Gish v. Eci Services of Oklahoma, Inc.

• Decision Date: 21 November 2006
• Docket Number: No. 102,309.,No. 102,861. Released for Publication by Order of the Court of Civil Appeals of Oklahoma, Division No. 1.,102,309.,102,861. Released for Publication by Order of the Court of Civil Appeals of Oklahoma, Division No. 1.
• Citation: 162 P.3d 223,2007 OK CIV APP 40
• Parties: John GISH, Plaintiff/Appellee/Counter-Appellant, v. ECI SERVICES OF OKLAHOMA, INC., a subsidiary of Equity Corporation International of Texas, now known as SCI Oklahoma Funeral Services, Inc., Defendant/Appellant/Counter-Appellee.
• Court: United States State Court of Criminal Appeals of Oklahoma. Court of Civil Appeals of Oklahoma

162 P.3d 223

2007 OK CIV APP 40

John GISH, Plaintiff/Appellee/Counter-Appellant, v. ECI SERVICES OF OKLAHOMA, INC., a subsidiary of Equity Corporation International of Texas, now known as SCI Oklahoma Funeral Services, Inc., Defendant/Appellant/Counter-Appellee.

No. 102,309.

No. 102,861. Released for Publication by Order of the Court of Civil Appeals of Oklahoma, Division No. 1.

Court of Civil Appeals of Oklahoma, Division No. 1.

November 21, 2006.

Rehearing Denied January 23, 2007.

Certiorari Denied April 30, 2007.

Appeal from the District Court of Kiowa County; Honorable Richard Darby, Judge.

AFFIRMED.

Jack S. Dawson, Holly Hillerman, Miller Dollarhide, Oklahoma City, OK, for Defendant/Appellant.

John P. Zelbst, Chandra L. Holmes Ray, John P. Zelbst Law Firm, Lawton, OK, for Plaintiff/Appellee.

LARRY JOPLIN, Judge.

¶ 1 Appellant seeks review of the order of the trial court denying a Motion for New Trial/Remittiter and Judgment Not Withstanding the Verdict (JNOV) filed by Defendant/Appellant ECI Services of Oklahoma, Inc., a subsidiary of Equity Corporation International of Texas now known as SCI Oklahoma Funeral Services, Inc. (ECI) after entry of a $4.5 million jury verdict in favor of Plaintiff/Appellee John Gish (Gish) on his fraud claim allegation in which Gish claimed he would not have sold the family-owned funeral business but for ECI's fraudulent misrepresentations. On counter-appeal, Gish seeks review of trial court's order denying his Motion to Conform Judgment to the Evidence (Motion to Conform) and include Service Corporation International as a defendant. By order dated December 19, 2005, the Oklahoma Supreme Court consolidated the appeals for all purposes.

¶ 2 John Gish's grandfather opened the first Gish Funeral Home in 1901. John Gish began working for the family business at age fourteen, ultimately becoming its sole owner in 1992 when he purchased the business from his father. In February of 1997, Gish sold the funeral homes to ECI, a publicly-traded corporation. At the time of the sale, Gish Funeral Homes were advertised as the oldest family-owned and operated funeral homes in the state.

¶ 3 Gish considered selling his two funeral homes to ECI following a chance meeting with Ray Hackney. Hackney, along with his wife, Martha (The Hackneys) were Gish's competitors in Hobart and Mountain View. Negotiations with ECI's Director of Development, Royce Carrigan (Carrigan), ensued. At a dinner meeting with the Hackneys, Gish and Carrigan present, the four agreed the funeral homes would merge and be known as Hackney-Gish. Carrigan advised Gish and Ray Hackney they would be co-managers of the operation.

¶ 4 Prior to signing a five-year Management Agreement, Asset Purchase Agreement and a twenty-year Covenant Not to Compete prohibiting Gish from working in the funeral industry in any counties contiguous to either Kiowa or Caddo county, Carrigan addressed Gish's concerns over his status as a manager with the company on a long-term basis as well as the importance of ECI's willingness to continue the use of the Gish name. The contracts were signed following these discussions.

¶ 5 After the sale, ECI closed the two buildings owned by John Gish and moved the operation into buildings operated by Hackney Funeral Homes in Mountain View and Hobart. At trial, Gish testified that within a few weeks of the sale, Hackney and ECI excluded him from all management decisions. All communications with ECI were funneled through Ray Hackney; Mr. Hackney scheduled and conducted staff meetings and determined the employee's work schedules; Ray Hackney told Gish which funeral services he would be handling; and although given a key to the front door of the Mountain View funeral home, Gish was not given a key to the office or access to business records.

¶ 6 In April of 1997, The Hackneys submitted their resignation to ECI, citing an inability to work with Gish. ECI did not accept the resignation and the Hackneys continued working. In January of 1998, Gish was stripped of the title of manager, but was told he would continue working under Hackney's supervision as a funeral director and embalmer. Following ECI's merger with SCI Oklahoma Funeral Services, Inc., Gish's employment was terminated. The company continued to pay Gish his salary and benefits through the end of the five-year term. Following termination, Gish obtained employment in the same locale as an insurance agent.

