Dean Witter Reynolds, Inc. v. Hammock

• Decision Date: 04 April 1986
• Docket Number: Nos. BE-226,BE-470 and BF-411,s. BE-226
• Citation: 11 Fla. L. Weekly 1341,489 So.2d 761
• Parties: 11 Fla. L. Weekly 1341, 11 Fla. L. Weekly 799 DEAN WITTER REYNOLDS, INC., Appellant, v. Collin R. HAMMOCK, Appellee.
• Court: Florida District Court of Appeals

Page 761

489 So.2d 761

11 Fla. L. Weekly 1341, 11 Fla. L. Weekly 799

DEAN WITTER REYNOLDS, INC., Appellant, v. Collin R. HAMMOCK, Appellee.

Nos. BE-226, BE-470 and BF-411.

District Court of Appeal of Florida First District.

April 4, 1986.

On Motion for Rehearing June 13, 1986.

Thomas M. Baumer and Michael G. Tanner, of Gallagher, Baumer, Mikals, Bradford, Cannon & Walters, P.A., Jacksonville, for appellant.

John C. Taylor, Jr., of Taylor, Day, Rio & Mercier, Jacksonville, for appellee.

JOANOS, Judge.

This is a combined appeal and cross appeal from a final judgment which awarded compensatory damages, attorney's fees, and costs to Collin R. Hammock (Hammock), appellee/cross appellant. Appellant Dean Witter Reynolds, Inc. (DWR) raises three points for review: (1) the denial of DWR's motion for judgment notwithstanding the verdict with respect to DWR's claim against Hammock, (2) the denial of DWR's motion for judgment notwithstanding the verdict with respect to Hammock's claim, and (3) the assessment of attorney's fees and costs against DWR. Appellee/cross appellant Hammock also presents three points for review: (1) the directed verdict against Hammock on the punitive damages claim in his counterclaim, (2) the exclusion of DWR's in house manuals and procedures from evidence, and (3) the directed verdict on Count I of Hammock's counterclaim. We affirm in part and reverse in part.

DWR's complaint against Hammock alleged that Hammock executed and then breached a customer agreement entered into with DWR in which DWR was to provide brokerage services to Hammock for trading in commodity futures. Under the terms of the agreement, DWR was authorized to advance sums to Hammock's account, and Hammock was liable for all sums advanced. According to DWR, it advanced $125,437.30 to Hammock to cover losses sustained by him as a result of his trading activities, and Hammock had failed to pay the monies advanced.

Hammock answered the complaint and filed a four-count counterclaim. Count I of the counterclaim alleged that DWR breached the customer's agreement by violating the rules and regulations of the commodities exchanges. Count II alleged that Stephens, DWR's account executive, defrauded Hammock by failing to disclose the risks inherent in trading silver futures. Count III alleged that DWR "churned the account," i.e., engaged in excessive trading in the account in order to generate commissions, in violation of the anti-fraud provisions of the Commodity Exchange Act (CEA). ¹ Count IV alleged that DWR was negligent in the supervision and handling of Hammock's account. In Counts II-IV, Hammock sought compensatory and punitive damages.

The record indicates that Hammock encountered difficulty in obtaining discovery from DWR. For example, DWR failed to produce equity runs and the original of the commodity account application sought by Hammock until ordered by the court to do so, and threatened by the court with sanctions for failure to comply. In all, Hammock's counsel presented eleven separate requests for production and ten motions to compel discovery. The two most sought-after documents were the original of the application and a memo authored by G.W. Miller relating to DWR's policies with regard to suitability of a client to engage in commodities trading, the trading limits on accounts, and the margin requirements. After DWR represented that neither document could be located, the trial court directed DWR to furnish Hammock with names of employees who had any responsibility for the care and custody of the G.W. Miller memo and to produce for deposition in New York any of those named individuals. Pursuant to the trial court's order, Hammock's counsel took the depositions of two DWR vice-presidents. Joseph Greenberg, vice-president of DWR's corporate credit department, stated that on September Similar circumstances surrounded the production of the G.W. Miller memo. Wendy Goetz, assistant vice-president of DWR's compliance department, stated that on September 20, 1984, she was asked to find the G.W. Miller memo. She located a copy of the memo in files that had been maintained by her predecessor. Prior to September 20, 1984, neither she nor anyone else in her department had been asked to locate the memo. Ms. Goetz found the memo within fifteen minutes of receipt of the request. According to Ms. Goetz, the policy and procedures set forth in the memo have not been superseded; rather, they have been translated into the firm's policy and procedure manual, CMY2, which was published in October 1981.

