Gass v. Handley
| Decision Date | 02 September 2021 |
| Docket Number | 351080 |
| Parties | CHARLES GASS, Plaintiff/Counterdefendant-Appellee, v. DANIEL HANDLEY, Defendant-Appellant, and GREEN4ALL ENERGY SOLUTIONS and JOELEX, INC., Defendants/Counterplaintiffs-Appellants. |
| Court | Court of Appeal of Michigan — District of US |
UNPUBLISHED
Lapeer Circuit Court LC No. 17-051143-CK
Before: Riordan, P.J., and Markey and Swartzle, JJ.
Plaintiff Charles Gass filed suit against defendants Daniel Handley Green4All Energy Solutions, and JoeLex, Inc., alleging causes of action for breach of contract against Handley, unjust enrichment against Handley and Green4All, fraud against Handley, and promissory estoppel against Handley, along with other counts that were summarily dismissed and are no longer at issue. Green4All and JoeLex filed counterclaims against plaintiff alleging causes of action for conversion and unjust enrichment. With respect to plaintiff's action, a jury returned a verdict in favor of plaintiff on the breach-of-contract claim and awarded him $198, 200 in damages. In regard to plaintiffs claim of unjust enrichment the jury rendered a verdict for plaintiff, awarding him restitution in the amount of $145, 798, but only as to Green4All. With respect to the fraud claim, the jury found in favor of plaintiff and awarded him $102, 640 in damages. Finally, the jury returned a verdict for plaintiff on his promissory-estoppel claim but awarded no damages. On the counterclaims, the trial court directed a verdict in favor of plaintiff on JoeLex's conversion claim, and the jury rendered no-cause of action verdicts for plaintiff with regard to the remaining counts of conversion and unjust enrichment pursued by JoeLex and Green4All. The verdicts were memorialized in a judgment. Defendants moved for judgment notwithstanding the verdict (JNOV), or new trial, remittitur or other relief, which the trial court denied. Defendants appeal by right. We affirm plaintiff's damage awards for breach of contract and fraud, reverse the restitution award for unjust enrichment, and affirm the directed verdict on JoeLex's conversion counterclaim.
This case arises from a 2012 oral agreement between plaintiff and Handley to enter into a business arrangement to sell and distribute the H2minusO valve (the valve) that plaintiff designed and developed. The valve purportedly reduces the water and sewer costs for a residence by decreasing the amount of air in water lines, which air artificially inflates the amount of water usage as read by a meter. Handley owned Green4All and, pursuant to the oral agreement, he was to transfer a 30% interest in Green4All to plaintiff. In return, plaintiff promised to assign his rights in and to the valve to JoeLex, a holding company formed by plaintiff and Handley to hold patent rights and collect royalties in connection with the valve, thereby allowing JoeLex to give Green4All exclusive rights to market and distribute the valve. Handley owned 51% of JoeLex, and plaintiff owned the remaining 49%. There was evidence that the oral agreement also provided that plaintiff and Handley would each receive 50% of any profits derived from sales of the valve.[1]
Plaintiff worked for Green4All from 2010 or 2011 until early 2017 when Handley terminated plaintiff's employment with the company. Plaintiff testified that he worked for years for Green4All in reliance on the oral agreement. Plaintiff claimed that throughout his employment with Green4All he tinkered on revisions to the valve. Multiple design changes to address various problems with the valve resulted in ongoing patent applications. Several patents, with plaintiff and Handley listed as the inventors, were eventually obtained. Handley claimed that pertinent improvements to the valve could not be attributed to plaintiff's efforts. Plaintiff, however, believed otherwise. There is no dispute that plaintiff assigned his valve-related rights to JoeLex as promised under the oral agreement. But Handley never actually transferred any ownership interest or shares in Green4All to plaintiff. There was evidence that throughout plaintiff's employment Handley falsely indicated to plaintiff, through certain tax and financial documents and verbal statements, that Handley had in fact transferred a 30% interest in Green4All to plaintiff. Defendants claimed that plaintiff knew early on that he held no interest in Green4All.