¶ 7 Gish filed the instant lawsuit seeking damages for fraudulent inducement and misrepresentation.¹ ECI filed Motions to Compel Arbitration which were denied by the trial court. Instructions tendered by ECI were rejected by the court as well as Gish's demand to include Service Corporation International as a named defendant on the verdict forms.

¶ 8 A $4.5 million verdict was returned in Gish's favor. The trial court denied ECI's Motion for a New Trial or Remittitur, and JNOV was filed by ECI. Gish's demand for a modified entry of judgment against Service Corporation International was denied. The trial court entered judgment against ECI Services of Oklahoma, Inc., a subsidiary of Equity International Corporation of Texas (now known as SCI Oklahoma Funeral Services). This appeal ensued.

¶ 9 ECI asserts the trial court erred in instructing the jury on fraud absent competent evidence to support the claim. Particularly, ECI claims that insufficient evidence was presented to support a finding that the company misled Gish with a premeditated intent to never fulfill its promises. The Appellant also challenges the trial court's failure to instruct as to the effect of ECI's performance under the contract and the trial court's failure to provide a parol evidence instruction. Further, ECI challenges the verdict based upon Gish's ratification of the contract notwithstanding his later claim of fraud in the inducement as well as the trial court's rejection of its Motion to Compel Arbitration. ECI also seeks remittitur.

¶ 10 Gish contends that the direct and circumstantial evidence offered on his behalf provided an overwhelming basis for the jury to find that ECI's oral promise to retain him as a manager for as long as he wanted to work for the company as well as its commitment to continue the prominent use of the Gish family name in the communities the business served, were made for the sole purpose of inducing him into selling the family business and never intended to be fulfilled. In addition, says Gish, but for ECI's misrepresentations, he would not have had to leave the funeral industry and find a job in a different field.

¶ 11 The standard of appellate review of a decision from the trial court denying a motion for new trial is well-settled: "A trial court is vested with broad legal discretion in granting or denying new trial, and unless it clearly appears that the trial court erred in some pure simple question of law or acted arbitrarily, its judgment will not be disturbed on appeal." Dominion Bank of Middle Tenn. v. Masterson, 1996 OK 99, ¶ 16, 928 P.2d 291, 294. Unless a damage award appears to be grossly excessive or issued as the result of passion, prejudice or sympathy, it will not be subject to remittitur. LeFlore v. Reflections of Tulsa, Inc., 1985 OK 72, ¶ 40, 708 P.2d 1068, 1077.

¶ 12 A jury's verdict and judgment based thereon should be sustained on appeal unless contrary to law or unsupported by competent evidence. Doyle v. Kelly, 1990 OK 119, ¶ 4, 801 P.2d 717, 719; Silk v. Phillips Petroleum Co., 1988 OK 93, ¶ 10, 760 P.2d 174, 176. On questions of fact, the appellate court is to determine the sufficiency of evidence "in light of the evidence tending to support it, together with every reasonable inference deducible therefrom, rejecting all evidence adduced by the adverse party which conflicts with it." Florafax International, Inc. v. GTE Market Resources, Inc., 1997 OK 7, ¶ 3, 933 P.2d 282, 287. Should any competent evidence be found tending to support the verdict, it shall not be disturbed on appeal. Florafax at ¶ 3, 933 P.2d at 287.

FRAUD

¶ 13 ECI asserts that Gish failed to prove it never intended to fulfill its contractual obligations. ECI particularly argues that Gish failed to establish a material fact necessary to warrant a fraud instruction, pointing to the fact that Gish was, in fact, a manager until such time as a conflict arose between the Plaintiff and The Hackneys. Gish responds by pointing to conflicts between Carrigan's pre-contract oral assurances and the events occurring after the sale as circumstantial evidence of the company's intent to defraud him.

¶ 14 Actionable fraud is composed of the following elements: (1) a false misrepresentation of a material fact, (2) made as a positive assertion either known to be false or recklessly made without knowledge of the truth, (3) made with the intention of causing the other party to act, and (4) which is relied on by the other party to his or her own detriment. Rogers v. Meiser, 2003 OK 6, ¶ 17, 68 P.3d 967, 976. Silk at ¶ 12, 760 P.2d at 176-177. Although fraud cannot be presumed, circumstantial evidence may be used to prove its occurrence. Id. at ¶ 14, 760 P.2d at 177. Sellers v. Sellers, 1967 OK 34, ¶ 35, 428 P.2d 230, 238.

¶ 15 Within a short time after selling his funeral homes to ECI, it became clear to Gish that the company did not intend to recognize him as a manager. All internal memorandums were sent by the company to Ray Hackney at "Hackney Funeral Homes," never to Gish or to "Hackney-Gish." Ray Hackney selected which vendors the funeral homes would use, discontinuing Gish's prior business relationships. Ray Hackney directed all employee work schedules, advising Gish which funerals he would work. Access to the business office was controlled by Hackney and one of his long-time employees. Gish was not given access to business records.

¶ 16 Evidence of events transpiring after the occurrence of fraud, as appropriate circumstantial evidence of a wrongdoer's...