber Co. During his nine years with Coast Materials, Coughlin assumed primary responsibility for the operation of ready-mix plants in Beeville, Three Rivers and Refugio, Texas. In an effort to capitalize on his accumulated experience, Coughlin organized Padre in 1965. Although Padre began operations with only a single plant in Beeville, Texas, additional plants were added in Kingsville, Corpus Christi and Three Rivers by 1968.

A. W. Van Cleave, Jr., on the other hand, was a stranger to the ready-mix business. In 1967, however, through an inheritance from his father-in-law, Van Cleave obtained a crushed limestone company and certain aggregate-producing equipment. By way of a similar bequest, Van Cleave's son, Bill Van Cleave, obtained title to some 500 acres of land in San Antonio, Texas. Van Cleave transferred his equipment to Allied and began producing limestone, washed gravel and sand from his son's acreage. The venture was not a success. Allied suffered a net loss in fiscal years 1967 and 1968 and by the spring of 1969 was not generating sufficient cash to meet its obligations. ⁷

Padre's financial stability was equally precarious. In his pre-trial deposition, Coughlin admitted that he was "broke" by the spring of 1969 and was receiving "extreme pressure" from Padre's creditors. ⁸ Despite these seemingly insurmountable financial odds, Coughlin and Van Cleave decided to pool their personal and corporate resources in San Antonio. To this end they formed a partnership known as Northside Ready Mix (hereinafter "Northside"). Under the terms of the partnership agreement, Padre furnished twelve ready-mix trucks, a batching plant and other equipment, which Coughlin transferred to San Antonio from his Kingsville, Texas plant. Padre was supposed to receive $1 per cubic yard of concrete sold in exchange for the trucks, and Northside funds were to be used to pay for maintenance, fuel and drivers' salaries. Allied agreed to provide a business location, i. e., the 500-acre site in San Antonio, an office, water, sand and gravel. Northside was to pay Allied for sand and gravel at prevailing market prices. The day-to-day operations of the new business were entrusted to Coughlin as the only partner with any experience. Northside opened for business on May 10, 1969. ⁹

In the minds of Coughlin and Van Cleave, Northside was a sure bet. In addition to Coughlin's experience, Northside had sand, gravel, water and other utilities available on the actual plant site and "a construction boom was anticipated" in the vicinity. All that remained was a local source for the remaining essential ingredient of concrete, cement. Without attempting to summarize all of the relevant evidence, it may be said that Northside was unable to purchase bulk cement directly or indirectly from either of the named defendants or from the remaining local producer, San Antonio Portland. Both Van Cleave and Coughlin made repeated efforts to purchase for cash, credit or cashier's check, but each time came up empty handed. Efforts to substitute bag cement purchased from local outlets and bulk cement delivered from Houston, Texas proved inadequate. ¹⁰

Coughlin left San Antonio for good on August 26, 1969, and thereafter attempted to continue Padre's Beeville operation. That venture subsequently failed as did Padre's other plants. Van Cleave tried to operate the San Antonio ready-mix business in Coughlin's absence. Northside's assets were transferred to Allied, trucks were purchased and some local cement became available. These measures, however, were to no avail, and Allied finally went out of business in June 1970. ¹¹ The lawsuit involved in this appeal was initiated two years later.

As previously mentioned, plaintiffs have presented eighteen issues on appeal. For purposes of discussion and analysis, the issues may be grouped into three basic categories: sufficiency of the evidence, jury instructions and evidentiary rulings. We now proceed to address each in turn.

II. SUFFICIENCY OF THE EVIDENCE

The bulk of the proof tendered in the trial court was directed to the question of whether the defendants' refusals to sell to Northside were a result of concerted action or independent business judgment. The jury concluded that neither Capitol nor Kaiser had entered any contract, combination or conspiracy not to sell. On appeal, however, plaintiffs contend that "the evidence (was) legally insufficient to support the jury's verdict." But our review of the record reveals that plaintiffs failed to move for a directed verdict at the close of all the evidence or for a judgment n. o. v. following the return of the verdict. See Fed.R.Civ.P. 50. Without mentioning these crucial lapses in their brief, plaintiffs ask this court to review for the first time the sufficiency of the evidence.

It is well settled that in the absence of a motion for directed verdict, the sufficiency of the evidence supporting the jury's findings is not reviewable on appeal. Fugitt v. Jones, 549 F.2d 1001, 1004 (5th Cir. 1977); American Lease Plans, Inc. v. Houghton Construction Co., 492 F.2d 34, 35 (5th Cir. 1974) (per curiam); Rawls v. Daughters of Charity of St. Vincent De Paul, Inc., 491 F.2d 141, 147 (5th Cir.), cert. denied, 419 U.S. 1032, 95 S.Ct. 513, 42 L.Ed.2d 307 (1974). Federal appellate courts simply do not directly review jury verdicts. The policy underlying this rule is sound: a party is not permitted to gamble on the verdict and later question the sufficiency of the evidence that led to his defeat. See House of Koscot Development Corp. v. American Line Cosmetics, 468 F.2d 64, 67 (5th Cir. 1972); Taylor v. Gulf States Utilities Co., 375 F.2d 949, 950 (5th Cir.), cert. denied, 389 U.S. 871, 88 S.Ct. 154, 19 L.Ed.2d 151 (1967). Under these circumstances, our inquiry is limited to whether there was any evidence to support the jury's verdict, irrespective of its sufficiency, or whether plain error was committed which, if not noticed, would result in a "manifest miscarriage of justice." American Lease Plans, Inc. v. Houghton Construction Co., 492 F.2d at 35; Little v. Bankers Life & Casualty Co., 426 F.2d 509, 511 (5th Cir. 1970).

Plaintiffs did, however, raise the sufficiency issue in their motion for a new trial. ¹² Although this action will not reopen the question foreclosed by plaintiffs' failure to move for a directed verdict, it is relevant to the nature of the review available here. As we said in Little v. Bankers Life & Casualty Co.:

When, as in this case, a motion for a new trial has been made on the ground of insufficient evidence to support the verdict and the like, the failure by the losing party to move for a directed verdict . . . still operates to foreclose consideration of the question of sufficiency on appeal, and the appellate court may inquire only whether the trial court abused its discretion in overruling the motion for a new trial.

426 F.2d at 511, citing Brown v. Burr-Brown Research Corp., 378 F.2d 822, 824 (5th Cir. 1967); Pruett v. Marshall, 283 F.2d 436, 438 (5th Cir. 1960). Of course, when we review the denial of a motion for new trial, we do not review "sufficiency" in its technical sense. What is in issue is whether there was an "absolute absence of evidence to support the jury's verdict." Fugitt v. Jones, 549 F.2d at 1004; Litherland v....