Fleetwood Enterprises, Inc. v. Hutcheson
| Decision Date | 17 November 2000 |
| Citation | 791 So.2d 920 |
| Parties | FLEETWOOD ENTERPRISES, INC., and Roger Mitchell v. Tommy HUTCHESON d/b/a Mountaineer Homes; and Mountaineer Homes, Inc. |
| Court | Alabama Supreme Court |
Kimberly N. Sibley and Sherry Collum-Butler of Gonce, Young, Sibley & Moreau, Florence, for appellants.
Jeffrey L. Bowling of Bedford, Rogers & Bowling, P.C., Russellville, for appellees.
Tommy Hutcheson d/b/a Mountaineer Homes; and Mountaineer Homes, Inc., sued Fleetwood Enterprises, Inc. ("Fleetwood"), and Roger Mitchell, alleging fraud, breach of contract and "bad faith," after Hutcheson was terminated as a Fleetwood mobile-home retailer. The trial court entered a summary judgment on the breach-of-contract and bad-faith claims asserted by Hutcheson and Mountaineer Homes, Inc. On the fraud claim, a jury awarded Hutcheson and Mountaineer Homes, Inc., $63,100 in compensatory damages and $189,300 (three times the compensatory damages) in punitive damages. Fleetwood and Mitchell appealed, arguing that they were entitled to a judgment as a matter of law because, they contended, there was a total absence of proof of a false representation and Hutcheson had failed to offer legally adequate evidence of any damage. We reverse and render a judgment for Fleetwood and Mitchell.
Hutcheson started a retail mobile-home business in Spruce Pine, Alabama, in 1989. At that time, Hutcheson entered into retail agreements with Fleetwood, a mobile-home manufacturer. Hutcheson worked with Fleetwood under annual retail agreements, the last of which expired in January 1995. Hutcheson continued to sell Fleetwood homes after the retail agreement expired. The agreements provided Fleetwood retailers, such as Hutcheson, with geographical protection from competing Fleetwood dealers. The retailers were provided with maps that highlighted their protected areas.
Hutcheson's original territory included Franklin, Lawrence, Winston, and Marion Counties. However, in 1994, Fleetwood notified Hutcheson that his customer-satisfaction-index ("CSI") had decreased 40%, and it informed him that because of the decrease it was reducing his protected territory to include only Franklin County. Hutcheson brought his CSI up to 100% by 1996. The last agreement between the parties included a map that indicated Hutcheson's protected area was Franklin County. However, Hutcheson claims that Fleetwood indicated to him that he would regain his original territory once his CSI increased.
In the summer of 1996, Hutcheson opened a mobile-home business in Moulton, in Lawrence County. The evidence suggests that Tom Humphries, a Fleetwood representative, told Hutcheson he would need to obtain Fleetwood's approval before taking any Fleetwood mobile homes to the Moulton lot. Roger Mitchell, a sales manager for Fleetwood, testified that he told Hutcheson not to move any Fleetwood mobile homes to the Moulton lot. On August 19, 1996, after Hutcheson had moved five Fleetwood mobile homes to Moulton, Mitchell sent Hutcheson a letter that stated:
On August 23, 1996, Mitchell wrote Hutcheson again:
On September 21, 1996, Hutcheson met with Fleetwood representatives Mitchell and Mike Sullivan to discuss his providing Fleetwood mobile homes in Moulton. A letter from Mitchell to Hutcheson dated September 25, 1996, but postmarked October 2, 1996, states:
Hutcheson had sold three of the Fleetwood mobile homes before the September 1996 meeting. Hutcheson did not move the remaining mobile homes from the Moulton lot until October 3 or 4, 1996. He claims that although he intended to move the two remaining Fleetwood mobile homes before the September 30, 1996, deadline, he wanted and demanded a letter confirming what had transpired at the meeting. On October 18, 1996, Hutcheson received a letter terminating his business relationship with Fleetwood.
We review a trial court's denial of a motion for a judgment as a matter of law by the same standard we applied to an order denying the motion formerly known as a motion for a directed verdict. Winn Dixie of Montgomery, Inc. v. Colburn, 709 So.2d 1222, 1223 n. 1 (Ala.1998). "The standard of review applicable to a directed verdict or to a denial of a motion for a directed verdict is whether the nonmoving party has presented substantial evidence in support of his position." K.S. v. Carr, 618 So.2d 707, 713 (Ala.1993). "Substantial evidence is evidence of such weight and quality that fair-minded persons in the exercise of impartial judgment can reasonably infer the existence of the fact sought to be proved." West v. Founders Life Assurance Co. of Florida, 547 So.2d 870, 871 (Ala.1989). We have held:
With regard to his fraud claim, Hutcheson and Mountaineer argue that Fleetwood informed Hutcheson in March 1994 that his territory was being reduced because his "customer service index" had fallen. Hutcheson testified that he was led to believe that if he raised his CSI, then his original territory, which had included Moulton, would be restored. "The elements of fraud are: (1) a misrepresentation of a material fact, (2) made willfully to deceive, recklessly, without knowledge, or mistakenly, (3) that was reasonably relied on by the plaintiff under the circumstances, and (4) that caused damage as a proximate consequence." Brushwitz v. Ezell, 757 So.2d 423, 429 (Ala.2000). The parties executed their last retail agreement in March 1994. It was effective from January 1994 through January 1995. Attached to the retail agreement was a map showing Hutcheson's protected territory— Franklin County—shaded out. Fleetwood's former sales manager, Roger Mitchell, testified that this map would have still been in effect even though the agreement to which it was attached had expired. Hutcheson testified that Mike Sullivan, a Fleetwood employee, indicated to him that if he got his CSI up, then Fleetwood would restore his original territory. There was a genuine issue of material fact as to whether Fleetwood misrepresented to Hutcheson that his original territory would be restored once he got his CSI up.
Hutcheson claims that, in reliance on Fleetwood's representation that he would receive his original territory if his CSI increased, he increased his CSI and moved some Fleetwood Homes to Moulton. In order to prevail on his fraud claim, Hutcheson must prove that he reasonably relied on Fleetwood's representations. Hutcheson testified that in May or June 1996, he had a discussion with Tom Humphries about taking some Fleetwood Homes to his new lot in Moulton. Hutcheson testified as follows:
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