At trial, plaintiff submitted numerous financial documents concerning Green4All, and he testified in regard to those documents in an attempt to provide the jury with information from which it could calculate a value for Green4All. Handley opined that Green4All was worth around $200, 000. Plaintiff testified that had he not contracted with Handley and worked for Green4All, he would have been employed in the field of hydraulics, just as he had before joining Green4All and as he was doing after being fired by Handley. Plaintiff claimed that he would have earned $583, 000 above and beyond what he had earned working for Green4All.
After the trial court granted partial summary disposition in favor of defendants on several counts in plaintiff's complaint, the remaining claims of breach of contract, unjust enrichment, fraud, and promissory estoppel went to the jury, and it rendered the verdicts described above. The jury also rejected the counterclaims, with the court directing a verdict for plaintiff on JoeLex's conversion count. Subsequently, a judgment reflecting the jury's verdicts was entered. The judgment also awarded plaintiff approximately $29, 000 in pre-judgment interest. Defendants' posttrial motions were denied.
In this appeal, issues are raised concerning rulings by the trial court with respect to motions for new trial, JNOV, directed verdict, and remittitur. This Court reviews a trial court's decision whether to grant or deny a motion for new trial for an abuse of discretion. Gilbert v DaimlerChrysler Corp, 470 Mich. 749, 761; 685 N.W.2d 391 (2004). This includes a motion for new trial based on a claim that a verdict was against the great weight of the evidence. Bosak v Hutchinson, 422 Mich. 712, 737; 375 N.W.2d 333 (1985).[2] We also review for an abuse of discretion a trial court's ruling on a motion for remittitur. Freed v Salas, 286 Mich.App. 300, 334; 780 N.W.2d 844 (2009). This Court reviews de novo a trial court's decision on a motion for directed verdict or JNOV. Taylor v Kent Radiology, PC, 286 Mich.App. 490, 499; 780 N.W.2d 900 (2009).[3]
This case presents some difficult and intricate issues, and we believe that the most concise, understandable, and cohesive approach in addressing the issues is to separately examine and analyze those issues in the context of each of the relevant causes of action.
In plaintiffs first amended complaint, he alleged that in exchange for his assignment of rights related to the design of the valve, Handley had promised that he would convey a 30% interest in Green4All to plaintiff and that he would also share equally with plaintiff "in the profits derived from sales of the [v]alve, regardless of whether those profits flowed through Green4All or JoeLex." Plaintiff further contended that he fully performed under the parties' agreement, assigning his "valve" rights to JoeLex, which in turn authorized Green4All to sell products predicated on plaintiffs valve design. Plaintiff maintained that Handley breached the contract by failing to convey a 30% ownership interest in Green4All to plaintiff and by failing to pay plaintiff revenues to which plaintiff was entitled.
At trial, plaintiff did not present any expert testimony regarding the value of Green4All. Instead, plaintiff introduced numerous documents related to Green4All and testified about those documents and Green4All's net operating income and expenses from year to year. The documents included transaction reports, profit-and-loss statements, balance sheets, tax and financial records, and interrogatory answers. Plaintiff also submitted a redacted document that he created challenging certain expenses Green4All listed in its financial records from 2015 to 2017.[4] Plaintiff additionally elicited testimony that the valve was a successful product and that sales would likely increase in the future. Plaintiff introduced a Wall Street Journal article on price-to-earnings ratios and yields on major indexes, as well as Moody's corporate bond yields. The trial court would not allow plaintiff himself to give an opinion on the value of Green4All because he lacked the expertise to do so. During closing argument, plaintiffs counsel referenced all of the documentary evidence noted above, along with plaintiffs testimony, and informed the jurors, "So if you have general knowledge and experience in the affairs of life that allows you to interpret those documents and know what Green4All is worth, you can do so." Plaintiffs counsel did not suggest to the jury any particular valuation dollar amount for Green4All that would or might be produced upon analysis of the financial information submitted to the jurors. Rather, plaintiff simply requested a damage award for breach of contract in an amount equal to 30% of whatever valuation for Green4All the jurors might arrive at after examining the financial documents and information and doing their own computations.[5] As noted earlier, Handley did testify at trial that Green4All was worth approximately $200, 000. Plaintiffs attorney did not ask the jury to return a verdict for contract damages based on 50% of the profits derived from sales of the valve.
Plaintiff next argued to the jury that, in the alternative, it could award plaintiff contract damages for the amount of money that he would have earned working in...
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