18, 1984, he was advised by DWR's Jacksonville attorneys that the original of the account application had been requested. On that same day, Greenberg sent the requested document to Jacksonville. ²

On October 3, 1984, Hammock's counsel filed a motion for contempt and for assessment of attorney's fees. The case was tried before a jury on October 22-26, 1984.

The jury was presented with evidence which, if viewed in a light favorable to appellee, as we are required to view it on this appeal, would support the following:

(1) Hammock had limited investment experience, and his knowledge of the silver market had been obtained by reading articles, library books, and stock exchange brochures;

(2) Hammock, with a high school education and work experience as mechanic, truck driver, and contractor, was an unlikely candidate for successful trading in the highly speculative area of silver futures;

(3) Hammock's investment funds were the result of a personal injury settlement arising from an accident on an offshore oil rig which left his right arm totally disabled, and precluded his future employment as a mechanic;

(4) Hammock advised DWR's account executive that $40,000 was the maximum amount he was willing to invest;

(5) Hammock was influenced by DWR's account executive to change his investment plan from long-range trading, i.e., buying silver contracts to hold as long as possible, to daytrading in which a contract is bought and sold the same day;

(6) the account executive filled out the account application forms with false information regarding Hammock's employment status and income;

(7) DWR's account executive greatly understated the potential losses that could be incurred in daytrading;

(8) DWR's account executive never advised Hammock that he had not deposited the correct margin amounts to cover the trading in his account;

(9) responsibility for supervision of Hammock's account was confused and well nigh non-existent;

(10) in a five day period, trading in the account generated $30,800 based on 270 contracts.

At the conclusion of Hammock's case, DWR moved for a directed verdict with respect to portions of Hammock's counterclaim. The trial court granted the motion with respect to Count I, and with respect to all claims for punitive damages in Counts II, III, and IV.

The jury returned a verdict in favor of Hammock with respect to DWR's claim, and in favor of Hammock on his counterclaim. Hammock's damages were assessed at $40,000, which is the amount that Hammock had deposited with DWR to open the account. In the final judgment, the trial Subsequently, a hearing was held on Hammock's motion for contempt and assessment of attorney's fees. The trial court found the documents sought by Hammock had been located by DWR precisely where they were supposed to be--despite DWR's numerous representations that they could not be located. Accordingly, the trial court found DWR had acted in bad faith and awarded attorney's fees and costs to Hammock. DWR appealed these final orders, and the three cases were consolidated for this appeal.

court awarded Hammock compensatory damages in the amount of $40,000, and retained jurisdiction for the purpose of taxing costs against DWR. DWR moved for new trial or judgment notwithstanding the verdict, and Hammock moved for new trial on the issue of punitive damages. Both motions were denied; both parties appealed.

The first issue raised by DWR is the trial court's failure to grant DWR's motion for judgment notwithstanding the verdict with respect to its claim against Hammock to recover alleged losses incurred in Hammock's commodity trading account. Such a motion is governed by Florida Rule of Civil Procedure 1.480(b), which provides:

When a motion for a directed verdict made at the close of all of the evidence is denied or for any reason is not granted, the court is deemed to have submitted the action to the jury subject to a later determination of the legal questions raised by the motion. Within ten days after the reception of a verdict a party who has moved for a directed verdict may move to have the verdict and any judgment entered thereon set aside and to have judgment entered in accordance with his motion for a directed verdict or if a verdict was not returned, such party may move for judgment in accordance with the motion for a directed verdict within ten days after the jury has been discharged.

The failure to make a motion for directed verdict at the close of all the evidence will preclude consideration of a motion for judgment notwithstanding the verdict, i.e., motion for judgment in accordance with motion for directed verdict. Hall v. Ricardo, 331 So.2d 375 (Fla. 3rd DCA 1976). In Prime Motor Inns, Inc. v. Waltman, 480 So.2d 88, 90 (Fla.1985), the supreme court reaffirmed the principle set forth in 6551 Collins Avenue Corp. v. Millen, 104 So.2d 337 (Fla.1958), holding that "one who submits his cause to the trier of fact without first moving for directed verdict at the end of all evidence has waived the right to make that motion." And in Lee County Oil Company v. Marshall, 98 So.2d 510, 512-513 (Fla. 1st DCA), cert. denied 101 So.2d 819 (Fla.1958), this court held that one who failed to move for a directed verdict at the close of all the evidence--

cannot now be heard to question the sufficiency of the evidence upon which the jury based its verdict. Under such circumstances, an appellate court is...